The Poverty of Philosophy/Chapter 1/Section 3
Section III.—Application of the Law of the Proportion of Value.
(A)—Money.
"Gold and silver are the first commodities the value of which has arrived at its constitution."
Gold and silver then are the first applications of the "constituted value" of M. Proudhon, And as M. Proudhon constitutes the values of products in determining them by the comparative quantity of labor they embody, all that he had to do was to prove that variations which have taken place in the value of gold and silver were always to be explained by the variations in the time of labor necessary to produce them. M. Proudhon does not dream of that. He does not speak of gold and silver as commodities, he speaks of them as money.
All his logic, if logic there be, consists in juggling with the quality which gold and silver possess, of serving as money, for the benefit of all the commodities which have the quality of being valued by labor time. Decidedly there is more of simplicity than malice in this shuffling.
A useful product, being valued by the labor time necessary to produce it, is always acceptable in exchange. Witness, cries M. Proudhon, gold and silver which find themselves in my desired conditions of "exchangeability." Then gold and silver are value arrived at the state of constitution—they are the incorporation of the idea of M. Proudhon. He is most happy in his choice of an example. Gold and silver, in addition to the quality which they possess of being commodities, valued like all other commodities by labor time, have further that of being the universal agent of exchange, of being money. In taking now gold and silver as an application of "value constituted" by labor time, nothing is more easy than to prove that every commodity the value of which may be constituted by labor time will be always exchangeable, will be money.
A very simple question presents itself to the mind of M. Proudhon. Why have gold and silver the privilege of being the type of "constituted value"?
"The particular function which usage has devolved upon the precious metals of serving as the agent of commerce is purely conventional, and every other commodity could, less conveniently perhaps, but in a sufficiently satisfactory manner, fill this rôle; the economists recognise and cite more than one example of this. What, then, is the reason for this preference generally accorded to the precious metals, of serving as money, and how is this speciality of functions of money, without analogy in political economy, to be explained . . . . Is it possible to re-establish the series from which money seems to have been detached, and thereby to bring it back to its true principle?"
Already, in putting the question in these terms, M. Proudhon has supposed the existence of money. The first question he should have put is, why, in the exchanges as they are actually constituted, exchange-value should have had to be individualised, so to speak, by the creation of a special agent of exchange. Money is not a thing, it is a social relation. Why is the relation of money a relation of production, like every other economic relation, such as the division of labor, &c.? If M. Proudhon had clearly asecrtained this relation he would not have seen in money an exception, a member detached from a series, unknown or to be discovered.
He would, on the contrary, have recognised that this relation is a link of, and as such, intimately attached to, the whole chain of the other economic relations, and that this relation corresponds to a determined mode of production, neither more nor less than individual exchange. What does he do? He begins by detaching money from the whole of the existing mode of production, in order later to make it the first member of an imaginary series, a series to be discovered.
Once the necessity for a special agent of exchange, that is to say the necessity for money, is recognised, it is only necessary to explain why this particular function has devolved upon gold and silver rather than upon any other commodity. That is a secondary question which is not explained by the chain of the relations of production, but by the specific qualities inherent in gold and silver as material. If, after all, the economists on this occasion have "gone outside their own science and have made this a physical, a mechanical, and historical question, &c.," as M. Proudhon has reproached them with having done, they have only done what they ought. The question is no longer within the domain of political economy.
"What none of the economists," says M. Proudhon, "has either seen or comprehended, is the economic reason which has determined, in favor of the precious metals, the privilege which they enjoy."
The economic reason which no one, and with good cause, has either seen or comprehended, M. Proudhon has seen, comprehended, and bequeathed to posterity.
"But what no one has remarked is that, of all commodities, gold and silver are the first the value of which has been constituted. In the patriarchal period, gold and silver were bought and sold and exchanged in ingots, but even then with an obvious tendency to domination, and with a marked preference. Little by little monarchs took possession of them and set their seal upon them; and from this sovereign consecration sprang money, that is to say the commodity par excellence, which in spite of all the shocks of commerce, maintains a fixed proportioned value and makes itself accepted in payment everywhere. . . . . The distinctive feature of gold and silver, I repeat, arise from this that, thanks to their metallic properties, to the difficulties attending their production, and, above all, to the intervention of the public authority, they have at an early stage, conquered, as commodities, fixity and authenticity."
