Karl Marx's 
 
                        THE POVERTY OF PHILOSOPHY 
          Answer to the "Philosophy of Poverty" by M. Proudhon 
 
 
                                chapter 1 
                          A SCIENTIFIC DISCOVERY 
 
 
                2.  CONSTITUTED VALUE OR SYNTHETIC VALUE 
 
"Value (marketable value) is the corner-stone of the economic 
structure."  "Constituted" value is the corner-stone of the system of 
economic contradictions.  
 
What then is this "constituted value' which is all M. Proudhon has 
discovered in political economy? 
 
Once utility is admitted, labor is the source of all value.  The measure 
of labor is time.  The relative value of products is determined by the 
labor time required for their production.  Price is the monetary 
expression of the relative value of a product.  Finally, the the 
constituted value of a product is purely and simply the value which is 
constituted by the labor time incorporated in it.  
 
Just as Adam Smith discovered the division of labor, so he, M.  
Proudhon, claims to have discovered "constituted value".  This is not 
exactly "something unheard of", but then it must be admitted that there 
is nothing unheard of in ny discovery of economic science.  M.  
Proudhon, who appreciates to the full the importance of his own 
invention, seeks nevertheless to tone down the merit therefore "in order 
to reassure the reader to as his claims to originality, and to win over 
minds whose timidity renders them little favorable to new ideas".  But 
in apportioning the contribution made by each of his predecessors to the 
understanding of value, he is forced to confess openly that the largest 
portion, the lion's share, of the merit falls to himself.  
 
     "The synthetic idea of value had been vaguely perceived by 
     Adam Smith....  But with Adam Smith the idea of value was  
     entirely intuitive.  Now, society does not change its  
     habits merely on the strength of intuitions: its decisions 
     are made only on the authority of facts.  The antinomy had 
     to be stated more palpably and more clearly: J.B. Say was 
     its chief interpreter." 
 
                                                          [I 66] 
 
 
Here, in a nutshell, is the history of the discovery of synthetic value: 
Adam Smith -- vague intuition; J. B. Say -- antinomy; M.  Proudhon -- 
constituting and "constituted" truth.  And let there be no mistake about 
it: all the other economists, from Say to Proudhon, have merely been 
trudging along in the rut of antimony.  
 
     "It is incredible that for the last 40 years so many men of 
     sense should have fumed and fretted at such a simple idea.   
     But no, values are compared without there being any point  
     of comparison between them and with no unit of measure- 
     ments; this, rather than embrace the revolutionary theory 
     of equality, is what the economists of the 19th century are 
     resolved to uphold against all comers.  What will posterity  
     say about it?" 
 
                                                   {Vol.I, p.68) 
 
 
Posterity, so abruptly invoked, will begin by getting muddled over the 
chronology.  It is bound to ask itself: are not Ricardo and his school 
economists of the 19th century? Ricardo's system, putting as a principle 
that "the relative value of commodities corresponds exclusively to their 
production", dates from 1817.  Ricardo is the head of a whole school 
dominant in England since the Restoration.  [The period in question 
begins after the termination of the Napoleonic wars and restoration of 
the Bourbon dynasty in France in 1815.]  The Ricardian doctrine 
summarizes severely, remorselessly, the whole of the English 
bourgeoisie.  "What will posterity say about it?"  It will not say that 
M. Proudhon did not know Ricardo, for he talks about him, he talks at 
length about him, he keeps coming back to him, and concludes by calling 
his system "trash".  If ever posterity does interfere, it will say 
perhaps that M. Proudhon, afraid of offending his readers' Anglophobia, 
preferred to make himself the responsible editor of Ricardo's ideas.  In 
any case, it will think it very naive that M. Proudhon should give as a 
"revolutionary theory of the future" what Ricardo expounded 
scientifically as the theory of present-day society, of bourgeois 
society, and that he should thus take for the solution of the antinomy 
between utility and exchange value what Ricardo and his school presented 
long before him as the scientific formula of one single side of this 
antinomy, that of exchange value.  But let us leave posterity alone once 
and for all, and confront M. Proudhon with his predecessor Ricardo.  
Here are some extracts from this author which summarize his doctrine on 
value: 
 
     "Utility then in not the measure of exchangeable value,  
     although it is absolutely essential to it." 
 
                          (Vol.I, p.3, _Principles de l'economie  
                           politique, etc._, translated from the  
                         English by F.S. Constancio, Paris 1835) 
 
 
     "Possessing utility, commodities derive their exchangeable  
     value from two sources: from their scarcity, and from the  
     quantity of labor required to obtain theM. There are some 
     commodities, the value of which is determined by their  
     scarcity alone.  No labor can increase the quantity of such 
     goods, and therefore their value cannot be lowered by an  
     increased supply.  Some rare statues and pictures, scarce  
     books...  are all of this description.  Their value...   
     varies with the varying wealth and inclinations of those  
     who are desirous to possess them." 
 
                                      (Vol.I, pp.4 and 5, l. c.) 
 
 
     "These commodities, however, form a very small part of the  
     mass of commodities daily exchanged in the market.  By far  
     the greatest part of these goods which are the objects of  
     desire, are procured by labor; and they may be multiplied,  
     not in one country alone, but in many, almost without any 
     assignable limit, if we are disposed to bestow the labor  
     necessary to obtain them." 
 
                                            (Vol.I, pp.5, l. c.) 
 
 
     "In speaking then of commodities, of their exchangeable  
     value, and of the laws which regulate their relative  
     prices, we mean always such commodities only as can be  
     increased in quantity by the exertion of human industry,  
     and on the production of which competition operates without 
     restraint." 
 
                                                   (Vol.I, pp.5) 
 
 
Ricardo quotes Adam Smith, who, according to him, "so accurately defined 
the original source of exchangeable value" (Adam Smith, _Wealth of 
Nations_, Book I, Chap 5 [Full reference: _An Inquiry into the Nature 
and Causes of the Wealth of Nations_, first edition appearing in London, 
1776]), and he adds: 
 
     "That this (i.e., labor time) is really the foundation of  
     the exchangeable value of all things, excepting those which  
     cannot be increased by human industry, is a doctrine of the  
     utmost importance in political economy; for from no source  
     do so many errors, and so much difference of opinion in  
     that science proceed, as from the vague ideas which are  
     attached to the word value." 
 
                                                    (Vol.I, p.8) 
 
     "If the quantity of labor realized in commodities regulate  
     their exchangeable value, every increase of the quantity of  
     labor must augment the value of that commodity on which it  
     is exercised, as every diminution must lower it." 
 
                                                    (Vol.I, p.8) 
 
 
Ricardo goes on to reproach Smith: 
 
  1. With having "himself erected another standard measure of value" 
     than labor.  "Sometimes he speaks of corn, at other times of labor, 
     as a standard measure; not the quantity of labor bestowed on the 
     production of any object, but the quantity it can command in the 
     market." (Vol.I, pp.9 and 10) 
 
  2. With having "admitted the principle without qualification and at 
     the same time restricted its application to that early and rude 
     state of society, which precedes both the accumulation of stock and 
     the appropriation of land". (Vol.I, p.21) 
 
Ricardo sets out to prove that the ownership of land, that is, ground 
rent, cannot change the relative value of commodities and that the 
accumulation of capital has only a passing and fluctuation effect on the 
relative values determined by the comparative quantity of labor expended 
on their production.  In support of this thesis, he gives his famous 
theory of ground rent, analyses capital, and ultimately finds nothing in 
it but accumulated labor.  Then he develops a whole theory of wages and 
profits, and proves that wages and profits rise and fall in inverse 
ratio to each other, without affecting the relative value of the 
product.  He does not neglect the influence that the accumulation of 
capital and its different aspects (fixed capital and circulating 
capital), as also the rate of wages, can have on the proportional value 
of products.  In fact, they are the chief problems with which Ricardo is 
concerned.  
 
