Inverted chimney sweep urban dictionary

Karl Marx

CAPITAL

A Critique of Political Economy

Volume One

Introduced by Ernest Mandel

Translated by Ben Fowkes

Penguin Books in association with New Left Review

Contents

Introduction by Ernest Mandel

Translator’s Preface

Preface to the First Edition

Postface to the Second Edition

Preface to the French Edition

Postface to the French Edition

Preface to the Third Edition (by Engels)

Preface to the English Edition (by Engels)

Preface to the Fourth Edition (by Engels)

Book I: The Process of Production of Capital

Part One: Commodities and Money

Chapter 1: The Commodity

1. The Two Factors of the Commodity: Use-Value and Value (Substance of Value, Magnitude of Value)

2. The Dual Character of the Labour Embodied in Commodities

3. The Value-Form, or Exchange-Value

(a) The Simple, Isolated, or Accidental Form of Value

(1) The two poles of the expression of value: the relative form of value and the equivalent form

(2) The relative form of value

(i) The content of the relative form of value

(ii) The quantitative determinacy of the relative form of value

(iii) The equivalent form

(iv) The simple form of value considered as a whole

(b) The Total or Expanded Form of Value

(1) The expanded relative form of value

(2) The particular equivalent form

(3) Defects of the total or expanded form of value

(c) The General Form of Value

(1) The changed character of the form of value

(2) The development of the relative and equivalent forms of value: their interdependence

(3) The transition from the general form of value to the money form

(d) The Money Form

4. The Fetishism of the Commodity and Its Secret

Chapter 2: The Process of Exchange

Chapter 3: Money, or the Circulation of Commodities

1. The Measure of Values

2. The Means of Circulation

(a) The Metamorphosis of Commodities

(b) The Circulation of Money

(c) Coin. The Symbol of Value

3. Money

(a) Hoarding

(b) Means of Payment

(c) World Money

Part Two: The Transformation of Money into Capital

Chapter 4: The General Formula for Capital

Chapter 5: Contradictions in the General Formula

Chapter 6: The Sale and Purchase of Labour-Power

Part Three: The Production of Absolute Surplus-Value

Chapter 7: The Labour Process and the Valorization Process

1. The Labour Process

2. The Valorization Process

Chapter 8: Constant Capital and Variable Capital

Chapter 9: The Rate of Surplus-Value

1. The Degree of Exploitation of Labour-Power

2. The Representation of the Value of the Product by Corresponding Proportional Parts of the Product

3. Senior’s ‘Last Hour’

4. The Surplus Product

Chapter 10: The Working Day

1. The Limits of the Working Day

2. The Voracious Appetite for Surplus Labour. Manufacturer and Boyar

3. Branches of English Industry without Legal Limits to Exploitation

4. Day Work and Night Work. The Shift System

5. The Struggle for a Normal Working Day. Laws for the Compulsory Extension of the Working Day, from the Middle of the Fourteenth to the End of the Seventeenth Century

6. The Struggle for a Normal Working Day. Laws for the Compulsory Limitation of Working Hours. The English Factory Legislation of 1833–64

7. The Struggle for a Normal Working Day. Impact of the English Factory Legislation on Other Countries

Chapter 11: The Rate and Mass of Surplus-Value

Part Four: The Production of Relative Surplus-Value

Chapter 12: The Concept of Relative Surplus-Value

Chapter 13: Co-operation

Chapter 14: The Division of Labour and Manufacture

1. The Dual Origin of Manufacture

2. The Specialized Worker and His Tools

3. The Two Fundamental Forms of Manufacture – Heterogeneous and Organic

4. The Division of Labour in Manufacture, and the Division of Labour in Society

5. The Capitalist Character of Manufacture

Chapter 15: Machinery and Large-Scale Industry

1. The Development of Machinery

2. The Value Transferred by the Machinery to the Product

3. The Most Immediate Effects of Machine Production on the Worker

(a) Appropriation of Supplementary Labour-Power by Capital. The Employment of Women and Children

(b) The Prolongation of the Working Day

(c) Intensification of Labour

4. The Factory

5. The Struggle between Worker and Machine

6. The Compensation Theory, with Regard to the Workers Displaced by Machinery

7. Repulsion and Attraction of Workers through the Development of Machine Production. Crises in the Cotton Industry

8. The Revolutionary Impact of Large-Scale Industry on Manufacture, Handicrafts and Domestic Industry

(a) Overthrow of Co-operation Based on Handicrafts and on the Division of Labour

(b) The Impact of the Factory System on Manufacture and Domestic Industries

(c) Modern Manufacture

(d) Modern Domestic Industry

(e) Transition from Modern Manufacture and Domestic Industry to Large-Scale Industry. The Hastening of this Revolution by the Application of the Factory Acts to those Industries

9. The Health and Education Causes of the Factory Acts. The General Extension of Factory Legislation in England

10. Large-Scale Industry and Agriculture

Part Five: The Production of Absolute and Relative Surplus-Value

Chapter 16: Absolute and Relative Surplus-Value

Chapter 17: Changes of Magnitude in the Price of Labour-Power and in Surplus-Value

1. The Length of the Working Day and the Intensity of Labour Constant; the Productivity of Labour Variable

2. The Length of the Working Day and the Productivity of Labour Constant; the Intensity of Labour Variable

3. The Productivity and Intensity of Labour Constant; the Length of the Working Day Variable

4. Simultaneous Variations in the Duration, Productivity and Intensity of Labour

Chapter 18: Different Formulae for the Rate of Surplus-Value

Part Six: Wages

Chapter 19: The Transformation of the Value (and Respectively the Price) of Labour-Power into Wages

Chapter 20: Time-Wages

Chapter 21: Piece-Wages

Chapter 22: National Differences in Wages

Part Seven: The Process of Accumulation of Capital

Chapter 23: Simple Reproduction

Chapter 24: The Transformation of Surplus-Value into Capital

1. Capitalist Production on a Progressively Increasing Scale. The Inversion which Converts the Property Laws of Commodity Production into Laws of Capitalist Appropriation

2. The Political Economists’ Erroneous Conception of Reproduction on an Increasing Scale

3. Division of Surplus-Value into Capital and Revenue. The Abstinence Theory

4. The Circumstances which, Independently of the Proportional Division of Surplus-Value into Capital and Revenue, Determine the Extent of Accumulation, namely, the Degree of Exploitation of Labour-Power, the Productivity of Labour, the Growing Difference in Amount between Capital Employed and Capital Consumed, and the Magnitude of the Capital Advanced

5. The So-Called Labour Fund

Chapter 25: The General Law of Capitalist Accumulation

1. A Growing Demand for Labour-Power Accompanies Accumulation if the Composition of Capital Remains the Same

2. A Relative Diminution of the Variable Part of Capital Occurs in the Course of the Further Progress of Accumulation and of the Concentration Accompanying it

3. The Progressive Production of a Relative Surplus Population or Industrial Reserve Army

4. Different Forms of Existence of the Relative Surplus Population. The General Law of Capitalist Accumulation

5. Illustrations of the General Law of Capitalist Accumulation

(a) England from 1846 to 1866

(b) The Badly Paid Strata of the British Industrial Working Class

(c) The Nomadic Population

(d) Effect of Crises on the Best Paid Section of the Working Class

(e) The British Agricultural Proletariat

(f) Ireland

Part Eight: So-Called Primitive Accumulation

Chapter 26: The Secret of Primitive Accumulation

Chapter 27: The Expropriation of the Agricultural Population from the Land

Chapter 28: Bloody Legislation against the Expropriated since the End of the Fifteenth Century. The Forcing Down of Wages by Act of Parliament

Chapter 29: The Genesis of the Capitalist Farmer

Chapter 30: Impact of the Agricultural Revolution on Industry. The Creation of a Home Market for Industrial Capital

Chapter 31: The Genesis of the Industrial Capitalist

Chapter 32: The Historical Tendency of Capitalist Accumulation

Chapter 33: The Modern Theory of Colonization

Appendix: Results of the Immediate Process of Production Introduction by Ernest Mandel

