THE MARXIST DOCTRINE

V. I. Lenin 

KARL MARX (A Brief Biographical Sketch with an Exposition of Marxism)

The present English translation of V. I. Lenin's Karl Marx -- a Brief Biograpbical Sketch with an Exposition of Marxism is reprinted, with a few changes, from Lenin's Marx, Engels, Marxism, English edition, Foreign Languages Publishing House, Moscow. 1951. The "Bibliography" has been translated from V. I. Lenin, Collected Works, 4th Russian edition, Vol. XXI, pp. 63-74.

Prepared © for the Internet by David J. Romagnolo, djr@cruzio.com (May 1997)

THE MARXIST DOCTRINE

Marxism is the system of the views and teachings of Marx. Marx was the genius who continued and completed the three main ideological currents of the nineteenth century, belonging to the three most advanced countries of mankind: classical German philosophy, classical English political economy, and French socialism together with French revolutionary doctrines in general. The remarkable consistency and integrity of Marx's views, acknowledged even by his opponents, views which in their totality constitute modern materialism and modern scientific socialism, as the theory and programme of the labour movement in all the civilized countries of the world, oblige us to present a brief outline of his world conception in general before proceeding to the exposition of the principal content of Marxism, namely, Marx's economic doctrine.

PHILOSOPHICAL MATERIALISM

From 1844-45, when his views took shape, Marx was a materialist, in particular a follower of Ludwig Feuerbach, whose weak sides he even later considered to consist exclusively in the fact that his materialism was not consistent and comprehensive enough. Marx regarded the historic and "epoch-making" importance of Feuerbach to be that he had resolutely broken away from Hegelian idealism and had proclaimed materialism, which already "in the eighteenth century, especially in France, had been a struggle not only against the existing political institutions and against . . . religion and theology, but also . . . against all metaphysics" (in the sense of "intoxicated speculation" as distinct from "sober philosophy"). (The Holy Family, in the Literarischer Nachlass.) "To Hegel . . ." wrote Marx, "the process of thinking, which, under the name of 'the Idea,' he even transforms into an independent subject, is the demiurgos (the creator, the maker) of the real world. . . . With me, on the contrary, the ideal is nothing else than the material world reflected by the human mind, and translated into forms of thought." (Capital, Vol. I, Afterword to the Second Edition.) In full conformity with this materialist philosophy of Marx's, and expounding it, Frederick Engels wrote in Anti-Dühring (which Marx read in the manuscript): "The unity of the world does not consist in its being. . . . The real unity of the world consists in its materiality, and this is proved . . . by a long and tedious development of philosophy and natural science. . . ." "Motion is the mode of existence of matter. Never anywhere has there been matter without motion, or motion without matter, nor can there be. . . . But if the . . . question is raised what thought and consciousness really are and where they come from, it becomes apparent that they are products of the human brain and that man himself is a product of nature, which has developed in and along with its environment; hence it is self-evident that the products of the human brain, being in the last analysis also products of nature, do not contradict the rest of nature's interconnections but are in correspondence with them." "Hegel was an idealist, that is to say, the thoughts within his mind were to him not the more or less abstract images (Abbilder, reflections; Engels sometimes speaks of "imprints") of real things and processes, but, on the contrary, things and their development were to him only the images made real of the 'Idea' existing somewhere or other already before the world existed." In his Ludwig Feuerbach -- in which he expounds his and Marx's views on Feuerbach's philosophy, and which he sent to the press after re-reading an old manuscript written by Marx and himself in 1844-45 on Hegel, Feuerbach and the materialist conception of history -- Frederick Engels writes: "The great basic question of all philosophy, especially of more recent philosophy, is that concerning the relation of thinking to being . . . the relation of spirit to nature . . . which is primary, spirit or nature. . . . The answers which the philosophers gave to this question split them into two great camps. Those who asserted the primacy of spirit to nature and, therefore, in the last instance, assumed world creation in some form or other . . . comprised the camp of idealism. The others, who regarded nature as primary, belong to the various schools of materialism." Any other use of the concepts of (philosophical) idealism and materialism leads only to confusion. Marx decidedly rejected not only idealism, always connected in one way or another with religion, but also the views, especially widespread in our day, of Hume and Kant, agnosticism, criticism, positivism in their various forms, regarding such a philosophy as a "reactionary" concession to idealism and at best a "shamefaced way of surreptitiously accepting materialism, while denying it before the world." On this question, see, in addition to the above-mentioned works of Engels and Marx, a letter of Marx to Engels dated December 12, 1868, in which Marx, referring to an utterance of the well-known naturalist Thomas Huxley that was "more materialistic" than usual, and to his recognition that "as long as we actually observe and think, we cannot possibly get away from materialism," reproaches him for leaving a "loophole" for agnosticism, for Humism. It is especially important to note Marx's view on the relation between freedom and necessity: "Freedom is the appreciation of necessity. 'Necessity is blind only in so far as it is not understood'" (Engels, Anti-Dühring). This means the recognition of objective law in nature and of the dialectical transformation of necessity into freedom (in the same manner as the transformation of the unknown, but knowable, "thing-in-itself" into the "thing for-us," of the "essence of things" into "phenomena"). Marx and Engels considered the fundamental shortcomings of the "old" materialism, including the materialism of Feuerbach (and still more of the "vulgar" materialism of Büchner, Vogt and Moleschott), to be: (I) that this materialism was "pre dominantly mechanical," failing to take account of the latest developments of chemistry and biology (in our day it would be necessary to add: and of the electrical theory of matter); (2) that the old materialism was non-historical, non-dialectical (metaphysical, in the sense of anti-dialectical), and did not adhere consistently and comprehensively to the standpoint of development; (3) that it regarded the "human essence" abstractly and not as the "complex" of all (concretely defined historical) "social relations," and therefore only "interpreted" the world, whereas the point is to "change" it; that is to say, it did not understand the importance of "revolutionary, practical activity."