     "Economy in the use of labor never fails to reduce the  
     relative value [*] of a commodity, whether the saving be in  
     the labor necessary to the manufacture of the commodity it- 
     self, or in that necessary to the formation of the capital,  
     by the aid of which it is produced." 
 
                                                   (Vol.I, p.28) 
 
* [ NOTE by Engels to 1885 German edition: Ricardo, as is well known, 
  determines the value of a commodity by the quantity of labor necessary 
  for its production.  Owing, however, to the prevailing form of 
  exchange in every mode of production based on production of 
  commodities, including therefore the capitalist mode of production, 
  this value is not expressed directly in quantities of labor but in 
  quantities of some other commodity.  The value of a commodity 
  expressed in a quantity of some other commodity (whether money or not) 
  is termed by Ricardo its relative value. ] 
 
     "Under such circumstance the value of the deer, the produce  
     of the hunter's day's labor, would be exactly equal to the  
     value of the fish, the produce of the fisherman's day's  
     labor.  The comparative value of the fish and the game  
     would be entirely regulated by the quantity of labor real- 
     ized in each, whatever might be the quantity of production,  
     or however high or low general wages or profits might be." 
 
                                                   (Vol.I, p.28) 
 
     "In making labor the foundation of the value of  
     commodities and the comparative quantity of labor which is 
     necessary to their production, the rule which determines  
     the respective quantities of goods which shall be given in 
     exchange for each other, we must not be supposed to deny  
     the accidental and temporary deviations of the actual or  
     market price of commodities from this, their primary and  
     natural price." 
 
                                           (Vol.I, p.105, l. c.) 
 
     "It is the cost of production which must ultimately  
     regulate the price of commodities, and not, as has been  
     often said, the proportion between supply and demand." 
 
                                                 (Vol.II, p.253) 
 
 
Lord Lauderdale had developed the variations of exchange value according 
to the law of supply and demand, or of scarcity and abundance relatively 
to demand.  In his opinion the value of a thing can increase when its 
quantity decreases or when the demand for it increases; it can decrease 
owing to an increase of its quantity or owing to the decrease in demand.  
Thus the value of a thing can change through eight different causes, 
namely, four causes that apply to money or to any other commodity which 
serves as a measure of its value.  Here is Ricardo's refutation: 
 
     "Commodities which are monopolized, either by an individ- 
     ual, or by a company, vary according to the law which Lord 
     Laudersdale has laid down: they fall in proportion as the  
     sellers augment their quantity, and rise in proportion to  
     the eagerness of the buyers to purchase them; their price  
     has no necessary connexion with their natural value; but  
     the prices of commodities, which are subject to competi- 
     tion, and whose quantity may be increased in any moderate  
     degree, will ultimately depend, not on the state of demand  
     and supply, but on the increased or diminished cost of  
     their production." 
 
                                                 (Vol.II, p.259) 
 
 
We shall leave it to the reader to make the comparison between this 
simple, clear, precise language of Ricardo's and M. Proudhon's 
rhetorical attempts to arrive at the determination of relative value by 
labor time.  
 
Ricardo shows us the real movement of bourgeois production, which 
constitutes value.  M. Proudhon, leaving the real movement out of 
account, "fumes and frets" in order to invent new processes and to 
achieve the reorganization of the world on a would-be new formula, which 
formula is no more than the theoretical expression of the real movement 
which exists and which is so well described by Ricardo.  Ricardo takes 
his starting point from present-day society to demonstrate to us how it 
constitutes value -- M. Proudhon takes constituted value as his 
starting point to construct a new social world with the aid of this 
value.  For him, M. Proudhon, constituted value must move around and 
become once more the constituting factor in a world already completely 
constituted according to this mode of evaluation.  The determination of 
value by labor time, is, for Ricardo, the law of exchange value; for M.  
Proudhon.  it is the synthesis of use value and exchange value.  
Ricardo's theory of values is the scientific interpretation of actual 
economic life; M. Proudhon's theory of values is the utopian 
interpretation of Ricardo's theory.  Ricardo establishes the truth of 
his formula by deriving it from all economic relations, and by 
explaining in this way all phenomena, even those like ground rent, 
accumulation of capital and the relation of wages to profits, which at 
first sight seems to contradict it; it is precisely that which makes his 
doctrine a scientific system: M. Proudhon, who has rediscovered this 
formula of Ricardo's by means of quite arbitrary hypotheses, is forced 
thereafter to seek out isolated economic facts which he twists and 
falsifies to pass them off as examples, already existing applications, 
beginning of realization of his regenerating idea.  (See our S.3.  
APPLICATION OF CONSTITUTED VALUE) 
 
Now let us pass on to the conclusions M. Proudhon draws from value 
constituted (by labor time).  
 
  -- A certain quantity of labor is equivalent to the product created by 
     this same quantity of labor. 
 
  -- Each day's labor is worth as much as another day's  labor; that is 
     to say, if the quantities are equal, one man's labor is worth as 
     much as another man's labor: there is no qualitative difference.  
     With the same quantity of work, one man's product can be given in 
     exchange for another man's product.  All men are wage workers 
     getting equal pay for an equal time of work.  Perfect equality 
     rules the exchanges.  
 
Are these conclusions the strict, natural consequences of value 
"constituted" or determined by labor time? 
 
If the relative value of a commodity is determined by the quantity of 
labor required to produce it, it follows naturally that the relative 
value of labor, or wages, is likewise determined by the quantity of 
labor needed to produce the wages.  Wages, that is, the relative value 
or the price of labor, are thus determined by the labor time needed to 
produce all that is necessary for the maintenance of the worker.  
 
     "Diminish the cost of production of hats, and their price  
     will ultimately fall to their own new natural price,  
     although the demand should be doubled, trebled, or quad- 
     rupled.  Diminish the cost of subsistence of men, by dimin- 
     ishing the natural price of food and clothing, by which  
     life is sustained, and wages will ultimately fall, notwith- 
     standing the demand for laborers may very greatly  
     increase." 
 
                                        (Ricardo, Vol.II, p.253) 
 
 
Doubtless, Ricardo's language is as cynical as can be.  To put the cost 
of manufacture of hats and the cost of maintenance of men on the same 
plane is to turn men into hats.  But do not make an outcry at the 
cynicism of it.  The cynicism is in the facts and not in the words which 
express the facts.  French writers like MM. Droz, Blanqui, Rossi and 
others take an innocent satisfaction in proving their superiority over 
the English economists, by seeking to observe the etiquette of a 
"humanitarian" phraseology; if they reproach Ricardo and his school for 
their cynical language, it is because it annoys them to see economic 
relations exposed in all their crudity, to see the mysteries of the 
bourgeoisie unmasked.  
 
To sum up: Labor, being itself a commodity, is measured as such by the 
labor time needed to produce the labor-commodity.  And what is needed to 
produce this labor-commodity? Just enough labor time to produce the 
objects indispensable to the constant maintenance of labor, that is, to 
keep the worker alive and in a condition to propagate his race.  The 
natural price of labor is no other than the wage minimum.* If the 
current rate of wages rises above this natural price, it is precisely 
because the law of value put as a principle by M. Proudhon happens to 
be counterbalanced by the consequences of the varying relations of 
supply and demand.  But the minimum wage is nonetheless the centre 
towards which the current rates of wages gravitate.  
 
