böhm-bawerk's criticism of marx

8/12/2019 Bhm-Bawerk's Criticism of Marx

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SUMMARY

Rudolf Hilferding.................................................................................................................................................1

Bhm-Bawerk's Criticism of Marx.........................................................................................1

Summar.....................................................................................................................................!

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REFACE


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,H# 5u6lication of the third 7olume of Capital has made hardl an im5ression u5on

6ourgeois economic science. 8e ha7e seen nothing of the 9:u6ilant hue and cr9 antici5ated 6

Som6art. ;1 it enters the lists onl where the 6ourgeoisie has 5ractical

interests to defend. +n the economico-5olitical struggles of the da it faithfull reflects the conflict of

interests of the dominant cli?ues> 6ut it shuns the attem5t to consider the totalit of social

relationshi5s> for it rightl feels that an such consideration would 6e incom5ati6le with its continued

existence as 6ourgeois economics. #7en where the 6ourgeois economists> com5iling their 9sstems9 or

writing their 9sketches>9 must 5erforce s5eak of the relationshi5s of the whole> the onl whole the

succeed in 5resenting is la6oriousl 5ieced together out of its se5arate 5arts. ,he ha7e ceased to deal

with 5rinci5les= the ha7e ceased to 6e sstematic= the ha7e 6ecome eclectics and sncretists. 0iet@el>

author of Theoretische Sozialkonomie, is 5erfectl logical when> making the 6est of a 6ad 6usiness>

he raises eclecticism to the rank of a 5rinci5le.

,he onl exce5tion is the 5schological school of 5olitical econom. ,he adherents of this

school resem6le the classical economists and the Marxists in that the endea7or to a55rehendeconomic 5henomena from a unitar outlook. *55osing Marxism with a circumscri6ed theor> their

criticism is sstematic in character> and their critical attitude is forced u5on them 6ecause the ha7e

started from totall different 5remises. %s earl as 1AA> in his Capital and Interest,Bhm-Bawerk

:oined issue with the first 7olume of Capital,and soon after the 5u6lication of the third 7olume of that

work he issued a detailed criticism the su6stance of which was re5roduced in the second edition of his

Ca5ital and +nterest ;erman edition 144 since he does not attack isolated and ar6itraril

selected 5oints or conclusions> 6ut ?uestions and reflects as untena6le the 7er foundation of the

Marxist sstem> 5ossi6ilit is afforded for a fruitful discussion. But since the Marxist sstem has to 6e

dealt with in its entiret> this discussion must 6e more detailed than that which is re?uisite to meet theo6:ections of the eclectics> o6:ections 6ased u5on misunderstanding and concerned onl with

indi7idual details.

Foo!no!e"#$8erner Som6art>9Dur 3ritik des konomischen Sstems 7on 3arl Marx>9Archiv fr

Soziale Gesetzge!ng !nd Statistik,&ol. &++ E1AF> 55. -.

%$%ll Hilferding's su6se?uent references to this 6ook are from the second erman editionE144F> and it is therefore im5ossi6le for us to refer the reader to Smart's #nglish translation> made

from the first erman edition E1AAF. % third erman edition was 5u6lished in 11. ;,ranslators and for such a

su6:ect somewhat singular line of e7idenceGthe method of a 5urel logical 5roof> a dialectic deduction

from the 7er nature of exchange.9 ;1 and e?ualit

cannot exist without commensura6ilit. Starting with this idea> he concei7es the exchange of two

commodities under the form of an e?uation> and from this infers that a common factor of the same

amount must exist in the things exchanged and there6 e?uated> and then 5roceeds to search for this

common factor to which the two e?uated things must> as exchange 7alues> 6e reduci6le. )ow

according to Bhm-Bawerk the most 7ulnera6le 5oint in the Marxist theor is to 6e found in the

logical and sstematic 5rocesses of distillation 6 means of which Marx o6tains the sought-for

9common factor9 in la6or. ,he exhi6it> he declares> almost as man cardinal errors as there are 5oints

in the argument. $rom the 6eginning Marx onl 5uts into the sie7e those exchangea6le ;should read>

9interchangea6le>9 R. H.< things which he desires finall to winnow out as 9the common factor>9 and

he lea7es all the others outside. ,hat is to sa> he limits from the outset the field of his search to9commodities>9 considering these solel as the 5roducts of la6or contrasted with the gifts of nature.

)ow it stands to reason> continues Bhm-Bawerk> that if exchange reall means an e?uali@ation>

which assumes the existence of 9a common factor of the same amount>9 this common factor must 6e

sought and found in e7er s5ecies of goods which is 6rought into exchange> not onl in 5roducts of

la6or> 6ut also in gifts of nature> such as the soil> wood in trees> water 5ower> etc. ,o exclude these

exchangea6le goods is a gross error of method> and the exclusion of the gifts of nature is the less to 6e

:ustified 6ecause man natural gifts> such as the soil> are among the most im5ortant o6:ects of 5ro5ert

and commerce> and also 6ecause it is im5ossi6le to affirm that in nature's gifts exchange 7alues ;this

of course should 6e 95rices9 R. H.< are alwas esta6lished ar6itraril and 6 accident. Marx is

likewise careful to a7oid mentioning that he excludes from in7estigation a 5art of exchangea6le goods.

+n this case> as in so man others> he manages to glide with eel-like dialectic skill o7er the difficult

5oints of his argument. He omits to call his readers' attention to the fact that his idea of 9commodities9is narrower than that of exchangea6le goods as a whole. )a> more> he continuall endea7ors to

o6literate the distinction. He is com5elled to take this course> for unless Marx had confined his

research> at the decisi7e 5oint> to 5roducts of la6or> if he had sought for the common factor in the

9exchangea6le9 gifts of nature as well> it would ha7e 6ecome o67ious that la6or cannot 6e the

common factor. Had he carried out this limitation ?uite clearl and o5enl> the gross fallac of method

would ine7ita6l ha7e struck 6oth himself and his readers. ,he trick could onl ha7e 6een 5erformed>

as Marx 5erformed it> with the aid of the mar7elous dialectic skill wherewith he glides swiftl and

lightl o7er the knott 5oint.

But 6 means of the artifice :ust descri6ed> 5roceeds our critic> Marx has merel succeeded in

con7incing us that la6or can in fact enter into the com5etition. ,he exclusion of other com5etitors is

effected 6 two arguments> each of a few words onl> 6ut each containing a 7er serious logical

fallac. +n the first of these Marx excludes all 9geometrical> 5hsical> chemical> or other natural?ualities of the commodities>9 for 9their 5hsical ?ualities claim our attention onl in so far as the

affect the utilit of the commoditiesGmake them use 7alues. *n the other hand> the exchange relation

of commodities is e7identl characteri@ed 6 the a6straction of their use 7alues>9 6ecause 9within this

relation Ethe exchange relationF one use 7alue is as good as another 5ro7ided onl it 6e 5resent in the

5ro5er 5ro5ortion.9

Here> sas Bhm-Bawerk> Marx falls into a gra7e error. He confuses the disregarding of a

genus with the disregarding of the s5ecific forms in which this genus manifests itself. ,he s5ecial

forms under which use 7alue ma a55ear ma 6e disregarded> 6ut the use 7alue of the commodit in

general must ne7er 6e disregarded. Marx might ha7e seen that we do not a6solutel disregard use

7alue> from the fact that there can 6e no exchange 7alue where there is not a use 7alueGa fact which

Marx himself is re5eatedl forced to admit.

et us for a moment interru5t our reca5itulation of Bhm-Bawerk's criticism 6 a 6rief

inter5olation calculated to throw light u5on the 5scholog no less than u5on the logic of the leader of

the 5schological school.
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8hen + disregard the 9s5ecific forms in which use 7alue ma manifest itself>9 disregarding>

therefore> use 7alue in its concreteness> + ha7e> as far as + am concerned> disregarded use 7alue in

general> since> as far as + am concerned> use 7alue exists in its concreteness solel as a thus or thus

constituted use 7alue. Ha7ing ceased for me to 6e a use 7alue> it matters nothing to me that it has a use

7alue for others> 5ossesses utilit for this or that other 5erson. + do not exchange it until the moment

arri7es when it has ceased to 5ossess a use 7alue for me. ,his a55lies literall to the 5roduction of

commodities in its de7elo5ed form. Here the indi7idual 5roduces commodities of 6ut one kind>

commodities of which one s5ecimen at most can 5ossess a use 7alue for him> whereas in the mass the

commodities ha7e for him no such use 7alue. +t is a 5recondition to the exchangea6ilit of the

commodities that the should 5ossess utilit for others> 6ut since for me the are de7oid of utilit> the

use 7alue of m commodities is in no sense a measure e7en for m indi7idual estimate of 7alue> and

still less is it a measure of an o6:ecti7e estimate of 7alue. +t a7ails nothing to sa that the use 7alue

consists of the ca5acit of these commodities to 6e exchanged for other commodities> for this would

im5l that the extent of the 9use 7alue9 is now determined 6 the extent of the exchange 7alue> not the

extent of the exchange 7alue 6 the extent of the use 7alue.

%s long as goods are not 5roduced for the 5ur5ose of exchange> are not 5roduced as

commodities> as long> that is to sa> as exchange is no more than an occasional incident whereinsu5erfluities onl are exchanged> goods confront one another solel as use 7alues.

