Karl Marx

2. The General Relations of Production to Distribution, Exchange and Consumption

Before starting upon a further analysis of production, it is necessary to consider the various sections which economists place alongside it. The quite obvious conception is this: In the process of production, members of society appropriate (produce, fashion) natural products in accordance with human requirements; distribution determines the share the individual receives of these products; exchange supplies him with the particular products into which he wants to convert the portion accruing to him as a result of distribution; finally, by consumption, the products becomes objects of use -- i.e., they are appropriated by individuals. Production creates articles corresponding to requirements; distribution allocates them according to social laws; exchange, in its turn, distributes the goods, which have already been allocated, in conformity with individual needs; finally, in consumption, the product leaves this social movement and it becomes the direct object and servant of an individual need, which use it satisfies. Production thus appears as the point of departure, consumption as the goal, distribution and exchange as the middle -- which has a dual form since, according to the definition, distribution is actuated by society and exchange is actuated by individuals. In production, p[persons acquire an objective aspect, and in consumption objects acquire a subjective aspect; in distribution, it is society which, by means of dominant general rules, mediates between production and consumption; in exchange, this mediation occurs as a result of random decisions of individuals. Distribution determines the proportion (the quantity) of the products accruing to the individual, exchange determines the products in which the individual claims to make up the share assigned to him by distribution. Production, distribution, exchange and consumption, thus, form a proper syllogism; production represents the general, distribution and exchange the particular, and consumption the individual case, which sums up the whole. This is indeed a sequence, but a very superficial one. Production is determined by general laws of nature; distribution by random social factors, it may therefore exert a more-or-less beneficial influence on production; exchange, a formal social movement, lies between these two; and consumption, as the concluding act, which is regarded not only as the final aim but as the ultimate purpose, falls properly outside the sphere of economy -- except insofar as it in turn exerts a reciprocal action on the point of departure, thus once again initiating the whole process. The opponents of the economists, who accuse the latter of crudely separating interconnected elements, either argue from the same standpoint or even from a lower one -- no matter whether these opponents come from within or without the domain of political economy. Nothing is more common that the reproach that the economists regard production as a goal in itself, and that distribution is equally important. This argument is based on the concept of the economists that distribution is a separate and independent sphere alongside production. Another argument is that the different factors are not considered as a single whole; as though this separation had forced its way from the textbook into real life and not, on the contrary, from real life into the textbooks; and as though it were a question of the dialectic reconciliation of concepts, and not of the resolution of actually existing conditions. (a) Production and Consumption Production is simultaneously consumption as well. It is consumption in a dual form -- subjective and objective consumption. Firstly, the individual, who develops his abilities while producing, expends them as well, using them up in the act of production, just as in natural procreation, vital energy is consumed. Secondly, it is consumption of the means of production -- which are used and used up and in part (as for instance fuel) are broken down into simpler components. It similarly involves consumption of raw material, which is absorbed and does not retain its original shape and quality. The act of production itself is thus, in all its phases, also an act of consumption. The economists concede this. They call productive consumption, production that is simultaneously identical with consumption, and consumption which is directly concurrent with production. The identity of production and consumption amounts to Spinoza's proposition: _Determinatio est negatio_. But this definition of productive consumption is only advanced in order to separate consumption that is identical with production from consumption in the proper sense, which is regarded by contrast as the destructive antithesis or production. Let us therefore consider consumption proper. Consumption is simultaneously also production -- just as in nature, the production of a plant involves the consumption of elemental forces and chemical materials. It is obvious that man produces his own body (e.g., through feeding, one form of consumption). But the same applies to any other kind of consumption which in one way or another contributes to the production of some aspect of man. Hence, this is consumptive production. Nevertheless, says political economy, this type of production that is identical with consumption is a secondary phase arising from the destruction of the first product. In the first type of production, the producer assumes an objective aspect; in the second type, the objects created by him assume a personal aspect. Hence, this consuming production -- although it represents a direct unity of production and consumption -- is essentially different from production proper. The direct unity, in which production is concurrent with consumption and consumption with production, does not affect their simultaneous duality. Production is, thus, at the same time consumption, and consumption is at the same time production. Each is simultaneously its opposite. But an intermediary movement takes place between the two at the same time. Production leads to consumption, for which it provides the material; consumption without production would have no object. But consumption also leads to production by providing for its products the subject for whom they are products. The product attains its final consummation in consumption. A railway on which no one travels (which is therefore not used up, not consumed) is potentially, but not actually, a railway. Without production, there is no consumption; but without consumption, there is no production, either -- since in that case production would be useless. Consumption produces production in two ways. 1. Because a product becomes a real product only through consumption. For example, a dress really becomes a dress only by being worn, a house which is uninhabited is indeed not really a house -- in other words, a product (as distinct from a simple natural object) manifest itself as a product, becomes a product, only in consumption. It is only consumption which, by destroying the product, gives it the finishing touch -- for the product is a product not because it is materialized activity, but only in so far as it is an object for the active subject. 