* [ NOTE by Engels to the 1885 German edition: The thesis that the 
  "natural", i.e., normal, price of labor power coincides with the wage 
  minimum, i.e., with the equivalent in value of the means of 
  subsistence absolutely indispensable for the life and procreation of 
  the worker, was first put forward by me in _Sketches for a Critique of 
  Political Economy_ (Deutsch-Franzosische Jahrbucher [Franco-German 
  Annual], Paris 1844) and in _The Condition of the Working Class in 
  England in 1844_.  As seen here, Marx at that time excepted the 
  thesis.  Lassalle took it over from both of us.  Although, however, in 
  reality wages have a constant tendency to approach the minimum, the 
  above thesis is nevertheless incorrect.  The fact that labor is 
  regularly and on the average paid below its value cannot alter its 
  value.  In _Capital_, Marx has put the above thesis right (Section on 
  Buying and Selling Labor of Power) and also (Chapter 25: The General 
  Law of Capitalist Accumulation) analyzed the circumstances which 
  permit capitalist production to depress the price of labor power more 
  and more below its value. ] 
 
Thus relative value, measured by labor time, is inevitably the formula 
of the present enslavement of the worker, instead of being, as M.  
Proudhon would have it, the "revolutionary theory" of the emancipation 
of the proletariat.  
 
Let us now see to what extent the application of labor time as a measure 
of value is incompatible with the existing class antagonism and the 
unequal distribution of the product between the immediate worker and the 
owner of accumulated labor.  
 
Let us take a particular product: broadcloth, which has required the 
same quantity of labor as the linen.  
 
If there is an exchange of these two products, there is an exchange of 
equal quantities of labor.  In exchanging these equal quantities of 
labor time, one does not change the reciprocal position of the 
producers, any more than one changes anything in the situation of the 
workers and manufacturers among themselves.  To say that this exchange 
of products measured by labor time results in an equality of payment for 
all the producers is to suppose that equality of participation in the 
product existed before the exchange.  When the exchange of broadcloth 
for linen has been accomplished, the producers of broadcloth will share 
in the linen in a proportion equal to that in which they previously 
shared in the broadcloth.  
 
M. Proudhon's illusion is brought about by his taking for a consequence 
what could be at most but a gratuitous supposition.  
 
Let us go further.  
 
Does labor time, as the measure of value, suppose at least that the days 
are equivalent, and that one man's day is worth as much as another's? 
No.  
 
Let us suppose for a moment that a jeweller's day is equivalent to three 
days of a weaver; the fact remains that any change in the value of 
jewels relative to that of woven materials, unless it be the transitory 
result of the fluctuations of supply and demand, must have as its cause 
a reduction or an increase in the labor time expended in the production 
of one or the other.  If three working days of different workers be 
related to one another in the ratio of 1:2:3, then every change in the 
relative value of their products will be a change in this same 
proportion of 1:2:3.  Thus values can be measured by labor time, in 
spite of the inequality of value of different working days; but to apply 
such a measure we must have a comparative scale of the different working 
days: it is competition that sets up this scale.  
 
Is your hour's labor worth mine? That is a question which is decided by 
competition.  
 
Competition, according to an American economist, determines how many 
days of simple labor are contained in one day's compound labor.  Does 
not this reduction of days of compound labor to days of simple labor 
suppose that simple labor is itself taken as a measure of value?  If the 
mere quantity of labor functions as a measure of value regardless of 
quality, it presupposes that simple labor has become the pivot of 
industry.  It presupposes that labor has been equalized by the 
subordination of man to the machine or by the extreme division of labor; 
that men are effaced by their labor; that the pendulum of the clock has 
become as accurate a measure of the relative activity of two workers as 
it is of the speed of two locomotives.  Therefore, we should not say 
that one man's hour is worth another man's hour, but rather that one man 
during an hour is worth just as much as another man during an hour.  
Time is everything, man is nothing; he is, at the most, time's carcase.  
Quality no longer matters.  Quantity alone decides everything; hour for 
hour, day for day; but this equalizing of labor is not by any means the 
work of M. Proudhon's eternal justice; it is purely and simply a fact 
of modern industry.  
 
In the automatic workshop, one worker's labor is scarely distinguishable 
in any way from another worker's labor: workers can only be 
distinguished one from another by the length of time they take for their 
work.  Nevertheless, this quantitative difference becomes, from a 
certain point of view, qualitative, in that the time they take for their 
work depends partly on purely material causes, such as physical 
constitution, age and sex; partly on purely negative moral causes, such 
as patience, imperturbability, diligence.  In short, if there is a 
difference of quality in the labor of different workers, it is at most a 
quality of the last kind, which is far from being a distinctive 
speciality.  This is what the state of affairs in modern industry 
amounts to in the last analysis.  It is upon this equality, already 
realized in automatic labor, that M. Proudhon wields his 
smoothing-plane of "equalization", which he means to establish 
universally in "time to come"! 
 
All the "equalitarian" consequences which M. Proudhon deduces from 
Ricardo's doctrine are based on a fundamental error.  He confounds the 
value of commodities measured by the quantity of labor embodied in them 
with the value of commodities measured by "the value of labor".  If 
these two ways of measuring the value of commodities were equivalent, it 
could be said indifferently that the relative value of any commodity is 
measured by the quantity of labor embodied in it; or that it is measured 
by the quantity of labor it can buy; or again that it is measured by the 
quantity of labor which can acquire it.  But this is far from being so.  
The value of labor can no more serve as a measure of value than the 
value of any other commodity.  A few examples will suffice to explain 
still better what we have just stated.  
 
If a quarter of wheat cost two days' labor instead of one, it would have 
twice its original value; but it would not set in operation double the 
quantity of labor, because it would contain no more nutritive matter 
than before.  Thus the value of the corn, measured by the quantity of 
labor used to produce it, would have doubled; but measured either by the 
quantity of labor it can buy or the quantity of labor with which it can 
be bought, it would be far from having doubled.  On the other hand, if 
the same labor produced twice as many clothes as before, their relative 
value would fall by half; but, nevertheless, this double quantity of 
clothing would not thereby be reduced to disposing over only half the 
quantity of labor, nor could the same labor command the double quantity 
of clothing; for half the clothes would still go on rendering the worker 
the same service as before.  
 
Thus it is going against economic facts to determine the relative value 
of commodities by the value of labor.  It is moving in a vicious circle, 
it is to determine relative value by a relative value which itself needs 
to be determined.  
 
It is beyond doubt that M. Proudhon confuses the two measures, measure 
by the labor time needed for the production of a commodity and measure 
by the value of the labor.  "Any man's labor," he says, "can buy the 
value it represents."  Thus, according to him, a certain quantity of 
labor embodied in a product is equivalent to the worker's payment, that 
is, to the value of labor.  It is the same reasoning that makes him 
confuse cost of production with wages.  
 
     "What are wages?  They are the cost price of corn, etc.,  
     the integral price of all things." 
 
Let us go still further. 
 
     "Wages are the proportionality of the elements which  
     compose wealth." What are wages?  They are the value  
     of labor. 
 
Adam Smith takes as the measure of value, now the time of labor needed 
for the production of a commodity, now the value of labor.  Ricardo 
exposes this error by showing clearly the disparity of these two ways of 
measuring.  M. Proudhon goes one better than Adam Smith in error by 
identifying the two things which the latter had merely put in 
juxtaposition.  
 
It is in order to find the proper proposition in which workers should 
share in the products, or, in other words, to determine the relative 
value of labor, that M. Proudhon seeks a measure for the relative value 
of commodities.  To find out the measure relative value of commodities 
he can think of nothing better than to give as the equivalent of a 
certain quantity of labor the sum total of the products it has created, 
which is as good as supposing that the whole of society consists merely 
of workers who receive their own produce as wages.  In the second place, 
he takes for granted the equivalence of the working days of different 
workers.  In short, he seeks the measure of the relative value of 
commodities.  What admirable dialectics! 
 
