Tuesday, January 02, 2007


Notes for our discussion on pp.533-690

"The annihilation of space by time"

Capital, argues Marx, drives to create an ever-wider-ranging world market - to extend and to speed up economic exchanges.
While capital must on one side strive to tear down every spatial barrier to intercourse, i.e. to exchange, and conquer the whole earth for its market, it strives on the other side to annihilate this space with time, i.e. to reduce to a minimum the time spent in motion from one place to another. The more developed the capital, therefore, the more extensive the market over which it circulates, which forms the spatial orbit of its circulation, the more does it strive simultaneously for an even greater extension of the market and for greater annihilation of space by time... [p.539].
This idea of "the annihilation of space by time" has been taken as a cardinal theme, almost as a motto, by the Marxist geographer David Harvey in the books where he examines globalisation and post-modern conditions, such as The Condition of Postmodernity and Spaces of Capital.

Capital laying the basis for "the universal development of the individual"

This "universalising" tendency of capital, argues Marx, both makes it immensely productive and creates the basis for a new society.
The universalizing tendency of capital... distinguishes it from all previous stages of production. Although limited by its very nature, it strives towards the universal development of the forces of production, and thus becomes the presupposition of a new mode of production...
The result is: the tendentially and potentially general development of the forces of production -- of wealth as such -- as a basis; likewise, the universality of intercourse, hence the world market as a basis. The basis as the possibility of the universal development of the individual...

Overview of these pages

Previous sections of the Grundrisse corresponded, more or less, with sections in Capital, or were more or less self-contained "essays", like the Introduction, the review of Bastiat and Carey, and the polemic against "labour-money".
From about this point onwards, the notes in the Grundrisse become more diffuse and disjointed. A large part is taken up by surveys of what previous economists have written on various questions, but these surveys are much more bitty than those published in Theories Of Surplus-Value.
Pp.549-602 are indeed about previous economists' theories of surplus value (i.e. of profit). Then, going back to the problem of circulation or "realisation" - how capital sells its products and gets the revenue promptly - Marx spends over 100 pages on notes on or around the questions of credit, competition, the speed of turnover of capital, and fixed and circulating capital. In view, he gets nowhere near crisp conclusions on those questions, and a lot of Marx's discussion of turnover is spoiled by mistakes.
Nevertheless, always striving to relate his discussion of even detailed technical questions back to basic concepts, Marx studs these pages with vivid remarks on basic issues.
There are important comments in these pages on:
(1) The distinction between labour and labour-power (or labour-capacity), which, as we've seen, Marx failed to make in the earlier sections of the Grundrisse;
(2) Why labour is the substance of value, and labour-time the measure of value - an idea pretty much taken for granted in the earlier sections of the Grundrisse;
(3) Capital's drive to develop human potentialities beyond any pre-set limit; how it does that in a way which cramps and the subjugates the majority, and also brings great crises; but also, how in doing that it lays the basis for exploding itself and allowing the creation of a new society.

The economic effects of competition

Competition may well even out, equalize the level of profit, but in no way creates the measure of this level. Likewise, competition among the workers could press down a higher wages level etc., but the general standard of wages... could not be explained by the competition between worker and worker, but only by the original relation between capital and labour.
Competition generally, this essential locomotive force of the bourgeois economy, does not establish its laws, but is rather their executor. Unlimited competition is therefore not the presupposition for the truth of the economic laws, but rather the consequence -- the form of appearance in which their necessity realizes itself. For the economists to presuppose, as does Ricardo, that unlimited competition exists is to presuppose the full reality and realization of the bourgeois relations of production in their specific and distinct character. Competition therefore does not explain these laws; rather, it lets them be seen, but does not produce them.
Here Marx is dealing with the sort of argument that says that profits are set by competition between capitalists, or by competition between workers which reduces wages to a level suitable for a particular rate of profit. Later, he comments on Ricardo's statement that he, Ricardo, takes unrestricted competition as a theoretical assumption.
The laws of capital are completely realized only within unlimited competition and industrial production. Capital develops adequately on the latter productive basis and in the former relation of production; i.e. its immanent laws enter completely into reality. Since this is so, it would have to be shown how this unlimited competition and industrial production are conditions of the realization of capital, conditions which it must itself little by little produce... [p.559-60].
Production founded on capital for the first time posits itself in the forms adequate to it only in so far as and to the extent that free competition develops, for it is the free development of the mode of production founded on capital; the free development of its conditions and of itself as the process which constantly reproduces these conditions...
But free competition is the adequate form of the productive process of capital. The further it is developed, the purer the forms in which its motion appear...
Competition merely expresses as real, posits as an external necessity, that which lies within the nature of capital; competition is nothing more than the way in which the many capitals force the inherent determinants of capital upon one another and upon themselves...

