\"PhilipI，KingofFrance，\"saysM。Proudhon，\"mixeswithCharlemagne’sgoldpoundathirdofalloy，imaginingthat，havingthemonopolyofthemanufactureofmoney，hecoulddowhatisdonebyeverymanufactureofmoney，hecoulddowhatisdonebyeverytradesmanwhohasthethemonopolyofaproduct。WhatwasactuallythisdebasementofthecurrencyfromwhichPhilipandhissuccessorshavebeensomuchblamed？Itwasperfectlysoundreasoningfromthepointofviewofcommercialpractice，butveryunsoundeconomicscience，viz。，tosupposethat，assupplyanddemandregulatevalue，itispossible，eitherbyproducinganartificialscarcityorbymonopolizingmanufacture，toincreasetheestimationandconsequentlythevalueofthings;andthatthisistrueofgoldandsilverasofcorn，wine，oilortobacco。ButPhilip’sfraudwasnosoonersuspectedthanhismoneywasreducedtoitstruevalue，andhehimselflostwhathehadthoughttogainfromhissubjects。Thesamethinghashappenedasaresultofeverysimilarattempt。\"
[I70—71]
Ithasbeenprobedtimeswithoutnumberthat，ifaprincetakesintohisheadtodebasethecurrency，itishewholoses。Whathegainsonceatthefirstissueheloseseverytimethefalsifiedcoinagereturnstohimintheformoftaxes，etc。ButPhilipandhissuccessorswereabletoprotectthemselvesmoreorlessagainstthisloss，for，oncethedebasedcoinagewasputintocirculation，theyhastenedtoorderageneralre—mintingofmoneyontheoldfooting。
Andbesides，ifPhilipIhadreallyreasonedlikeM。Proudhon，hewouldnothavereasonedwell\"fromthecommercialpointofview\"。NeitherPhilipInorM。Proudhondisplaysanymercantilegeniusinimaginingthatitispossibletoalterthevalueofgoldaswellasthatofeveryothercommoditymerelybecausetheirvalueisdeterminedbytherelationbetweensupplyanddemand。
IfKingPhiliphaddecreedthatonequarterofwheatwasinfuturetobecalledtwoquartersofwheat，hewouldhavebeenaswindler。Hewouldhavedeceivedalltherentiers，allthepeoplewhowereentitledtoreceive100quartersofwheat。Hewouldhavebeenthecauseofallthesepeoplereceivingonly50quartersofwheat;hewouldhavehadtopayonly50。
Butincommerce100suchquarterswouldneverhavebeenworthmorethan50。Bychangingthenamewedonotchangethething。Thequantityofwheat，whithersuppliedordemanded，willbeneitherdecreasednorincreasedbythismerechangeofname。Thus，therelationbetweensupplyanddemandbeingjustthesameinspiteofthischangeofname，thepriceofwheatwillundergonorealchange。Whenwespeakofthesupplyanddemandofthings，wedonotspeakofthesupplyanddemandofthenameofthings。
PhilipIwasnotamakerofgoldandsilver，asM。Proudhonsays;hewasamakerofnamesforcoins。PassoffyourFrenchcashmeresasAsiaticcashmeres，andyoumaydeceiveabuyerortwo;butoncethefraudbecomesknown，yourso—calledAsiaticcashmereswilldroptothepriceofFrenchcashmeres。
Whenheputafalselabelongoldandsilver，KingPhilipcoulddeceiveonlysolongasthefraudwasnotknown。Likeanyothershopkeeper，hedeceivedhiscustomersbyafalsedescriptionofhiswares，whichcouldnotlastforlong。Hewasboundsoonerorlatertosuffertherigourofcommerciallaws。IsthiswhatM。Proudhonwantedtoprove？No。Accordingtohim，itisfromthesovereignandnotfromcommercethatmoneygetsitsvalue。Andwhathashereallyproved？Thatcommerceismoresovereignthanthesovereign。Letthesovereigndecreethatonemarkshallinfuturebetwomarks，commercewillkeeponsayingthatthesetwomarksareworthnomorethanonemarkwasformerly。
But，forallthat，thequestionofvaluedeterminedbythequantityoflaborhasnotbeenadvancedastep。Itstillremainstobedecidedwhetherthevalueofthesetwomarks（whichhavebecomewhatonemarkwasonce）
isdeterminedbythecostofproductionorbythelawofsupplyanddemand。
M。Proudhoncontinues：\"Itshouldevenbeborneinmindthatif，insteadofdebasingthecurrency，ithadbeenintheking’spowertodoubleitsbulk，theexchangevalueofgoldandsilverwouldimmediatelyhavedroppedbyhalf，alwaysfromreasonsofproportionandequilibrium。\"
[I71]
Ifthisopinion，whichM。Proudhonshareswiththeothereconomists，isvalid，itarguesinfavorofthelatter’sdoctrineofsupplyanddemand，andinnowayinfavorofM。Proudhon’sproportionality。For，whateverthequantityoflaborembodiedinthedoubledbulkofgoldandsilver，itsvaluewouldhavedroppedbyhalf，thedemandhavingremainedthesameandthesupplyhavingdoubled。Orcanitbe，byanychance，thatthe\"lawofproportionality\"wouldhavebecomeconfusedthistimewiththesomuchdisdainedlawofsupplyanddemand？ThistrueproportionofM。Proudhon’sisindeedsoelastic，iscapableofsomanyvariations，combinationandpermutations，thatitmightwellcoincideforoncewiththerelationbetweensupplyanddemand。
Tomake\"everycommodityacceptableinexchange，ifnotinpracticethenatleastbyright\"，onthebasisoftheroleofgoldandsilveris，then，tomisunderstandthisrole。Goldandsilverareacceptablebyrightonlybecausetheyareacceptableinpractice;andtheyareacceptableinpracticebecausethepresentorganizationofproductionneedsauniversalmediumofexchange。Rightisonlytheofficialrecognitionoffact。
WehaveseenthattheexampleofmoneyasanapplicationofvaluewhichhasattainedconstitutionwaschosenbyM。Proudhononlytosmugglethroughhiswholedoctrineofexchangeability，thatistosay，toprovethateverycommodityassessedbyitscostofproductionmustattainthestatusofmoney。Allthiswouldbeveryfine，wereitnotfortheawkwardfactthatpreciselygoldandsilver，asmoney，areofallcommoditiestheonlyonesnotdeterminedbytheircostofproduction;andthisissotruethatincirculationtheycanbereplacedbypaper。Solongasthereisacertainproportionobservedbetweentherequirementsofcirculationandtheamountofmoneyissued，beitpaper，gold，platinum，orcoppermoney，therecanbenoquestionofaproportiontobeobservedbetweentheintrinsicvalue（costofproduction）andthenominalvalueofmoney。Doubtless，ininternationaltrade，moneyisdetermined，likeanyothercommodity，bylabortime。Butitisalsotruethatgoldandsilverininternationaltradearemeansofexchangeasproductsandnotasmoney。Inotherwords，theylosethischaracteristicof\"stabilityandauthenticity\"，of\"sovereignconsecration\"，which，forM。Proudhon，formstheirspecificcharacteristic。