DIALECTICS

Hegelian dialectics, as the most comprehensive, the most rich in content, and the most profound doctrine of development, was regarded by Marx and Engels as the greatest achievement of classical German philosophy. They considered every other formulation of the principle of development, of evolution, one-sided and poor in content, and distorting and mutilating the real course of development (which often proceeds by leaps, catastrophes and revolutions) in nature and in society. "Marx and I were pretty well the only people to rescue conscious dialectics" (from the destruction of idealism, including Hegelianism) "and apply it in tbe materialist conception of nature. . . . Nature is the test of dialectics, and it must be said for modern natural science that it has furnished extremely rich" (this was written before the discovery of radium, electrons, the transmutation of elements, etc.!) "and daily increasing materials for this test, and has thus proved that in the last analysis nature's process is dialectical and not metaphysical."

"The great basic thought," Engels writes, "that the world is not to be comprehended as a complex of ready-made things, but as a complex of processes, in which the things apparently stable no less than their mind images in our heads, the concepts, go through an uninterrupted change of coming into being and passing away . . . this great fundamental thought has, especially since the time of Hegel, so thoroughly permeated ordinary consciousness that in this generality it is now scarcely ever contradicted. But to acknowledge this fundamental thought in words and to apply it in reality in detail to each domain of investigation are two different things." "For dialectical philosophy nothing is final, absolute, sacred. It reveals the transitory character of everything and in everything; nothing can endure before it except the uninterrupted process of becoming and of passing away, of endless ascendency from the lower to the higher. And dialectical philosophy itself is nothing more than the mere reflection of this process in the thinking brain." Thus, according to Marx, dialectics is "the science of the general laws of motion, both of the external world and of human thought."

This revolutionary side of Hegel's philosophy was adopted and developed by Marx. Dialectical materialism "no longer needs any philosophy standing above the other sciences." Of former philosophy there remains "the science of thought and its laws -- formal logic and dialectics." And dialectics, as understood by Marx, and in conformity with Hegel, includes what is now called the theory of knowledge, or epistemology, which, too, must regard its subject matter historically, studying and generalizing the origin and development of knowledge, the transition from non-knowledge to knowledge.

Nowadays, the idea of development, of evolution, has penetrated the social consciousness almost in its entirety, but by different ways, not by way of the Hegelian philosophy. But as formulated by Marx and Engels on the basis of Hegel, this idea is far more comprehensive, far richer in content than the current idea of evolution. A development that seemingly repeats the stages already passed, but repeats them otherwise, on a higher basis ("negation of negation"), a development, so to speak, in spirals, not in a straight line; -- a development by leaps, catastrophes, revolutions; -- "breaks in continuity"; the transformation of quantity into quality; -- the inner impulses to development, imparted by the contradiction and conflict of the various forces and tendencies

acting on a given body, or within a given phenomenon, or within a given society; -- the interdependence and the closest, indissoluble connection of all sides of every phenomenon (while history constantly discloses ever new sides), a connection that provides a uniform, law-governed, universal process of motion -- such are some of the features of dialectics as a richer (than the ordinary) doctrine of development. (See Marx's letter to Engels of January 8, 1868, in which he ridicules Stein's "wooden trichotomies" which it would be absurd to confuse with materialist dialectics.)