     "Say and the economists after him have observed that labor  
     being itself subject to valuation, being a commodity like  
     any other commodity, it is moving in a vicious circle to  
     treat it as the principle and the determining cause of  
     value.  In so doing, these economists, if they will allow  
     me to say so, show a prodigious carelessness.  Labor is 
     said to have value not as a commodity itself, but in view  
     of the values which it is supposed potentially to contain.   
     The value of labor is a figurative expression, an anticipa- 
     tion of the cause for the effect.  It is a fiction of the  
     same stamp as the productivity of capital.  Labor produces,  
     capital has value....   
 
     By a sort of ellipsis one speaks of the value of labor....   
 
     Labor like liberty...  is a thing vague and indeterminate  
     by nature, but defined qualitatively by its object, that is 
     to say, it becomes a reality by the product." 
 
                                                          [I 61] 
 
     "But is there any need to dwell on this?  The moment the  
     economist (read M. Proudhon) changes the name of things,  
     vera rerum vocabula [the true name of things], he is implic- 
     itly confessing his impotence and proclaiming himself not  
     privy to the cause." 
 
                                              (Proudhon, I, 188) 
 
 
We have seen that M. Proudhon makes the value of labor the "determining 
cause" of the value of products to such an extent that for him wages, 
the official name for the "value of labor", form the integral price of 
all things: that is why Say's objection troubles hiM. In labor as a 
commodity, which is a grim reality, he sees nothing but a grammatical 
ellipsis.  Thus the whole of existing society, founded on labor as a 
commodity, is henceforth founded on a poetic licence, a figurative 
expression.  If society wants to "eliminate all the drawbacks" that 
assail it, well, let it eliminate all the ill-sounding terms, change the 
language; and to this end it has only to apply to the Academy for a new 
edition of its dictionary.  After all that we have just seen, it is easy 
for us to understand why M. Proudhon, in a work on political economy, 
has to enter upon long dissertations on etymology and other parts of 
grammar.  Thus he is still learnedly discussing the antiquated 
derivation of _servus_ from _servare_.  These philological dissertations 
have a deep meaning, an esoteric meaning -- they form an essential part 
of M. Proudhon's argument.  
 
Labor, * inasmuch as it is bought and sold, is a commodity like any 
other commodity, and has, in consequence, an exchange value.  But the 
value of labor, or labor as a commodity, produces as little as the value 
of wheat, or wheat as a commodity, serves as food.  
 
  [ NOTE: In the copy Marx presented to N. Utina in 1876 after this 
    word "labor" Marx adds "labor power"; this addition is found in the 
    1896 French edition. ] 
 
Labor "is worth" more or less, according to whether food commodities are 
more or less dear, whether the supply and demand of hands exist to such 
or such a degree, etc., etc.  
 
Labor is not a "vague thing"; it is always some definite labor, it is 
never labor in general that is bought and sold.  It is not only labor 
that is qualitatively defined by the object; but also the object which 
is determined by the specific quality of labor.  
 
Labor, in so far as it is bought and sold, is itself a commodity.  Why 
is it bought?  "Because of the values it is supposed potentially to 
contain." But if a certain thing is said to be a commodity, there is no 
longer any question as to the reason why it is bought, that is, as to 
the utility to be derived from it, the application to be made of it.  It 
is a commodity as an object of traffic.  All M. Proudhon's arguments 
are limited to this: labor is not bought as an immediate object of 
consumption.  No, it is bought as an instrument of production, as a 
machine would be bought.  As a commodity, labor has no value and does 
not produce.  M. Proudhon might just as well have said that there is no 
such thing as a commodity, since every commodity is obtained merely for 
some utilitarian purpose, and never as a commodity in itself.  
 
In measuring the value of commodities by labor, M. Proudhon vaguely 
glimpses the impossibility of excluding labor from this same measure, in 
so far as labor has a value, as labor is a commodity.  He has a 
misgiving that it is turning the wage minimum into the natural and 
normal price of immediate labor, that is is accepting the existing state 
of society.  So, to get away from this fatal consequence, he faces about 
and asserts that labor is not a commodity, that it cannot have value.  
He forgets that he himself has taken the value of labor as a measure, he 
forgets that his whole system rests on labor as a commodity, on labor 
which is bartered, bought, sold, exchanged for produce, etc., on labor, 
in fact, which is an immediate source of income for the worker.  He 
forgets everything.  
 
To save his system, he consents to sacrifice its basis.  
 
             Et propter vitam vivendi perdere causas!  
 
We now come to a new definition of "constituted value".  
 
     "Value is the proportional relation of the products which 
     constitute wealth." 
 
Let us note in the first place that the single phrase "relative or 
exchange value" implies the idea of some relation in which products are 
exchanged reciprocally.  By giving the name "proportional relation" to 
this relation, no change is made in the relative value, except in the 
expression.  Neither the depreciation nor the enhancement of the value 
of a product destroys its quality of being in some "proportional 
relation" with the other products which constitute wealth.  
 
Why then this new term, which introduces no new idea? 
 
"Proportional relation" suggests many other economic relations, such as 
proportionality in production, the true proportion between supply and 
demand, etc., and M. Proudhon is thinking of all that when he 
formulates this didactic paraphrase of marketable value.  
 
In the first place, the relative value of products being determined by 
the comparative amount of labor used in the production of each of them, 
proportional relations, applied to this special case, stand for the 
respective quota of products which can be manufactured in a given time, 
and which in consequence are given in exchange for one another.  
 
Let us see what advantage M. Proudhon draws from this proportional 
relation.  
 
Everyone knows that when supply and demand are evenly balanced, the 
relative value of any product is accurately determined by the quantity 
of labor embodied in it, that is to say, that this relative value 
expresses the proportional relation precisely in the sense we have just 
attached to it.  M. Proudhon inverts the order of thing.  Begin, he 
says, by measuring the relative value of a product by the quantity of 
labor embodied in it, and supply and demand will infallibly balance one 
another.  Production will correspond to consumption, the product will 
always be exchangeable.  Its current price will express exactly its true 
value.  Instead of saying like everyone else: when the weather is fine, 
a lot of people are to be seen going out for a walk.  M. Proudhon makes 
his people go out for a walk in order to be able to ensure them fine 
weather.  
 
What M. Proudhon gives as the consequence of marketable value 
determined a priori by labor time could be justified only by a law 
couched more or less in the following terms: 
 
Products will in future be exchanged in the exact ratio of the labor 
time they have cost.  Whatever may be the proportion of supply to 
demand, the exchange of commodities will always be made as if they had 
been produced proportionately to the demand.  Let M. Proudhon take it 
upon himself to formulate and lay down such a law, and we shall relieve 
him of the necessity of giving proofs.  If, on the other hand, he 
insists on justifying his theory, not as a legislator, but as an 
economist, he will have to prove that the time needed to create a 
commodity indicates exactly the degree of its utility and marks its 
proportional relation to the demand, and in consequence, to the total 
amount of wealth.  In this case, if a product is sold at a price equal 
to its cost of production, supply and demand will always be evenly 
balanced; for the cost of production is supposed to express the true 
relation between supply and demand.  
 
Actually, M. Proudhon sets out to prove that labor time needed to 
create a product indicates its true proportional relation to needs, so 
that the things whose production costs the least time are the most 
immediately useful, and so on, step by step.  The mere production of a 
luxury object proves at once, according to this doctrine, that society 
has spare time which allows it to satisfy a need for luxury.  
 
