Sunday, December 17, 2006


Notes for our discussion on pp. 458-533

Labour-power and labour

In the earlier parts of the Grundrisse, Marx makes no distinction between labour-power and labour. In the later parts, that distinction appears. The first clear statement is in these pages.
"Living labour itself appears as alien vis-à-vis living labour capacity, whose labour it is, whose own life's expression it is, for it has been surrendered to capital in exchange for objectified labour, for the product of labour itself. Labour capacity relates to its labour as to an alien". [p.462].

Capital as ongoing concern, and capital as first emerging

Once capitalism is up and going, it reproduces its own conditions. "Capital turns into capitalist" [p.462] and continuously nourishes itself; "living labour... after production... has become poorer by the life forces expended, but otherwise begins the drudgery anew..." [p.462-3].
But initially? How does capitalism get up and going in the first place?
Marx look at the "conditions... which have... arisen... historically, for money to become capital and labour to become capital-positing, capital-creating labour, wage-labour" [p.463].
First he defines more strictly what he means by wage-labour:
"(1)... living labour capacity... separated from the means of living labour as well as from the means of existence...
(2) ... accumulation... sufficiently large... for the absorption of surplus labour...
(3) a free exchange relation - money-circulation - between both sides...
(4) ... money-making as the ultimate purpose..." [p.463-4].

Analysis of the present, and description of history

On pages 460-1, Marx writes:
"In order to develop the laws of bourgeois economy... it is not necessary to write the real history of the relations of production. But the correct observation and deduction of those laws... always leads to primary equations - like the empirical numbers e.g. in natural science - which point towards a past lying behind this system. These indications, together with a correct grasp of the present, then also offer the key to the understanding of the past - a work in its own right... This correct view likewise leads at the same time to the points at which the suspension of the present form of production relations gives signs of its becoming..."
What Marx means here, I think, is:
(1) Once capitalism is up and going, it reproduces its own conditions. That process of reproduction has its own logic, and can be analysed as such without having to describe the whole history of how it got going.
In fact, Marx is highly critical of bourgeois economists who "attempt... to legitimise [capital] by formulating the conditions of its becoming as the conditions of its contemporary realisation, i.e. presenting the moments in which the capitalist still appropriates as non-capitalist... as the very conditions in which he appropriates as capitalist". [p.460].
Here Marx has in mind the sort of bourgeois economics which analyses production as requiring two inputs. The capitalist brings the means of production, as the fruit of saving and thrift. The worker brings nothing but his or her brains and brawn. Naturally, what's produced must be distributed in proportion to the inputs, so the capitalist having brought the impressive factory and the shiny equipment gets more than the feckless worker.
This approach skates over the fact that the factory and the equipment are nothing other than the material form of recent years' surplus-labour, and suggests instead that they have been accumulated by "saving" by the capitalist, in the same sort of way as many early capitalists were indeed small craft-workers or tenant-farmers who saved a sufficient pile from their own labour to be able to launch out on a larger scale.
(2) The reference to natural science is cryptic, but I think it may refer to such things as the fact that the equation for the movement of objects falling under gravity near the earth's surface contains a number, 9.81 metres/second/second, which for the purposes of that equation is just a bald fact. The number points us to further research into why it is 9.81 and not anything else, i.e. towards an investigation of the more general laws of gravity. Marx cannot have had anything in mind like Martin Rees's "just six numbers" - the remark by a present-day cosmologist that the viability of the universe depends on six physical constants having more or less the values which they do have, although, as far as we can tell at present, there is no logical or physical reason why they could not have had different values.
(3) Although capitalism, once underway, has its own logic, it is not a perfect, stable, conflict-free logic. On the contrary. Thus, Marx argues, investigation of the logic of capitalism once fully underway will point towards both the tendencies within it which will lead to the overthrow of capitalism, and to the special conditions which must have been needed for it to arise in the first place.
Marx makes a similar point more crisply in Capital, chapter 28:
"The dull compulsion of economic relations completes the subjection of the labourer to the capitalist. Direct force, outside economic conditions, is of course still used, but only exceptionally. In the ordinary run of things, the labourer can be left to the 'natural laws of production', i.e. to his dependence on capital, a dependence springing from, and guaranteed in perpetuity by, the conditions of production themselves. It is otherwise during the historic genesis of capitalist production. The bourgeoisie, at its rise, wants and uses the power of the state... to keep the labourer himself in the normal degree of dependence".