To say that, of all commodities, gold and silver are the first the value of which has been constituted, is to say, after all which has preceded it, that gold and silver are the first commodities which have become money. That is the great revelation of M. Proudhon, that is the truth which no one had discovered before him!
If by these words M. Proudhon has wished to say that gold and silver are commodities the time necessary to the production of which has been sooner known than in the case of any others, that would still be one of the suppositions with which he is so ready to gratify his readers. If we wished to hold to this patriachal erudition, we should say to M. Proudhon that the time necessary for the production of the objects of prime necessity, such as iron, &c., was known in the first place. We would make him a present of the classic arch of Adam Smith.
But, after all, how can M. Proudhon speak of the constitution of a value, since one value is never constituted alone? It is constituted not by the time which is necessary for its production alone, but relatively to the quota of all other products which can be created in the same time. Thus the constitution of the value of gold and silver presupposes the constitution to be already established of a mass of other products.
It is then, not the commodity which has arrived, in gold and silver, at the state of "constituted value," it is the "constituted value" of M. Proudhon which has arrived, in gold and silver, at the state of money.
Let us now examine more closely these economic reasons, which, according to M. Proudhon, have afforded gold and silver the advantage of being erected into money sooner than all other products, of passing to the constitutive state of value.
These economic reasons are: the "marked preference," already in "the patriarchal period," and other circumlocutions of the same fact, which augment the difficulty, since they multiply the fact in multiplying the incidents which M. Proudhon brings forward to explain the fact. M. Proudhon has not yet exhausted all the pretended economic reasons. Here is one of supreme force, irresistible:
"It is from the sovereign consecration that money springs; the monarchs seize gold and silver and place their seal upon them."
Thus the good pleasure of monarchs is, for M. Proudhon, the supreme reason, in political economy!
Truly it is necessary to be entirely innocent of all historical knowledge not to know that in all times sovereigns have had to submit to the economic conditions and have never made laws for these. Legislation, political as well as civil, could do no more than give expression to the will of the economic conditions.
Has the monarch seized gold and silver to make them the universal agents of exchange by impressing his seal upon them, or have these universal agents of exchange not rather taken possession of the monarch by forcing him to impress his seal upon them and thus give them a political consecration?
The imprint which has been, and is, given to money is not that of its value, it is that of its weight. The fixity and authenticity of which M. Proudhon speaks applies only to the standard of the money, and this standard indicates how much of material metal there is in a coined piece of gold or silver. "The sole intrinsic value of a silver mark," said Voltaire, with his usual good sense, "is that of a mark of silver—a half pound of the weight of eight ounces. The weight and the standard alone make this intrinsic value." (Voltaire, "Système de Law.") But the question: What is the value of an ounce of gold or of silver? still remains. If a cashmere from the establishment of the great Colbert bore the trade mark of the manufactory, pure wool, this mark would still not tell us the value of the cashmere. The question of how much the wool was worth would still remain. "Philippe I., King of France," says M. Proudhon, "mixed with the pound (sterling) of Charlemagne a third of alloy, imagining that as he alone had the monopoly of the manufacture of money he could do what any trader having a monopoly can do. What was the effect of this alteration of the coinage with which Philippe and his successors have been so strongly reproached? A very sound reasoning, from the commercial point of view, but very unsound in economic science, is to suppose that, as supply and demand regulate value, it is possible, either by producing an artificial scarcity or by monopolising the manufacture, to increase the estimation and consequently the value of things, and that this is true of gold and silver as well as of corn, wine, oil or tobacco. However, the fraud of Philippe was no sooner suspected than his money was reduced to its proper value, and he at once lost all that he imagined he had gained out of his subjects. The same thing would happen as the result of any similar attempts."
To begin with, it has been demonstrated over and over again that if the monarch debases the coinage it is he who suffers the loss. What he has gained once by the first issue he loses as many times as the falsified money returns to him in the form of duties, taxes, &c. But Philippe and his successors knew how to more or less protect themselves from this loss, as, once the debased money was put in circulation, they had nothing to do but to order a general reminting of money at the old standard.
And, besides, if Philippe I. had really reasoned like M. Proudhon, Philippe would not have reasoned well "from the commercial point of view." Neither Philippe I. nor M. Proudhon show any evidence of mercantile genius when they imagine that it is possible to alter the value of gold as well as that of every other commodity, simply because that value is determined by the relation of supply and demand.