9,he 5ro5ortions in which the are exchangea6le are at first ?uite a matter of chance. 8hat

makes them exchangea6le is the mutual desire of their owners to alienate them. Meantime the need for

foreign o6:ects of utilit graduall esta6lishes itself. ,he constant re5etition of exchange makes it a

normal social act. +n the course of time> therefore> some 5ortion at least of the 5roducts of la6or must

6e 5roduced with a s5ecial 7iew to exchange. $rom that moment the distinction 6ecomes firml

esta6lished 6etween the utilit of an o6:ect for the 5ur5oses of consum5tion> and its utilit for the

5ur5oses of exchange. +ts use 7alue 6ecomes distinguished from its exchange 7alue. *n the other

hand> the ?uantitati7e 5ro5ortion in which the articles are exchangea6le 6ecomes de5endent on their

5roduction itself. Custom stam5s them as 7alues with definite magnitudes.9 ;! for97alue9 is nothing more than an economic modification of use 7alue. +t is solel the anarch of the

contem5orar method of 5roduction> owing to which under certain conditions Ea glutF a use 7alue

6ecomes a non-use-7alue and conse?uentl 7alueless> which makes the recognition of this self-e7ident

truth a matter of considera6le im5ortance.

et us return to Bhm-Bawerk. ,he second ste5 in the argument> he tells us> is still worse.

Marx contends that if the use 7alue of commodities 6e disregarded> there remains in them 6ut one

other ?ualit> that of 6eing 5roducts of la6or. But do there not remain a num6er of other ?ualitiesI

Such is Bhm-Bawerk's indignant in?uir. Ha7e the not the common ?ualit of 6eing scarce in

5ro5ortion to demandI +s it not common to them to 6e the o6:ects of demand and su55l> or that the

are a55ro5riated> or that the are natural 5roductsI +s it not common to them that the cause ex5ense

to their 5roducersGa ?ualit to which Marx draws attention in the third 7olume of Capital" 8h

should not the 5rinci5le of 7alue reside in an one of these ?ualities as well as in the ?ualit of 6eing5roducts of la6orI $or in su55ort of this latter 5ro5osition Marx has not adduced a shred of 5ositi7e

e7idence. His sole argument is the negati7e one> that the use 7alue> thus ha55il disregarded and out of

the wa> is not the 5rinci5le of exchange 7alue. But does not this negati7e argument a55l with e?ual

force to all the other common ?ualities o7erlooked ;< 6 MarxI ,his is not all. Marx writes as

followsJ 9%long with the useful ?ualities of the 5roducts ;of la6or< we 5ut out of sight 6oth the useful

character of the 7arious kinds of la6or em6odied in them> and the concrete forms of that la6or= there is

nothing left 6ut what is common to them all= the are reduced to one and the same sort of la6or>

human la6or in the a6stract.9 ;/ not onl

one use 7alue 6ut also an one kind of la6or 9is :ust as good as another> 5ro7ided onl it 6e 5resent in

the 5ro5er 5ro5ortion.9 +t follows that the identical e7idence on which Marx formulated his 7erdict of

exclusion in the case of use 7alue will hold good as regards la6or. a6or and use 7alue> sas Bhm-

Bawerk> ha7e a ?ualitati7e side and a ?uantitati7e side. 2ust as the use 7alue differs according as it is

manifested in a ta6le or in arn> so also does la6or differ as car5entr or s5inning. %nd :ust as we ma

com5are different kinds of la6or according to their ?uantit> so we ma com5are use 7alues of
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different kinds according to the 7aring amount of use 7alue. +t is ?uite im5ossi6le to understand wh

the 7er same e7idence should result in the exclusion of one com5etitor and in the assigning of the

5ri@e to the other. Marx might :ust as well ha7e re7ersed his reasoning 5rocess and ha7e disregarded

la6or.

Such is Marx's logic> such his method of 5rocedure> as reflected in the mind of Bhm-Bawerk.

His 5rocedure> according to the latter> was 5erfectl ar6itrar. %lthough in an utterl un:ustified 6ut

extremel artful manner he has managed to secure that nothing 6ut the 5roducts of la6or shall 6e left to

6e exchanged> it was im5ossi6le for him to adduce e7en the slightest ground for the contention that the

common ?ualit which must 5resuma6l 6e 5resent in the commodities to 6e exchanged is to 6e

sought and found in la6or. *nl 6 willfull ignoring a num6er of other ?ualities> onl 6 his utterl

unwarranted disregard of use 7alue> did Marx attain the desired result. 2ust as little as the classical

economists was Marx in a 5osition to furnish an atom of 5roof on 6ehalf of the 5ro5osition that la6or

is the 5rinci5le of 7alue.

Bhm-Bawerk's critical ?uestion to which Marx is alleged to ha7e gi7en so fallacious an

answer is the ?uestionJ what right had Marx to 5roclaim la6or to 6e the sole creator of 7alueI *ur

counter-criticism must in the first instance consist of a demonstration that the analsis of the

commodit furnishes the desired answer.,o Bhm-Bawerk> the Marxist analsis esta6lishes a contrast 6etween utilit and the 5roduct

of la6or. )ow we full agree with Bhm-Bawerk that no such contrast exists. a6or must 6e done on

most things in order to render them useful. *n the other hand> when we estimate the utilit of a thing>

it is a matter of indifference to us how much la6or has 6een ex5ended on it. % good does not 6ecome a

commodit merel in 7irtue of 6eing the 5roduct of la6or. But onl in so far as it is a commodit#does

a good exhi6it the contrasted ?ualities of use 7alue and 7alue. )ow a good 6ecomes a commodit

solel through entering into a relationshi5 with other goods> a relationshi5 which 6ecomes manifest in

the act of exchange> and which> ?uantitati7el regarded> a55ears as the exchange 7alue of the good.

,he ?ualit of functioning as an exchange 7alue thus determines the commodit character of the good.

But a commodit cannot of its own initiati7e enter into relationshi5s with other commodities= the

material relationshi5 6etween commodities is of necessit the ex5ression of a 5ersonal relationshi5

6etween their res5ecti7e owners. %s owners of commodities> these reci5rocall occu5 definiterelationshi5s of 5roduction. ,he are inde5endent and e?ual 5roducers of 5ri7ate 9la6ors.9 But these

5ri7ate 9la6ors9 are of a 5eculiar kind> inasmuch as the are effected> not for 5ersonal use 6ut for

exchange> in as much as the are intended for the satisfaction> not of indi7idual need> 6ut of social

need. ,hus whereas 5ri7ate ownershi5 and the di7ision of la6or reduces societ into its atoms> the

exchange of 5roducts restores to societ its social interconnections.

,he term commodit> therefore> is an economic term= it is the ex5ression of social

relationshi5s 6etween mutuall inde5endent 5roducers in so far as these relationshi5s are effected

through the instrumentalit of goods. ,he contrasted ?ualities of the commodit as use 7alue and as

7alue> the contrast 6etween its manifestation as a natural form or as a 7alue form> now a55ears to us to

6e a contrast 6etween the commodit manifesting itself on the one hand as a nat!ralthing and on the

other hand as asocialthing. 8e ha7e> in fact> to do with a dichotom> wherein the gi7ing of the 5lace

of honor to one 6ranch excludes the other> and con7ersel. But the difference is merel one of 5oint of7iew. ,he commodit is a unit of use 7alue and of 7alue> 6ut we can regard that unit from two

different as5ects. %s a natural thing> it is the o6:ect of a natural science= as a social thing> it is the

o6:ect of a social science> the o6:ect of 5olitical econom. ,he o6:ect of 5olitical econom is the social

as5ect of the commodit> of the good> in so far as it is a sm6ol of social interconnection. *n the other

hand> the natural as5ect of the commodit> its use 7alue> lies outside the domain of 5olitical econom.; howe7er> can 6e the ex5ression of social relationshi5s onl in so far as it is

itself contem5lated as a 5roduct of societ> as a thing on which societ has stam5ed its im5rint. But for

societ> which exchanges nothing> the commodit is nothing more than a 5roduct of la6or. Moreo7er>

the mem6ers of societ can onl enter into economic relationshi5s one with another according as the

work one for another. ,his material relationshi5 a55ears in its historic form as the exchange of

commodities. ,he total 5roduct of la6or 5resents itself as a total 7alue> which in indi7idual

commodities manifests itself ?uantitati7el as exchange 7alue.


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,he commodit 6eing> as far as societ is concerned> the 5roduct of la6or> this la6or there6

secures its s5ecific character as sociall necessar la6or= the commodit no longer exhi6its itself to us

as the 5roduct of the la6or of different su6:ects> for these must now rather 6e looked u5on as sim5le

9instruments of la6or.9 #conomicall regarded> therefore> the 5ri7ate 9la6ors9 manifest themsel7es as

their o55osites> as social 9la6ors.9 ,he condition which gi7es its 7alue-creating ?ualit to la6or is>

therefore> the social determination of the la6orGit is a ?ualit of social la6or.

,hus the 5rocess of a6straction where6 Marx 5asses from the conce5t of concrete 5ri7ate

la6or to the conce5t of a6stractl human social la6or> far from 6eing> as Bhm-Bawerk imagines>

identical with the 5rocess of a6straction where6 Marx excludes use 7alue from consideration> is in

fact the 7er o55osite of that 5rocess.

% use 7alue is an indi7idual relationshi5 6etween a thing and a human 6eing. +f + disregard its

concreteness Eand + am com5elled to do so as soon as + alienate the thing so that it ceases to 6e a use

7alue for meF + there6 destro this indi7idual relationshi5. But solel in its indi7idualit can a use

7alue 6e the measure of m 5ersonal estimate of 7alue. +f> on the other hand> + disregard the concrete

manner in which + ha7e ex5ended m la6or> it ne7ertheless remains a fact that la6or in general has

6een ex5ended in its uni7ersal human form> and this is an o6:ecti7e magnitude the measure of which is

furnished 6 the duration of the effort.+t is 5recisel this o6:ecti7e magnitude with which Marx is concerned. He is endea7oring to

disco7er the social nexus 6etween the a55arentl isolated agents of 5roduction. Social 5roduction> and

therewith the actual material 6asis of societ> is> according to its nature> ?ualitati7el determined 6

the nature of the organi@ation of social la6or. ,his organi@ation> causall determined 6 economic

need> soon ac?uires a legal> a :uristic fixation. %n 9external regulation9 of this character constitutes a

logical 5remise of the economic sstem> and furnishes the framework within which the se5arate

elements of the societ> the elements which la6or and the elements which control la6or> mutuall

influence one another. +n a societ characteri@ed 6 the di7ision of 5ro5ert and 6 the di7ision of

la6or> this relationshi5 a55ears in the form of exchange> ex5resses itself as exchange 7alue. ,he social

nexus manifests itself as the outcome of 5ri7ate relationshi5s> the relationshi5s not of 5ri7ate

indi7iduals 6ut of 5ri7ate things. +t is 5recisel this which in7ol7es the whole 5ro6lem in mster.

