A Contribution to the Critique of Political Economy

by Karl Marx

2. THE GENERAL RELATION OF PRODUCTION TO DISTRIBUTION, EXCHANGE, AND CONSUMPTION.

Before going into a further analysis of production, it is necessary to look at the various divisions which economists put side by side with it. The most shallow conception is as follows: By production, the members of society appropriate (produce and shape) the products of nature to human wants; distribution determines the proportion in which the individual participates in this production; exchange brings him the particular products into which he wishes to turn the quantity secured by him through distribution; finally, through consumption the products become objects of use and enjoyment, of individual appropriation. Production yields goods adopted to our needs; distribution distributes them according to social laws; exchange distributes further what has already been distributed, according to individual wants; finally, in consumption the product drops out of the social movement, becoming the direct object of the individual want which it serves and satisfies in use. Production thus appears as the starting point; consumption as the final end; and distribution and exchange as the middle; the latter has a double aspect, distribution being defined as a process carried on by society, while exchange, as one proceeding from the individual. In production the person is embodied in things, in [consumption[157]] things are embodied in persons; in distribution, society assumes the part of go-between of production and consumption in the form of generally prevailing rules; in exchange this is accomplished by the accidental make-up of the individual.

Distribution determines what proportion (quantity) of the products the individual is to receive; exchange determines the products in which the individual desires to receive his share allotted to him by distribution.

Production, distribution, exchange, and consumption thus form a perfect connection, production standing for the general, distribution and exchange for the special, and consumption for the individual, in which all are joined together. To be sure this is a connection, but it does not go very deep. Production is determined [according to the economists] by universal natural laws, while distribution depends on social chance: distribution can, therefore, have a more or less stimulating effect on production: exchange lies between the two as a formal (?) social movement, and the final act of consumption which is considered not only as a final purpose, but also as a final aim, falls, properly, outside of the scope of economics, except in so far as it reacts on the starting point and causes the entire process to begin all over again.

The opponents of the economists—whether economists themselves or not—who reproach them with tearing apart, like barbarians, what is an organic whole, either stand on common ground with them or are below them. Nothing is more common than the charge that the economists have been considering production as an end in itself, too much to the exclusion of everything else. The same has been said with regard to distribution. This accusation is itself based on the economic conception that distribution exists side by side with production as a self-contained, independent sphere. Or [they are accused] that the various factors are not treated by them in their connection as a whole. As though it were the text books that impress this separation upon life and not life upon the text books; and the subject at issue were a dialectic balancing of conceptions and not an analysis of real conditions.

a. Production is at the same time also consumption. Twofold consumption, subjective and objective. The individual who develops his faculties in production, is also expending them, consuming them in the act of production, just as procreation is in its way a consumption of vital powers. In the second place, production is consumption of means of production which are used and used up and partly (as e. g. in burning) reduced to their natural elements. The same is true of the consumption of raw materials which do not remain in their natural form and state, being greatly absorbed in the process. The act of production is, therefore, in all its aspects an act of consumption as well. But this is admitted by economists. Production as directly identical with consumption, consumption as directly coincident with production, they call productive consumption. This identity of production and consumption finds its expression in Spinoza’s proposition, Determinatio est negatio. But this definition of productive consumption is resorted to just for the purpose of distinguishing between consumption as identical with production and consumption proper, which is defined as its destructive counterpart. Let us then consider consumption proper.

Consumption is directly also production, just as in nature the consumption of the elements and of chemical matter constitutes production of plants. It is clear, that in nutrition, e. g., which is but one form of consumption, man produces his own body; but it is equally true of every kind of consumption, which goes to produce the human being in one way or another. [It is] consumptive production. But, say the economists, this production which is identical with consumption, is a second production resulting from the destruction of the product of the first. In the first, the producer transforms himself into things; in the second, things are transformed into human beings. Consequently, this consumptive production—although constituting a direct unity of production and consumption—differs essentially from production proper. The direct unity in which production coincides with consumption and consumption with production, does not interfere with their direct duality.

Production is thus at the same time consumption, and consumption is at the same time production. Each is directly its own counterpart. But at the same time an intermediary movement goes on between the two. Production furthers consumption by creating material for the latter which otherwise would lack its object. But consumption in its turn furthers production, by providing for the products the individual for whom they are products. The product receives its last finishing touches in consumption. A railroad on which no one rides, which is, consequently not used up, not consumed, is but a potential railroad, and not a real one. Without production, no consumption; but, on the other hand, without consumption, no production; since production would then be without a purpose. Consumption produces production in two ways.