If King Philippe had ordered that a quarter of wheat should be henceforth called two quarters he would have been a swindler. He would have deceived all the fund-holders, all the people who had to receive a hundred quarters of wheat; he would have been the cause of all these people receiving, instead of a hundred quarters, only fifty. Suppose the king to owe a hundred quarters of wheat, he would have only really had to pay fifty. But in commerce a hundred such quarters would never be worth more than fifty. In changing the name we do not change the thing. The quantity of wheat, either in supply or demand, would not be diminished or increased by this simple change of name. Thus, the relation of supply to demand being precisely the same in spite of this change of name, the price of the wheat would undergo no real alteration. In speaking of the supply and demand of things we do not speak of the supply and demand of the name of things. Philippe I. was not the maker of gold or silver, as Proudhon says; he was the maker of the name of moneys. Make your French cashmeres pass for Asiatic cashmeres, and it is possible that you may deceive a buyer or two; but once the fraud becomes known, and your pretended Asiatic cashmeres will fall to the price of the French article. In giving a false standard to gold and silver, King Philippe could only make dupes so long as the fraud was not known. Like any other shopkeeper, he deceived his customers by a false description of the commodity, but that could not last long. Sooner or later he must suffer the rigor of the laws of commerce. Is it that which M. Proudhon wishes to prove? No. According to him it is from the monarch, and not from commerce, that money receives its value. And what is it that he has effectively proved? That commerce is more sovereign than the monarch. Let the monarch order that a mark shall be henceforth two marks, commerce will always tell you that these two marks are only worth one mark as before.
But for all that, the question of the determination of value by the quantity of labor has not been taken a step further. It still remains to be decided if the value of these two marks—again become the original mark—is determined by the cost of production or by supply and demand.
M. Proudhon continues: "It may be equally assumed that if, instead of altering the money it had been in the power of the King to double its quantity, the exchange-value of gold and silver would have immediately fallen to half, always in consequence of this proportion and equilibrium."
If this opinion, which M. Proudhon shares with the economists, is correct, it is a proof in support of their theory of supply and demand, and not in support of the "proportion" of M. Proudhon. Because, whatever may have been the quantity of labor embodied in the double quantity of gold and silver its value would have fallen by half, the demand remaining the same and the supply having doubled. Or is it indeed, by chance, that "the law of proportion" confounds itself this time with the so-despised law of supply and demand? This just proportion of M. Proudhon is in effect so elastic, it lends itself to so many variations, combinations and permutations, that it may possibly for once coincide with the relation of supply and demand.
To "make every commodity acceptable in exchange, if not in fact at least by right," in basing it on the function performed by gold and silver, is then to misunderstand this function. Gold and silver are only acceptable in exchange by right, because they are so in fact, and they are so in fact because the existing organisation of production has need of a universal agent of exchange. The right is only the official recognition of the fact.
We have seen this, that the example of money as an application of value passed to the state of constitution has been chosen by M. Proudhon only that he might smuggle in the whole of his theory of exchangeability; that is to say, in order to demonstrate that every commodity valued by its cost of production must arrive at the state of money. All that would be beautiful and good but for the difficulty that precisely gold and silver—as money—are of all commodities the only ones which are not determined by their cost of production; and that is so far true that in circulation they may be replaced by paper. Inasmuch as there will be a certain proportion observed between the needs of circulation and the quantity of money issued, whether the money be in paper, in gold, in platinum, or in copper, there can be no question of any proportion to the observed between the intrinsic value (the cost of production) and the nominal value of money. Undoubtedly, in international commerce the value of money, as that of every other commodity, is determined by labor time. But that is simply because gold and silver in international commerce are means of exchange as products and not as money; that is to say, that in this connection gold and silver lose that very character of "fixity and authenticity," of "sovereingn consecration," which is for M. Proudhon their specific characteristic. Ricardo has so well understood this truth that after having based his whole system on value determined by labor time and after having said, "Gold and silver, as well as all other commodities, have value only in proportion to the quantity of labor necessary to produce them and put them on the market," he added, nevertheless, that the value of money is not determined by the labor time embodied in its substance, but only by the law of supply and demand. "Although paper money has no intrinsic value, nevertheless if its quantity be limited its exchangeable value may equal the value of metallic money of the same denomination, or of bullion estimated as specie. It is by the same principle, that is to say by the limitation of the quantity of money, that coins of a low standard are able to circulate at the same value as they would have had if their weight and their value were those fixed by law, and not at the intrinsic value of the pure metal which they contain. That is why in the history of English money we find that our currency has never been depreciated in the same proportion as it has been changed. The reason is that it has never been multiplied in proportion to its depreciation" (Ricardo.)