Ricardounderstoodthetruthsowellthat，afterbasinghiswholesystemonvaluedeterminedbylabortime，andaftersaying：
\"Goldandsilver，likeallothercommodities，arevaluableonlyinproportiontothequantityoflabornecessarytoproducethem，andbringthemtomarket\"，headds，nevertheless，thatthevalueofmoneyisnotdeterminedbythelabortimeitssubstanceembodies，butbythelawofsupplyanddemandonly。
\"Thoughit[papermoney]hasnointrinsicvalue，yet，bylimitingitsquantity，itsvalueinexchangeisasgreatasanequaldenominationofcoin，orofbullioninthatcoin。Onthesameprinciple，too，namely，bylimitationofitsquantity，adebasedcoinwouldcirculateatthevalueitshouldbear，ifitwereofthelegalweightandfineness，andnotatthevalueofthequantityofmetalwhichitactuallycontained。InthehistoryoftheBritishcoinage，wefind，accordingly，thatthecurrencywasneverdepreciatedinthesameproportionthatitwasdebased;thereasonofwhichwas，thatitneverwasincreasedinquantity，inproportiontoitsdiminishedintrinsicvalue。\"
（Ricardo，loc。cit。[pp。206—07]）
ThisiswhatJ。B。SayobservesonthispassageofRicardo’s：
\"Thisexampleshouldsuffice，Ithink，toconvincetheauthorthatthebasisofallvalueisnottheamountoflaborneededtomakeacommodity，buttheneedfeltforthatcommodity，balancedbyitsscarcity。\"
[ThereferenceistoSay’snoteontheFrencheditionofRicardo’sbook，Vol。II，pp。206—07。]
Thusmoney，whichforRicardoisnolongeravaluedeterminedbylabortime，andwhichJ。B。SaythereforetakesasanexampletoconvinceRicardothattheothervaluescouldnotbedeterminedbylabortimeeither，thismoney，Isay，takenbyJ。B。Sayasanexampleofavaluedeterminedexclusivelybysupplyanddemand，becomesforM。Proudhontheexampleparexcellenceoftheapplicationofvalueconstituted……bylabortime。
Toconclude，ifmoneyisnotavalue\"constituted\"bylabortime，itisallthelesslikelythatitcouldhaveanythingincommonwithM。
Proudhon’strue\"proportion\"。Goldandsilverarealwaysexchangeable，becausetheyhavethespecialfunctionofservingastheuniversalagentofexchange，andinnowisebecausetheyexistinaquantityproportionaltothesumtotalofwealth;or，toputitstillbetter，theyarealwaysproportionalbecause，aloneofallcommodities，theyserveasmoney，theuniversalagentofexchange，whatevertheirquantityinrelationtothesumtotalofwealth。
\"Acirculationcanneverbesoabundantastooverflow;forbydiminishingitsvalue，inthesameproportionyouwillincreaseitsquantity，andbyincreasingitsvalue，diminishitsquantity。\"
（Ricardo[II205]）
\"Whatanimbrogliothispoliticaleconomyis！\"criesM。Proudhon。[I72]
\"Cursedgold！\"criesaCommunistflippantly（throughthemouthofM。Proudhon）。Youmightaswellsay：Cursedwheat，cursedvines，cursedsheep！——for\"justlikegoldandsilver，everycommercialvaluemustattainitsstrictlyexactdetermination。\"[I73]
Theideaofmakingsheepandvinesattainthestatusofmoneyisnotnew。InFrance，itbelongstotheageofLouisXIV。Atthatperiod，moneyhavingbeguntoestablishitsomnipotence，thedepreciationofallothercommoditieswasbeingcomplainedof，andthetimewhen\"everycommercialvalue\"mightattainitsstrictlyexactdetermination，thestatusofmoney，wasbeingeagerlyinvoked。EveninthewritingsofBoisguillebert，oneoftheoldestofFrencheconomists，wefind：
\"Money，then，bythearrivalofinnumerablecompetitorsintheformofcommoditiesthemselves，re—establishedintheirtruevalues，willbethrustbackagainwithinitsnaturallimits。\"
（Economistesfinanciersdudix—huitiemesiecle，Daireedition，p。422）
Oneseesthatthefirstillusionsofthebourgeoisiearealsotheirlast。
B）SurplusLabor\"Inworksonpoliticaleconomywereadthisabsurdhypo—thesis：Ifthepriceofeverythingweredoubled……Asifthepriceofeverythingwerenottheproportionofthings——andonecoulddoubleaproportion，arelation，alaw！\"
（Proudhon，Vol。I，p。81）
Economistshavefallenintothiserrorthroughnotknowinghowtoapplythe\"lawofproportionality\"andof\"constitutedvalue\"。
UnfortunatelyintheverysameworkbyM。Proudhon，VolumeI，p。110，wereadtheabsurdhypothesisthat，\"ifwagesrosegenerally，thepriceofeverythingelsewouldrise\"。Furthermore，ifwefindthephraseinquestioninworksonpoliticaleconomy，wealsofindasexplanationofit。
\"Whenonespeaksofthepriceofallcommoditiesgoingupordown，onealwaysexcludessomeonecommoditygoingupordown。Theexcludedcommodityis，ingeneral，moneyorlabor。\"
（EncyclopediaMetropolitanaorUniversalDictionaryofKnowledge，Vol。IV，Article\"PoliticalEconomy\"，by[N。W。]
Senior，London1836。Regardingthephraseunderdiscussion，seealsoJ。St。Mill：EssaysonSomeUnsettledQuestionsofPoliticalEconomy，London1844，andTooke：AHistoryofPrices，etc。，London1838。[FullreferenceisTh。Tooke，AHistoryofPrices，andoftheStateoftheCirculation，from1793to1837，Vols。I—II，London，1838]）
Letuspassnowtothesecondapplicationof\"constitutedvalue\"，andofotherproportions——whoseonlydefectistheirlackofproportion。AndletusseewhetherM。Proudhonishappierherethaninthemonetarizationofsheep。
\"Anaxiomgenerallyadmittedbyeconomistsisthatalllabormustleaveasurplus。Inmyopinionthispropositionisuniversallyandabsolutelytrue：itisthecorollaryofthelawofproportion，whichmayberegardedasthesummaryofthewholeofeconomicscience。But，iftheeconomistswillpermitmetosayso，theprinciplethatalllabormustleaveasurplusismeaninglessaccordingtotheirtheory，andisnotsusceptibleofanydemonstration。\"
（Proudhon[I73]）
Toprovethatalllabormustleaveasurplus，M。Proudhonpersonifiessociety;
heturnsitintoaperson，Society——asocietywhichisnotbyanymeansasocietyofpersons，sinceithasitslawapart，whichhavenothingincommonwiththepersonsofwhichsocietyiscomposed，andits\"ownintelligence\"，whichisnottheintelligenceofcommonmen，butanintelligencedevoidofcommonsense。M。Proudhonreproachestheeconomistswithnothavingunderstoodthepersonalityofthiscollectivebeing。WehavepleasureinconfrontinghimwiththefollowingpassagefromanAmericaneconomist，whoaccusestheeconomistsofjusttheopposite：
