"Money and Crisis:

Marx as Correspondent of the New York Daily Tribune, 1856–57"

Sergio Bologna

[Editorial Note: This article was written in 1973. It was a key article in developing the theoretical base of the newly emerging politics of working-class autonomy. This translation, presented here in five parts, was made by Ed Emery and John Merrington for an anticipated volume to be published by Red Notes: Selected Writings of Sergio Bologna. For further details, write to Red Notes, BP15, 2a St Paul's Road, London N1 UK]

At the beginning of 1855, in a series of articles in the Neuer Oder Zeitung (11, 12, 20 and 25 January and in successive articles in the following months) Marx confronted the problem of cyclical crises and questions related to the British banking reforms of 1844. Already there were signs of the coming world recession of 1856–58 and it was urgent to set about analysing its causes.

Marx's unpublished notes on Geldwesen, Kreditwesen, Krisen ("Essence of Money, Credit and Crisis") also date from the same period — November 1854 to January 1855. The relation between the money form and general crisis must thus have been clear to him before the direct experience of the crisis of 1857. Even so, it seems historically legitimate to locate in this experience a decisive turning point in Marx, relating the early stages of his project for Capital to the need for building the base for an international revolutionary working-class party. It seems likely that this convergence of his theoretical and practical work would not have been so solidly achieved had it not been for the close scrutiny and stage-by-stage observation that he devoted to the monetary crisis of 1857. I have taken this as my starting point for a reading of the articles which Marx was writing about the crisis, articles which appeared in the New York Daily Tribune between June 1856 and December 1858.

The fact that this part of Marx's journalistic activity has received scant attention from commentators is partly due to his own attitude to it. He lost no opportunity to express his contempt for the newspaper: "Yesterday I read again the NYDT (weekly). The paper is full of 'electoral subtleties' and will be for months. We will only be able to get seriously involved again with the NYDT when this shit of the presidential election is over." Exasperated by a reduction in his fees — his only source of fixed income at the time — he again wrote to Engels on 23 January 1857: "To grind bones and pound them into soup like paupers in workhouses, that is what our political work is reduced to when condemned to work for such a concern. I am also aware that I am an ass to have contributed so much to these young gentlemen for their money, not only recently, but over the past few years."

To Lassalle he wrote (12 November 1858) of having written enough articles to fill two large volumes "de omnibus rebus et quibusdam aliis" ("on everything under the sun, and more besides"). Was this then simply occasional hack-work, imposed on him and outside any development of his interests? Alienated wage work imposed by hunger? Certainly it was that; his wife Jenny was explicit: "Karl is working day and night: during the day to provide our daily bread and at night to finish his Economics" (to Conrad Schramm, 8 December 1857). "I am not master of my time but rather its servant. I have only the night left for myself." "I am forced to fritter away my days earning a living. Only the nights remain free for real work" ? Marx wrote on two separate occasions to Lassalle.

And yet in the last of these two letters — that of 21 December 1857 — he makes an important observation. "The present commercial crisis has impelled me to set to work seriously on my outlines of political economy." The truth of this admission can easily be tested by comparing the material gathered for the NYDT articles and Marx's opinions as expressed there, with the text of the Grundrisse. This proves that there was not in fact a dividing line between his day-work and his night-work, a fact which is already rich in implications. But I am not intending a literary reconstruction of the sources for the Grundrisse and Capital: my central purpose is to show the political and theoretical centrality — albeit conditioned by its journalistic form — of Marx's analysis of the monetary crisis of 1857. I should say that this hypothesis is by no means original. Rosdolsky, with his usual perspicacity, has argued a similar position: "From the summer of 1852 until the autumn of 1856, Marx's work on the Critique of Political Economy was interrupted by his professional work as a journalist. This did not of course mean that the research which he engaged in for this purpose had no significance for his work in political economy. On the contrary; Marx had to make himself familiar with practical details, since many of his reports deal with 'noteworthy economic events in England and on the Continent'. Although these lay 'strictly speaking outside the sphere of political economy', they did prove useful to him later. We need only refer to his numerous articles on economic conditions, on questions of trade policy, on the English working-class movement and strikes." Rosdolsky continues: "Characteristically, it was the outbreak of the economic crisis of 1857 which was responsible for both the immediate decision to write the Rough Draft, and the feverish hurry with which this was done. (The entire work, almost 50 proof sheets, was completed in nine months, between July 1857 and March 1858)." Hence "it would be worthwhile," he concludes, "to compare closely the historical-economic themes treated by Marx in his New York Daily Tribune articles with those in Capital."