+nasmuch> howe7er> as the things enter into mutual relations> the 5ri7ate la6or which has 5roducedthem ac?uires 7alidit solel in so far as it is an ex5enditure of its own antithesis> sociall necessar

la6or.

,he outcome of the social 5rocess of 5roduction thus ?ualitati7el determined is ?uantitati7el

determined 6 the sum total of the ex5ended social la6or. %s an ali?uot 5art of the social 5roduct of

la6or Eand as such onl does the commodit function in exchangeF> the indi7idual commodit is

?uantitati7el determined 6 the ?uota of social la6or time em6odied in it.

%s a 7alue> therefore> the commodit is sociall determined> is a social thing. %s such alone

can it 6e su6:ected to economic consideration. But when our task is to effect the economic analsis of

an social institution that we ma disco7er the intimate law of motion of the societ> and when we call

u5on the law of 7alue to render us this ser7ice> the 5rinci5le of 7alue cannot 6e an other than that to

whose 7ariations the changes in the social institution must in the last instance 6e referred.

#7er theor of 7alue which starts from use 7alue> that is to sa from the natural ?ualities ofthe thing> whether from its finished form as a useful thing or from its function> the satisfaction of a

want> starts from the indi7idual relationshi5 6etween a thing and a human 6eing instead of starting

from the social relationshi5s of human 6eings one with another. ,his in7ol7es the error of attem5ting

from the su6:ecti7e indi7idual relationshi5> therefrom su6:ecti7e estimates of 7alue are 5ro5erl

deduci6le> to deduce an o6:ecti7e social measure. +nasmuch as this indi7idual relationshi5 is e?uall

5resent in all social conditions> inasmuch as it does not contain within itself an 5rinci5le of change

Efor the de7elo5ment of the wants and the 5ossi6ilit of their satisfaction are themsel7es likewise

determinedF> we must> if we ado5t such a 5rocedure> renounce the ho5e of disco7ering the laws of

motion and the e7olutionar tendencies of societ. Such an outlook is unhistorical and unsocial. +ts

categories are natural and eternal categories.

Marx> con7ersel> starts from la6or in its significance as the constituti7e element in human

societ> as the element whose de7elo5ment determines in the final analsis the de7elo5ment of

societ. +n his 5rinci5le of 7alue he thus gras5s the factor 6 whose ?ualit and ?uantit> 6 whose

organi@ation and 5roducti7e energ> social life is causall controlled. ,he fundamental economic idea


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is conse?uentl identical with the fundamental idea of the materialist conce5tion of histor.

)ecessaril so> seeing that economic life is 6ut a 5art of historic life> so that conformit to law in

economics must 6e the same as conformit to law in histor. ,o the extent that la6or in its social form

6ecomes the measure of 7alue> economics is esta6lished as a social and historical science. ,herewith

the 5ur7iew of economic science is restricted to the definite e5och of social e7olution wherein the

good 6ecomes a commodit. +n other words> it is restricted to the e5och wherein la6or and the 5ower

which controls la6or ha7e not 6een consciousl ele7ated to the rank of a regulati7e 5rinci5le of social

meta6olism and social 5redominance> 6ut wherein this 5rinci5le unconsciousl and automaticall

esta6lishes itself as a material ?ualit of thingsGinasmuch as> as the outcome of the 5eculiar form

which social meta6olism has assumed in exchange> it results that 5ri7ate la6ors ac?uire 7alidit onl in

so far as the are social la6ors. Societ# has, as it $ere, assigned to each of its memers the %!ota of

laor necessar# to societ#& has specified to each individ!al ho$ m!ch laor he m!st e'pend. %nd

these indi7iduals ha7e forgotten what their ?uota was> and redisco7er it onl in the 5rocess of social

life.

+t is therefore 6ecause la6or is the social 6ond uniting an atomi@ed societ> and not 6ecause

la6or is the matter most technicall rele7ant> that la6or is the 5rinci5le of 7alue and that the law of

7alue is endowed with realit. +t is 5recisel 6ecause Marx takes sociall necessar la6or as hisstarting 5oint that he is so well a6le to disco7er the inner working of a societ 6ased on 5ri7ate

5ro5ert and the di7ision of la6or. $or him the indi7idual relation 6etween human 6eing and good is a

5remise. 8hat he sees in exchange is not a difference of indi7idual estimates> 6ut the e?uation of a

historicall determined relationshi5 of 5roduction. *nl in this relationshi5 of 5roduction> as the

sm6ol> as the material ex5ression> of 5ersonal relationshi5s> as the 6earer of social la6or> does the

good 6ecome a commodit= and onl as the e'pression of derivative relationships of prod!ction can

things which are not the 5roducts of la6or assume the character of commodities.

8e thus reach Bhm-Bawerk's o6:ection as ex5ressed in his in?uir> How can the 5roducts of

nature ha7e 9exchange 7alue9I ,he natural conditions under which la6or is 5erformed are unaltera6l

gi7en to societ> and from these conditions therefore changes in social relationshi5s cannot 6e deri7ed.

,he onl thing that changes is the manner in which la6or is a55lied to these natural conditions. ,he

degree to which such a55lication is successful determines the 5roducti7it of la6or. ,he change in5roducti7it is effected solel 6 the concrete la6or which creates use 7alue= 6ut according as the mass

of 5roducts wherein the 7alue-creating la6or is em6odied increases or diminishes> it results that more

or less la6or than 6efore is em6odied in the indi7idual s5ecimen. ,o the extent that natural energ is at

an indi7idual's dis5osal> so that he is there6 ena6led to la6or with a 5roducti7it exceeding the social

a7erage> that indi7idual is in a 5osition to reali@e an extra sur5lus 7alue. ,his extra sur5lus 7alue>

ca5itali@ed> then manifests itself as the 5rice of this natural energ Eit ma 6e of the soilF whose

a55urtenance it is. ,he soil is not a commodit> 6ut in a length historical 5rocess it ac?uires the

characteristics of a commodit as a condition re?uisite to the 5roduction of commodities. ,he

ex5ressions 97alue of land9 or 95rice of land9 are therefore nothing more than irrational formulas

6eneath which is concealed a real relationshi5 of 5roduction> that is to sa a relationshi5 of 7alue. ,he

ownershi5 of land does not create the 5ortion of 7alue which is transformed into sur5lus 5rofit= it

merel ena6les the landowner to transfer this sur5lus 5rofit from the manufacturer's 5ocket to his own.But Bhm-Bawerk> who ascri6es to the gifts of nature a 7alue 5eculiar to themsel7es> is a 5re to the

5hsiocrats' illusion that rent is deri7ed from nature and not from societ.

,hus Bhm-Bawerk continuall confuses the natural and the social. ,his is 5lainl shown in

his enunciation of the additional ?ualities common to commodities. +t is a strange medleJ the fact of

a55ro5riation is the legal ex5ression of the historical relationshi5s which must 6e 5resu55osed in order

that goods ma 6e exchanged at all Eit is 95re-economic9 factFGthough how this should 6e a

?uantitati7e measure remains inex5lica6le. +t is a natural ?ualit of commodities to 6e natural

5roducts> 6ut in no wa does this render them ?uantitati7el com5ara6le. +nasmuch> further> as the

are the o6:ects of demand and ha7e a relationshi5 to demand> the ac?uire a use 7alue= for relati7e

scarcit renders them su6:ecti7el the o6:ects of esteem> whereas o6:ecti7el Efrom the stand5oint of

societF their scarcit is a function of the cost of la6or> securing therein its o6:ecti7e measure in the

magnitude or its cost.

2ust as in the foregoing Bhm-Bawerk fails to distinguish the natural ?ualities of commodities

from their social ?ualities> so in the further course of his criticism he confuses the outlook on la6or in


9/35

so far as it creates use 7alue with the outlook on la6or in so far as it creates 7alue= and he 5roceeds to

disco7er a new contradiction in the law of 7alueGthough Marx 9with a masterl dialectic ... seeks to

suggest9 that the facts 9do not contain a contradiction of his fundamental 5rinci5le> 6ut are onl a

slightl different reading of it.9

Marx declares that skilled la6or is e?ui7alent to a definite ?uantit of unskilled la6or. He has

howe7er taught us> sas Bhm-Bawerk> that things e?uated with one another 6 exchange 9contain

e?ual amounts of some common factor> and this common factor must 6e la6or and working time.9 But

the facts 6efore us> he sas> do not com5l at all with this demand. $or in skilled la6or> for exam5le in

the 5roduct of a scul5tor> there is no unskilled la6or at all> and still less can we sa that the unskilled

la6or e?ual to the fi7e das' la6or of the stone6reaker is em6odied in the scul5tor's 5roduct. 9,he 5lain

truth is ;7er 5lain indeedGR. H.< that the two 5roducts em6od different 3inds of la6or in different

amounts> and e7er un5re:udiced 5erson will admit that this means a state of things exactl contrar to

the conditions which Marx demands and must affirm> namel> that the em6od la6or of the same

kindand of thesame amo!nt.(

et me 5arentheticall remark that there is no ?uestion here of the 9same amount>9 no ?uestion

of %!antitative e%!alit#.8e are solel concerned with the com5ara6ilit of different kindsof la6or>

that is to sa with the 5ossi6ilit of ex5ressing them in terms of some common measure> with the5ossi6ilit of their %!alitativee?uali@ation.

