division of the produced social values and the regulation of IOI4 Capitalist Production.
the prices of production takes place on a capitalist basis, but that competition is abolished.
Under these assumptions, then, under which the value of commodities would be constant and would appear so, under which that part of the value of commodities which resolves itself into revenues would remain a constant magnitude and would always present itself as such, and under which, finally, this given and constant part of value would always be di- vided according to constant proportions into wages, profit and rent, even under these assumptions would the real move- ment necessarily appear in an inverted form: not as a divi- sion of a previously given quantity of value into three parts, which assume mutually independent forms of revenue, but on the contrary, as the formation of this quantity of value by. the sum of the independent and selfdetermined elements of wages, profit and rent, of which it is composed. This illu- sion would necessarily arise, because in the actual movement of the individual capitals and of the commodities produced by them not the value of the commodities would seem to pre- cede their division, but vice versa, the parts into which it is divided would seem to exist before the value of the commodi- ties. In the first place we have seen that to every capitalist the cost price of his commodities appears as a given magnitude and continually presents itself as such in tlie actual price of production. But the cost price is equal to the value of the constant capital, the advanced means of production, plus the value of labor-power, which, however, presents it- self to the agent in production in the irrational shape of a price of labor, so that the wages appear at the same time as a revenue for the laborer. The average price of labor is a given magnitude, because the value of labor-power, like that of any other commodity, is determined by the labor time re- quired for its reproduction. But as concerns that portion of the value of commodities, which resolves itself into wages, it does not arise from the fact that it assumes this form of wages, nor from the fact that the capitalist advances to the laborer his share of his o"\vn product in the shape of wages, but from the fact that the laborer produces an equivalent The Semblance of Competition. 1015 for his wages, that is, that a portion of his daily or annual labor produces the value contained in the price of his labor- power. But the wages are stipulated by contract, before the value equivalent to them has been produced. As an element of price, whose magnitude is given before the commodity and its value have been produced, as a constituent part of the cost price, wages do not appear as a part which detaches it- self in an independent form from the total value of the com- modity^ but rather as a given magnitude, which predeter- mines this value, a creator of price or value. A role similar to that of wages in the cost price of commodities is played by the average profit in their price of production, for the price of production is equal to the cost price plus the average profit on the advanced capital. This average profit figures practically, in the conception and in the calculation of the capitalist himself, as a regulating element, not merely to the extent that it determines the transfer of the capitals from one sphere of investment into another, but also in all sales and contracts, which embrace a process of reproduction ex- tending over long epochs. But whenever it figures in this way, it is a previously existing magnitude, which is in fact independent of the value and surplus-value produced in any particular sphere of production, and still more independent of the value and surplus-value produced by any individual invest- ment of capital in any sphere of production. It does not pre- sent itself as a result of a division of value, but rather as a magnitude independent of the value of the produced commodi- ties, as existing from the start and determining the average price of the commodities, that is, as a creator of value. Indeed, the surplus-value, owing to its separation into various and mutually unrelated parts, appears in a still more concrete form as a prerequisite for the creation of the value of com- modities. A part of the average profit, in the form of in- terest, faces the capitalist independently as an element pre- ceding the production of commodities and of their value. Although the fluctuations of the amount of interest are con- siderable, yet at any sp<_;cific moment it is a given magni- tude for every capitalist, and it enters into the cost price of ioi6 Capitalist Production.
the commodities produced by any individual capitalist. So does also the ground-rent in the form of lease money fixed by contract in the case of the agricultural capitalist, and in the form of rent for business rooms in the case of other busi- ness men. These parts, into which surplus-value is divided, being given as elements of cost price for the individual cap- italist, appear for this reason' inversely as creators of sur- plus-value; they appear as creators of a portion of the price of commodities, just as wages appear as the creator of the other portion. The secret of the continual reappearance of these divided parts of commodity value in the role of pre- requisites for tlie formation of value itself is simply this, that the capitalist mode of production, like any other, does not merely always reproduce the material product, but also the economic conditions, the definite economic forms of its creation. Its result, therefore, appears as continually as its prerequisites, as its prerequisites appear in the role of its re- sults. And it is this continual reproduction of the same conditions, which the individual capital antieijiates in a mat- ter of fact way as an indubitable fact. So long as the capitalist mode of production persists as such, a portion of the newly added labor resolves itself continually into wages, an- other into profit (interest and profit of enterprise), and a third into rent. In the contracts between the owners of the various agencies of production this is always assumed, and this assumption is correct, no matter how much the relative proportions may fluctuate in individual cases. The definite shape, in which the parts of value face each other, is assumed as pre-existing, because it is continually reproduced, and it is continually reproduced, because it is continually taken for granted.