Capital without wage-workers? Wage-payment without capitalist wage-labour?

It is possible for capitalists to emerge without any large number of wage-workers. For example, merchant capitalists. Another example: "slavery is possible at individual points within the bourgeois system of production" [p.464]; "the plantation owners in America... are capitalists... based on their existence as anomalies within a world market based on free labour" [p.513].
Generalised wage-labour - wage-labour as the main form of deployment of labour - is impossible without capital; and generalised capital is impossible without wage-labour.
But sometimes large numbers of workers can be paid in the wage-form without being capitalist wage-workers. Workers living from a wage, salary, stipend, or fees are not necessarily wage-workers working for capital. For centuries there are many such workers, paid from revenue rather than capital.
"The entire class of so-called services from the bootblack up to the king falls into this category. Likewise the free day-labourer... In Asiatic societies... whole cities arise... from the exchange of [the monarch's] revenue with the 'free hands'... The pay of the common soldier is also reduced to a minimum... but he exchanges the performance of his services not for capital, but for the revenue of the state..." [p.467].
"In bourgeois society itself, all exchange of personal services for revenue - ... cooking, sewing etc., garden work etc., up to and including... civil servants, physicians, lawyers, scholars, etc. - belongs under this rubric, within this category..." [p.468].

Relevance of these distinctions in developed capitalist society?

Marx does not coin a term for this category of "wage-workers for revenue". In developed capitalist society, broadly speaking, all of what Marx elsewhere calls capitalistically unproductive wage-labourers fall into this category - health and education workers in the public domain; finance, retail, and sales workers; civil servants, etc. They constitute a large and growing proportion of the workforce, and work for capitalists or state-capitalists under conditions essentially similar to those of the capitalistically productive wage-workers. They may even be able to choke off the flow of surplus-value by going on strike: finance and retail workers can do that, although they do not strictly speaking produce surplus-value.
A question is posed. Maybe, historically, it is important to distinguish between the growth of large bodies of "wage-workers for revenue" - servants, porters, etc. - and the growth of wage-labour as the basis of production. But is the analytical distinction within the working class today, between capitalistically productive and capitalistically unproductive wage-workers, of strategic consequence? I think not.
Doctors, lawyers, accountants, and so on, working for fees, remain a distinct category, petty-bourgeois, more akin to independent craft workers or workshop-masters than to wage-workers.

Relevance to debates about Stalinism

What light does this discussion shed on the debates about Stalinism? Your conclusion as to whether the workers in the Stalinist states were wage-workers or not depends, up to a point, on how much you reckon Marx's third condition, "a free exchange-relation - money-circulation - between both sides", must be understood as requiring a fully, or nearly fully, free market, or only as requiring that the relationship be mediated through money, perhaps on a very imperfect market.
In fact labour markets are extremely "imperfect" in almost all capitalist states - for varying reasons, sometimes to do with trade unions - and the basic development of the concept of wage-labour presupposes only the money-relationship, not any particular level of freely-competitive price-setting, nor any particular level of individual legal freedom going with the money-relationship beyond the requirement that the worker not be a slave or a serf legally annexed to another individual.
That the worker is a "slave" to "capital in general" does not contradict wage-labour. "The free worker... sells the particular expenditure of force to a particular capitalist, whom he confronts as an independent individual. It is clear that this is not his relation to the existence of capital as capital, i.e. to the capitalist class". [p.464].
Logically, you could build on Marx and argue that in the USSR the bureaucrats formed a state-capitalist class while exploiting by methods other than wage-labour, because of their "existence as anomalies within a world market based on free labour". (That was approximately Tony Cliff's idea, though his summary was that the whole economy was capitalist despite no wage-labour). The more common view (e.g. of some Regulation School writers) that the Stalinist USSR was a wage-labour society, but not a capitalist one, seems harder to mesh with Marx's argument.