2. Because consumption creates the need for _new_ production, and therefore provides production with the conceptual, intrinsically actuating reason for production, which is the precondition for production. Consumption furnishes the impulse to produce, as well as providing the object, which acts as the determining purpose of production. If it is evident that, externally, production supplies the object of production as a _concept_, an internal image, a need, a motive, a purpose. Consumption furnishes the object or production in a form that is still subjective. There is no production without a need, but consumption re-creates the need. This is matched on the side of production. 1. By the fact that production supplies the material, the object of consumption. Consumption without an object is no consumption; in this respect, therefore, production creates, produces consumption. 2. But production provides not only the object of consumption, it also gives the consumption a distinct form, a character, a finish. Just as consumption puts the finishing touch on the product as a product, so production puts the finishing touch to consumption. The object is not simply an object in general, but a particular object which must be consumed in a particular way, a way determined by production. Hunger is hunger; but the hunger that is satisfied by cooked meat eaten with a knife and fork differs from hunger that devours raw meat with the help of hands, nails and teeth. Production this produces not only the object of consumption but also the mode of consumption, not only objectively but also subjectively. Production therefore creates the consumer. 3. Production not only provides the material to satisfy a need, but it also provides the need for the material. When consumption emerges from its original primitive crudeness and immediacy -- and its remaining in that state would be due to the fact that production was still primitively crude -- then it is itself, as a desire, brought about by the object. The need felt for the object is induced by the perception of the object. An _objet d'art_ creates a public that has artistic taste and is able to enjoy beauty -- and the same can be said of any other product. Production accordingly produces not only an object for the subject, but also a subject for the object. Hence production produces consumption: 1. by providing the material of consumption; 2. by determining the mode of consumption; 3. by creating in the consumer a need for the objects which it first presents as products. It therefore produces the object of consumption, the mode of consumption and the urge to consume. Similarly, consumption produces the _predisposition_ of the producer by positing him as a purposive requirement. The identity of consumption and production has three aspects: 1. Direct identity: Production is consumption and consumption is production. Consumptive production and productive consumption. Economists call both productive consumption, but they still make a distinction. The former figures in their work as reproduction, the latter as productive consumption. All investigations concerning the former are concerned with productive and unproductive labor, concerning the latter with productive and non-productive consumption. 2. Each appears as a means of the other, as being induced by it; this is called their mutual dependence; they are thus brought into mutual relation and appear to be indispensable to each other, but nevertheless remain extrinsic to each other. Production provides the material which is the external object of consumption, consumption provides the need -- i.e., the internal object, the purpose of production. There is no consumption without production, and no production without consumption. This proposition appears in various forms in political economy. 3. Production is not only simultaneously consumption, and consumption simultaneously production; nor is production only a means of consumption and consumption the purpose of production -- i.e., each provides the other with its objects, production supplying the external object of consumption, and consumption the conceptual object of production -- in other words, each of them is not only simultaneously the other, and not merely the cause of the other, but each of them by being carried through creates the other, it creates itself as the other. it is only consumption that consummates the process of production, since consumption completes the product as a product by destroying it, by consuming its independent concrete form. Moreover, by its needs for repetition, consumption leads to the perfection of abilities evolved during the first process of production and converts them into skills. Consumption is therefore the concluding act which turns not only the product into a product, but also the producer into a producer. Production, on the other hand, produces consumption by creating a definite mode of consumption, and by providing an incentive to consumption it thereby creates the capability to consume as a requirement. The last kind of identity, which is defined in point 3, has been variously interpreted by economists when discussing the relation of demand and supply, of objects and needs, of needs created by society and natural needs. After this, nothing is simpler for a Hegelian than to assume that production and consumption are identical. And this has been done not only by socialist _belletrists_ but also by prosaic economists, such as Say, in declaring that if one considers a nation -- or mankind _in abstracto_ -- then its production is its consumption. Storch has shown that this proposition of Say's is wrong, since a nation, for instance, does not consume its entire product, but must also provide means of production, fixed capital, etc. It is, moreover, wrong to consider