Capitalist Crisis, Cooperative Labor, and the Conquest of Political Power: Marx’s ‘Inaugural Address’ (1864) and Its Relevance in the Current Moment

Michael Joseph

In the fall of 1864, Karl Marx was hard at work in London to complete the first volume of Capital when he chose to exit the study and put theory at the service of practice. Marx had done something similar in Brussels almost 20 years earlier. He and Frederick Engels had “settled accounts” with former associates, an assortment of Left Hegelians and proponents of “true socialism,” in a lengthy manuscript that was never to be published in their lifetimes. For Marx, it appeared that the decision to terminate work on The German Ideology would free him to resume his studies in political economy. But not for long! He and Engels had already recognized that an unprecedented economic crisis had struck much of Europe and that it was time to act. So in early 1846 they established the Communist Correspondence Committee, the first proletarian International. From Brussels, Marx had hoped to build in key cities a network of similar committees whose main objective would be the continuous exchange of information on socialist movements in England, France, Germany, and elsewhere in Europe. Although the plan never materialized, Marx’s efforts were seminal to the formation of the Communist League and to the spirit of proletarian internationalism that spread through much of Europe in 1848 – until the democratic revolutions launched by workers against the “old order” were betrayed by their temporary partners, the bourgeois republicans of various stripes. With defeat came the counterrevolution and a decade of stifling reaction, from which emerged a new type of politics characterized by Marx in The Eighteenth Brumaire of Louis Bonaparte (1851) as the first form of modern-capitalist dictatorship, and which Engels ably summed up a few years later when he called Bonapartism “the true religion of the bourgeoisie.”1

All this was central to Marx’s thinking on the evening of September 28, 1864 as he entered St. Martin’s Hall to attend a meeting called by British trade unionists and a contingent of Parisian workers to support the nationalist movement in Poland and Italy. For Marx, whose decision to attend marked a break with his longstanding rule of refusing such invitations, more was at stake than the national questions in Poland and Italy. The unprecedented economic boom of the 1850s turned to bust, as rampant speculation brought a new crisis and, with it, a resurgent workers’ movement in Britain and parts of the Continent. This raised new historic possibilities for the European working classes. “This much is certain,” he had written Engels more than a year earlier: “the era of revolution has now fairly opened up in Europe once more. And the general state of affairs is good.” Yet for all his excitement, Marx cautioned that the next wave of action required revolutionaries to learn from the “comfortable delusions and almost childish enthusiasm” of the politics they had pursued in the years leading up to 1848.2

Indeed the long retreat after 1848 had helped Marx to deal with his own delusions. For one thing, he had learned that social revolution was only possible as an outcome of capitalist crisis, and the next one would require revolutionaries to push aside all romantic notions of the past and organize the majority rather than clinging to the politics of a self-purifying, delusional minority. Marx thought that this moment had come in 1857 when a series of bank failures brought a sharp and dramatic financial crisis. But the crisis quickly passed, driving him deeper into his studies to figure out why. As it turned out, his decision to reengage politically on the night of September 28, 1864 would further delay completion of the first volume of Capital – and prevent subsequent planned volumes from appearing during his lifetime. But everything he had learned since Brussels told him to do just that. Something quite momentous was underway and, given what he had jotted in one of his Brussels notebooks in 1845 (later known to the world as his Theses on Feuerbach), Marx knew well that theory was of little use if not validated by practice. So he could hardly refuse to be present that night, especially considering who had called the meeting. As he later told Engels, “I knew that on this occasion ‘people who really count’ were appearing, both from London and from Paris,” and the meeting “which was chock full” plainly showed that “a revival of the working classes [was] taking place.” Quite simply, Marx had put himself squarely in the midst of an historic occasion since those present “resolved to found a ‘Workingmen’s International Association’, whose General Council would be located in London and whose purpose was to “‘intermediate’ between the workers’ societies in Germany, Italy, France, and England.”3

As we commemorate the 150th anniversary of the founding of the International Workingmen’s Association – the First International – we also reaffirm Marx’s key role in shaping its structure and politics. Engels made this clear enough in 1877, when he wrote that Marx’s activity in the International was synonymous with its history, that he was the “soul” of the organization who drafted nearly every document issued by the General Council from 1864 to 1871.4 Indeed, the large corpus of historiography and political commentary we now have has proven Engels right. But it also makes one wonder, is there anything more to say? To this I respond: Is it not Marx who seems always to remind us that the past must always be revisited from the standpoint of the present? And is it not this very principle that makes Marx’s method central to the historian’s craft, or at least to those who grasp and then embrace it? And if the answer to both is ‘yes’ is it not this kind of history that allows us to arrive at Marx’s understanding of theory, which cannot remain as theory unless put into practice?

From these questions, I call attention to four cardinal points in Marx’s Inaugural Address to the First International in 1864: (1) his grasp of the character of the crisis of the 1860s and the role it played in fueling a resurgent working-class movement of historic proportions, (2) why he considered the principle of cooperative labor to be a transformative process and transitional step toward socialism, (3) why cooperative labor as a primary passage to social emancipation could not be achieved without the conquest of state power by the working class, and (4) how his approach to political organizing in the 1860s demonstrated a keen understanding of what had to be done at that moment in order to advance toward the ultimate objective, communism. I then close with a brief discussion of why all four cardinal points made by Marx in 1864 resonate in the current moment.

Capitalist Crisis: Increasing Misery in a Sea of Plenty

Keenly and adeptly, Marx opens the Address by describing the link between crisis conditions typical of a new phase of capitalist development and the resurgence of the working-class movement. In so doing, he focuses on a cardinal feature of the crisis – increasing misery in a rising sea of plenty – which resulted from the contradictions of industrial production. Marx had detected the origins of this phase and its peculiar conditions in the lead-up to the commercial and trade crisis of 1845-47. Rapid industrialization in the 1820s and 1830s had put a new twist on the meaning of demand which, as Marx had determined in 1846, dictated the further development of machinery as “the necessary consequence of market requirements” and, consequently, the coming of the “first world crisis of capitalism."5 As British employers displaced workers with machines, their counterparts on the Continent and in North America were compelled to do the same, setting into motion “crisis tendencies in capitalist accumulation” as capitalists increasingly looked to transform the forces of production as a means of appropriating surplus value from workers.6 By the late 1830s and early 1840s, these tendencies were evident in other parts of Europe as crisis conditions fully materialized in 1847.