In the first place, in that the product first becomes a real product in consumption; e. g., a garment becomes a real garment only through the act of being worn; a dwelling which is not inhabited, is really no dwelling; consequently, a product as distinguished from a mere natural object, proves to be such, first becomes a product in consumption. Consumption gives the product the finishing touch by annihilating it, since a product is the [result] of production not only as the material embodiment of activity, but also as a mere object for the active subject.

In the second place, consumption produces production by creating the necessity for new production, i. e. by providing the ideal, inward, impelling cause which constitutes the prerequisite of production. Consumption furnishes the impulse for production as well as its object, which plays in production the part of its guiding aim. It is clear that while production furnishes the material object of consumption, consumption provides the ideal object of production, as its image, its want, its impulse and its purpose. It furnishes the object of production in its subjective form. No wants, no production. But consumption reproduces the want.

In its turn, production:

First, furnishes consumption[158] with its material, its object. Consumption without an object is no consumption, hence production works in this direction by producing consumption.

Second. But it is not only the object that production provides for consumption. It gives consumption its definite outline, its character, its finish. Just as consumption gives the product its finishing touch as a product, production puts the finishing touch on consumption. For the object is not simply an object in general, but a definite object, which is consumed in a certain definite manner prescribed in its turn by production. Hunger is hunger; but the hunger that is satisfied with cooked meat eaten with fork and knife is a different kind of hunger from the one that devours raw meat with the aid of hands, nails, and teeth. Not only the object of consumption, but also the manner of consumption is produced by production; that is to say, consumption is created by production not only objectively, but also subjectively. Production thus creates the consumers.

Third. Production not only supplies the want with material, but supplies the material with a want. When consumption emerges from its first stage of natural crudeness and directness—and its continuation in that state would in itself be the result of a production still remaining in a state of natural crudeness—it is itself furthered by its object as a moving spring. The want of it which consumption experiences is created by its appreciation of the product. The object of art, as well as any other product, creates an artistic and beauty-enjoying public. Production thus produces not only an object for the individual, but also an individual for the object.

Production thus produces consumption: first, by furnishing the latter with material; second, by determining the manner of consumption; third, by creating in consumers a want for its products as objects of consumption. It thus produces the object, the manner, and the moving spring of consumption. In the same manner, consumption [creates] the disposition of the producer by setting (?) him up as an aim and by stimulating wants. The identity of consumption and production thus appears to be a three fold one.

First, direct identity: production is consumption; consumption is production. Consumptive production. Productive consumption. Economists call both productive consumption, but make one distinction by calling the former reproduction, and the latter productive consumption. All inquiries into the former deal with productive and unproductive labor; those into the latter treat of productive and unproductive consumption.

Second. Each appears as the means of the other and as being brought about by the other, which is expressed as their mutual interdependence; a relation, by virtue of which they appear as mutually connected and indispensable, yet remaining outside of each other.

Production creates the material as the outward object of consumption; consumption creates the want as the inward object, the purpose of production. Without production, no consumption; without consumption, no production; this maxim figures (?) in political economy in many forms.

Third. Production is not only directly consumption and consumption directly production; nor is production merely a means of consumption and consumption the purpose of production. In other words, not only does each furnish the other with its object; production, the material object of consumption; consumption, the ideal object of production. On the contrary, either one is not only directly the other, not (?) only a means of furthering the other, but while it is taking place, creates the other as such for itself (?). Consumption completes the act of production by giving the finishing touch to the product as such, by destroying the latter, by breaking up its independent material form; by bringing to a state of readiness, through the necessity of repetition, the disposition to produce developed in the first act of production; that is to say, it is not only the concluding act through which the product becomes a product, but also [the one] through which the producer becomes a producer. On the other hand, production produces consumption, by determining the manner of consumption, and further, by creating the incentive for consumption, the very ability to consume, in the form of want. This latter identity mentioned under point 3, is much discussed in political economy in connection with the treatment of the relations of demand and supply, of objects and wants, of natural wants and those created by society.

Hence, it is the simplest matter with a Hegelian to treat production and consumption as identical. And this has been done not only by socialist writers of fiction but even by economists, e. g. Say; the latter maintained that if we consider a nation as a whole, or mankind in abstracto—her production is at the same time her consumption. Storch pointed out Say’s error by calling attention to the fact that a nation does not entirely consume her product, but also creates means of production, fixed capital, etc. To consider society as a single individual is moreover a false mode of speculative reasoning. With an individual, production and consumption appear as different aspects of one act. The important point to be emphasized here is that if production and consumption be considered as activities of one individual or of separate individuals, they appear at any rate as aspects of one process in which production forms the actual starting point and is, therefore, the predominating factor. Consumption, as a natural necessity, as a want, constitutes an internal factor of productive activity, but the latter is the starting point of realization and, therefore, its predominating factor, the act into which the entire process resolves itself in the end. The individual produces a certain article and turns again into himself by consuming it; but he returns as a productive and a self-reproducing individual. Consumption thus appears as a factor of production.

