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1 See Marx, Introduction to a Critique of the Hegelian Philosophy of Law, 1844 (MEGA, I, 1, i, p. 612). For an early anticipation of the later critical standpoint, see Friedrich Engels, Outlines of a Critique of National Economy, 1844 (MEGA, I, ii, pp. 377-404).
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itself; or that up to now he had merely "criticized Political Economy from the standpoint of Political Economy."

By the time when he had raised this objection to his first socialist antagonist, Proudhon, Marx himself had adopted an altogether different standpoint which utterly transcended all economic science in an apparently final manner. His economico-philosophical manuscripts dating from this second period,1 and the economic fragments inserted in a mainly philosophical work written at the same time,2 anticipated all the critical and revolutionary conclusions which were later embodied in Capital. Yet this new critical insight was couched in a highly philosophical language and appeared much more as a materialistic continuation of the old philosophical struggles among the different Hegelian schools than as a scientific criticism of the contents and premises of Political Economy. Instead of dealing directly with the theories and concepts of the great classical economists, Marx dealt rather with the idealistic, that is, insufficient reconstruction and criticism which these concepts had in the meantime found in the philosophy of Hegel and of the right and left Hegelians of the 1830's and 40's. For example, he disposed of the socio-economic phenomenon which he was later to solve in a rational way in his critical exposure of the "Fetishism of Commodities," by a reference to the then most fashionable Hegelian term of "human self-alienation." He summed up his criticism of Proudhon in the sentence: "Proudhon conquers economic alienation only within the bounds of economic alienation.”3 In the same manner his criticism of other fundamental economic phenomena started from the assumption that “Hegel takes the position of modern Political Economy"4 and that, therefore, a materialistic exposure of the idealistic shortcomings of Hegel's

1 See MEGA, I, iii, pp. 33-172.

2 See Marx and Engels, The Holy Family, 1845, (now reprinted MEGA, I, iii, pp. 173-388).

3 Ibid, p. 213.

4 Ibid, p. 157.

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philosophical criticism of the economic terms is equivalent to a final refutation of Political Economy itself.

Marx began to free himself from the remaining vestiges of his former philosophical creed by a comprehensive criticism of all post-Hegelian philosophy. In this he was joined by Engels. As a first result of their life-long co-operation, which after some more or less frustrated earlier attempts was now really beginning, Marx and Engels during the next two years worked out in detail the contrast prevailing between their own materialistic and scientific views and the various ideological standpoints represented by their former friends among the left Hegelians (Feuerbach, Bruno Bauer, Stirner) and by the philosophical belles-letters of the "German" or "true" socialists.1 Thus, they finally broke with what Marx later called their "former philosophical conscience”2 From this thoroughly changed standpoint Marx now cruelly criticized the somewhat bewildering manner in which his former philosophical criticism of Political Economy in the meantime had been further worked out by Proudhon.3 He showed that Proudhon did not treat the economic categories as theoretical expressions of historical conditions, corresponding to a definite stage in the development of material production, but as "pre-existing eternal ideas," and thus ultimately fell back on the standpoint of bourgeois economics.4 Such criticism of Proudhon's philosophical mystification of economic concepts was undoubtedly justified. But Marx's new anti-philosophical tendency was now so strong that, instead of supplanting Proudhon's bad philosophy by a better and more scientific criticism of Political Economy, he rather confronted Proudhon's un-

1 See MEGA, I, v, pp. 1-544.

2 See Preface 1859.

3 See Misère de la philosophie. Résponse à la philosophie de la misère de M. Proudhon, 1847, Chapter II, La Métaphysique de L'economie politique (MEGA, I, vi, pp. 175-228); see further the letter dealing with the same question written by Marx to Annenkov, 28.12.46), printed in Mouvement socialiste, vol. XXXIII, Nos. 249-50, pp. 141 et seq.)