I. Commodities as the Product of Capital

II. Capitalist Production as the Production of Surplus-Value

III. Capitalist Production is the Production and Reproduction of the Specifically Capitalist Relations of Production

IV. Isolated Fragments

Quotations in Languages Other than English and German

Note on Previous Editions of the Works of Marx and Engels

Chronology of Works by Marx and Engels

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PENGUIN CLASSICS

CAPITAL

VOLUME 1

Karl Marx was born at Trier in 1818 of a German–Jewish family converted to Christianity. As a student in Bonn and Berlin he was influenced by Hegel’s dialectic, but he later reacted against idealist philosophy and began to develop his theory of historical materialism. He related the state of society to its economic foundations and mode of production, and recommended armed revolution on the part of the proletariat. In Paris in 1844 Marx met Friedrich Engels, with whom he formed a life-long partnership. Together they prepared the Manifesto of the Communist Party (1848) as a statement of the Communist League’s policy. In 1848 Marx returned to Germany and took an active part in the unsuccessful democratic revolution. The following year he arrived in England as a refugee and lived in London until his death in 1883. Helped financially by Engels, Marx and his family nevertheless lived in great poverty. After years of research (mostly carried out in the British Museum), he published in 1867 the first volume of his great work, Capital. From 1864 to 1872 Marx played a leading role in the International Working Men’s Association, and his last years saw the development of the first mass workers’ parties founded on avowedly Marxist principles. Besides the two posthumous volumes of Capital compiled by Engels, Karl Marx’s other writings include The German Ideology, The Poverty of Philosophy, The 18th Brumaire of Louis Bonaparte, The Civil War in France, A Contribution to the Critique of Political Economy, Grundrisse: Foundations of the Critique of Political Economy and Theories of Surplus-Value.

Ernest Mandel was born in 1923. He was educated at the Free University of Brussels, where he was later Professor for many years, and the École Pratique des Hautes Études in Paris. He gained his Ph.D. from the Free University of Berlin. He was a Member of the Economic Studies Commission of FGTB (Belgian TUC) from 1954 to 1963 and was chosen for the annual Alfred Marshall Lectures by Cambridge University in 1978. His many books include The Formation of the Economic Thought of Karl Marx, Late Capitalism, The Long Waves of Capitalist Development, The Second Slump and The Marxist Theory of Bureaucracy. His influential pamphlet, An Introduction to Marxist Economics, sold over half a million copies and was translated into thirty languages. Ernest Mandel died in July 1995. In its obituary the Guardian

described him as ‘one of the most creative and independent-minded revolutionary Marxist thinkers of the post-war world’.

Introduction

When Volume 1 of Capital was first published, capitalist industry, though predominant in a few Western European countries, still appeared as an isolated island encircled by a sea of independent farmers and handicraftsmen which covered the whole world, including the greater part even of Europe. What Marx’s Capital explained, however, was above all the ruthless and irresistible impulse to growth which characterizes production for private profit and the predominant use of profit for capital accumulation. Since Marx wrote, capitalist technology and industry have indeed spread all over the world. As they have done so, moreover, not only have material wealth and the possibilities for freeing mankind definitively from the burden of meaningless, repetitive and mechanical work increased, but so too has the polarization of society between fewer and fewer owners of capital and more and more workers of hand and brain, forced to sell their labour-power to these owners. The concentration of wealth and power in a small number of giant industrial and financial corporations has brought with it an increasingly universal struggle between Capital and Labour. Periodically the bourgeois class and its ideologues have thought they have found

the stone of wisdom; have felt able, accordingly, to announce the end of crises and socio-economic contradictions in the capitalist system. But despite Keynesian techniques, notwithstanding all the various attempts to integrate the working class into late capitalism, for over a decade now the system has appeared if anything more crisis-ridden than when Marx wrote Capital. From the Vietnam war to the turmoil of the world monetary system; from the upsurge of radical workers’ struggles in Western Europe since 1968 to the rejection of bourgeois values and culture by large numbers of young people throughout the world; from the ecology and energy crises to the recurrent economic recessions: there is no need to look very far for indications that capitalism’s heyday is over. Capital explains why the sharpening contradictions of the system were as inevitable as its impetuous growth. In that sense, contrary to a generally accepted belief, Marx is much more an economist of the twentieth century

than of the nineteenth. Today’s Western world is much nearer to the ‘pure’ model of Capital than was the world in which it was composed.

1. THE PURPOSE OF CAPITAL

In Capital Marx’s fundamental aim was to lay bare the laws of motion which govern the origins, the rise, the development, the decline and the disappearance of a given social form of economic organization: the capitalist mode of production. He was not seeking universal laws of economic organization. Indeed, one of the essential theses of Capital is that no such laws exist. For Marx, there are no economic laws valid for each and every basically different form of society (aside from trivialities like the formula which points out that no society can consume more than it produces without reducing its stock of wealth – whether the natural fertility of the land, the total population, the mass of means of production, or several of these). Each specific social form of economic organization has its own specific economic laws. Capital limits itself to examining those which govern the capitalist mode of production. Capital is therefore not ‘pure’ economic theory at all. For Marx, ‘pure’ economic

theory, that is economic theory which abstracts from a specific social structure, is impossible. It would be similar to ‘pure’ anatomy, abstracted from the specific species which is to be examined. We can push the analogy further. Although, of course, comparative anatomy is a branch of natural science, useful for increasing our knowledge of human and animal physiology, it can be only a by-product of the development of the anatomical understanding of specific given species. In the same way, Marx’s theory of historical materialism does indeed include comparative economic analysis – for example an examination of the evolution of human labour, human labour productivity, social surplus product and economic growth, from slave society through feudalism to capitalism. But such comparison can result only from the analysis of specific modes of production, each with its own economic logic and its own laws of motion. These cannot be superseded by or subsumed under ‘eternal’ economic laws. We can even push the analogy to its final conclusion. If one tries to find some basic common kernel in ‘all’ anatomy, one leaves the realm of that specific science and enters another: biology or biochemistry. In the same way, if one tries to discover basic working hypotheses valid for ‘all’ economic systems, one passes from the realm of economic theory to that of the science of social structures: historical materialism. In this way, Marx’s economic theory and its crowning work Capital are based upon

an understanding of the relativity, social determination and historical limitation of all

economic laws. In the socio-economic development of mankind, commodity production, market economy or the distribution of social resources among different branches of production by ‘objective economic laws’ operating ‘behind the back of the producers’ do not correspond to ‘human nature’, have not always existed and will not always exist. Capital, explaining the origins of the capitalist mode of production, points towards the inevitable historical decline and fall of this same social system. An economic theory based upon the historical relativity of every economic system, its strict limitation in time, tactlessly reminds Messrs the capitalists, their hangers-on and their apologists that capitalism itself is a product of history. It will perish in due course as it once was born. A new social form of economic organization will then take the place of the capitalist one: it will function according to other laws than those which govern the capitalist economy. Nevertheless, Capital does not deal exclusively with the capitalist mode of

production, although the discovery of the laws which govern this mode of production is its fundamental objective. Capitalist production is generalized commodity production. Generalized commodity production fully unfolds trends and contradictions which are latent in every one of its basic ‘cells’, the commodities. It is no accident that Marx starts Capital Volume 1 with an analysis neither of ‘the capitalist mode of production’, nor of capital, nor of wage-labour, nor even of the relations between wage-labour and capital. For it is impossible to analyse any of these basic concepts or categories – which correspond to the basic structure of capitalist society – scientifically, totally and adequately without a previous analysis of value, exchange-value and surplus-value. But these latter categories in turn hinge upon an analysis of the commodity and of commodity-producing labour. Just as surplus-value and capital emerge logically from an analysis of value and

exchange-value, so too does the capitalist mode of production emerge historically from the growth of commodity production: without simple commodity production no capitalism can come into existence. Capital, the Grundrisse and the other basic economic writings of Karl Marx therefore include many analyses of simple commodity production, a form of production which existed in manifold ways for nearly 10,000 years before modern capitalism was born, but which found its fullest flowering only between the thirteenth and sixteenth centuries A.D. in the Low Countries, northern Italy, and later Britain (and to a lesser degree in Japan before the Meiji revolution). Objections have been advanced – by early Russian Marxist authors like Bogdanov,

by later commentators like Rubin and by contemporary Marxists like Lucio Colletti

and Louis Althusser1 – to the view, originating with Engels and held by Rosa Luxemburg, to which I subscribe,2 that Marx’s Capital provides not only a basic analysis of the capitalist mode of production, but also significant comments upon the whole historical period which includes essential phenomena of petty commodity production. These objections, however, are based upon a double confusion. It is true that the capitalist mode of production is the only social organization of the economy which implies generalized commodity production. It would thus be completely mistaken to consider, for example, Hellenistic slave society or the classical Islamic Empire – two forms of society with strongly developed petty commodity production, money economy and international trade – as being ruled by the ‘law of value’. Commodity production in these pre-capitalist modes of production is intertwined with, and in the last analysis subordinated to, organizations of production (in the first place agricultural production) of a clearly non-capitalist nature, which follow a different economic logic from that which governs exchanges between commodities or the accumulation of capital. But this in no way implies that in societies in which petty commodity production