"Capital is the existence of social labour"

Before going on to his main discussion of pre-capitalist economic formations, Marx outlines an idea which he will summarise tersely in Capital, chapter 13.
"The productive power developed by the labourer when working in cooperation, is the productive power of capital... it appears as a power with which capital is endowed by Nature - a productive power that is immanent in capital".
The idea is expressed at greater length, and perhaps more vividly, in the Grundrisse.
"The combination of this labour appears... subservient to and led by an alien will and an alien intelligence - having its animating unity elsewhere... Just as the worker relates to the product of his labour as an alien thing, so does he relate to the combination of labour as an alien combination, as well as to his own labour as an expression of his life, which, although it belongs to him, is alien to him and coerced from him... Communal or combined labour... is... posited as an other towards the really existing individual labour - as an alien objectivity (alien property) as well as an alien subjectivity (of capital)... Capital... is the existence of social labour" [p.470-1].
"The collective power of labour, its character as social labour, is... the collective power of capital. Likewise science. Likewise the division of labour... All social powers of production are productive powers of capital, and it appears as itself their subject. The association of the workers, as it appears in the factory, is therefore not posited by them but by capital. Their combination is not their being, but the being of capital. Vis-à-vis the individual worker, the combination appears accidental. He relates to his own combination and cooperation with other workers as alien, as modes of capital's effectiveness". [p.585].

The sequence of pre-capitalist societies

Marx now goes on to look at the historical steps in the emergence of wage-labour and capital. Central, he asserts, is the separation of the worker from the land.
"Above all... dissolution of small, free landed property as well as of communal landownership resting on the oriental commune". [p.471].
When Marx discusses this issue in Capital, he looks more or less exclusively at the processes leading to the breakdown of feudal society and the emergence from it of widespread wage-labour and capitalist production.
"The economic structure of capitalistic society has grown out of the economic structure of feudal society. The dissolution of the latter set free the elements of the former". [Chapter 26].
In the Grundrisse, perhaps because Marx has not narrowed his focus enough yet, and is making notes for an overview of the whole of economic history, the approach is different. Marx discusses a wide variety of "forms which precede capitalist production", without any particular emphasis on feudalism.
Moreover, the discussion in the Grundrisse does not present the picture of a tidy sequence of modes of production, each emerging duly from the previous one, in a regular way, which is suggested by a famous sentence in the 1859 Preface to a Contribution to the Critique of Political Economy.
"In broad outline, the Asiatic, ancient, feudal and modern bourgeois modes of production may be designated as epochs marking progress in the economic development of society".
(Stalinist orthodoxy would later make this sequence even more mechanical, by erasing the Asiatic variant).
In the Grundrisse, Marx gives a picture of three variants based on communal landownership, none of which is "primitive communism", and none of which stands logically "after" the others. He then describes slavery and serfdom as representing breakdowns of systems of communal landownership.

The three communal forms

All three forms start from the "presupposition" of some form of clan communities and patches of land belonging to them. Then:
(1) The "Asiatic" form. The despot, "the comprehensive unity standing above all these little communities appears as the higher proprietor or as the sole proprietor; the real communities hence only as hereditary possessors... The surplus product... automatically belongs to this highest unity [the despot]... Clan or communal property exists in fact as the foundation, created mostly by a combination of manufactures and agriculture within the small commune, which thus becomes altogether self-sustaining... A part of their surplus labour belongs to the higher community... and this surplus labour takes the form of tribute etc., as well as of common labour for the... despot" and religious purposes. [p.473].
Sub-variants: labour within the communities may be organised communally, or may be mostly individual. There may be "a more despotic or a more democratic" organisation of the community. Aqueducts and means of communication, organised by the despot, may or may not play a big role.
(2) The "Roman" form. This "presupposes as base not the countryside, but the town as an already created seat (centre) of the rural population (owners of land). The cultivated field here appears as a territorium belonging to the town; not the village as mere accessory to the land". [p.474]. The society is dominated by war between communes over land. "Hence the commune consisting of families initially organized in a warlike way - as a system of war and army... The concentration of residences in the town, basis of this bellicose organization... Communal property - as state property, ager publicus - here separated from private property... Membership in the commune remains the presupposition for the appropriation of land and soil, but, as a member of the commune, the individual is a private proprietor." [p.474-5].
(3) The "Germanic" form. "In the Germanic form, the agriculturist not citizen of a state, i.e. not inhabitant of a city; [the] basis [is] rather the isolated, independent family residence, guaranteed by the bond with other such family residences of the same tribe, and by their occasional coming-together to pledge each others' allegiance in war, religion, adjudication etc. Individual landed property here appears neither as a form antithetical to the commune's landed property, nor as mediated by it, but just the contrary. The commune exists only in the interrelations among these individual landed proprietors as such... [It] is really the common property of the individual proprietors, not of the union of these proprietors endowed with an existence separate from themselves, the city itself". [p.484-5]
The three forms produce different relations of town and country:
"The history of classical antiquity is the history of cities, but of cities founded on landed property and on agriculture; Asiatic history is a kind of indifferent unity of town and countryside (the really large cities must be regarded here merely as royal camps...); the Middle Ages (Germanic period) begins with the land as the seat of history, whose further development then moves forward in the contradiction between town and countryside". [p.479].