To our knowledge, Marx and Engels were the first to analyze the crisis, in a review they wrote in 1850, describing the boom-bust intervals in the decade leading up to the 1848 revolutions.7 The “uninterrupted depression” of industry in the years 1837-42 was followed by two years of commercial and industrial prosperity (1843-45), which fueled massive speculation. Sub-crises, i.e., the Europe-wide famine in 1846 and rising speculation in cotton and railroads, converged to create the conditions for a general commercial and trade crisis in 1847. The crisis seemingly began in 1845 with the potato blight, devastating Ireland and spreading to the Continent though with far less catastrophic results. A year later, the grain harvest failed in much of Europe, “the worst in a generation.”8 The consequent doubling of food prices was disastrous for two-thirds of the European population still living below or barely above subsistence levels. Relief rolls expanded in many European cities, as food riots and other public disorders were frequent and widespread.9 In England, railroad speculation had driven up share prices, resulting in a speculative “whirlpool” that turned unproductive investments into a “superstructure of fraud.”10 A wave of bankruptcies followed and soon spread to the Continent, causing shareholders to sell at reduced prices. The rising number of bankers and brokers in European cities who went bankrupt served to depress other areas of trade and commerce. Deposits made on railroad loans to the Bank of England, already earmarked for railroad expansion in other countries, found their way instead to overseas markets in sugar, coffee and other colonial products, thus pushing up prices and providing the impetus for even greater speculation. These developments accompanied the downturn in the cotton industry caused by overproduction of English cloth, which then, fueled by speculation in East Indian and Chinese markets, led to an industry-wide recession and huge production and employment cuts in English factories.11 Meanwhile, the steady outflow of gold and silver from the Bank created panic over dwindling bullion in the money market. By May 1847, the first stage of the general crisis hit, and all credit transactions in Great Britain came to a halt. By September, speculation in the corn trade following the repeal of the Corn Laws a year earlier led to still more bankruptcies, which dovetailed with the collapse of East Asian trade caused by the routing of surplus capital into industrial production and the subsequent glut of commodities in those markets – all contributing to the collapse of the entire credit system. For Marx and Engels, the bankruptcies of 1847-48 were “unprecedented in the history of commerce.”12

Such were the makings of a general crisis, the first of its kind in the European capitalist core of the expanding world market system, seemingly caused by speculation in certain commodities but essentially a contradiction arising from over-accumulation that triggered overproduction. The superabundant investment of English capital in railroads at home and abroad led to the creation of many new enterprises and their rampant speculation, making it appear the cause of the crisis. Yet Marx and Engels saw through the appearances and concluded that at root it was a crisis of overproduction.13 But it turned out to be much more: the first general crisis of the capitalist core, or more properly, a crisis rooted in the passage of one hegemonic form of capital to another.14 Industrialization in Europe had coincided with the lateral extension of capital into the non-capitalist world on the basis of the older, hegemonic form of commerce. In both cases, speculation played a major role, but fundamentally this crisis marked an historic watershed in the history of capitalism, the birth of one phase and demise of another. “For the historian,” as Eric Hobsbawm has written, “the great boom of the 1850s marks the foundation of a global industrial economy and a single world history.”15 The trade crisis of 1847, therefore, was the last of its kind. The ensuing wave of industrialization made Europe the undisputed core of the world capitalist market, constituting a pivotal moment in the history of world capitalism.

The key point here is that the general crisis of 1845-47 made possible the paradox of capitalist progress on a qualitatively new scale, increasing poverty and misery is a rising sea of plenty. Marx had experienced this in Brussels; in the winter of 1847-48, as he was writing The Communist Manifesto, almost one-quarter of the entire population received assistance of some kind despite the tremendous growth in textiles.16 He had also addressed the causes of the paradox in The Poverty of Philosophy, his 1847 polemic against Pierre Joseph Proudhon. Proudhon, who also saw the paradox but could not grasp its main cause, had sought to reconcile the irreconcilable, attempting to bridge the contradictions of capitalist production and exchange through acts of free will and bonds of mutual assistance. In his mammoth System of Economical Contradictions, or the Philosophy of Poverty, Proudhon had set all this down in proposing a new political economy that Marx called a “phantasmagoria.” Against Proudhon, Marx argued that the paradox of rising poverty in a sea of plenty required its transcendence, a revolutionary overhaul of existing economic conditions through the conscious activity of working-class theoreticians guided by the knowledge of “profane history” and scientific political economy.17 As Marx wrote in The Poverty of Philosophy, or the Anti-Proudhon as it was commonly known, the transcendent moment or moments would materialize when proletarian theoreticians no longer needed to find science “in their minds” but only to recognize what was occurring before them and “become its mouthpiece. So long as they look for science and merely make systems … they see in poverty nothing but poverty, without seeing its revolutionary, subversive side, which will overthrow the old society. From this moment, science, which is a product of the historical movement, has associated itself consciously with it, has ceased to be doctrinaire and has become revolutionary”18

This was Marx’s mindset when he drafted the Inaugural Address almost 20 years later. Through his ongoing studies and journalism, he had come to understand the paradoxical contradiction of capitalist progress as a primary feature of industrial development, specifically, the tendency of rising poverty as a necessary consequence of capital accumulation. His explanation of this tendency appears in Volume 1, chapter 25 of Capital, “The General Law of Capitalist Accumulation.” Marx’s explanation, which is based on conditions in England between 1846 and 1866, is also a core argument in the Address. For Marx, all that is plausible for the working-class movement depends on the character of the crisis.

“It is a great fact,” he begins, “that the misery of the working masses has not diminished from 1848 to 1864, and yet this period is unrivalled for the development of its industry and the growth of its commerce.”19 It also brought “astonishing” wealth to the capitalists. He cites William Gladstone, the Chancellor of Exchequer, who informed Parliament in April 1864 that the total import and export trade of England had tripled since 1843. A year earlier, Gladstone had boasted to Parliament in a speech entitled “Progress of the Nation” that taxable income had risen 6 percent from 1842 to 1852, then another 20 percent since 1853, a fact “so astonishing [as] to be almost incredible.” From his research on Capital, Marx could have thrown in much more data, with respect not only to the augmentation of income but also to the increasing concentration and centralization of capital.20 Progress, for sure, but for whom? Gladstone freely admitted that “this intoxicating augmentation of wealth and power [was] entirely confined to classes of property.” But that wasn’t enough. Gladstone also deemed it necessary to trumpet capitalist prosperity for the richest of the capitalists as evidence that the war on poverty could be won since, as he claimed, nine out of ten workers whose wages remained unchanged and whose lives were all about the “struggle for existence” still “lived on the border of that region.”21 In other words, the exploited masses needed to hold on because prosperity might still come their way.