THE MATERIALIST CONCEPTION OF HISTORY

Having realized the inconsistency, incompleteness, and one-sidedness of the old materialism, Marx became convinced of the necessity of "bringing the science of society . . . into harmony with the materialist foundation, and of reconstructing it thereupon." Since materialism in general explains consciousness as the outcome of being, and not conversely, materialism as applied to the social life of mankind has to explain socialconsciousness as the outcome of social being. "Technology," writes Marx (Capital, Vol. I), "discloses man's mode of dealing with nature, the immediate process of production by which he sustains his life, and thereby also lays bare the mode of formation of his social relations, and of the mental conceptions that flow from them." In the preface to his Contribution to the Critique of Political Economy, Marx gives an integral formulation of the fundamental principles of materialism as applied to human society and its history, in the following words:

"In the social production of their life, men enter into definite relations that are indispensable and independent of their will, relations of production which correspond to a definite stage of development of their material productive forces.

"The sum-total of these relations of production constitutes the economic structure of society, the real foundation, on which rises a legal and political superstructure and to which correspond definite forms of social consciousness. The mode of production of material life conditions the social, political and intellectual life process in general. It is not the consciousness of men that determines their being, but, on the contrary, their social being that determines their consciousness. At a certain stage of their development, the material productive forces of society come in conflict with the existing relations of production, or -- what is but a legal expression for the same thing -- with the property relations within which they have been at work hitherto. From forms of development of the productive forces these relations turn into their fetters. Then begins an epoch of social revolution. With the change of the economic foundation the entire immense superstructure is more or less rapidly transformed. In considering such transformations a distinction should always be made between the material transformation of the economic conditions of production, which can be determined with the precision of natural science, and the legal, political, religious, aesthetic or philosophic -- in short, ideological forms in which men become conscious of this conflict and fight it out.

"Just as our opinion of an individual is not based on what ! he thinks of himself, so can we not judge of such a period of transformation by its own consciousness; on the contrary, this consciousness must be explained rather from the contradictions of material life, from the existing conflict between the social productive forces and the relations of production. . . . In broad outlines Asiatic, ancient, feudal, and modern bourgeois modes of production can be designated as progressive epochs in the economic formation of society." (Cf. Marx's brief formulation in a letter to Engels dated July 7, 1866: "Our theory that the organization of labour is determined by the means of production.")

The discovery of the materialist conception of history, or rather, the consistent continuation and extension of materialism into the domain of social phenomena, removed two chief defects of earlier historical theories. In the first place, they at best examined only the ideological motives of the historical activity of human beings, without investigating what produced these motives, without grasping the objective laws governing the development of the system of social relations, and without discerning the roots of these relations in the degree of development of material production; in the second place, the earlier theories did not cover the activities of the masses of the population, whereas historical materialism made it possible for the first time to study with the accuracy of the natural sciences the social conditions of the life of the masses and the changes in these conditions. Pre-Marxist "sociology" and historiography at best provided an accumulation of raw facts, collected sporadically, and a depiction of certain sides of the historical process. By examining the whole complex of opposing tendencies, by reducing them to precisely definable conditions of life and production of the various classes of society, by discarding subjectivism and arbitrariness in the choice of various "leading" ideas or in their interpretation, and by disclosing that all ideas and all the various tendencies, without exception, have their roots in the condition of the material forces of production, Marxism pointed the way to an all-embracing

and comprehensive study of the process of rise, development, and decline of social-economic formations. People make their own history. But what determines the motives of people, of the mass of people, that is, what gives rise to the clash of conflicting ideas and strivings; what is the sum-total of all these clashes of the whole mass of human societies; what are the objective conditions of production of material life that form the basis of all historical activity of man; what is the law of development of these conditions -- to all this Marx drew attention and pointed out the way to a scientific study of history as a uniform and law-governed process in all its immense variety and contradictoriness.