Emancipation from the commune

In all these forms, the individual is submerged in the clan. Marx again restates his views on the emptiness and alienation characteristic of capitalist society, and at the same time the immense potential for future emancipation incubated in it, and the futility of backward-looking romantic reactions. Far from Marx endorsing any sort of beehive-communism, he exalts the emancipation of the individual from the commune as the precondition for the emancipation of human creative powers.
The same sort of idea would be developed later, by Russian Marxists like Lenin with no knowledge of the Grundrisse, in their insistence against the populists that the breakdown of the old Russian village community, the mir (seen by the populists as the basis to create a special Russian socialism), was progressive.
Lenin: "Tied to their allotment, to their tiny 'village community,' [the peasants] were completely fenced off even from the peasants of the neighbouring village community by the difference in the categories to which they belonged (former landowners’ peasants, former state peasants, etc.), [etc.]. Capitalism for the first time broke down these purely medieval barriers—and it was a very good thing that it did... Capitalism destroys local seclusion and insularity, and replaces the minute medieval divisions among cultivators by a major division, embracing the whole nation, that divides them into classes occupying different positions in the general system of capitalist economy.
"The mass of cultivators were formerly tied to their place of residence by the very conditions of production, whereas the creation of diverse forms and diverse areas of commercial and capitalist agriculture could not but cause the movement of enormous masses of the population throughout the country; and unless the population is mobile... there can be no question of developing its understanding and initiative" [Lenin, The Development of Capitalism in Russia, chapter 4].
Marx, in the Grundrisse: "The reproduction of presupposed relations... of the individual to his commune, together with a specific, objective existence, predetermined for the individual, of his relations both to the conditions of labour and to his co-workers, fellow tribesmen etc. - are the foundation of development, which is therefore from the outset restricted...
Great developments can take place here within a specific sphere. The individuals may appear great. But there can be no conception here of a free and full development either of the individual or of the society, since such development stands in contradiction to the original relation.
Do we never find in antiquity an inquiry into which form of landed property etc. is the most productive, creates the greatest wealth? Wealth does not appear as the aim of production, although Cato may well investigate which manner of cultivating a field brings the greatest rewards, and Brutus may even lend out his money at the best rates of interest. The question is always which mode of property creates the best citizens. Wealth appears as an end in itself only among the few commercial peoples -monopolists of the carrying trade - who live in the pores of the ancient world, like the Jews in medieval society...
Thus the old view, in which the human being appears as the aim of production, regardless of his limited national, religious, political character, seems to be very lofty when contrasted to the modern world, where production appears as the aim of mankind and wealth as the aim of production.
In fact, however, when the limited bourgeois form is stripped away, what is wealth other than the universality of individual needs, capacities, pleasures, productive forces etc., created through universal exchange? The full development of human mastery over the forces of nature, those of so-called nature as well as of humanity's own nature? The absolute working-out of his creative potentialities, with no presupposition other than the previous historic development, which makes this totality of development, i.e. the development of all human powers as such the end in itself, not as measured on a predetermined yardstick? Where he does not reproduce himself in one specificity, but produces his totality? Strives not to remain something he has become, but is in the absolute movement of becoming?
In bourgeois economics - and in the epoch of production to which it corresponds - this complete working-out of the human content appears as a complete emptying-out, this universal objectification as total alienation, and the tearing-down of all limited, one-sided aims as sacrifice of the human end-in-itself to an entirely external end. This is why the childish world of antiquity appears on one side as loftier..." [p.487-8].
"In this [old] community, the objective being of the individual as proprietor, say proprietor of land, is presupposed, and presupposed moreover under certain conditions which chain him to the community, or rather form a link in his chain. In bourgeois society, the worker e.g. stands there purely without objectivity, subjectively; but the thing which stands opposite him has now become the true community, which he tries to make a meal of, and which makes a meal of him". [p.496].

