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few and small, in comparison with the hopes and the fears it evoked and the noise it made, that not a few critics have shown a disposition to treat it as a great blot upon the life of Marx, whom they hold responsible for its colossal and tragic failure.

It is, however, exceedingly puerile criticism which holds Marx responsible for the early decline and dissolution of the International. A candid and intelligent study of the causes which led to its destruction will show that they arose from political developments in Europe with which neither Marx nor any of his associates had anything to do, and for which they could not in any manner, either directly or indirectly, be held responsible. The most effective cause was the Franco-Prussian war, with its tragic sequel, the Paris Commune. To charge Marx with responsibility for these events is, of course, absurd in the extreme. As we know, he did his best to create a public sentiment against the war in France and Germany strong enough to prevent it, and that he failed in this is not to his discredit. As it was, the war created conditions which made the failure of the International an imperative historical necessity, and it was even believed by many that Bismarck had contrived to bring about a war with that end in view.

Although the International was not responsible for the Paris Commune, it was closely associated with it, and it was therefore perfectly natural that some of the odium which was provoked by that insurrection should be heaped upon the International, and especially upon its founder and chief directing spirit. Marx, it is quite evident from his correspondence with Kugel- : mann, saw the Parisian revolt through the spectacles of a rose- ( hued Utopianism. He believed that through the Parisian, struggle the fight of the working classes against the capitalists f “ entered into a new phase.” He wrote on the 17th of April, j 1871, “ This insurrection is a glorious deed for our party, the best since the Revolution of June, and the grandeur appears the greater when we think of all the vices of the old society, of J its wolves, its swine, and its common hounds.” In the year


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following he and Engels wrote a preface to a new edition of the Communist Manifesto, in which they said, “ The Commune notably offers a proof that the working class cannot simply take possession of the state machinery and set it in motion for their own aims.” Such was their disillusionment. Twenty-three years later, in 1895, in the preface to The Class War in France, Engels set forth his reasons for believing that the steady growth jof Socialism could best be secured by peaceful, parliamentary ■ activity, that the time for “ revolutions of small conscious mi- inorities at the head of unconscious masses ” was past, and that | violent revolution would necessarily result in checking the prog- 1 ress of the movement.

While it is true that Marx attached far too much importance to the revolt of Paris, it is also true that,under the circumstances, the International could not have held aloof from the Commune, and that it pursued practically the only policy possible for it. Marx was placed in a position of great difficulty. Living in London, and depending for his view of the situation upon the reports of others, who were not always the most judicial observers, he had to play the proverbially difficult role of an adviser from afar. On the one hand much of the advice given under these circumstances was wasted, and, on the other hand, he has been held responsible for all that was done, though much of it was contrary to what he regarded as the best policy to pursue. But no amount of criticism can detract from the merit of having created such a great international political movement of the proletariat as the International Workingmen’s Association was.

_!

* But while the International was Marx’s greatest single

achievement upon the field of practical politics, it is only fair

to recognize that the service he rendered, during many years,

| as the adviser of the Socialist movement, was of even greater importance. For many years, practically from 1848 to 1883, the year of his death, he was constantly called upon to advise the Socialists of various countries upon matters of policy, and

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to carry on negotiations between the different Socialist parties and between Socialists and other working-class organisations. It is impossible to present the corpus of this work in the form of a definite, tangible achievement, but it may be said that the development of a multitude of small sectarian and conspiratory societies into the great political Socialist movement of to-day has been due in no small measure to the political genius of Marx. When it was proposed, a few years ago, that the Socialists of Europe and America should raise funds for the erection of a monument to his memory, in Highgate Cemetery, one of the oldest of his friends wrote to the present writer: “ Marx’s monument exists already — not in hammered brass or sculptured stone, but in human hearts. The whole international Socialist movement is his monument, and each new victory of the Socialist forces raises it higher.”

As an economist Marx belongs to the Ricardian school, and his most notable achievement in the domain of political economy is his development of the crude labour-value theory held by some of the Ricardian Socialists and its scientific restatement. Notwithstanding the fact that between the labour-value theory of Marx and that of the English Socialists of the Ricardian school there yawns a gulf of difference as wide as that which divides the work of Darwin, for example, from the crude guesswork of Anaximander, it is common to find even the most pretentious of his critics charging Marx with all the immature notions of his predecessors. We have a conspicuous example of this in the work of Mr. W. H. Mallock, an English writer who has managed, despite his superficiality, to earn an international reputation as a serious and profound critic of Marx and the Socialist movement. During his visit to the United States in 1907, in a series of lectures delivered in the leading universities, Mr. Mallock gave the most grotesque and misleading account of the economic theories of Marx. It is not too much to say that the Socialists of America were highly amused — and as 22

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much surprised as amused — at the stupid travesty of Marx’s teaching so sententiously presented by Mr. Mallock, and so seriously received by the capitalist press as a damaging criticism of modern Socialism.