\"Themoralentity——thegrammaticalbeingcalledanation，hasbeenclothedinattributesthathavenorealexistenceexceptintheimaginationofthosewhometamorphoseawordintoathing……Thishasgivenrisetomanydifficultiesandtosomedeplorablemisunderstandinginpoliticaleconomy。\"
（Th。Cooper，LecturesontheElementsofPoliticalEconomy，Columbia1826）
[ThefirsteditionofthebookwaspublishedinColombiain1826。Asecond，enlargededitionappearedinLondonin1831。]
\"Thisprincipleofsurpluslabor，\"continuesM。Proudhon，\"istrueofindividualsonlybecauseitemanatesfromsociety，whichthusconfersonthemthebenefitofitsownlaws。\"
[I75]
DoesM。Proudhonmeantherebymerelythattheproductionofthesocialindividualexceedsthatoftheisolatedindividual？IsM。Proudhonreferringtothisexcessoftheproductionofassociatedindividualsoverthatofnon—associatedindividuals？Ifso，wecouldquoteforhimahundredeconomistswhohaveexpressedthissimpletruthwithoutanyofthemysticismwithwhichM。Proudhonsurroundshimself。This，forexample，iswhatMr。Sadlersays：
\"Combinedlaborproducesresultswhichindividualexertioncouldneveraccomplish。Asmankind，therefore，multiplyinnumber，theproductsoftheirunitedindustrywouldgreatlyexceedtheamountofanymerearithmeticaladditioncalculatedonsuchanincrease……Inthemechanicalarts，aswellasinpursuitsofscience，amanmayachievemoreinaday……thanasolitary……individualcouldperforminhiswholelife……Geometrysays……
thatthewholeisonlyequaltothesumofallitsparts;asappliedtothesubjectbeforeus，thisaxiomwouldbefalse。Regardinglabor，thegreatpillarofhumanexistence，itmaybesaidthattheentireproductofcombinedexertionalmostinfinitelyexceedsallwhichindividualanddisconnectedeffortscouldpossiblyaccomplish。\"
（T。Sadler，TheLawofPopulation，London1830）
[Vol。I，pp。83and84]
ToreturntoM。Proudhon。Surpluslabor，hesays，isexplainedbytheperson，Society。Thelifeofthispersonisguidedbylaws，theoppositeofthosewhichgoverntheactivitiesofmanasanindividual。Hedesirestoprovethisby\"facts\"。
\"Thediscoveryofaneconomicprocesscanneverprovidetheinventorwithaprofitequaltothatwhichheprocuresforsociety……Ithasbeenremarkedthatrailwayenterprisesaremuchlessasourceofwealthforthecontractorsthanforthestate……Theaveragecostoftransportingcommoditiesbyroadis18centimespertonperkilometre，fromthecollectionofthegoodstotheirdelivery。Ithasbeencalculatedthatatthisrateanordinaryrailwayenterprisewouldnotobtain10percentnetprofit，aresultapproximatelyequaltothatofaroad—transportenterprise。Butletussupposethatthespeedofrailtransportcomparedwiththatofroadtransportisas4isto1。Sinceinsocietytimeisvalueitself，therailwaywould，pricesbeingequal，presentanadvantageof400percentoverroad—transport。
Yetthisenormousadvantage，veryrealforsociety，isfarfrombeingrealizedinthesameproportionforthecarrier，who，whilebestowinguponsocietyanextravalueof400percent，doesnotforhisownpartdraw10percent。
Tobringthematterhomestillmorepointedly，letussuppose，infact，thattherailwayputsupitsrateto25centimes，thecostofroadtransportremainingat18：itwouldinstantlyloseallitsconsignments。Senders，receivers，everybodywouldreturntothevan，totheprimitivewaggonifnecessary。Thelocomotivewouldbeabandoned。Asocialadvantageof400
percentwouldbesacrificedtoaprivatelossof35percent。Thereasonforthisiseasilygrasped：theadvantageresultingfromthespeedoftherailwayisentirelysocial，andeachindividualparticipatesinitonlyinaminuteproportion（itmustberememberedthatatthemomentwearedealingonlywiththetransportofgoods），whilethelossstrikestheconsumerdirectlyandpersonally。Asocialprofitequalto400representsfortheindividual，ifsocietyiscomposedonlyofamillionmen，fourten—thousandths;
whilealossof33percentfortheconsumerwouldsupposeasocialdeficitof33million。
（Proudhon[I75，76]）
Now，wemayevenoverlookthefactthatM。Proudhonexpressesaquadrupledspeedas400percentoftheoriginalspeed;butthatheshouldbringintorelationthepercentageofspeedandthepercentageofprofitandestablishaproportionbetweentworelationswhich，althoughmeasuredseparatelybypercentages，areneverthelessincommensuratewitheachother，istoestablishaproportionbetweenthepercentageswithoutreferencetodenominations。
Percentagesarealwayspercentages，10percentand400percentarecommensurable;theyaretoeachotheras10isto400。Therefore，concludesM。Proudhon，aprofitof10percentisworth40timeslessthanaquadrupledspeed。Tosaveappearances，hesaysthat，forsociety，timeismoney。Thiserrorarisesfromhisrecollectingvaguelythatthereisaconnectionbetweenlaborvalueandlabortime，andhehastenstoidentifylabortimewithtransporttime;thatis，heidentifiesthefewfiremen，driversandothers，whoselabortimeisactuallytransporttime，withthewholeofsociety。
Thusatoneblow，speedhasbecomecapital，andinthiscaseheisfullyrightinsaying：\"Aprofitof400percentwillbesacrificedtoalossof35percent。\"Afterestablishingthisstrangepropositionasamathematician，hegivesustheexplanationofitasaneconomist。
\"Asocialprofitequalto400representsfortheindividual，inasocietyofonlyamillionmen，4/10，000ths。\"
Agreed;butwearedealingnotwith400，butwith400percent，andaprofitof400percentrepresentsfortheindividual400percent，neithermorenorless。Whateverbethecapital，thedividendswillalwaysbeintheratioof400percent。WhatdoesM。Proudhondo？Hetakespercentagesforcapital，and，asifhewereafraidofhisconfusionnotbeingmanifestenough，\"pointed\"enough，hecontinues：
\"Alossof33percentfortheconsumerwouldsupposeasocialdeficitof33million。\"
