Karl Marx: Grundrisse

Grundrisse contains seven notebooks written by Marx between 1857-8. In these notebooks, Marx makes a relatively condensed first attempt at laying out the ideas that would later be more fully developed in the three volumes of Capital. His concepts and distinctions often seem to develop as he writes them down, allowing the reader a valuable glimpse into Marx’s intellect in action. Grundrisse hits all the main points of Capital—money, value, capital, the labor process, surplus-value, circulation, fixed capital, machinery, the rate of profit, etc. Having covered most of those ideas in my three previous posts, I will stick here to the more original aspects of Grundrisse. Hegel looms large over these notebooks, which resonate in many ways with Marx’s 1844 Manuscripts. As the footnotes reveal, Marx clearly had Hegel’s Logic on his mind, and the argument tends to slip into a dialectical mode that Marx has to make a self-conscious effort to combat. For the contemporary reader, however, these traces of Hegel result in some of the most original and thought provoking passages in the text. The introduction, the most finished part of Grundrisse, exhibits Marx’s debt and resistance to Hegel. Taking up the question of production, or, more specifically, social production, Marx brilliantly and seemingly effortlessly shows how production and consumption, which seem to be opposite poles, are identical, how production is consumption and consumption is production (production requires productive consumption, production is not finished until the moment of consumption, production determines the nature of consumption, etc.). Marx is perfectly aware that his mode of reasoning here resembles his idealist opponents', writing, “Thereupon, nothing simpler for a Hegelian than to posit production and consumption are identical.” Nonetheless, as he adds exchange and distribution into the equation, he only slightly lessens the argument’s Hegelian tendencies. “The conclusion we reach is not that production, distribution, exchange, and consumption are identical, but that they all form the members of a totality, distinctions within a unity. Production predominates not only over itself . . . but over the other moments as well. . . . A definite production thus determines a definite consumption, distribution and exchange as well as definite relations between these different moments.” In the middle of the “Chapter on Money,” the first of the text’s two long sections, Marx again slips into dialectical mode: “[I]t is an inherent property of money to fulfill its purposes by simultaneously negating them; to achieve independence from commodities; to be a means which becomes an end; to realize the exchange value of commodities by separating them from it; to facilitate exchange by splitting it; to overcome the difficulties of the direct exchange of commodities by generalizing them; to make exchange independent of the producers in the same measure as the producers become dependent on exchange.” But Marx then catches himself and leaves a note: “It will be necessary later . . . to correct the idealist manner of the presentation, which makes it seem as if it were merely a matter of conceptual determinations of the dialectic of these concepts.” In the much longer “Chapter on Capital,” the Hegelian tendencies lead to some strikingly unique formulations on the antithesis of labor and capital that Negri and others have made much of. Marx claims that commodities, as exchange values, one form of capital, “are objectified labor. The only thing distinct from objectified labor is non-objectified labor, labor which is still objectifying itself, labor as subjectivity. . . . If it is to be present in time, alive, then it can be present only as the living subject, in which it exists as capacity, as possibility, hence as worker.” He goes on, “Not-objectified labor, not-value, conceived positively, or as a negativity in relation to itself, is the not-objectified, hence non-objective, i.e. subjective existence of labor itself. Labor not as an object, but as activity; not as itself value, but as the living source of value.” Capitalist production brings together the objective and subjective, the objectified and the non-objectified. In fact, capital’s incorporation of subjective living labor brings to life capital’s lifeless objectivity. To use a theological metaphor: “living labor makes instrument and material in the production process into the body of its soul and thereby resurrects them from the dead.” “Through the exchange with the worker, capital has appropriated labor itself; labor has become one of its moments, which now acts as a fructifying vitality upon its merely existent and hence dead objectivity.” Capital only momentarily touches on this idea, developed here with rhetorical flourishes, instead tending to analyze the relation of the living and the (un)dead in capitalism in the more economistic terms of variable and constant capital. Much later, in the famous section on machinery, Marx claims that there has apparently been a historical reversal in the relation of (living) labor to (dead) capital with the creation of automatic systems of machinery. In the case of such machines, “The production process has ceased to be a labor process in the sense of a process dominated by labor as its governing unity. Labor appears, rather, merely as a conscious organ, scattered among the individual living workers at numerous points of the mechanical system; subsumed under the total process of the machinery itself, as itself only a link of the system, whose unity exists not in the living workers, but rather in the living (active) machinery, which confronts his individual, insignificant doings as a mighty organism. In machinery, objectified labor confronts living labor within the labor process itself as the power which rules it.” Such machines not only seem to have a life of their own, which now dominates the life of the worker, but also exhibit a productive power that makes the individual worker’s labor power seem insignificant. Although this productive power appears as an attribute of the machines, or fixed capital, it actually has been appropriated from the “general productive power” created by the growth of the “general productive forces of the social brain.” “The development of fixed capital [i.e., machines] indicates to what degree general social knowledge has become a direct force of production, and to what degree, hence, the conditions of the process of social life itself have come under the control of the general intellect and been transformed in accordance with it.” As Paolo Virno has noted, this leads Marx to a rather un-Marxist conclusion. Embodying the productive power of the general intellect, automatic systems of machinery make the appropriation of surplus-value from the worker no longer important for the generation of “general wealth.” They undermine the law of value and therefore contradict the capitalist mode of production. “As soon as labor in the direct form has ceased to be the great well-spring of wealth, labor time ceases and must cease to be its measure, and hence exchange value must cease to be the measure of use value. The surplus labor of the mass has ceased to be the condition for the development of general wealth, just as the non-labor of the few, for the development of the general powers of the human head. With that, production based on exchange value breaks down, and the direct, material production process is stripped of the form of penury and antithesis.”

