Dühring, E. “Marx, Das Kapital, Kritik der politischen Oekonomie, 1. Band, Hamburg 1867,” in Ergänzungsblätter zur Kenntnis der Gegenwart 3.3: pp. 182–186.There is a copy of the German text and rather inaccurate transcription of the German review here:
http://nam-students.blogspot.jp/2013/04/duhring-e-1867-marx-das-kapital-kritik.htmlIn the review, Dühring had criticisms of the labour theory of value, and Marx in a letter to Engels on the 8th January, 1868 had the following to say about Dühring’s review:
Dear Fred,It is the passage at the end that interests me: when Marx said that Dühring would be “astonished to see in Volume 2 how little the determination of value ‘directly’ counts in bourgeois society,” what did he mean by this?
With regard to Dühring. It is a great deal from this man that he almost positively receives the section on Primitive Accumulation. He is still young. As a follower of Carey, he is in direct opposition to the free-traders. Added to this he is a university lecturer and therefore not grieved that Professor Roscher, who blocks the way for all of them, should get some kicks. One thing in his appraisal has struck me very much. Namely, so long as the determination of value by working time is left ‘vague’, as it is with Ricardo, it does not make people shaky. But as soon as it is brought into exact connection with the working day and its variations, a very unpleasant new light dawns upon them. I believe that an additional reason for Dühring to review my book at all was malice against Roscher. His fear of being treated like Roscher is certainly very easily perceptible. It is strange that the fellow does not sense the three fundamentally new elements of the book:
1) That in contrast to all former political economy, which from the very outset treats the different fragments of surplus value with their fixed forms of rent, profit, and interest as already given, I first deal with the general form of surplus value, in which all these fragments are still undifferentiated – in solution, as it were.
2) That the economists, without exception, have missed the simple point that if the commodity has a double character – use value and exchange value – then the labour represented by the commodity must also have a two-fold character, while the mere analysis of labour as such, as in Smith, Ricardo, etc, is bound to come up everywhere against inexplicable problems. This is, in fact, the whole secret of the critical conception.
3) That for the first time wages are presented as an irrational manifestation of a relation concealed behind them, and that this is scrupulously demonstrated with regard to the two forms of wages – time rates and piece rates. (It was a help to me that similar formulae are often found in higher mathematics.)
And as for Dühring’s modest objections to the determination of value, he will be astonished to see in Volume 2 [sc. of Capital] how little the determination of value ‘directly’ counts in bourgeois society. Indeed, no form of society can prevent the working time at the disposal of society from regulating production one way or another. So long, however, as this regulation is accomplished not by the direct and conscious control of society over its working time – which is possible only with common ownership – but by the movement of commodity prices, things remain as you have already quite aptly described them in the Deutsch-Französische Jahrbücher...
Letter of Karl Marx to Friedrich Engels in Manchester, 8 January 1868
Earlier in the letter, Marx notes that if the theory of labour value as a determination of price is left “vague” or “underdetermined” (the latter word is used in the translation of this letter in Marx and Engels 1987: 514), then people do not seem to have so much doubt about it. The gist of what Marx is saying here appears to be that, when he attempts to explain how labour value actually determines price, this is when the troubles begin.
But the final statement of Marx seems to me to be very significant:
“So long, however, as this regulation is accomplished not by the direct and conscious control of society over its working time – which is possible only with common ownership – but by the movement of commodity prices, things remain as you have already quite aptly described them in the Deutsch-Französische Jahrbücher...”This is significant because Marx wrote this in 1868 after volume 1 of Capital had been published in 1867.
Marx appears to be saying that when labour time’s relation to value is determined by the “movement of commodity prices” then labour time counts for little and prices are actually determined as described by Engels in his essay “Outlines of a Critique of Political Economy” in Deutsch-Französische Jahrbücher (1844).
But a careful reading of this essay shows that Engels, although he thought that labour is the main factor in production and the fundamental “source of wealth,” nevertheless did not think that abstract socially necessary labour time determines exchange value.
Instead, for Engels, exchange value is determined by (1) cost of production and (2) the interaction of supply and demand:
“It is, however, quite correct, and a fundamental law of private property, that price is determined by the reciprocal action of production costs and competition. This purely empirical law was the first to be discovered by the economist; and from this law he then abstracted his ‘real value,’ i.e., the price at the time when competition is in a state of equilibrium, when demand and supply cover each other. Then, of course, what remains over are the costs of production and it is these which the economist proceeds to call ‘real value,’ whereas it is merely a definite aspect of price.”If Marx was agreeing with Engels that in reality prices in real world capitalism are not determined by abstract socially necessary labour time, then this was a frank admission by Marx in private to Engels that the analysis in volume 1 of Capital was grossly deficient and misleading.
Frederick Engels, “Outlines of a Critique of Political Economy,” Deutsch-Französische Jahrbücher, 1844
For in volume 1 of Capital, Marx does try to explain individual commodity prices in terms of their abstract socially necessary labour time (SNLT). For example, Marx argues that rising unit SNLT in a reduced cotton crop after a bad harvest is supposed to explain the rising price of cotton and even the price rise of cotton produced in previous production (Marx 1982: 317–318). Marx argues that when commodities exchange for one another, this is because there is ultimately an equality of socially necessary labour time embodied in them (Marx 1982: 124, 127–128). Even worse Marx wants to make prices directly corresponding to SNLT an anchor or equilibrium value around which market prices fluctuate:
“The production of commodities must be fully developed before the scientific conviction emerges, from experience itself, that all the different kinds of private labour (which are carried on independently of each other; and yet, as spontaneously developed branches of the social division of labour, are in a situation of all-round dependence on each other) are continually being reduced to the quantitative proportions in which society requires them. The reason for this reduction is that in the midst of the accidental and ever-fluctuating exchange relations between the products, the labour-time socially necessary to produce them asserts itself as a regulative law of nature. In the same way, the law of gravity asserts itself when a person’s house collapses on top of him. The determination of the magnitude of value by labour-time is therefore a secret hidden under the apparent movements in the relative values of commodities.” (Marx 1982: 168).But if market prices are not determined in this way, but by cost of production and the interaction of supply and demand, then this makes a nonsense of Marx’s statements in volume 1 of Capital.
I can only conclude that there is a fundamental contradiction in Marx’s thinking here, and that Marx’s letter to Engels of 8 January, 1868 was a private and tacit admission of this contradiction too.
Dühring, E. “Marx, Das Kapital, Kritik der politischen Oekonomie, 1. Band, Hamburg 1867,” in Ergänzungsblätter zur Kenntnis der Gegenwart 3.3: 182–186.
Engels, Frederick. 1844. “Outlines of a Critique of Political Economy,” Deutsch-Französische Jahrbücher
Marx, Karl and Frederick Engels. 1987. Collected Works. Volume 42. Marx and Engels 1864–1868. Lawrence & Wishart, London.