has already become the predominant mode of production (that is where the majority of the producers are free peasants and free handicraftsmen who own and exchange the products of their labour), the laws governing the exchange of commodities and the circulation of money do not strongly influence the economic dynamic. Indeed, it is precisely the unfolding of the law of value which leads in such societies to the separation of the direct producers from their means of production, although a whole series of social and political developments influences this birth-process of modern capitalism, hastening it, slowing it down, or combining it with trends going in different directions. On the other hand, if it is true that fully-fledged ‘economic accounting based upon

quantities of socially equalized labour’ comes into its own only under capitalism, and this only as an objective economic law and not as conscious decisions of owners of commodities, it does not follow at all from this statement that ‘labour quantities accounting’ cannot begin to appear in pre-capitalist societies, in which commodity production becomes a regular institution. Indeed, it is precisely when petty commodity production is already largely developed, but at the same time still intertwined with traditional forms of ‘natural’ economic organization, which imply conscious allocations of economic resources and social labour between different forms of production (through customs, habits, rites, religion, deliberation of elders, assemblies of participants etc.), that the need for a conscious accounting of ‘labour

quantities’ can and must appear, in order to avoid basic injustices and inequalities in social organizations still based upon a high degree of social equality and coherence. I have tried to prove by empirical data that this has in fact been the case, at different historical periods, in different parts of the world.3

This does not mean that the ‘law of value’ is a ‘product of pre-capitalist history’. Nor does it mean that such still relatively primitive societies were burdened with the same manic pursuit of material rewards, and measurement of labour-time expenditure down to fractions of seconds, as our own; for these are, indeed, ‘pure’ products of bourgeois society. It only means that the embryonic forms of the ‘law of value’ can be discovered in the embryonic developments of commodity production, just as the ‘elementary cell’ of capital, the commodity, contains in an embryonic way all the inner qualities and contradictions of that social category. To deny this historical dimension of Marx’s analysis is to transform the origins of capitalism into an insoluble mystery. One could argue that this is rather a moot point for economists, interesting only for

anthropologists, ethnologists or historians. But its implications are in fact extremely far-reaching. By stating that the analysis of the laws of motion governing the capitalist mode of production necessarily includes at least some essential elements of an analysis of economic phenomena valid for the whole historical epoch encompassing economic organizations in which commodity production exists, one extends the validity of parts of Marx’s Capital not only into the past but also into the future. For phenomena of commodity production obviously survive, at least partially, in those societies in which the rule of capital has already been overthrown, but which are not yet fully-fledged classless, that is socialist, societies: the USSR and the People’s Republics of Eastern Europe, China, North Vietnam, North Korea and Cuba. Capital is no more a guide to understanding the laws of motion of these societies than it is a guide to understanding the laws of motion of developed late medieval society based upon petty commodity production. But it can tell us a lot about the dynamics (and disintegrating logic) of commodity production and money economy in such non- capitalist societies, and the contradictions which these introduce into the specific and ‘pure’ laws of motion of the latter. If Capital is not a treatise on eternal economic laws, does it at least contain a

science of the capitalist economy? Some Marxists, in the first place the German Karl Korsch, have denied this.4 For them – as for so many bourgeois critics of Marx – Capital is essentially an instrument for the revolutionary overthrow of capitalism by the proletariat. According to them, it is impossible to separate the ‘scientific’ content

of Capital from its ‘revolutionary’ intention, as the Austro-German Marxist Rudolf Hilferding tried to do.5 This contention overlooks a basic distinction which Marx and Engels introduced between utopian and scientific socialism. Marx remained indeed a revolutionary during the whole of his adult life after 1843. But he considered it essential to base socialism (communism) upon a scientific foundation. The scientific analysis of the capitalist mode of production was to be the cornerstone of that foundation, showing why and how capitalism created, through its own development, the economic, material and social preconditions for a society of associated producers. In that sense, Marx strove, not indeed in contradiction to, but precisely as a function of this intention, to analyse capitalism in an objective and strictly scientific way. In other words, he did not simply give vent to an aggressive hostility towards a particular form of economic organization, for reasons of revolutionary passion and compassion for the downtrodden and oppressed; nor, it hardly needs to be said, was he motivated by personal spite, material failure or psychotic imbalance. Marx sought to discover objective laws of motion. There was nobody – not even the typical bourgeois Spiesser – whom he despised more than the man with scientific pretensions who nevertheless deliberately twists empirical data or falsifies research results to suit some subjective purpose. Precisely because Marx was convinced that the cause of the proletariat was of decisive importance for the whole future of mankind, he wanted to create for that cause not a flimsy platform of rhetorical invective or wishful thinking, but the rock- like foundation of scientific truth.

2. THE METHOD OF CAPITAL

The purpose of Capital is itself a clear reminder of the method of knowledge applied by Marx to his main work: the method of the materialist dialectic. Marx left no doubt that this was indeed how he himself understood his labours. In a letter sent to Maurice Lachâtre, the editor of the first French edition of Capital Volume 1, he insisted on the fact that he was the first person to have applied this method to the study of economic problems.6 Again in his own postface to the second German edition of Capital Volume 1, Marx specified this use of the dialectical method as the differentia specifica of Capital, which distinguished it from all other economic analyses.7

When the dialectical method is applied to the study of economic problems, economic phenomena are not viewed separately from each other, by bits and pieces, but in their inner connection as an integrated totality, structured around, and by, a basic predominant mode of production. This totality is analysed in all its aspects and

manifestations, as determined by certain given laws of motion, which relate also to its origins and its inevitable disappearance. These laws of motion of the given mode of production are discovered to be nothing but the unfolding of the inner contradictions of that structure, which define its very nature. The given economic structure is seen to be characterized at one and the same time by the unity of these contradictions and by their struggle, both of which determine the constant changes which it undergoes. The (quantitative) changes which constantly occur in the given mode of production, through adaptation, integration of reforms and self-defence (evolution), are distinguished from those (qualitative) changes which, by sudden leaps, produce a different structure, a new mode of production (revolution). Marx clearly opposes his own dialectical method of investigation and knowledge to

that of Hegel, although he never hesitates to recognize his debt of gratitude to the German philosopher who, spurred on by the French Revolution, catapulted dialectical thought back into the modern world. Hegel’s dialectics were idealist: the basic motion was that of the Absolute Idea; material reality was only the outward appearance of ideal essence. For Marx, on the contrary, the dialectic is materialist, ‘the ideal is nothing but the material world reflected in the mind of man, and translated into forms of thought’.8 The basic laws of motion of history are those of real men, themselves producing their own material existence in a given social framework. The development of thought corresponds in the final analysis to that basic movement, and reflects it, albeit through many mediations. Thus the scientific thought process through which Marx came to understand the operations of the capitalist mode of production was itself a product of that mode of production, of bourgeois society and its contradictions. Only secondarily can it be seen as a product of the development of many human sciences and ideologies: classical German philosophy; English political economy; French historiography and political science; pre-Marxian socialism. Only the growth of bourgeois society and its contradictions, above all the struggle between capital and labour, enabled Marx to assimilate, combine and transform these sciences in the specific way and the specific direction he did. Nevertheless, while the materialist dialectic is Hegel’s (idealist) dialectic ‘turned right side up again’, both have basic common traits. Dialectics as the logic of motion presupposes that all motion, all evolution, whether of nature, society or human thought, adopts certain general forms which are called ‘dialectical’.9 Engels and Lenin both saw, in the very way in which Capital Volume 1 was constructed, a striking application of this general dialectical method; thus Lenin wrote that although Marx had never written his

projected short treatise on dialectics, he had nevertheless left us Capital, which is the application of the materialist dialectic in the field of economic phenomena.10