Alossof33percentfortheconsumerremainsalossof33percentforamillionconsumers。HowthencanM。Proudhonsaypertinentlythatthesocialdeficitinthecaseofa33percentlossamountsto33million，whenheknowsneitherthesocialcapitalnoreventhecapitalofasingleoneofthepersonsconcerned？ThusitwasnotenoughforM。Proudhontohaveconfusedcapitalwithpercentage;hesurpasseshimselfbyidentifyingthecapitalsunkinanenterprisewiththenumberofinterestedparties。
\"Tobringthematterhomestillmorepointedlyletussupposeinfact\"agivencapital。Asocialprofitof400percentdividedamongamillionparticipants，eachoftheminterestedtotheextentof1franc，wouldgive4francsprofitperhead——andnot0。0004，asM。Proudhonalleges。
Likewisealossof33percentforeachoftheparticipantsrepresentsasocialdeficitof330，000francsandnotof33million（100：33=1，000，000：330，000）。
M。Proudhon，preoccupiedwithhistheoryoftheperson，Society，forgetstodivideby100，whichentailsalossof330，000francs;but4
francsprofitperheadmake4millionfrancsprofitforsociety。Thereremainsforsocietyanetprofitof3，670，000francs。ThisaccuratecalculationprovespreciselythecontraryofwhatM。Proudhonwantedtoprove：namely，thattheprofitsandlossesofsocietyarenotininverseratiototheprofitsandlossesofindividuals。
Havingrectifiedthesesimpleerrorsofpurecalculation，letustakealookattheconsequenceswhichwewouldarriveat，ifweadmittedthisrelationbetweenspeedandcapitalinthecaseofrailways，asM。
Proudhongivesit——minusthemistakesincalculation。Letussupposethatatransportfourtimesasrapidcostsfourtimesasmuch;thistransportwouldnotyieldlessprofitthancartage，whichisfourtimesslowerandcostsaquartertheamount。Thus，ifcartagetakes18centimes，railtransportcouldtake72centimes。Thiswouldbe，accordingto\"therigorofmathematics\"，theconsequenceofM。Proudhon’ssuppositions——alwaysminushismistakesincalculation。Buthereheisallofasuddentellingustheif，insteadof72centimes，railtransporttakesonly25，itwouldinstantlyloseallitsconsignments。Decidedlyweshouldhavetogobacktothevan，totheprimitivewaggoneven。Only，ifwehaveanyadvicetogiveM。Proudhon，itisnottoforget，inhisProgrammeoftheProgressiveAssociation，todivideby100。But，alas！itisscarcelytobehopedthatouradvicewillbelistenedto，forM。Proudhonissodelightedwithhis\"progressiveassociation\"，thathecriesmostemphatically：
\"IhavealreadyshowninChapterII，bythesolutionoftheantinomyofvalue，thattheadvantageofeveryusefuldiscoveryisincomparablylessfortheinventor，whateverhemaydo，thanforsociety。Ihavecarriedthedemonstrationinregardtothispointintherigorofmathematics！\"
Letusreturntothefictionoftheperson，Society，afictionwhichhasnootheraimthanthatofprovingthissimpletruth——thatanewinventionwhichenablesagivenamountoflabortoproduceagreaternumberofcommodities，lowersthemarketablevalueoftheproduct。Society，then，makesaprofit，notbyobtainingmoreexchangevalues，butbyobtainingmorecommoditiesforthesamevalue。Asfortheinventor，competitionmakeshisprofitfallsuccessivelytothegenerallevelofprofits。HasM。Proudhonprovedthispropositionashewantedto？No。Thisdoesnotpreventhimfromreproachingtheeconomistswithfailuretoproveit。Toprovetohimonthecontrarythattheyhaveprovedit，weshallciteonlyRicardoandLauderdale——Ricardo，theheadoftheschoolwhichdeterminesvaluebylabortime，andLauderdale，oneofthemostuncompromisingdefendersofthedeterminationofvaluebysupplyanddemand。Bothhaveexpoundedthesameproposition：
\"Byconstantlyincreasingthefacilityofproduction，weconstantlydiminishthevalueofsomeofthecommoditiesbeforeproduced，thoughbythesamemeanswenotonlyaddtothenationalriches，butalsotothepoweroffutureproduction……Assoonasbytheaidofmachinery，orbytheknowledgeofnaturalphilosophy，youobligenaturalagentstodotheworkwhichwasbeforedonebyman，theexchangeablevalueofsuchworkfallsaccordingly。If10menturnedacornmill，anditbediscoveredthatbytheassistanceofwind，orofwater，thelaborofthese10menmaybespared，theflourwhichistheproducepartlyoftheworkperformedbythemill，wouldimmediatelyfallinvalue，inproportiontothequantityoflaborsaved;andthesocietywouldbericherbythecommoditieswhichthelaborofthe10mencouldproduce，thefundsdestinedfortheirmaintenancebeinginnodegreeimpaired。\"
（Ricardo[II59]）
Lauderdale，inhisturn，says：
Ineveryinstancewherecapitalissoemployedastoproduceaprofit，ituniformlyarises，either——fromitssupplantingaportionoflabor，whichwouldotherwisebeperformedbythehandofman;or——fromitsperformingaportionoflabor，whichisbeyondthereachofthepersonalexertionofmantoaccomplish。Thesmallprofitwhichtheproprietorsofmachinerygenerallyacquire，whencomparedwiththewagesoflabor，whichthemachinesupplants，mayperhapscreateasuspicionoftherectitudeofthisopinion。
Somefire—engines，forinstance，drawmorewaterfromacoalpitinonedaythancouldbeconveyedontheshoulderof300men，evenassistedbythemachineryofbuckets;andafire—engineundoubtedlyperformsitslaboratamuchsmallerexpensethantheamountofthewagesofthosewhoselaboritthussupplants。Thisis，intruth，thecasewithallmachinery。Allmachinesmustexecutethelaborthatwasantecedentlyperformedatacheaperratethanitcouldbedonebythehandofman……
Ifsuchaprivilegeisgivenfortheinventionofamachine，whichperforms，bythelaborofoneman，aquantityofworkthatusedtotakethelaboroffour;asthepossessionoftheexclusiveprivilegepreventsanycompetitionindoingthework，butwhatproceedsfromthelaboroftheworkmen，theirwages，aslongasthepatentcontinues，mustobviouslyformthemeasureofthepatentee’scharge;thatistosecureemployment，hehasonlytochargealittlelessthanthewagesofthelaborwhichthemachinesupplants。Butwhenthepatentexpires，othermachinesofthesamenaturearebroughtintocompetition;andthenhischargemustberegulatedonthesameprincipleaseveryother，accordingtotheabundanceofmachines……