Skillfully, Marx exposed Gladstone’s view of progress in England with evidence – also found in Capital – from property and income tax returns and public health reports. Gladstone had declared that the average condition of the British laborer had improved to an “extraordinary degree” and was unrivalled “in the history of any country or any age.” Marx countered with statistics from income and property tax returns in 1864 showing that about 3,000 of the wealthiest in the nation reaped more income than “the whole mass of agricultural laborers in England and Wales.” From parliamentary reports, Marx also cited examples of deprivation and misery among various categories of workers, their children, and even prisoners. He then concluded that workers in England and on the Continent all shared one thing in common. We cite Marx’s passage in full because it is a pivotal point of the Address:

Everywhere, the great mass of the working classes were sinking down to a lower depth, at the same rate, at least, that those above them were rising in the social scale. In all countries of Europe it has now become a truth demonstrable to every unprejudiced mind, and only denied by those whose purpose it is to hedge people in a fool’s paradise, that no improvement of machinery, no appliance of science to production, no contrivances of communication, no new colonies, no emigration, no opening of markets, no free trade, nor all these things put together, will do away with the miseries of the industrious masses; but that on the present false base, every fresh development of the productive powers of labour must tend to deepen social contrast and point to social antagonisms. Death of starvation rose almost to the rank of an institution, during this intoxicating epoch of economical progress, in the metropolis of the British Empire. That epoch is marked in the annals of the world by the quickened return, the widening compass, and the deadlier effects of the social pest called a commercial and industrial crisis.22

To write this passage, Marx had drawn from his journalistic writings and his research for Capital. Two years before the International was formed, he had clearly recognized that capitalists always had the upper hand, whether in boom or bust times. As he wrote in Capital, the aim of every capitalist

is the valorization of his capital, the production of commodities which contain more labour than he paid for, and therefore contain a portion of value which costs him nothing and is nevertheless realized [realisiert] through the sale of those commodities. The production of surplus-value, or the making of profits, is the absolute law of this mode of production. Labour-power can be sold only to the extent that it preserves and maintains the means of production as capital, reproduces its own value as capital, and provides a source of additional capital in the shape of unpaid labour.23

These same processes sharpened during a crisis of overproduction, which brought greater poverty and misery to an ever-growing labor force. Marx had made this point in an article in Die Presse in February 1862, when he wrote about the impact of the cotton crisis on Lancashire, the largest industrial district of Great Britain and the center of cotton manufacturing. Marx reported that the main cause of the crisis was not the impact of the American Civil War on the cotton trade but the problem of overproduction in English mills. He quoted one of the biggest cotton barons, who admitted that “since 1858 an unprecedented glutting of the Asian markets had taken place and that in consequence of steadily continuing overproduction on a mass scale the present crisis was bound to occur,” even without the war, tariffs and the North’s blockade of the South.24 And what impact did this crisis of overproduction have on workers? It led to the Lancashire Cotton Famine of 1861-65. In December 1862, at the height of the famine, 49 percent of all mill operatives in the cotton districts in Lancashire were unemployed; another 35 percent were on short-time, leaving only 16 percent employed full time. But just as Gladstone and others saw possibilities for workers on the threshold of newfound wealth, “some disingenuous observers” like the social reformer Edwin Chadwick saw in all the poverty and suffering the possibility of improvements in public health. It was not a case of starvation when a man was deprived of beer, gin, or even tea … but the case of men having bread, simple food with better air, as against a high or ordinary diet with impure air.”25

In the end, the underlying theoretical principles for Marx’s explanation of capitalist progress in the Inaugural Address also appear in Volume 1 of Capital. Together, they demonstrate that Marx continued, as earlier in Brussels, to put theory at the service of practice. The difference now was his deeper understanding of the complex processes of capitalist production and exchange. From sections of Chapter 25 one cannot doubt how thoroughly Marx had come to understand the dialectics of capital accumulation and poverty. “The greater the social wealth, the functioning capital, the extent and energy of its growth,” Marx wrote, “and therefore also the greater the absolute mass of the proletariat and the productivity of its labour, the greater is the industrial reserve army.” Marx then added:

The same causes which develop the expansive power of capital, also develop the labour-power at its disposal. The relative mass of the industrial army thus increases with the potential energy of wealth. But the greater this reserve army in proportion to the active labour-army, the greater is the mass of a consolidated surplus population, whose misery is in reverse ratio to the amount of torture it has to undergo in the form of labour. The more extensive, finally, the pauperized sections of the working class and the industrial reserve army, the greater is official pauperism. This is the absolute general law of capitalist accumulation.26

For Marx, the law governing capitalist accumulation was the same law that governed the extraction of unpaid labor, surplus-value from the worker:

Within the capitalist system all methods for raising the social productivity of labour are put into effect at the cost of the individual worker; that all means for the development of production undergo a dialectical inversion so that they become means of domination and exploitation of the producers; they distort the worker into a fragment of a man, they degrade him to the level of an appendage of a machine. … They transform his life-time into working-time, and drag his wife and child beneath the wheels of the juggernaut of capital. But all methods for the production of surplus-value are at the same time methods of accumulation, and every extension of accumulation becomes, conversely, a means for the development of those methods. It follows therefore that in proportion as capital accumulates, the situation of the worker, be his payment high or low, must grow worse…. Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, the torment of labour, slavery, ignorance, brutalization and moral degradation at the opposite pole, i.e. on the side of the class that produces its own product in the form of capital.27

Such was the theory that Marx began turning into a material force when the International agreed to accept his draft of the Inaugural Address. By theorizing the paradox of capitalist progress, Marx had himself become what he had described in the Anti-Proudhon years earlier, a theoretician who had found science not in his mind but before his very eyes and had then become its mouthpiece. Against those like Proudhon, who saw in poverty nothing but poverty, Marx’s intent in the Inaugural Address was an extension of what he wrote in 1847, to see in poverty “the revolutionary, subversive side, which will overthrow the old society.” No wonder that later in life, Marx would refer to the Anti-Proudhon as the embryo of Capital. In the Inaugural Address we see some of this offspring.