Mr. Mallock represented Marx as teaching that all wealth is due to “ that ordinary manual labour which brings the sweat to the brow of the ordinary labouring man 1 that wealth “ not only ought to be, but actually can be distributed amongst a certain class of persons, namely, the labourers. . . . Because

these labourers comprise in the acts of labour everything that is involved in the production of it”;² that “ordinary manual labour is the source of all wealth,” 3 and that “ all productive effort is absolutely equal in productivity.” 4 Each of these statements he repeated over and over, and upon them he based his entire criticism of Marx. It ought to be obvious to the astute gentlemen of the National Civic Federation that if Marx really taught or believed such arrant nonsense he would not merit the slightest attention as a thinker. It is quite inconceivable that the international Socialist movement could have made such gigantic strides in the world’s politics if it rested upon such absurd theoretical foundations.

But as a matter of fact, there is not the slightest foundation for either of the statements quoted, or for the criticism based upon them. There is not a single passage in all the voluminous writings of Marx which in the slightest degree warrants the statements made by his critic. In fact, Marx specifically repudiated each of the notions ascribed to him by Mr. Mallock, and subjected them to keen ridicule. Mr. Mallock insulted the

Note: All quotations are taken from the volume containing the text of Mr. Mallock’s lectures as delivered, entitled Socialism, published and distributed by the National Civic Federation, New York, 1907.

¹ Lecture I, page 12.

² Idem, page 7.

³ Idem, page 6; Lecture IV, pages 76, 81; Lecture V, page 115, etc.

*Idem, Lecture III, page 46.

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intelligence of every one of his auditors when he so outrageously misrepresented Marx.

As we have already seen, Marx was exceedingly angry when the Gotha Programme of the German Socialists was adopted, because of the phrase “ Labour is the source of all wealth and of all culture.” An element of bitterness entered into his criticism of the programme for the reason that he knew perfectly well that in the popular mind, and in the minds of his critics, he would be held responsible for the programme and charged with its absurdities. Instead of divorcing the concept of wealth from the concept of utility, Marx always insisted that they could not be separated. Material wealth consists of use-values, and Nature is just as much the source of these use-values as is human labour. If one takes such different units of wealth as a ton of coal, a gun and a table, it is at once apparent that to speak of labour as the “ sole cause ” of their existence, ignoring the natural elements which enter into their composition, would be foolish in the extreme. Each of these widely-varying commodities is a use-value resulting from the application of human labour to natural resources, and to ignore these natural resources, as we must if we are to speak of labour as the sole source of value, would be absurd. And that absurdity Marx never committed.

But wealth in modern society does not consist of simple use- values. Social use-value, not simple use-value, is the essence of wealth in capitalistically developed countries. A man may own an abundance of simple use-values and yet be very poor. For example, a manufacturer of tables may be poor precisely because of the large number of tables in his stock unsold. Each of the tables may be admirably suited to the purpose for which it was made, a simple use-value. But one table, or at most a very small number of tables, is all that the manufacturer needs for his own use. Unless, therefore, other persons should desire to own the surplus tables, making them social use-values and thus giving them an exchange-value, they must remain valueless


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and keep the manufacturer poor, notwithstanding their excel lence as primary use-values. Social use-value, or utility, is therefore the basis of exchange-value.

Now, it is perfectly obvious that the objective of capitalistic production is not the creation of simple use-values, but of ex- change-values. Commodities are produced, not for use primarily, but for sale at a profit. No matter how useful a thing may be, unless its utility is social, giving it an exchange-value, no capitalist bothers with its production. Social use-values, then, have the quality of exchangeability. They can be exchanged one for another. If we take our three commodities, the ton of coal, the gun and the table, we shall find that they bear a certain relative value in exchange. Utterly unlike each other, as dissimilar in appearance as in the purpose for which they are intended, they nevertheless may possess equal value in exchange, any one of them exchanging for either of the others.