Karl Marx: Capital Volume III

Volume I dealt with the “process of capitalist production,” and Volume II the “process of circulation.” Volume III aims “to discover and present the concrete forms which grow out of the process of capital’s movement considered as a whole. . . . The configurations of capital, as developed in this volume, thus approach step by the step the form in which they appear on the surface of society, in the action of different capitals on one another, i.e., in competition and in the everyday consciousness of the agents of production themselves.” Marx begins by discussing profit, which presents surplus-value in a “mystified form.” The value of any commodity C is equal to the sum of the constant and variable capital laid out in its production and its surplus-value. So C = c + v + s. To the capitalist, however, what the commodity costs, its “cost price,” is equal to the “price of the means of production consumed and the labor-power employed.” That is, cost price k is equal to c + v. Cost price k erases the difference between constant and variable capital, so that, to the capitalist, surplus-value appears to derive from the entire capital invested rather than from variable capital, labor-power, in particular. The capitalist therefore measures the return on his investment not as a ratio of surplus-value to variable-capital, but rather as the profit p obtained from the entire capital laid out. So C = c + v + s appears to the capitalist as “C = k + p, or commodity value = cost price + profit.” The capitalist mistakenly ends up taking the cost price for the value of the commodity, and imagines that excess value, or profit, is created through the act of selling the commodity. To the capitalist, the breeding of surplus-value in the production process described in Volume I becomes hidden, and value seems to be created through circulation, something that Volume II demonstrated to be impossible. If a commodity is sold at its value, then the profit equals the surplus-value. In the earlier volumes Marx assumed that this was always the case. But in this volume, Marx acknowledges that prices may in fact diverge from values. For example, a commodity may be sold for less than its value. So long as the sale price does not drop below the cost price, the capitalist still makes a profit, although only a part of the commodity’s surplus-value is realized. The rate of surplus-value is the ratio of surplus-value to variable capital, or s/v. The rate of profit is the ratio of surplus-value or profit to the entire capital laid out, or s/(c + v). “These are two different standards for measuring the same quantity,” but the capitalist is only concerned with the rate of profit, which is the more “visible surface phenomena.” The capitalist’s focus on cost price and profit obscures the “extortion of surplus labor,” and, as a result, “the capital relation is mystified.” Profit is “a transformed form of surplus-value, a form in which its origin and the secret of its existence are veiled and obliterated. . . . In surplus-value, the relationship between capital and labor is laid bare. In the relationship between capital and profit . . . capital appears as a relationship to itself, a relationship in which it is distinguished, as an original sum of value, from another new value that it posits.” The rate of profit is determined primarily by two factors: the rate of surplus-value and the organic composition of capital. The rate of profit is also especially influenced by the speed of the turnover of capital and by economy in the use of constant capital. Because of differences in the composition of capital, turnover time, etc., “different spheres of production” should have different rates of profit. However, “These different rates of profit are balanced out by competition to give a general rate of profit which is the average of all these rates.” As was the case with socially necessary labor time in Volume I, Marx argues that, at a certain level of development, capitalism deals with social averages and social totals. The capitalists in different spheres of production “do not secure the surplus-value and hence profit that is produced in their own sphere in connection with the production of these commodities. What they secure is only the surplus-value and hence profit that falls to the share of each aliquot part of the total social capital, when evenly distributed, from the total social surplus-value or profit produced in a given time by the social capital in all spheres of production.” At this point, Marx sets forth his controversial law of the tendential fall in the rate of profit. As Volume I demonstrated, capitalists are always revolutionizing the production process and thereby increasing “the social productivity of labor.” As a result, labor-power is able to set a greater quantity of means of production into motion. The ratio of constant to variable capital, what Marx terms the organic composition of capital, tends to rise, so that variable capital becomes an increasingly smaller part of the total capital investment. Only variable capital is the source of surplus-value, so the total surplus-value to be potentially realized from a given investment of capital, assuming a constant rate of surplus-value, depends on what proportion of that capital is spent on variable capital. As the organic composition of the total social capital rises, variable capital declines in relation to constant capital, the potential quantity of surplus-value to be realized per unit of capital declines as well, and the general rate of profit ultimately drops. The law of the tendential fall in the rate of profit can be only partially counteracted through factors such as more intense exploitation of labor, which increases the rate of surplus-value. But the long-term tendency is towards stagnation of the economy and overaccumulation of capital (which always just means the production of more capital than can be employed as capital). As a result, capital lies idle and is devalued, or, in the case of a crisis, capital is destroyed. Marx identifies the problem here as being internal to capital: “Capitalist production constantly strives to overcome these immanent barriers, but it overcomes them only by means that set up the barriers afresh and on a more powerful scale. The true barrier to capitalist production is capital itself. It is that capital and its self-valorization appear as the starting and finishing point, as the motive and purpose of production; production is production only for capital, and not the reverse, i.e. the means of production are not simply means for a steadily expanding pattern of life for the society of the producers. The