Cooperative labor as a lever of socialist transition

From his discussion of the crisis, Marx briefly described the political setbacks European workers had experienced in the post-1848 political climate. “The short-lived dreams of emancipation,” he wrote, “vanished before an epoch of industrial fever, moral marasme and political reaction.” Working-class party organizations and journals on the Continent were “crushed by the iron hand of force” and many of its political leaders had fled to England. British workers, too, had lost much political ground. Some gave it up willingly to join the “immense exodus” to California and Australia in search of gold, while those who remained found themselves in the tightening grip of capital. Class-conscious workers once in the forefront of political radicalism were bribed by more work and higher wages; in the eyes of fellow workers, they had become “political blacks.” Meanwhile, all efforts to revitalize the Chartist movement came to naught, and the many once-vital working-class publications went down from mass apathy. Marx summed it all up cleverly: “No solidarity of action between the British and the continental working classes” had become “a solidarity of defeat.”28

Still, he found two great victories achieved by the conscious political activity of workers during the previous two decades. First was the passage of the Ten Hours Bill, which had limited the working day for women and children in British factories – whenever the law was enforced. Moreover, the bill’s passage had signaled a widening divide between the landed aristocracy and industrial bourgeoisie; Tories in support of landed, aristocratic interests voted for the bill against the commercial bourgeoisie, which had infuriated the aristocracy by repealing the Corn Laws nearly two years earlier. Then, too, the legislation discredited middle-class reformers who, in defense of capitalism, had argued that legal restrictions on the length of the working day would be ruinous to British industry and, therefore, calamitous for workers. It was the defeat of the reformers, Marx said, that showed how British workers had triumphed “over the blind rule of supply and demand which forms the political economy of the middle class.” Even more significant than the bill’s practical success, “the victory of a principle” meant that for “the first time in broad daylight the political economy of the middle class succumbed to the political economy of the working class.”29

But Marx saw an even greater triumph of the political economy of labor in the cooperative movement, especially the cooperative factories established, organized and run solely by workers. Here, “the unassisted efforts of a few bold ‘hands’” demonstrated what workers could accomplish on their own “by deed instead of by argument”; in other words, workers reaping success from their practical efforts without direction or meddling from bourgeois intellectuals. Cooperatives were the “great social experiments” of the day whose importance to the working class movement could not be overstated because they demonstrated to the world how large-scale production

in accord with the behests of modern science, may be carried out without the existence of a class of masters employing a class of hands; that to bear fruit, the means of labour need not be monopolized as a means of dominion over, and of extortion against, the laboring man himself; and that like slave labour, like serf labour, hired labour is but a transitory and inferior form, destined to disappear before associated labor, plying its toil with a willing hand, a ready mind, and a joyous heart.30

Marx leaves no doubt that workers engaged in cooperative production were true pathfinders in the struggle against capitalism.31 Compare his strong support for this segment of the working class to his glaring omission of the many accomplishments of British trade unions since the 1840s. Since “the real worker-kings of London” had invited him to the meeting, the omission is jarring.32 But it demonstrates that Marx was already wary of the reformist tendency of British trade unionism and was likely pondering the harder line he would take against it a year later when he criticized trade unions that fail the working class by “limiting themselves to a guerrilla war against the effects of the existing system, instead of simultaneously trying to change it, instead of using their organized forces as a lever for the final emancipation of the working class, that is to say, the ultimate abolition of the wages system.”33 On the other hand, Marx’s championing of the cooperative movement is the only section of the Address where he explicitly points to socialist transition.34 Insisting that all forms of labor, including the hired labor of cooperatives, are “transitory and inferior,” he demonstrated his historical-materialist grasp of the long trajectory that made the coming of a superior form, the labor of associated producers, plausible.

At the same time, the historical realities since 1848 also revealed equally concrete forces that stood in the way of this trajectory, all to prove that “however excellent in principle, and however useful in practice, cooperative labour, if kept within the narrow circle of the casual efforts of private workmen, will never be able to arrest the growth in geometrical progression of monopoly, to free the masses, nor even to perceptibly lighten the burden of their miseries.” On this point Marx could not be clearer about the solution:

To save the industrious masses, cooperative labour ought to be developed to national dimensions, and consequently, to be fostered by national means. Yet the lords of land and the lords of capital will always use their political privileges for the defence and perpetuation of their economical monopolies. So far from promoting, they will continue to lay every possible impediment in the way of the emancipation of labour.35

Undoubtedly, the development of cooperative labor on a national scale and by “national means” required political struggle at all levels of society that ultimately aimed at the taking of state power. But on this point the issue of cooperative labor became a source of deep and lasting conflict in the International. The Marx “party” – not an organization but “a party in the broadest historical sense” as Marx described it – stressed the absolute necessity of political struggle in the long march to a revolutionary society based on free, associated labor.36 In opposition, the Proudhonists insisted that the social emancipation of labor could – and should – be achieved without it. Consequently, the growing divide between the Marxists and the Proudhonists during the first four years of the International only represented the deepening of the political chasm created by its two principals, Marx and Proudhon, during the crisis years of the mid-1840s.