Slavery and serfdom

Marx presents slavery as an element in Roman society destroying its foundations.
"Among the Romans, the development of slavery, the concentration of land possession, exchange, the money system, conquest etc., although all these elements up to a certain point seemed compatible with the foundation, and in part appeared merely as innocent extensions of it..." [were destructive]. {p.487].
More generally, he suggests that both slavery and serfdom are phenomena of the decay of economic systems based on the local communities.
"Slavery, bondage etc., where the worker himself appears among the natural conditions of production for a third individual or community.... - i.e. property no longer the relation of the working individual to the objective conditions of labour - is always secondary, derived.." [p.495-6].

The transition to capitalism

Marx then rather abruptly discusses the transition to capitalism as one from feudal society, without having yet made more than passing remarks about feudal society, or about the transition from the old communal-based systems to feudalism.
The transition "presupposes a process of history which dissolves the various forms in which the worker is a proprietor, or in which the proprietor works. Thus above all:
(1) Dissolution of the [worker's] relation to the earth - land and soil... [of] all forms... [of] community, whose members, although there may be formal distinctions between them, are, as members of it, proprietors...
(2) Dissolution of the relations in which [the worker] appears as proprietor of the instrument [of production]... Property of the worker in the instrument [of production] presuppose[s] a particular form of the development of manufactures, namely craft, artisan work; bound up with it, the guild-corporation system etc...
(3) [Dissolution of situations where the worker] has the means of consumption in his possession before production, which are necessary for him to live as producer... As proprietor of land he appears as directly provided with the necessary consumption fund. As master in a craft he has inherited it, earned it, saved it up... as an apprentice.. he... shares the master's fare in a patriarchal way...
(4) Dissolution likewise at the same time of the relations in which the workers themselves, the living labour capacities themselves, still belong directly among the objective conditions of production, and are appropriated as such - i.e. are slaves or serfs..." [p.497-8].
This summary corresponds quite closely with Marx's discussion in Capital, and suggests a much more violent, struggle-filled history of transition to capitalism than some earlier passages in the Grundrisse which hint at pre-capitalist societies being transformed into capitalism by the gradual influence of trade.
Marx then comments: "But the question arises, on the other side, which conditions are required so that he finds himself up against a capital?" [p.498].
After much digression, his answer is: the same conditions which create wage-labour also create capital.
"The same process which placed the mass face to face with the objective conditions of labour as free workers also placed these conditions, as capital, face to face with the free workers... The separation of the objective conditions [the means of production] from the classes which have become transformed into free workers necessarily also appears at the same time as the achievement of independence by these same conditions at the opposite pole". [p.503].

The rise of the capitalists: Capital

In Capital, Marx divides his description of the rise of the capitalist producers into two chapters: "Genesis of the Capitalist Farmer", and "Genesis of the Industrial Capitalist".
The capitalist farmer? "In England the first form of the farmer is the bailiff, himself a serf... During the second half of the 14th century he is replaced by a farmer, whom the landlord provided with seed, cattle and implements. His condition is not very different from that of the peasant. Only he exploits more wage-labour... [Then he becomes] the farmer proper, who makes his own capital breed by employing wage-laborers, and pays a part of the surplus-product, in money or in kind, to the landlord as rent.
"So long, during the 15th century, as the independent peasant and the farm-laborer working for himself as well as for wages, enriched themselves by their own labor, the circumstances of the farmer, and his field of production, were equally mediocre. The agricultural revolution which commenced in the last third of the 15th century, and continued during almost the whole of the 16th (excepting, however, its last decade), enriched him just as speedily as it impoverished the mass of the agricultural people...
"[As a result of this polarisation} England, at the end of the 16th century, had a class of capitalist farmers, rich, considering the circumstances of the time". [Chapter 29].
The industrial capitalist? "Many small guild-masters, and yet more independent small artisans, or even wage-labourers, transformed themselves into small capitalists, and (by gradually extending exploitation of wage-labour and corresponding accumulation) into full-blown capitalists..."
But a huge part was played by the creation of large accumulations of wealth by merchant and usurer capital, and by colonial looting. In the cities, traditional restrictions prevented the transformation of those accumulations into productive capital.
"The new manufactures were established at sea-ports, or at inland points beyond the control of the old municipalities and their guilds. Hence in England an embittered struggle of the corporate towns against these new industrial nurseries".
Marx does not expand on the point, but the capitalists that built the new mills in the river valleys of Nottingham and Derbyshire and thereabouts were mostly of middle-class origin.
Richard Arkwright was the son of a barber and wigmaker. James Hargreaves was a weaver and carpenter. Henry Cort was a former clerk, thought to have been the son of a builder. Matthew Boulton's father owned a small metal-working shop. John Wilkinson's father worked at a blast furnace. Josiah Wedgwood's father was the master-potter at the churchyard works in Burslem.