barriers within which the maintenance and valorization of the capital-value has necessarily to move . . . therefore come constantly into contradiction with the methods of production that capital must apply to its purpose and which set its course towards an unlimited expansion of production, to production as an end in itself, to an unrestricted development of the social productive powers of labor. The means—the unrestricted development of the forces of social production—comes into persistent conflict with the restricted end, the valorization of the existing capital.” After showing how commercial capital affects the general rate of profit by appropriating for itself a certain proportion of the surplus-value created in production, Marx turns to interest-bearing capital. Rather than directly investing his money in production, the owner of money can lend this money out to someone else, who then takes on the function of employing the money as capital that, through the production process, generates more value. At the end of the circuit of production, this borrower must pay back the money borrowed plus, in the form of interest, a certain portion of the surplus-value he obtained. The surplus-value and profit generated by production are split between the owner of money and the employer of capital. The capital relation is thoroughly mystified in this process of lending and borrowing money. In contrast to the owner of money, who does not work, the industrial capitalist comes to see himself as earning a wage for his work, which, as always, remains the exploitation and appropriation of the labor others. The formation of joint-stock companies reinforces this appearance by replacing the industrial capitalist with the salaried manager. But even more mystified is the perspective of the owner of money. The formula for interest-bearing capital should be: M-M-C…P…C’-M’-M’. Marx repeatedly points out that without the mediation of production, no surplus-value can be generated, and therefore no interest is possible. But to the owner of money, the circuit appears simply as M-M’: money lent out returns as money plus interest. “While interest is simply one part of the profit, i.e. the surplus-value, extorted from the worker by the functioning capitalist, it now appears conversely as if interest is the specific fruit of capital, the original thing, while profit, now transformed into the form of profit of enterprise, appears as a mere accessory and trimming added in the reproduction process. The fetish character of capital and the representation of this capital fetish is now complete. In M-M’ we have the irrational form of capital, the misrepresentation and objectification of the relations of production, in its highest power.” “Like the growth of trees, so the generation of money seems a property of capital in this form of money capital.” “The product of past labor, and past labor itself, is seen as pregnant in and of itself with a portion of present or future living surplus labor. We know however that in actual fact the preservation and thus also the reproduction of the value of products of past labor is only the result of their contact with living labor; and secondly, that the command that the products of past labor exercise over living surplus labor lasts only as long as the capital relation, the specific social relation in which past labor confronts living labor as independent and superior.” Interest-bearing capital predates the existence of the capitalist mode of production, but the latter causes the former to develop into a specific kind of credit system containing institutions and instruments that facilitate production and circulation. Banks are one the key elements of this credit system, which, it must be admitted, plays a valuable—perhaps even essential—role in the acceleration of the accumulation of capital. One of the most important functions of the banks is the concentration of money that otherwise would remain unused or spent merely on private consumption. “With the development of the banking system, and particularly once they pay interest on deposits, the money savings and the temporarily unoccupied money of all social classes are also deposited with them. Small sums which are incapable of functioning as money capital by themselves are combined into great masses and thus form a monetary power.” The money that creditors such as banks lend out is not available for their further use until it is repaid. However, in exchange for the money that is advanced, the lender receives a bill of exchange, a promissory note that the debt will be repaid at a certain date. Or in the case of securities such as corporate shares and stocks, the money is exchanged for a title of ownership to a certain portion of future revenues. Marx considers these bills of exchange and securities “fictitious capital” because they are merely “paper duplicates” of the original capital, which is now in someone else’s hands. Fictitious forms of capital can themselves be traded, such as on the stock market, and in the process their value can diverge from the value of the original capital they are meant to represent. An entire superstructure of fictitious capital can then be built on top of interest-bearing capital. “With the development of interest-bearing capital and the credit system, all capital seems to be duplicated, and at some points triplicated, by the various ways in which the same capital, or even the same claim, appears in various hands in different guises. The greater part of this ‘money capital’ is purely fictitious.” During a crisis, however, fictitious capital’s ability to represent capital is thrown into question, and extreme measures have to be taken to preserve the illusion of fictitious capital’s value. “In a system of production where the entire interconnection of the reproduction process rests on credit, a crisis must evidently break out if credit is suddenly withdrawn and only cash payment is accepted, in the form of a violent scramble for means of payment. At first glance, therefore, the entire crisis presents itself as simply a credit and monetary crisis. And in fact all it does involve is simply the convertibility of bills of exchange into money. The majority of these bills represent actual purchases and sales, the ultimate basis of the entire crisis being the expansion of these far beyond the social need. On top of this, however, a tremendous number of these bills represent purely fraudulent deals, which now come to light and explode; as well as unsuccessful speculations conducted with borrowed capital, and finally commodity capitals that are either devalued or unsaleable, or returns that are never going to come in.”