THE CLASS STRUGGLE

That in any given society the strivings of some of its members conflict with the strivings of others, that social life is full of contradictions, that history discloses a struggle between nations and societies as well as within nations and societies, and, in addition, an alternation of periods of revolution and reaction, peace and war, stagnation and rapid progress or decline -- are facts that are generally known. Marxism provided the clue which enables us to discover the laws governing his seeming labyrinth and chaos, namely, the theory of the class struggle. Only a study of the whole complex of strivings of all the members of a given society or group of societies can lead to a scientific definition of the result of these strivings. And the source of the conflicting strivings lies in the difference in the position and mode of life of the classes into which each society is divided. "The history of all hitherto existing society is the history of class struggles," wrote Marx in the Communist Manifesto (except the history of the primitive community -- Engels added subsequently). "Freeman and slave, patrician and plebeian, lord and serf, guild-master and journeyman, in a word, oppressor and oppressed, stood in constant opposition to one another, carried on an uninterrupted, now hidden, now open fight, a fight that each time ended, either in a revolutionary re-constitution of society at large, or in the common ruin of the contending classes. . . . The modern bourgeois society that has sprouted from the ruins of feudal society has not done away with class antagonisms. It has but established new classes, new conditions of oppression, new forms of struggle in place of the old ones. Our epoch, the epoch of the bourgeoisie, possesses, however, this distinctive feature: it has simplified the class antagonisms. Society as a whole is more and more splitting up into two great hostile camps, into two great classes directly facing each other: Bourgeoisie and Proletariat." Ever since the Great French Revolution European history has very clearly revealed in a number of countries this real undersurface of events, the struggle of classes. And the Restoration period in France already produced a number of historians (Thierry, Guizot, Mignet, Thiers) who, generalizing from events, were forced to recognize that the class struggle was the key to all French history. And the modern era -- the era of the complete victory of the bourgeoisie, representative institutions, wide (if not universal) suffrage, a cheap, popular daily press, etc., the era of powerful and ever-expanding unions of workers and unions of employers, etc., has revealed even more manifestly (though sometimes in a very one-sided, "peaceful," "constitutional" form) that the class struggle is the mainspring of events. The following passage from Marx's Communist Manifesto will show us what Marx required of social science in respect to an objective analysis of the position of each class in modern society in connection with an analysis of the conditions of development of each class: "Of all the classes that stand face to face with the bourgeoisie to-day, the proletariat alone is a really revolutionary class. The other classes decay and finally disappear in the face of modern industry; the proletariat is its special and essential product. The lower middle class, the small manufacturer, the shop keeper, the artisan, the peasant, all these fight against the bourgeoisie, to save from extinction their existence as fractions of the middle class. They are therefore not revolutionary, but conservative. Nay more, they are reactionary, for they try to roll back the wheel of history. If by chance they are revolutionary, they are so only in view of their impending transfer into the proletariat, they thus defend not their present, but their future interests, they desert their own standpoint to place themselves at that of the proletariat." In a number of historical works (see Bibliography), Marx has given us brilliant and profound examples of materialist historiography, of an analysis of the position of each individual class, and sometimes of various groups or strata within a class, showing plainly why and how "every class struggle is a political struggle." The above-quoted passage is an iliustration of what a complex network of social relations and transitional stages between one class and another, from the past to the future, Marx analyzes in order to determine the resultant of historical development.

The most profound, comprehensive and detailed confirmation and application of Marx's theory is his economic doctrine.

MARX'S ECONOMIC DOCTRINE

It is the ultimate aim of this work to lay bare the eco nomic law of motion of modern society" (that is to say, capitalist, bourgeois society), says Marx in the preface to Capital. The investigation of the relations of production in a given, historically defined society, in their genesis, development, and decline -- such is the content of Marx's economic doctrine. In capitalist society it is the production of commodities that dominates, and Marx's analysis therefore begins with an analysis of the commodity.