The rise of the capitalists: Grundrisse

"The formation of capital [emerges]... from merchant's and usurer's wealth". [p.505]. But then, so Marx suggests, and so is (generally) the fact, it is not the merchants and usurers who become the industrial capitalists. "The capitalist inserts himself as (historic) middle-man between landed property, or property generally, and labour". [p.505]. Marx mentions the putting-out system, where a merchant became an organiser of production by supplying inputs for weavers and spinners, working in their own homes, and then taking and selling the cloth produced; but even in that form, the merchants involved were usually smaller, rural-based ones, rather than the richest big-city merchants.
A large accumulation of monetary wealth is necessary for capitalist production. "But the mere presence of monetary wealth, and even the achievement of a kind of supremacy on its part, is in no way sufficient for... dissolution into capital to happen". [p.506].
Marx emphasises repeatedly that capital does not create the means of production. "Capital proper does nothing but bring together the mass of hands and instruments which it finds on hand... There can... be nothing be nothing more ridiculous than to conceive this original formation of capital as if capital had stockpiled and created the objective conditions of production - necessaries, raw materials, instrument - and then offered them to the worker, who was bare of these possessions. Rather, monetary wealth in part helped to strip the labour powers of able-bodied individuals from these conditions..." [p.508-9].

Turnover and profit

On pages 518ff, Marx discusses the relation between rate of profit and speed of turnover in a way messed up by confusions which also mark the discussion in Capital (volume 3, chapter 18).
Marx does not distinguish clearly between stock and flow. Capital advanced is a stock, an amount. Profit is a flow, an amount per year or other unit of time. The rate of profit is not just a percentage, but a percentage per year.
Marx sometimes states it as a simplifying assumption that the constant capital is all used up in one time period, so that the stock of constant capital advanced is equal to the flow of constant capital (per unit time period). But this is a very improbable assumption.
The argument on pages 518ff and in Capital volume 3, chapter 18, depends on the idea that a variable capital of a given amount will generate more surplus value if the capital turns over more rapidly. Not necessarily. The real difference for capital between very slow turnover (say, growing a hardwood forest, or building a very large construction project) and fast turnover is that the slow-turnover capitalist needs very much more "working capital" in addition to his fixed capital. The equalisation of the rate of profit will tend to bring him a rate of profit in proportion to the total capital deployed, i.e., all other things being equal, in excess of the surplus value produced in that particular business. There is no special, different, process of equalisation of rates of profit for businesses of different turnover times.
According to Shane Mage's study of the tendency of the rate of profit to fall, in actual capitalist practice the amount of variable capital actually advanced is usually very small, and sometimes zero - i.e. because of workers being paid in arrears, the capitalists need no prior stash of cash to cover that expense. They can recoup enough revenue from sales to cover the wage bill by the time it comes due. This will not be true for capitalists in businesses with very slow turnover.
In these pages, there is also a confusion between speeding up the time of production of each item, and reducing the labour-time embodied in each item. The two often go together, but are not the same. A production process may require very few workers and so very little labour-time per unit of production, but be very slow (growing a hardwood forest, for example). Or it may be very fast, but require a large number of workers, and so a lot of labour-time per unit of production.