+t is true> continues Bhm-Bawerk> that Marx sasJ 9#x5erience shows that this reduction

;from skilled to unskilled la6or< is constantl 6eing made. % commodit ma 6e the 5roduct of the

most skilled la6or> 6ut its 7alue> 6 e?uating it to the 5roduct of sim5le unskilled la6or> re5resents a

definite ?uantit of the latter la6or alone. ,he different 5ro5ortions in which different sorts of la6or are

reduced to unskilled la6or as their standard are esta6lished 6 a social 5rocess that goes on 6ehind the

6acks of the 5roducers> and> conse?uentl> a55ear to 6e fixed 6 custom.9 ; howe7er> in?uires> what is the meaning of the a55eal to 97alue9 and the 9social

5rocess9 as the determining factors of the standard of reductionI 9%5art from e7erthing else> it

sim5l means that Marx is arguing in a circle. ,he real su6:ect of in?uir is the exchange relations of

commodities>9 wh> for instance> the scul5tor's work is worth fi7e times as much as the unskilled la6or

of the stone-6reaker. 9Marx... sas that the exchange relation is this> and no otherG6ecause one da ofscul5tor's work is reduci6le exactl to fi7e das' unskilled work. %nd wh is it reduci6le to exactl

fi7e dasI Because ex5erience shows that it is so reduced 6 a social 5rocess.9 But it is this 7er

5rocess which re?uires ex5lanation. 8ere the exchange relationshi5 1J/ instead of 1J> 9Marx would

e?uall 6id us acce5t the rate of reduction of 1J/ as the one deri7ed from ex5erience= ... in short> it is

clear that we shall ne7er learn in this wa the actual reasons wh 5roducts of different kinds of work

should 6e exchanged in this or that 5ro5ortion.9 +n this decisi7e 5oint> sas the critic> the law of 7alue

6reaks down.

8e ha7e here a statement of the familiar difficult> the difficult to which others 6esides

Bhm-Bawerk ha7e drawn attention. +n the 5reface to the first 7olume of Capital,Marx> with his well-

known 9social o5timism>9 5resu55oses 9a reader who is willing to learn something new> and therefore

to think for himself9G this 6eing + 6elie7e the onl unwarranted 5resu55osition Marx e7er made. But

e7er thoughtful reader will at the outset feel that there is a ga5 in the argument> and the 7oid has 6eenindicated 6 9more or less Marxist9 writers> as 6 Bernstein> C. Schmidt> and 3autsk.

et us regard the matter more closel. $irst of all> Bhm-Bawerk himself tells us that the

difference consists onl in this> that in the one case we ha7e to do with skilled and in the other with

unskilled la6or. +t is o67ious> therefore> that the difference in 7alue of the res5ecti7e 5roducts must

de5end u5on a difference in the la6or. ,he same natural 5roduct is in one case the o6:ect u5on which

skilled la6or has 6een ex5ended> and in the other case the o6:ect u5on which unskilled la6or has 6een

ex5ended> and it ac?uires a different 7alue in the res5ecti7e cases. ,hus there is no logicalo6:ection to

the law of 7alue. ,he onl ?uestion that arises is whether it is necessar to determine the ratio of 7alue

6etween the two kinds of la6or> and whether the difficult of effecting this determination ma not

5ro7e insu5era6le. $or> if we assume a knowledge of the ratio to 6e indis5ensa6le> in the a6sence of

such knowledge the conce5t of 7alue will 6e inca5a6le of furnishing the ex5lanation of economic

5rocesses.

et us reconsider Marx's argument. +n the 5assage 5re7iousl ?uoted we readJ 9+ts 7alue ;that

is to sa the 7alue of the 5roduct of skilled la6or 6 e?uating it to the 5roduct of sim5le unskilled


10/35

la6or> re5resents a definite ?uantit of the latter la6or alone.9 $or this 5rocess to 6e com5rehensi6le>

howe7er> 7alue theor must regard the la6or a7aila6le for societ at an gi7en moment as com5osed of

homogeneous 5artsGindi7idual la6or> in so far as it creates 7alue> 6eing merel an ali?uot 5art of this

?uantitati7e whole. But onl if + am a6le to ex5ress this whole in terms of some common unit of

measurement can + regard it as ?ualitati7el homogeneous. ,he re?uired unit of measurement is

furnished 6 9sim5le a7erage la6or>9 and this 9is the ex5enditure of sim5le la6or 5ower> that is> of the

la6or 5ower which on the a7erage> a5art from an s5ecial de7elo5ment> exists in the organism of e7er

ordinar indi7idual.9 ;K sas Marx> is esta6lished 6 a social 5rocess that goes on 6ehind the 6acks of the

5roducers. )ow Bhm-Bawerk will not admit that this a55eal to ex5erience is 7alid> and declares that

here the theor of 7alue 6reaks down utterl. $or 9in what 5ro5ortions skilled is to 6e translated into

terms of unskilled la6or in the 7aluation of their res5ecti7e 5roducts is not determined> nor can it 6e

determined> a 5riori> 6 an 5ro5ert inherent in the skilled la6or itself> 6ut it is the actual result alone

which decides the actual exchange relations.9 ;L for in his 7iew> as he elsewhere tells

us> the essential task of economics is to ex5lain the 5henomenon of 5rice.

+s it reall true> howe7er> that in default of a knowledge of the ratio> the law of 7alue 6ecomesunworka6leI +n striking contrast with Bhm-Bawerk> Marx looks u5on the theor of 7alue> not as the

means for ascertaining 5rices> 6ut as the means for disco7ering the laws of motion of ca5italist societ.

#x5erience teaches us that the asol!teheight of 5rices is the starting 5oint of this mo7ement> 6ut> for

the rest> the a6solute height of 5rices remains a matter of secondar im5ortance> and we are concerned

merel with studing the law of their 7ariation. +t is a matter of indifference whether an s5ecific kind

of skilled la6or is to 6e reckoned the fourfold multi5le or the sixfold multi5le of unskilled la6or. ,he

im5ortant 5oint is that a dou6ling or tre6ling of 5roducti7e 5ower in the s5here of skilled la6or would

lower the 5roduct of skilled la6or twofold or threefold 7is-a-7is the 5roduct of unskilled la6or E6

h5othesis unchangedF.

,he asol!teheight of 5rices is gi7en us 6 ex5erience= what interests us is the la$)aiding

variationthat these 5rices undergo. ike all 7ariations> this 7ariation is 6rought a6out 6 a force= and

since we ha7e to do with changes in social 5henomena> these changes must 6e effected 6 7ariations inthe magnitude of a social force> the social 5ower of 5roduction.

Since> howe7er> the law of 7alue discloses to us that in the final analsis this de7elo5ment of

5roducti7e 5ower controls 7ariations in 5rices> it 6ecomes 5ossi6le for us to gras5 the laws of these

changes= and since all economic 5henomena manifest themsel7es 6 changes in 5rices> it is further

5ossi6le to attain to an understanding of economic 5henomena in general. Ricardo> aware of the

incom5leteness of his analsis of the law of 7alue> therefore declares in so man words that the

in7estigation to which he wishes to direct the reader's attention concerns 7ariations in the relati7e

7alue of commodities and not 7ariations in their a6solute 7alue.

+t follows that the lack of a knowledge of the ratio in ?uestion 6 no means restricts the

im5ortance of the law of 7alue as a means 6 which we are ena6led to recogni@e the conformit to law

dis5laed 6 the economic mechanism. +n another res5ect> howe7er> this lack would 6e serious. +f in

5ractice the a6solute height of 5rice had in the first instance to 6e esta6lished 6 the social 5rocess> theconce5t of 7alue would ha7e to contain all the elements which theoreticall#allow us to a55rehend the

5rocess where6 societ effectuates the reduction of skilled la6or to unskilled. *therwise this 5rocess>

which exercises a decisi7e influence u5on the magnitude of 7alue> though it would indeed 5ositi7el

exist and would not in7ol7e an contradiction to the law of 7alue> would ne7ertheless afford an

ex5lanation of a 5art onl Eand that the most im5ortantF of economic 5henomena> 6ut would lea7e

unex5lained another 5art> namel the starting 5oint of these 7ariations.

8hen> howe7er> Bhm-Bawerk in?uires> what is the ?ualit inherentin skilled la6or which

gi7es that la6or its 5eculiar 5ower to create 7alue> the ?uestion is wrongl stated. ,he 7alue-creating

?ualit is not 5er se inherent in an la6or. Solel in con:unction with a definite mode of social

organi@ation of the 5rocess of 5roduction does la6or create 7alue. Hence> we cannot attain to the

conce5t of 7alue-creating la6or merel 6 contem5lating isolated la6or in its concreteness. Skilled

la6or> therefore> if + am to regard it as 7alue-creating> must not 6e contem5lated in isolation> 6ut as 5art

of social la6or.


11/35

,he ?uestion conse?uentl arises> what is skilled la6or from the social stand5ointI *nl when

we can answer this can we ex5ect to attain to a 5osition from which we shall 6e a6le to recogni@e the

5rinci5les according to which the aforesaid social reduction can 6e effected. Manifestl these

5rinci5les can 6e none other than those which are contained in the law of 7alue. But here we encounter

a difficult. ,he law of 7alue a55lies to commodities> whereas la6or is not a commodit e7en though it

a55ears as such when we s5eak of the wage of la6or. *nl la6or po$er is a commodit and 5ossesses

7alue= la6or creates7alue 6ut does not itself 5ossess 7alue. +t is not difficult to calculate the 7alue of a

la6orpo$erengaged on skilled work= like e7er other commodit it is e?ual to the la6or re?uisite for

its 5roduction and re5roduction> and this is com5osed of the cost of maintenance and the cost of

training. But here we are not concerned with the 7alue of a skilled la6or 5ower> 6ut with the ?uestion

how and in what ratio skilled la6or creates more 7alue than unskilled.

