There is a necessary presupposition to this origin and birth of capital. "For the transformation of money into capital the money owner must first find free laborers in the market, free in the double sense that as a free person the laborer can use his labor power as a commodity, that he has no other wares to sell, that he is unemployed and that he is free of everything necessary to the realisation of his labor power." But this condition of a possessor of money or commodities on the one hand, and, on the other, of the possessor of nothing, except his own labor force, is no natural condition of affairs nor is it common to all periods of history; "it is clearly the result of a historical development, the product of a whole series of older forms of social production." And this free laborer first strikes our notice as a historical phenomenon at the end of the fifteenth and the beginning of the sixteenth century as a result of the dissolution of feudal society. Thereupon with the creation of the world trade and the world market which dates from the same period the foundation was laid for the mass of moveable wealth to become more and more transformed into capital and for the capitalistic system, directed more and more to the production of surplus value, to become the dominant system.
VIII. Capital and Surplus Value (Conclusion).
(Duehring having said that the term surplus value merely signifies in ordinary language, rent, profit and interest, Engels still further explains)
We have already seen that Marx does not say that the surplus product of the industrial capitalist, of which he is the first owner, is always exchanged for its value, as Herr Duehring points out. Marx plainly says that trade profit only constitutes a portion of the surplus value and under the foregoing conditions this is only possible if the factory proprietor sells his product under value to the trader and thus parts with a portion of the booty. Marx' contention rationally put is How is surplus value transformed into its subordinate forms, profit, interest, trade-profits, ground rents etc.? and this question Marx undertakes to answer in the third volume of Capital. But since Herr Duehring cannot wait long enough for the second volume to appear he has in the meantime to take a close look at the first volume. He thereupon reads that the immanent laws of capitalistic production, the course of the development of capitalism, realise themselves as the necessary laws of competition and thus are brought to the consciousness of the individual capitalists as dominant motives. That therefore a scientific analysis of competition is only possible when the real nature of capital is grasped, just as the apparent movement of heavenly bodies can only be understood by apprehending their real movement, and not merely those movements which are perceptible to the senses. So Marx shows how a certain law, the law of value, appears under given conditions in the competitive system and makes evident its impelling force. Herr Duehring might have understood that competition plays an important role in the distribution of surplus values, and, after sufficient thought, might have grasped at least the outlines of the transformation of surplus value into its subordinate forms from the examples given in the first volume.
Herr Duehring finds competition to be the stumbling block in the way of his comprehension. He cannot understand how competing entrepreneurs can manage to sell the entire product of labor including the surplus product for so much more than the natural cost of production. Here again that "force" of his which, in his estimation, is the very evil thing, comes into play. According to Marx, the surplus product does not have any cost of production, it is the part of the product which costs the capitalist nothing. If the entrepreneurs were to sell the surplus product at its real cost of production they would have to give it away. Is it not a fact that the competing entrepreneurs really sell the product of labor every day at its natural cost of production? According to Herr Duehring the cost of production consists "in the expenditure of labor or force and therefore in the last analysis must be measured by cost of maintenance," and therefore, in present day society, is to be estimated at the cost of the raw material, instruments of labor and actual wages paid in distinction to taxation, profit and compulsory raising of prices. It is well recognised that in modern society the competing entrepreneurs do not sell their wares at the natural cost of production but calculate on a profit and generally get it. This question which Herr Duehring fancies will level the walls of Marxism as the blast of Joshua did those of Jericho is a question which the economic doctrines of Duehring have to meet also.
"Capitalistic property," he says, "has no practical value and only realises itself because it implies the exercise of indirect power over man. The testimony to the existence of this force is capitalistic profit, and the amount of this latter depends upon the extent and intensity of the power of 'force.'... Capitalistic profit is a political and social institution which manifests itself very strongly as competition. The entrepreneurs take their stand on this relation and each one of them maintains his position. A certain amount of profit is a necessity of the dominant economic condition."
We know quite well that the entrepreneurs are in a position to sell the products of labor at a cost above the natural cost of production. Surely Herr Duehring does not think so meanly of his public as to hold the position that profit on capital stands above competition as the King of Prussia used to stand above the law. The proceeding by which the King of Prussia reached his position of superiority to the law we all know, the methods by which profit has come to be mightier than competition is just what Herr Duehring has to explain and what he stubbornly refuses to explain. It is no argument when he says that the entrepreneurs trade from this position and each one of them maintains his own place. If we take him at his word, how is it possible for a number of people each to be able to trade only on certain terms and yet each one of them to keep his position? The gildmen of the Middle Ages and the French nobility of 1789 operated from a decidedly superior position, and yet they came to grief. The Prussian army at Jena occupied an advantageous position and yet it had to abandon it and surrender piecemeal. It is not enough to tell us that a certain measure of profit is a necessary concomitant of domination in the economic sphere, it is necessary to tell us why. We do not get a step further by the statement of Duehring. "Capitalistic superiority is inseparable from landlordism. A portion of the peasantry is transformed in the cities into factory hands and in the final analysis into factory material. Profit appears as another form of rent." This is a mere assertion and only repeats what should have been explained and proved. We can come to no other conclusion, then, except that Herr Duehring does not like to tackle the answer to his own question how the capitalists are in a position to sell products of labor for more than the natural cost of production, in short Herr Duehring shirks an explanation of profit. He takes the only path open to him, a short cut, and simply declares that profit is the product of "force." This has been stated by Herr Duehring in his economic theory under the statement "force distributes." That is all very well; but the question still persists what does force distribute? There must be something to distribute otherwise force cannot distribute it. The profit which the competing capitalists pocket is something actual and tangible. Force may take but it cannot create. And if Herr Duehring still obstinately persists in his statement that "force" takes the profits for the entrepreneurs he is as silent as the grave as to whence it takes it. Where there is nothing the Kaiser, as all other "force," ceases to operate. From nothing comes nothing, particularly nothing in the shape of profits. If capitalistic private property has not practical actuality, and cannot realize itself, except by the exercise of indirect force over men, the question still persists, in the first place, how did the capitalist government come into possession of this "force" and in the second place how has this force been transformed into profits, and in the third place where does it get these profits?
(The remainder of this section is merely further elaboration of this idea with more caustic satire at the expense of the antagonist of Engels.)
IX. Natural Economic Laws—Ground Rent.
(In this chapter Engels proceeds to examine what Herr Duehring called the "fundamental laws" of his theory of economic science.)