VALUE

A commodity is, in the first place, a thing that satisfies a human want; in the second place, it is a thing that can be exchanged for another thing. The utility of a thing makes it a use-value. Exchange-value (or simply, value) presents itself first of all as the ratio, the proportion, in which a certain number of use-values of one sort are exchanged for a certain number of use-values of another sort. Daily experience shows us that millions upon millions of such exchanges are constantly equating with one another every kind of use-value, even the most diverse and incomparable. Now, what is there in common between these various things, things constantly equated one with another in a definite system of social relations? What is common to them is that they are products of labour. In exchanging products people equate to one another the most diverse kinds of labour. The production of commodities is a system of social relations in which the individual producers create diverse products (the social division of labour), and in which all the products are equated to one another in exchange. Consequently, what is common to all commodities is not the concrete labour of a definite branch of production, not labour of one particular kind, but abstract human labour -- human labour in general. All the labour power of a given soclety, as represented in the sum-total of values of all commodities, is one and the same human labour power: millions and millions of acts of exchange prove this. And, consequently, each particular commodity represents only a certain share of the socially necessarylabour time. The magnitude of value is determined by the amount of socially necessary labour, or by the labour time that is socially necessary for the production of the given commodity, of the given use-value. "Whenever, by an exchange, we equate as values our different products, by that very act, we also equate, as human labour, the different kinds of labour expended upon them. We are not aware of this, nevertheless we do it." As one of the earlier economists said, value is a relation between two persons; only he ought to have added: a relation disguised as a reIation between things. We can understand what value is only when we consider it from the standpoint of the system of social relations of production of one particular historical formation of society, relations, moreover, which manifest themselves in the mass phenomenon of exchange, a phenomenon which repeats itself millions upon millions of times. "As values, all commodities are only definite masses of congealed labour time." Having made a detailed analysis of the twofold character of the labour incorporated in commodities, Marx goes on to analyze the forms of value and money. Marx's main task here is to study the genesis of the money form of value, to study the historical process of development of exchange, from single and casual acts of exchange ("elementary or accidental form of value," in which a given quantity of one commodity is exchanged for a given quantity of another) to the universal form of value, in which a number of different commodities are exchanged for one and the same particular commodity, and to the money form of value, when gold becomes this particular commodity, the universal equivalent. Being the highest product of the development of exchange and commodity production, money masks and conceals the social character of all individual producers who are united by the market. Marx anallyzes in very great detail the various functions of money; and it is essential to note here in particular (as generally in the opening chapters of Capital ), that the abstract and seemingly at times purely deductive mode of exposition in reality reproduces a gigantic collection of factual material on the history of the development of exchange and commodity production. "If we consider money, its existence implies a definite stage in the exchange of commodities. The particular functions of money which it performs, either as the mere equivalent of commodities, or as means of circulation, or means of payment, as hoard or as universal money, point, according to the extent and relative preponderance of the one function or the other, to very different stages in the process of social production." (Capital, Vol. I.)

SURPLUS VALUE

At a certain stage in the development of commodity production money becomes transformed into capital. The formula of commodity circulation was C -- M -- C (commodity -- money -- commodity), i.e., the sale of one commodity for the purpose of buying another. The general formula of capital, on the contrary, is M -- C -- M, i.e., purchase for the purpose of selling (at a profit). The increase over the original value of the money put into circulation Marx calls surplus value. The fact of this "growth" of money in capitalist circulation is well known. It is this "growth" which transforms money into capital, as a special, historically defined, social relation of production. Surplus value cannot arise out of commodity circulation, for the latter knows only the exchange of equivalents; it cannot arise out of an addition to price, for the mutual losses and gains of buyers and sellers would equalize one another, whereas what we have here is not an individual phenomenon but a mass, average, social phenomenon. In order to derive surplus value? the owner of money "must . . . find . . . in the market a commodity, whose use-value possesses the peculiar property of being a source of value" -- a commodity whose process of consumption is at the same time a process of creation of value. And such a commodity exists. It is human labour power. Its consumption is labour, and labour creates value. The owner of money buys labour power at its value, which, like the value of every other commodity, is determined by the socially necessary labour time requisite for its production (i.e., the cost of maintaining the worker and his family). Having bought labour power, the owner of money is entitled to use it, that is, to set it to work for the whole day -- twelve hours, let us suppose. Yet, in the course of six hours ("necessary" labour time) the labourer creates product sufficient to cover the cost of his own maintenance; and in the course of the next six hours ("surplus" labour time), he creates "surplus" product, or surplus value, for which the capitalist does not pay. In capital, therefore, from the standpoint of the process of production, two parts must be distinguished: constant capital, expended on means of production (machinery, tools, raw materials, etc.), the value of which, without any change, is transferred (all at once or part by part) to the finished product; and variable capital, expended on labour power. The value of this latter capital is not invariable, but grows in the labour process, creating surplus value. Therefore, to express the degree of exploitation of labour power by capital, surplus value must be compared not with the whole capital but only with the variable capital. Thus in the example given, the rate of surplus value, as Marx calls this ratio, will be 6:6, i.e., 100 per cent.

The historical prerequisites for the genesis of capital were, firstly, the accumulation of a certain sum of money in the hands of individuals and a relatively high level of development of commodity production in general, and, secondly, the existence of a labourer who is "free" in a double sense: free from all constraint or restriction on the sale of his labour power, and free from the land and all means of production in general, a free and unattached labourer, a "proletarian," who cannot subsist except by the sale of his labour power.

There are two principal methods by which surplus value can be increased: by lengthening the working day ("absolute surplus value"), and by shortemng the necessary working day ("relative surplus value"). Analyzing the first method, Marx gives a most impressive picture of the struggle of the working class to shorten the working day and of governmental interference to lengthen the working day (from the fourteenth century to the seventeenth century) and to shorten the working day (factory legislation of the nineteenth century). Since the appearance of Capital, the history of the working-class movement in all civilized countries of the world has provided a wealth of new facts amplifying this picture.

