THE FALLACIES OF KARL MARX.
Karl Marx, like all the economic writers that I know of, started out to study the laws which govern the relations of men, by observing some of the things that men do; which is like trying to learn the mechanical construction and movements of a machine by examining a few of the different kinds of work it turns out. What can a man find out of the complicated mechanical movements of a planing machine by examining a planed board after it has passed through? And what can we infer of the laws which govern the social relations of men by observing the phenomena of the circulation of wealth, splitting economic hairs, and drawing fine distinctions as to the nature of property, the rightfulness of interest, or the value of commodities? We must first know what man is; what are his springs of action, what the purpose of his being, and in what ways he seeks to accomplish that purpose, before we can make real headway in tracing his relations to his fellows.
Without any disrespect to Mr. Marx for his faulty methods, for they have been the methods of others before and since, and with no purpose to detract anything from the real value of his work, I will try and point out some of the mistakes into which he fell, and which might have been avoided had he begun at the right point and followed the subject with the same care and fidelity that he has evidently bestowed upon his work (Kapital).
Along with other economic writers, Mr. Marx falls into an almost inextricable confusion over “labor value,” “surplus value, “and “value in exchange.”  Observing that a commodity requiring a given number of hours’ or days’ labor to produce it, does not always exchange equally for another commodity into which the same amount of labor has entered, and which he therefore regards as of equal labor value, he calls that difference “profit,” or “surplus value,” which, together with the “labor value” make up the “value in exchange.” He roundly condemns profit or surplus value, as a species of robbery. Insisting that it can have no economic basis, he says:
“Turn and twist then as we may, the fact remains unaltered. If equivalents are exchanged, no surplus value results, and if non-equivalents are exchanged, still no surplus value. Circulation, or exchange of commodities, begets no value.”
By this he thinks he has shown the injustice of profit, taking profit to mean the difference between the labor cost to produce the commodity and the labor that entered into the cost of production of the thing it is exchanged for.
Condillac came nearer the truth when he said:
“It is not true that on an exchange of commodities we give value for value. On the contrary, each of the two contracting parties, in every case, gives a less for a greater value. And yet, they both gain, or ought to gain—why? The value of a thing consists solely in its relation to our wants. What is more to one is less to the other, and vice versa.”
But why more to one and less to another? Let us see. I have desires. It is only by my labor that I can gratify my desires. By an expenditure of thirty days of my labor, I have produced wheat; but my desire is for clothing. Owing to various causes, the principal of which is my want of skill, if I apply my labor directly to the making of the clothes I want, I must work sixty days to obtain them. But here is another who has clothing which has cost him thirty days’ labor, and who wants wheat. His skill in wheat growing is as limited as mine is in the making of  clothes, and it would take him as long, were he to undertake directly to grow wheat, to get the wheat he wants as it would me to produce the clothes I want. But, if we can exchange, I giving him my wheat for his clothes, we have clearly both made a profit in the transaction He has saved thirty days of his labor over what it would have cost him to grow the wheat he wanted, and I have saved thirty days of my labor over what it would have cost me to make the clothes
I needed. This is how both parties to an equal exchange make a profit on the same transaction. But what is meant by “labor cost” and “labor value?“ Are they both the same thing, or different? Let us see. If I speak of the labor cost of a thing I mean the amount of labor that entered into its production. But if I speak of its “labor value,” I mean the amount of the product of labor, measured by its labor cost, that it will exchange for, which is often a very different thing. Let me make that plain. In the case of a famine my wheat rises in value. Labor applied to the production of wheat, owing to the conditions which cause the famine, is unproductive. It may take five times as much of my skilled labor, or five times as much of the others’ unskilled labor, to produce as much wheat as I already have that only cost., me thirty days’ labor. The cost of my wheat remains the same, but its labor value has risen five fold. It will require five times as much labor to replace it as it did to produce what I have. The labor necessary to produce clothing remaining the same, if I now wish to exchange for clothing I can get five times as many clothes as I could before, and yet I only obtain the labor value, under the then existing conditions, of my wheat.
Again, it often occurs that the labor value of a thing falls below its labor cost. Any improvement in methods of production by which labor is saved, its effectiveness increased, and the labor cost of future production is reduced, reduces the labor value of all  the goods of that kind in the market, although labor cost remains the same. If a plan of producing wheat is discovered by which I, and others who grow wheat, can realize as much wheat in fifteen days as I have already obtained in thirty, then, although the labor cost of the wheat I now have remains the same, its labor value falls one half, because I am unable to obtain, in the products of others’ labor, more than half as much as I could before.
Labor cost, then, is the amount of labor which entered into the production of a thing in the past: or at the time it was produced; and the labor value represents the amount of labor, which, at the time being, (the present,) it would require to replace it.