But for Marx, the materialist dialectician, the distinction between ‘essence’ and ‘appearance’ in no sense implies that ‘appearance’ is less ‘real’ then ‘essence’. Movements of value determine in the last analysis movements of prices; but Marx the materialist would have laughed at any ‘Marxist’ who suggested that prices were ‘unreal’, because in the last analysis determined’ by value movements. The distinction between ‘essence’ and ‘appearance’ refers to different levels of determination, that is in the last analysis to the process of cognition, not to different degrees of reality. To explain the capitalist mode of production in its totality it is wholly insufficient to understand simply the ‘basic essence’, the ‘law of value’. It is necessary to integrate ‘essence’ and ‘appearance’ through all their intermediate mediating links, to explain how and why a given ‘essence’ appears in given concrete forms and not in others. For these ‘appearances’ themselves are neither accidental nor self-evident. They pose problems, they have to be explained in their turn, and this very explanation helps to pierce through new layers of mystery and brings us again nearer to a full understanding of the specific form of economic organization which we want to understand. To deny this need to reintegrate ‘essence’ and ‘appearance’ is as un- dialectical and as mystifying as to accept ‘appearances’ as they are, without looking for the basic forces and contradictions which they tend to hide from the superficial and empiricist observer. Precisely because Marx’s dialectic is a materialist one, however, it does not start

from intuition, preconceptions or mystifying schemes, but from a full assimilation of scientific data. The method of investigation must differ from the method of exposition. Empirical facts have to be gathered first, the given state of knowledge has to be fully grasped. Only when this is achieved can a dialectical reorganization of the material be undertaken in order to understand the given totality. If this is successful, the result is a ‘reproduction’ in man’s thought of this material totality: the capitalist mode of production. The main danger for any scientist involved in the study of social phenomena is that

of taking anything for granted, of ‘problem-blindness’. The distinction between appearance and essence, which Marx inherited from Hegel11 and which is part and parcel of the dialectical method of investigation, is nothing but a constant attempt to pierce farther and farther through successive layers of phenomena, towards laws of motion which explain why these phenomena evolve in a certain direction and in certain ways. Constantly searching for questions – calling into question! – where

others only see ready-made answers and vulgar ‘evidence’: this is certainly one of Marx’s main merits as a revolutionary innovator in economic science. The way in which Capital starts with an analysis of the basic categories of

commodity production, with the ‘basic unit’ (fundamental cell) of capitalist economic life, the commodity, has often been cited as a model application of this materialist dialectic. Marx himself makes it clear that he does not start from a basic concept – value – but from an elementary material phenomenon – the commodity–which is at the basis of capitalism, as the only economic organization based upon generalized commodity production.12 It is therefore correct but incomplete, strictly speaking, to say that Marx’s method consists of ‘rising from the abstract to the concrete’.13 In fact, he starts from elements of the material concrete to go to the theoretical abstract, which helps him then to reproduce the concrete totality in his theoretical analysis. In its full richness and deployment, the concrete is always a combination of innumerable theoretical ‘abstractions’. But the material concrete, that is, real bourgeois society, exists before this whole scientific endeavour, determines it in the last instance, and remains a constant practical point of reference to test the validity of the theory. Only if the reproduction of this concrete totality in man’s thought comes nearer to the real material totality is thought really scientific. At first sight, the movement which dominates Capital Volume 1 appears as a movement of economic ‘categories’, from the commodity and its inner contradictions to the accumulation of capital and its breakdown. The question has often been asked: is this movement just an abstract synopsis of the ‘essence’ of capitalism, or is it a greatly simplified reflection of real economic development, that is, the real history leading from the first appearance of commodity production up to full-scale capitalist production in the West, purified of all secondary and combined forms which would only obscure the basic nature of this movement? It is impossible to answer this question simply with a ‘yes’ or a ‘no’. Commodities

produced accidentally in pre-capitalist societies, at the very margin of the basic processes of production and consumption, obviously cannot trigger off the striking and terrifying logic of the ‘law of value’ which Marx majestically unfolds in Capital. Commodity production as a basic and dominant feature of economic life presupposes capitalism, that is a society in which labour-power and instruments of labour have themselves become commodities. In that sense it is true that the analysis of Volume 1 of Capital is logical (based upon dialectical logic) and not historical. But dialectics imply that every phenomenon has an origin and an end, that nothing

is either eternal or finished once and for all. Hence the historical cell of capital is at

the same time the key to the logical analysis of capital: phylogenesis and embryology cannot be completely separated. Within capital accumulation in contemporary everyday capitalist life, some aspects of primitive capital accumulation are reproduced: without that primitive capital accumulation, there would be no capitalist mode of production. So the logical analysis does reflect some basic trends of historical development after all. The simplest forms of appearance of the ‘economic categories’ (which are just forms of material existence, of material reality as perceived and simplified by the human mind) are often also their primitive, that is their original, form. However controversial this interpretation may be, it is difficult to deny that this unity of historical and logical analysis is the way in which Marx and Engels understood their own method.14

A whole literature has been produced, from Bernstein to Popper and on to contemporary academic economists, on the subject of the ‘useless’, ‘metaphysical’ or even ‘mystifying’ nature of the dialectical method which Marx borrowed from Hegel.15 The positivist narrowness of outlook of these critics themselves generally bears eloquent testimony to the contrary, that is to the broad historical vision and the piercing lucidity which the dialectical method helped Marx to achieve. Thanks to that method, Marx’s Capital appears as a giant compared to any subsequent or contemporary work of economic analysis. It was never intended as a handbook to help governments to solve such problems as balance-of-payments deficits, nor yet as a learned, if somewhat trite, explanation of all the exciting happenings in the market place when Mr Smith finds no buyer for the last of his 1,000 tons of iron. It was intended as an explanation of what would happen to labour, machinery, technology, the size of enterprises, the social structure of the population, the discontinuity of economic growth, and the relations between workers and work, as the capitalist mode of production unfolded all its terrifying potential. From that point of view, the achievement is truly impressive. It is precisely because of Marx’s capacity to discover the long-term laws of motion of the capitalist mode of production in its essence, irrespective of thousands of ‘impurities’ and of secondary aspects, that his long-term predictions – the laws of accumulation of capital, stepped-up technological progress, accelerated increase in the productivity and intensity of labour, growing concentration and centralization of capital, transformation of the great majority of economically active people into sellers of labour-power, declining rate of profit, increased rate of surplus value, periodically recurrent recessions, inevitable class struggle between Capital and Labour, increasing revolutionary attempts to overthrow capitalism – have been so strikingly confirmed by history.16

This judgement has generally been challenged on two grounds. The easiest way out for critics of Marx is simply to deny that the laws of motion of the capitalist mode of production which he discovered have been verified at all. This is generally done by reducing them to a couple of misstated and oversimplified formulae (see below): ‘progressive immiseration of the working class’ and ‘ever-worsening economic crisis’.17 A more sophisticated objection was advanced by Karl Popper, who denied the very possibility, or rather the scientific nature, of such ‘laws’, calling them ‘unconditional historical prophecies’ to be clearly distinguished from ‘scientific predictions’. ‘Ordinary predictions in science,’ says Popper, ‘are conditional. They assert that certain changes (say, of the temperature of water in a kettle) will be accompanied by other changes (say the boiling of the water).’18 Popper denies the scientific nature of Capital by asserting that, unlike scientific theories, its hypotheses cannot be scientifically tested.19

This is obviously based upon a misunderstanding of the very nature of the materialist dialectic, which, as Lenin pointed out, requires constant verification through praxis to increase its cognition content.20 In fact, it would be very easy to ‘prove’ Marx’s analysis to have been wrong, if experience had shown, for example, that the more capitalist industry develops, the smaller and smaller the average factory becomes, the less it depends upon new technology, the more its capital is supplied by the workers themselves, the more workers become owners of their factories, the less the part of wages taken by consumer goods becomes (and the greater becomes the part of wages used for buying the workers’ own means of production). If, in addition, there had been decades without economic fluctuations and a full-scale disappearance of trade unions and employers’ associations (all flowing from the disappearance of contradictions between Capital and Labour, inasmuch as workers increasingly become the controllers of their own means and conditions of production), then one could indeed say that Capital was so much rubbish and had dismally failed to predict what would happen in the real capitalist world a century after its publication. It is sufficient to compare the real history of the period since 1867 on the one hand with what Marx predicted it would be, and on the other with any such alternative ‘laws of motion’, to understand how remarkable indeed was Marx’s theoretical achievement and how strongly it stands up against the experimental test of history.21