It is true, that both experience and the appearance of things demonstrate the fact that the market prices, whose in- fluence seems to the capitalist to be indeed the whole thing in the determination of values, are by no means dependent upon these anticipations, so far as their amount is concerned. They are not governed by any contracts demanding a high or a low rent and interest. But the market prices are constant The Semblance of Competition. 1017 only in their changes, and their average for a certain long period results in the respective averages of wages, profit and rent as magnitudes dominating the constant ones, such as the market prices, in the last analysis.
On the other hand, it seems like a simple reflection, that if wages, profit and rent are creators of value for the reason that they seem to precede the production of value, and that they are taken for granted by the individual capitalist in his cost price and price of production, then the constant portion of value, whose value enters as a given quantity into the production of every commodity, is also a creator of value. But the constant portion of value is nothing but a quantity of commodities and, therefore, of values of commodities. Thus we should arrive at the absurd tautology that the value of commodities is the creator and cause of the value of com- modities.
If the capitalist were interested in reflecting about this — and his reflections as a capitalist are dictated exclusively by his interests and his interested motives — his experience would show him, that the product, which he himself pro- duces, passes over into other spheres of production as a con- stant part of capital, and that products of these other spheres of production pass over into his own product as constant parts of capital. Owing to the fact that the additional value of his own new production, from his point of view, seems to be formed by means of wages, profit and rent, the same ap- pearance holds good also in the case of the constant portion consisting of products of other capitalists. And so the price of the constant portion of capital, and with it the total value of the commodities, reduces itself in the last resort, although in a somewhat unaccountable manner, to a sum of values re- sulting from the addition of the independent creators of value, wages, profit and rent, which are regulated by differ- ent laws and come from different sources.
4) Whether the commodities are sold, or not sold, at their values, whether their value is determined in one way or an- other, is quite immaterial for the individual capitalist. This fletermination of values is from the very outset a process ioi8 Capitalist Production.
passing behind his back and controlled by conditions inde- j pendent of himself, because it is not the values, but the di- J vergent prices of production, which form the regulating av- erage prices in every sphere of production. The determina- tion of values as such, interests and influences the individual capitalist and the capital in each sphere of production only to the extent that the reduced or increased quantity of labor required in accordance with, the rise or fall of the produc- tive power of labor, enables him in one case to make an ex- tra profit, and compels him in another to raise the price of his commodities, because an additional amount of wages, an additional amount of constant capital, and consequently some more interest, fall upon each individual part of the product, or upon the individual commodities. This determination of values interests him only to the extent that it raises or lowers the cost of production of commodities for himself, in other words, only to the extent that it places him in an ex- ceptional position.
On the other hand, wages, interest and rent appear to him as regulating boundaries, not only of the price at which he can realize the profit of enterprise, that is, the profit falling to his share in his capacity as a producing capitalist, but also of the price at which he must be able to sell his commodi- ties, if he is to keep his reproduction going at all. It is quite immaterial for him, whether he realises the value and sur- plus-value in his commodities by their sale, provided only that he gets the customary profit or enterprise or more than that, so long as he pockets this surplus over and above the individual cost price determined for him by wages, interest and rent. Aside from the constant portion of capital, wages, j interest and rent appear to him, therefore, as the limiting, creating, determining elements of the price of commodities. For instance, if he can succeed in depressing wages below their normal level, below the value of labor-power, if he can obtain capital at a lower rate of interest, if he can pay less than the normal amount for rent, then he does not care, whether he sells his product below its value, or even below its price of production, so that he gives away without any The Semblance of Competition. 1019 equivalent a portion of the surplus-value contained in the commodities. This applies even to the constant portion of capital. For instance, if an industrial capitalist can buy his raw material below its price of i:)roduction, then this protects him against loss, even if he sells it in his own finished product under its price of production. His profit of enterprise may remain the same, or may even increase, so long as the excess of the price of commodities over its ele- ments remains the same or increases. But aside from the value of the means of production, which enter into his own production with a given price, it is precisely wages, interest and rent which enter into this production as limiting and regulating amounts of price. Consequently they appear to him as elements determining the price of commodities. The profit of enterprise, from his point of view, seems deteraiined either by the excess of the market prices, dependent upon accidental conditions of competition, over the immanent value of commodities determined by those elements of price. Or, to the extent that this profit itself exerts a determining influence upon market prices, it seems itself dependent upon the competition between buyers and sellers.