But Mr. Marx says, that the “circulation, or exchange of commodities, begets no value.” We have already seen wherein it does beget very important values to both the parties to the exchange. We will now take the case of the merchant who only trades (speculates if you please) in the products. When the goods receive their finishing touches in the shop, they are ready for the customers. But the customers must either come after them, or some one must take them to the customers. However performed, this means the additional expenditure of labor. Then too, all the excepted customers are not ready, and some of the goods must be kept on hand until they are prepared for them. This again, requires further labor to care for them, to show them when wanted, and attend to the delivery of them. All these things enter into and form a part of the labor cost, which, barring other influences which might operate to cheapen them, must appear in the selling value. The merchant who performs the labor of “circulation, or exchange of the commodities,” by the performance of that labor, has added a value, which added value represents his wages for his share in the production of those goods: wages which are just as legitimate, and just as necessary, as the wages of any person, at any step in the whole  series of processes. A failure to recognize this fact led Mr. Marx to make his astonishing statement above quoted, and another of the same kind later on that, “wherever equality exists there can be no gain,” and in fact, this idea not only prevails throughout his works, but it is the key note of the socialistic propaganda of the day.
But Mr. Marx makes more serious mistakes than what may be called economic slips. He has missed the essential character of man himself. Observing the men’s wants can only be supplied by labor, noting the increased power of production that comes from association, and without stopping to consider what the essential conditions of association are, he concludes that it is the all-important thing; and he would bring about an enforced association, and that without complying with the pre-requisites upon which all association must rest.
Speaking of present conditions of industry, he says; “In manufacture, in order to make the collective laborer, and through him capital, rich in social productive power, each laborer must be made poor in individual productive powers. Ignorance is the mother of industry as well as superstition. Reflection and fancy are subject to err; but a habit of moving the hand or foot is independent of either. Manufacturers, accordingly, prosper most where the mind is least consulted, and where the workshop may be considered as an engine, the parts of which are men.”
It would hardly be possible to crowd into the same space a greater number of gross absurdities than are contained in this short paragraph. In the very first sentence there are two distinct statements, or inferences, neither of which are true; first, that capital seeks labor which is poor in individual productive power; and second, that there is a social productive power apart from individual productive power. If the first were true, then those who become incapacitated individually: that is, become “poor in individual  productive powers,” would be the ones most sought for by capital, and of course, would command the best wages. This is his proposition stated in plain terms, the absurdity of which is self-evident.
But this is probably not what Mr. Marx meant. He doubtless referred to the fact that capitalists, in the employment, of labor, in order to make that labor as productive as possible, promote the greatest degree of subdivision of labor; and, in order to keep wages down, they render the laborers as helpless as possible, by shutting out every opportunity for other, or independent employment; and to still further increase their helplessness they discourage them from learning more than the few simple movements required to perform their assigned parts. But this is a very different thing from seeking incapacity for the sake of that incapacity. Nor do they seek incapacity at all in the things that the laborer is required to do In them they require the highest degree of skill and efficiency; and are willing to, and do, pay additional wages for additional skill. But instead of the subdivision of labor in itself rendering labor dependent and helpless, with labor free, so that it can reap the full reward of its exertion, it becomes the greatest means for making it independent by increasing its productiveness, and thereby increasing the prosperity and happiness of the laborers. The thing then for laborers to do, in order to increase their wages, is to break down all the barriers which shut them out from any or all other employments: which prevent them from freely employing themselves in any line they may see fit to engage in.
But what is this “social productive power” that Mr. Marx speaks of? What is it that enables one hundred men working together, that is, socially, to produce more than the same hundred working separately, or as individuals? Why, simply, this same subdivision of labor. If the one hundred laborers individually engage in the manufacture of watches, each must spend many years in learning how to make  watches. In undertaking so much, none of them can become very proficient watch makers. In the course of their lives none of them will make more than a comparatively few watches. If they have some holes to bore in a plate, a few springs to temper, or pinions to turn, or any other process to perform, they must, each time, fit up specially for the occasion, which of itself requires much time; and these fittings must be changed with every change in the process. From the very nature of such work it is imperfect, and under such conditions the manufacture of watches becomes slow and difficult. But divide up these several processes into one hundred parts; let one man bore holes in plates, another temper springs, another turn pinions, another polish a wheel, and so on through the whole list, each being supplied with perfect appliances for doing his work exactly and quickly, and these hundred persons will each save, in the time required to learn his trade, several of the best years of his life, and still the number of watches turned out will probably. be a thousand fold more than it would have been had these men continued to work individually; and besides, the watches will be of much better workmanship. But, while this “social productive power” depends upon association, it is still only the aggregate of the “individual productive powers” of the one hundred watchmakers.
