London Notebooks

Study notes by Marx on political economy and other matters. Written in London from September 1850 to August 1853, partially included in the Marx-Engels Historisch-Kritische Gesamtausgabe (MEGA2), IV/7 and IV/8.

After the defeat of the Revolutions of 1848–1849, in order to sum up the experience of the revolution and formulate the revolutionary theory of the proletariat as well as furnish the proletariat with revolutionary theoretical weapons, Marx, who was in exile in London, resumed his interrupted study of political economy in 1850, reading and excerpting a large number of works on economics, especially on the quantity theory of price and money, the theory of ground-rent and agriculture, and the theory of value, which constitute the main body of the London Notebooks.

The London Notebooks consist of 24 notebooks of varying length, over 100 printed sheets, totaling 1,250 pages, and contains more than 300 works and press materials. Included are unfinalized topical papers such as Reflection, Bullion: Das vollendete Geldsystem (Bullion: The Consummate Monetary System), Geldwesen, Creditwesen, Crisen (Money, Credit, Crises), the main contents of which are as follows: First, it criticized the limitations of the quantity theory of money of the classical political economy, which holds that price of a commodity depend on the amount of money in circulation and rise and fall with its increase or decrease. “Even with a purely metallic currency, the quantity thereof, its expansion or contraction, has nothing to do with the outflow and inflow of precious metals, with the favourable or unfavourable balance of trade, with the favourable or unfavourable rate of exchange... the whole theory of circulation is denied in its very fundamentals.” Marx elaborated that the quantity of money in circulation is not a determining factor for the price of a commodity under any conditions; conversely, the quantity of money in circulation is determined by the price of the commodity, the number of commodities traded on a daily basis, and other factors. Second, it expounded the essence, the basic functions of money, etc., holding that money is a commodity fixed as a general equivalent, and that the measure of value and the means of exchange are the two basic functions of money. Third, it re-examined and criticized Ricardo’s theory of differential rent. Ricardo held that demand for land by the population increased, thus compelling the cultivation of inferior land; the increase in the amount of ground-rent was determined by the rise in the price of grain. In this regard, taking the theory and methodology of historical materialism as the framework for scientific analysis and the process of historical development and the inner laws of economic movement as the entry point for the examination of economic theories, Marx pointed out that Ricardo’s theory of rent, “the whole thing is very much the question”, and pointed out that “1. There is no doubt that, with the advance of civilisation, ever poorer types of soil are brought under cultivation. But equally, there is no doubt that, as a result of the progress of science and industry, these poorer types of soil are relatively good as against those previously regarded as good. 2. Since 1815 the price of corn has fallen, irregularly but steadily, from 90 to 50 shillings... Rent has steadily risen. 3. In all countries... we find that, when the price of corn fell, the country’s overall rental rose.” Therefore, Marx held that “the real joke where rent is concerned is that it is generated by evening out the price for the resultants of varying production costs, but that this law of market price is nothing other than the law of bourgeois competition.” Fourth, it pointed out that the failure to recognize the inner contradiction between the use-value and the exchange-value and the failure to discover where the “surplus” came from were the defects of Ricardo’s value theory as a bourgeois economist, and preliminarily elaborated the basic thought of the labor theory of value. Marx pointed out in his notes that “the contradiction between this increase in values, which cancels itself out [sich aufhebt] in its own movement into an increase in products, is the basis of all crises, etc. A contradiction in which bourgeois industry is constantly revolving.” It elaborated the viewpoint that the surplus is created by the working class in labor production. Fifth, in his notes, Marx also made a systematic investigation and study of the condition of the working class, the colonial system, history and economic history, the natural sciences and the history of crafts.

London Notebooks is one of the important documents in the study of Marxist political economy, and it has a very important historical position in the history of the development of Marx’s economic thought. It comprehensively and systematically investigated many important theoretical questions of political economy, which laid an important theoretical foundation for Marx’s later study of political economy, and constitutes the direct preparation for Capital.