3. To Conrad Schmidt, 27 October 1890

London, 27 October 1890

Dear Schmidt,

I am using the first free hour to answer you. I think you would do very well to accept the post in Zurich. You can always learn a good deal about economics there, especially if you bear in mind that Zurich is still only a third-rate money and speculation market, so that the impressions that make themselves felt there are weakened, or deliberately falsified, by being reflected twice or three times over. But you will get to know the mechanism in practice and will be obliged to follow the stock-exchange reports from London, New York, Paris, Berlin and Vienna at first hand, and so the world market will open up before you, in its reflex as a money and securities market. Economic, political and other reflexes are just like those in the human eye: they pass through a converging lens and therefore appear the wrong way round, standing on their heads. Only the nervous apparatus is lacking that would set them on their feet again for our perception. The money-market man sees the movement of industry and of the world market only in the inverted reflex of the money and securities market, and so for him the effect becomes the cause. I saw that as early as the forties in Manchester: for the course of industry and its periodical maxima and minima the London stock-exchange reports were absolutely useless, because the gentlemen tried to explain everything from crises of the money market, which were themselves mostly only symptoms. At that time the point was to explain away the origin of industrial crises from temporary overproduction, so that the matter had in addition a tendentious side that invited distortion. This point has now dropped out, once for all at least so far as we are concerned; besides, it is a fact that the money market can also have its own crises, in which direct disturbances of industry play only a subordinate part or none at all; and here a good deal remains to be established and investigated, especially in the history of the last twenty years.

Where there is division of labour on a social scale, the separate parts of labour also become independent of one another. Production is in the last instance the decisive factor. But as soon as trade in products becomes independent of production proper, it follows a movement of its own, which is governed, by and large, by that of production, but which in particulars, and within this general dependence, again follows laws of its own, lying in the nature of this new factor; this movement has its own phases and in its turn reacts upon the movement of production. The discovery of America was due to the hunger for gold that had already driven the Portuguese to Africa (cf. Soetbeer’s Production of the Precious Metals), because the European industry and the trade corresponding to it, enormously expanded in the fourteenth and fifteenth centuries, required more means of exchange than Germany, the great silver country from 1450 to 1550, could supply. The conquest of India by the Portuguese, Dutch and English between 1500 and 1800 had as its object imports from India; nobody dreamt of exporting anything there. And yet what a colossal reaction these discoveries and conquests, conditioned purely by the interests of trade, had upon industry: it was only the need to export to those countries that created and developed large-scale industry.

So it is with the money market too. As soon as trade in money becomes separate from trade in commodities, it has (under certain conditions set by production and commodity trade, and within these limits) a development of its own, special laws determined by its own nature, and distinct phases. If, in addition, trade in money develops further into trade in securities, and these securities are not only government bonds but shares in industry and transport as well, so that money trade conquers direct control over a part of the production by which, by and large, it is itself controlled, then the reaction of money trade upon production becomes still stronger and more complicated. The money dealers are the owners of railways, mines, ironworks and so on. These means of production take on a double aspect: their working has to be governed now by the interests of direct production, now also by the needs of the shareholders, so far as they are money dealers. The most striking example of this is the North American railways, whose working depends entirely on the stock-exchange operations of the moment of a Jay Gould, a Vanderbilt and the like, which are completely foreign to the particular line and its interests as a means of transport. And even here in England we have seen decades of struggles between the different railway companies over the territory lying between any two of them, struggles in which enormous sums were squandered, not in the interest of production and transport but solely because of a rivalry whose main purpose, as a rule, was to make possible the stock-exchange operations of the money dealers who held the shares.

In these few indications of my view of the relation of production to commodity trade, and of both to money trade, I have in essence also answered your questions about historical materialism in general. The thing is most easily grasped from the standpoint of the division of labour. Society gives rise to certain common functions which it cannot do without. The people appointed for this purpose form a new branch of the division of labour within society. They thereby acquire particular interests, distinct also from those of the people who gave them their mandate; they make themselves independent of them, and the state is there. And now the same thing happens as with commodity trade and later with money trade: the new independent power must, by and large, follow the movement of production, but by virtue of the relative independence inherent in it, that is, the independence once conferred on it and gradually developed further, it also reacts in its turn upon the conditions and course of production. It is the interaction of two unequal forces: on the one side the economic movement, on the other the new political power, which strives for as much independence as possible and which, once it has been set up, is also endowed with a movement of its own. The economic movement asserts itself on the whole, but it must also suffer reactions from the political movement that it itself set up and endowed with relative independence, the movement of the state power on the one hand and of the opposition created at the same time on the other. Just as the movement of the industrial market is reflected in the money market, by and large and with the reservations indicated above, and of course inverted, so the struggle between the classes already existing and already fighting one another is reflected in the struggle between government and opposition, but likewise inverted, no longer directly but indirectly, not as a class struggle but as a struggle for political principles, and so inverted that it has taken us thousands of years to see behind it again.