Questions raised by Marx's comments on the economic effects of competition

(1) These passages, and others similar, are given a rather inflated and mystical interpretation by some Marxist writers. They claim that all the laws of motion of capitalism are set by "capital in general" at some very abstract and abstruse level, and even to refer to what competition does is to sink into empiricist shame: see for example many of the reviews of and polemics against Robert Brenner's Global Turbulence.
But if "unlimited competition" is the "executor" of the laws of capitalism, then it follows that the actual forms and limits, the sharpening and slackening and shifts, of capitalist competition must modify how capitalism develops.
(2) Starting soon after Marx's death, and for a century afterwards, the usual argument by Marxists (starting with Engels) was that the rise of free competition characterised the youth of capitalism; that free competition was being squeezed out (or even: had been squeezed out) by the rise of monopolies and state intervention; and that this development signified capitalism moving into old age.
Marx has a passage in the Grundrisse that fits well into that interpretation.
As long as capital is weak, it still itself relies on the crutches of past modes of production, or of those which will pass with its rise. As soon as it feels strong, it throws away the crutches, and moves in accordance with its own laws. As soon as it begins to sense itself and become conscious of itself as a barrier to development, it seeks refuge in forms which, by restricting free competition, seem to make the rule of capital more perfect, but are at the same time the heralds of its dissolution and of the dissolution of the mode of production resting on it. [p.651].
Today it is plain that capitalist competition is once again increasing, and has been doing so for some time. Brenner makes sharpened competition the foundation of his theories, and not even his most critical reviewers have denied the fact. Semmler has shown that the rise of "monopolies" in the traditional Marxist sense (i.e. the domination of an industry a small group of big capitalist corporations) does not necessarily reduce competition, and may even sharpen it. (Semmler, W. 1982. Theories of competition and monopoly, Capital and Class, vol. 12, Winter, 91–116).
It is certainly true that "advanced" capitalism needs more and more state regulation. Even the most extravagant bouts of neo-liberalism have modified that state regulation rather than removing it. But that state regulation can quite well coexist with sharp, and sharpening, capitalist competition.
It seems that the rise of cartels in the early 20th century was mostly to do with difficulties and setbacks in the development of the world market, forcing capital back into greater concern with the creation of protected national arenas. It seems further that those, like Kautsky and Rosa Luxemburg, who argued (at first anyway) that these cartels were necessarily fragile and unstable, were closer to the truth than those, like Hilferding, who argued, very influentially, that they had permanently created a new "organised capitalism".
In short, the weight of evidence is that the drive to increase and expand competition is inherent to capitalism at all stages of its development, not only its youth; any "organised capitalism" will in due course face capitalist impulses to transform it once again into a "disorganised capitalism".

Competition and freedom

By some bourgeois economists, so Marx comments, free economic competition is seen:
... as the absolute mode of existence of free individuality in the sphere of consumption and of exchange. Nothing can be more mistaken...
It is not individuals who are set free by free competition; it is, rather, capital which is set free... Free competition is the real development of capital...
Free competition... is nothing more than free development on a limited basis — the basis of the rule of capital. This kind of individual freedom is therefore at the same time the most complete suspension of all individual freedom, and the most complete subjugation of individuality under social conditions which assume the form of objective powers, even of overpowering objects — of things independent of the relations among individuals themselves.
The analysis of what free competition really is, is the only rational reply to the middle-class prophets who laud it to the skies or to the socialists who damn it to hell... The assertion that free competition = the ultimate form of the development of the forces of production and hence of human freedom means nothing other than that middle-class rule is the culmination of world history - certainly an agreeable thought for the parvenus of the day before yesterday.
Even while flaying the bourgeois ideologues of free competition, Marx also separates himself from the sentimental socialists who say that socialism is a question of emphasising the cooperative as against the competitive, or the collective as against the individual, in human activity. In fact Marx will also show that capital creates cooperation on a huge scale.