M. Proudhon finds the very proof of his thesis in the observation that 
the most useful things cost the least time to produce, that society 
always begins with the easiest industries and successively "starts on 
the production of objects which cost more labor time and which 
correspond to a higher order of needs." 
 
M. Proudhon borrows from M. Dunoyer the example of extractive industry 
-- fruit-gathering, pasturage, hunting, fishing, etc.  -- which is the 
simplest, the least costly of industries, and the one by which man began 
"the first day of his second creation".  The first day of his first 
creation is recorded in Genesis, which shows God as the world's first 
manufacturer.  
 
Things happen in quite a different way from what M. Proudhon imagines.  
The very moment civilization begins, production begins to be founded on 
the antagonism of orders, estates, classes, and finally on the 
antagonism of accumulated labor and actual labor.  No antagonism, no 
progress.  This is the law that civilization has followed up to our 
days.  Till now the productive forces have been developed by virtue of 
this system of class antagonisms.  To say now that, because all the 
needs of all the workers were satisfied, men could devote themselves to 
the creation of products of a higher order -- to more complicated 
industries -- would be to leave class antagonism out of account and turn 
all historical development upside down.  It is like saying that because, 
under the Roman emperors, muraena were fattened in artificial fishponds, 
therefore there was enough to feed abundantly the whole Roman 
population.  Actually, on the contrary, the Roman people had not enough 
to buy bread with, while the Roman aristocrats had slaves enough to 
throw as fodder to the muraena.  
 
The price of food has almost continuously risen, while the price of 
manufactured and luxury goods has almost continuously fallen.  Take the 
agricultural industry itself; the most indispensable objects, like corn, 
meat, etc., rise in price, while cotton, sugar, coffee, etc., fall in a 
surprising proportion.  And even among comestibles proper, the luxury 
articles, like artichokes, asparagus, etc., are today relatively cheaper 
than foodstuffs of prime necessity.  In our age, the superfluous is 
easier to produce than the necessary.  Finally, at different historical 
epochs, the reciprocal price relations are not only different, but 
opposed to one another.  In the whole of the Middle Ages, agricultural 
products were relatively cheaper than manufactured products; in modern 
times they are in inverse ratio.  Does this mean that the utility of 
agricultural products has diminished since the Middle Ages? 
 
The use of products is determined by the social conditions in which the 
consumers find themselves placed, and these conditions themselves are 
based on class antagonism.  
 
Cotton, potatoes and spirits are objects of the most common use.  
Potatoes have engendered scrofula; cotton has to a great extent driven 
out flax and wool, although wool and flax are, in many cases, of greater 
utility, if only from the point of view of hygiene; finally, spirits 
have got the upper hand of beer and wine, although spirits used as an 
alimentary substance are everywhere recognized to be poison.  For a 
whole century, governments struggled in vain against the European opium; 
economics prevailed, and dictated its orders to consumption.  
 
Why are cotton, potatoes and spirits the pivots of bourgeois society? 
Because the least amount of labor is needed to produce them, and, 
consequently, they have the lowest price.  Why does the minimum price 
determine the maximum consumption?  Is it by any chance because of the 
absolute utility of these objects, their intrinsic utility, their 
utility insomuch as they correspond, in the most useful manner, in the 
needs of the worker as a man, and not to the man as a worker?  No, it is 
because in a society founded on poverty the poorest products have the 
fatal prerogative of being used by the greatest number.  
 
To say now that because the least costly things are in greater use, they 
must be of greater utility, is saying that the wide use of spirits, 
because of their low cost of production, is the most conclusive proof of 
their utility; it is telling the proletarian that potatoes are more 
wholesome for him than meat; it is accepting the present state of 
affairs; it is, in short, making an apology, with M. Proudhon, for a 
society without understanding it.  
 
In a future society, in which class antagonism will have ceased, in 
which there will no longer be any classes, use will no longer be 
determined by the minimum time of production; but the time of production 
devoted to different articles will be determined by the degree of their 
social utility.  
 
To return to M. Proudhon's thesis: the moment the labor time necessary 
for the production of an article ceases to be the expression of its 
degree of utility, the exchange value of this same article, determined 
beforehand by the labor time embodied in it, becomes quite usable to 
regulate the true relation of supply to demand, that is, the 
proportional relation in the sense M. Proudhon at the moment attributes 
to it.  
 
It is not the sale of a given product at the price of its cost of 
production that constitutes the "proportional relation" of supply to 
demand, or the proportional quota of this product relatively to the sum 
total of production; it is the variations in supply and demand that show 
the producer what amount of a given commodity he must produce in order 
to receive in exchange at least the cost of production.  And as these 
variations are continually occurring, there is also a continual movement 
of withdrawl and application of capital in the different branches of 
industry.  
 
     "It is only in consequence of such variations that capital 
     is apportioned precisely, in the requisite abundance and no 
     more, to the production of the different commodities which  
     happen to be in demand.  With the rise or fall of price,  
     profits are elevated above, or depressed below their gener- 
     al level, and capital is either encouraged to enter into,  
     or is warned to depart from, the particular employment in  
     which the variation has taken place." -- 
 
     "When we look at the markets of a large town, and observe  
     how regularly they are supplied both with home and foreign 
     commodities, in the quantity in which they are required,  
     under all the circumstances of varying demand, arising from 
     the caprice of taste, or a change in the amount of popula- 
     tion, without often producing either the effects of a glut  
     from a too abundant supply, or an enormously high price  
     from the supply being unequal to the demand, we must con- 
     fess that the principle which apportions capital to each  
     trade in the precise amount that is required, is more  
     active than is generally supposed." 
 
                                (Ricardo, Vol.I, pp.105 and 108) 
 
 
If M. Proudhon admits that the value of products is determined by labor 
time, he should equally admit that it is the fluctuating movement alone 
that in society founded on individual exchanges make labor the measure 
of value.  There is no ready-made constituted "proportional relation", 
but only a constituting movement.  
 
We have just seen in what sense it is correct to speak of "proportion" 
as of a consequence of value determined by labor time.  We shall see now 
how this measure by time, called by M. Proudhon the "law of 
proportion", becomes transformed into a law of _disproportion_.  
 
Every new invention that enables the production in one hour of that 
which has hitherto been produced in two hours depreciates all similar 
products on the market.  Competition forces the producer to sell the 
product of two hours as cheaply as the product of one hour.  Competition 
carries into effect the law according to which the relative value of a 
product is determined by the labor time needed to produce it.  Labor 
time serving as the measure of marketable value becomes in this way the 
law of the continual depreciation of labor.  We will say more.  There 
will be depreciation not only of the commodities brought into the 
market, but also of the instruments of production and of whole plants.  
This fact was already pointed out by Ricardo when he said: 
 
     "By constantly increasing the facility of production, we  
     constantly diminish the value of some of the commodities 
     before produced." 
 
                                                  (Vol.II, p.59) 
 
 
Sismondi goes further.  He sees in this "value constituted" by labor 
time, the source of all the contradictions of modern industry and 
commerce.  
 
     "Mercantile value," he says, "is always determined in the  
     long run by the quantity of labor needed to obtain the  
     thing evaluated: it is not what it has actually cost, but  
     what it would cost in the future with, perhaps, perfected  
     means; and this quantity, although difficult to evaluate,  
     is always faithfully established by competition....  
 
     "It is on this basis that the demand of the seller as well  
     as the supply of the buyer is reckoned.  The former will  
     perhaps declare that the thing has cost him 10 days' labor;  
     but if the latter realizes that it can henceforth be pro- 
     duced with eight days' labor, in the event of competition  
     proving this to the two contracting parties, the value will 
     be reduced, and the market price fixed at eight days only.   
     Of course, each of the parties believes that the thing is  
     useful, that it is desired, that without desire there would 
     be no sale; but the fixing of the price has nothing to do  
     with utility." 
 