In society, however, the relation of the producer to his product, as soon as it is completed, is an outward one, and the return of the product to the individual depends on his relations to other individuals. He does not take immediate possession of it. Nor does the direct appropriation of the product constitute his purpose, when he produces in society. Between the producer and the product distribution steps in, which determines by social laws his share in the world of products; that is to say, distribution steps in between production and consumption.

Does distribution form an independent sphere standing side by side with and outside of production?

b. Production and Distribution. In perusing the common treatises on economics one can not help being struck with the fact that everything is treated there twice; e. g., under distribution, there figure rent, wages, interest, and profit; while under production we find land, labor, and capital as agents of production. As regards capital, it is at once clear that it is counted twice: first, as an agent of production; second, as a source of income; as determining factors and definite forms of distribution, interest and profit figure as such also in production, since they are forms, in which capital increases and grows, and are consequently factors of its own production. Interest and profit, as forms of distribution, imply the existence of capital as an agent of production. They are forms of distribution which have for their prerequisite capital as an agent of production. They are also forms of reproduction of capital.

In the same manner, wages is wage-labor when considered under another head; the definite character which labor has in one case as an agent of production, appears in the other as a form of distribution. If labor were not fixed as wage-labor, its manner of participation in distribution[159] would not appear as wages, as is the case e. g. under slavery. Finally, rent—to take at once the most developed form of distribution—by means of which landed property receives its share of the products, implies the existence of large landed property (properly speaking, agriculture on a large scale) as an agent of production, and not simply land, no more than wages represents simply labor. The relations and methods of distribution appear, therefore, merely as the reverse sides of the agents of production. An individual who participates in production as a wage laborer, receives his share of the products, i. e. of the results of production, in the form of wages. The subdivisions and organization of distribution are determined by the subdivisions and organization of production. Distribution is itself a product of production, not only in so far as the material goods are concerned, since only the results of production can be distributed; but also as regards its form, since the definite manner of participation in production determines the particular form of distribution, the form under which participation in distribution takes place. It is quite an illusion to place land under production, rent under distribution, etc.

Economists, like Ricardo, who are accused above all of having paid exclusive attention to production, define distribution, therefore, as the exclusive subject of political economy, because they instinctively[160] regard the forms of distribution as the clearest forms in which the agents of production find expression in a given society.

To the single individual distribution naturally appears as a law established by society determining his position in the sphere of production, within which he produces, and thus antedating production. At the outset the individual has no capital, no landed property. From his birth he is assigned to wage-labor by the social process of distribution. But this very condition of being assigned to wage-labor is the result of the existence of capital and landed property as independent agents of production.

From the point of view of society as a whole, distribution seems to antedate and to determine production in another way as well, as a pre-economic fact, so to say. A conquering people divides the land among the conquerors establishing thereby a certain division and form of landed property and determining the character of production; or, it turns the conquered people into slaves and thus makes slave labor the basis of production. Or, a nation, by revolution, breaks up large estates into small parcels of land and by this new distribution imparts to production a new character. Or, legislation perpetuates land ownership in large families or distributes labor as an hereditary privilege and thus fixes it in castes.

In all of these cases, and they are all historic, it is not distribution that seems to be organized and determined by production, but on the contrary, production by distribution.

In the most shallow conception of distribution, the latter appears as a distribution of products and to that extent as further removed from and quasi-independent of production. But before distribution means distribution of products, it is first, a distribution of the means of production, and second, what is practically another wording of the same fact, it is a distribution of the members of society among the various kinds of production (the subjection of individuals to certain conditions of production). The distribution of products is manifestly a result of this distribution, which is bound up with the process of production and determines the very organization of the latter. To treat of production apart from the distribution which is comprised in it, is plainly an idle abstraction. Conversely, we know the character of the distribution of products the moment we are given the nature of that other distribution which forms originally a factor of production. Ricardo, who was concerned with the analysis of production as it is organized in modern society and who was the economist of production par excellence, for that very reason declares not production but distribution as the subject proper of modern economics. We have here another evidence of the insipidity of the economists who treat production as an eternal truth, and banish history to the domain of distribution.

What relation to production this distribution, which has a determining influence on production itself, assumes, is plainly a question which falls within the province of production. Should it be maintained that at least to the extent that production depends on a certain distribution of the instruments of production, distribution in that sense precedes production and constitutes its prerequisite; it may be replied that production has in fact its prerequisite conditions, which form factors of it. These may appear at first to have a natural origin. By the very process of production they are changed from natural to historical, and if they appear during one period as a natural prerequisite of production, they formed at other periods its historical result. Within the sphere of production itself they are undergoing a constant change. E. g., the application of machinery produces a change in the distribution of the instruments of production as well as in that of products, and modern land ownership on a large scale is as much the result of modern trade and modern industry, as that of the application of the latter to agriculture.