The political anger and frustration that Marx expressed in this period of his life was channelled into a renewed period of active militancy and organisational objectives, for which Capital was to provide both the programme and the theoretical basis. However much he cast himself in the role of a poor piece-rate worker exploited by that "donkey" Dana (editor of the NYDT), there is a basic continuity between these articles and his earlier writings on the laws governing the behaviour of the working class in the 1848 revolution (The Class Struggles in France). Throughout this period we find him constantly writing to his friend Engels in Manchester, obsessively seeking reports on how the crisis was being experienced and understood in the cotton districts and in entrepreneurial and commercial circles; this is already the Marx of the first volume of Capital.

But there is more than simply a continuity in these writings. The relation between crisis and the money form, which is the central theme, provides the key to a re-interpretation of political institutions from the standpoint of monetary organisation, and of the laws of value seen from the viewpoint of a stage of capitalist development now in its maturity. The crisis overthrew the structure of the new banques d'affaires and upset the political stability of the Bonapartist regime in France. It thus condemned to failure the project of capitalist restructuration embarked on by Napoleon III, and simultaneously opened up a new terrain of confrontation for the working class, indicating the new dimensions of organisation for the seizure of power. At the same time, Marx's battle against the "socialist doctrinaires" is now pitched at a new level: his polemic is not so much directed against the "labourist" tendencies — the socialisation of work through "association" propagandised by Louis Blanc — as against the utopian illusions of the Proudhonites regarding the relation between money and commodities — the socialist belief that exploitation could be eliminated by the abolition of money. Bonaparte is seen in Marx's polemic alongside the Péreire brothers and the utopia of work-time chits preached by the Saint-Simonian Gray. This is the historical bloc against which Marx now directs the full weight of his critique; he watches as its disintegration in the general crisis opens the way for a new revolutionary class offensive. This was the "new historical form" of capital which had emerged from the revolutionary crisis of 1848 — a historical bloc based directly on the world market as a homogeneous entity and on the new level of productive forces which this implied. Crisis was both its precondition and its result.

Much of this is of course anticipated in the earlier articles on The Class Struggles in France. For instance he had already highlighted the importance of banking, both in the July monarchy and the new Bonapartist regime: "After the July revolution, when the Liberal banker Laffitte led his godfather the Duke of Orleans in triumph to the Hôtel de Ville, he let fall the words: 'From now on the bankers will rule'. Laffitte had betrayed the secret of the revolution. It was not the French bourgeoisie that ruled under Louis Philippe, but a fraction of it: bankers, stock-exchange kings, railway kings, owners of coal and iron works and forests, a part of the landed proprietors that rallied round them - the so-called finance aristocracy... The real industrial bourgeoisie formed part of the official opposition, that is it was represented only as a minority in the Chambers." By 1850, the circle closes: "The new finance minister was Fould. Fould as finance minister signifies the official surrender of French national wealth to the Bourse, the management of the state's property by the Bourse. With the nomination of Fould, the finance aristocracy announced its restoration in the Moniteur."

Here the limitation of Marx's early historical judgement is evident: in it a "Manchesterian" formulation of the problem remains and informs the whole class analysis. On the one hand, he portrays an advanced, reforming and progressive industrialist fraction which is productivist; on the other a financial sector which is parasitic, backward and conservative. In these earlier texts, Marx is still trapped in this schematic opposition: on the one hand the law of value, on the other capital as interest. Finance and banking are still seen as symbols of the ancien régime. Indeed, he proceeds to define the "finance aristocracy" as: "the resurrection of the lumpen-proletariat at the top of bourgeois society". A world balanced between industrialists and workers, landowners and peasants, a lumpenbourgeoisie and a lumpenproletariat.