Labour and labour-power

On p.462, Marx concludes from a discussion of the way that the wage-worker is subordinated to the machine:
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... Labour capacity's own labour is as alien to it -- and it really is, as regards its direction etc. -- as are material and instrument. Which is why the product then appears to it as a combination of alien material, alien instrument and alien labour - as alien property, and why, after production, it has become poorer by the life forces expended, but otherwise begins the drudgery anew...
Not in the way it is usually explained (by trying to explain how the "value of labour" can be two different things, the worker's product and their wage, and concluding that the wage is not the value of labour but of labour-power), Marx has concluded that labour is not only different from labour-power but alien to it.
Marx uses "labour-capacity" and "labour-power" interchangeably, without any nuance of difference. In Capital chapter 6 he writes:
By labour-power or capacity for labour is to be understood the aggregate of those mental and physical capabilities existing in a human being, which he exercises whenever he produces a use-value of any description.
Unter Arbeitskraft oder Arbeitsvermögen verstehen wir den Inbegriff der physischen und geistigen Fähigkeiten, die in der Leiblichkeit, der lebendigen Persönlichkeit eines Menschen existieren und die er in Bewegung setzt, sooft er Gebrauchswerte irgendeiner Art produziert.
In these pages, Marx returns again and again to the difference between labour-power and labour.
What the capitalist acquires through exchange is labour capacity: this is the exchange value which he pays for. Living labour is the use value which this exchange value has for him, and out of this use value springs the surplus value and the suspension of exchange as such. Because Ricardo allows exchange with living labour -- and thus falls straight into the production process -- it remains an insoluble antinomy in his system that a certain quantity of living labour does not = the commodity which it creates, in which it objectifies itself, although the value of the commodity = to the amount of labour contained in it... [p.561-2].
Wages, however, express the value of living labour capacity, but in no way the value of living labour, which is expressed, rather, in wages + profit... The amount of labour which the worker works is very different from the amount of labour that is worked up into his labour capacity... He does not sell as commodity the use made of him, he sells himself not as cause but as effect. [p.571].
Labour capacity is not = to the living labour which it can do, = to the quantity of labour which it can get done -- this is its use value. It is equal to the quantity of labour by means of which it must itself be produced and can be reproduced. The product is thus in fact exchanged not for living labour, but for objectified labour, labour objectified in labour capacity. [p.576].
What is exchanged for wages is labour capacity, and this does not figure in production at all, but only in the use made of it -- labour. Labour appears as the instrument of the production of value because it is not paid for, hence not represented by wages. As the activity which creates use values, it likewise has nothing to do with itself as paid labour. In the hand of the worker, the wage is no longer a wage, but a consumption fund. It is wages only in the hand of the capitalist, i.e. the part of capital destined to be exchanged for labour capacity. It has reproduced a saleable labour capacity for the capitalist, so that in this regard even the worker's consumption takes place in the service of the capitalist. He does not pay for labour itself at all, only for labour capacity. [p.593-4].
The capitalist does not exchange capital directly for labour or labour time; but rather time contained, worked up in commodities, for time contained, worked up in living labour capacity. The living labour time he gets in exchange is not the exchange value, but the use value of labour capacity...
The exchange which proceeds between capitalist and worker thus corresponds completely to the laws of exchange; it not only corresponds to them, but also is their highest development. For, as long as labour capacity does not itself exchange itself, the foundation of production does not yet rest on exchange, but exchange is rather merely a narrow circle resting on a foundation of non-exchange, as in all stages preceding bourgeois production.
But the use value of the value the capitalist has acquired through exchange is... more labour time than is objectified in labour capacity, i.e. more labour time than the reproduction of the living worker costs. Hence, by virtue of having acquired labour capacity in exchange as an equivalent, capital has acquired labour time -- to the extent that it exceeds the labour time contained in labour capacity -- in exchange without equivalent; it has appropriated alien labour time without exchange by means of the form of exchange... and, as we saw, in the further development of capital even the semblance is suspended that capital exchanges for labour capacity anything other than the latter's own objectified labour; i.e. that it exchanges anything at all for it...
Thus the exchange turns into its opposite, and the laws of private property -- liberty, equality, property -- property in one's own labour, and free disposition over it -- turn into the worker's propertylessness, and the dispossession of his labour, [i.e.] the fact that he relates to it as alien property...

