NEWS & LETTERS, July-August 2005


Marx, Proudhon and alternatives to capital

by Seth W.

Marx’s critical dialogue with the work of the French anarchist thinker Pierre Joseph Proudhon spanned several decades--from his youth haunting the cafes of Paris, where he had occasion to meet Proudhon and discuss German philosophy, through the writing of the GRUNDRISSE, CAPITAL, and the CRITIQUE OF THE GOTHA PROGRAM. While largely ignored in the present, Marx’s critique of Proudhon remains of real import for all of us struggling to break the hold of capital over our lives and our world.  

Three aspects of Marx’s critique will be explored here: (I) the limits of reforms in the sphere of circulation; (II) economic laws and the possibilities which politics and consciousness offer for their transcendence; and (III) Marx’s still largely uncharted concept of "directly social labor."


In his 1846 PHILOSOPHY OF POVERTY, Proudhon locates a contradiction between use-value and exchange-value--a contradiction which he holds as the basis of poverty, inequality, and economic crises. With what he terms "constituted value" or "synthetic value," Proudhon, drawing on the value theory of classical political economy, endeavors a resolution of the contradiction. "Synthetic value," Proudhon maintains, is the ground for abolishing unequal exchange. (1) What Proudhon is proposing, in practical terms is that one commodity which requires, for instance, four hours to produce will exchange with any other commodity that requires four hours to produce. For Proudhon this would be a situation of equality: equal contributions to society receiving equal rewards from society.

A year later, in his 1847 POVERTY OF PHILOSOPHY, the only book that he wrote in French, Marx tears this formulation to pieces. Proudhon, Marx argues, "give[s] as a ‘revolutionary theory of the future’ what Ricardo expounded scientifically as the theory of present-day society, of bourgeois society, and...thus take[s] for the solution of the antinomy between utility and exchange value what Ricardo and his school presented long before him as the scientific formula of one single side of this antinomy, that of exchange value." Moreover, says Marx, "relative value [or exchange-value], measured by labor time, is inevitably the formula of the present enslavement of the worker, instead of being, as M. Proudhon would have it, the ‘revolutionary theory’ of the emancipation of the proletariat."

Marx understood the law of value rather differently than Proudhon: not in terms of "equality" but in terms of "inequality." What appears as an equality is just that--an appearance--because it is not individual, concrete labor that has a tendency to exchange in equal ratios, but only socially average, abstract labor. In CAPITAL, Marx shows that the value of a commodity is determined by the amount of "socially necessary labor-time" required for its reproduction--any labor-time beyond that which is socially necessary is simply wasted (i.e., labor-time during which no value is created). (2) 

The fact that our labor doesn’t count equally is not because of unequal exchange, but because our labor is not counted equally in the first place--in the process of production. The labor of some workers counts more than the labor of other workers in production. One worker, for instance, may be stronger or faster than another worker; one worker may be working with more modern technology than another. Only socially necessary labor, labor which measures up to the social average, is registered in our society.

Marx maintains that relations of exchange are rooted in the relations of production. Unequal exchange, or rather what appears as unequal exchange, ultimately can’t be overcome without uprooting present production relations and transcending value production.

 Much of the Left today--including both anarchists and Marxists--continues to locate the roots of poverty, inequality and economic crises in the realm of exchange and to prescribe remedies that focus on exchange. This is particularly pronounced in the anti-globalization movement. Think about campaigns for "Fair Trade" (rather than "Free Trade") and the work of organizations like Global Exchange and Trade Craft. Consider also the recent Life After Capitalism conference at the CUNY Graduate Center, which featured panels promoting gift-exchange and barter as alternatives to capitalism. The panel on the latter was called "The Barter System in Argentina: is it Possible in our Town?"