All of these questions resolve themselves in the last instance to this: How do general historical conditions affect production and what part does it play at all in the course of history? It is evident that this question can be taken up only in connection with the discussion and analysis of production.

Yet in the trivial form in which these questions are raised above, they can be answered just as briefly. In the case of all conquests three ways lie open. The conquering people may impose its own methods of production upon the conquered (e. g. the English in Ireland in the nineteenth century, partly also in India); or, it may allow everything to remain as it was contenting itself with tribute (e. g. the Turks and the Romans); or, the two systems by mutually modifying each other may result in something new, a synthesis (which partly resulted from the Germanic conquests). In all of these conquests the method of production, be it of the conquerors, the conquered, or the one resulting from a combination of both, determines the nature of the new distribution which comes into play. Although the latter appears now as the prerequisite condition of the new period of production, it is in itself but a product of production, not of production belonging to history in general, but of production relating to a definite historical period. The Mongols with their devastations in Russia e. g. acted in accordance with their system of production, for which sufficient pastures on large uninhabited stretches of country are the main prerequisite. The Germanic barbarians, with whom agriculture carried on with the aid of serfs was the traditional system of production and who were accustomed to lonely life in the country, could introduce the same conditions in the Roman provinces so much easier since the concentration of landed property which had taken place there, died away completely with the older systems of agriculture. There is a prevalent tradition that in certain periods robbery constituted the only source of living. But in order to be able to plunder, there must be something to plunder, i. e. there must be production.[161] And even the method of plunder is determined by the method of production. A stockjobbing nation[162] e. g. can not be robbed in the same manner as a nation of shepherds.

In the case of the slave the instrument of production is robbed directly. But then the production of the country in whose interest he is robbed, must be so organized as to admit of slave labor, or (as in South America, etc.) a system of production must be introduced adapted to slavery.

Laws may perpetuate an instrument of production, e. g. land, in certain families. These laws assume an economic importance if large landed property is in harmony with the system of production prevailing in society, as is the case e. g. in England. In France agriculture had been carried on on a small scale in spite of the large estates, and the latter were, therefore, broken up by the Revolution. But how about the legislative attempt to perpetuate the minute subdivision of the land? In spite of these laws land ownership is concentrating again. The effect of legislation on the maintenance of a system of distribution and its resultant influence on production are to be determined elsewhere.

c. Exchange and Circulation. Circulation is but a certain aspect of exchange, or it may be defined as exchange considered as a whole. Since exchange is an intermediary factor between production and its dependent, distribution, on the one hand, and consumption, on the other; and since the latter appears but as a constituent of production, exchange is manifestly also a constituent part of production.

In the first place, it is clear that the exchange of activities and abilities which takes place in the sphere of production falls directly within the latter and constitutes one of its essential elements. In the second place, the same is true of the exchange of products, in so far as it is a means of completing a certain product, designed for immediate consumption. To that extent exchange constitutes an act included in production. Thirdly, the so-called exchange between dealers and dealers[163] is by virtue of its organization determined by production, and is itself a species of productive activity. Exchange appears to be independent of and indifferent to production only in the last stage when products are exchanged directly for consumption. But in the first place, there is no exchange without a division of labor, whether natural or as a result of historical development; secondly, private exchange implies the existence of private production; thirdly, the intensity of exchange, as well as its extent and character are determined by the degree of development and organization of production, as e. g. exchange between city and country, exchange in the country, in the city, etc. Exchange thus appears in all its aspects to be directly included in or determined by production.

The result we arrive at is not that production, distribution, exchange, and consumption are identical, but that they are all members of one entity, different sides of one unit. Production predominates not only over production itself in the opposite sense of that term, but over the other elements as well. With it the process constantly starts over again. That exchange and consumption can not be the predominating elements is self evident. The same is true of distribution in the narrow sense of distribution of products; as for distribution in the sense of distribution of the agents of production, it is itself but a factor of production. A definite [form of] production thus determines the [forms of] consumption, distribution, exchange, and also the mutual relations between these various elements. Of course, production in its one-sided form is in its turn influenced by other elements; e. g. with the expansion of the market, i. e. of the sphere of exchange, production grows in volume and is subdivided to a greater extent.

With a change in distribution, production undergoes a change; as e. g. in the case of concentration of capital, of a change in the distribution of population in city and country, etc. Finally, the demands of consumption also influence production. A mutual interaction takes place between the various elements. Such is the case with every organic body.