society as a single individual, as in 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 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 sector alongside and outside production? (b) Production and distribution When looking through the ordinary run of economic works, one's attention is attracted forthwith by the fact that everything is mentioned twice -- e.g., rent, wages, interest and profit figure under the heading distribution, while under the heading of production, land, labor and capital. As to capital, it is evident from the outset that this is counted twice: first as a factor of production, and secondly as a source of income (i.e., as a determining and determinate form of distribution). Interest and profit appear therefore in production as well, since they are forms in which capital increases and grows, and are thus phases of its production. As forms of distribution, interest and capital presuppose capital as a factor of production. They are forms of distribution whose precondition is the existence of capital as a factor of production. They are likewise modes of production of capital. Wages represent also wage-labor, which is examined in a different section; the particular function that labor performs as a factor of production in the one case appears as a function of distribution in the other. If labor did not have the distinct form of wage-labor, then its share in the product would not appear as wages, as for instance in slavery. Finally, rent -- if we take the most advanced form of distribution by which landed property obtains a share in the products -- presupposes large-scale landed property (strictly speaking, large-scale agriculture) as a factor of production, and not land in general; just as wages do not presuppose labor in general. The relations and modes of distribution are thus merely the reverse aspect of the factors of production. An individual whose participation in production takes the form of wage-labor will receive a share in the product, the result of production, in the form of wages. The structure of distribution is entirely determined by the structure of production. distribution itself is a product of production, not only with regard to the content, for only the results of production can be distributed, but also with regard to the form, since the particular mode of men's participation in production determines the specific form of distribution, the form in which they share in distribution. It is altogether an illusion to speak of land in the section of production, and of rent in the section on distribution, etc. Economists like Ricardo, who are mainly accused of having paid exclusive attention to production, have accordingly regarded distribution as the exclusive subject of political economy -- for they have instinctively treated the forms of distribution as the most precise expression in which factors of production manifest themselves in a given society. To the single individual, distribution naturally appears as a social law, which determines his position within the framework of production, and within which he produces; distribution thus being antecedent to production. An individual who has neither capital nor landed property of his own is dependent on wage-labor from his birth as a consequence of social distribution. But this dependence is itself the result of the existence of capital and landed property as independent factors of production. When one considers whole societies, still another aspect of distribution appears to be antecedent to production and to determine it, as though it were an ante-economic factor. - A conquering nation may divide the land among the conquerors and, in this way, impose a distinct mode of distribution and for of landed property (thus determining production). Or, - it may turn the population into slaves, thus making slave-labor the basis of production. Or, - in the course of a revolution, a nation may divide large estates into plots, thus altering the character of production in consequence of the new distribution. Or, - legislation may perpetuate land ownership in certain families, or allocate labor as a hereditary privilege, thus consolidating it into a caste system. In all these cases (and they have all occurred in history) it seems that distribution is not regulated and determined by production but, on the contrary, production by distribution. Distribution, according to the most superficial interpretation, is distribution of products; it is thus removed farther from production and made quasi-independent of it. But, before distribution becomes distribution of products, it is (1) distribution of the means of production, and (2) (which is another aspect of the same situation) distribution of the members of society among the various types of production (the subsuming of the individuals under definite relations of production). It is evident that the distribution of products is merely a result of this distribution -- which is comprised in the production process and determines the structure of production. To examine production divorced from this distribution which is a constituent part of it, is obviously idle abstraction; whereas conversely the distribution of products is automatically determined by that distribution which forms a primary factor of production. Ricardo, the economist of production _par excellence_, whose object was the understanding of modern production and of its distinct social structure, for this very reason declares that distribution, _not_ production, is the proper subject of contemporary political economy. This is a witness to the banality of those economists who proclaim production as an eternal truth, and confine history to the domain of distribution. The question as to the relation between that form of distribution that determines production and production itself, belongs obviously to the sphere of production. If it should be said that, in this case at least, since production must proceed from a specific distribution of the means of production, distribution is to this extent antecedent to, and a prerequisite of, production, then the reply would be as follows. Production has indeed its conditions and prerequisites which are constituent elements of it. At the very outset, these may have seemed to be naturally evolved. In the course of production, however, they are transformed from naturally evolved factors into historical ones, and, although they may appear as natural preconditions for any one period, they are the historical result of another period. For example, the