Marx’s critique of Proudhon demands that we consider whether efforts at abolishing markets or changing property relations can offer ground for real social transformation. In this, it also demands that we rethink the experience of the Soviet Union, China, Cuba and the other so-called "socialist" countries. The new global justice movements have largely rejected this experience as a model--they have rejected the vanguard party, the seizure of state power, the five-year plan. This is plainly sensible--but it is a partial critique: it is not sufficient to counterpose new decentralized and anti-authoritarian movements to the old vanguardist movements. Like with Proudhon’s work, there is a failure to look closely at the mode of production itself. To be sure, some property relations were changed and some wealth was redistributed in the so-called "socialist" countries, but value production was simply not overcome and labor remained alienated.  

A second feature of Marx’s critique of Proudhon that deserves attention is his treatment of economic laws and their transcendence.


Proudhon argues that the contradiction he finds between "use-value" and "exchange-value" is also a contradiction between "supply" and "demand." Proudhon’s concerns are practical in nature. The 1840s, known as the "hungry forties," witnessed severe economic crisis across the continent, culminating in the revolutions of 1848. In a crisis demand drops off--things can’t be sold and prices fall. Proudhon says that the contradiction between supply and demand can be overcome if commodities are made to exchange directly in proportion to the amount of labor required for their production. Set prices equal to values, so that supply and demand find equilibrium, and voila: commodities will always be exchangeable and at a fair price. 

Marx maintains, in the POVERTY OF PHILOSOPHY, that Proudhon "inverts the order of things." For it is when supply and demand come into balance that prices equal values. (3) Marx jokes that while everyone else ventures outside for a walk when the weather is good, Proudhon would have us leave the house to insure good weather! 

In the course of his discussion of these issues in the POVERTY OF PHILOSOPHY, Marx draws an important distinction between the role of a "legislator" and that of an "economist." As a legislator, Marx tells us, Proudhon is free to decree the abolition of the law of supply and demand. However, says Marx, "[i]f...he [Proudhon] insists on justifying his theory, not as a legislator, but AS AN ECONOMIST [my emphasis], he will have to prove that the time needed to create a commodity indicates exactly the degree of its utility and marks its proportional relation to the demand..." A legislator--and for Marx’s legislator we could easily substitute a central committee, a workers’ council or a worker-run co-op--may be able to decree that one hour of labor is equal to another. However, what will happen when demand for a product--as with typewriters in the advent of the personal computer--drops off? The labor that went into the production of the typewriters will no longer count --they simply won’t sell, their price will fall, workers will lose their jobs.

While Proudhon was content to remain a captive of the commodity-form, there are many of us today who want to transcend commodity production and transcend capital. Can we legislate the abolition of commodity production? Can politics break the law of value?

Too often we seem to be thinking like Marx’s "legislator." Much of the Left today--from Stalinists to social democrats to anarchists--seems to believe that politics are in command. Too often, regardless of whether one’s program demands seizing state power or smashing state power, the problematic remains limited to matters of political power, consciousness, and organizational form.

Proudhon’s interest in the equilibration of supply and demand led him to advocate the abolition of money. In the course of his critique of this aspect of Proudhon’s thought, Marx elaborates a crucially important notion--namely that of "directly social labor"--which is still not well understood.


Marx develops the concept of "directly social labor" or "immediately social labor" in critical dialogue with the work of Proudhon, the Ricardian socialists and later with the followers of Ferdinand Lassalle. In endeavoring an equalitarian application of Ricardo’s theory, Proudhon and left Ricardian thinkers like John Gray, advocated what we would today call monetary reform: they sought to replace money with "time chits" or "labor money." These "time chits" were designed to directly reflect labor time. In other words, in exchange for a commodity that took, say, 12 hours to produce, the producer would receive a certificate from a bank entitling her to any other commodity that took 12 hours to produce. Proudhon and Gray wanted every commodity to be directly social, directly exchangeable, with every other commodity in the same way that money is directly social. Proudhon and the other "time-chitters," as Marx calls them in the GRUNDRISSE, thought the mediation of money stood in the way. (4) 

Marx, however, cautions us not to get caught up in money’s dazzle and sheen. Money, Marx argues in Volume I of CAPITAL, crystallizes out of a contradiction within the commodity itself: a contradiction in the commodity between "use-value" on the one hand and "value" on the other hand; a contradiction between "concrete labor" (labor which produces use-values) and "abstract labor" (labor which produces value); and a contradiction between "private labor" (the labor of the individual) and "directly social labor" (the labor that society counts). One can’t then abolish money without abolishing the commodity-form. 