Analyzing the production of relative surplus value, Marx investigates the three main historlcal stages by which capitalism has increased the productivity of labour:" 1) simple co-operation, 2) division of labour and manufacture; 3) machinery and large-scale industry. How profoundly Marx has here revealed the basic and typical features of capitalist development is incidentally shown by the fact that investigations into the handicraft industries of Russia furnish abundant material illustrating the first two of the mentioned stages. And the revolutionizing effect of large-scale machine industry, described by Marx in 1867, has been revealed in a number of "new" countries (Russia, Japan, etc.) in the course of the half-century that has since elapsed.

To continue. New and important in the highest degree is Marx's analysis of the accumulation of capital, i.e., the transformation of a part of surplus value into capital, its use, not for satisfying the personal needs or whims of the capitalist, but for new production. Marx revealed the mistake of all the earlier classical political economists (from Adam Smith on) who assumed that the entire surplus value which is transformed into capitai goes to form variable capital. (In actual fact, it is divided into means of production and variable capital. Of tremendous importance to the process of development of capitalism and its transformation into socialism is the more rapid growth of the constant capital share (of the total capital) as compared with the variable capital share.

The accumulation of capital, by accelerating the supplanting of workers by machinery and creating wealth at one pole and poverty at the other, also gives rise to what is called the "reserve army of labour," to the "relative surplus" of workers, or "capitalist overpopulation," which assumes the most diverse forms and enables capital to expand production at an extremely fast rate. This, in conjunction with credit facilities and the accumulation of capital in means of production, incidentally furnishes the clue to the crises of over production that occur periodically in capitalist countries -- at first at an average of every ten years, and later at more lengthy and less dehnite intervals. From the accumulation of capital under capitalism must be distinguished what is know as primitive accumulation: the forcible divorcement of the worker from the means of production the driving of the peasants from the land, the stealing of communal land, the system of colonies and national debts, protective tariffs, and the like. "Primitive accumulation" creates the "free" proletarian at one pole, and the owner of money, the capitalist, at the other.

The "historical tendency of capitalist accumulation" is described by Marx in the following famous words: "The expropriation of the immediate producers was accomplished with merciless Vandalism, and under the stimulus of passions the most infamous, the most sordid, the pettiest, the most meanly odious. Self-earned private property" (of the peasant and handicraftsman), "that is based, so to say, on the fusing together of the isolated, independent labouring individual with the conditions of his labour, is supplanted by capitalistic private property, which rests on exploitation of the nominally free labour of others. . . . That which is now to be expropriated is no longer the labourer working for himself, but the capitalist exploiting many labourers. This expropriation is accomplished by the action of the immanent laws of capitalistic production itself, by the centralization of capital. One capitalist always kills many. Hand in hand with this centralization, or this expropriation of many capitalists by few, develop, on an ever-extending scale, the co-operative form of the labour process, the conscious technical application of science, the methodical cultivation of the soil, the transformation of the instruments of labour into instruments of labour only usable in common, the economizing of all means of production by their use as the means of production of combined, socialized labour, the entanglement of all peoples in the net of the world market, and with this, the international character of the capitalistic regime. Along with the constantly diminishing number of the magnates of capital, who usurp and monopolize all advantages of this process of transformation, grows the mass of misery, oppression, slavery, degradation, exploitation; but with this too grows the revolt of the working class, a class always increasing in numbers, and disciplined, united, organized by the very mechanism of the process of capitalist production itself. The monopoly of capital becomes a fetter upon the mode of production, which has sprung up and flourished along with, and under it. Centralization of the means of production and socialization of labour at last reach a point where they become incompatible with their capitalist integument. This integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated." (Capital, Vol. I.)