J. B. Say, on the subject of this passage of Ricardo, observes:
"This example should suffice, it seems to me, to convince the author that the basis of all value is not the quantity of labor necessary to produce a commodity, but the need which exists for that commodity, balanced by its scarcity."
Thus money, which is for Ricardo no longer a value determined by labor time and which J. B. Say takes for that rason as an example to convince Ricardo that other values cannot be any more than money, determined by labor time, this money, I say, which is taken by J. B. Say as the example of value determined exclusively by supply and demand, becomes for M. Proudhon the example, par excellence, of the application of value constituted. . . . by labor time.
To conclude, if money is not a "value constituted" by labor time, still less can it have anything in common with the "just proportion" of M. Proudhon. Gold and silver are always exchangeable, because they have the particular function of serving as the universal agent of exchange, and not at all because they exist in a proportionate quantity to the mass of wealth; or, to speak more correctly, they are always in proportion because, alone of all commodities, they serve as money, as the universal agent of exchange, whatever may be their quantity relatively to the whole mass of wealth. "The money in circulation can never be sufficient to cause a glut; because if you reduce its value you augment its quantity in the same proportion, and in increasing its value you diminish the quantity." (Ricardo.)
"What an imbroglio is political economy!" cries M. Proudhon.
"Accursed gold!" ironically exclaims a Communist (by the mouth of M. Proudhon). It would be as reasonable to say: Accursed wheat, accursed vines, accursed sheep! seeing that "in the same way as gold and silver, all commercial value must arrive at its exact and rigorous determination."
The idea of sheep and vines being brought to the state of money is not new. In France that idea belongs to the period of Louis XIV. At that epoch, money having begun to establish its omnipotence, there was great complaint of the depreciation of all other commodities, and the people prayed most ardently for the moment in which "every commercial value" would arrive at its exact and rigorous determination, at the state of money. . Here is what we find in Bois-Guillebert, one of the oldest economists of France: "Money then, by this growth of innumerable competitors, which will be the commodities themselves established in their exact values, will be restricted to its natural limits." ("Economistes Financiers du Dixhuitième Siècle," p. 422.)
We see that the first illusions of the bourgeoisie are also their last.
(B.)—Surplus Labor.
"We read in some works on political economy this absurd hypothesis: If the price of all things were doubled. . . . As if the price of all things was not the proportion of things, and as if one could double a proportion, a relation, a law!" (Proudhon, vol. I., page 81.)
The economists have fallen into this error through not having known how to apply the "law of proportion" and of "constituted value"!
Unfortunately we find in the work of M. Proudhon (Vol. I., p. 110) this absurd hypothesis, that "if wages were raised generally, the price of everything would rise." Furthermore, if the phrase in question is found in a work of poltical economy, there is also the explanation. "If we say that the prices of all commodities rise or fall, we always exclude one commodity or another, the commodity excluded being generally either money or labor." ("Encyclopædia Metropolitaine, or Universal Dictionary of Knowledge," vol. IV., the article on Political Economy by Senior, London. 1836.) See also, on this expression, John Stuart Mill, "Essays on some Unsettled Questions of Political Economy," London, 1844, and Tooke, "A History of Prices, &c.," London, 1838.
Let us now pass to the second application of "constituted value," and other proportionalities, whose single failing is that they are so little proportioned, and see if M. Proudhon is more happy in that than in the monetisation of sheep.
"An axiom generally admitted by the economists is that all labor must leave a surplus. This proposition is for me a universal and absolute truth: it is the corollary of the law of proportion, which may be regarded as the summary of the whole science of economy. But, I must crave the pardon of the economists, the principle that all labor must leave a surplus has, in their theory, no meaning, and is not susceptible of demonstration." (Proudhon.)
In order to prove that all labor must leave a surplus, M. Proudhon personifies society; he makes a personal society, a society which is not, so much as it is necessary, the society of persons, since it has its laws apart, having nothing in common with the people composing society, and its "own intelligence," which is not the common intelligence of men but an intelligence which has no common sense. M. Proudhon reproaches the economists with not having understood the personality of this collective being. We are pleased to oppose to him the following passage from an American economist who reproaches the other economists with quite the opposite fault. "The moral entity in the grammatical being called society has been clothed with attributes which have no existence except in the imagination of those who make a thing with a word. . . . that it is which has led to so many difficulties and to such deplorable mistakes in political economy." (Th. Cooper, "Lectures on the Elements of Political Economy," Columbia, 1826.)