Proudhon’s "pious wish" to abolish money without abolishing commodity production, Marx says in CAPITAL, is rooted in "the illusion...that all commodities can simultaneously be imprinted with the stamp of direct exchangeability, in the same way that it might be imagined that all Catholics can be popes." In other words, as long as there are commodities, one commodity will necessarily take the form of Pope ruling over all the other commodities. 

In the 1875 CRITIQUE OF THE GOTHA PROGRAM, Marx again returns to the issue of "directly social labor." Marx’s characterization here of a higher phase of communism in which society will inscribe upon its banners "from each according to her ability, to each according to her needs" is well known. His characterization of the lower phase of communism remains poorly understood. In this lower phase, Marx says:

[T]he individual producer receives back from society...exactly what he gives to it...He receives a certificate from society that he has furnished such-and-such an amount of labor...and with this certificate he draws from the social stock of means of consumption as much as the same amount of labor costs. The same amount of labor which he has given to society in one form, he receives back in another.

This sounds very much like the proposals of Proudhon and other "time-chitters" that were the subject of decades of invective from Marx. There is, however, a real difference between what Marx is suggesting and the formulations of Proudhon--if we can get at this difference, we will have understood not only Marx’s critique of Proudhon but also have discovered one of the real clues that Marx has left us for figuring out how to transcend capital.

The difference is that, here, labor is "directly" or "immediately" social. Unlike in the formulations of Proudhon and unlike in our own commodity-producing society, where the exchange of equivalents exists only in the average, here there would actually be an exchange of equivalents in the individual case. "[N]ow," as Marx notes, "in contrast to capitalist society, individual labor no longer exists in an indirect fashion but directly as a component part of total labor." So here, right from the beginning, Marx is telling us that the law of value will not hold. The labor, Marx says, employed in the production of products will no longer take the form of a material quality possessed by them; the products of our own hands will no longer have control over us.

While Proudhon is not well remembered today, the kinds of ideas that he advanced have become conventional wisdom on the Left, particularly in the new global justice movements. A return to Marx’s critique of Proudhon offers a salutary antidote to such conventional wisdom and, perhaps, a path forward for all of us searching for real alternatives to capital.


1. Ricardo's PRINCIPLES OF POLITICAL ECONOMY AND TAXATION, which posits labor as the source of value and labor-time as its measure, had been translated into French more than a decade before Proudhon’s PHILOSOPHY OF POVERTY was first published.

2. "Socially necessary labour-time is the labour-time required to produce any use-value under the conditions of production normal for a given society and with the average degree of skill and intensity of labour prevalent in that society" (CAPITAL, p. 129, Penguin edition). In the PHILOSOPHY OF POVERTY, Marx posits the labor-time required by the most productive workers (rather than "socially necessary labor-time") as determining the magnitude of value.

3. Strictly speaking, as Marx shows elsewhere, when supply equals demand, prices in the market equal prices of production, not values.

4. Ideas of this kind still remain with us today --e.g., alternative currency schemes like "Ithaca Dollars," the "LETSystem" and "Burlington Bread" (which is denominated in "slices").

Return to top

Home l News & Letters Newspaper l Back issues l News and Letters Committees l Dialogues l Raya Dunayevskaya l Contact us l Search

Subscribe to News & Letters

Published by News and Letters Committees
Designed and maintained by  Internet Horizons