Proudhon had proposed a new political economy based on the principle of reciprocity; i.e., equal exchange of goods based on values “constituting” equal amounts of labor put into their making, and all done by voluntary agreement. For Proudhon, value so constituted was easily achievable if made integral to the practices of cooperatives and mutual aid societies that had been operating in France and elsewhere on the Continent since the 1830s. Why abolish the existing system, Proudhon asked, when all that was “good” in commodity exchange could be preserved simply by eliminating all the “bad”? The struggle to attain this, Proudhon insisted, was purely economic and in no way political. Accordingly, he rejected any call for workers to engage in political activity aimed at the restructuring of society – in short, a revolution.37

As is well known, Marx had sought Proudhon as a key ally in building the European workers’ movement – until Proudhon’s book appeared. In 1846, Marx called on Proudhon to take the lead in establishing a correspondence committee in Paris just like the one he and his associates had set up in Brussels. His invitation to Proudhon stressed the importance of breaking down national barriers to prepare for concerted European working-class action, a prescient internationalism that Marx sought to develop fully later on in the International. But Proudhon said no, wanting no part in the creation of any new authority, opposing participation in unions, strikes, and any revolutionary “jolt ... as the means of social reform.”38 Revolution was nowhere on Proudhon’s table. For Marx, the final break came with the appearance of Proudhon’s book. Proudhon’s “phantasmagoria” of political economy would do great harm to the working-class movement if not ruthlessly criticized. And so Marx quickly wrote the Anti-Proudhon.39

All of this was replayed two decades later but at a much deeper level and with considerably more at stake. In the International, Proudhonists pushed for societal transformation strictly on their terms, which meant promoting cooperative enterprise in the main and solely on the basis of self-help, mutual assistance and gratuitous credit. The Marx party saw matters differently: the cooperative movement was one of many key parts in the broad struggle to build a new society. Marx made this clear in Section 5 (“Co-operative labour”) of the “Instructions” he wrote for the delegates to the first congress of the International in Geneva in September 1866. The “business of the International,” Marx wrote, was “to combine and generalize the spontaneous movements of the working classes, but not to dictate or impose any doctrinary system whatever.” Instead, support was limited to “a few general principles” that nonetheless made cooperatives central to the International’s broader and long-term political objectives. The great value of the cooperative movement as a transformative force was to demonstrate how the working class could build “a republican and beneficent system of the association of free and equal producers.” The Instructions also affirmed Marx’s position in the Inaugural Address that cooperatives alone could never achieve this end. They were but one of many “changes of the general conditions of society” only to be realized by “the transfer of the organized forces of society, viz. the state power, from capitalists and landlords to the producers themselves.” Moreover, the Instructions also signaled Marx’s view that the real transformative power of cooperative enterprise lay in the production of goods rather than in their distribution (via cooperative stores).40

The Proudhonists battled this position at Geneva and lost, but the struggles over the character of cooperative labor were far from over. Indeed, the arguments grew more intense at the next two congresses. When discussion about collective ownership first emerged at the second congress at Lausanne in 1867, the Proudhonists called for the transfer of all large-scale industry to small-scale cooperative societies. The Marxists countered that the tasks involved would prove to be unmanageable for small-scale, local cooperatives and argued for the necessity of state control and management. Horrified at the prospects of even greater augmentation of state power, the Proudhonists quickly retreated to a vacuous position by merely calling for their transfer to “social ownership” and without stipulating its forms. The Marxists had no objection to such emptiness and were willing to let it pass. Though the whole matter was tabled for the next congress, the discussions sharpened the Marx-Proudhon divide on collective ownership and the role of the state. The last gasp of the Proudhonists came at the third congress in Brussels in 1868, when they sought a resolution calling for people’s banks to provide gratuitous credit in order to free labor from the dominion of capital and thereby restore capital to “its natural and legitimate function, that of being the agent of labour.” For the Marx party, the resolution smacked of Proudhon’s phantasmagoria of an historic reversion to preindustrial, petty-capitalist society. Despite the fact that the resolution was tabled, the Proudhonists thought they had achieved a great victory. But it proved to be their last. By the time of the fourth congress at Basel, Proudhonism had been swept away by the pace of capitalist development, as the sharpening of class antagonisms had made its doctrines ridiculously anachronistic, a vestige of earlier times. The Marxist position on cooperatives and the principle of cooperative labor in the context of the broader struggle against capital had prevailed – only to face a new threat from Bakunin and his followers.41

The Necessity of Political Power in the March to Associated Labor

Marx closes the Address with a call to action: “To conquer political power has therefore become the great duty of the working classes.” No matter what the gains of workers through strikes and protests or the spread of cooperative enterprise, none were alone sufficient for a revolutionary transformation of society and the end to capitalism. Victory depended mainly on the workers being “united by combination and led by knowledge.”42 For Marx, only a scientific and collective grasp of material conditions made possible the concerted, conscious political action required for the proletariat’s line of march to communism. Here again, we find the embryo of Marx’s thinking on these matters in the practical and theoretical work he forged in Brussels nearly twenty years earlier. In the Anti-Proudhon he had argued that working-class theoreticians who had found science before their very eyes could then articulate that knowledge to build the working-class movement. “Of all the instruments of production,” Marx wrote, the greatest productive power is the revolutionary class itself.”43 A year later, he and Engels had themselves become its leading advocates. Relying on their theoretical grasp of the general crisis of the 1840s in the Manifesto of the Communist Party, they called on the working class to take “the first step in the revolution” to win “the battle of democracy” and then “use its political supremacy to wrest, by degrees, all capital from the bourgeoisie, to centralize all production in the hands of the State, i.e. of the proletariat organized as the ruling class, and to increase the total of productive forces as rapidly as possible.”44 Two decades later all this came to bear on Marx as he sat down to write the Inaugural Address, which he crafted as a review of the working class since the 1840s. A new crisis was underway and the moment had arrived to renew revolutionary struggle. The delusions of the past must give way to new thinking and practice but with the same goal – the conquest of state power by the working class as an independent political force.

As political struggle within and beyond the International intensified in the late 1860s and early 1870s, Marx remained steadfast in his conviction that social emancipation could only proceed from that political struggle. Whatever the particular forms of political struggle dictated by national and or regional conditions, this objective remained its central task and prime duty. The economic struggles, whether to achieve cooperative enterprise or to build trade unions, would not of themselves lead to a new society based on associated labor. The ultimate challenge lay in building movements in various capitalist nations whose objective would be to conquer state power in order to democratize the political system and then to engage in the processes aimed at the emancipation of labor. The task of creating a revolutionary society built on the principles and practices of associated labor could only proceed once state power was achieved. The political revolution once made had to vanquish all vestiges of the counterrevolution in order to advance the social revolution. And it could only be successful if done internationally.