Karl Marx: Capital Volume II

The “circuit of money capital” follows the formula: M-C…P…C’-M’. Money is transformed into commodities, which, during the production process, are productively consumed to create new commodities that are exchanged for money. The creation of surplus-value during production makes the final M’ greater than the original M advanced. In volume I, Marx studied the middle stage of production, P, so in this volume he turns to the first and third stages, M-C and C’-M’. In M-C, the original money capital is transformed into two kinds of commodities: labor-power, L, and means of production, mp. When money capital has been transformed in this way into L + mp, it can now function as “productive capital,” P, which is capable of breeding surplus-value. In this seemingly abstract formula, the fact that L and mp are separate commodities reflects the historical separation of workers from the means of production. At this point there is “an interruption” in the circulation of capital indicated by the dots in M-C…P. “By the transformation of money capital into productive capital, the capital value has received a natural form in which it cannot circulate any further, but has to go into consumption, that is into productive consumption. The use of labor-power, labor, can be realized only in the labor process. The capitalist cannot sell the worker again as a commodity, for he is not his slave, and the capitalist has bought nothing more than the utilization of his labor-power for a certain time.” Rather than exchanging them, productive capital “consumes its own components,” exploiting labor so as to produce commodities that are “impregnated with surplus-value.” Productive capital has now become commodity capital, C’, a “bearer of the valorized capital.” But before the circuit of money capital is complete, C’ must first “fully undergo the metamorphosis C’-M’,” so that capital returns to its money form and is ready to once again function as the starting point for a fresh round of valorization. M-M’ thus “expresses the capital-relation,” the breeding of value from value. “The two forms that the capital value assumes within its circulation stages are those of money capital and commodity capital; the form pertaining to the production stage is that of productive capital. The capital that assumes these forms in the course of the total circuit, discards them again and fulfils in each of them its appropriate function, is industrial capital—industrial here in the sense that it encompasses every branch of production that is pursued on a capitalist basis.” “The circuit of capital proceeds normally only as long as its various phases pass into each other without delay. If capital comes to a standstill in the first phase, M-C, money capital forms into a hoard; if this happens in the production phase, the means of production cease to function, and labor-power remains unoccupied; if in the last phase, C’-M’, unsaleable stocks of commodities obstruct the flow of circulation.” In the circuit of money capital, M-M’, “it is the exchange-value, not the use-value, that is the decisive inherent purpose of the movement. . . . The production process appears simply as an unavoidable middle term, a necessary evil for the purpose of money-making. (This explains why all nations characterized by the capitalist mode of production are periodically seized by fits of giddiness in which they try to accomplish the money-making without the mediation of the production process.).” Money capital, M, is not the only starting point, so Marx then turns to the circuit of productive capital and the circuit of commodity capital. The circuit of productive capital follows the formula P…C’-M’-C…P. In P-P, productive capital is “reproduced,” allowing production to continue. Although the formulas for money capital and productive capital are similar, the different starting and ending points create important contrasts between the two circuits. “[W]hile in the first form, M…M’, the production process, the function of P, interrupts the circulation of money capital and appears only as a mediator between its two phases M-C and C’-M’, here the entire circulation process of industrial capital, its whole movement within the circulation phase, merely forms an interruption, and hence a mediation, between the productive capital that opens the circuit as the first extreme and closes it in the same form as the last extreme.” P-P is simply the reproduction of production at the same scale. But as the first volume demonstrated, the individual capitalist, in order to survive, must enlarge the scale of production, so the circuit actually must take the form P-P’, so that in each repetition of the circuit the value of productive capital is “augmented.” The circuit of commodity capital follows the formula C’-M’-C…P…C’. In the previous two circuits, an increase of value is the end point (M’, P’), but the circuit of commodity capital begins with C’, commodities that are already the bearers of surplus-value. “In this circuit, C’ exists as the point of departure, the point of transit, and the conclusion of the movement.” The circuit C’-C’ implies the existence of other commodity capital that is drawn into the circuit, and therefore should be considered a “social form.” Having examined the three forms of the circulation of capital independently, Marx draws some comparisons. He claims, “not only does every particular circuit (implicitly) presuppose the others, but also that the repetition of the circuit in one form includes the motions which have to take place in the other