From the late 19th century through to the 1970s, it was Marxist orthodoxy that as capitalism progressed, the economic role of the state would inexorably increase. This was not entirely wrong. Vehemently pro-privatisation governments, like Blair's and Howard's, have often nonetheless actually increased the size of the public sector. But they have privatised, and that was not expected.
On pages 530-2 Marx suggests, contrary to the Marxist orthodoxy that grew up after his death, that privatisation is characteristic of the most advanced capitalism.
"All general conditions of production, such as roads, canals, etc... presuppose, in order to be undertaken by capital instead of by the government which represents the community as such, the highest development of production founded on capital. The separation of public works from the state, and their migration into the domain of the works undertaken by capital itself, indicates the degree to which the real community has constituted itself in the form of capital..." [p.531].
"The highest development of capital exists when the general conditions of the process of social production are not paid out of deductions from the social revenue, the state's taxes - where revenue and not capital appears as the labour fund, and where the worker, although he is a free wage worker like any other, nevertheless stands economically in a different relation - but rather out of capital as capital. This shows the degree to which capital has subjugated all conditions of social production to itself, on one side; and, on the other side, hence, the extent to which social reproductive wealth has been capitalized, and all needs are satisfied through the exchange form; as well as the extent to which the socially posited needs of the individual, i.e. those which he consumes and feels not as a single individual in society, but communally with others - whose mode of consumption is social by the nature of the thing - are likewise not only consumed but also produced through exchange, individual exchange". [p.532].
Actually, the historical record suggests that both Marx's argument here, and the 20th century Marxist orthodoxy, are too "broad-brush". The rise of the economic role of the state, and of nationalised industries, was tied up with a drive by the different capitalist nation-states each to create their own more-or-less autonomous integrated industrial base (partly to bolster them for war); the spread of privatisation is tied up with a drive by capitalist states to orient more to the world market and to abandon all projects of more-or-less integrated "capitalism in one country".

Capitalist free labour

“A presupposition of wage labour, and one of the historic preconditions for capital, is free labour and the exchange of this free labour for money, in order to realize money, to consume the use value of labour not for individual consumption, but as use value for money.”
Grundrisse p.471

“When e.g. the great English landowners dismissed their retainers, who had, together with them, consumed the surplus product of the land; when further their tenants chased off the smaller cottagers etc., then, firstly, a mass of living labour powers was thereby thrown onto the labour market, a mass which was free in a double sense, free from the old relations of clientship, bondage and servitude, and secondly free of all belongings and possessions, and of every objective, material form of being, free of all property; dependent on the sale of its labour capacity or on begging, vagabondage and robbery as its only source of income.”
Grundrisse p.507

Here the “freedom” of the labourer appears merely as two negatives – absence of the old relationships and absence of labourers’ property.

Yet in Capital these same ideas are expressed more “positively”

“It [capital] can spring into life, only when the owner of the means of production and subsistence meets in the market with the free labourer selling his labour power. And this one historical condition comprises a world’s history. Capital, therefore, announces from its first appearance a new epoch in the process of social production.
Capital p.170

“The capitalist epoch is therefore characterized by this, that labour-power takes in the eyes of the labourer himself the form of a commodity which is his property; his labour consequently becomes wage-labour. On the other hand, it is only from this moment that the produce of labour universally becomes a commodity.”
Capital p.170 footnote

While “free” labour does not imply political rights such as the right to vote or the right to join a trade union, it does, in Marx’s finished exposition in Capital, mean something more than the mere absence of slavery or serfdom. That something is the effective ownership by the worker of his own labour power.

Thus the existence of a genuine (not necessarily “perfect”) labour market is a defining characteristic of a capitalist system. The “imperfection” introduced by trade unions shows that “perfection” can be a disadvantage to workers. However trade unionism is based on the existence of a genuine labour market and simply tries to obtain a better price for the sellers of labour power.

Direct compulsion can still occur under established capitalism, but only as an anomaly – eg the cotton plantation owners in the US were capitalists who exploited slaves, but they could only be capitalists because production by wage labour was the general rule in the US, i.e. the dominant mode of production in the US at the time was capitalism.

Cliffe’s “state-capitalist” theory of full-blown Stalinism (the USSR from 1929-1956) is nonsense. Direct state compulsion in USSR was an anomaly in the world economy, but was the general rule in the USSR in this period. Therefore the dominant mode of production in the world was capitalist, but the dominant mode of production in the USSR was not.
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