Letter to Friedrich Engels, March 5, 1858

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To Engels in Manchester

[London,] 5 March 1858

Dear Frederic,

As regards the enclosed, which has clearly been delayed you might be so good as to discuss with Lupus the kind of answer you think would be suitable. Don’t return the thing (but keep it) because such things are safer with you than with me just now. At present London is a gathering-point for mouchards of all nations. Hardly a day goes by when the curs aren’t plus ou moins lynched.

My best thanks for your éclaircissements about machinery. The figure of 13 years corresponds closely enough to the theory, since it establishes a unit for one epoch of industrial reproduction which plus ou moins coincides with the period in which major crises recur; needless to say their course is also determined by factors of a quite different kind, depending on their period of reproduction. For me the important thing is to discover, in the immediate material postulates of big industry, one factor that determines cycles. In considering the reproduction of machinery, as distinct from capital circulant one is irresistibly reminded of the Moleschotts who also pay insufficient attention to the period of reproduction of the bony skeleton, contenting themselves rather, like the economists, with the average time taken by the human body to replace itself completely. Another question in respect of which I require only one example (approximate), is how, e.g. in your own mill or rather manufacturing business, floating capital is apportioned over raw material and wages, and what portion on average you leave with your banker. Further, how you calculate turnover in your books. Here the theoretical rules are extremely simple and self-evident. But it is nevertheless just as well to have some inkling of how the thing looks in practice. The method of calculation used by businessmen is, of course, partly based on illusions even greater than those of the economists; on the other hand it rectifies the latter’s theoretical illusions by means of practical ones. You speak of 10% profit. I suppose that you do not take into account the interest and that this is doubtless shown along with the profit. In the ‘First Report of the Factory Commissioners’ I have found the following statement, which serves as an average example:

* Capital sunk in building and machinery		£10,000
Floating capital		£7,000
£500	interest on 10,000 fixed capital
£350	interest on floating capital
£150	Rents, taxes, rates
£650	Sinking fund of 6 1/2 p.c. for wear and tear of the fixed capital
£1,650
1,100	contingencies (?), carriage, coal, oil
£2,750
£2,600	wages and salaries
£5,350
£10,000	for about 400,000 lbs raw cotton at 6d
£15,350*

16,000 for 363,000 lbs twist spun. Value 16,000. Profit 650, or about 4.2 p.c. Hence wages of operatives here about 1/6.

It is true that in this case the total profit only amounts to about 10%, including interest. Mr Senior, however, who after all represents the manufacturers’ interests, states that in Manchester the average profit including interest amounts to 15%. It is a great pity that the above statement does not show the number of operatives, or the proportion of actual wages to what appears as salaries.

By the by, the manner in which even the best economists, such as Ricardo ipsissimus descend into sheer juvenile poppycock whenever they find themselves on the treadmill of bourgeois thought, struck me very forcibly in the following passage of Ricardo’s, which I happened to come across yesterday. You will recall that A. Smith, who is still very old-fashioned, declares that by comparison with trade at home, overseas trade only gives one half of the encouragement to the productive labour of a country etc. To this Ricardo replies with the following example:

‘Smith’s argument appears to me to be fallacious; for though two capitals, one Portuguese and one English, be employed, as Smith supposes, still a capital will be employed in the foreign trade, double of what would be employed in the home trade. Suppose that Scotland employs a capital of a thousand pounds in making linen, which she exchanges for the produce of a similar capital employed in making silks in England, two thousand pounds, and a proportional quantity of labour will be employed by the two countries. Suppose now, that England discovers that she can import more linen from Germany, for the silks which she before exported to Scotland, and that Scotland discovers that she can obtain more silks from France in return for her linen, than she before obtained from England,— will not England and Scotland immediately cease trading with each other, and will not the home trade of consumption be changed for a foreign trade of consumption? But although two additional capitals will enter into this trade, the capital of Germany and that of France, will not the same amount of Scotch and of English capital continue to be employed, and will it not give motion to the same quantity of industry as when it was engaged in the home trade?'

The assumption that in such circumstances Germany would buy her silks in England instead of France, and France her linen in Scotland instead of Germany is hardly what one would expect of a fellow like Ricardo.

Friend Thomas Tooke has died, and with him the last English economist of any value.

Did you overlook, in one of the Guardians you sent me, the item in which David Urquhart figures as an infanticide? The fool treated his 13-month-old baby to a Turkish bath which, as chance would have it, contributed to congestion of the brain and hence its subsequent death. The Coroner’s inquest on this case lasted for 3 days and it was only by the skin of his teeth that Urquhart escaped a verdict of manslaughter. Quel triomphe pour Pam.

Salut.

Your
K. M.