Theprofitofcapitalemployed……，thoughitarisesfromsupplantinglabor，comestoberegulated，notbythevalueofthelaboritsupplantsbut，asinallothercases，bythecompetitionamongtheproprietorsofcapitalthatpresentsitselfforperformingtheduty，andthedemandforit。
[Pp。119，123，124，125，134]
Finally，then，solongastheprofitisgreaterthaninotherindustries，capitalwillbethrownintothenewindustryuntiltherateofprofitfallstothegenerallevel。
Wehavejustseenthattheexampleoftherailwaywasscarcelysuitedtothrowanylightonhisfictionoftheperson，Society。Nevertheless，M。Proudhonboldlyresumeshisdiscourse：
\"Withthesepointsclearedup，nothingiseasierthantoexplainhowlabormustleaveasurplusforeachproducer。\"
[I77]
Whatnowfollowsbelongstoclassicalantiquity。Itisapoeticalnarrativeintendedtorefreshthereaderafterthefatiguewhichtherigoroftheprecedingmathematicaldemonstrationsmusthavecausedhim。M。Proudhongivestheperson，Society，thenameofPrometheus，whosehighdeedsheglorifiesintheseterms：
Firstofall，Prometheusemergingfromthebosomofnatureawakenstolife，inadelightfulinertia，etc。，etc。Prometheussetstowork，andonthisfirstday，thefirstdayofthesecondcreation，Prometheus’product，thatis，hiswealth，hiswell—being，isequalto10。Onthesecondday，Prometheusdivideshislabor，andhisproductbecomesequalto100。Onthethirddayandoneachofthefollow—ingdays，Prometheusinventsmachines，discoversnewutil—itiesinbodies，newforcesinnature……Witheverystepofhisindustrialactivity，thereisanincreaseinthenumberofhisproducts，whichmarksanenhancementofhap—pinessforhiM。Andsince，afterall，toconsumeisforhimtoproduce，itisclearthateveryday’sconsumption，usinguponlytheproductofthedaybefore，leavesasurplusproductforthenextday。\"
[I77—78]
ThisPrometheusofM。Proudhon’sisaqueercharacter，asweakinlogicasinpoliticaleconomy。SolongasPrometheusmerelyteachesusthedivisionoflabor，theapplicationofmachinery，theexploitationofnaturalforcesandscientificpower，multiplyingtheproductiveforcesofmenandgivingasurpluscomparedwiththeproduceoflaborinisolation，thisnewPrometheushasthemisfortuneonlyofcomingtoolate。ButthemomentPrometheusstartstalkingaboutproductionandconsumptionhebecomesreallyludicrous。Toconsume，forhim，istoproduce;heconsumesthenextdaywhatheproducedthedaybefore，sothatheisalwaysonedayinadvance;thisdayinadvanceishis\"surpluslabor\"。But，ifheconsumesthenextdaywhathehasproducedthedaybefore，hemust，onthefirstday，whichhadnodaybefore，havedonetwodays’workinordertobeonedayinadvancelateron。HowdidPrometheusearnthissurplusonthefirstday，whentherewasneitherdivisionoflabor，normachinery，norevenanyknowledgeofphysicalforcesotherthanfire？Thusthequestion，forallitsbeingcarriedback\"tothefirstdayofthesecondcreation\"，hasnotadvancedasinglestepforward。ThiswayofexplainingthingssavorsbothofGreekandofHebrew，itisatoncemysticalandallegorical。ItgivesM。Proudhonaprefectrighttosay：
\"Ihaveprovedbytheoryandbyfactstheprinciplethatalllabormusthaveasurplus。\"
The\"facts\"arethefamousprogressivecalculation;thetheoryisthemythofPrometheus。
\"But，\"continuesM。Proudhon，\"thisprinciple，whilebeingascertainasanarithmeticalproposition，isasyetfarfrombeingrealizedbyeveryone。
Whereas，withtheprogressofcollectiveindustry，everyday’sindividuallaborproducesagreaterandgreaterproduct，andwhereastherefore，byanecessaryconsequence，theworkerwiththesamewageoughttobecomerichereveryday，thereactuallyexistestatesinsocietywhichprofitandotherswhichdecay。\"
[I79—80]
In1770thepopulationoftheUnitedKingdomofGreatBritainwas15million，andtheproductivepopulationwas3million。Thescientificpowerofproductionequalledapopulationofabout12millionindividualsmore。Thereforetherewere，altogether，15millionofproductiveforces。Thustheproductivepowerwastothepopulationas1isto1;andthescientificpowerwastothemanualpoweras4isto1。
In1840thepopulationdidnotexceed30million：theproductivepopulationwas6million。Butthescientificpoweramountedto650million;
thatis，itwastothewholepopulationas21isto1，andtomanualpoweras108isto1。
InEnglishsocietytheworkingdaythusacquiredin70asurplusof2，700percentproductivity;thatis，in1840itproduced27timesasmuchasin1770。AccordingtoM。Proudhon，thefollowingquestionshouldberaised：whywasnottheEnglishworkerof184027timesasrichastheoneof1770？InraisingsuchaquestiononewouldnaturallybesupposingthattheEnglishcouldhaveproducedthiswealthwithoutthehistoricalconditionsinwhichitwasproduced，suchas：privateaccumulationofcapital，moderndivisionoflabor，automaticworkshops，anarchicalcompetition，thewagesystem——inshort，everythingthatisbaseduponclassantagonisM。
Now，thesewerepreciselythenecessaryconditionsofexistenceforthedevelopmentofproductiveforcesandofsurpluslabor。Therefore，toobtainthisdevelopmentofproductiveforcesandthissurpluslabor，therehadtobeclasseswhichprofitedandclasseswhichdecayed。
Whatthen，ultimately，isthisPrometheusresuscitatedbyM。Proudhon？
Itissociety，socialrelationsbasedonclassantagonisM。Theserelationsarenotrelationsbetweenindividualandindividual，butbetweenworkerandcapitalist，betweenfarmerandlandlord，etc。Wipeouttheserelationsandyouannihilateallsociety，andyourPrometheusisnothingbutaghostwithoutarmsorlegs;thatis，withoutautomaticworkshops，withoutdivisionoflabor——inaword，withouteverythingthatyougavehimtostartwithinordertomakehimobtainthissurpluslabor。
Inthen，intheory，itsufficedtointerpret，asM。Proudhondoes，theformulaofsurpluslaborintheequalitariansense，withouttakingintoaccounttheactualconditionsofproduction，itshouldsuffice，inpractice，toshareoutequallyamongtheworkersallthewealthatpresentacquired，withoutchanginginanywaythepresentconditionsofproduction。
Suchadistributionwouldcertainlynotassureahighdegreeofcomforttotheindividualparticipants。