forms of the circuit. Thus, the entire distinction presents itself as merely one of form, a merely subjective distinction that exists only for the observer.” Capital continuously reproduces itself and undergoes a “metamorphosis” in its form. “The circuit of capital is a constant process of interruption; one stage is left behind, the next stage embarked upon; one form is cast aside, and the capital exists in another; each of these stages not only conditions the other, but at the same time excludes it. But continuity is the characteristic feature of capitalist production, and is required by its technical basis, even if it is not always completely attainable.” “Capital, as self-valorizing value, does not just comprise class relations, a definite social character that depends on the existence of labor as wage-labor. It is a movement, a circulatory process through different stages, which itself in turn includes three different forms of the circulatory process. Hence, it can only be grasped as a movement, and not as a static thing.” The time it takes for capital to complete its circuit can be divided into two parts: production time and circulation time, which are “mutually exclusive. During its circulation time, capital does not function as productive capital, and therefore produces neither commodities nor surplus-value.” Therefore, the less time capital spends in circulation, the more time it is available in the sphere of production and capable of generating surplus-value. As a result, there is great pressure to reduce circulation time to an absolute minimum. This pressure is increased by the fact that many commodities lose their value if they are not quickly exchanged and used. Nonetheless, “Circulation is just as necessary for commodity production as is production itself, and thus agents of circulation are just as necessary as agents of production.” A great deal of circulation time is spent on buying and selling. Although necessary for the conversion or realization of value, “the time taken up with buying and selling creates no value.” The labor required for buying or selling is “unproductive,” a necessary cost in the valorization process. The labor-power and constant capital needed for storing commodities are also necessary but unproductive “expenses.” Transportation, however, is necessary for most commodities to be used, and therefore can be considered a part of the production process that contributes to the value of the commodities. The sum of production time and circulation time is the length of capital’s “turnover,” of one interval of capital’s cycle. The turnover of capital is complicated by the division of constant capital into two forms: circulating capital and fixed capital. Circulating capital includes those means of production that are immediately consumed in the production process and therefore transfer their value to the commodities produced during each cycle. Fixed capital includes those means of production, such as factories or machinery, that are purchased up front but not productively consumed all at once. Instead, they slowly transfer their value to the commodities over a number of capital cycles. The confinement of large sums of capital as fixed capital for extended periods of time contributes to the formation of business cycles, a specific kind of periodicity characterized by “successive periods of stagnation, moderate activity, over-excitement, and crisis.” So far, Marx has examined the circuits of capital from the standpoint of the individual capital. “But each individual capital forms only a fraction of the total social capital. . . . The movement of the social capital is made up of the totality of movements of these autonomous fractions, the turnovers of the individual capitals. Just as the metamorphosis of the individual commodity is but one term in the series of metamorphoses of the commodity world as a whole, of commodity circulation, so the metamorphosis of the individual capital, its turnover, is a single term in the circuit of the social capital.” It is necessary to now go beyond examining the reproduction of individual capitals and consider the reproduction of the social capital considered in its entirety. “[S]ociety’s total product” can be divided into two “departments.” Department I consists of “Means of production: commodities that possess a form in which they either have to enter productive consumption, or at least can enter this.” Department II consists of “Means of consumption: commodities that possess a form in which they enter the individual consumption of the capitalist and working classes.” “In each of these departments, all the various branches of production belonging to it form a single great branch of production, one of these being that of means of production, the other that of means of consumption.” An individual capital is free to produce any commodity that has a use-value, and it matters little to the individual capital whether this commodity serves as a means of production or a means of consumption. But in order for the social capital as a whole to reproduce itself or to expand and accumulate, there must be certain proportionalities and growth rates in the two departments. These “reproduction schema” have been the source of no end of disagreement, but, as Mandel points out in his introduction, they not only prove that the reproduction and expansion of the capitalist system is at least theoretically possible, but also underscore the extremely tenuous stability of that system, which continuously risks slight disproportions growing into full blown crises.