This much was certain even in the fifth and final congress held in The Hague in 1872, the only one Marx attended. Within less than a year after the International was established, the Marx party had waged constant internal struggles against two main camps, a politically indifferent and often truculent Proudhonism, and the reformism of the British trade unions. By then history had swept away the abstract fantasies of Proudhonism, while the British labor movement sought greater accommodation and acquiescence to capital. As delegates convened in The Hague, the European working classes faced the growing power of monopoly capital and political reaction. The Paris Commune had been crushed the previous year, and European capitalism would soon generate a new and unprecedented round of imperial expansion that would bring the carving up of Africa, the race for new markets in the East, and, eventually, a global conflagration. Meanwhile, the likelihood of a Bakuninist majority at the next congress and the increasing factionalism in the various European sections suggested that the International had done its part in facilitating the growth of proletarian consciousness, though it now seemed clear that new vehicles were necessary for further development. For these reasons, the Marx party boldly engineered a vote to move the General Council to New York, thereby signaling its view that further development of the working-class movement in Europe required a new vehicle or vehicles.

Nevertheless, Marx was relentless in reminding the International that the primary duty of the working class was still, in the end, the conquest of political power. The Commune’s crushing defeat had dramatized that imperative. For this reason, the Marx party proposed a resolution at the congress that was adopted by a wide margin and inserted into the Rules under Article 7a. It read:

In its struggle against the collective power of the propertied classes, the working class cannot act as a class except by constituting itself into a political party, distinct from, and opposed to, all old parties formed by the propertied classes.

This constitution of the working class into a political party is indispensable in order to ensure the triumph of the social revolution, and of its ultimate end, the abolition of classes.

The combination of forces which the working class has already effected by its economic struggles ought, at the same time, to serve as the lever for its struggles against the political power of the landlords and capitalists.

The lords of land and capital will always use their political privileges for the defence and perpetuation of their economic monopolies, and for the enslavement of labour. The conquest of political power has therefore become the great duty of the working class.45

Ironically, perhaps, this call to the working class which Marx made central to the cause of the International would ultimately transform his and Engels’ meaning of the party, if not the role of communists in it. Almost from the beginning of their collaboration, both had viewed “their” party as likeminded individuals with consensus on the character of revolutionary struggle at any moment and on the seminal analysis which defined that struggle. As August Nimitz reminds us, the “Marx-Engels team” logged more time in the International than any other political group. But outside of the General Council, where they anticipated what Nimtz calls “Leninist organizational norms” for discipline within a centralized but democratic body, the team rejected any idea of an organizational model that might risk putting the International at the service of an existing bourgeois political party.

Nevertheless, Marx came to see the International as a transformative phase of party building. In 1873, a year after the decision at the Hague congress to transfer the General Council to New York, Marx advised its secretary, Friedrich Sorge, to allow the “formal organization” of the International to “recede into the background for the time being,” since the struggle to win political power had now passed “to the most capable in the various countries.” Party-building would now occur within the “various countries.”46 At the same time, Marx and Engels retained their longstanding position that communists “do not form their own political party opposed to other working class parties … have no interests separate and apart from the proletariat as a whole … [and] do not set up sectarian principles of their own, by which to shape and mould the proletarian movement.”47

 “Strong in Deed, Mild in Manner

Marx’s astute use of content and analysis in his crafting of the Inaugural Address often overshadows the political sensitivity he brought to its delivery. To his understanding of theory and practice we must also add his grasp of the moment and the method and style it required. As a member of the committee charged with drafting a declaration of principles and provisional rules, Marx was asked to complete the task after all efforts by committee had failed. Quickly discarding a confusing jumble of ideas and sentiments offered by other committee members, Marx drafted what he described to Engels as “a sort of review of the working class since 1845,” along with a list of 10 provisional rules. For Marx, the main purpose of the address was to unite politicized workers of varying viewpoints – “the people who really counted” – on the basis of content that all would find more or less acceptable. This, he told Engels, was difficult to do since the reawakening of the workers was still in its earlier stages and direct, plain-speaking calls for revolution that characterized the old boldness, were premature. So, he wrote Engels, “we must be strong in content, soft in form.”48

Marx showed tremendous skill in employing language to unite distinct factions of workers, though there could be no mistaking the bold communist principles beneath the moderate language that called for a revolution aimed at the transition to socialism. Long ago, one of the first historians of the International to write from a communist viewpoint observed that Marx’s scientific training and his political experiences empowered him to explain the historical course of the proletarian struggle to those around him. From the various currents of workers’ movements since the 1840s, Marx saw the essence and historical trajectory of the class itself by grasping its fundamental causes and hence its laws of development. On this basis, Marx then directed all his knowledge toward helping workers think of themselves as a class for itself. To that end, Marx the great thinker became also a respected and likeable person. When we read about Marx’s work in the International, we begin to feel the vibe that Marx had generated to secure genuine acceptance among those he believed “really counted” but were not like him. Marx’s sensitivity to language in the Inaugural Address reflected his sensitivity to the cause and the enormous responsibilities it required to be human. While he recognized how important it was theoretically to be one step ahead of the masses, he realized politically that it could be “no more than one step.”49

The Inaugural Address from Our Vantage Point

From our studies and practical work, many of us understand that the current crisis points to a global capitalist system beyond repair. Indeed, the human toll in the core and periphery, as well as on nature itself, is unprecedented. Nor has so-called progress under capitalism ever been more paradoxical. Consider that a million people living on the streets in Mumbai routinely go to work every day in the informal sector, while India’s richest man – some media accounts say the world’s fourth richest – enjoys unfathomable pleasures with his wife and three children in their 27-story house, replete with a ballroom, lounges, and ceilings on the top floors high enough to accommodate a small forest of trees. As capitalism draws to an historic close, so do its extremes. But how difficult it is to grasp them in today’s spectacle of capitalist prosperity! Gladstone’s promises of “intoxicating” wealth to the workers of 19th-century England pale in comparison to the corporate propaganda mills of today, which call on us to consume ever more, though each act of consumption often means submission to more debt and the moral degradation now inseparable from the coming ecological catastrophe – all resulting from the incessant drive for capital accumulation.

Yet for all its dysfunctional features and dystopian elements, this crisis points to the plausibility of another world beyond capitalism. Transitional and transformative forces are at work that connect our moment of transition to the one that Marx and the founders of the First International considered theirs.