In the competition, both of the individual capitalists among themselves and in the competition on the world mar- ket, it is the given and presupposed magnitudes of wages, interest and rent which enter into the calculation as constant and regulating magnitudes. They are constant, not in the sense of being unalterable magnitudes, but in the sense that they are given in any individual case and that they form the constant boundary for the continually fluctuating market prices. For instance, in the competition on the world mar- ket the question is exclusively as to whether the commodities can be sold at, or below, the existing world market prices with a profit, as to whether, with the existing wages, interest and rent a corresponding profit of enterprise can be real- ized. If the wages and the price of land are low in a cer- tain country, while the interest on capital is high, because the capitalist mode of production has not been developed in it, whereas in some other country the wage and the price of I020 Capitalist Production.
land are nominally liigli, while the interest on capital is low, then the capitalist employs in the one country more labor and land, in the other relatively more capital. These fac- tors enter as determining elements into the calculation by which the degree of possible competition between these two countries is estimated. Here, then, experience shows theo- retically, and the interested calculation of the capitalist shows practically, that the prices of commodities are deter- mined by w^ages, interest and rent, by the price of labor, of capital and of land, and that these elements of price are in- deed the regulating factors of price.
Of course, this always leaves an element which is not as- sumed as pre-existing, but which rather results from the mar- ket price of commodities, namely the surplus above the cost price formed by the addition of these elements, namely of wages, interest and rent. This fourth element seems to be determined in every individual case by competition, and in the long average of cases by the average profit, which in its turn is regulated by this same competition, only at longor intervals.
5) On the basis of capitalist competition it becomes so much a matter of course to separate the value, in which the newly added labor is represented, into the forms of revenue known as wages, profit and ground-rent, that this method is applied (not to mention past stages of history, of which w-e gave illustrations under the head of gTound-rent) even in cases, in which the conditions required for those foiTas of revenue are missing. In other words, everything is counted under these heads by analogy.
If an independent laborer — for instance, a small farmer, in whose ease all three forms of revenue may be used — works for himself and sells hrs own product, he is, in the first place, considered as his own employer (capitalist), who employs himself as a laborer, and as his own landlord, who employs himself as his own tenant. To himself as a wage worker he pays his wages, to himself as a capitalist he turns over his profit, and to himself as a landlord he pays his rent. Assuming the capitalist mode of production and the cmidi- The Semblance of Competition. 102 1 tions corresponding to it to be the general basis of society, this conception is correct, in so far as he does not owe it to his labor, but to his ownership of means of production — - which have here assumed the general form of capital — that he is able to appropriate his own surj)lus labor. And fur- thermore, to the extent that he creates his own product in the shape of commodities, and thus depends upon its price (and even if he does not depend upon it, this price can be estimated), the quantity of surplus labor, which he can real- ize, does not depend upon its own size, but upon the general rate of profit; and in like manner any surplus above the amount of surplus-value allowed by the general rate of profit is not determined by the quantity of labor performed by him- self, but can be appropriated by him only because he is the owner of the land. Because a form of production not cor- responding to the capitalist mode of production may thus be brought in line with its forms of revenue — and to a cer- tain extent not incorrectly — the illusion is strengthened so much the more that the capitalist conditions are the natural conditions of any mode of production.
On the other hand, if we reduce the wages to their general basis, namely to that portion of the product of the producer's own labor which passes over into the individual consumption of the laborer; if we relieve this portion of its capitalist lim- itations and extend it to that volume of consumption, which is permitted, on the one hand, by the existing productivity of society (that is the social productivity of his own individ- ual labor in its capacity as a truly social one), and on the other hand, required by the full development of his individ- uality; if we reduce the surplus labor and the surplus prod- uct to that measure, which is required under the existing conditions of social production, on the one hand for the formation of an insurance and reserve fund, and on the other hand for the continuous expansion of reproduction to an ex- tent dictated by social needs; finally, if we include in num- ber one, necessary labor, and number two, surplus labor, that quantity of labor, which must always be performed by the ablebodied for the incapacitated or immature members of I022 Capitalist Production.
society, in other words, if we deprive both wages and surplus- value, both necessary and surplus labor, of their specifically capitalist character, then we have not these forms, but merely their foundations, which are common to all social modes of production.
Moreover, this manner of generalizing was also used in previous modes of production, for instance, in the feudal one. Conditions of production, which did not correspond to it at all, which stood entirely outside of it, were counted in as feudal relations. This was done, for instance, in Eng- land, in the case of tenures in common socage (as distinguished from tenures on knight's service), which comprised merely monetary obligations and were feudal in name only.
CHAPTER LT.
COIv^DITIONS OF DISTEIBUTION AND PBODUCTION.