ButM。Proudhonisnotsopessimisticasonemightthink。Asproportioniseverythingforhim，hehastoseeinhisfullyequippedPrometheus，thatis，inpresent—daysociety，thebeginningsofarealizationofhisfavoriteidea。
\"Buteverywhere，too，theprogressofwealth，thatis，theproportionofvalues，isthedominantlaw;andwheneconomistsholdupagainstthecomplaintsofthesocialpartytheprogressivegrowthofthepublicwealth，andtheimprovedconditionsofeventhemostunfortunateclasses，theyunwittinglyproclaimatruthwhichisthecondemnationoftheirtheories。\"
[I80]
Whatis，exactly，collectivewealth，publicfortune？Itisthewealthofthebourgeoisie——notthatofeachbourgeoisinparticular。Well，theeconomistshavedonenothingbutshowhow，intheexistingrelationsofproduction，thewealthofthebourgeoisiehasgrownandmustgrowstillfurther。Asfortheworkingclasses，itstillremainsaverydebatablequestionwhethertheirconditionhasimprovedasaresultoftheincreaseinso—calledpublicwealth。Ifeconomists，insupportoftheiroptimism，citetheexampleoftheEnglishworkersemployedinthecottonindustry，theyseetheconditionofthelatteronlyintheraremomentsoftradeprosperity。Thesemomentsofprosperityaretotheperiodsofcrisisandstagnationinthe\"trueproportion\"of3to10。Butperhapsalso，inspeakingofimprovement，theeconomistswerethinkingofthemillionsofworkerswhohadtoperishintheEastIndiessoastoprocureforthemillionandahalfworkersemployedinEnglandinthesameindustrythreeyears’prosperityoutoften。
Asforthetemporaryparticipationintheincreaseofpublicwealth，thatisadifferentmatter。Thefactoftemporaryparticipationisexplainedbythetheoryoftheeconomists。Itistheconfirmationofthistheoryandnotits\"condemnation\"，asM。Proudhon。Iftherewereanythingtobecondemned，itwouldsurelybethesystemofM。Proudhon，whowouldreducetheworker，aswehaveshown，totheminimumwage，inspiteoftheincreaseofwealth。Itisonlybyreducingtheworkertotheminimumwagethathewouldbeabletoapplythetrueproportionofvalues，of\"valueconstituted\"
bylabortime。Itisbecausewages，asaresultofcompetition，oscillatenowabove，nowbelow，thepriceoffoodnecessaryforthesustenanceoftheworker，thathecanparticipatetoacertainextentinthedevelopmentofcollectivewealth，andcanalsoperishfromwant。Thisisthewholetheoryoftheeconomistswhohavenoillusionsonthesubject。
Afterhislengthydigressionsofrailways，onPrometheus，andonthenewsocietytobereconstitutedon\"constitutedvalue\"，M。Proudhoncollectshimself;emotionoverpowershimandhecriedinfatherlytones：
\"Ibeseechtheeconomiststoaskthemselvesforonemoment，inthesilenceoftheirhearts——farfromtheprejudicesthattroublethemandregardlessoftheemploymenttheyareengagedinorhopetoobtain，oftheintereststheysubserve，ortheapprobationtowhichtheyaspire，ofthehonorswhichnursetheirvanity——letthemsaywhetherbeforethisdaytheprinciplethatalllabormustleaveasurplusappearedtothemwiththischainofpremisesandconsequencesthatwehaverevealed。\"
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NOTES
[1]ReferencestoquotationsfromworksbyEnglishauthorsaretotheeditionwhichMarxhimselfused。
[2]NOTEbyEngelsto1885Germanedition：Ricardo，asiswellknown，determinesthevalueofacommoditybythequantityoflabornecessaryforitsproduction。Owing，however，totheprevailingformofexchangeineverymodeofproductionbasedonproductionofcommodities，includingthereforethecapitalistmodeofproduction，thisvalueisnotexpresseddirectlyinquantitiesoflaborbutinquantitiesofsomeothercommodity。Thevalueofacommodityexpressedinaquantityofsomeothercommodity（whethermoneyornot）istermedbyRicardoitsrelativevalue。
[3]NOTEbyEngelstothe1885Germanedition：Thethesisthatthe\"natural\"，i。e。，normal，priceoflaborpowercoincideswiththewageminimum，i。e。，withtheequivalentinvalueofthemeansofsubsistenceabsolutelyindispensableforthelifeandprocreationoftheworker，wasfirstputforwardbymeinSketchesforaCritiqueofPoliticalEconomy（Deutsch—FranzosischeJahrbucher[Franco—GermanAnnual]，Paris1844）andinTheConditionoftheWorkingClassinEnglandin1844。Asseenhere，Marxatthattimeexceptedthethesis。Lassalletookitoverfrombothofus。Although，however，inrealitywageshaveaconstanttendencytoapproachtheminimum，theabovethesisisneverthelessincorrect。Thefactthatlaborisregularlyandontheaveragepaidbelowitsvaluecannotalteritsvalue。InCapital，Marxhasputtheabovethesisright（SectiononBuyingandSellingLaborofPower）andalso（Chapter25：TheGeneralLawofCapitalistAccumulation）analyzedthecircumstanceswhichpermitcapitalistproductiontodepressthepriceoflaborpowermoreandmorebelowitsvalue。
[4]InthecopyMarxpresentedtoN。Utinain1876afterthisword\"labor\"Marxadds\"laborpower\";thisadditionisfoundinthe1896Frenchedition。
[5]BACKGROUNDNOTE：TheTenHours’
Bill，whichappliedonlytowomenandchildren，waspassedbytheBritishParliamentonJune8，1847。Manymanufacturers，however，ignoredthelawinpractice。
[6]NOTEbyMarx：Mr。Bray’stheory，likealltheories，hasfoundsupporterswhohaveallowedthemselvestobedeludedbyappearances。Equitablelabor—exchangebazaarshavebeensetupinLondon，Sheffield，LeedsandmanyothertownsinEngland。Thesebazaarshaveallendedinscandalousfailuresafterhavingabsorbedconsiderablecapital。Thetasteforthemhasgoneforever。Youarewarned，M。Proudhon！
NOTEbyEngelstothe1885Germanedition：ItisknownthatProudhondidnottakethiswarningtoheart。In1849hehimselfmadeanattemptwithanewExchangeBankinParis。Thebank，however，failedbeforeithadgotgoingproperly：acourtcaseagainstProudhonhadtoservetocoveritscollapse。
chapter2
THEMETAPHYSICS
OFPOLITICALECONOMY
1。
THEMETHOD
Hereweare，rightinGermany！Weshallnowhavetotalkmetaphysicswhiletalkingpoliticaleconomy。AndinthisagainweshallbutfollowM。Proudhon’s\"contradictions\"。JustnowheforcedustospeakEnglish，tobecomeprettywellEnglishourselves。Nowthesceneischanging。M。Proudhonistransportingustoourdearfatherlandandisforcingus，whetherwelikeitornot，tobecomeGermanagain。