Profit "misrepresents" surplus value

On pp.565ff Marx examines actual factory accounts. The discussion is confused - the profit rate in the example is 3.8%, not 4.2% as in Marx's text or 4.7% as in the editor's footnote - but the important conclusion is that this percentage "misrepresents" the rate of surplus value, which is 63.5% (1650 divided by 2600, not 1650 divided by 2000, as in text).

The workers' combination as the capitalists' property

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].
Same idea as p.470-1: 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].
And as 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".
It is the central idea in Michael Lebowitz's book Beyond Capital: Marx’s Political Economy of the Working Class.
On pp.586-7 Marx discusses how this capitalist appropriation of worker cooperation develops.
[In some industries, like mining, there is worker cooperation even before they are taken over by capital. There] capital does not create but rather takes over the accumulation and concentration of workers... [Or sometimes in its early stages] capital employs different hand weavers, spinners etc. who live independently and are dispersed over the land... Their unification by capital is thus merely formal, and concerns only the product of labour, not labour itself...
[Later capital] gathers them [the workers] in one spot under its command, into one manufactory, and no longer leaves them in the mode of production found already in existence, establishing its power on that basis, but rather creates a mode of production corresponding to itself, as its basis. It posits the concentration of the workers in production, a unification which will occur initially only in a common location, under overseers, regimentation, greater discipline, regularity... Now capital appears as the collective force of the workers, their social force, as well as that which ties them together, and hence as the unity which creates this force. [p.586-7]
This idea of first the formal, and then the real, subjection of the workers to capital is further developed in Capital:
... The capitalist mode of production, a mode which, along with its methods, means, and conditions, arises and develops itself spontaneously on the foundation afforded by the formal subjection of labour to capital. In the course of this development, the formal subjection is replaced by the real subjection of labour to capital. [Capital chapter 16].
And in Results of the Immediate Production Process, a text written as a chapter of Capital volume 1 but omitted by Marx in the final editing.
'This continual progression of knowledge and of experience,' says Babbage, 'is our great power.' This progression, this social progress belongs [to] and is exploited by capital. All earlier forms of property condemn the greater part of humanity, the slaves, to be pure instruments of labour. Historical development, political development, art, science etc. take place in higher circles over their heads. But only capital has subjugated historical progress to the service of wealth. [p.589-90].


Around p.352 Marx follows an argument fairly commonplace in his day - that accumulation of capital will lead to to increased wages, but that this tendency will eventually be counterbalanced by the increased wages encouraging workers to have more children, and allowing more of those children to survive, thus creating a surplus population.
On p.604 Marx corrects this simplistic and wrong theory of population, developing the basis of the ideas he will later expound in Capital.
It is already contained in the concept of the free labourer, that he is a pauper: virtual pauper. According to his economic conditions he is merely a living labour capacity, hence equipped with the necessaries of life... [But] he can live as a worker only in so far as he exchanges his labour capacity for that part of capital which forms the labour fund. This exchange is tied to conditions which are accidental for him, and indifferent to his organic presence. He is thus a virtual pauper.
Since it is further the condition of production based on capital that he produces ever more surplus labour, it follows that ever more necessary labour is set free. Thus the chances of his pauperism increase. To the development of surplus labour corresponds that of the surplus population.
In different modes of social production there are different laws of the increase of population and of overpopulation... Only in the mode of production based on capital does pauperism appear as the result of labour itself, of the development of the productive force of labour.