From this symmetrical and rigid schema one element was missing - the material constituency of socialism, the social base within which the utopian ideologies were proliferating, namely the petty bourgeoisie. Marx battled against the "doctrinaires" Louis Blanc and Proudhon, but while he was willing to admit that the "labourist" slogans, however mystified, nonetheless represented a (distorted) demand for real power, he considered the utopian schemes for the reorganisation of credit as mere doctrinaire impositions, and as such a long way from any real demands of the working class. "But behind the 'right to work' stands the power over capital; behind the power over capital, the appropriation of the means of production, their subjection to the associated working class and therefore the abolition of wage labour, as well as of capital and of their mutual relations. Behind the 'right to work' stood the June insurrection." "And if private credit rests on confidence that bourgeois production in the entire scope of its relations, that is the bourgeois order, will not be touched, will remain inviolate, what effect must a revolution have had which questioned the basis of bourgeois production, the economic slavery of the proletariat, and set up against the Bourse the sphinx of the Luxembourg? The uprising of the proletariat is the abolition of bourgeois credit; for it is the abolition of bourgeois production and its order."

In 1856 Marx had to return to these questions that he had examined in The Class Struggles in France. It would be logical to expect his emphasis to be directed against that part of Proudhonist socialist doctrine that preached the right to work, the social organisation of production and workers' self-management of the factories. In other words to expect his emphasis to be on analysis of the theory of value, the factory and immediate relations of production. But no — the Grundrisse opens with the Chapter on Money — with the critique, moreover, of a distinctly mediocre author, Darimon, who had written numerous prefaces to Proudhon's works full of unctuous praise for his master. What had happened to cause this about-turn? It is true that on 31 January 1849 Proudhon had presented himself before a Paris lawyer, Dassaignes, to register the statutes of his Banque du Peuple; this institution was intended to be the realisation of his ideas on free credit, the means for the emancipation of the workers and their transformation from wage labour into associated labour within the framework of a single cooperative organisation of society. But this was only a marginal episode in the revolution; its practical importance was not much greater than the novelist Eugene Sue's notion of a Banque de l'Honneur, which would lend money to workers on the security of their word of honour!

Throughout 1848 and 1849, Proudhon, preceded by his faithful herald Darimon, continued preaching his idea of free credit; there was even a direct polemic with Bastiat on this issue, to which Marx refers extensively in the Grundrisse. However the banking utopias were of secondary practical and ideological significance within the proletariat, compared to the influence of the slogan of the "right to work". It was, after all, the masses thrown out of work by the closure of the Atéliers Nationaux (the pseudo-welfare public works scheme set up by the provisional government to satisfy the demand for the "right to work") that had launched the June insurrection. Certainly no barricade was ever erected to defend the abortive utopian banking schemes! Yet it is precisely this aspect of socialist doctrine that Marx chooses to highlight in the Grundrisse.

Had he not said that the "finance aristocracy" represented only one fraction of the bourgeoisie, the one that did not express the movement of capital as a process but only circulating capital productive of interest? Yet in 1856 the institutional organisation of the money form — the banking system — becomes the point of departure for Marx's analysis of the entire bourgeoisie, of aggregate social capital. What had happened to cause this shift? This is the question that I shall seek to answer from a reading of Marx's articles for the NYDT.

Certainly, when one reads these articles separately one has the impression that Marx's treatment of the financial nature, the monetary terrain and the speculative origins of the crisis of 1857 is such as to justify an interpretation of his conception of crisis as "pathogenic". But this would be a superficial impression, an interpretation that gives us a distorted view of Marx as a radical bourgeois. On the other hand, one can find innumerable quotations from his correspondence with Engels, to the effect that the "monetary panic" is a precursor of the "industrial crash". The crisis has to expose for all to see the new terrain of working-class initiatve, the internationalist dimensions of the communist programme. And yet — and this is striking — Marx pays very little attention to working-class behaviours, within the crisis. Engels provides him with a diligent account of the short-time working in the cotton industry and the textile industry in general, but Marx concentrates his attention entirely on the money-form and the world market. And at a certain point the relationship between the world market and the crisis becomes so essential as to appear as the end-point of one of the numerous summaries in Capital - the schematic summary in the famous "Introduction" of 1857. These understandings spurred the urgency to resume political and organisational work, and to develop organisational links. Marx goes to sound out Lassalle and the possibilities of publishing "Towards a Critique of Political Economy" in Germany; this was not the easiest route, but it was the solution that best matched "party" considerations. It would have been easier to publish in London — given that England was accustomed to debates in the area of economic science — but he would not necessarily have been able to rely on the relationship with the working-class associations after the devastation of the Chartist movement at the hands of Urquhart et al. Better to rely on Lassalle and his relations with the working-class associations. So on the one hand Marx was not devoting much attention to the crisis in the cotton districts, but on the other he was making it a priority to set up a formal relationship with the organisational project in Germany, even though organisational projects that start from a re-unification of emigrants do not generally hold great promise of success. The point on which we find everything focussed is once again France — the country in which the workers had dared to launch an insurrection against the radical bourgeoisie, the France of June 1848, which in the meantime had become the France of imperial socialism, of monetary Proudhonism, the France of the Crédit Mobilier.