4 See Marx's letter to the editor of the Sozialdcmokrat, 24.1.65 (printed in Nos. 16-18, 1865).

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scientific criticism with the science of Political Economy itself, i.e., with Ricardo's theory of value.1 Thus he no longer reproached Proudhon for not having passed critically beyond the narrow bounds of economic science. He now reproached him for sharing, as an economist, the "illusions of speculative philosophy" and for not yet having entered the realm of a really scientific Political Economy.

Only with the next stage of this long and somewhat circuitous development do we reach the period, during which Marx finally worked out his own critical economic theory which is, at the same time, the basic part of his materialistic theory of the historical development of society and of the proletarian revolution. The first mature fruit of this new stage is contained in the masterly lectures which Marx delivered to the German Workers' Educational Association at Brussels in 1847 and later published, in a revised form, in his own revolutionary paper during the 1848 revolution.2 Outline and contents reveal that we have here the first fragmentary statement of comprehensive exposition of the "economic conditions underlying all present-day class wars and national struggles," which, later, after being further worked out and many times entirely recast was to appear as Das Kapital.3 The most conspicuous difference is that Marx in the earlier work does not yet start from the analysis of “commodities" in general but from a particular kind of commodity - wage-labour, and from the opposition between the two main classes of modern capitalistic society which directly springs from the appearance of that commodity. We find, moreover, in this

1 See note by Rjasanov to the German tranlation of Marx's letter to Annenkov in Neue Zeit, XXXI, p. 822.

2 See Neue Rheinische Zeitung, 5.4.-ii.4.1849 (now reprinted MEGA,I, vi, PP-473-99).

3 See the Leading Article of Neue Rheinische Zeitung, 4.4.49, in which Marx outlined the topics to be discussed in the subsequent articles and thus, at the same time, the general scope of his planned economic work. This article was added as a general introduction to the pamphlet, in which Engels re-edited the Marxian articles under the title Wage-Labor and Capital, 1891.
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first scientific exposition the striking description (pivotal for all subsequent developments and unsurpassed, in trenchant power, even by Marx's own later formulae) of "capital" itself, which is defined as not being a relation between men and nature, but as a relation between man and men based on a relation between man and nature — a specific historic form of a social relation arising and decaying with the rise and decay of modern industrial or "capitalistic society."1

The working out of this first scientific exposition of Marx's revolutionary criticism of Political Economy was interrupted by the outbreak of the February Revolution,2 just as in a later period of world history, Lenin's presentation of "The Marxian Doctrine of the State and the Task of the Proletariat in the Revolution" was interrupted by a situation calling for the performance of that very task.3

After the final defeat of the abortive European revolution of 1848-49, Marx made the most of the long years of involuntary leisure which were forced upon him as an exile in London, by making "an entirely fresh start" in his economic studies.4 The ultimate form of his materialistic theory, which resulted from that new and prolonged period of economic and social research, is at the same time Political Economy and a criticism of Political Economy. It works out the classical system of bourgeois economy and ultimately transcends all phases and forms of bourgeois economy. It shows the most general ideas and principles of Political Economy to be mere fetishes disguising actual social relations, prevailing between individuals and classes within a definite historical epoch of the socio-economic formation.
1 See MEGA, I, vi, pp. 482 et seq.

2 See Preface 1859.

3 See Lenin, Postscript to State and Revolution, 1917, with the concluding remark equally characteristic of both authors - that "it is more agreeable and useful to experience the revolution than to write about it."