                                 (_Etudes, etc._, Vol.II, p.267) 
 
 
It is important to emphasize the point that what determines value is not 
the time taken to produce a thing, but the minimum time it could 
possibly be produced in, and the minimum is ascertained by competition.  
Suppose for a moment that there is no more competition and consequently 
no longer any means to ascertain the minimum of labor necessary for the 
production of a commodity; what will happen? It will suffice to spend 
six hours' on the production of an object, in order to have the right, 
according to M. Proudhon, to demand in exchange six times as much as 
the one who has taken only one hour to produce the same object.  
 
Instead of a "proportional relation", we have a disproportional 
relation, at any rate if we insist on sticking to relations, good or 
bad.  
 
The continual depreciation of labor is only one side, one consequence of 
the evaluation of commodities by labor time.  The excessive raising of 
prices, overproduction and many other features of industrial anarchy 
have their explanation in this mode of evaluation.  
 
But does labor time used as a measure of value give rise at least to the 
proportional variety of products that so delights M. Proudhon? 
 
On the contrary, monopoly in all its monotony follows in its wake and 
invades the world of products, just as to everybody's knowledge monopoly 
invades the world of the instruments of production.  It is only in a few 
branches of industry, like the cotton industry, that very rapid progress 
can be made.  The natural consequence of this process is that the 
products of cotton manufacture, for instance, fall rapidly in price: but 
as the price of cotton goes down, the price of flax will be replaced by 
cotton.  In this way, flax has been driven out of almost the whole of 
North America.  And we have obtained, instead of the proportional 
variety of products, the dominance of cotton.  
 
What is left of this "proportional relation"? Nothing but the pious wish 
of an honest man who would like commodities to be produced in 
proportions which would permit of their being sold at an honest price.  
In all ages good-natured bourgeois and philanthropic economists have 
taken pleasure in expressing this innocent wish.  
 
Let us hear what old Boisguillebert says: 
 
     "The price of commodities," he says, "must always be pro- 
     portionate; for it is such mutual understanding alone that  
     can enable them to exist together so as to give themselves  
     to one another at any moment (here is M. Proudhon's  
     continual exchangeability) and reciprocally give birth to  
     one another....  
 
     "As wealth, then, is nothing but this continual intercourse  
     between man and man, craft and craft, etc., it is a fright- 
     ful blindness to go looking for the cause of misery else- 
     where than in the cessation of such traffic brought about  
     by a disturbance of proportion in prices." 
 
                    (_Dissertation sur la nature des richesses_, 
                                   Daire's ed. [pp.405 and 408]) 
 
             [Boisguillebert's work is quoted from the symposium 
             _Economistes-financiers du XVIII siecle_.  Prefaced  
           by a historical sketch on each author and accompanied 
          by commentaries and explanatory notes by Eugene Daire; 
                                                    Paris 1843.] 
 
 
Let us listen also to a modern economist: 
 
     "The great law as necessary to be affixed to production,  
     that is, the law of proportion, which alone can preserve  
     the continuity of value....  
 
     "The equivalent must be guaranteed.... 
 
     "All nations have attempted, at various periods of their  
     history, by instituting numerous commercial regulations and 
     restrictions, to effect, in some degree, the object here 
     explained....   
 
     But the natural and inherent selfishness of man...  has  
     urged him to break down all such regulations.  Proportion- 
     ate Production is the realization of the entire truth of  
     the Science of Social Economy." 
 
                (W. Atkinson, _Principles of Political Economy_,  
                                         London 1840, pp.170-95) 
 
 
_Fuit Troja_.  [Troy is no more.]  This true proportion between supply 
and demand, which is beginning once more to be the object of so many 
wishes, ceased long ago to exist.  It has passed into the stage of 
senility.  It was possible only at a time when the means of production 
were limited, when the movement of exchange took place within very 
restricted bounds.  With the birth of large-scale industry this true 
proportion had to come to an end, and production is inevitably compelled 
to pass in continuous succession through vicissitudes of prosperity, 
depression, crisis, stagnation, renewed prosperity, and so on.  
 
Those who, like Sismondi, wish to return to the true 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.  
 
What kept production in true, or more or less true, proportions?  It was 
demand that dominated supply, that preceded it.  Production followed 
close on the heels of consumption.  Large-scale industry, forced by the 
very instruments at its disposal to produce on an ever-increasing scale, 
can no longer wait for demand.  Production precedes consumption, supply 
compels demands.  
 
In existing society, in industry based on individual exchange, anarchy 
of production, which is the source of so much misery, is at the same 
time the source of all progress.  
 
Thus, one or the other: 
 
     Either you want the true proportions of past centuries with 
     present-day means of production, in which case you are both 
     reactionary and utopian.  
 
     Or you want progress without anarchy: in which case, in order to 
     preserve the productive forces, you must abandon individual 
     exchange.  
 
Individual exchange is suited only to the small-scale industry of past 
centuries with its corollary of "true proportion", or else to 
large-scale industry with all its train of misery and anarchy.  
 
After all, the determination of value by labor time -- the formula M.  
Proudhon gives us as the regenerating formula of the future -- is 
therefore merely the scientific expression of the economic relations of 
present-day society, as was clearly and precisely demonstrated by 
Ricardo long before M. Proudhon.  
 
But does the "equalitarian" application of this formula at least belong 
to M. Proudhon?  Was he the first to think of reforming society by 
transforming all men into actual workers exchanging equal amounts of 
labor? Is it really for him to reproach the Communists -- these people 
devoid of all knowledge of political economy, these "obstinately foolish 
men", these "paradise dreamers" -- with not having found, before him, 
this "solution of the problem of the proletariat"? 
 
Anyone who is in any way familiar with the trend of political economy in 
England cannot fail to know that almost all the Socialists in that 
country have, at different periods, proposed the equalitarian 
application of the Ricardian theory.  We quote for M. Proudhon: 
Hodgskin, _Political Economy_, 1827; William Thompson, _An Inquiry 
into the Principles of the Distribution of Wealth Most Conducive to 
Human Happiness_, 1824; T. R. Edmonds, _Practical Moral and Political 
Economy_, 1828 [18], etc., etc., and four pages more of etc.  We shall 
content ourselves with listening to an English Communist, Mr. Bray. 
We shall give the decisive passages in his remarkable work, _Labor's 
Wrongs and Labor's Remedy_, Leeds, 1839, and we shall dwell some time 
upon it, firstly, because Mr. Bray is still little known in France, and 
secondly, because we think that we have discovered in him the key to the 
past, present and future works of M. Proudhon.  
 
     "The only way to arrive at truth is to go at once to First  
     Principles....  Let us...  go at once to the source from  
     whence governments themselves have arisen....  By thus  
     going to the origin of the thing, we shall find that every  
     form of government, and every social and governmental  
     wrong, owes its rise to the existing social system -- to  
     the institution of property as it at present exists -- and 
     that, therefore, if we would end our wrongs and our  
     miseries at once and for ever, the present arrangements of  
     society must be totally subverted....  By thus fighting  
     them upon their own ground, and with their own weapons, we  
     shall avoid that senseless clatter respecting 'visionaries'  
     and 'theorists', with which they are so ready to assail all  
     who dare move one step from that beaten track which 'by  
     authority', has been pronounced to be the right one.   
     Before the conclusions arrived at by such a course of  
     proceeding can be overthrown, the economists must unsay or  
     disprove those established truths and principles on which  
     their own arguments are founded." 
 
                                            (Bray, pp.17 and 41) 
 
     "It is labor alone which bestows value.... 
 