"This principle of the surplus of labor," continues M. Proudhon, "is true of individuals only because it emanates from society, which thus confers upon them the benefit of its own laws."
Does M. Proudhon wish by that to say simply that the production of the social individual exceeds that of the isolated individual? Is it of this surplus of the production of associated individuals over that of non-associated individuals that M. Proudhon is to be understood to speak? If that is so we can cite a hundred economists who have expressed this simple truth without all the mysticism with which M. Proudhon surrounds it. Here is what Sadler, for instance, says on the subject:
"Combined labor gives results which individual labor could never produce. In proportion, then, as people increase in number, the products of their united industry will greatly exceed the sum of a simple addition calculated on this increase.. . . . In mechanical arts, as in the labors of science, a man can actually do more in a day than an isolated individual could do in the whole of his life. The axiom of the mathematician, that the whole is equal to the parts, is not true, as applied to this subject. As to labor, the great pillar of human existence, it may be said that the product of accumulated efforts greatly exceeds all that individual and separate efforts could ever accomplish." (T. Sadler, "The Law of Population," London, 1830.)
To return to M. Proudhon. The surplus of labor, he says, explains itself by society personified. The life of this personal society follows laws opposed to the laws by which man acts as an individual, as he will prove by "facts."
"The discovery of an economic process can never be worth to the inventor the profit which it yields to society.. . . . It has been remarked that railway undertakings have been much less a source of riches to the owners than to the State.. . . . The average price for the transport of commodities by road is eighteen centimes per ton per kilometre, goods called for and delivered. It has been calculated that at this rate, an ordinary railway undertaking would not clear ten per cent. net profit, a return nearly equal to that of road cartage. But, admitting that the speed of railway transport is to road transport as four to one, as in society time is money, the railway would show an advantage over the road of four hundred per cent. This enormous advantage, however, very real for society, is far from being realised in the same proportion by the railway proprietor, who, while he enables society to enjoy an additional value of four hundred per cent. does not draw, himself, even ten per cent. Let us suppose, to make the matter clearer, that the railway increases its tariff to twenty-five centimes, that of road transport remaining at eighteen, it would immediately lose all its consignments. Traders and their consignees, everybody, in fact, would return to the old road waggons. The locomotive would be deserted. A social advantage of four hundred per cent. would be sacrified to a loss of thirty-five per cent. The reason is easy to comprehend: the advantage arising from the speed of the railway is entirely social, and each individual participates in it only in a minimum proportion (remember we are dealing here only with the transport of merchandise), while the loss falls directly upon the consumer personally. A social benefit of four hundred represents for the individual, if the society only number a million men, four ten-thousandths; while a loss of thirty-three per cent. for the consumer would suppose a social deficit of thirty-three millions." (Proudhon.)
M. Proudhan not only expresses a quadrupled speed by four hundred per cent. of the primitive celerity, but he sets up a relation between the percentage of speed and the percentage of profit, and establishes a proportion between two conditions which, although they may be separately estimated at so much per cent., are nevertheless incommensurable with each other: This is to establish a proportion between the percentages and to leave out the denominations. Percentages are always percentages. Ten per cent. and four hundred per cent. are commensurable, they are to each other as ten is to four hundred. Then, concludes M. Proudron, a profit of ten per cent. is worth forty times less than a quadrupled speed. In order to save appearances he says that, for society, time is money. This error arises from the fact that he confusedly recollects that there is a relation between value and labor time, and he has nothing to do but assimilate labor time with the time of transport; that is to say, he identifies the drivers, guards and firemen, whose labor time is nothing but the time of transport, with the whole of society, For this master stroke, behold speed become capital, and in such case he is quite right to say: "A benefit of four hundred per cent. would be sacrificed to a loss of thirty-five per cent." After having set up this strange proposition as a matehematician, he gives us the explanation as an economist.