4 See Preface 1859.

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TWO ASPECTS OF REVOLUTIONARY MATERIALISM IN MARX'S ECONOMIC THEORY

THERE appears in the successive phases of Marx's theory, besides the main line of a continuous growth of the critical revolutionary standpoint, another line of development which, to a certain extent, runs contrary to the first. Hand in hand with increasing stress on a strictly materialistic and scientific approach, goes a greater emphasis on economic theory itself, as against a mere critical attack on its philosophical, historical, and practical premises. It seems as if Marx during the further study of the vast unexhausted material accumulated during the classical epoch of Political Economy that he found heaped up in the vaults of the British Museum, was more and more strongly impressed by the lasting significance which the scientific results of classical Political Economy were bound to have for the new revolutionary class, for a really materialistic theory of bourgeois society, and for a practicable way to its revolutionary overthrow. Just as the tremendous depression and stagnation following the defeat of the Paris workers in 1848 had imposed upon the materialistic investigator a long period of leisure for his ever-expanding, ever-deepening economic studies,1 so at the same time many revolutionary impulses within the actual workers' movement were forcibly repressed in their genuine practical function. A new stage of development seemed to he opened for Capitalism with the discoveries of gold in California and Australia - discoveries which attracted the most active members of the working class and thus further paralyzed even the faintest attempts at recovery within the European revolutionary
1 See the reminiscence of this quiet period, during which the echo of the Taiping revolt and the new spiritualistic fad of table-tipping provided the only diversion, in a footnote to Capital: "One will remember how China and the tables began to dance when the rest of the world appeared to stand still pour encourager les autres."
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movement. All those historical changes were reflected in the later development of Marx's revolutionary theory. The social revolution of the proletariat was now mainly represented as a necessary development of society, during which capitalistic production by the working of an unevitable economic law brings forth its negation with the inexorability of a natural process.1 He did not for this reason, commit himself to the so-called fatalist tendency "discovered" over and over again in some of Marx's phrases by the later bourgeois critics and by their supporters within the labour movement. A closer investigation reveals that even in that gloomiest period, both of the proletarian movement2 and of his own career, Marx kept himself far away from any fatalism. Still, it is a definitely changed pattern of revolutionary action which was henceforward sketched out by the materialistic theory for the historical movement of the workers' class. The question as to whether that change resulted in a strengthening or a weakening of the revolutionary movement can only be answered by taking into account the historical circumstances prevailing at the time, or rather, through the entire historical period. We merely note that the new phase of Marx's revolutionary science and the increased importance which was now assigned to economic theory within its frame,3 arose from a particular historical situation and suggested a form of behaviour adapted to that particular situation. Marx's materialistic theory, grounded on firm economic foundations, seemed to point out a new way to the workers, who had now passed the period of their first Utopian enthusiasm and spontaneous aggressive activity. Though this new way might not
1 See the sub-section on the "Historical Tendency of Capitalist Accumulation" in Capital, I, xxiv.

2 See the impressive description of these conditions in the Inaugural Address of the Working Men's International Association. 1864.,

3 See the interesting remark made by Engels in his review of Marx's book, Critique of Political Economy, in the London emigrants' newspaper, Das Volk, No. 14, of 6.8.1859: "The whole theoretical existence of the German proletarian party emanated from the study of Political Economy. . . ."
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ensure a quick and easy advance to victory, nor even a direct approach to decisive battles, yet in comparison with the meagre chances of the earlier period, it afforded a distinctly better opportunity, nay even a practical certainty of success.

This element of disillusionment and dearly-bought sobriety which is inherent in the later phases of Marx's “materialism” and is largely responsible for the tremendous effect which Marxism was to exert upon the workers' movement during the ensuing historical period, was produced by the historical conditions of the 50's. It is, at the same time, both historically and theoretically connected with another and much more general chain of historical events. The proletarian revolution of the 19th century, which so far had found its most powerful and most conspicuous theoretical expression in the revolutionary materialism of Marx, appears, under a secular aspect, as being itself a mere second phase within the whole of the modern revolutionary movement.1 Thus it shares, to a certain extent, the more general "disenchantment" which after the after the conclusion of the great French Revolution was first proclaimed by the early French theorists of the counter-revolution and Romanticists. This idea of disenchantment has, in fact, exerted a considerable influence upon Marx mainly through Hegel, and has thus directly entered into the “materialistic” Marxian theory of the modern workers' movement. Nay, more, we may go still further back and find within the materialistic theory of the proletarian revolution some traces of the revolutionary tradition of the Jacobinic Convention of 1792-94. This particular phase of the French revolution which was afterwards exalted over and over again by Marx, Engels, and Lenin as a model of the highest political sagacity and energy, had, likewise, been a "second" and sobered phase in contrast to the exuberant and illusionary phase of 1789-92.