     "Every man has an undoubted right to all that his honest  
     labor can procure hiM. When he thus appropriates the  
     fruits of his labor, he commits no injustice upon any other  
     human being; for he interferes with no other man's right of  
     doing the same with the produce of his labor.... 
 
     "All these ideas of superior and inferior -- of master and  
     man -- may be traced to the neglect of First Principles,  
     and to the consequent rise of inequality of possessions;  
     and such ideas will never be subverted, so long as this  
     inequality is maintained.  Men have hitherto blindly hoped  
     to remedy the present unnatural state of things...  by  
     destroying existing inequality; but it will be shortly  
     seen...  that misgovernment is not a cause, but a  
     consequence -- that it is not the creator, but the created  
     -- that is is the offspring of inequality of possessions;  
     and that the inequality of possessions is inseparably  
     connected with our present social system." 
 
                                        (Bray, pp.33, 36 and 37) 
 
     "Not only are the greatest advantages, but strict justice  
     also, on the side of a system of equality....  Every man is 
     a link, in the chain of effects -- the beginning of which  
     is but an idea, and the end, perhaps, the production of a  
     piece of cloth.  Thus, although we may entertain different 
     feelings towards the several parties, it does not follow  
     that one should be better paid for his labor than another. 
     The inventor will ever receive, in addition to his just  
     pecuniary reward, that which genius only can obtain from us 
     -- the tribune of our admiration....  
 
     "From the very nature of labor and exchange, strict justice 
     not only requires that all exchangers should be mutually,  
     but that they should likewise be equally, benefited.  Men  
     have only two things which they can exchange with each  
     other, namely, labor, and the produce of labor....  
 
     "If a just system of exchanges were acted upon, the value 
     of articles would be determined by the entire cost of  
     production; and equal values should always exchange for  
     equal values.  If, for instance, it takes a hatter one day  
     to make a hat, and a shoemaker the same time to make a pair 
     of shoes -- supposing the material used by each to be of  
     the same value -- and they exchange these articles with  
     each other, they are not only mutually but equally 
     benefited: the advantage derived by either party cannot be  
     a disadvantage to the other, as each has given the same  
     amount of labor, and the materials made use of by each were 
     of equal value.  But if the hatter should obtain two pair  
     of shoes for one hat -- time and value of material being as  
     before -- the exchange would clearly be an unjust one.  The  
     hatter would defraud the shoemaker of one day's labor; and  
     were the former to act thus in all his exchanges, he would  
     receive, for the labor of half a year, the product of some  
     other person's whole year.  We have heretofore acted upon  
     no other than this most unjust system of exchanges -- the  
     workmen have given the capitalist the labor of a whole year,  
     in exchange for the value of only half a year -- and from  
     this, and not from the assumed inequality of bodily and 
     mental powers in individuals, has arisen the inequality of  
     wealth and power which at present exists around us.  It is  
     an inevitable condition inequality of exchanges -- of  
     buying at one price and selling at another -- that  
     capitalists shall continue to be capitalists, and working  
     men to be working men -- the one a class of tyrants and the 
     other a class of slaves -- to eternity....  
 
     "The whole transaction, therefore, plainly shews that the 
     capitalists and proprietors do no more than give the  
     working man, for his labor of one week, a part of the  
     wealth which they obtained from him the week before! --  
     which amounts to giving him nothing for something....  
 
     "The whole transaction, therefore, between the producer and 
     the capitalist is a palpable deception, a mere farce: it  
     is, in fact, in thousands of instances, no other than a  
     barefaced though legalized robbery." 
 
                                    (Bray, pp.45, 48, 49 and 50) 
 
     "... the gain of the employer will never cease to be the  
     loss of the unemployed -- until the exchanges between the  
     parties are equal; and exchanges never can be equal while  
     society is divided into capitalists and producers -- the  
     last living upon their labor and the first bloating upon  
     the profit of that labor.  
 
     "It is plain [continues Mr.Bray] that, establish whatever  
     form of government we will...  we may talk of morality and 
     brotherly love...  no reciprocity can exist where there are 
     unequal exchanges.  Inequality of exchanges, as being the  
     cause of inequality of possessions, is the secret enemy  
     that devours us." 
 
                                            (Bray, pp.51 and 52) 
 
     "It has been deduced, also, from a consideration of the  
     intention and end of society, not only that all men should  
     labor, and thereby become exchangers, but that equal values  
     should always exchange for equal values -- and that, as the  
     gain of one man ought never to be the loss of another,  
     value should be determined by cost of production.  but we  
     have seen, that, under the present arrangements of  
     society...  the gain of the capitalist and the rich man is  
     always the loss of the workman -- that this result will  
     invariably take place, and the poor man be left entirely at 
     the mercy of the rich man, under any and every form of  
     government, so long as there is inequality of exchanges --  
     and that equality of exchanges can be ensured only under  
     social arrangements in which labor is universal....  
 
     "If exchanges were equal, would the wealth of the present 
     capitalists gradually go from them to the working classes." 
 
                                                (Bray, pp.53-55) 
 
     "So long as this system of unequal exchanges is tolerated,  
     the producers will be almost as poor and as ignorant and as 
     hardworked as they are at present, even if every govern- 
     mental burthen be swept away and all taxes be abolished...   
     nothing but a total change of this system -- an equality of 
     labor and exchanges -- can alter this state of rights....  
 
     "The producers have but to make an effort -- and by them  
     must every effort for their own redemption be made -- and  
     their chains will be snapped asunder forever.... 
 
     "As an end, the political equality is there a failure, as a  
     means, also, it is there a failure.  
 
     "Where equal exchanges are maintained, the gain of one man  
     cannot be the loss of another; for every exchange is then  
     simply a transfer, and not a sacrifice of labor and wealth.   
     Thus, although under a social system based on equal  
     exchanges, a parsimonious man may become rich, his wealth  
     will be no more than the accumulated produce of his own  
     labor.  He may exchange his wealth, or he may give it to  
     others...  but a rich man cannot continue wealthy for any  
     length of time after he has ceased to labor.  Under equal- 
     ity of exchanges, wealth cannot have, as it now has, a  
     procreative and apparently self-generating power, such as 
     replenishes all waste from consumption; for, unless it be  
     renewed by labor, wealth, when once consumed, is given up  
     for ever.  That which is now called profit and interest  
     cannot exist as such in connection with equality of  
     exchanges; for producer and distributor would be alike  
     remunerated, and the sum total of their labor would  
     determine the value of the article created and brought to  
     the hands of the consumer....  
 
     "The principle of equal exchanges, therefore, must from its 
     very nature ensure universal labor." 
 
                               (Bray, pp.67, 88, 89, 94, 109-10) 
 
 
After having refuted the objections of the economists to communism, Mr.  
Bray goes on to say: 
 
     "If, then a changed character be essential to the success  
     of the social system of community in its most perfect form  
     -- and if, likewise, the present system affords no circum- 
     stances and no facilities for effecting the requisite  
     change of character and preparing man for the higher and  
     better state desired -- it is evident that these things  
     must necessarily remain as they are....  or else some  
     preparatory step must be discovered and made use of -- some  
     movement partaking partly of the present and partly of the  
     desired system -- some intermediate resting place, to which  
     society may go with all its faults and its follies, and  
     from which it may move forward, imbued with those qualities  
     and attributes without which the system of community and  
     equality cannot as such have existence." 
 