8e must not deduce the higher 7alue which skilled la6or creates from the higher wage of

skilled la6or 5ower> for this would 6e to deduce the 7alue of the 5roduct from the 97alue of la6or.9 +t is

true that Bernstein ;A and 6elie7es that he can :ustif himself 6 a ?uotation from

Marx. But if we read the sentence in the context from which Bernstein has torn it> we see that it

con7es the 5recise o55osite of that which Bernstein wishes to deduce from it. Marx writesJ 9+t has

5re7iousl 6een 5ointed out that> as far as the 5rocess of 5roducing sur5lus 7alue is concerned> it is amatter of a6solutel no moment whether the la6or a55ro5riated 6 the ca5italist 6e a7erage unskilled

social la6or or com5arati7el skilled la6or> la6or of a higher s5ecific gra7it. ,he la6or which> when

contrasted with a7erage social la6or> counts as higher> com5arati7el skilled la6or> is the manifestation

of a la6or 5ower to the making of which higher formati7e costs ha7e gone> whose 5roduction has cost

more la6or time> and which conse?uentl has a higher 7alue than that 5ossessed 6 unskilled la6or

5ower. )ow whereas the 7alue of this 5ower is higher> it must also 6e remem6ered that it manifests

itself in higher work> and conse?uentl materiali@es> in e?ual s5aces of time> in com5arati7el higher

7alues. 8hate7er difference in skill there ma 6e 6etween the la6or of a s5inner and that of a :eweler>

the 5ortion of his la6or 6 which the :eweler merel re5laces the 7alue of his own la6or 5ower does

not in an wa differ in ?ualit from the additional 5ortion 6 which he creates sur5lus 7alue. +n the

making of :ewelr> :ust as in s5inning> the sur5lus 7alue results onl from a ?uantitati7e excess of

la6or> from a lengthening out of one and the same la6or 5rocess> in the one case of the 5rocess ofmaking :ewels> in the other of the 5rocess of making arn.9 8e see that the ?uestion Marx here

discusses is how skilled la6or can create sur5lus 7alue des5ite the high wage> des5ite> that is to sa> the

magnitude of the necessar la6or. #x5ressed in fuller detail> the thoughts in the sentence ?uoted 6

Bernstein would read somewhat as followsJ 9#7en though the 7alue of this 5ower 6e higher> it can

none the less 5roduce more sur5lus 7alue> 6ecause it manifests itself in higher work9Gand so on.

Marx lea7es out the intermediate clause and introduces what follows with the word (aer(

;96ut9whereas> if Bernstein had 6een right> he would ha7e had to use the word (daher(

;9conse?uentl>9 or 9therefore9 + should onl 6e in a

5osition to deduce the 7alue which this la6or 5ower newl creates if + knew what had 6een the rate of

ex5loitation. But e7en if the rate of ex5loitation of unskilled la6or were known to me> + should ha7e no

right to assume that the identical rate of ex5loitation 5re7ailed for skilled la6or. $or the latter> the rateof ex5loitation might 6e much lower. ,hus neither directl nor indirectl does the wage of a skilled

la6or 5ower gi7e me an information regarding the 7alue which this la6or 5ower newl creates. ,he

7isage which the Marxist theor would assume if Bernstein's inter5retation were to 6e acce5ted Eand

Bernstein himself tells us that in his 7iew the theor would assume an utterl different 7isageF would

5ossess ironical lineaments which could hardl 6e concealed. 8e must> therefore> endea7or to

a55roach the solution of the 5ro6lem in a different manner. ; 6ut ?ualified or skilled

la6or is the ex5enditure of ?ualified la6or 5ower. $or the 5roduction of this skilled la6or 5ower>

howe7er> a num6er of unskilled la6ors were re?uisite. ,hese are stored u5 in the 5erson of the

?ualified la6orer> and not until he 6egins to work are these formati7e la6ors made fluid on ehalf of

societ#.,he la6or of the technical educator thus transmits> not onl val!eEwhich manifests itself in the

form of the higher wageF> 6ut in addition its own val!e)creating po$er.,he formati7e la6ors are

therefore latent as far as societ# is concerned,and do not manifest themsel7es until the skilled la6or


12/35

5ower 6egins to work. +ts ex5enditure conse?uentl signifies the ex5enditure of all the different

unskilled la6ors which are simultaneousl condensed therein.

(nskilled la6or> if a55lied to the 5roduction of a ?ualified or skilled la6or 5ower> creates on

the one hand the 7alue of this la6or 5ower> which rea55ears in the wage of the ?ualified' la6or 5ower=

6ut on the other hand 6 the concrete method of its a55lication it creates a new use 7alue> which

consists in this> that there is now a7aila6le a la6or 5ower which can create 7alue with all those

5otentialities 5ossessed 6 the unskilled la6ors utili@ed in its formation. +nasmuch as unskilled la6or is

used in the formation of skilled la6or> it thus creates on the one hand new 7alue and transmits on the

other to its 5roduct its use 7alueGto 6e the source of new 7alue. Regarded from the stand5oint of

societ> unskilled la6or is latent as long as it is utili@ed for the formation of skilled la6or 5ower. +ts

working for societ does not 6egin until the skilled la6or 5ower it has hel5ed to 5roduce 6ecomes

acti7e. ,hus in this single act of the ex5enditure of skilled la6or a sum of unskilled la6ors is ex5ended>

and in this wa there is created a sum of 7alue and sur5lus 7alue corres5onding to the total 7alue

which would ha7e 6een created 6 the ex5enditure of all the unskilled la6ors which were re?uisite to

5roduce the skilled la6or 5ower and its function> the skilled la6or. $rom the stand5oint of societ>

therefore> and economicall regarded> skilled la6or a55ears as a multi5le of unskilled la6or> howe7er

di7erse skilled and unskilled la6or ma a55ear from some other outlook> 5hsiological> technical> oraesthetic.

+n what it has to gi7e for the 5roduct of skilled la6or> societ conse?uentl 5as an e?ui7alent

for the 7alue which the unskilled la6ors would ha7e created had the 6een directl consumed 6

societ.

,he more unskilled la6or that skilled la6or em6odies> the more does the latter create higher

7alue> for in effect we ha7e numerous unskilled la6ors simultaneousl em5loed u5on the formation

of the same 5roduct. +n realit> therefore> skilled la6or is unskilled la6or multi5lied. %n exam5le ma

make the matter clearer. % man owns ten storage 6atteries wherewith he can dri7e ten different

machines. $or the manufacture of a new 5roduct he re?uires another machine for which a far greater

moti7e 5ower is re?uisite. He now em5los the ten 6atteries to charge a single accumulator> which is

ca5a6le of dri7ing the new machine. ,he 5owers of the indi7idual 6atteries thereu5on manifest

themsel7es as a unified force in the new 6atter> a unified force which is the tenfold multi5le of thesim5le a7erage force.

% skilled la6or ma contain> not unskilled la6ors alone> 6ut in addition skilled la6ors of a

different kind> and these in their turn are reduci6le to unskilled la6or. ,he greater the extent to which

other skilled la6ors are incor5orated in a skilled la6or> the 6riefer will 6e its formati7e 5rocess.

,hus the Marxist theor of 7alue ena6les us to recogni@e the 5rinci5les in accordance with

which the social 5rocess of reducing skilled la6or to unskilled la6or is effected. +t therefore renders the

magnitude of 7alue theoreticall# meas!rale.But when Bhm-Bawerk insists that Marx ought to ha7e

furnished the em5irical 5roof of his theor> and when he contends that the re?uisite 5roof would ha7e

consisted in demonstrating the relationshi5 6etween exchange 7alues or 5rices and ?uantities of la6or>

he is confusing theoretical withpracticalmeasura6ilit. 8hat + am a6le to determine 6 ex5erience is

the concrete ex5enditure of la6or re?uisite for the 5roduction of a s5ecified good. How far this

concrete la6or is sociall necessar la6or> how far> that is to sa> it has a 6earing on the formation of7alue> + am onl a6le to determine if + know the actual a7erage degree of 5roducti7it and intensit

which the 5roducti7e 5ower has re?uired> and if + also know what ?uantum of this good is demanded

6 societ. ,his means that we are asking from the indi7idual that which societ 5erforms. $or societ

is the onl accountant com5etent to calculate the height of 5rices> and the method which societ

em5los to this end is the method of com5etition. +nasmuch as> in free com5etition on the market>

societ treats as a unit the concrete la6or ex5ended 6 all 5roducers for the 5roduction of a good> and

inasmuch as societ onl 5as for la6or in so far as its ex5enditure was sociall necessar> it is societ

which first shows to what degree this concrete la6or has actuall colla6orated in the formation of 7alue

and fixes the 5rice accordingl. ,he uto5ia of 9la6or notes9 and 9constituted 7alue9 was 6ased u5on

this 7er illusion that the theoretical standard of measurement is at the same time an immediatel

5ractical standard of measurement. ,his is the conce5tion in accordance with which the theor of

7alue is regarded> not as a means 9for detecting the law of motion of contem5orar societ>9 6ut as a

means of securing a 5rice list that shall 6e as sta6le and as :ust as 5ossi6le.


13/35

,he search for such a 5rice list led 7on Buch ;14 in order to determine 5rice>

needs nothing more than thisGa knowledge of the 5rice. But the 5schological theor of 97alue9 is in

no 6etter case.

,hat theor indicates the 7arious degrees of satisfaction of needs with definite 6ut ar6itraril

selected figures> and arranges that these figures shall signif the 5rices which 5eo5le are willing to 5a

for the means wherewith needs are satisfied. ,his more effectuall conceals the 5rocess where6 a

num6er of ar6itrar 5rices are assumed instead of a single ar6itrar 5rice.