IftheEnglishmantransformsmenintohats，theGermantransformshatsintoideas。TheenglishmanisRicardo，richbankeranddistinguishedeconomist;theGermanisHegel，simpleprofessorattheUniversityofBerlin。
LouisXV，thelastabsolutemonarchandrepresentativeofthedecadenceofFrenchroyalty，hadattachedtohispersonaphysicianwhowashimselfFrance’sfirsteconomist。Thisdoctor，thiseconomist，representedtheimminentandcertaintriumphoftheFrenchbourgeoisie。DoctorQuesnaymadeascienceoutofpoliticaleconomy;hesummarizeditinhisfamousTablueaueconomique。Besidesthethousandandonecommentariesonthistablewhichhaveappeared，wepossessonebythedoctorhimself。Itisthe\"analysisoftheeconomictable\"，followedby\"sevenimportantobservations\"。
M。ProudhonisanotherDr。Quesnay。HeistheQuesnayofthemetaphysicsofpoliticaleconomy。
Nowmetaphysics——indeedallphilosophy——canbesummedup，accordingtoHegel，inmethod。Wemust，therefore，trytoelucidatethemethodofM。Proudhon，whichisatleastasfoggyastheEconomicTable。
Itisforthisreasonthatwearemakingsevenmoreorlessimportantobservations。
IfDr。Proudhonisnotpleasedwithourobservations，well，then，hewillhavetobecomeanAbbeBaydeauandgivethe\"explanationoftheeconomico—metaphysicalmethod\"himself。
FirstObservation\"Wearenotgivingahistoryaccordingtotheorderintime，butaccordingtothesequenceofideas。Economicphasesorcategoriesareintheirmanifestationsometimescontemporary，sometimesinverted……Economictheorieshavenonethelesstheirlogicalsequenceandtheirserialrelationintheunderstanding：
itisthisorderthatweflatterour—selvestohavediscovered。\"
（Proudhon，Vol。I，p。146）
M。ProudhonmostcertainlywantedtofrightentheFrenchbyflingingquasi—HegelianphrasesattheM。Sowehavetodealwithtwomen：firstlywithM。Proudhon，andthenwithHegel。HowdoesM。Proudhondistinguishhimselffromothereconomists？AndwhatpartdoesHegelplayinM。Proudhon’spoliticaleconomy？
Economistsexpresstherelationsofbourgeoisproduction，thedivisionoflabor，credit，money，etc。，asfixed，immutable，eternalcategories。
M。Proudhon，whohastheseready—madecategoriesbeforehim，wantstoexplaintoustheactofformation，thegenesisofthesecategories，principles，laws，ideas，thoughts。
Economistsexplainhowproductiontakesplaceintheabove—mentionedrelationsthemselvesareproduced，butwhattheydonotexplainishowtheserelationsthemselvesareproduced，thatis，thehistoricalmovementwhichgavethembirth。M。Proudhon，takingtheserelationsforprinciples，categories，abstractthoughts，hasmerelytoputintoorderthesethoughts，whicharetobefoundalphabeticallyarrangedattheendofeverytreatiseonpoliticaleconomy。Theeconomists’materialistheactive，energeticlifeofman;M。Proudhon’smaterialisthedogmasoftheeconomists。Butthemomentweceasetopursuethehistoricalmovementofproductionrelations，ofwhichthecategoriesarebutthetheoreticalexpression，themomentwewanttoseeinthesecategoriesnomorethanideas，spontaneousthoughts，independentofrealrelations，weareforcedtoattributetheoriginofthesethoughtstothemovementofpurereason。Howdoespure，eternal，impersonalreasongiverisetothesethoughts？Howdoesitproceedinordertoproducethem？
IfwehadM。Proudhon’sintrepidityinthematterofHegelianismweshouldsay：itisdistinguishedinitselffromitself。Whatdoesthismean？Impersonalreason，havingoutsideitselfneitherabaseonwhichitcanposeitself，noranobjecttowhichitcanopposeitself，norasubjectwithwhichitcancomposeitself，isforcedtoturnheadoverheels，inposingitself，opposingitselfandcomposingitself——position，opposition，composition。Or，tospeakGreek——wehavethesis，antithesis，andsynthesis。
ForthosewhodonotknowtheHegelianformula：affirmation，negationandnegationofthenegation。Thatiswhatlanguagemeans。ItiscertainlynotHebrew（withdueapologiesM。Proudhon）;butitisthelanguageofthispurereason，separatefromtheindividual。Insteadoftheordinaryindividualwithhisordinarymannerofspeakingandthinkingwehavenothingbutthisordinarymannerinitself——withouttheindividual。
Isitsurprisingthateverything，inthefinalabstraction——
forwehavehereanabstraction，andnotananalysis——presentsitselfasalogicalcategory？Isitsurprisingthat，ifyouletdroplittlebylittleallthatconstitutestheindividualityofahouse，leavingoutfirstofallthematerialsofwhichitiscomposed，thentheformthatdistinguishesit，youendupwithnothingbutabody;that，ifyouleaveoutofaccountthelimitsofthisbody;yousoonhavenothingbutaspace——thatif，finally，youleaveoutoftheaccountthedimensionsofthisspace，thereisabsolutelynothingleftbutpurequantity，thelogicalcategory？Ifweabstractthusfromeverysubjectalltheallegedaccidents，animateorinanimate，menorthings，wearerightinsayingthatinthefinalabstraction，theonlysubstanceleftisthelogicalcategory。Thusthemetaphysicianswho，inmakingtheseabstractions，thinktheyaremakinganalyses，andwho，themoretheydetachthemselvesfromthings，imaginethemselvestobegettingallthenearertothepointofpenetratingtotheircore——
thesemetaphysiciansinturnarerightinsayingthatthingsherebelowareembroideriesofwhichthelogicalcategoriesconstitutethecanvas。
ThisiswhatdistinguishesthephilosopherfromtheChristian。TheChristian，inspiteoflogic，hasonlyoneincarnationoftheLogos;thephilosopherhasneverfinishedwithincarnations。Ifallthatexists，allthatlivesonland，andunderwater，canbereducedbyabstractiontoalogicalcategory——ifthewholerealworldcanbedrownedthusinaworldofabstractions，intheworldoflogicalcategories——whoneedbeastonishedatit？
Allthatexists，allthatlivesonlandandunderwater，existsandlivesonlybysomekindofmovement。Thus，themovementofhistoryproducessocialrelations;industrialmovementgivesusindustrialproducts，etc。