"A social benefit equal to four hundred represents for the individual, if the society is only one of a million of men, four ten-thousandths." Certainly; but it is not a question of four hundred, it is a question of four hundred per cent., and a benefit of four hundred per cent. represents neither more nor less than four hundred per cent. for the individual. Whatever may be the capital, the dividends will be always in the proportion of four hundred per cent. What does M. Proudhon do? He takes the percentage for the capital, and, as though he feared that his confusion was not sufficiently manifest, sufficiently "clear," he continues:—
"A loss of thirty-three per cent. for the consumer would suppose a social deficit of thirty-three millinns." Thirty-three per cent. of loss for the consumer would remain a loss of thirty-three per cent. for a million consumers. How can M. Proudhon say afterwards, definitely, that the social deficit, in the case of a loss of thirty-three per cent. would amount to thirty-three millions when he does not know either the social capital or even that of a single one of those interested? Thus, it is not sufficient for M. Proudhon to have confounded the capital and the percentage, but he must go further still, and identify the capital put into an undertaking with the number of those concerned. "Let us suppose, to make the matter still clearer," a determined capital. A social profit of four hundred per cent. shared among a million participants, supposing each to be interested to the extent of a franc, would mean four francs profit per head, and not 0.0004, as M. Proudhon pretends. In the same way a loss of thirty-three per cent. for each of the participants would represent a social deficit of 330,000 francs, and not thirty-three millions (100:33=1,000,000:330,000).
M. Proudhon, preoccupied with his theory of personified society, forgets to make the division by 100. He thus obtains 330,000 francs loss; but four francs per head profit make for the society a profit of four million francs. There remains for society a net profit of 3,670,000 francs. This account exactly demonstrates the opposite to that which M. Proudhon wished to demonstrate, that is, that the profits and losses of society are not in inverse ratio to the profits and losses of the individual.
After having rectified these simple errors of calculation, let us glance for a moment at the consequences to which we should arrive if we were to admit for railways this relation of speed to capital such as M. Proudhon gives it, less the errors of calculation. Suppose a transport four times as rapid cost four times as much, this transport would not give less profit than the road transport which is four times as slow and costs only a quarter as much. Then if the latter charges eighteen centimes the railway could charge seventy-two centimes. This would be, according to "mathematical rigor," the consequence of the supposition of M. Proudhon, always excepting his errors of calculation. But then he suddenly tells us that if, instead of seventy-two centimes the railway charged twenty-five it would at once lose all its consignments. Decidedly it would be necessary to return to the old road waggons. Only if we have any advice to offer M. Proudhon it is not to forget in his "Programme of the Progressive Association" to make the division by 100. But, alas! it is scarcely to be hoped that our advice will be listened to, for M. Proudhon is so enamored of his "progressive" calculation, corresponding to the "progressive occasion" that he cries with much emphasis: "I have already shown in Chapter II., by the solution of the contradiction of value, that the advantage of every useful discovery is incomparably less for the inventor, whoever he may be, than for society. I have carried out the demonstration of this point with matehematical rigor!"
Let us return to the fiction of society personified, a fiction which has no other object than to prove the following simple truth: A new invention causing a larger quantity of commodities to be produced with the same amount of labor, results in a fall in the saleable value of the product. Society makes a profit then, not in obtaining more exchangeable values, but in obtaining more commodities for the same value. As to the inventor, competition causes his profit to fall successively to the general level of profits. Has M. Proudhon proved this proposition as well as he wished to do? No. That does not prevent him from reproaching the economists with having failed to make this demonstration. To prove to him the contrary we will only cite Ricardo and Lauderdale; Ricardo, the chief of the school which determines value by labor time, Lauderdale one of the most vigorous defenders of the determination of value by supply and demand. Both have developed the same thesis.
"In constantly augmenting the facility of production, we constantly diminish the value of some of the things already produced, although by the same means we not only add to the national wealth, but we increase the facility of producing for the future.. . . . As soon as, by means of machines, or by our knowledge of physics, we force natural agents to do the work which has previously been done by man, the value of this work falls in consequence. If it takes ten men to turn a corn-mill, and it is discovered that by means of wind or water the labor of these ten men can be saved, the flour which will be the product of the action of the mill will, from that moment, fall in value, in proportion to the amount of labor saved; and society will find itself enriched by all the value of the things which the labor of these ten men can produce, the funds: destined to the support of the workers not having by that suffered the least diminution." (Ricardo.)