The next statement in Mr. Marx’s paragraph is even more astonishing. “Ignorance is the mother of industry as well as superstition ;“ that is, the cause of it. Then the more ignorant men are, the more in dustrious they are, which is pure nonsense. Men labor to satisfy their desires; but desire depends upon their ability to appreciate good things, and therefore to desire them. But how can they appreciate a thing, and consequently desire it, without a knowledge of that thing? The greater men’s knowledge the greater their desires, and consequently the greater the stimulus to labor to gratify those desires. 
There is just one more statement in this remarkable paragraph to which I wish to call attention, and that is, that “manufacturers, accordingly, prosper most where the mind is least consulted, and where the workshop may be considered as an engine, the parts of which are men.” Of course, he means, where the mind of the workman is least consulted. This is clearly indicated by the context; but even if it were not, he would not say that manufacturers prospered most where their own minds were least consulted. The absurdity of such a statement would be too apparent, even to Mr. Marx. But it is certainly not true as applied to the workmen. The fact that the most intelligent workmen get the most pay, and are most sought for, is a sufficient refutation of this most transparent absurdity. Even in shops where there is the least regard paid to the interests of the workmen, superior intelligence is rewarded by higher wages; and the more intelligent the workman, the more intelligently, and therefore the more productively, he can apply his labor. He may even invent a machine to do the work of several men; and as a matter of fact, the machines invented for the saving of labor, and increasing the production in shops, have, in a great majority of cases, been invented by the workmen in those shops. The trouble with Mr. Marx is, that he has missed the whole spirit and purpose of labor. His diagnosis of the disease is seriously at fault, therefore, it is safe to conclude that his remedy is not to be trusted.
The indications are numerous throughout Mr. Marx’s whole work of this misconception of the whole genius of labor. In treating of the subordination of labor to capital he makes that subordination a matter of necessity. He says, “That the capitalist should command on the field of production, is now as indispensable as that a general should command on the field of battle,” which is not true in any sense. Referring to our analysis of capital in Chapter II, it will be remembered that we found that the only function  that capital performs in the production of wealth is that of a tool, to aid labor; to make it more productive. To assume that it is necessary for the owners of that tool, when they chance to be other than the laborers themselves, to command in the processes where that tool is used, is a monstrous assumption. It has neither truth nor reason. It is like assuming that a slave must have a master in order to raise the food for himself to live on. If I own a pick which a miner must use in digging ore, is it necessary, in order to enable him to dig that ore, that I command him in the use of that pick? Nonsense! My interference would be a hindrance. And, so far as capitalists, as such, presume to direct in the processes of production, they hinder and obstruct production. The thing that is necessary is this; when capital represents monopoly, as it commonly does, then, to enable monopoly to make sure of getting the largest possible proportion of the product, it must “command on the field of production.” That is where the necessity for the command comes in; and it is the only necessity for it. The master commands the slave, not because that command is necessary to enable the slave to produce, but to enable the master to obtain the product. And if I wish to get the ore which the miner will dig, I may undertake to do so through the command of the use of the pick. But, as a matter of fact, capitalists almost never directly “command on the field of production.” They realize that they are not competent to do so. What they do is, to select workmen (officers of the corporation) who they believe are competent, and on whom they can depend to protect the interests of their monopoly. These men command, not as capitalists, but as superior workmen. The capitalist (the stockholder) does nothing but help select the commanders, and draw his share of the monopoly (his dividend) at stated periods. But, even this limited and indirect command which the capitalist exercises, so far from being necessary to the processes of production, is a discouragement, and  therefore a hindrance. Every dollar which the capitalist takes in dividends, which does not represent his own labor expended in that particular branch of production, is the fruit of monopoly, and means just so much dishonestly abstracted from the wages of those who have expended their labor on it. It can never be justified upon any principle of nature, or equity, until it can be shown that it is natural, or equal, for one man who does not work to live upon the earnings of another who does. Nature does not produce on the one side the capitalist, and on the other the laborer. The relation is an abnormal one. We shall try to ascertain at what point the difference is set up which results in monstrous wealth on the one side, and extreme poverty on the other.
Mr. Marx, in urging the need of co-operation, points to those vast structures of the ancient Asiatics, Egyptians, Etruscans, etc., as evidence of the wonderful power and effectiveness of co-operation. From these he argues the utility and necessity for centering the power of direction and sustenance of the people in government. He says; “It is that confinement of the revenues which feed them, (the people) to one, or a few hands, which makes such undertakings possible;" and for once Mr. Marx is right. It does require just such a concentration in “one or a few hands” to make such undertakings possible. And more than that, where such concentrations exist, such undertakings become, not only possible, but exceedingly probable. The history of every country in the world where these concentrations have been reached, tells the same story of vast and useless structures, consuming the unpaid labor of millions, built to gratify the ostentation of the despot, and along with it, of the abject misery, destitution, and ignorance of the people. If we would prevent such a result in our own case, we must stop this concentration that is going on, this “confinement of the revenues which feed them (the people) in one or a few hands,” to render these undertakings impossible. 