3. THE PLAN OF CAPITAL

Capital was not the result of spontaneous generation nor was it the product of a sudden interest of Marx in economic problems. Ever since this doctor in philosophy (Jena, 1841) had become a communist in the course of the eighteen-forties under the pressure of current experience with social problems (the treatment of wood-thieves in the Rhine provinces of Prussia; the uprising of the Silesian textile workers; the strikes in England; the class struggle in France), he had turned towards economic studies. But his first encounter with modern political economy (which left its main results in the Economic and Philosophical Manuscripts, The Poverty of Philosophy, Wage Labour and Capital and The Communist Manifesto) was roughly interrupted by the pressure of external events. Participating actively in politics, Marx returned from Paris to Germany at the outbreak of the revolutionary movement in 1848. There he founded and directed a daily paper. When counter-revolutionary reaction submerged Europe after the revolutions collapsed, he emigrated to London and had to struggle for his livelihood as a journalist. These current pressures, together with the burden of émigré politics in London, delayed the possibility of a systematic presentation of his economic theory for a whole decade. Only when, through Lassalle, a publisher pressed him to explain his economic ideas

in a fully-fledged way did he return to a full-scale encounter with Adam Smith and Malthus, Ricardo and J.-B. Say, Simonde de Sismondi and Tooke, together with the famous British government Blue Books which were to become an invaluable source of factual material about the conditions of British industry, trade, finance and working- class life. The systematic study of economic facts and thoughts about capitalism, resumed by Marx around 1857, produced the following works:

(a) a first rough draft of Capital, published posthumously under the title Grundrisse der Kritik der politischen Oekonomie (Foundations of the Critique of Political Economy), written in 1857–8; (b) the uncompleted book Zur Kritik der politischen Oekonomie (A Contribution to the Critique of Political Economy), published in 1859; (c) the 1861–3 manuscripts, twenty-three enormous notebooks, from which Kautsky extracted Theories of Surplus-Value (also known as Volume 4 of Capital). This however encompasses only notebooks VI–XV inclusive. Notebooks I–V deal with matters generally encompassed in Capital Volume 1; notebooks XVI, XVII and XVIII deal with matters in Capital Volume 3; notebooks XIX–XXIII again deal with matters related to Capital Volume 1, and include a lengthy treatment of the history of techniques and the use of machines under capitalism;

(d) a manuscript of 1864–5, mostly dealing with matters taken up in Capital Volume 3; (e) four manuscripts written between 1865 and 1870, from which Engels extracted most of the material for Capital Volume 2; (f) the final version of Capital Volume 1, written in 1866–7.

Of the six basic economic writings of the mature Marx, Volume 1 is therefore the only one which the author completed and edited himself, and of which he even made available corrected editions in German and in French.22 Volumes 2 and 3 of Capital, left unfinished, were posthumously and laboriously published by Marx’s life-long friend Friedrich Engels. Theories of Surplus-Value was rearranged and published by Kautsky. The Grundrisse was presented to the public for the first time only in 1939. A considerable part of the 1861–3 manuscripts still remains unpublished. The initial plan of Capital was drawn up in 1857; the final plan dates from 1865–6.

Between these two dates there lay nine years of intense study, especially in the British Museum, realized under very difficult circumstances. Marx was burdened by constant financial troubles; by the illness and death of three of his children, among them his beloved son Edgar; and by his growing re-involvement in current political and social studies, especially through his activity in the International Working Men’s Association (the so-called First International). The need to answer a sharp and slanderous attack by a German political opponent, a certain Herr Vogt, cost Marx nearly half a year’s delay in the production of Capital Volume 1. Finally, illness and bad health became increasing obstacles. He himself spoke sarcastically of his ‘carbuncles’, the effects of which the bourgeoisie would not forget for a long time. But in fact it is his strikingly stoical attitude towards all the miseries surrounding him, rather than any special bitterness born from material hardship, that permeates his mature work. From the beginning, Marx wanted to present an all-round analysis of capitalism in

its totality. The initial plan of Capital already bears witness to this intention and reads as follows: 1. Volume on Capital (a) Capital in general (1) Process of production of capital (2) Process of circulation of capital (3) Profit and interest

(b) On competition (c) On credit

(d) On joint stock companies 2. Volume on landed property 3. Volume on wage labour 4. Volume on the State 5. Volume on international trade 6. Volume on the world market and crises23

The 1865–6 version of Capital, however, falls into four volumes:

Volume 1: Process of production of capital Volume 2: Process of circulation of capital Volume 3: Forms of the process in its totality Volume 4: History of the theory

Roman Rosdolsky, who has made the most extensive study to date of this problem, has isolated no less than fourteen different versions of the plan for Capital between September 1857 and April 1868.24

Two questions are raised by these changes. First, why did Marx modify his initial plan, and what implications do the modifications have for an understanding of Marx’s method and for the content of Capital? Second, does the 1865–6 version imply that the four volumes which we possess today represent the full – although in the case of all save the first volume unedited – work as finally intended by Marx? The answer to each of those questions has many interesting implications both for the discussion of Marx’s economic theory itself and for the light it throws on the contributions made by some of his gifted followers and disciples. In fact, what we today call Capital is the third attempt by Marx to present his views

on the capitalist mode of production in its totality. The first attempt, the Grundrisse of 1857–8, follows exactly the initial plan of Capital, but stops at point 1 (a) (3) of that plan. The second attempt, dating from 1861–3, is still unpublished, except for the part on Theories of Surplus-Value. The third attempt is the 1865–6 one, of which we have Volumes 1–4. We know that, as early as January 1863, Marx had already decided to deal with land rent as an element of distribution of total surplus-value among different sectors of the ruling classes. However, he still seemed to stick at that time to a separate volume on wage-labour, a separate volume on landed property, and separate volumes on credit, competition and joint-stock companies.25 The logic of this plan implied the desire to deal with the basic social classes of bourgeois society in a

separate way: first the industrial capitalists; then the landowners; finally the proletariat. It implied also the desire to separate sharply the problems of production of value, surplus-value and capital from the problems of capitalist competition, which can only be understood as arising out of processes of redistribution of previously produced surplus-value. However, if this original plan was clearly a necessary stepping stone towards the

final analysis of the capitalist mode of production, as Marx’s analysis progressed it proved itself increasingly an obstacle to a rigorous and consistent exposé of the laws of motion of that mode of production. It had therefore to be discarded in the end. The volume on wage-labour became integrated into Volume 1, ‘The Process of Production of Capital’. It appeared impossible to deal with wage-labour separately and apart from the production of surplus-value, that is from the capitalist process of production (Marx probably intended to deal with the fluctuations of wages in Volume 6 on the world market and crises). The volume on landed property became integrated, together with those on profit and interest, on competition and on joint-stock companies, into the new Volume 3, which examines key forms of the capitalist mode of production in its totality, from the point of view of redistribution of the total surplus-value produced among various sectors of the propertied class. Looking at this transformation of the initial plan of Capital, we can, however, also

understand what did not change. Volumes 1 and 2 of Capital can still be subsumed under the heading of ‘Capital in General’. Only Volume 3, like the originally planned 4, 5 and 6, which were never written, falls under the heading of ‘many capitals’. This means concretely that a certain number of problems, such as, for instance, the problem of the origin and mechanics of the ‘trade cycle’ (of capitalist crises of overproduction), have no place in Volumes 1 and 2 and can be dealt with only when one descends from the highest level of abstraction, where capital is dealt with in its global relationship to wage-labour, to an examination of the interactions of various capitals upon each other. Because she did not take this specific structure of the successive volumes of Capital into account, Rosa Luxemburg was methodologically mistaken in accusing Marx of having constructed his reproduction schemes of Volume 2 without solving the ‘realization problem’ or without formulating a theory of crises.26

I shall return to this interesting problem in my introduction to Capital Volume 2. A similar mistake is made by Joan Robinson, in her Preface to the second edition of