,he em5irical 5roof of the accurac of the theor of 7alue lies in a 7er different direction

from that towards which Bhm-Bawerk directs his in?uiries. +f the theor of 7alue is to 6e the ke for

the understanding of the ca5italist mode of 5roduction> it must 6e a6le to ex5lain the 5henomena of

that mode of 5roduction in a manner free from contradictions. ,he actual 5rocesses of the ca5italist

world must not conflict with the theor 6ut must confirm it. %ccording to Bhm-Bawerk the theor

fails in this res5ect. ,he third 7olume of Capital,in which Marx has no longer 6een a6le to ignore the

actual 5rocesses> shows that these actual 5rocesses could not 6e harmoni@ed with the 5resu55ositions

of the theor of 7alue. ,he data of the third 7olume are in crass contradiction with those of the first

7olume. ,he theor is shi5wrecked on the rocks of realit. $or realit> sas Bhm-Bawerk> shows that

the law of 7alue has no 7alidit for the 5rocess of exchange> seeing that commodities are exchanged at5rices which 5ermanentl di7erge from the 7alue of the commodities. +n the discussion of the 5ro6lem

of the a7erage rate of 5rofit the contradiction 6ecomes o67ious. Marx can sol7e this 5ro6lem onl 6

the sim5le a6andonment of his theor of 7alue. ,his re5roach of self-contradiction has 6ecome a

common5lace of 6ourgeois economics since it was made 6 Bhm-Bawerk. 8hen we are critici@ing

Bhm-Bawerk we are critici@ing the re5resentati7es of 6ourgeois criticism of the third 7olume of

Capital.

#$Geschichte !nd *ritik der *apitalzins)Theorien,!nd ed.> 55. 11 ff. %6o7e> 55. KA ff.%$&ol. +> 5. 144.*$&ol. +> 5. .+$9,hat is the reason wh erman com5ilers are so fond of dwelling on use 7alue> calling it a'good.'... $or intelligent information on 'goods' one must turn to treatises on commodities.9 Marx>A

Contri!tion to the Criti%!e of +olitical conom#,3err ed.> 5. !1n.

,$&ol. +> 55. 1-!.$&ol. +> 5. 1..$%6o7e> 5. A/./$#duard Bernstein> 9Dur ,heorie des %r6eitswerts>9-ie e!e /eit,&ol. N&+++ E1A-144F> "art +>

5. /.

0$,he translators had ho5ed to a7oid 6urdening Hilferding's text with an extended notes of theirown> 6ut the find it necessar to draw attention to a strange discre5anc 6etween the text of the

fourth EermanF edition of Capital,finall re7ised 6 #ngels in 1A4> and the third edition> that of

1AA/> the one ?uoted a6o7e 6 Hilferding. +n the third edition> the sentence a6out which the trou6le

arises runs as follows E5. 1LAFJ (Ist der 0ert dieser *raft hher, so a!ssert sie sich aer a!ch in

hherer Areit !nd vergegenstandlicht sich daher, in denselen /eitra!men, in verhaltnissmassighheren 0ert.(*ur translation of this> which we 5refer to that found on 5age 1L of Moore O

%7eling's 7ersion> runs as followsJ 9)ow whereas the 7alue of this 5ower is higher> it must also 6e

remem6ered that it manifests itself in higher work> and conse?uentl materiali@es> in e?ual s5aces of

time> in com5arati7el higher 7alues.9 ,he 5hrase 9it must 6e remem6ered that9 seems rather a length

rendering of the erman 9a6er>9 6ut in this 5articular context that 5hrase effecti7el 5resents the

5recise shade of meaning.

)ext let us turn to Bernstein. ,his writer ?uotes from the second EermanF edition of Capital,

in which E5. 1AKF the 5assage cited is identical with that ?uoted from the third edition 6 Hilferding.

But Bernstein inter5olates an exclamation mark ex5ressi7e almost of derision> the 5assage thus

readingJ 9)ow whereas the 7alue of this 5ower is higher> it must also 6e remem6ered that it manifests

itself in higher work> and conse?uentl ;< materiali@es in e?ual s5aces of time> in com5arati7el

higher 7alues.9 ,hereafter Ewriting in-ie e!e /eitof 0ecem6er !/> 1AF Bernstein continuesJ

9Here the 7alue of the la6or 5ower which materiali@es in the wage of la6or a55ears to 6e decisi7e for

the 7alue of the 5roduct. 8ere we to acce5t this as uni7ersall 7alid> the Marxist theor of 7alue
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would in m o5inion assume a 7isage utterl different from that which> as 5resented 6 all its

ex5ositors> it has hitherto assumed. +t would differ from the theor as ex5ounded 6 Marx himself> for

Marx> in his essa 1al!e, +rice, and +rofitex5ressl declaresJ ',o determine the 7alues of

commodities 6 the relati7e ?uantities of la6or fixed in them> is> therefore> a thing ?uite different from

the tautological method of determining the 7alues of commodities 6 the 7alue of la6or> or 6 wages'

;+nternational "u6lishers' ed.> 5. /! here is a 5oint which still remains to 6e

cleared u5> unless it 6e imagined that the elucidation is to 6e found in the dis?uisitions of the third

7olume concerning cost 5rice and 5rice of 5roduction which> :ust like the fact of sur5lus 7alue> do not

re?uire for their esta6lishment the la6or theor of 7alue in its original form.9

8hat Hilferding has to sa of Bernstein we ha7e seen in the text. ,he reader will note more

5articularl Hilferding's contention that were Bernstein right> Marx would ha7e written 9daher9 in

5lace of 9a6er.9 )ow comes the 5oint :ustifing the introduction of the 5resent note. +n the fourth

EermanF edition of CapitalE5. 1K4F the word 9a6er9 has 6een changed to 9daher>9 not in conse?uence

of what Bernstein wrote in-ie e!e /eitin 1A> for #ngels' 5reface to the fourth edition is dated

2une !> 1A4. $urther> in this 5reface> #ngels gi7es a detailed s5ecification of the im5ortant

alterations in the text of the fourth edition> making no direct allusion to the change on 5age 1K4> 6ut

addingJ 9*ther trifling modifications are of a 5urel technical nature.9 8e take it this means triflingim5ro7ements in literar stle. +n an case it would seem clear that #ngels did not regard this

5articular alteration as im5ortant. ,he re7ised sentence ma 6est 6e rendered as followsJ 9)ow if the

7alue of this 5ower 6e higher> the result is that it manifests itself in higher work> and conse?uentl it

materiali@es in e?ual s5aces of time> in com5arati7el higher 7alues.9

Marx and #ngels are 6eond our reach. $or the moment we are una6le to communicate with

Bernstein in Berlin or with Hilferding in &ienna. 8e must lea7e the 5ro6lems raised anent this

dis5uted text to the ingenuit of the #nglish-s5eaking Marxists. ,he must shar5en their wea5ons> and

make read to deal with 6oth the erman and the %ustrian commentators when the foolish ca5italist

6ickering which at 5resent ham5ers communications shall at length ha7e drawn to a dose. %mong

other things> the will want to know wh Hilferding> writing in 14/> did not consult the definiti7e

fourth edition of Ca5ital> 5u6lished thirteen ears earlierG#. O C. ".

#1$-ie Intensitat der Areit,ei5@ig> 1AK.
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%$ &AUE A(2 A&ERA)E ROFIT

,H# 5ro6lem with which we are now concerned is familiar. +n the 7arious s5heres of

5roduction the organic com5osition of ca5ital> the ratio 6etween cEconstant ca5ital> ex5ended on the

means of 5roductionF and vE7aria6le ca5ital> ex5ended in 5aing the wage of la6orF> 7aries. Since>

howe7er> onl 7aria6le ca5ital 5roduces new 7alue> and since> therefore> it alone 5roduces sur5lus

7alue> the amount of sur5lus 7alue 5roduced 6 two ca5itals of e?ual si@e 7aries in accordance with

the organic com5osition of these res5ecti7e ca5itals> 7aries> that is to sa> in accordance with

7ariations in the ratio 6etween the constant ca5ital and the 7aria6le ca5ital in the res5ecti7e

enter5rises. But> therewith> also> the rate of 5rofit> the ratio 6etween the sur5lus 7alue and the total

ca5ital> 7aries. ,hus according to the law of 7alue e?ual ca5itals ield different 5rofits 5ro5ortionate to

the magnitudes of the li7ing la6or which the set in motion. ,his conflicts with realit> for in the real

world e?ual ca5itals 6ring identical 5rofits> whate7er their com5osition. How can the 9contradiction9

6e ex5lainedI

et us first hear what Marx has to sa.

9,he whole difficult arises from the fact that commodities are not exchanged sim5l ascommodities,6ut asprod!cts of capitalwhich claim e?ual shares of the total amount of sur5lus 7alue>

if the are of e?ual magnitude> or shares 5ro5ortional to their different magnitudes.9 ;1 for which he must ad7ance 144 in 5roduction> costs him the

same amount whether he in7ests 4c Q 147> or 14c Q 47. He alwas s5ends 144 for it> no more no

less. ,he cost 5rices are the same for in7estment of the same amounts of ca5ital in different s5heres>

no matter how much the 5roduced 7alues and sur5lus 7alues ma differ. ,he e?ualit of cost 5rices is

the 6asis for the com5etition of the in7ested ca5itals> 6 which an a7erage rate of 5rofit is 6rought

a6out.9;! wherein

the rates of sur5lus 7alue s7 are assumed to 6e identical> while as regards the constant ca5ital 7aring5ro5ortions are incor5orated into the 5roduct according as the wear and tear 7aries.

C34i!3l"R3!e ofSur4lu" &3lue5er6en!

Sur4lu" &3lueR3!e of rofi!5er6en!