But while Mr. Marx is right in attributing the possibility of these vast structures to such concentration, he is wrong in calling that concentration co-operation. Webster defines co-operation as “the act of co-operating, or operating together to one end; joint operation; concurrent effort or labor.” The very construction of the word implies equality, and just in proportion as equality, is violated, the operation ceases to be a co-operation. And when the power of direction is centered “in one, or a few hands,” the operation is always performed by the other hands; and to call it a co-operation is a burlesque of the word. There can be no co-operation that is worthy the name which is not an absolutely free and voluntary one: a concurrent operation of equals, and where the rewards are equally shared. Such equality is wholly incompatible with the condition of master to command on one side, and man to obey on the other. His use of the term cooperation in connection with these ancient relics of slavery, proves, as much as anything else, Mr. Marx’s want of comprehension of the whole labor problem, as well as his ignorance of the necessary conditions of co-operation.
One point more and we will leave Mr. Marx and his friends to reconstruct their system, if they can. If any one still has any doubt of Mr. Marx’s utter want of comprehension of the social question let him read his treatment of the subject of the subdivision of labor. I will quote a few sample passages which will give the clew to his notion of this important matter. He says:
“Division of labor, which is the distinguishing principle of manufacture, requires the isolation of the various stages of production, and their independence of each other. The establishment and maintenance of a connection between the isolated functions necessitates the incessant transport of the articles from one hand to another, and from one process to another. From the standpoint of modern mechanical industry, this necessity stands forth as a characteristic and costly disadvantage, and one that is immanent in the principle of manufacture.” 
And again: “Some crippling of body and mind is inseparable even from division of labor in society as a whole. The subdivision of labor is the assassination of a people.”
It is hard to understand how a man of even ordinary intelligence should so completely misunderstand this great fact and factor; in short, this one essential condition of human progress. To revert to a previous illustration of the manufacture of watches, we saw that when watchmakers made entire watches the processes were slow, and imperfect, and required many years of patient effort before even indifferent work was turned out. But with a subdivision of the work of watch-making, the production was probably increased a thousand fold, while the work was also improved in quality. A saving, amounting to years of labor to every man engaged at it, was made at the outset; and, measured by the comparative results obtained, a saving of days almost against minutes is further made during the whole active working part of a watchmaker’s life. But this is not singular to the watchmaker’s trade. It applies in a varying degree to every industry in this world. In fact, it is a safe calculation to assume that the subdivision of labor, as a principle, has been a greater labor-saving device than all other machines and devices that were ever invented. And more, the greater the subdivision, the more easily mechanical invention can be made to take the place of manual labor. If a man had attempted to invent a machine to make watches, he would have found it a very difficult thing to do; but, resulting from the subdivision of the labor of watch making, almost every part of a watch is made by machinery, which still further reduces the cost of watches.
This process of subdivision of labor has been going on steadily ever since men began to develop from barbarism, and has kept pace with that development. It does not “require the isolation of the various stages of production, and their independence of each other.” It is a very common thing to see one process follow  another through a great variety of stages, under the same roof, as the goods are passed successively through the hands of operatives, each adding his own part until they issue finished; or, in other cases, where the several parts and processes are completed separately, and are finally assembled by others specially trained to that work. If this isolation and separation were “immanent in modern mechanical industry” to the extent of rendering it a “characteristic and costly disadvantage,” it would have been impossible for the subdivision of labor to have developed as it has done. It has developed because not one of these statements is true; because facility and advantage of handling, as well as cheapness of production, is its uniform and characteristic feature.
Then, so far from its having a tendency to cripple the body and mind, the tendency has been to save the body, and give opportunity to develop the mind by shortening the hours of labor and giving leisure for improvement. It has lowered the prices of commodities and cheapened the comforts of life to an extent which has brought them within the reach of people of moderate means. That men have not enjoyed the benefits of shorter hours and improved conditions corresponding to these improvements has been from other causes than the subdivision of labor. This subdivision in itself has been an unmixed blessing to humanity; and it is destined to a still further extension beyond the most sanguine expectation of the wildest dreamer. What shall we say then to the man who sees in it only “the assassination of a people?”
Is Mr. Marx like those protectionists who are so fearful of the demoralizing effects of cheap goods that they seek to pass laws to make goods dear?