An Essay on Marxian Economics, where she construes a contradiction between the assumptions regarding real wages of Capital Volume 1 and those of Volume 3. In Volume 1, she says, Marx assumes that a rising labour productivity leads to a rising

rate of exploitation, whereas in Volume 3 he assumes that rising labour productivity could lead, through a stable rate of exploitation, to a rising rate of real wages and a declining rate of profit.27 Joan Robinson does not understand that Volumes 1 and 3 of Capital are at different levels of abstraction, deal with different questions, and make different assumptions in order to clarify the specific dynamics which allow answers to these questions. In Volume 1, Marx examines the relations between Capital and Labour in general,

abstracting from the effects of competition between capitalists on the distribution of surplus-value and on the variations of real wages. He therefore assumes initially stable real subsistence wages, in order to show through what mechanics surplus-value is produced, appropriated and increased by capital. In Volume 3 he examines the effects of capitalist competition upon the distribution and redistribution of surplus- value among capitalists, and therefore has to integrate into the analysis the effects of this competition on the rate of exploitation (for example in periods of boom, with a high level of employment). In order to work out the basic answers to these questions, it is perfectly logical to abstract initially from fluctuations in the rate of profit and wages in Volume 1, and to assume initially a stable rate of exploitation in Volume 3, but subsequently to abandon these simplifying hypotheses (Volume 1, Chapter 17; Volume 3, Chapter 14). Finally, it seems clear from many remarks interspersed throughout the manuscript

of Volume 3 that Marx maintained his intention of completing Capital with volumes on the state, foreign trade, the world market and crises, although he placed these problems clearly outside the final plan of Capital itself.28 Only when the unpublished manuscript of 1861–3 becomes available will we know whether some rough draft of what he intended to develop in these three books does indeed exist somewhere, or whether it was intended as a completely new and further development of his study of bourgeois society. In view of these changes in the plan of Capital as a whole, the final version of the

plan of Volume 1 is all the more striking. We should not forget that Volume 1, as edited by Marx, is largely posterior to the original and incomplete drafts of Volumes 2 and 3 later to be edited by Engels.29 It is therefore Volume 1 which allows us the best insight into Marx’s view of capitalism. From the place of Volume 1 in the total final plan of Capital, we can immediately

draw an answer to two misconceptions which occur again and again in discussion of Marx’s economic theory. It is true that according to Marx and Engels capitalists do not exchange the commodities they own on the basis of their value, whereas under

petty commodity production exchange of commodities is roughly based upon their value.30 But it does not follow at all that Capital Volume 1, which assumes the exchange of commodities according to their value, is concerned with pre-capitalist commodity production and exchange, and that only in Volume 3 do we start to examine what capitalist commodity circulation is all about. On the contrary, Marx abstracts from the problem of redistribution of surplus-value among competing capitalists – that is, the problem of the equalization of the rate of profit – in Volume 1 precisely in order to isolate and demonstrate the laws of capitalist commodity production and circulation in their ‘purest’, most fundamental way. In the same way it is wrong to assume that Volume 1 deals only with the ‘essence’

or with ‘abstractions’, whereas ‘concrete’ capitalism is analysed only in Volume 3. Nothing could be more ‘concrete’ and closer to immediately perceived economic data (‘appearances’) than the analysis of the working day, of wages and of machinery in Volume 1. Commentators here confuse the type of question solved in Volume 1 with the method of answering. Volume 1 abstracts from capitalist competition, from uneven and combined development and therefore from prices of production and equalization of the rate of profit and even more from market prices, in order to reveal the basic origin of surplus-value in the process of production, which is a process of consumption of labour-power by capital. But this problem is dealt with by a combination of theoretical insight and empirical verification, by a constant attempt to discover the mediating links between ‘essence’ and ‘appearance’, by a thorough analysis of how and why the ‘essence’ (the value of labour-power) is manifesting itself through the ‘appearances’ (the fluctuations of real wages).

4. THE PLAN OF VOLUME I

Volume 1 of Capital presents itself as a rigorously logical construction. We start from the elementary form of capitalist wealth – the commodity – and its inner contradiction – the contradiction between use-value and exchange-value. Because it is produced by private labour, whose social character can no longer be recognized automatically, immediately and directly by society, the commodity can exist only together with a necessary corollary, money, a universal means of exchange. But the analysis of the circulation of commodities accompanied by circulation of money leads to the unfolding of the inner potentialities and contradictions of money: the possibility of exchange-value embodied in money becoming an autonomous economic agent; of money appearing as starting and final point, and not simply intermediary, of a process of circulation; of money bent upon accretion of money, that is of capital.

In pre-capitalist societies, capital appears outside the sphere of production, and hardly ever enters that sphere. It feeds parasitically upon the social surplus product produced and originally appropriated by non-capitalist classes. Here Marx comes to his central point. A basic difference between the capitalist and pre-capitalist modes of production is that under capitalism capital not only appropriates surplus-value; it produces surplus-value. Because he considered this fundamental to an understanding of all aspects of bourgeois society – incidentally, not only the economic but also the political – Marx starts Capital with a whole volume devoted to a lengthy analysis of the process of production. For the capitalist process of production is at one and the same time a process of production of value, a process of production of surplus-value, a process of production of capital, and a process of production and constant reproduction of the basic antagonistic social relations: the relation between wage- labour and capital, the compulsion for the proletariat to sell its labour-power to the capitalists, the compulsion for the capitalists to accumulate capital and therefore to maximize the extortion of surplus-value from the workers. Volume 1 of Capital is centred around Marx’s basic discovery, the explanation of

the ‘secret’ of surplus-value. There exists one commodity, to wit labour-power, whose use-value for the capitalist is its ability to produce new value larger than its own exchange-value. The ‘process of production’ which Marx analyses in Volume 1 is, therefore, essentially the process of production of surplus-value. The production of surplus-value can, however, be examined in a more detailed way

only if capital itself is subdivided into constant capital and variable capital. Constant capital represents that part of the wealth of the capitalist class with which it acquires and maintains a monopoly of property and access to the material means of production. Thereby it cuts the working class off from any possibility of producing its own livelihood in an independent way. It is a necessary precondition for the production of surplus-value. But it does not produce that surplus-value in and by itself. Only the labour-power of living labour produces additional value, including surplus-value. That is why Marx calls that portion of capital by which the capitalists buy the labour-power of the workers variable capital, for only that portion actually produces surplus-value. The next step in the analysis is the distinction between the production of absolute

and of relative surplus-value. Absolute surplus-value is produced by a lengthening of the working day beyond that number of hours during which the worker produces the value which is only the equivalent of his wages. Relative surplus-value is produced by increasing the productivity of labour in the wage-goods industry sector, which enables the worker to reproduce the equivalent of his wages in a shorter portion of the

working day, thereby increasing surplus-value without a lengthening of the working day. Marx notes that while the production of absolute surplus-value predominated in the early centuries of the capitalist mode of production (in England, roughly speaking, between the sixteenth century and the first half of the nineteenth), the production of relative surplus-value becomes predominant once the logic of the industrial revolution (of the development of machinery) and the logic of the class struggle between labour and capital fully unfold themselves. A central section of Part Four of Volume 1 (‘The Production of Relative Surplus-

Value’) is taken up by a lengthy and minute analysis of manufacture and of the modern factory (Chapters 14 and 15). Here the production of surplus-value takes on an important additional dimension. During the stage of manufacturing industry, capital exploits the fruits of an increase in the productivity of labour born from more and more advanced forms of the division of labour. But the technique of production remains fundamentally the same. Labour is subdivided in function of the subdivision of the final product produced by manufacture. But beyond these subdivisions no changes occur in the labour process. The main interest for the capitalist during the stage of manufacture is, therefore, the constant direct control of capital over labour in order to secure a maximum expenditure of surplus labour with a given level of technique. It is like a workhouse in which the workers lose their freedom to determine their own work rhythm, in which work becomes unfree, forced labour from that point of view also. Many initial manufacturing concerns were indeed literally that: workhouses, filled with labourers who to various degrees had lost their individual freedom. With the industrial revolution and the emergence of the modern factory, this

process of the submission of labour to capital in the course of the process of production is rooted, not only in the hierarchical forms of labour organization, but in the very nature of the production process itself. Inasmuch as production becomes mechanized, it becomes reorganized around machinery. The work rhythm and work content of living labour are subordinated to the mechanical needs of machinery itself. Alienation of labour is no longer only alienation of the products of labour, but alienation of the forms and contents of the work itself. The explosive potentialities of modern machinery are developed by Marx in three

directions simultaneously. Machines are capital’s main weapon for subordinating labour to capital in the course of the process of production. Machines are the main weapon for increasing the production of relative surplus-value, thereby relentlessly spurring on the process of accumulation of capital. And labour-saving machines are

the main weapon for producing and reproducing the industrial ‘reserve army of labour’, through which wages are kept fluctuating around the value of the commodity labour-power, and through which the appropriation of surplus-value is normally guaranteed to the capitalists. Marx, therefore, logically integrates the development of the class struggle between

capital and labour into his analysis of the production of surplus-value, inasmuch as he sees that class struggle as originating in that process of production. The extortion of surplus-value from living labour means a struggle by the capitalists to lengthen the working day, to increase the work-load of the workers without increasing wages, to appropriate for capital all the benefits of increased productivity of labour. Conversely, the struggle against capitalist exploitation means, for the workers, a struggle to reduce the working day without any reduction of wages, a struggle for cuts in the work-load, a struggle for increased real wages. How this class struggle against the immediate aspects of capitalist exploitation transforms itself into a struggle for the overthrow of the capitalist system – this question is briefly taken up in the eighth and final part of Volume 1. Part Seven, meanwhile, deals basically with the accumulation of capital, the goal of the whole infernal logic which Marx has laid bare so far. Capital produces surplus-value which in turn is, to a large extent, transformed into additional capital, which in turn produces additional surplus-value. And so on, with all its subsequent contradictory effects for mankind. If we list the contents of the successive parts of Volume 1, subdividing Part One

into its three constituent chapters, we can see how this flawless logic of the analysis unfolds and how it roughly corresponds to the historical process ‘stripped of the historical form and diverting chance occurrences’.31