Karl Marx: Capital Volume I

Marx begins with an analysis of the commodity, which he treats as the key to unlocking the mysteries of capitalism. “A commodity appears at first sight an extremely obvious, trivial thing. But its analysis brings out that it is a very strange thing abounding in metaphysical subtleties and theological niceties.” Commodities have a “dual character.” As material things that can be used in different ways in consumption, commodities have use-values. But commodities “are also the material bearers of . . . exchange-value,” which “appears first of all as the quantitative relation, the proportion, in which use-values of one kind exchange for use-values of another kind.” “As use-values, commodities differ above all in quality, while as exchange-values they can only differ in quantity, and therefore do not contain an atom of use-value.” Human labor is “objectified” or “materialized” in commodities. The value of commodities, then, is determined by the quantity of labor, or more accurately, the quantity of labor-time, required to produce them. But this value is not based on the specific labor-time involved in each case, but rather on an average, the “socially necessary labor-time” needed to produce the commodity. Socially necessary labor-time is “the labor-time required to produce any use-value under the conditions of production normal for a given society and with the average degree of skill and intensity of labor prevalent in that society.” But the value of a commodity cannot be found anywhere in its physical being (“We may twist and turn a single commodity as we wish; it remains impossible to grasp it as a thing possessing value”); it can only be expressed through exchange with another commodity. That is, value “can only appear in the social relation between commodity and commodity.” This manner in which value “transcends sensuousness” leads to the “fetishism” of the commodity. “The mysterious character of the commodity-form consists . . . simply in the fact that the commodity reflects the social characteristics of men’s own labor as objective characteristics of the products of labor themselves, as the socio-natural properties of these things. . . . It is nothing but the definite social relation between men themselves which assumes here, for them, the fantastic form of a relation between things. . . . I call this the fetishism which attaches itself to the products of labor as soon as they are produced as commodities, and is therefore inseparable from the production of commodities.” For their initial owners, commodities have no use-values, but have to be exchanged for commodities that do have desired use-values. They are not directly consumed by their producers but exchanged, and the development of the capitalist mode of production leads to a tendency of all commodities being produced for exchange. As exchange historically develops, one commodity becomes a “universal equivalent,” through which any other commodity can express its value. Any commodity can become the universal equivalent, but money (for Marx, gold) ultimately specializes in the function. The process or “circuit” of exchange then takes the form of Commodity-Money-Commodity, or C-M-C: a commodity is brought to the market and exchanged for money, and that money is then used to purchase another commodity. In this circuit, money functions merely as a “medium of exchange.” Money becomes capital, however, when it enters into a process of exchange that takes the form Money-Commodity-Money, or M-C-M, in which money is exchanged with the goal of acquiring more money. Exchanging money for the same amount of money would be pointless, so the second quantity of money must be greater than the original quantity exchanged. That is, the circuit takes the form M-C-M’, in which M’ contains “surplus value” that makes it greater than M. In M-C-M’, the original money offered has been “valorized”: the magnitude of its value has increased through the process. C-M-C and M-C-M’ appear very similar, but there are important differences. Commodity exchange, C-M-C, serves the purpose of acquiring specific use-values. Capitalist valorization, M-C-M’, however, serves the purpose of increasing exchange-value. “[T]he circulation of money as capital is an end in itself, for the valorization of value takes place only within this constantly renewed movement. The movement of capital is therefore limitless.” The circulation of commodities does not add to their value (that is, it does not alter the socially necessary labor-time of their production), so where does surplus value, the difference between M and M’, come from? “In order to extract value out of the consumption of a commodity, our friend the money-owner must be lucky enough to find within the sphere of circulation, on the market, a commodity whose use-value possesses the peculiar property of being a source of value. . . . The possessor of money does find such a special commodity on the market: the capacity for labor, in other words labor-power.” “We mean by labor-power, or labor-capacity, the aggregate of those mental and physical capabilities existing in the physical form, the living personality, of a human being, capabilities which he sets in motion whenever he produces a use-value of any kind.” Historical conditions are necessary for the money-owning capitalist to discover labor-power on the market. Individuals must be free to offer their labor-power temporarily as a commodity, and they must be compelled to do so because they have nothing else to offer on the market. There is nothing natural about this division of society into those who own money and commodities and those who have nothing to offer but their own labor-power. Capitalism is not an eternal form of society but rather a specific, temporary “epoch in the process of social production.” “The value of labor-power is determined, as in the case of every other commodity, by the labor-time necessary for the production, and consequently also the reproduction, of this specific article. . . . Labor-power exists only as a capacity of the living individual. Its production consequently presupposes his existence. Given the existence of the individual, the production of labor-power consists in his reproduction of himself or his maintenance.” The capitalist purchases the commodities needed for production, including labor-power, but it is impossible to discover how surplus value is produced unless one leaves the sphere of circulation and dives “into the hidden abode of production.” Regardless of the mode of production, the labor process involves individuals using their labor-power (and, at a certain point of development, instruments) to form “the materials of nature” according to some purpose. But in the capitalist mode of production, the capitalist strictly controls the process of production, the final “product is the property of the capitalist and not that of the worker, its immediate producer,” and the purpose of the entire operation is the production of surplus-value. Surplus-values can be produced because of a potential discrepancy between the value of labor-power and the value that labor-power valorizes. The capitalist purchases labor-power, paying for its value, i.e., the cost of maintaining it. For the time that his labor-power has been purchased, the laborer “alienates” from himself the use-value of his labor-power. The capitalist