New and important in the highest degree, further, is the analysis Marx gives in the second volume of Capital of the reproduction of the aggregate social capital. Here, too, Marx deals not with an individual phenomenon but with a mass phenomenon; not with a fractional part of the economy of society but with this economy as a whole. Correcting the mistake of the classical economists mentioned above, Marx divides the entire social production into two big sections: I) production of means of production, and II) production of articles of consumption, and examines in detail, with arithmetical examples, the circulation of the aggregate social capital -- both in the case of reproduction in its former dimensions and in the case of accumulation. The third volume of Capital solves the problem of the formation of the average rate of profit on the basis of the law of value. The immense advance in economic science made by Marx consists in the fact that he conducts his analysis from the standpoint of mass economic phenomena, of the social economy as a whole, and not from the standpoint of individual cases or of the external, superficial aspects of competition, to which vulgar political economy and the modern "theory of marginal utility" are frequently limited. Marx first analyzes the origin of surplus value, and then goes on to consider its division into profit, interest, and ground rent. Profit is the ratio between the surplus value and the total capital invested in an undertaking. Capital with a "high organic composition" (i.e., with a preponderance of constant capital over variable capital exceeding the social average) yields a lower than average rate of profit; capital with a "low organic composition" yields a higher than average rate of profit. The competition of capitals, and the freedom with which they transfer from one branch to another equate the rate of profit to the average in both cases. The sum-total of the values of all the commodities in a given society coincides with the sum-total of prices of the commodities; but, owing to competition, in individual undertakings and branches of production commodities are sold not at their values but at the prices of production (or production prices), which are equal to the expended capital plus the average profit.

In this way the well-known and indisputable fact of the divergence between prices and values and of the equalization of profits is fully explained by Marx on the basis of the law of value; for the sum-total of values of all commodities coincides with the sum-total of prices. However, the equation of (social) value to (individual) prices does not take place simply and directly, but in a very complex way. It is quite natural that in a society of separate producers of commodities, who are united only by the market, law can reveal itself only as an average, social, mass law, when individual deviations to one side or the other mutually compensate one another.

An increase in the productivity of labour implies a more rapid growth of constant capital as compared with variable capital. And since surplus value is a function of variable capital alone, it is obvious that the rate of profit (the ratio of surplus value to the whole capitai; and not to its variable part alone) tends to fall. Marx makes a detailed analysis of this tendency and of a number of circumstances that conceal or counteract it. Without pausing to give an account of the extremely interesting sections of the third volume of Capital devoted to usurer's capital, commercial capital and money capital, we pass to the most important section, the theory of ground rent. Owing to the fact that the land area is limited and, in capitalist countries, is all occupied by individual private owners, the price of production of agricultural products is determined by the cost of production not on average soil, but on the worst soil, not under average conditions, but under the worst conditions of delivery of produce to the market. The difference between this price and the price of production on better soil (or under better conditions) constitutes differential rent. Analyzing this in detail, and showing how it arises out of the difference in fertility of different plots of land and the difference in the amount of capital invested in land, Marx fully exposed (see also Theories of Surplus Value, in which the criticism of Rodbertus deserves particular attention) the error of Ricardo, who considered that differential rent is derived only when there is a successive transition from better land to worse. On the contrary, there may be inverse transitions, land may pass from one category into others (owing to advances in agricultural technique, the growth of towns, and so on), and the notorious "law of diminishing returns" is a profound error which charges nature with the defects, limitations and contradictions of captalism. Further, the equalization of profit in all branches of industry and national economy in general presupposes complete freedom of competition and the free flow of capital from one branch to another. But the private ownership of land creates monopoly, which hinders this free flow. Owing to this monopoly, the products of agriculture, which is distinguished by a lower organic composition of capital, and, consequently, by an