                                                   (Bray, p.134) 
 
     "The whole movement would require only co-operation in its  
     simplest form....  Cost of production would in every  
     instance determine value; and equal values would always  
     exchange for equal values.  If one person worked a whole  
     week, and another worked only half a week, the first would  
     receive double the remuneration of the last; but this extra  
     pay of the one would not be at the expense of the other,  
     nor would the loss incurred by the last man fall in any way  
     upon the first.  Each person would exchange the wages he 
     individually received for commodities of the same value as  
     his respective wages; and in no case could the gain of one  
     man or one trade be a loss to another man or another trade.   
     The labor of every individual would alone determined his  
     gains of his losses....  
 
     "... By means of general and local boards of trade... the 
     quantitities of the various commodities required for  
     consumption -- the relative value of each in regard to each  
     other -- the number of hands required in various trades and 
     descriptions of labor -- and all other matters connected  
     with production and distribution, could in a short time be  
     as easily determined for a nation as for an individual  
     company under the present arrangements....  
 
     "As individuals compose families, and families towns, under 
     the existing system, so likewise would they after the  
     joint-stock change had been effected.  The present distrib- 
     ution of people in towns and villages, bad as it is, would  
     not be directly interfered with....  
 
     "Under this joint-stock system, the same as under that now 
     existing, every individual would be at liberty to accumu- 
     late as much as he pleased, and to enjoy such accumulations  
     when and where he might think proper....  
 
     "The great productive section of the community...  is  
     divided into an indefinite number of smaller sections, all 
     working, producing and exchanging their products on a  
     footing of the most perfect equality....  
 
     "And the joint-stock modification (which is nothing but a 
     concession to present-day society in order to obtain  
     communism), by being so constituted as to admit of  
     individual property in productions in connection with a  
     common property in productive powers -- making every  
     individual dependent on his own exertions, and at the same  
     time allowing him an equal participation in every advantage 
     afforded by nature and art -- is fitted to take society as  
     it is, and to prepare the way for other and better  
     changes." 
 
                           (Bray, pp.158, 160, 162, 168 and 194) 
 
 
We now only need to reply in a few words to Mr. Bray who without us and 
in spite of us had managed to supplant M. Proudhon, except that Mr.  
Bray, far from claiming the last word on behalf of humanity, proposes 
merely measures which he think good for a period of transition between 
existing society and a community regime.  
 
One hour of Peter's labor exchanges for one hour of Paul's labor. That 
is Mr. Bray's fundamental axiom. 
 
Let us suppose Peter has 12 hours' labor before him, and Paul only six.  
Peter will consequently have six hours' labor left over.  What will he 
do with these six hours' labor? 
 
Either he will do nothing with them -- in which case he will have worked 
six hours for nothing; or else he will remain idle for another six hours 
to get even; or else, as a last resource, he will give these six hours' 
labor, which he has no use for, to Paul into the bargain.  
 
What in the end will Peter have earned more than Paul?  Some hours of 
labor?  No!  He will have gained only hours of leisure; he will be  
forced to play the loafer for six hours.  And in order that this new 
right to loaf might be not only relished but sought after in the new 
society, this society would have to find in idleness its highest bliss, 
and to look upon labor as a heavy shackle from which it must break free 
at all costs.  
 
And indeed, to return to our example, if only these hours of leisure 
that Peter had gained in excess of Paul were really a gain!  Not in the 
least.  Paul, beginning by working only six hours, attains by steady and 
regular work a result that Peter secures only by beginning with an 
excess of work.  Everyone will want to be Paul, there will be a 
competition to occupy Paul's position, a competition in idleness.  
 
Well, then! What has the exchange of equal quantities of labor brought 
us? Overproduction, depreciation, excess of labor followed by 
unemployment; in short, economic relations such as we see in present-day 
society, minus the competition of labor.  
 
No! We are wrong! These is still an expedient which may save this new 
society of Peters and Pauls.  Peter will consume by himself the product 
of the six hours' labor which he has left.  But from the moment he has 
no longer to exchange because he has produced, he has no need to produce 
for exchange; and the whole hypothesis of a society founded on the 
exchange and division of labor will fall to the ground.  Equality of 
exchange will have been saved by the simple fact that exchange will have 
ceased to be: Paul and Peter would arrive at the position of Robinson.  
 
Thus, if all the members of society are supposed to be actual workers, 
the exchange of equal quantities of hours of labor is possible only on 
condition that the number of hours to be spent on material production is 
agreed on before hand.  But such an agreement negates individual 
exchange.  
 
We still come to the same result, if we take as our starting point not 
the distribution of the products created but the act of production.  In 
large-scale industry, Peter is not free to fix for himself the time of 
his labor, for Peter's labor is nothing without the co-operation of all 
the Peters and all the Pauls who make up the workshop.  This explains 
very well the dogged resistance which the English factory owners put up 
to the Ten Hours' Bill.  They knew only too well that a two-hours' 
reduction of labor granted to women and children * would carry with it 
an equal reduction of working hours for adult men.  It is in the nature 
of large-scale industry that working hours should be equal for all.  
What is today the result of capital and the competition of workers among 
themselves will be tomorrow, if you sever the relation between labor and 
capital, an actual agreement based upon the relation between the sum of 
productive forces and the sum of existing needs.  
 
* [ NOTE: The Ten Hours' Bill, which applied only to women and children, 
    was passed by the British Parliament on June 8, 1847.  Many 
    manufacturers, however, ignored the law in practice. ] 
 
But such an agreement is a condemnation of individual exchange, and we 
are back again at our first conclusion! 
 
In principle, there is no exchange of products -- but there is the 
exchange of the labor which co-operated in production.  The mode of 
exchange of products depends upon the mode of exchange of the productive 
forces.  In general, the form of exchange of products corresponds to the 
form of production.  Change the latter, and the former will change in 
consequence.  Thus in the history of society we see that the mode of 
exchanging products is regulated by the mode of producing them.  
Individual exchange corresponds also to a definite mode of production 
which itself corresponds to class antagonisM. There is thus no 
individual exchange without the antagonism of classes.  
 
But the respectable conscience refuses to see this obvious fact.  So 
long as one is a bourgeois, one cannot but see in this relation of 
antagonism a relation of harmony and eternal justice, which allows no 
one to gain at the expense of another.  For the bourgeois, individual 
exchange can exist without any antagonism of classes.  For him, these 
are two quite unconnected thing.  Individual exchange, as the bourgeois 
conceives it, is far from resembling individual exchange as it actually 
exists in practice.  
 
Mr. Bray turns the illusion of the respectable bourgeois into an ideal 
he would like to attain.  In a purified individual exchange, freed from 
all the elements of antagonism he finds in it, he sees an "equalitarian" 
relation which he would like society to adopt generally.  
 
Mr. Bray does not see that this equalitarian relation, this corrective 
ideal that he would like to apply to the world, is itself nothing but 
the reflection of the actual world; and that therefore it is totally 
impossible to reconstitute society on the basis of what is merely an 
embellished shadow of it.  In proportion as this shadow takes on 
substance again, we perceive that this substance, far from being the 
transfiguration dreamt of, is the actual body of existing society.  * 
 
* [ NOTE by Marx: Mr. Bray's theory, like all theories, has found 
    supporters who have allowed themselves to be deluded by appearances.  
    Equitable labor-exchange bazaars have been set up in London, 
    Sheffield, Leeds and many other towns in England.  These bazaars 
    have all ended in scandalous failures after having absorbed 
    considerable capital.  The taste for them has gone for ever.  You 
    are warned, M. Proudhon! ] 
 
  [ NOTE by Engels to the 1885 German edition: It is known that Proudhon 
    did not take this warning to heart.  In 1849 he himself made an 
    attempt with a new Exchange Bank in Paris.  The bank, however, 
    failed before it had got going properly: a court case against 
    Proudhon had to serve to cover its collapse. ] 
 
 
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