employment of machinery led to changes in the distribution of both the means of production and the product. Modern, large-scale landed property has been brought about not only by modern trade and modern industry, but also by the application of the latter to agriculture. The above-mentioned questions can be ultimately resolved into this: what role do general historical conditions play in production and the relations of production to the historical development as a whole? This question clearly belongs to the analysis and discussion of production. In the trivial form, however, in which these questions have been raised above, they can be dealt with quite briefly. Conquests may lead to either of three results. - The conquering nation may impose its own mode of production upon the conquered people (this was done, for example, by the English in Ireland during this century, and to some extent in India); or, - it may refrain from interfering in the old mode of production and be content with tribute (e.g., Turks and Romans); or, - interaction may take place between the two, giving rise to a new system as a synthesis (this occurred partly in the Germanic conquests). In any case, it is the mode of production -- whether that of the conquering nation, or of the conquered, or the new system brought about by a merging of the two -- that determines the new mode of distribution employed. Although the latter appears to be a precondition of the new period of production, it is in its turn a result of production, a result not simply occassioned by the historical evolution of production in general, but by a specific historical form of production. The Mongols, for example, who caused devastation in Russia, acted in accordance with their mode of production (cattle breeding) for which large, uninhabited tracts are a fundamental requirement. The Germanic barbarians, whose traditional mode of production was agriculture with the aid of serfs, and who lived scattered over the countryside, could more easily adapt the Roman provinces to their requirements because the concentration of landed property carried out there had already uprooted the older agricultural relations. It is a long-established view that over certain epochs, people lived by plunder. But in order to be able to plunder, there must be something to be plundered, and this implies production. Moreover, the manner of plunder depends itself on the manner of production -- e.g., a stock-jobbing nation cannot be robbed in the same way as a nation of cowherds. The means of production may be robbed directly in the form of slaves. But in that case, it is necessary that the structure of production in the country to which the slave is abducted admits of slave labor, or (as in South America, etc.) a mode of production appropriate to slave labor has to be evolved. Laws may perpetuate a particular means of production -- e.g., land, in certain families. These laws acquire economic significance only if large-scale landed property is in keeping with the social mode of production -- as for instance in Britain. Agriculture was carried on in France on a small scale, despite the existence of large estates, which were therefore parcelled out by the Revolution. But is it possible (e.g., by law) to perpetuate the division of land into small lots? Landed property tends to become concentrated again, despite these laws. The influence exercised by laws on the preservation of existing conditions of distribution, and the effect they thereby exert on production has to be examined separately. (c) Lastly, Exchange and Circulation Circulation is merely a particular phase of exchange, or of exchange regarded in its totality. Since exchange is simply an intermediate phase between production and distribution, which is determined by production, and consumption; since consumption is moreover itself an aspect of production, the latter obviously comprises also exchange as one of its aspects. Firstly, it is evident that exchange of activities and skills, which takes place in production itself, is a direct and essential part of production. Secondly, the same applies to the exchange of products in so far as this exchange is a means to manufacture the finished product intended for immediate consumption. The action of exchange in this respect is comprised in the concept of production. Thirdly, what is known as exchange between dealer and dealer, both with respect to its organization and as a productive activity, is entirely determined by production. Exchange appears to exist independently alongside production and detached from it only in the last stage, when the product is exchanged for immediate consumption. But, (1) no exchange is possible without division of labor, whether this is naturally evolved or is already the result of an historical process; (2) private exchange presupposes private production; (3) the intensity of exchange, its extent and nature, are determined by the development and structure of production -- e.g., exchange between town and country, exchange in the countryside, in the town, etc. All aspects of exchange to this extent appear either to be directly comprised in production or else determined by it. The conclusion which follows from this is, not that production, distribution, exchange and consumption are identical, but that they are links, or sections, of a single whole, different aspect of one unit. Production is the decisive phase both with regard to the contradictory aspects of production and with regard to the other phases. The process always starts afresh with production. That exchange and consumption cannot be the decisive elements, is obvious, and the same applies to distribution in the sense of distribution of products. distribution of the factors of production thus determines the specific mode of consumption, distribution, exchange and the _specific relations of these different phases to one another_. Production, _in the narrow sense_, however, is in its turn also determined by the other aspects. For example, if the market, or the sphere of exchange, expands, then the volume of production grows and tends to become more differentiated. Production also changes in consequence to changes in distribution -- e.g., concentration of capital, different distribution of the population in town and countryside, and the like. Production is, finally, determined by the demands of consumption. There is an interaction between the various aspects. Such interaction takes place in any organic entity.


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