Lauderdale, in his turn, says:—
"There is no part of the capital of a country that more obviously derives its profits from supplanting a portion of labor that would otherwise be performed by man, or from performing a portion which is beyond the reach of his personal exertion, than that which is vested in machinery.. . . . The small profit which the proprietors of machinery generally acquire, when compared with the wages of labor which the machine supplants, may perhaps create a suspicion of the rectitude of this opinion. Some fire-engines, for instance, draw more water from a coalpit in one day than could be conveyed on the shoulders of three hundred men, even assisted by the machinery of buckets; and a fire-engine undoubtedly performs its labor at a much smaller expense than the amount of the wages of those whose labor it thus supplants. This is, in truth, the case with all machinery. All machines must execute the labor that was antecedently performed, at a cheaper rate than it could be dome by the hand of man.. . . . If such a privilege is given for the invention of a machine, which performs, by the labor of one man a quantity of work that used to take the labor of four; as the possession of the exclusive privilege prevents any competition in doing the work, but what proceeds from the labor of the four workmen, their wages, as long as the patent continues, must obviously form the measure of the patentee's charge; that is, to secure employment, he has only to charge a little less than the wages of the labor which the machine supplants. But when the patent expires, other machines of the same nature are brought into competition; and then his charge must be regulated on the same principle as every other, according to the abundance of machines. . . . The profit of capital employed in foreign trade, though it arises from supplanting labor, comes to be regulated, not by the value of the labor it supplants, but, as in all other cases, by the competition among the proprietors of capital, and it will be great or small in proportion to the quantity of capital that presents itself for performing the duty, and the demand for it." ("An Enquiry into the Nature and Origin of Public Wealth.")
Finally, then, in proportion as the profit may be greater than in other industries, fresh capital will be thrown into the new industry until the average profits in it have fallen to the common level.
We have just seen that the illustration of the railway was scarcely appropriate for throwing any light on the fiction of personified society. Nevertheless, M. Proudhon hardily continues his discourse: "These points cleared, nothing is more easy than to explain how labor must leave to each producer a surplus."
This which now follows belongs to classic antiquity. It is a poetic romance told in order to relieve the reader from the fatigue he has suffered from the rigor of the mathematical demonstrations which have preceded it. M. Proudhon gives to his personified society the name of Prometheus, whose noble traits he glorifies in these terms:
"At first, Prometheus, springing from the bosom of nature, awakes to life in an inertia full of charms, &c., &c. Prometheus sets to work, and from his first day, the first day of the second creation, the product of Prometheus, that is to say his wealth, his well-being, is equal to ten. The second day Prometheus divides his labor, and his product becomes equal to a hundred. The third day and every following day, Prometheus invents machines, discovers new utilities in his body, new forces in nature. . . . At each step that his industry takes the amount of his production increases, and denotes to him an increase of felicity. And finally, since, for him, to consume is to produce, it is clear that each day's consumption, absorbing only the product of yesterday, leaves a surplus product for the day after."
This Prometheus of M. Proudhon is a droll sort of fellow, as feeble in logic as in political economy. so far as Prometheus only informs us of the division of labor, the application of machinery, the exploitation of natural forces and scientific power, multiplying the productive forces of men and giving a surplus as compared with the product of isolated labor, this new Prometheus has only the misfortune of coming too late. But when Prometheus begins to speak of production and consumption he becomes really grotesque. To consume is, for him, to produce; he consumes next day that which he produced the day before—thus he has always a day in hand; this day in hand is his "surplus of labor." But in consuming the next day that which he produced the day before, it is necessary that on the first day, which had no yesterday, he should have worked two days, in order to afterwards have a day in hand. How did Prometheus gain this surplus on the first day, when there was neither division of labor, nor machinery, nor even any knowledge of physical forces except fire? Thus the question, in order to have been deferred to "the first day of the second creation," has not advanced a step. This manner of explaning things derived at the same time from the Greek and the Hebrew, which is at once mystic and allegorical, gives to M. Proudhon the perfect right to say, "I have demonstrated by theory and by facts the principle that all labor must leave a surplus."
The facts, they are the famous progressive calculation; the theory, it is the myth of Prometheus.
"But," continues M. Proudhon, "this principle, accurate as an arithmetical proposition, is yet far from being realised for everybody. While by the progress of collective industry, each day of individual labor creates a larger and still larger product, and by a necessary consequence, while the worker, with the same wages, must become richer every day, there exist in society some classes which thrive and others which perish." In 1770 the population of the United Kingdom of Great Britain was fifteen millions and the productive population three millions. The scientific power of production would about equal a population of twelve more millions; thus making a total of fifteen millions of productive forces. Thus the productive power was to the population as 1 is to 1, and the scientific power was to manual power as 4 is to 1.