The reaction of the state power upon economic development can be of three kinds. It can run in the same direction, and then things go faster; it can run against it, and then nowadays it will go to pieces in the long run in every great nation; or it can cut off certain directions of economic development and prescribe others, a case that ultimately reduces itself to one of the two preceding ones. But it is clear that in cases II and III the political power can do great damage to economic development and can cause waste of energy and material on a massive scale.

Then there is also the case of conquest and the brutal destruction of economic resources, by which, in certain circumstances, a whole local or national economic development could formerly be ruined. Nowadays this case mostly has the opposite effect, at least among the great nations: in the long run the defeated sometimes gains more economically, politically and morally than the victor.

It is similar with law. As soon as the new division of labour becomes necessary that creates professional lawyers, another new and independent sphere is opened up, which, for all its general dependence on production and trade, still has a special capacity of its own for reacting upon these spheres. In a modern state law must not only correspond to the general economic situation and be its expression, but must also be an expression that is consistent in itself, one that does not slap itself in the face through internal contradictions. And to achieve this, the faithfulness of the reflection of economic conditions goes more and more to pieces. All the more so because it rarely happens that a code of law is the blunt, unmitigated, unadulterated expression of the domination of one class: that in itself would be contrary to the “concept of right”. Even the pure, consistent concept of right of the revolutionary bourgeoisie of 1792 to 1796 is already falsified in many respects in the Code Napoléon, and so far as it is embodied there it has to undergo all sorts of daily attenuations owing to the growing power of the proletariat. Which does not prevent the Code Napoléon from being the code on which all new codifications in every part of the world are based. Thus to a great extent the course of “legal development” consists only in this: first an attempt is made to remove the contradictions that arise from the direct translation of economic relations into legal principles, and to establish a harmonious legal system, and then the influence and pressure of further economic development keep breaking through this system again and entangle it in fresh contradictions (I am speaking here for the moment only of civil law).

The reflection of economic relations as principles of law is necessarily also one that turns things upside down: it takes place without the persons acting being conscious of it; the jurist imagines he is operating with a priori propositions, whereas they are really only economic reflexes; so everything is upside down. And it seems to me obvious that this inversion, which, so long as it is not recognised, forms what we call an ideological outlook, reacts in its turn upon the economic basis and may, within certain limits, modify it. The basis of the law of inheritance, assuming the same stage of development of the family, is an economic one. Nevertheless it will be difficult to prove, for instance, that the absolute freedom of testamentary disposition in England and its severe restriction in France have only economic causes in every detail. But both react back upon the economy in a very considerable way, because they influence the distribution of property.

As to the spheres of ideology that float still higher in the air, religion, philosophy and so on, these have a prehistoric stock, found in existence and taken over by the historical period, of what we should today call nonsense. These various false conceptions of nature, of man’s own being, of spirits, magic forces and so on, have for the most part only a negative economic basis; the low economic development of the prehistoric period has as its complement, but also here and there as its condition and even its cause, the false conceptions of nature. And even though economic need was the main driving force of the progressive knowledge of nature, and has become ever more so, it would surely be pedantic to try to find economic causes for all this primitive nonsense. The history of science is the history of the gradual clearing away of this nonsense, or rather of its replacement by fresh but always less absurd nonsense. The people who attend to this belong in their turn to special spheres of the division of labour and appear to themselves to be working in an independent field. And to the extent that they form an independent group within the social division of labour, to that extent their productions, including their errors, have a reacting influence upon the whole development of society, even on its economic development. But all the same they themselves are in turn under the dominating influence of economic development. In philosophy, for example, this can be most easily shown for the bourgeois period. Hobbes was the first modern materialist (in the eighteenth-century sense), but he was an absolutist at a time when absolute monarchy was in its heyday throughout Europe and in England was taking up the struggle with the people. Locke, in religion as in politics, was the child of the class compromise of 1688. The English deists and their more consistent continuators, the French materialists, were the true philosophers of the bourgeoisie, the French even of the bourgeois revolution. The German philistine runs through German philosophy from Kant to Hegel, now positively, now negatively. But as a definite sphere of the division of labour, the philosophy of every epoch presupposes a definite body of thought handed down to it by its predecessors, from which it starts. And that is why economically backward countries can nevertheless play first fiddle in philosophy: France in the eighteenth century as against England, on whose philosophy the French based themselves, and later Germany as against both. But in France as in Germany philosophy, like the general flowering of literature at that time, was also the result of an economic upswing. For me the ultimate supremacy of economic development over these spheres too is certain, but it takes place within the conditions prescribed by the particular sphere itself: in philosophy, for example, through the action of economic influences (which again mostly act only in their political, etc., disguise) upon the existing philosophical material handed down by predecessors. Here economics creates nothing anew, but it determines the way in which the existing material of thought is altered and further developed, and that too mostly indirectly, for it is the political, legal and moral reflexes that exert the greatest direct influence on philosophy.