I. Starting point: elementary form of capitalist wealth: the commodity (a) the commodity and the realization of its exchange-value, or the process of exchange (b) the process of exchange and the means of exchange: money (c) money, necessary mediator of the process of circulation of commodities

II. Money transforming itself into capital, i.e. value searching for an accretion of value, surplus-value; the nature of surplus-value III. The production of surplus-value: absolute surplus-value IV. The production of surplus-value: relative surplus-value (from manufacturing to the modern factory system) V. Relations between wages, productivity of labour and surplus-value; the rate of surplus-value

VI. How the value of labour-power is transformed into wages, their different forms and variations VII./VIII. The accumulation of capital, i.e. capitalist wealth in its totality: its consequences for labour. The origins of capitalism (the ‘primitive accumulation of capital’)

At the end of Volume 1 we are back where we started from: capitalist wealth. But now we no longer understand it simply as a sum of ‘elementary elements’, a mountain of commodities (although it is this mountain also !). We see it now also as the result of a gigantic process of value production, of surplus-value extraction, out of living labour; as a gigantic movement constantly revolutionizing the means of production, the organization of production, the labour process and the producers themselves. The formula ‘capital-value in search of additional value’ is now understood as capital organizing a process of self-valorization (Verwertung), a process of constant searching for increases in its own value through the unity of the labour process and the process of production of increased value (Einheit von Arbeitsprozess und Verwertungsprozess). We thus understand more fully why an analysis of capitalism has first to clarify everything which happens in the course of the process of production.32

Marx’s attitude towards technology, machinery and the factory system has often been misinterpreted, even by authors favourably inclined towards him. It is obviously true that more than any other contemporary economist, sociologist or philosopher, he was aware of the long-range revolutionary effects of machinery upon all aspects of life in bourgeois society. It is also true that his indictment of the inhuman results of the capitalist use of machinery cannot escape anyone who reads Chapters 10, 15 and 25 of Capital Volume 1 with a minimum of attention. Is it therefore appropriate to see in Marx a latter-day Luddite, a forerunner of the zero-growth prophets? Or is it true, as others have argued,33 that Marx was a deep admirer of capitalist technology and put all his hopes in the long-run emancipatory effects of that technology, alone capable of reducing the unavoidable work-load and work-fatigue to which man is condemned? Marx the dialectician, bent upon an all-sided analysis of capitalism and capitalist

technology, avoids both these pitfalls, the conservatively romantic as well as the inhumanly mechanistic one. In classic passages of the Grundrisse34 he underlines the civilizing and progressive aspects of capitalism, its giant impulse to develop the social forces of production, its relentless search for new ways and means to economize on

labour, for new needs and new sectors of mass production, which help to unfold man’s unlimited possibilities. But simultaneously he shows how the specific capitalist form of this development increases tenfold the inhuman potentiality of technology, machinery and exchange-value ‘gone mad’ (that is, becoming goals in themselves). Capitalism subordinates men to machines instead of using machines to liberate men from the burden of mechanical and repetitive work. It subordinates all social activities to the imperatives of an incessant drive for individual enrichment in terms of money, instead of gearing social life to the development of rich individualities and their social relations. The contradiction between use-value and exchange-value, inherent in every commodity, fully unfolds itself in this contradictory nature of capitalist machinery. When capitalism is not overthrown once it has created the material and social preconditions for a classless society of associated producers, this contradiction implies the possibility of a steadily increasing transformation of the forces of production into forces of destruction, in the most literal sense of the word: not only forces of destruction of wealth (crises and wars), of human wealth and human happiness, but also forces of destruction of life tout court.

5. THE MARXIST LABOUR THEORY OF VALUE

No part of Marx’s theory has been more assaulted in the academic world during the last seventy-five years than his theory of value. His bourgeois critics show a sharp class instinct here, for this theory is indeed the corner-stone of the whole system. But no contemporary intellectual endeavour has been so obviously based upon a basic misunderstanding as the repeated attacks on the Marxist labour theory of value.35

That theory recognizes two aspects of the problem of value, a quantitative and a qualitative one. From a quantitative point of view, the value of a commodity is the quantity of simple labour (skilled labour being reduced to simple labour through a given coefficient) socially necessary for its production (that is, at a given average productivity of labour). From a qualitative point of view, the value of a commodity is determined by abstract human labour – commodities which have been produced by private labour become commensurate only inasmuch as society abstracts from the concrete and specific aspect of each individual private craft or branch of industry and equalizes all these labours as abstract social labour, regardless of the specific use- value of each commodity. In order to understand this theory, it is sufficient to formulate the question to which

Marx tried to give an answer. The problem is as follows. Man has to work in order to satisfy his material needs, to ‘produce his material life’. The way in which the labour

of all producers in a given society is divided among different branches of material production will determine the extent to which different needs can be fulfilled. Hence, given a certain set of needs, a rough equilibrium between needs and output requires a distribution of labour (of ‘labour inputs’) between these various branches of production in a given proportion, and in that only. In a primitive society, or in a fully developed socialist one, this distribution of labour inputs occurs in a consciously planned way: in a primitive society, on the basis of habits, custom, tradition, magico- ritual processes, decisions by elders etc.; in a socialist one, on the basis of a democratic selection of priorities by the mass of the associated producers-consumers themselves. But under capitalism, where labour has become private labour, where products of labour are commodities produced independently from each other by thousands of independent firms, no conscious decision pre-establishes such an equilibrium of inputs of labour and socially recognized needs (under capitalism this implies, of course, that only those needs expressed through effective demand are socially recognized). Equilibrium is reached only accidentally, through the operation of blind market forces. Price fluctuations, to which academic economists remain glued, are in the most favourable hypothesis only signals which indicate whether this equilibrium is being shaken, by what pressure and in what direction. They do not explain what is being equilibrated and which is the driving force behind all these myriad fluctuations. It is precisely this question which Marx tried to answer with his perfected labour theory of value. From this approach it is immediately clear that, contrary to what so many of his

critics starting with the Austrian Böhm-Bawerk assumed, Marx never intended to explain short-term price fluctuations on the market with his theory of value.36

(Probably he intended to raise some of the problems involved in short-term price fluctuations in the never-written Volume 6 of the original plan for Capital.) Nor does it make any sense to speak of the labour theory of value, as explained in Volume 1 of Capital, as a ‘micro-economic theory’ allegedly in contrast with the ‘macro- economic’ labour theory of value in Volume 3. What Marx tried to discover was a hidden key behind price fluctuations, the atoms inside the molecule so to speak. He moved the whole economic analysis to a different and higher level of abstraction. His question was not: how does Sammy run (what movements do his legs and body make while running), but what makes Sammy run. It follows that 99 per cent of the criticism directed against the Marxist labour theory

of value is entirely beside the point, especially when it tries to ‘refute’ the first pages of Chapter 1 of Capital Volume 1, which have sometimes been construed as a ‘proof,

of that theory.37 To say that commodities have qualities in common other than the fact that they are products of social labour transforms an analysis of social relations into a logical parlour game. Obviously, these ‘other qualities’ have nothing to do with the nexus between members of society in an anarchic market economy. The fact that both bread and aeroplanes are ‘scarce’ does not make them commensurable. Even when thousands of people are dying of hunger, and the ‘intensity of need’ for bread is certainly a thousand times greater than the ‘intensity of need’ for aeroplanes, the first commodity will remain immensely cheaper than the second, because much less socially necessary labour has been spent on its production. The question has often been asked: why bother at all with this type of inquiry? Why

