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In his turn, Boisguillebert, if not consciously, at any rate actually reduces the exchange value of a commodity to labor-time, since he determines "true value" (la juste valeur) by the right proportion in which the labor-time of individuals is distributed among the several branches of industry, and defines free competition as the social process which determines these correct proportions. At the same time, however, and in contrast Pg 60with Petty he wages a fanatical war against money which, by its interference, disturbs the natural equilibrium or harmony of exchange of commodities and, like a wanton Moloch, demands all natural wealth as sacrifice. It is true that this assault on money was called forth by certain historic conditions. Since Boisguillebert attacked18 the blind destructive lust after gold which possessed the court of Louis XIV, his tax collectors, and his nobility; on the other hand, Petty extolled in the greed of gold the mighty impulse which spurred on the nation in her industrial development and in her conquest Pg 61of the world-market; still, there asserts itself here a deeper antagonism of principles which constantly recurs between true English and true French19 Political Economy. Boisguillebert sees, in fact, only the material substance of wealth, its use-value, the enjoyment20 of it, and considers the capitalistic form of labor, i. e. the production of use-values as commodities and the exchange of those commodities, as the natural social form in which individual labor attains its end. When he is, therefore, confronted with the specific character of capitalistic wealth as in the case of money, he sees in it the usurping interference of extraneous elements and gets into a rage about the capitalist system of labor in one form while utopian-like he praises it in another.21 Boisguillebert furnishes us with proof that one may Pg 62treat labor-time as the measure of value of commodities, and at the same time confound labor embodied in the exchange value of commodities and measured by time, with the direct natural activity of individuals.

The first sensible analysis of exchange value as labor-time, made so clear as to seem almost commonplace, is to be found in the work of a man of the New World where the bourgeois relations of production imported together with their representatives sprouted rapidly in a soil which made up its lack of historical traditions with a surplus of humus. That man was Benjamin Franklin, who formulated the fundamental law of modern political economy22 in his first work which he wrote when a mere youth and published in 1721.

He declares it necessary to look for another measure of value than precious metals. That measure is labor. "By labor may the value of silver be measured as well as other things. As, suppose one man employed to raise corn, while another is digging and refining silver; at the year's end, or at any other period of time, the complete produce of corn, and that of silver, are the natural price of each other; and if one be twenty bushels, and the other twenty ounces, then an ounce of that silver is worth the labor of raising a bushel of that corn. Now if by the discovery of some nearer, more easy or plentiful mines, a man may get forty ounces of silver as easily as formerly he did twenty, and the same labor is still rePg 63quired to raise twenty bushels of corn, then two ounces of silver will be worth no more than the same labor of raising one bushel of corn, and that bushel of corn will be as cheap at two ounces, as it was before at one, ceteris paribus. Thus the riches of a country are to be valued by the quantity of labor its inhabitants are able to purchase."23 Thus Franklin regards labor-time from the one-sided economic point of view, as the measure of value. The transformation of actual products into exchange values is self-evident with him and the only question is as to finding a quantitative measure of value. "Trade," says he, "in general being nothing else but the exchange of labour for labour, the value of all things is, as I have said before, most justly measured by labour."24 Substitute the word "work" for "labor" in the above statement, and the confusion of labor in one form and labor in another form becomes at once apparent. Since trade consists e. g. in the exchange of the respective labors of the shoemaker, miner, spinner, painter, etc., does it follow that the value of shoes is most justly measured by the work of a painter? On the contrary, Franklin meant that the value of shoes, mining products, yarn, paintings, etc., is determined by abstract labor which possesses no particular qualities and can, therefore, be measured only quantitatively.25 But since he does not develop the idea that labor contained in exchange value is abstract uniPg 64versal labor which assumes the form of social labor as a result of the universal alienation of the products of individual labor, he necessarily fails to recognize in money the direct embodiment of this alienated labor. For that reason he sees no inner connection between money and labor which creates exchange value, and considers money merely as an instrument introduced from outside into the sphere of exchange for purposes of technical convenience.26 Franklin's analysis of exchange value did not exert any direct influence on the general trend of science, because he discussed only special questions of political economy whenever there was a definite practical occasion for it.

The contrast between useful work and labor which creates exchange value agitated all Europe during the eighteenth century in the form of this question: what particular kind of labor constitutes the source of bourgeois wealth? It was thus assumed that not every kind of labor which is realized in use-values or yields certain products does thereby directly create wealth. With the physiocrats, however, as well as with their opponents, the burning question was not, what kind of labor creates value, but which is it that creates surplus value. They approached the problem in its complicated form before they had solved it in its elementary form; such is the historical course of all sciences leading them by a labyrinth of intersecting paths to the real starting points. Unlike other builders, science not only erects castles in Pg 65the air, but constructs separate stories of the building, before it has laid the foundation. Without dwelling any longer on the physiocrats and omitting quite a number of Italian economists who in some more or less ingenious ideas came close to a correct analysis of the nature of commodity,27 we pass at once to the first Briton who elaborated the general system of bourgeois economics, Sir James Steuart.28 His idea of exchange value as well as all the abstract categories of political economy still seem to be with him in the process of differentiation from the material elements they represent and therefore appear quite vague and unsettled. In one place he determines real value by labor-time ("what a workman can perform in a day"), but immediately creates confusion by introducing the elements of wages and raw material.29 In another place his struggle with the material substance of the subject he treats of is revealed even more Pg 66strikingly. He calls the material of nature contained in a commodity, such as the silver in a silver plate, its "intrinsic worth," while the labor-time contained in it he calls "useful value." The former, he says "is ... something real in itself," while "the value of the second must be estimated according to the labour it has cost to produce it.... The labour employed in the modification [of the substance] represents a portion of a man's time."30