Is it possible to see in Marx's writings for the NYDT a fragment of the organisational work which he was to undertake in parallel with the writing of Capital? Is it also possible to see in Marx's political journalism an advance in relation to his earlier "historical" works?

In such a framework, Marx's continual collaboration with the newspaper that he so despised can be understood not only as part of his refusal to allow himself to be turned into a "money-making machine", as he once wrote to Wedermayer, but also as a determination to maintain a political link — however slender and mystified — with the United States. It was against the background created by the world market that the forthcoming project of communist organisation would concretely have to measure itself.

* * * *

"Military and Finance": these were the topics that Marx was expected to write about as correspondent for the NYDT. Exploiting Engels's interest in military history, Marx managed to get a long series on India and China accepted. These articles have long interested those who have sought textual references for Marx's "theories of imperialism". It is surprising, though the reasons are not hard to decipher, that these articles on the "colonial issue" have been extracted and commented upon by scholars as if they represent a separate argument, internally homogeneous and quite distinct from the general body of writing on the world crisis. It would be more correct to see the articles as the parts of a whole, an integrated discourse. Marx takes the contradictions provoked in the world market by imperialist adventures and sets them alongside signs of coming revolution in the metropolitan countries. Events in India or China are primarily interpreted in the light of the progress of working class revolution in Europe.

In this group of articles, Engels's collaboration often plays a role on a par with that of Marx. If we examine the correspondence of this period, we find that Engels also contributed to a considerable extent in the drafting of the articles on the international crisis. More than once his judgements are reproduced verbatim.

In a letter of 14 April 1856, Engels predicted with certainty the "catastrophic" nature of the coming crisis: "This time the CRASH will be quite unprecedented; all the ingredients are there: intensity, universal scope, and the involvement of all propertied and ruling social elements." In the same letter we find Engels attempting to find the right connection between the abnormalities of speculation and the normality of the productive process: a relation of precarious stability which then plunges into crisis — a crisis which begins in one sector, the railways, which he identifies as the source of instability which sets in train the general process of overproduction. He ends with observations on the competition between Britain and the European continent: "it is in this enormous leap forward of industry on the Continent that the most viable embryo of English revolution lies."

The proliferation in Europe of financial institutions of the Crédit Mobilier type is already seen by Engels as the main vector of speculation on a world scale. But Marx's penetrating analysis of the French Crédit Mobilier bank (his first article on this theme appeared in the Chartist People's Paper, 7 June 1856, and was republished in the NYDT on 21 June) was far richer and more articulated. He goes straight to the point: "The Crédit Mobilier thus presents itself as one of the most curious economical phenomena of our epoch, wanting a thorough sifting..." It is "the greatest representative of Imperial Socialism in France". Analysis of the Crédit's operational mechanisms enabled Marx to "compute the chances of the French empire" and to "understand the symptoms of the general convulsion of society manifesting themselves throughout Europe". Marx studies the statutes of the Crédit in order to specify its characteristics. Set up as a means of promoting industry and public services, the Crédit Mobilier had ended up acquiring a large part of the shares in various major French companies, and had issued in their place a joint share, one common title, of its own. Thus it had, on the one hand, become the owner of a large part of French industry, and on the other it had functioned as an element promoting a centralisation and levelling of the capitalist market. Since, like other monopolies in France, the Crédit depended on a privilege granted by the emperor, this effectively meant that it was Bonaparte's creature, enabling him to exercise control over the whole of French industry. But precisely this very close interdependence between the Crédit and the regime meant that the political fortunes of the latter were tied to the economic fortunes of the former - in other words, that the stability of Napoleon's regime rested on the sands of speculation. And the Crédit, for its part, was "the slave of the treasury and the despot of commercial credit".