U"ed-u4C

&3lue ofCo77odi!ie"

IA4c Q !4c 144 !4 !4 4 4

IIL4c Q /47 144 /4 /4 1 111

IIIK4c Q 47 144 4 4 1 1/1

I&Ac Q 17 144 1 1 4 L4&c Q 7 144 14 !4

+n this ta6le we see fi7e instances in which the total ca5ital is identical> and in which the

degree of ex5loitation of la6or is the same in e7er case> 6ut the rates of 5rofit 7ar widel> according

to the differing organic com5osition. et us now look u5on these ca5itals> in7ested in 7arious fields> as

a single ca5ital> of which num6ers + to & merel constitute com5onent 5arts Emore or less analogous to

the different de5artments of a cotton mill which has different 5ro5ortions of constant and of 7aria6le

ca5ital in its carding> 5re5arator s5inning> s5inning> and wea7ing rooms> on the 6asis of which the

a7erage 5ro5ortion for the whole factor is calculatedF> then we should ha7e a total ca5ital of 44> a

sur5lus 7alue of 114> and a total 7alue of commodities of K14. ,he a7erage com5osition of the ca5ital

would 6e 44> made u5 of /4c and 1147> or in 5ercentages> LAc and !!7. +f each of the ca5itals of144 were to 6e regarded sim5l as one fifth of the total ca5ital> the a7erage com5osition of each

5ortion would 6e LAc and !!7> and in like manner to each 144 of ca5ital would 6e allotted a mean
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sur5lus 7alue of !!> so that the mean rate of 5rofit would 6e !! 5ercent. ,he commodities must> then>

6e sold as followsJ

C34i!3l" Sur4lu"&3lue U"ed-u4 C&3lue of

Co77odi!ie"

Co"!

ri6e ofCo77odi!ie"

ri6e ofCo77odi!ie"

R3!e ofrofi!5

er6en!

2e8i3!ion ofri6e fro7

&3lue

IA4c Q !4c !4 4 4 L4 ! !! Q !

IIL4c Q /47 /4 1 111 A1 14/ !! - A

IIIK4c Q 47 4 1 1/1 1 11/ !! - 1A

I&Ac Q 17 1 4 L4 LL !! Q L

&c Q 7 14 !4 1 /L !! Q 1L

,he commodities are thus sold at ! Q L Q 1L P !K a6o7e> and A Q 1A P !K 6elow> their 7alue> sothat the de7iations of 5rices from 7alues mutuall 6alance one another 6 the uniform distri6ution of

the sur5lus 7alue> or 6 the addition of the a7erage 5rofit of !! 5ercent of ad7anced ca5ital to the

res5ecti7e cost 5rices of the commodities of + to &. *ne 5ortion of the commodities is sold in the same

5ro5ortion a6o7e in which the other is sold 6elow 7alue. *nl the sale of the commodities at such

5rices renders it 5ossi6le that the rate of 5rofit for all fi7e ca5itals shall uniforml 6e !! 5ercent>

without regard to the organic com5osition of these ca5itals.

9Since the ca5itals in7ested in the 7arious lines of 5roduction are of a different organic

com5osition> and since the different 5ercentages of the 7aria6le 5ortions of these total ca5itals set in

motion 7er different ?uantities of la6or> it follows that these ca5itals a55ro5riate 7er different

?uantities of sur5lus la6or> or 5roduce 7er different ?uantities of sur5lus 7alue. Conse?uentl the

rates of 5rofit 5re7ailing in the 7arious lines of 5roduction are originall 7er different. ,hese different

rates of 5rofit are e?uali@ed 6 means of com5etition into a general rate of 5rofit> which is the a7erageof all these s5ecial rates of 5rofit. ,he 5rofit allotted according to this a7erage rate of 5rofit to an

ca5ital> whate7er ma 6e its organic com5osition> is called the a7erage 5rofit. ,hat 5rice of an

commodit which is e?ual to its cost 5rice 5lus that share of a7erage 5rofit on the total ca5ital in7ested

Enot merel consumedF in its 5roduction which is allotted to it in 5ro5ortion to its conditions of

turno7er> is called its 5rice of 5roduction. ... 8hile the ca5italists in the 7arious s5heres of 5roduction

reco7er the 7alue of the ca5ital consumed in the 5roduction of their commodities through the sale of

these> the do not secure the sur5lus 7alue> and conse?uentl the 5rofit> created in their own s5here 6

the 5roduction of these commodities> 6ut onl as much sur5lus 7alue> and 5rofit> as falls to the share of

e7er ali?uot 5art of the total social ca5ital out of the total social sur5lus 7alue> or social 5rofit

5roduced 6 the total ca5ital of societ in all s5heres of 5roduction. #7er 144 of an in7ested ca5ital>

whate7er ma 6e its organic com5osition> draws as much 5rofit during one ear> or an other 5eriod of

time> as falls to the share of e7er 144 of the total social ca5ital during the same 5eriod. ,he 7arious

ca5italists> so far as 5rofits are concerned> are so man stockholders in a stock com5an in which the

shares of 5rofit are uniforml di7ided for e7er 144 shares of ca5ital> so that 5rofits differ in the case

of the indi7idual ca5italists onl according to the amount of ca5ital in7ested 6 each one of them in

the social enter5rise> according to his in7estment in social 5roduction as a whole> according to his

shares9 E+++> 1AK-1ALF. ,he a7erage 5rofit is nothing other than the 5rofit on the a7erage social ca5ital=

its total> like the total of the sur5lus 7alues> and like the 5rices determined 6 the addition of this

a7erage 5rofit to the cost 5rices> are nothing other than the 7alues transformed into 5rices of

5roduction. +n the sim5le 5roduction of commodities> 7alues are the center of gra7it round which

5rices fluctuate. But 9under ca5italist 5roduction it is not a ?uestion of merel throwing a certain mass

of 7alues into circulation and exchanging that mass for e?ual 7alues in some other form> whether of

mone or other commodities> 6ut it is also a ?uestion of ad7ancing ca5ital in 5roduction and reali@ingon it as much sur5lus 7alue> or 5rofit> in 5ro5ortion to its magnitude> as an other ca5ital of the same

or of other magnitudes in whate7er line of 5roduction. +t is a ?uestion> then> of selling the commodities

at least at 5rices which will ield the a7erage 5rofit> in other words> at 5rices of 5roduction. Ca5ital


17/35

comes in this form to a reali@ation of the social nat!re of its po$er, in which e7er ca5italist

5artici5ates in 5ro5ortion to his share in the total social ca5ital....+f the commodities are sold at their

7alues...considera6l different rates of 5rofit arise in the 7arious s5heres of 5roduction...But ca5ital

withdraws from s5heres with low rates of 5rofit and in7ades others which ield a higher rate. B

means of this incessant emigration and immigration> in a word 6 its distri6ution among the 7arious

s5heres in res5onse to a rise in the rate of 5rofit here and its fall there> it 6rings a6out such a 5ro5ortion

of su55l to demand that the a7erage 5rofit in the 7arious s5heres of 5roduction 6ecomes the same> so

that 7alues are con7erted into 5rices of 5roduction9 E+++> !!-!/4F.

+n what relationshi5 does this doctrine of the third 7olume stand to the cele6rated law of 7alue

of the first 7olumeI

+n Bhm-Bawerk's o5inion the third 7olume of Capitalmanifestl contains the statement of an

actual and irreconcila6le contradiction to the law of 7alue> and furnishes 5roof that the e?ual a7erage

rate of 5rofit can onl 6ecome esta6lished if and 6ecause the alleged law of 7alue does not hold good.

+n the first 7olume> declares Bhm-Bawerk> ;/ in the form and with the em5hasis of a

stringent sllogistic conclusion> allowing of no exce5tion> that to set down two commodities ase?ui7alents in exchange im5lies that a common factor of the same magnitude exists in 6oth> to which

each of the two must 6e reduci6le. %5art> therefore> from tem5orar and occasional de7iations> which

are merel a55arent 6reaches of the law of exchange of commodities> commodities which em6od the

same amount of la6or must on 5rinci5le> in the long run> exchange for each other. %nd now> in the

third 7olume> we are told that what according to the teaching of the first 7olume must 6e> is not and

ne7er can 6e= that indi7idual commodities do and must exchange with each other in a 5ro5ortion

different from that of the la6or incor5orated in them> and this not accidentall and tem5oraril> 6ut of

necessit and 5ermanentl.

But this> sas Bhm-Bawerk> is no ex5lanation and reconciliation of a contradiction> it is the

naked contradiction itself. ,he theor of the a7erage rate of 5rofit and of the 5rices of 5roduction

cannot 6e reconciled with the theor of 7alue. Marx must himself ha7e foreseen that this re5roach

would 6e made> and to this 5re7ision is e7identl due an antici5ator self-defense which> if not inform> et in 5oint of fact> is found in the Marxist sstem. He tries 6 a num6er of o6ser7ations to

render 5lausi6le the 7iew that in s5ite of exchange relations 6eing directl go7erned 6 5rices of

5roduction> which differ from the 7alues> all is ne7ertheless mo7ing within the framework of the law

of 7alue> and that this law> in the last resort at least> go7erns 5rices. *n this su6:ect> howe7er> Marx

does not make use of his customar method> a formal> circumscri6ed demonstration> 6ut gi7es onl a

num6er of :uxta5osed casual remarks> containing di7ers arguments which are summed u5 6 Bhm-

Bawerk under four heads.

Before we consider these 9arguments9 and the counter-arguments of Bhm-Bawerk> it is

necessar to sa a word or two concerning the 9contradiction9 or the 9withdrawal9 which Marx is

su55osed to ha7e 5er5etrated in the third 7olume. %s regards the alleged withdrawal> those who use

this term ha7e forgotten that the first 7olume was not 5u6lished until the tenth cha5ter of the third

7olume> which forms the 6one of contention> had alread 6een com5osed. $or the draft of the last two6ooks ofCapitalwas com5osed 6 Marx during the ears 1AK/ to 1AKL> and from a note 6 #ngels

E+++> !4nF we learn that the tenth cha5ter of the third 7olume> the one containing the solution of the

riddle> was written in 1AK. ,o s5eak of a withdrawal in this connection is tantamount to saing that

Marx> in order to remain at a definite 5oint> first mo7ed a mile forward and then a mile 6ackward.

Such is> ne7ertheless> the 7iew which the 7ulgar economists ha7e formed of the essence of the

dialectic method> 6ecause the ne7er see the 5rocess 6ut onl the com5leted result> so that the method

alwas seems to them a mstical 9hocus-5ocus.9 )or is there an 6etter :ustification for the accusation

of contradiction than for the accusation of withdrawal.