In 1840 the population did not exceed thirty millions: the productive population was six millions, while the scientific power amounted to 650 millions, that is to say that is was to the whole population as 21 to 1, and to manual power as 108 to 1.
In English society, the day of labor had thus acquired in seventy years a surplus of 2,700 per cent. of productivity, that is to say that in 1840 it produced twenty-seven times as much as in 1770. According to M. Proudhon it is necessary to put the following question: Why is the English workmen of 1840 not twenty-seven times richer than the workman of 1770? In putting such a question one would naturally suppose that the English had been able to produce these riches without the historical conditions in which they were produced—such as: the private accumulation of capital; the modern division of labor; the automatic workshop; anarchic competition; the wage-system, and, in fine, all that which is based upon the antagonism of classes—having to exist. But these were precisely the necessary conditions for the development of the productive forces and of the surplus of labor. Thus, it was necessary, in order to obtain this development of the productive forces, and this surplus of labor, that there should be some classes which thrive and others which perish.
What then, in the last place, is this Prometheus resusciated by M. Proudhon? It is society, it is the social relations based on the antagonism of classes. These relations are, not the relations of individual to individual, but of workman to capitalist, of farmer to landlord, &c. Efface these relations and you have extinguished the whole of society, and your Prometheus is nothing more than a phantom without arms or legs, that is to say without the automatic workshop, without the division of labor, wanting, in fine, all that you have originally endowed him with in order to enable him to obtain this surplus of labor.
If then, in theory, it suffices to interpret, as M. Proudhon does, the formula of the surplus of labor in the sense of equality without taking account of the actual conditions of production, it must suffice, in practice, to make among the workers an equal distribution of wealth without changing anything in the actual conditions of production. This distribution would not assure a great degree of comfort to each of the participants.
But M. Proudhon is not so pessimistic as one might believe him to be. As proportion is everything for him, it is indeed necessary that he should see in his fully endowed Prometheus, that is to say in actual society, a commencement of the realisation of his favorite idea.
"But everywhere also the progress of riches, that is to say the proportion of values, is the dominant law; and when the economists oppose to the complaints of the social party the progressive growth of the public wealth and the amelioration effected in the condition of even the most unfortunate classes, they proclaim, without suspecting it, a truth which is the condemnation of their theories."
What, in effect, are collective riches, public wealth? They are the wealth of the bourgeoisie, and not that of each individual bourgeois. Well! the economist have simply demonstrated how, in the relations of production as they exist, the wealth of the bourgeoisie has developed and must still grow. As to the working classes, it is still a much debated question whether their condition has been ameliorated at all as a result of the growth of the so-called public wealth. If the economists cite to us, in support of their optimism, the example of the workers engaged in the English cotton industry, they only notice their position in the rare moments of commercial prosperity. These moments of prosperity are to the epochs of crisis and stagnation in the "exact proportion" of three to ten. But perhaps also, in speaking of amelioration, the economists may have wished to refer to the millions of workers condemned to perish, in the East Indies, in order to procure for the million and a half of workpeople employed in England in the same industry, three years of prosperity out of ten.
As to the temporary participation in the growth of public wealth, that is different. The fact of the temporary participation is explained by the theory of the economists. It is the confirmation of that theory and not the "condemnation," as M. Proudhon says. If there was anything to condemn it would certainly be the system of M. Proudhon, which, as we have demonstrated, would reduce the worker to the minimum wage, in spite of the growth of riches. It is only by reducing the worker to the minimum wage that he could make an application of the "exact proportion" of values, of "value constituted"—by labor time. It is because wages, in consequence of competition, oscillate above and below the price of the necessaries of life essential to the sustentation of the worker that he can not only participate, to however small a degree, in the development of the collective wealth, but also that he can perish of want. There is the whole theory of the economists, which sets up no illusions.
After his long divagations on the subject of railways, of Prometheus and of the new society to be reconstituted on "constituted value," M. Proudhon reflects; emotion overcomes him, and in a paternal tone he cries:
"I adjure the economists to question themselves a moment, in the silence of their hearts, far from the prejudices which disturb them and without regard to the employments which occupy, or which await them, to the interests which they serve so ill, to the approbation to which they aspire, or to the distinctions which their vanity craves; that they should say if to this day the principle that all labor must leave a surplus has been apparent to them with this chain of preliminaries and of consequences that we have raised."