appropriates for himself that use-value, which produces more value than the original cost of the labor-power. The difference between the original value of labor-power and the value it produces is the surplus-value. To carry out the process of production, the capitalist must turn some of his capital into “means of production,” such as materials and instruments. Marx calls this part of the capital spent “constant capital” because its value does not change as it is transferred into the commodities produced. The capitalist must also spend the other part of his capital on labor-power. Marx calls this part of the capital spent “variable capital” because labor-power produces more value, that is, it causes the quantity of value to vary. The rate of surplus-value is measured by the ratio of surplus-value (s) to variable capital (v), or s/v (the rate of surplus-value is different from the rate of profit, which Marx more fully treats in volume 3). The higher the rate of surplus value, the more the worker is forced to labor beyond the time necessary for his own maintenance and reproduction. “The rate of surplus-value is therefore an exact expression for the degree of exploitation of labor-power by capital, or of the worker by the capitalist.” One of the primary means through which the capitalist can obtain “absolute surplus-value” is the extension of the working day, which results in more total value being produced without increasing the cost of the labor-power purchased. Left unchecked, capitalism even has a tendency to extend the working day to the point that the quality of labor-power deteriorates and the reproduction of labor-power is undermined. “The establishment of a normal working day is therefore the product of a protracted and more or less concealed civil war between the capitalist class and the working class.” Because there are natural and historical limits to increasing absolute surplus value (the former is the maximum of 24 work hours in a day), capitalists attempt to produce “relative surplus value” by revolutionizing the labor process. The transformation of the conditions of production increases the productivity of labor, so less labor-time is socially necessary to produce a commodity. When productivity is increased in those industries that produce the commodities required for labor’s reproduction and maintenance, the value of labor-power decreases because it costs less to produce the laborer himself. Individual capitalists can also acquire relative surplus value by increasing productivity ahead of their competitors. Adopting new production techniques and technologies allows individual capitalists to produce commodities more cheaply while selling them at the average social value. But competition eventually forces everyone to become more productive, driving down the average social value of the commodities until this ephemeral form of relative surplus value disappears. Capitalism truly comes into its own when production reaches a certain scale and a large number of workers are brought together to labor cooperatively. The exceptional power of the collective workers, unfortunately, is placed under the command of the capitalist, or at least the managers and professionals who eventually come to specialize in this function. The cooperation of workers under capitalism therefore does not lead to the freeing of man’s species being. The workers “enter into relations with the capitalist, but not with each other. Their co-operation only begins with the labor process, but by then they have ceased to belong to themselves. On entering the labor process they are incorporated into capital. . . . Hence the productive power developed by the worker socially is the productive power of capital. . . . Because this power costs capital nothing, while on the other hand it is not developed by the worker until his labor itself belongs to capital, it appears as a power which capital possesses by its nature—a productive power inherent in capital.” The deepening of the division of labor inhumanly forces each worker to carry out only one “simple operation for the whole of his life.” It also creates a hierarchy of skills and a growing mass of “so-called unskilled laborers.” The adoption of machines furthers this deskilling of the worker and ultimately subjects the worker to a labor process determined according to technical rather than human criteria. As constant capital, machines do not produce new value, but slowly transfer their value to the commodities they produce. However, machines do increase the productivity of labor, and therefore decrease the amount of labor-time needed to produce commodities. In addition to potentially decreasing the value of labor-power, machines allow capitalists who first adopt them to obtain relative surplus value until competition forces the general use of the machines. The integration of machines reaches its culmination with the factory. “In the factory we have a lifeless mechanism which is independent of the workers, who are incorporated into it as its living appendages.” Like every mode of production, capitalism must not only produce things but also continually reproduce itself. The “simple reproduction” of capitalism requires the production of a class of workers. “The capitalist process of production, therefore, seen as a total, connected process, i.e. a process of reproduction, produces not only commodities, not only surplus-value, but it also produces and reproduces the capital-relation itself; on the one hand the capitalist, on the other the wage-laborer.” In reproduction on an expanded scale, i.e., the accumulation of capital, some of the surplus product is transformed into capital. As a result, the social basis of production expands and the size of the proletariat grows. The wages of this proletariat even might grow, but they are “confined within limits that not only leave intact the foundations of the capitalist system, but also secure its reproduction on an increasing scale.” As the accumulation of capital progresses, there is a concentration as well as a centralization of capital. The “organic composition” of capital also changes as less variable capital (labor-power) tends to set into action a greater quantity of constant capital (such as machinery and materials). In other words, expanded reproduction ultimately tends to cast off workers who are no longer needed due to changes in the organization of production. “The working population therefore produces both the accumulation of capital and the means by which it is itself made relatively superfluous.” In fact, this “surplus population . . . becomes a condition for the existence of the capitalist mode of production. It forms a disposable industrial reserve army, which belongs to capital just as absolutely as if the latter had bred it at its own costs. Independently of the limits of the actual increase of population, it creates a mass of human material always ready for exploitation by capital in the interests of capital’s own changing valorization requirements.” But eventually, the “monopoly of capital becomes a fetter upon the mode of production which has flourished alongside and under it. The centralization of the means of production and the socialization of labor reach a point at which they become incompatible with their capitalist integument. This integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated.”