1 See the first paragraphs of Marx's pamphlet, The 18^th Brumaire of Louis Bonaparte, published in Die Revolution, New York, 1852.
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On all these grounds the Marxian materialistic and economic theory bears the specific characteristics of a theory of the second phase of the proletarian revolution, and has actually made its first entrance in all countries where it became the dominant revolutionary theory at the very time when an analagous historical situation had arisen in that particular country. Even in Russia, where revolutionary Marxism was to make world history by a first great victory of its principle, similar historical circumstances accompanied its reception. The revolutionary social democratic, i.e., "Marxist," principle was inaugurated in Russia since 1883, according to the testimony of the best authority on the subject,1 mainly by a pamphlet of Plechanov which, under the heading Socialism and Political Struggle, endeavoured to "open up a new way for the defeated revolutionary movement through which it could secure for its cause a certain, if not immediate, victory." Instead of following by a conscious and violent action the model set by the preceding generation of Russian revolutionaries, it was to rely on the socio-economic process of development which would "slowly but unavoidably undermine the old régime" and through which the Russian working class "in an historical development proceeding just as inexorably as the development of capitalism itself," would finally "deal the death blow to Russian absolutism" and would then "join, as an equal member, the ranks of the international proletarian army."2

In a similar way, Marx and Engels themselves upon several occasions expressed the idea that the different degrees of "maturity," or the preparedness of the workers' movement in various capitalistic countries to accept the Marxian materialistic theory, more or less depended upon the experience gained by each section of the workers concerned during a preceding phase of Utopian illusions and immediate revolutionary attempts.

1 See the statement made by Rjasanov in his Preface to the German edition of Plechanov's book on Fundamental Problems of Marxism, 1929.

2 See Plechanov's pamphlet of 1883, as quoted in the text, and similar remarks in the works of all later Russian Marxists.

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This assumption of two definite phases, one "Utopian," the Other "scientific," through which every modern labour movement must pass in its historical development, was finally stated by Friedrich Engels in his well-known pamphlet on The development of Socialism from a Utopia to a Science. Since its first appearance in France, in 1880, this pamphlet was spread under this and under various other titles in large editions throughout the world and became as significant for the various Social-Democratic Movements preceding the World War, as have been, for other historical phases of the modern workers' movement, The Communist Manifesto of 1848, Marx's Address and Rules of the Working Men's International Association of 1864, and Lenin's pamphlet on State and Revolution of 1917.

Whatever the reasons, there is no doubt that Marx, during his later development, linked himself more and more closely with the scientific results of classical Political Economy. The- Marxian "Critique" as contained in the second and third books of Capital (which after his death were edited by Engels), and even in the first book edited by Marx himself, not infrequently gives the unwary reader the impression of being no longer directed against the whole of the preceding bourgeois economic science, but only against those superficial and apologetic forms into which the truly scientific statements and concepts of the great classical thinkers had degenerated with the post classical or "vulgar" economists. Yet this is by no means the real significance of Marx's economic and social theory. It is easy to clear up some ambiguous statements1 by reference to those sections of the first Chapter of Capital in which Marx stated with the utmost precision the difference between his critical economic theory and the doctrines presented by even the greatest and most advanced thinkers of the classical epoch of bourgeois Political Economy.2

1 See, e.g., Capital, III, ii, p. 366, and Theories of Surplus Value, III, pp. 71-72.

2 See Capital, I, pp. 46 et seq, footnotes 31-33.

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CHAPTER VI

ECONOMIC THEORY OF CAPITAL

IN our presentation of the economic theory of Capital, we shall confine ourselves to one or two results of the Marxian teaching, extremely abstract in appearance, which include, in our opinion, the revolutionary kernel of the Marxian theory and thus constitutes its fundamental and epoch-making importance. It is this, in fact, which explains why the teaching of Marx has gained and retained, for almost a century, the active support of millions of revolutionary workers in all parts of the world, and which even to-day forces from the most bitter opponents of the proletarian class movement an unwilling tribute, in that they announce as the aim of their reactionary and counter-revolutionary endeavours – War against Marxism.