First, there is the long tradition of working-class internationalism itself. At the end of the Inaugural Address, Marx calls attention to the unbounded potential of “fraternal concurrence” that arose from the historic struggles against capital and the old order. None were more central than the “heroic resistance” of English workers who kept their leaders from “plunging headlong into an infamous crusade for the perpetuation and propagation of slavery on the other side of the Atlantic.” Here, for Marx, was the archetype of “criminal designs” by European rulers whose lust for profit required the survival of pre-capitalist barbarisms. And just as that same, most advanced of all European nations sought to keep alive the Confederacy and its barbarous and anachronistic mode of production, so too did it give credence to czarist Russia, that most backward and reactionary giant and Poland’s assassin. In the name of the International, Marx called on the working classes of Europe and North America to forge their respective paths to political power, and to simultaneously “vindicate the simple laws of morals and justice” through a growing spirit of internationalism.50

I will not venture here on the necessary scope of a New International and the monumental efforts it will take to create one. But in the past quarter-century, we have seen moments of “fraternal concurrence” that have given rise to optimism and a coherent vision of the future. The anti-globalization protests of the late 1990s and early 2000s galvanized popular support against corporate power and its massive malfeasance toward hundreds of millions of people in the peripheries of the world capitalist system. The protests in Seattle and elsewhere sparked the formation of counter-hegemonic forces against neoliberalism and imperialism, manifest in the meetings of the World Social Forum. Then came the Occupy movement, which exploded in New York in the September of 2011, and quickly spread across the United States and beyond, its participants propelled by a desire “to vindicate the simple laws of morals and justice” against the power of the 1% whose prosperity has meant growing deprivation among the remaining ninety-nine. More recently, the courageous stand by Walmart employees and fast-food workers has given the rest of us some insight into the desperate lives of the working poor. Though far from socialist, all these efforts are byproducts of a nascent global movement that owes much to the legacy of the First International.

I have sought to explain why Marx’s grasp of his historical moment should resonate in ours. The cardinal points in the Address – crisis, cooperative labor, and the conquest of political power by the workers themselves – are all relevant to the current moment, albeit in more complex forms and in infinitely more dangerous times.

The global capitalist crisis of the 1860s marked the beginning of the end of capitalism. This explains on the one hand why the International emerged and, on the other, why it failed. As István Mészáros has recently suggested,51 the worldwide rise of imperialism against the forces of international labor brought the latter’s defeat, of which the demise of the International was symptomatic. During this last stage of capitalism – in which the reproduction of capital itself increasingly depends on financialization and ecological degradation – the gap between wealth and poverty advances dialectically with a titanic effort to conceal it; hence the paradox of appearance and essence on an unprecedented scale. For Gladstone, national progress flowed from the profits of the propertied classes, which held the claim that the vast majority of workers “on the borders” would one day reap its benefits as they actually fell into greater poverty. We find the same realities and baseless claims in the United States today. Recovery from the 2008 financial collapse, which concealed the deeper and longstanding crisis in the so-called productive economy, has been steady and increasingly profitable – but mainly for the owners and high-level managers of capital. But that’s the extent of it. For workers, official unemployment is dropping, but that masks the more significant statistics of underemployment and depressed wages. Even in the manufacturing sectors where some job growth has occurred, corporate profits are soaring while wages are sometimes no more than half of what they were in past times. One could say that more Americans are back at work though they are squeezed of surplus value in absolute terms. Meanwhile, the message they get from corporate media gurus about better times ahead echoes Gladstone’s.

Secondly, the magnitude of the current crisis is fueling the US cooperative movement, sometimes with the aid of Occupy groups. The best known case is in Chicago where occupiers supported workers at Republic Windows and Doors who took over the plant in January 2012 after owners illegally shut it down for the second time in four years. Occupiers raised a groundswell of community support that gave Republic’s workers time to develop a proposal for cooperative ownership. Their plan called for the creation of the New Era Windows Cooperative as the first large industrial cooperative in the US. The value of their efforts, typical of many others, is that they are involving individuals whose ideological dispositions vary quite significantly but who in working together create “the potentiality of class consciousness based on learned experiences in the process of production” as well as playing a role in the wider anti-capitalist struggle.52

Why not? The cooperative movement has deep roots in the US and also an historic connection with the First International. For example, the International took its position on the legal limit of an 8-hour working day from a declaration of the National Labor Union at its 1866 convention in Baltimore, a hallmark in the history of trade unionism.53 Nevertheless, the NLU put cooperation on an even higher plane, and the subsequent development of the cooperative movement in the parts of the United States during the late 1860s and 1870s was substantial, though decidedly Proudhonist and anarchist rather than socialist.54 Cooperatives also developed along regional lines. In the South, African Americans forged local consumer cooperatives that demonstrated community control and democratic decision-making within the wider framework of self-help. Their leading theoretician, W.E.B. Du Bois, called for “a cooperative Negro industrial system in America” as part of a broader vision and belief that what lay in the future was “the ultimate triumph of some form of Socialism the world over; that is, common ownership and control of the means of production and equality of income.”55

Nevertheless, as Marx reminds us, we cannot afford to restrict these efforts to narrow circles of workers developing cooperatives in their respective cities. Nor should we regard cooperatives operating within existing capitalist relations of production and exchange as anything more than transitional forms and measures. If this is indeed a structural crisis of world capitalism, then our moment of transition compels us to build a national force that is at once a movement and a political party. More than ever, our duty is the conquest of political power to facilitate the democratic-socialist revolution – or face our common ruin.


1. Engels to Marx, April 13, 1866, Karl Marx-Frederick Engels Collected Works (hereafter cited as MECW), vol. 42 (New York: International Publishers, 1987), 266.

2. Marx to Engels, February 13, 1863, MECW, vol. 41 (Moscow: Progress Publishers, 1985), 453.

3. Marx to Engels, November 4, 1864, MECW, vol. 42, 16.

4. Frederick Engels, “Karl Marx,” MECW, vol. 24 (New York: International, 1989), 190. Engels wrote the article in 1877 for the Volks-Kalendar, a publication of the Social-Democratic Workers Party.

5. Marx to Pavel Vasilyvich Annenkov, December 28, 1846, MECW, vol. 38 (Moscow: Progress, 1982), 99.

6. Simon Clarke, Marx’s Theory of Crisis (New York: St. Martin’s Press, 1994), 86.

7. Marx and Engels, “Review,” MECW, vol. 10 (Moscow: Progress, 1978), 490-95. This was the third review by Marx and Engels for the Neue Rheinische Zeitung: Politcisch-ökonimische Revue.