Karl Marx: The German Ideology

One of what Althusser terms the “Works of the Break,” Marx’s The Germany Ideology attacks the ideological illusions of philosophy while embracing an undeveloped form of empiricist historicism. The liquidation of philosophy clears a space for the installation of science, but, Althusser argues, the results of this break didn’t appear until much later. So, for the most part, Marx confronts the ideology of Man with the empirical reality of individuals, but primarily by placing “real,” “actual,” “concrete,” “material,” “empirical” in front of all his terms. The book opens with an attack on the Young Hegelians, who, staking different positions within the field opened up by the decomposition of Hegel’s philosophy, remain within the confines of Hegel’s idealism, and therefore confuse concepts and consciousness with reality. For the Young Hegelians, “The speculative idea, the abstract conception, is made the driving force of history, and history is thereby turned into the mere history of philosophy. . . . Thus, history becomes a mere history of illusory ideas, a history of spirits and ghosts, while the real, empirical history that forms the basis of this ghostly history is only utilized to provide bodies for these ghosts.” Detached from the real movement of history, these petty bourgeois Germans can only imagine a revolution of consciousness. Echoing his Theses on Feuerbach, Marx writes, “This demand to change consciousness amounts to a demand to interpret the existing world in a different way.” Marx jokes that this is to imagine that freeing oneself from the concept of gravity would also free oneself from gravity’s effects. Or in another witty jibe (and it should be noted, this is a very funny and sarcastic book), Marx writes, “Philosophy and the study of the actual world have the same relation to one another as onanism and sexual love.” Rather than the illusory abstractions of philosophy, Marx proposes to start from empirical reality. “The premises from which we begin are not arbitrary ones, not dogmas, but real premises from which abstractions can only be made in the imagination. They are the real individuals, their activity and the material conditions of their life, both those which they find already existing and those produced by their activity. These premises can thus be verified in a purely empirical way.” He adds, “Empirical observation must on each separate instance bring out empirically, and without any mystification and speculation, the connection of the social and political structure with production. The social structure and the state are continually evolving out of the life-process of definite individuals, however, of these individuals, not as they may appear in their own or other people’s imagination, but as they actually are.” For Marx, consciousness is produced alongside the production of men’s material, sensuous environment and their different social forms. “Men are the producers of their conceptions, ideas, etc., that is, real, active men, as they are conditioned by a definite development of their productive forces and of the intercourse corresponding to these, up to its furthest forms. Consciousness can never be anything else than conscious being, and the being of men is their actual life-process.” Historical, material conditions therefore determine the production of ideology, but ideology distorts, or rather inverts, the relation of ideas to reality. In a famous passage, Marx writes, “If in all ideology men and their relations appear upside-down as in a camera obscura, this phenomenon arises just as much from their historical life-process as the inversion of objects on the retina does from their physical life-process.” It is a matter, then, “not of setting out from what men say, imagine, conceive, nor from men as narrated, thought of, imagined, conceived, in order to arrive at men in the flesh; but setting out from real, active men, and on the basis of their real life-process, demonstrating the development of the ideological reflexes and echoes of this life-process. The phantoms formed in the brains of men are also, necessarily, sublimates of their material life-process.” Marx offers a short history of this “life-process,” of the development of the mode of production and forms of cooperation. A particularly important threshold is crossed when the evolution of the division of labor creates a separation of “material and mental labour” (what Balibar nicely terms “intellectual difference.”). From this point on, the production of ideology can continue in isolation from, and even in opposition to, empirical reality, and the petty bourgeois philosophers of Germany, sitting in their rooms, can convince themselves that their ideas dominate history. Marx writes, “Division of labour only becomes truly such from the moment when a division of material and mental labour appears. From this moment onwards consciousness can really flatter itself that it is something other than consciousness of existing practice, that it really represents something without representing something real; from now on consciousness is in a position to emancipate itself from the world and to proceed to the formation of ‘pure’ theory, theology, philosophy, morality, etc.” Unfortunately, this division of material and mental labor allows one class—the ruling class—to impose its ideas on the others. “The idea of the ruling class are in every epoch the ruling ideas: i.e., the class which is the ruling material force of society is at the same time its ruling intellectual force. The class which has the means of material production at its disposal, consequently also controls the means of mental production, so that the ideas of those who lack the means of mental production are on the whole subject to it. The ruling ideas are nothing more than the ideal expression of the dominant material relations, the dominant material relations grasped as ideas.” But, anticipating Gramsci, Marx seems to qualify this claim, arguing that the ruling class succeeds in imposing its ideas only by presenting its narrow, specific interest as the interest of all. Marx writes, “For each new class which puts itself in the place of one ruling before it is compelled, merely in order to carry through its aim, to present its interest as the common interest of all the members of society, that is, expressed in ideal form: it has to give its ideas the form of universality, and present them as the only rational, universally valid ones.” Each revolution in history has widened the base of those pulled into believing that the interest of the ruling class is their own, but only a revolution of the proletariat, the universal class, would install a true universality. Such a communist revolution of course must be carried out in reality, not just in consciousness. “Communism is for us not a state of affairs which is to be established, an ideal to which reality will have to adjust itself. We call communism the real movement which abolishes the present state of things.” In fact, during its course, the revolution, when carried out at a sufficient scale, would serve to sweep away the remnants of the ruling ideology and all estrangement of ideas from actual life. “Both for the production on a mass scale of this communist consciousness, and for the success of the cause itself, the alteration of men on a mass scale is necessary, an alteration which can only take place in a practical movement, a revolution; the revolution is necessary, therefore, not only because the ruling class cannot be overthrown in any other way, but also because the class overthrowing it can only in a revolution succeed in ridding itself of all the muck of ages and become fitted to found society anew.”