+n Bhm-Bawerk's 7iew> the contradiction is found in this> that> according to the first 7olume>

onl commodities em6oding e?ui7alent amounts of la6or are exchanged each for the other> whereas

in the third 7olume we are told that the indi7idual commodities are exchanged one for another in ratios

which do not corres5ond to the ratios 6etween the amounts of la6or res5ecti7el incor5orated in them.

8ho denies itI +f Marx had reall maintained that> a5art from irregular oscillations> commodities

could onl 6e exchanged one for another 6ecause e?ui7alent ?uantities of la6or are incor5orated in


18/35

them> or onl in the ratios corres5onding to the amounts of la6or incor5orated in them> Bhm-Bawerk

would 6e 5erfectl right. But in the first 7olume Marx is onl discussing exchange relationshi5s as

the manifest themsel7es when commodities are exchanged for their val!es& and solel on this

su55osition do the commodities em6od e?ui7alent ?uantities of la6or. But exchange for their 7alues

is not a condition of exchange in general> e7en though> under certain s5ecific historical conditions>

exchange for corres5onding 7alues is indis5ensa6le> if these historical conditions are to 6e 5er5etuall

re5roduced 6 the mechanism of social life. (nder changed historical conditions> modifications of

exchange ensue> and the onl ?uestion is whether these modifications are to 6e regarded as taking

5lace according to law> and whether the can 6e re5resented as modifications of the law of 7alue. +f

this 6e so> the law of 7alue> though in modified form> continues to control exchange and the course of

5rices. %ll that is necessar is that we should understand the course of 5rices to 6e a modification of

the 5re-existing course of 5rices> which was under direct control of the law of 7alue.

Bhm-Bawerk's mistake is that he confuses 7alue with 5rice> 6eing led into this confusion 6

his own theor. *nl if 7alue Edisregarding chance de7iations> which ma 6e neglected 6ecause the

are mutuall com5ensatorF were identical with 5rice> would a 5ermanent de7iation of the 5rices of

indi7idual commodities from their 7alues 6e a contradiction to the law of 7alue. +n the first 7olume>

Marx alread refers to the di7ergence of 7alues from 5rices. ,hus> he asksJ 9How can we account forthe origin of ca5ital on the su55osition that 5rices are regulated 6 the a7erage 5rice> that is> ultimatel

6 the 7alue of the commoditiesI9 %nd he addsJ 9+ sa 'ultimatel>' 6ecause a7erage 5rices do not

directl coincide with the 7alues of commodities> as %dam Smith> Ricardo> and others 6elie7e9 E+>

1AnF. %gainJ 98e ha7e assumed that 5rices P 7alues. 8e shall> howe7er> see in &olume +++> that e7en

in the case of a7erage 5rices the assum5tion cannot 6e made in this 7er sim5le manner9 E+> !nF.

8e thus see that the Marxist law of 7alue is not canceled 6 the data of the third 7olume> 6ut

is merel modified in a definite wa. 8e shall make closer ac?uaintance with these modifications and

gras5 their significance 6etter after we ha7e further considered the course of Bhm-Bawerk's

ex5osition.

,he first 9argument9 adduced 6 Marx in fa7or of his 7iew is summari@ed 6 Bhm-Bawerk

as followsJ; these

reci5rocal fluctuations cancel each other> and in the communit itselfGtaking into account all the6ranches of 5roductionGthe total of the 5rices of 5roduction of the commodities 5roduced still remains

e?ual to the sum of their 7alues.

,he first thing that strikes us here Eand the o6ser7ation ma 6e re5eated with regard to all that

followsF is that Bhm-Bawerk denotes as an 9argument9 that which for Marx was no more than a

logical deduction from his 5remises. +t is then> of course> eas to demonstrate that what Marx sas

does not amount to an argument.

Bhm-Bawerk tells us that it is admitted 6 Marx that individ!al commodities do not

exchange for one another at their 7alues. Stress is laid on the fact that these indi7idual de7iations

com5ensate or cancel each other. How much of the law of 7alue is leftI asks Bhm-Bawerk. ,he

o6:ect of the law of 7alue is to elucidate the actual exchange relations of commodities. 8e wish to

know> for instance> wh a coat should 6e worth as much in exchange as twent ards of linen. ,here

can clearl 6e a ?uestion of an exchange relationshi5 onl 6etween individ!al commodities amongeach other.%s soon> howe7er> as we look at all commodities as a $holeand sum u5 their 5rices> we

must studiousl and 5erforce a7oid looking at the relations existing within this whole. ,he relati7e

differences of 5rice com5ensate each other in the sum total. +t is> therefore> no answer to our ?uestion

concerning the exchange relationshi5s of the commodities to 6e told the total 5rice which the 6ring

when taken together. ,he state of the case is thisJ to the ?uestion of the 5ro6lem of 7alue> the Marxists

first re5l with their law of 7alue> telling us that commodities exchange in 5ro5ortion to the la6or time

em6odied in them. ,he then re7oke this answer as far as it concerns the domain of the exchange of

indi7idual commodities> the one domain in which the 5ro6lem has an meaning> while the maintain it

in full force onl for the aggregate national 5roduct> for a domain therefore in which the 5ro6lem>

6eing without o6:ect> cannot 5ro5erl 6e 5ut at all. %s an answer to the strict ?uestion of the 5ro6lem

of 7alue> the law of 7alue is a7owedl contradicted 6 the facts= and in the onl a55lication in which it

is not contradicted 6 them> it is no longer an answer to the ?uestion which demanded a solution. +t is

no answer at all> it is mere tautolog. 8hen one 5enetrates the disguises due to the use of mone>

commodities do e7entuall exchange for commodities. ,he aggregate of commodities is thus identical


19/35

with the aggregate of the 5rices 5aid for them= or the 5rice of the entire national 5roduct is nothing else

than the national 5roduct itself. +n these circumstances> therefore> it is ?uite true that the total 5rice

5aid for the entire national 5roduct coincides 5recisel with the total amount of 7alue or la6or

crstalli@ed therein. But this tautological utterance denotes no increase of true knowledge> neither does

it 5ro7e the correctness of the law that commodities exchange in 5ro5ortion to the la6or em6odied in

them. ,hus Bhm-Bawerk.

,he entire train of reasoning is utterl 6eside the 5oint. Marx is in?uiring a6out the total 7alue>

and his critic com5lains 6ecause he is not in?uiring a6out the 7alue of the indi7idual commodit.

Bhm-Bawerk fails to see what Marx is aiming at in this demonstration. +t is im5ortant to show that

the sum total of the 5rices of 5roduction is identical with the sum total of the 7alues> 6ecause there6>

first of all> it is shown that the total 5rice of 5roduction cannot 6e greater than the total 7alue= 6ut>

inasmuch as the 5rocess of the 5roduction of 7alue is effected solel within the s5here of 5roduction>

this signifies that all 5rofit originates from 5roduction and not from circulation> not from an addition

to the finished 5roduct su6se?uentl effected 6 the ca5italist. Secondl> we learn that> since the total

5rice is e?ual to the total 7alue> the total 5rofit cannot 6e anthing else than the total sur5lus 7alue.

,he total 5rofit is there6 ?uantitati7el determined> and solel on the 6asis of this determination does

it 6ecome 5ossi6le to calculate the magnitude of the rate of 5rofit.But can we> without la5sing into a6surdit> 7enture to s5eak of a total 7alue at allI Bhm-

Bawerk confounds the exchange 7alue with the 7alue. &alue manifests itself as exchange 7alue> as a

?uantitati7el determined relationshi5> in 7irtue of the fact that one commodit can 6e exchanged for

another. But whether> for exam5le> a coat can 6e exchanged for twent ards of linen cloth or for fort

ards is not a matter of chance> 6ut de5ends u5on o6:ecti7e conditions> u5on the amount of sociall

necessar la6or time contained in the coat and in the linen res5ecti7el. ,hese conditions must make

themsel7es felt in the 5rocess of exchange> the must su6stantiall control that 5rocess> and the must

ha7e an inde5endent existence ?uite a5art from exchange> if we are to 6e entitled to s5eak of the total

7alue of commodities. ; ?uantitati7el

determined magnitude. He o7erlooks it 6ecause in realit the conce5t of 7alue as determined 6 the

marginal utilit theor lacks this ?uantitati7e definiteness. #7en su55osing that the 7alue as e?ui7alentto the marginal utilit of each unit in an aggregate of goods is known to me> this 7alue 6eing

determined 6 the utilit of the last unit in this store of goods> this does not ena6le me to calculate the

magnitude of the 7alue of the total store. But if the 7alue> in the Marxist sense> of a single unit 6e

known to me> the 7alue of the aggregate of these units is likewise known.

+n the transition from the sim5le to the ca5italist 5roduction of commodities> the distri6ution

of the social 5roduct is what undergoes change. ,he distri6ution of the sur5lus 7alue is now no longer

effected in accordance with the measure of the la6or 5ower which the indi7idual 5roducer has in his

5articular s5here ex5ended for the 5roduction of sur5lus 7alue> 6ut is regulated 6 the magnitude of

the ca5ital it has 6een necessar to ad7ance in order to set in motion the la6or that creates the sur5lus

7alue. +t is o67ious that the change in the distri6ution makes no difference in the total amount of

sur5lus 7alue undergoing distri6ution> that the social relationshi5 is unaltered> and that the change in

the distri6ution comes to 5ass solel through a modification in the 5rice of the indi7idual commodities.+t is further o67ious that if we are to determine the amount of di7ergence> we must know> not onl the

magnitude of the sur5lus 7alue> 6ut also the magnitude and indeed the val!e magnitude of the

ad7anced ca5ital. ,he law of 7alue ena6les us to determine this magnitude. + can thus readil ascertain

the de7iations as soon as the 7alue magnitudes are known to me. &alue is conse?uentl the necessar

theoretical starting 5oint whence we can elucidate the 5eculiar 5henomenon of 5rices resulting from

ca5italist com5etition.

Bhm-Bawerk's entire 5olemic is therefore all the more fallacious inasmu

böhm-bawerk's criticism of marx

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