The new value added by the annual neAv labor — and thus also that portion of the annual product, in which this value is represented and may be drawn out of the total fund and separated from it — is divided into three parts, Avhich as- sume three different forms of revenue. These forms indi- cate that one portion of this value belongs, or goes to, the owner of labor-power, another portion to the owner of cap- ital, and a third portion to the owner of land. These, then are forms, or conditions, of distribution, for they express conditions, under which the newly produced total value is distributed among the owners of the different agencies of production.
To the ordinary mind these conditions of distribution ap- pear as natural conditions, as conditions arising from the nature of all social production, from the laws of human pro- duction in general. While it cannot be denied that precap- italist societies show other modes of distribution, yet those modes are interpreted as undeveloped, imperfect, disguised, Conditions of Distribution. 1023 differently colored modes of these natural conditions of dis- tribution, which have not reached their purest expression and their highest form.
The only correct thing in this conception is this: Assum- ing some form of social production to exist (for instauce, that of the primitive Indian communes, or that of the more artificially developed communism of the Peruvians), a dis- tinction can always be made between that portion of labor, which supplies products directly for the individual consump- tion of the producers and their families — aside from the part which is productively consumed — and that portion of labor, which produces surplus products, which always serve for the satisfaction of social needs, no matter what may be the mode of distribution of this surplus product, and whoever may perform the function of a Representative of these so- cial needs. The identity of the various modes of distribu- tion amounts merely to this, that they are identical, if we leave out of consideration their differences and specific forms and keep in mind only their common features as distin- guished from their differences.
A more advanced, more critical mind, however, admits the historically developed character of the condition of distribu- tion,^^" but clings on the other hand so much more tena- ciously to the unaltering character of the conditions of pro- duction arising from human nature and thus independent of all historical development.
On the other hand, the scientific analysis of the capitalist mode of production demonstrates that it is a peculiar mode of production, specifically defined by historical development; that it, like any other definite mode of production, is condi- tioned upon a certain stage of social productivity and upon the historically developed form of the forces of production. This historical prerequisite is itself the historical result and product of a preceding process, from which the new mode of production takes its departure as from its given foundation. The.conditions of production corresponding to this specific, historically determined, mode of production have a specific, "'^ J. Stuart M'll: Some Unsettled Questions in Political Economy, London, 1884.
I024 Capitalist Production.
historical, passing character, and men enter into them as into their process of social life, the process by which they create their social life. The conditions of distribution are essentially identical with these conditions of production, be- ing their reverse side, so that both conditions share the same historical and passing character.
In the study of conditions of distribution, the start is made from the alleged fact, that the annual product is distributed among wages, profit and rent. But if so expressed, it is a misstatement. The product is assigned on one side to cap- ital, on the other to revenues. One of these revenues, wages, never assumes the form of a revenue, a revenue of the la- borer, until it has first faced this laborer in the form of cap- ital. The meeting of the produced requirement of labor and of the general products of labor as capital, in opposition to the direct producers, includes from the outset a definite so- cial character of the material requirements of labor as com- pared to the laborers, and with it a definite relation, into which they enter in production itself with the owners of the means of production and among themselves. The trans- formation of these means of production into capital implies on their part the expropriation of the direct producers from the soil, and thus a definite form of property in land.
If one portion of the product were not transformed into capital, the other would not assume the form of wages, profit and rent.
On the other hand, just as the capitalist mode of produc- tion is conditioned upon this definite social form of the con- ditions of production, so it reproduces them continually. It produces not merely the material products, but reproduces continually the conditions of production, in which the others are produced, and with them the corresponding conditions of distribution.
It may indeed be said that capital (and the ownership of land implied by it) is itself conditioned upon a certain mode of distribution, namely the expropriation of the laborers from the means of production, the concentration of these condi- tions in the hands of a minority of individuals, the exclusive Conditions of Distribution. 1025 ownership of land by other individuals, in short, all those conditions, which have been described in the Part dealing with Primitive Accumulation (Volume I. Chapter XXVI). But this distribution differs considerablv from the meaning of " conditions of distribution," provided we invest them with a historical character in opposition to conditions of pro- duction. By the first kind of distribution is meant the vari- ous titles to that portion of the product, which goes into in- dividual consumption. By conditions of distribution, on the other hand, we mean the foundations of specific social func- tions performed within the conditions of production them- selves by special agents in opposition to the direct producers. They imbue the conditions of production themselves and their representatives with a specific social quality. They de- termine the entire character and the entire movement of pro- duction.
Capitalist production is marked from the outset by two pe- culiar traits.