To discover the source of this economic value is the fundamental problem with wh’ich the political economist must concern himself. Before Marx practically all the great English economists, from Petty to Ricardo and his followers, taught that labour was the source and determinant of value. Thus it was that the early Ricardian Socialists, whose ideas Marx is often said to have adopted, taught a doctrine very similar to that which Mr. Mallock has ascribed to Marx. They were practically compelled by the fundamental conditions of their theory to contend that all productive effort is of equal productivity. They based an ethic of distribution upon their fundamental idea, claiming that wealth is derived exclusively from human labour and should, therefore, belong to the labourers. Marx, on the other hand, could make no such claim for the labourers, since he recognized other elements than their labour in the composition of wealth. He was not concerned with the ethics of distribution at all, and was under no obligation to contend that a day’s labour of an inefficient worker was of the same value

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as that of an efficient one, or a day’s labour by a skilled artisan no more valuable than the labour of a coolie labourer for an equal period of time.

Critics innumerable have deemed it a sufficient refutation of Marx to point out that a slow and inefficient worker may take two or three times as long a time to make a coat, for example, as a quick and efficient worker would take to make one exactly like it; and that the coat made by the quick and efficient worker will bring exactly as much in the market as that which represents twice as large an expenditure of labour time. If Marx were the most addlepated writer that ever lived, his “ refutation ” could not be more easily accomplished!

The only objection to this criticism is the fact that it is wholly irrelevant, that it in nowise applies to the Marxian theory. According to Marx, the value of a commodity is not determined by the amount of actual labour embodied in it. Had the critics read Marx with reasonable care, they would know that the theory of value they attack is not his; that he completely exposed its absurdity, and that of its corollary, the doctrine that all productive effort is of equal productivity. Marx teaches that the value of commodities is determined, not by the amount of labour actually embodied in them, but by the amount of abstract labour they represent — or, better, by the amount of social labour necessary, on the average, for its production. Instead of the crude formula of the Ricardian Socialists, that the value of all commodities is determined by the amount of labour embodied in them, Marx gives us this: The

value of commodities is determined by the amount of social labour necessary, on an average, for their production.

To the question, How is this determined in the process of exchange ? Marx responds, in the words of Adam Smith, By the bargaining and higgling of the market. He does not claim that the amount of social labour necessary for their production is determined accurately and absolutely in individual cases, but approximately in general. No human intellect could possibly

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unravel the tangled skein of social labour involved in the manufacture of the simplest commodities. It would be absurd to contend that the buyer in the market makes elaborate calculations of the amount of labour necessary to the production of this, that or the other commodity. We know that buyers do nothing of the sort, and Marx nowhere contends that they do. He points out, on the contrary, that the process is unconscious and automatic.

Nor is it a criticism of Marx’s theory of value to point out, as many critics, following Bohm-Bawerk, have done, that a man may find a lump of gold, and so, in a few moments, secure as much wealth as would ordinarily take him years to acquire. The criticism has force only when directed against the crude labour-value theory which Marx did so much to destroy. The very terms in which Marx states his theory of value provides the answer to this criticism. The value of the lump of gold will be determined, not by the infinitesimal quantity of labour required to pick it up from the ground, but by the amount of labour necessary on an average to procure an equal amount of the precious metal.

Again, some of Marx’s critics point to what may be called unique values, or scarcity values, articles which cannot be reproduced by labour, and whose value is wholly independent of the amount of labour originally necessary to produce them. It needs no argument, however, to show that no criticism of Marx’s theory can be based upon such grounds. The criticism is ruled out by the terms of the theory itself, has been amply answered by Marx, and was answered by Ricardo before him. Autograph letters, great auks’ eggs, rare manuscripts, Stradi- varius violins, Caxton books and Napoleon snuff-boxes — such articles as these cannot be duplicated by human labour. That is to say, no possible amount of human labour could reproduce the exact utilities in them, the qualities which give them their peculiar value. A perfect copy of a Shakespeare letter, of a snuff-box belonging to Napoleon, however perfect the re

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production might be as regards physical properties, could not reproduce the sentimental quality, the association with the fingers of Shakespeare or Napoleon, which gives the article its special utility.