individually higher rate of profit, do not participate in the entirely free process of equalization of the rate of profit; the landowner, being a monopolist, can keep the price above the average, and this monopoly price engenders absolute rent. Differential rent cannot be done away with under capitalism, but absolute rent can -- for instance, by the natlonalization of the land, by making it the property of the state. Making the land the property of the state would undermine the monopoly of private landowners, and would lead to a more systematic and complete application of freedom of competition in the domain of agriculture. And, therefore, Marx points out, in the course of history bourgeois radicals have again and again advanced this progressive bourgeois demand for the nationalization of the land, which, however, frightens away the majority of the bourgeoisie, because it too closely "touches" another monopoly, which is particularly important and "sensitive" in our day -- the monopoly of the means of production in general. (Marx gives a remarkably popular, concise, and clear exposition of his theory of the average rate of profit on capital and of absolute ground rent in a letter to Engels, dated August 2, 1862. See Briefwechsel, Vol. III, pp. 77-81; also the letter of August 9, 1862, ibid., pp. 86-87.[3]) For the history of ground rent it is also important to note Marx's analysis showing how labour rent (when the peasant creates surplus product by labouring on the lord's land) is transformed into rent in produce or in kind (when the peasant creates surplus product on his own land and cedes it to the lord due to "non-economic constraint"), then into money rent (which is rent in kind transformed into money, the quitrent of old Russia, due to the development of commodity production), and finally into capitalist rent, when the peasant is replaced by the agricuItural entrepreneur, who cultivates the soil with the help of wage labour. In connection with this analysis of the "genesis of capitalist ground rent," note should be made of a number of penetrating ideas (especially important for backward countries like Russia) expressed by Marx on the evolution of capitalism in agriculture. "The transformation of rent in kind into money rent is not only necessarily accompanied, but even anticipated by the formation of a class of propertyless day labourers, who hire themselves out for wages. During the period of their rise, when this new class appears but sporadically, the custom necessarily develops among the better-situated tributary farmers of exploiting agricultural labourers for their own account, just as the wealthier serfs in feudal times used to employ serfs for their own benefit. In this way they gradually acquire the ability to accumulate a certain amount of wealth and to transform themselves even into future capitalists. The old self-employing possessors of the land thus give rise among themselves to a nursery for capitalist tenants, whose development is conditioned upon the general development of capitalist production outside of the rural districts." (Capital, Vol. III, p. 332.) "The expropriation and eviction of a part of the agricultural population not only set free for industrial capital, the labourers, their means of subsistence, and material for labour; it also created the home market." (Capital, Vol. I, p. 778.) The impoverishment and ruin of the agricultural population lead, in their turn, to the formation of a reserve army of labour for capital. In every capitalist country "part of the agricultural population is therefore constantly on the point of passing over into an urban or manufacturing proletariat. . . . (Manufacture is used here in the sense of all non-agricultural industries.) This source of relative surplus population is thus constantly flowing. . . . The agricultural labourer is therefore reduced to the minimum of wages, and always stands with one foot already in the swamp of pauperism." (Capital, Vol. I, p. 668.) The private ownership of the peasant in the land he tills constitutes the basis of small-scale production and the condition for its prospering and attaining a classical form. But such small-scale production is compatible only with a narrow and primitive framework of production and society. Under capitalism the "exploitation of the peasants differs only in form from the exploitation of the industrial proletariat. The exploiter is the same: capital. The individual capitalists exploit the individual peasants through mortgages and usury; the capitalist class exploits the peasant class through the state taxes." (The Class Struggles in France.) "The small holding of the peasant is now only the pretext that allows the capitalist to draw profits, interest and rent from the soil, while leaving it to the tiller of the soil himself to see how he can extract his wages." (The Eighteenth Brumaire.) As a rule the peasant cedes to capitalist society, i.e., to the capitalist class, even a part of the wages, sinking "to the level of the Irish tenant farmer -- all under the pretence of being a private proprietor." (The Class Struggles in France.) What is "one of the causes which keeps the price of cereals lower in countries with a predominance of small peasant land proprietorship than in countries with a capitalist mode of production"? (Capital, Vol. III, p. 340.) It is that the peasant cedes to society (i.e., to the capitalist class) part of his surplus product without an equivalent. "This lower price (of cereals and other agricultural produce) is consequently a result of the poverty of the producers and by no means of the productivity of their labour." (Capital. Vol. III, p. 340.) The small-holding system, which is the normal form of small-scale production, deteriorates, collapses, perishes under capitalism. "Proprietorship of land parcels excludes by its very nature the development of the social productive forces of labour, social forms of labour, social concentration of capital, large-scale cattle raising, and a progressive application of science. Usury and a taxation system must impoverish it everywhere. The expenditure of capital in the price of the land withdraws this capital from cultivation. An infinite dissipation of means of production and an isolation of the producers themselves go with it." (Co-operative societies, i.e., associations of small peasants, while playing an extremely progressive bourgeois role, only weaken this tendency without eliminating it; nor must it be forgotten that these co-operative societies do much for the well-to-do peasants, and very little, almost nothing, for the mass of poor peasants; and then the associations themselves become exploiters of wage labour.) "Also an enormous waste of human energy. A progressive deterioration of the conditions of production and a raising of the price of means of production is a necessary law of small peasants' property." In agriculture, as in industry, capitalism transforms the process of production only at the price of the "martyrdom of the producer." "The dispersion of the rural labourers over larger areas breaks their power of resistance while concentration increases that of the town operatives. In modern agriculture, as in the urban industries, the increased productiveness and quantity of the labour set in motion are bought at the cost of laying waste and consuming by disease labour power itself. Moreover, all progress in capitalistic agriculture is a progress in the art, not only of robbing the labourer, but of robbing the soil. . . . Capitalist production,therefore, develops technology, and the combining together of various processes into a social whole, only by sapping the original sources of all wealth -- the soil and the labourer." (Capital, Vol. I, end of Chap. 15.)

SOCIALISM