About religion I have said what is most necessary in the last section of Feuerbach.

If, therefore, Barth supposes that we deny any and every reaction of the political, etc., reflexes of the economic movement upon that movement itself, he is simply tilting at windmills. He has only to look at Marx’s Eighteenth Brumaire, which deals almost exclusively with the particular part played by political struggles and events, of course within their general dependence upon economic conditions. Or Capital, the section on the working day, for instance, where legislation, which is surely a political act, has such a trenchant effect. Or the section on the history of the bourgeoisie (chapter 24). Or why do we fight for the political dictatorship of the proletariat if political power is economically impotent? Force (that is, state power) is also an economic power!

But I have no time to criticise the book now. Volume III must come out first, and besides I think that Bernstein, for instance, could deal with it quite well.

What all these gentlemen lack is dialectics. They never see anything but cause here and effect there. That this is a hollow abstraction, that such metaphysical polar opposites exist in the real world only in crises, that the whole vast process goes on in the form of interaction (though of very unequal forces, the economic movement being by far the strongest, most primordial, most decisive), that here everything is relative and nothing absolute: this they simply cannot see. As far as they are concerned, Hegel never existed.

As for the party row, the gentlemen of the opposition dragged me into it by force, and I had no choice. The way Herr Ernst has treated me is absolutely beneath criticism, unless I am to call him a schoolboy. I am sorry the man is ill and has to write for a living. But anyone with so strong an imagination that he cannot read a line without reading into it the opposite of what it says may apply his imagination in other fields than the unimaginative one of socialism. Let him write novels, plays, art criticism and the like; there he will harm only bourgeois culture and so do us a service. Perhaps he will then mature so far as to be able to accomplish something in our field too. But I must say this: I have never and nowhere come across such a mass of half-baked stuff and absolute nonsense as this opposition has brought to light. And these greenhorns, who see nothing but their own boundless conceit, want to dictate the party’s tactics! I have learnt more from a single one of Bebel’s reports in the Vienna Arbeiter-Zeitung than from the whole jumble these people have produced. And they imagine they are worth more than that clear head, who grasps conditions so wonderfully correctly and describes them so tangibly in a couple of words! They are all failed belletrists, and even a successful belletrist is a nasty creature.

I should be sorry if the Volks-Tribüne went under. Under your editorship it has shown that a weekly of this kind, with more theoretical than topical content, could achieve something, and I know what sort of contributors you have! But of course, now that the Neue Zeit has become a weekly, it may perhaps be questionable whether it can survive. In any case you will be glad to be rid of the joys and sorrows of editing and to find time for work other than pure journalism. And in Berlin, too, the coming period will still be dominated by all sorts of echoes of the last row, and nothing comes of that for anyone in the thick of it.

The printing of the passage from my letter did no harm, but such things had better not happen. In letters one writes from memory and quickly, without looking things up, and so an expression can always slip in that one of those people whom we on the Rhine call Korinthenscheißer fastens on, deriving God knows what nonsense from it.

Many thanks for your anticipated congratulations on my seventieth birthday, which is still a month off. So far I am still quite well, except that I still have to spare my eyes and may not write by gaslight. Let us hope it stays so.

But now I must close.

With cordial greetings, yours, F. Engels