Marx himself, in a letter which he wrote to Engels soon after the appearance of Capital, designated as the "three fundamentally new elements" of his book, the following:

(1) that in contrast to all earlier economics which from the outset had dealt with the detached fragments of surplus value in their fixed forms of Rent, Profit, Interest, as given entities, he first treated the general form of Surplus Value, in which all those elements are still comprehended in an undivided unity like the uncrystallized components in a chemical solution ;

(2) that, without exception, economists had missed the simple fact that if a commodity is the sum of the "value in use" and the "value in exchange," the labour entailed in the production of the commodity must possess the same two-fold character, while the mere analysis for "labour sans phrase," as in Smith, Ricardo, etc., must inevitably stumble upon something inexplicable. This is indeed the whole secret of the critical conception;

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(3) that for the first time wages are shown to be an irrational manifestation of some other relation hidden behind them.1
All these innovations are of decisive importance with regard to the ultimate aim of the Marxist theory, the critical transformation of economics into a direct historical and social science dealing with the development of material production and of the class struggle. That goal, however, is not reached by an immediate disintegration of economics as a particular form of knowledge but by a further theoretical development which brings into relief the inherent contradiction between the inherent contradictions between economic categories and principles and the actual facts which had hitherto been presented in their guise. While Marx seems merely to proceed with the work begun by the great bourgeois economists, his further development of their theories is guided in every case by a definite critical purpose. A more refined, more comprehensive, more thorough, and more consistent analysis serves to advance the traditional economic concepts and theorems to that point where the practical reality behind them, i.e., their historical and social contents become tangible and subject to a critical attack.

Thus the Marxian definition of value in terms of labour differs from the classical definition not by its conceptual form but rather by a closer connection with the underlying social conditions. Similarly, the advance made by the famous Marxian doctrine of surplus value, as stated by Marx himself, is new only because of the more comprehensive synthesis, by which he reduced to a common denominator the various phenomena of profit, interest, and rent as described by the classical economists. Nor does the new Marxian definition of wages, not as the "price of labour" but as the price of labour-power, amount to a major scientific discovery since the best classic writers, and, indeed, Marx himself in his earlier period had already applied the former

1 See Marx's letter to Engels of 8.1.1868 (MEGA, III, iv, p. 6).
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term in exactly the same sense which was later more fully expressed by the more elaborate description.1 Both these apparent technicalities and, in fact, the whole of the Marxian improvements upon classical economic theory are important, not for their purely formal advance over the classical concepts, but for their definite transfer of economic thought from the field of the exchange of commodities and of the legal and moral conceptions of "right" and "wrong" originating therein to the field of material production taken in its full social significance. For example, the economic concept of a surplus value existing in the form of goods and money and competed for by its rival claimants is now transformed into the concept of a surplus labour performed by the real workers in the workshop under the social domination exerted upon them by the capitalist owner of the workshop, furthermore, the "free labour contract" of the modern wage labourer is, by an apparent change of terminology only, now revealed as a real sale of the labour-power of the wage-labourer to the capitalist in return for wages, and thus as a social oppression and exploitation of the labouring class persisting within an assumedly "free" and democratically ruled society.

Marx begins the further theoretical development of the economic categories at the point where classical political economists had ended, i.e., with an analysis of "value" based on the distinction of a "value in use" and "value in exchange," and with the reduction of "value" to "labour." These two scientific-discoveries of the last stage of bourgeois classical economics, of which, as they were then represented, the one was bound to remain entirely sterile, and the other led only to a one-sided