Justasbydintofabstractionwehavetransformedeverythingintoalogicalcategory，soonehasonlytomakeanabstractionofeverycharacteristicdistinctiveofdifferentmovementstoattainmovementinitsabstractcondition——purelyformalmovement，thepurelylogicalformulaofmovement。Ifonefindsinlogicalcategoriesthesubstanceofalltings，oneimaginesonehasfoundinthelogicalformulaofmovementtheabsolutemethod，whichnotonlyexplainsallthings，butalsoimpliesthemovementofthings。
ItisofthisabsolutemethodthatHegelspeaksintheseterms：
\"Methodistheabsolute，unique，supreme，infiniteforce，whichnoobjectcanresist;itisthetendencyofreasontofinditselfagain，torecognizeitselfineveryobject。\"
（Logic，Vol。III）[29]
Allthingsbeingreducedtoalogicalcategory，andeverymovement，everyactofproduction，tomethod，itfollowsnaturallythateveryaggregateofproductsandproduction，ofobjectsandofmovement，canbereducedtoaformofappliedmetaphysics。WhatHegelhasdoneforreligion，law，etc。，M。Proudhonseekstodoforpoliticaleconomy。
Sowhatisthisabsolutemethod？Theabstractionofmovement。
Whatistheabstractionofmovement？Movementinabstractcondition。Whatismovementinabstractcondition？Thepurelylogicalformulaofmovementorthemovementofpurereason。Whereindoesthemovementofpurereasonconsist？Inposingitself，opposingitself，composingitself;informulatingitselfasthesis，antithesis，synthesis;or，yet，inaffirmingitself，negatingitself，andnegatingitsnegation。
Howdoesreasonmanagetoaffirmitself，toposeitselfinadefinitecategory？Thatisthebusinessofreasonitselfandofitsapologists。
Butonceithasmanagedtoposeitselfasathesis，thisthesis，thisthought，opposedtoitself，splitsupintotwocontradictorythoughts——thepositiveandthenegative，theyesandno。Thestrugglebetweenthesetwoantagonisticelementscomprisedintheantithesisconstitutesthedialecticalmovement。Theyesbecomingno，thenobecomingyes，theyesbecomingbothyesandno，thenobecomingbothnoandyes，thecontrariesbalance，neutralize，paralyzeeachother。Thefusionofthesetwocontradictorythoughtsconstitutesanewthought，whichisthesynthesisoftheM。Thisthoughtsplitsuponceagainintotwocontradictorythoughts，whichinturnfuseintoanewsynthesis。Ofthistravailisbornagroupofthoughts。
Thisgroupofthoughtsfollowsthesamedialecticmovementasthesimplecategory，andhasacontradictorygroupasantithesis。Ofthesetwogroupsofthoughtsisbornanewgroupofthoughts，whichistheantithesisofthem。
Justasfromthedialecticmovementofthesimplecategoriesisbornthegroup，sofromthedialecticmovementofthegroupsisborntheseries，andfromthedialecticmovementoftheseriesisborntheentiresystem。
Applythismethodtothecategoriesofpoliticaleconomyandyouhavethelogicandmetaphysicsofpoliticaleconomy，or，inotherwords，youhavetheeconomiccategoriesthateverybodyknows，translatedintoalittle—knownlanguagewhichmakesthemlookasiftheyhadneverblossomedforthinanintellectofpurereason;somuchdothesecategoriesseemtoengenderoneanother，tobelinkedupandintertwinedwithoneanotherbytheveryworkingofthedialecticmovement。Thereadermustnotgetalarmedatthesemetaphysicswithalltheirscaffoldingofcategories，groups，series，andsystems。M。Proudhon，inspiteofallthetroublehehastakentoscaletheheightsofthesystemofcontradictions，hasneverbeenabletoraisehimselfabovethefirstworungsofsimplethesisandantithesis;andeventhesehehasmountedonlytwice，andononeofthesetwooccasionshefelloverbackwards。
UptonowwehaveexpoundedonlythedialecticsofHegel。WeshallseelaterhowM。Proudhonhassucceededinreducingittothemeanestproportions。
Thus，forHegel，allthathashappenedandisstillhappeningisonlyjustwhatishappeninginhisownmind。Thusthephilosophyofhistoryisnothingbutthehistoryofphilosophy，ofhisownphilosophy。Thereisnolongera\"historyaccordingtotheorderintime\"，thereisonly\"thesequenceofideasintheunderstanding\"。Hethinksheisconstructingtheworldbythemovementofthought，whereasheismerelyreconstructingsystematicallyandclassifyingbytheabsolutemethodofthoughtswhichareinthemindsofall。
SecondObservationEconomiccategoriesareonlythetheoreticalexpressions，theabstractionsofthesocialrelationsofproduction，M。Proudhon，holdingthisupsidedownlikeatruephilosopher，seesinactualrelationsnothingbuttheincarnationoftheprinciples，ofthesecategories，whichwereslumbering——soM。Proudhonthephilosophertellsus——inthebosomofthe\"impersonalreasonofhumanity\"。
M。Proudhontheeconomistsunderstandsverywellthatmenmakecloth，linen，orsilkmaterialsindefiniterelationsofproduction。Butwhathehasnotunderstoodisthatthesedefinitesocialrelationsarejustasmuchproducedbymenaslinen，flax，etc。Socialrelationsarecloselyboundupwithproductiveforces。Inacquiringnewproductiveforcesmenchangetheirmodeofproduction;andinchangingtheirmodeofproduction，inchangingthewayofearningtheirliving，theychangealltheirsocialrelations。Thehand—millgivesyousocietywiththefeudallord;thesteam—millsocietywiththeindustrialcapitalist。
Thesamemenwhoestablishtheirsocialrelationsinconformitywiththematerialproductivity，producealsoprinciples，ideas，andcategories，inconformitywiththeirsocialrelations。
Thustheideas，thesecategories，areaslittleeternalastherelationstheyexpress。Theyarehistoricalandtransitoryproducts。
Thereisacontinualmovementofgrowthinproductiveforces，ofdestructioninsocialrelations，offormationinideas;theonlyimmutablethingistheabstractionofmovement——morsimmortalis。
[Ed：MarxquotesthesewordsfromthefollowingpassageofLucretius’spoemOnTheNatureofThings（BookIII，line869）：\"mortalemvitammarsimmortalisademit\"（\"immoratldeathhathtakenawaymorallife\"）。]
ThirdObservationTheproductionrelationsofeverysocietyformawhole。M。Proudhonconsiderseconomicrelationsassomanysocialphases，engenderingoneanother，resultingonefromtheotherliketheantithesisfromthethesis，andrealizingintheirlogicalsequencetheimpersonalreasonofhumanity。