In the second article, published on 24 June 1856, Marx again addresses the close relationship between the regime and the bank. He examines the mobilisation of savings and the way they were sucked in through the Crédit subsidiaries, and sees this as one of the principal elements in mobilising otherwise unused resources and bringing them under the controlling hand of the regime. This regime, Marx notes, came to power "to save the bourgeoisie and 'material order' from the Red anarchy", but also to "save the working people from the middle-class despotism concentrated in the National Assembly". But how was one to reconcile these "contradictory pretences"? How was this "knotty point to be untwined"? The answer is simple: "All the varied past experience of Bonaparte pointed to the one great resource that had carried him over the most difficult economical situations — Credit. And there happened to be in France the school of Saint Simon, which in the beginning and in its decay deluded itself with the dream that all the antagonism of classes must disappear before the creation of universal wealth by some new-fangled scheme of public credit. And Saint-Simonism in this form had not yet died out at the epoch of the coup d'état. There was Michel Chevalier, the economist of the Journal des Débats; there was Proudhon, who tried to disguise the worst position of the Saint-Simonist doctrine under the appearance of eccentric originality; and there were two Portuguese Jews, practically connected with stockjobbing with the Rothschilds who had sat at the feet of the Pére Enfantin, and who with their practical experience were able to sniff stockjobbing behind Socialism and Law behind Saint Simon. These men — Emile and Issac Péreire — are the founders of the Crédit Mobilier, and the initiators of Bonaparte Socialism."

Implicit in this account is the sense that there has been a change in the mechanisms of extraction of surplus value. The Bonapartist regime could no longer count on direct control over labour power in the factory. A working class that had made the revolutionary challenge in 1848 would no longer permit itself to be exploited beyond certain limits, or to be paid below certain limits. The Bonapartist regime needed an ideology of collective participation in the benefits of development in order to co-opt the working class to its overall project. Hence it was no longer the Proudhon of the Philosophie de la Misére, but the Proudhon of the polemic with Bastiat, the advocate of "Free Credit", who was now so pivotal to the ideological needs of the the regime. The two-sidedness of Proudhonist doctrine perfectly corresponded to the dual and contradictory nature of the regime itself: it acted as the neutralising agent of the Bonapartist social bloc. Crédit Gratuit meant a social mobilisation of capital, the overcoming of competition between capitals, levelling of interest rates, unification of money prices, in short the creation of the collective capitalist. But it also signified the collective possibility of becoming producer-entrepreneurs, the spontaneous multiplication of the factory system, the encouragement of self-help, savings and collective enrichment. Proudhonist doctrine not only justified the Péreire brothers and the Central Bank, but simultaneously coopted the working class and petty bourgeoisie to the project of development through participation in growth, thereby frustrating revolutionary organisation. Marx had already criticised Proudhon's "rhetorical formula" of "constituted value" in The Poverty of Philosophy; this reduced the capital-labour relation to an exchange of commodities understood as exchange-values, relegating class antagonism to the sphere of simple circulation. Now it was of paramount importance to attack the specifically monetary aspects of the socialist utopia, even in their most "melodramatic" forms; the existence of the Crédit Mobilier gave them a new and more dangerously mystifying significance. Hence we find that, at the beginning of the Grundrisse, the Chapter on Money opens with the critique of Alfred Darimon's De la Réforme des Banques (large passages of this critique are, as we shall see, summaries of Marx's articles for the NYDT) and even of John Gray's outlandish scheme of "labour money" or "time chits". Gray is no longer regarded as the maniac who thought that simply representing the "value of labour" in symbolic money would do away with the disproportion between value and price, between labour and its product. He is now seen as the apostle of the Bank of France, the standard-bearer of Bonapartist socialism. Marx's critique has broadened from a critique of socialist theories of value to that of socialist monetary utopias; from Ricardian capitalism to the Bonapartist bourgeoisie; from workers' resistance against the law of value to the centralised control over relative surplus value.

The critical importance of this shift lies in the fact that Marx was now confronting the Bonapartist regime as the first complete form of the modern state, the government of social capital. He was facing the first realisation of a modern monetary system, the centralised government of liquidity. The shift is paralleled by the political direction of his critique: from the analysis of the state and crisis to the examination of the new basis of the revolutionary party. Seen in this light, the analysis of the crisis has the same importance in practical terms as the analysis of money had in the theoretical scheme at the start of the Grundrisse. The third article on the Crédit Mobilier, that of 11 July 1856, goes further into the links between money and crisis.

[This essay continues here.]