Labour under capital and in the future; labour as the substance of value

Adam Smith argued that labour-time was the measure of value because it was the measure of the sacrifice necessary to produce a commodity.
Marx's argument against Smith is very relevant to modern bourgeois economics, because there wages appear as determined by the "marginal cost" of giving up leisure, and profits (or interest, at any rate) by the "marginal cost" of waiting, i.e. setting money aside for production rather than spending it on immediate consumption.
This is labour for Smith, a curse. 'Tranquillity' appears as the adequate state, as identical with 'freedom' and 'happiness'. It seems quite far from Smith's mind that the individual, 'in his normal state of health, strength, activity, skill, facility', also needs a normal portion of work, and of the suspension of tranquillity...
The overcoming of obstacles is in itself a liberating activity - and that, further, the external aims [of labour] become stripped of the semblance of merely external natural urgencies, and become posited as aims which the individual himself posits - hence as self-realization, objectification of the subject, hence real freedom, whose action is, precisely, labour.
He [Adam Smith] is right, of course, that, in its historic forms as slave-labour, serf-labour, and wage-labour, labour always appears as repulsive, always as external forced labour; and not-labour, by contrast, as 'freedom, and happiness'...
But For example, even the semi-artistic worker of the Middle Ages does not fit into his definition. [p.612].
Marx emphatically does not see the communist future as a reign of universal idling and "fun" in which there is no tension of exertion.
[When] labour becomes attractive work, the individual's self-realization, [that] in no way means that it becomes mere fun, mere amusement, as Fourier... conceives it. Really free working, e.g. composing, is at the same time precisely the most damned seriousness, the most intense exertion.
The work of material production can achieve this character only (1) when its social character is posited, (2) when it is of a scientific and at the same time general character, not merely human exertion as a specifically harnessed natural force, but exertion as subject, which appears in the production process not in a merely natural, spontaneous form, but as an activity regulating all the forces of nature...
Labour regarded merely as a sacrifice... is a purely negative characterization. This is why Mr Senior, for example, was able to make capital into a source of production in the same sense as labour, a source sui generis of the production of value, because the capitalist too brings a sacrifice, the sacrifice of abstinence, in that he grows wealthy instead of eating up his product directly. Something that is merely negative creates nothing. If the worker should, e.g. enjoy his work - as the miser certainly enjoys Senior's abstinence - then the product does not lose any of its value...
Responding to Smith, Marx gives probably the longest exposition in all his writings of exactly why he considers labour to be the substance of value.
Two things are only commensurable if they are of the same nature. Products can be measured with the measure of labour — labour time — only because they are, by their nature, labour. They are objectified labour.
As objects they assume forms in which their being as labour... has, apart from itself, no other features in common. They exist as equals as long as they exist as activity. The latter is measured by time, which therefore also becomes the measure of objectified labour...
In so far as the product has a measure for itself, it is its natural measure as natural object, mass, weight, length, volume etc. Measure of utility etc. But as effect, or as static presence of the force which created it, it is measured only by the measure of this force itself. The measure of labour is time.
Only because products
are labour can they be measured by the measure of labour, by labour time, the amount of labour consumed in them.
The negation of tranquillity, as mere negation, ascetic sacrifice, creates nothing. Someone may castigate and flagellate himself all day long like the monks etc., and this quantity of sacrifice he contributes will remain totally worthless. The natural price of things is not the sacrifice made for them. This recalls, rather, the pre-industrial view which wants to achieve wealth by sacrificing to the gods. There has to be something besides sacrifice...

The arithmetic of turnover

Marx's discussions of turnover, such as on p.652-7, are vitiated by the confusions which we already saw on pp.518ff, and by another. In some passages Marx does note that differences in the length of the production process of different items are a completely different matter from differences in the quantities of labour-time embodied in them [p.602], and that each round of production does not wait for the sale of the products of the previous round [p.660], but in other passages he ignores these points: remember, these are rough, first-draft notes.
The governing assumption of the calculations on p.652-7 is that each next "production phase" must wait for the sale of the products of the previous one. As if capitalist production were like a craft shoemaker, waiting for the sale of each pair of shoes so that he can buy leather to make the next one.
Capitalist production is not like that. A capitalist in a line of business with a longer production and circulation process (within the normal range, i.e. excluding things like large construction projects, the cultivation of forests, etc.) will have revenue coming back to him just as continuously as one in a line with a shorter production and circulation process, only it will be revenue from the products of somewhat longer ago.
In that sense his capital will "turn over" just as fast. The main difference is that the longer-process capitalist will need a larger amount of "working capital" to finance his larger stock of "work in progress".

Comments: Post a Comment

<< Home

This page is powered by Blogger. Isn't yours?