can one not restrict ‘economics’ to the analysis of what actually occurs in day-to-day economic life (under capitalism, it goes without saying) – the ups and downs of prices, wages, interest rates, profits etc., instead of trying to discover mysterious ‘forces beneath the surface of the economy’ which are supposed to govern actual economic events, but only on a very high level of abstraction and in the very final analysis? This neo-positivist approach is curiously and typically unscientific. Nobody dealing

with medicine, not to speak of other physical sciences, would dare for fear of becoming a laughing stock to ask: ‘Why bother to look for the “deeper causes” of diseases, when one can collect symptoms to establish a diagnosis?’ Obviously no real understanding of economic development is possible if one does not try to discover precisely what ‘lies behind’ immediate appearances. Laws about immediate short- term fluctuations of prices on the market cannot explain why, to give an interesting example, one kilogram of gold buys in 1974 nearly twice as many given baskets of American consumer commodities as seventy years ago (the average consumer price index has risen somewhat more than fivefold compared to 1904, whereas the price of gold on the free market has risen nine times). Obviously this basic movement of prices in the long run has something to do with the different dynamics of the long- term social productivity of labour in the various consumer industries on the one hand and in the gold-mining industry on the other; that is, with the laws of value as formulated by Marx. Once we understand that the famous ‘invisible hand’ which is supposed to regulate

supply and demand on the market is nothing but the operation of that same law of value, we can tie together a whole series of economic processes which otherwise remain disconnected pieces of analysis. Money born out of exchange can serve as a universal equivalent of the value of commodities only because it is itself a commodity

with its own intrinsic value (or, in the case of paper money, represents a commodity with its own intrinsic value). Monetary theory is re-united with the theory of value and the theory of capital accumulation. The ups and downs of the trade cycle appear as the mechanism through which upheavals in the value of commodities end by asserting themselves, with the painful devalorization (loss of value) this entails, not only for the ‘infantry’ of the commodity army, the individual mass of finished consumer goods sold on a day-to-day basis, but also for its ‘heavy artillery’, that is, large-scale machinery, fixed capital. The theory of economic growth, of the ‘trade cycle’, of capitalist crises, the theory of the rate of profit and of its tendency to decline – everything flows in the last analysis from this operation of the law of value. So the question whether it has any use at all in economic analysis is, therefore, as meaningless as the question whether you need the concept of basic particles (atoms, etc.) in physics. Indeed, no coherent and consistent analysis of the capitalist economy in its totality, explaining all the basic laws of motion of that system, is possible without ‘elementary principles’ organized around the value of commodities. In Marxist economic theory, the ‘law of value’ fulfils a triple function. In the first

place it governs (which does not mean that it determines here and now) the exchange relations between commodities; that is to say, it establishes the axis around which long-term changes in relative prices of commodities oscillate. (This includes under capitalism also the exchange relation between capital and labour, an extremely important point to which we shall return presently.) In the second place it determines the relative proportions of total social labour (and this implies, in the last analysis, total material resources of society) devoted to the output of different groups of commodities. In this way, the law of value distributes in the final analysis material resources over different branches of production (and of social activity in general) according to the division of ‘effective demand’ for different groups of commodities, it being always understood that this occurs within the framework of antagonistic class relations of production and distribution. In the third place it rules economic growth, by determining the average rate of profit and directing investment towards those firms and sectors of production where profit is above average, and away from those firms and sectors where profit is below average. Again, these movements of capital and investment correspond in the final analysis to conditions of ‘economy’ and ‘waste’ of social labour, that is to the workings of the law of value. Marx’s labour theory of value is a further development and perfection of the labour

theory of value as it emanated from the ‘classical’ school of political economy, and especially of Ricardo’s version. But the changes Marx brought into that theory were

manifold. One especially was to be decisive: the use of the concept of abstract social labour as the foundation of his theory of value. It is for this reason that Marx cannot be considered as in any way an ‘advanced neo-Ricardian’. ‘Labour quantities as the essence of value’ is something quite different from ‘labour quantities as numéraire’ – a common measuring rod of the value of all commodities. The distinction between concrete labour, which determines the use-value of commodities, and abstract labour, which determines their value, is a revolutionary step forward beyond Ricardo of which Marx was very proud; indeed he considered it his main achievement, together with the discovery of the general category of surplus-value, encompassing profit, rent and interest. It is based on an understanding of the peculiar structure of a society of commodity-producers, that is of the key problem of how to relate to each other the segments of the global labour potential of society which have taken the form of private labour. It represents, therefore, together with Marx’s concept of necessary labour and surplus labour (necessary product and surplus product), the key nexus between economic theory and the science of social revolution, historical materialism. The way in which the Marxist labour theory of value sharply excludes use-value

from any direct determination of value and exchange-value has often been interpreted as a rejection by Marx of use-value beyond the boundary of economic analysis and theory altogether. This does not correspond at all to the rich dialectical complexity of Capital. When we deal with the problems of reproduction, in the introduction to Volume 2, we shall have occasion to dwell on the specific way in which the contradiction between use-value and exchange-value has to be bridged under capitalism, in order to make economic growth at all possible. Here, we only want to stress that, for Marx, the commodity was understood as encompassing both a unity and a contradiction between use-value and exchange-value: a good with no use-value for any potential buyer could not realize its exchange-value; and the specific use- value of two categories of commodities, means of production and labour-power, played a key role in his analysis of the capitalist mode of production. As has already been stated, the law of value fundamentally expresses the fact that

in a society based upon private property and private labour (in which economic decision-making is fragmented between thousands of independent firms and millions of independent ‘economic agents’) social labour cannot immediately be recognized as such. If Mr Jones has his workers produce 100,000 pairs of shoes a year he knows that people need shoes and buy them; he even knows, if he bothers to do his homework, that the annual number of shoes sold in the United Kingdom (and all those countries to which he intends to export his output) vastly outdistances the modest figure of

100,000 pairs. But he has no way of knowing whether the specific 100,000 pairs of shoes he owns will find specific customers willing and able to buy them. Only after selling his shoes and receiving their equivalent can he say (provided he has realized the average rate of profit on his invested capital): my workers have truly spent socially necessary labour in my factory. If part of the produced shoes remain unsold, or if they are sold at a loss or at a profit significantly less than the average, this means that part of the labour spent on their production has not been recognized by society as socially necessary labour, has in fact been wasted labour from the point of view of society as a whole. But this ‘recognition of’ or ‘refusal to recognize’ a given quantity of labour by

society occurs exclusively in function of meeting effective demand on the market, that is it is independent of the use-value or social usefulness of the specific physical qualities of a given commodity. Society recognizes quantities of labour spent in its production, making abstraction of these considerations. That is why Marx called these quantities, quantities of abstract socially necessary labour. If a pound of opium, a box of dum-dum bullets or a portrait of Hitler find customers on the market, the labour which has been spent on their output is socially necessary labour; its production has been value-production. If, on the contrary, an exquisite piece of china or a new pharmaceutical product for some reason does not find customers, its production has created no value, has been equivalent to a waste of social labour – even if, in some distant future, their creators will be celebrated as geniuses or benefactors of mankind. The labour theory of value has nothing to do with judgements on the usefulness of things from the point of view of human happiness or social progress. It has even less to do with establishing ‘conditions for justice in exchange’. It simply recognizes the deeper meaning of the actual act of exchange and of the output of commodities under capitalism, and what governs the distribution of income between social classes which results from these acts, independently of any moral, aesthetic or political judgement. Indeed, if one were to look for such ‘judgements’, one would have to say that Marx, while understanding why the law of value has to operate as it does under commodity production, did not at all strive to ‘defend’ that law, but on the contrary to build a society in which its operations would be totally abolished. One of the most common and innocuous objections made against Marx’s labour

theory of value runs along these lines: if prices are governed in the last analysis by value (socially necessary quantities of abstract labour), how can goods have prices if they are not products of labour, that is if they have no value? Marx himself in fact answered that objection long before drafting Capital Volume l.38 Products of nature

(‘free goods’), which have indeed no value since no social labour has been spent on their production, can get a price through private appropriation, through the social institution of private property. Land on which no human hand has ever worked to increase its fertility has no value. But it can get a price if it is surrounded by a fence upon which is put a placard ‘Private property: Trespassing forbidden’, and if people are ready to pay that price because they need that land as a source of livelihood. This price will in reality be the capitalization of the net income (land rent) accruing to its owner, income produced by those who will farm it and draw material resources (goods for self-consumption or commodities) from it through their toil.39