8. Jonathan Sperber, Revolutionary Europe, 1780-1850 (London & New York: Longman, 2000), 392.

9. Robert Justin Goldstein, Political Repression in 19th-Century Europe (London & Canberra: Croom Helm, 1983), 180.

10. Marx and Engels, “Review,” 491.

11. Ibid., 493-94.

12. Ibid., 495.

13. Ernest Mandel, The Formation of the Economic Thought of Karl Marx (New York & London: Monthly Review Press, 1971), 71-72.

14. Michael Joseph Roberto, “Crisis, Revolution, and the Meaning of Progress: The Poverty of Philosophy and Its Contemporary Relevance,” Cultural Logic: Marxist Theory and Practice, 2009,

15. Eric Hobsbawm, The Age of Capital, 1848-1875 (New York: Vintage Books, 1975), 69.

16. Edward De Maesschalck, Marx in Brussel, 1845-1848 (Leuven: Davidfonds, 2005), 31. I am grateful to Liesebeth Deporter for translating key passages from the Dutch edition of De Maesschalck’s very informative account of Marx’s experience in Brussels.

17. Marx to Annenkov, 97.

18. Marx, The Poverty of Philosophy: Answer to the Philosophy of Poverty by M. Proudhon, MECW, vol. 6 (Moscow: Progress Publishers, 1976), 177-78.

19. Marx, “Inaugural Address of the Working Men’s International Association,” MECW, vol. 20 (Moscow: Progress Publishers, 1985), 5.

20. Marx, Capital: A Critique of Political Economy, Vol. I, trans. Ben Fowkes (London: Penguin, 1990), 802-18.

21. Marx, “Inaugural Address,” 7.

22. Ibid., 9-10.

23. Marx, Capital, I, 769.

24. Marx, “On the Cotton Crisis,” MECW, vol. 19 (Moscow, Progress Publishers, 1984), 161.

25. John Belcham, Industrialization and the Working Class: The English Experience, 1750-1900 (Portland, Oregon: Areopagitica Press, 1990), 157-58.

26. Marx, Capital, I, 798.

27. Ibid., 799. 28. Marx, “Inaugural Address,” 10.

29. Ibid., 11.

30. Ibid. See also MECW, 42, 54-55, note on Rochdale Pioneers.

31. Marx credits Robert Owen with sowing “the seeds of the cooperative movement” in England. He was also aware of the Rochdale Society of Equitable Pioneers, one of the earliest and most successful of England’s cooperatives, was formed in 1844 in Manchester by weavers from a cotton thread factory. As we shall see, Marx eventually pushed the International to recognize the superiority of producer over consumer cooperatives. But the inclusiveness of the Rochdale cooperative, whose members were communists, chartists, trade union leaders, and others, demonstrated what Marx meant by workers joining together to avoid “the class of masters” over them. For more details on the particulars of the Rochdale Pioneers, see the old but still valuable study by Sydney R. Elliot, The English Cooperatives (New Haven: Yale University Press, 1937), and the brief but recent discussion of the cooperative by Jesús Cruz Reyes and Camilia Piñeiro Harnecker, “An Introduction to Cooperatives,” in Cooperatives and Socialism: A View from Cuba (New York: Palgrave Macmillan, 2013), 31-33.

32. Marx to Joseph Weydemeyer, November 29, 1864, MECW, 42, 44.

33. Marx, “Value, Price and Profit,” MECW, 20, 149.

34. Henry Collins and Chimen Abramsky, Karl Marx and the British Labour Movement: Years of the First International (London: Macmillan, 1965), 50.

35. Marx, “Inaugural Address,” 11-12.

36. Marx to Ferdinand Freiligrath, February 29, 1860, MECW, 41, 87.

37. Charles Sabel and Jonathan Zeitlin, “Historical Alternatives to Mass Production: Politics and Technology in Nineteenth-Century Industrialization,” Past and Present, 108 (August, 1985), 143; Steven K. Vincent, Pierre-Joseph Proudhon and the Rise of French Republican Socialism (New York: Oxford University Press, 1984), 160-61.

38. Robert L. Hoffman, Revolutionary Justice: The Social and Political Theory of P.-J. Proudhon (Urbana, Chicago & London: University of Illinois Press, 1972), 343-44.

39. Marx to Annenkov, 97.

40. Marx, “Instructions for the Delegates of the Provisional General Council. The Different Questions,” MECW, vol. 20, 190; see also The General Council of the First International 1864-1866: The London Conference, Minutes (Moscow: Foreign Languages Publishing House), 346-47. Since Marx was ever mindful of the necessity for cooperative production to expand on a national level, the Instructions also recommended that the income generated by each cooperative be put into a fund for the propagation of new enterprises. See the entire document in the documents section of this issue.

41. Julius Braunthal, History of the International, Volume 1: 1864-1914, trans. Henry Collins and Kenneth Mitchell (New York & Washington: Frederick A. Praeger, 1967), 128-31; G.M. Stekloff, History of the First International (New York: International Publishers, 1928), 99-132.

42. Marx, “Inaugural Address,” 12.

43. Marx, The Poverty of Philosophy, 211.

44. Marx and Engels, Manifesto of the Communist Party, MECW, vol. 6, 504.

45. Marx and Engels, “Resolutions of the General Congress Held at The Hague,” MECW, vol. 23 (New York: International Publishers, 1988), 243.

46. August Nimtz, Jr., Marx and Engels: Their Contribution to the Democratic Breakthrough (Albany: State University of New York Press, 2000), 234-35.

47. Marx and Engels, Manifesto of the Communist Party, 497.

48. Marx to Engels, MECE, vol. 42, 18.

49. Stekloff, History of the First International, 77.

50. Marx, “Inaugural Address,” 13.

51. István Mészáros, “Reflections on the New International,” Monthly Review, vol. 65, no. 9 (February, 2014), 47.

52. Peter Ranis, “Worker Cooperatives: Creating Participatory Socialism in Capitalism and State Socialism,” Democracy at Work, October 1, 2012,

53. Marx, “Instructions for the Delegates of the Provisional General Council,” 187.

54. Samuel Bernstein, The First International in America (New York: Augustus M. Kelley, 1965), 24, 93-98.

55. W.E.B. Du Bois, Dusk of Dawn: An Essay Toward an Autobiography of a Race Concept, in Du Bois: Writings, ed. Nathan Huggins (New York: Library of America, 1986), 788-89.