Finally, Marx not only recognized the exception to the law of value in the case of unique values, but he also recognized that there are other exceptions — especially in the case of monopolies and near-monopolies, which enable the vendors to control the market, exclude effective competition and set the law of value aside, so to speak. Marx not only pointed out this fact, but he also pointed out that the workers are exploited, under these conditions, in the circulation of commodities as well as in their circulation, and that this “ secondary exploitation ” of the workers must become more and more important as competition is outgrown and monopoly reached.1

Except for his greater clarity and precision of statement, Marx hardly differs from Ricardo in his treatment of value. In a well-known passage, Ricardo clearly develops the concept of social labour, and shows that the amount of labour necessary to the production of a commodity, rather than the amount actually embodied in it, determines its value. Taking stockings as an example, he includes in the term “ quantity of human labour,” not merely the total labour of those immediately concerned in the making of stockings, from the cultivation of the raw cotton to the making of the stockings in the factory, but all the indirect labour involved, even in the making and navigation of the ships, the building of the factories and machinery, and so on.2 Marx follows Ricardo and still further develops these ideas, and all criticisms of his economic teaching which rest upon the assumption that he regards the simple, direct labour actually embodied in commodities as the determinant of their value fall of their own weight.

¹ See, for instance, Capital, Vol. Ill, Chapter XXXVI.

² David Ricardo, Principles of Political Economy and Taxation, Chapter I, III.


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A theory of value which has obtained considerable popularity in recent years, and is held, even by some Socialists, to have rendered obsolete the labour-value theory of Marx, is the so- called Austrian theory of final, or marginal, utility. This theory, which is of English, not Austrian origin, as Professor Seligman has ably and clearly demonstrated,1 is in reality only the old theory that value is determined by the relation of supply and demand. To hold, as most writers seem to do, Socialists and non-Socialists alike, that the two theories are mutually exclusive, seems to the present writer to be a grave mistake. Rather, they seem to be complementary to each other. Men- ger, Jevons, and other exponents of the marginal utility theory, hold that value is determined by power to give satisfaction, while Marx holds that it is determined by the amount of labour socially necessary for the production of the object of value. At first thought these two concepts seem to be antagonistic, but closer study reveals the fact that the antagonism is more apparent than real. It resolves itself into a difference of terminology rather than of essential meaning. On the one hand, Marx regards utility as a necessary condition of value, and holds that social utility alone gives rise to exchange-value. On the other hand, Menger, Jevons, and their followers admit that the “ final utility ” of commodities is not, in actual practice, determined without regard to the labour necessary, on an average, for their production. Professor Jevons himself recognized that the two theories were not mutually exclusive. He says in one passage of his celebrated work that his theory of final utility leads “ directly to the well-known law, as stated in the ordinary language of economists, that value is proportional to the cost of production.” 2 It will be remembered, too, that he rests his whole logical structure ultimately upon labour, making

¹ Seligman, On Some Neglected British Economists, in the Economic Journal, Vol. XIII, pages 357-363.

2 Theory of Political Economy, by W. S. Jevons. Third edition, page 186.

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it the final determinant of value. The relation of labour to value Jevons expresses in tabular form, as follows:

“ Cost of production determines supply;

Supply determines final degree of utility;

Final degree of utility determines value.”

Could anything be clearer than that according to this reasoning, labour, and not utility, is the final determinant of value? If A, cost of production, causes B, supply, and B in turn causes C, final degree of utility, which causes D, value, is not A the ultimate cause of D? Upon the principle that the greater contains the lesser quantity, it may be said that the Ricardo-Marx theory of value contains all that is useful and true in the much- vaunted theory of final, or marginal utility.

With regard to the Marxian theory of surplus-value it is perhaps pertinent to remark that while many of his followers and expositors seem to think that he was the first to discover the fact that the capitalistic economy is an economy of surplus- value, by many of his critics he is accused of taking it, without acknowledgment, from obscure writers. These critics deny his title to the slightest originality just as emphatically as his most enthusiastic followers claim for him absolute originality. The fact is, of course, that Marx was neither the first to discern that the objective of capitalistic production is surplus-value, nor a crow strutting in borrowed peacock plumes. Many other writers before him, both French and English, had recognised that the secret of capitalism is the extraction of surplus-value from the labour-power of the workers. The term itself had long been in use before Marx adopted it. As Marx himself has pointed out, it was used by an anonymous pamphleteer, in an open letter to Lord John Russell, published in London as Jar back as 1821. By the time Marx came to take an active interest in political economy the term was in very general use by the English radicals of the time, the radical literature of “ the