tag:blogger.com,1999:blog-33972169984768798192024-03-19T06:18:24.033-04:00capital reading groupandyhttp://www.blogger.com/profile/10471554437242328309noreply@blogger.comBlogger57125tag:blogger.com,1999:blog-3397216998476879819.post-30309616011662215042010-05-03T16:24:00.002-04:002010-05-03T16:41:51.743-04:00Suns-Spurs Game One, test run at 10:00P EST<iframe src="http://www.coveritlive.com/index2.php/option=com_altcaster/task=viewaltcast/altcast_code=6efc65aa5d/height=600/width=550" scrolling="no" height="600px" width="550px" frameBorder ="0" ><a href="http://www.coveritlive.com/mobile.php/option=com_mobile/task=viewaltcast/altcast_code=6efc65aa5d" >Suns-Spurs game one</a></iframe>andyhttp://www.blogger.com/profile/10471554437242328309noreply@blogger.com0tag:blogger.com,1999:blog-3397216998476879819.post-42496775079964752322009-08-19T00:07:00.004-04:002009-08-19T00:30:13.177-04:00PART ONE: The Transformation of Surplus-Value into Profit, and of the Rate of Surplus-Value into the Rate of ProfitKey for this section:<br /><span style="font-style:italic;"><span style="font-weight:bold;">“An increase in the rate of profit always stems form a relative or absolute increase in the surplus value in relation to its cost of production, i.e. to the total capital advanced, or from a reduction in the difference between the rate of profit and the rate of surplus value. (237)” </span><br /></span><br /><span style="font-weight:bold;">CHAPTER ONE: Cost Price and Profit<br /></span><br />It should be noted that as with Vol. I we return to (begin from) the commodity form as the essential form from which to extrapolate the more general dynamics of capitalism (or, at least how Engels had arranged the text). Here, the task is to develop the distinction between value and cost price – and the unfolding relational dynamic that Marx derives his theory of the tendency towards equalization of the rate of profits (and the tendency for the rate of profit to fall). Verifying Mandel’s succinct summary in the introduction, Marx takes up the issue of cost price in the production process: <br /><br /><span style="font-style:italic;">“This old value [value of capital advanced] reappears therefore as a component of the product’s value, though it does not originate in the production process of this commodity. It exists only as a component of the commodity’s value because it existed previously as a component of the capital advanced….This element of the cost price has therefore a dual significance. On the one hand it enters into the cost price of the commodity because it is a component of commodity value, and replaces the capital used up; on the other hand it forms a component of this commodity value only because it is the value of capital that has been used up, or because the means of production cost such and such an amount. (119)”</span><br /><br />This distinction, both at the analytical-logical and economic levels, is necessary in order to isolate cost price and value (in relation to production, capital advanced and commodity capital), tying this into the discussion of Vol. II between fixed/circulating and constant/variable capital. But most importantly, we arrive to profit and its relation to surplus value:<br /><br /><span style="font-style:italic;">“Profit, as we are originally faced with it, is thus the same thing as surplus-value, save in a mystified form, through one that necessarily arises form the capitalist mode of production. (127)”<br /></span><br />This then establishes the problem – the relation between surplus-value and profit, and their relation to market prices (both in terms of input prices and the creation of commodity capital). In this regard, Marx argues that the:<br /><span style="font-style:italic;">“basic law of capitalist competition…the law that governs the general rate of profit and the so-called prices of production determined by it, depends…on this difference between the value and the cost price of commodities, and the possibility from this of selling commodities below their value at a profit. (128)”</span><br /><br />Cost price thus acts as the obvious “minimum limit” to the sale price. On the flip-side, profit is not magnitude that appears out of “nothing” in the market place, as Torrens and other classical economists imagine, but has to be located in the production of surplus value (thus again, the stakes of this distinction). With this general distinction established, Marx then sets out to development this dynamic more fully….<br /><br /><br /><span style="font-weight:bold;">CHAPTER TWO: The Rate of Profit<br /></span><br />Simply put: <br />1) Rate of Surplus Value =<span style="font-weight:bold;"> s/v </span>(surplus over variable capital)<br />2) Rate of Profit – <span style="font-weight:bold;">s/C</span> (surplus over total capital); or, in other words <span style="font-weight:bold;">s/c+v</span> (surplus over constant and variable)<br /><br />Note that although these are seemingly ratios only of capital advanced and productive capital (i.e. the composition of capital in relation to production – variable, constant and the surplus value produced), these ratios carry into the field of circulation due to the value embodied in the commodity (for sale) itself. Thus we are dealing with ratios that operate (or express value ratios) in both fields (production/circulation), which open into the intertwining of circuits, and most importantly, not derived from the accounting delimited to a singular capital. <br /><br />These are measuring the SAME magnitude (quantity), though Marx notes that the rate of profit is the appearance (“the historical starting point”) while the rate of surplus-value is the “invisible essence. (134)” Again this signals to the social character of surplus value, that the rate of surplus-value is not derived directly from the extraction of surplus-labour employed in an individual capital but derives from social necessary labor and the variations in the composition(s) of capital. Thus when we enter into the realm of circulation, though it is imperative that the capitalist realizes his value (both advanced, but also of surplus) via the act of selling, Marx reminds us that <span style="font-style:italic;">“if a commodity is sold above or below its value, there is simply a different distribution of the surplus-value, and that this distribution, the altered ratio in which various individuals partake of the surplus-value, in no way affects wither the magnitude or the character of the surplus-value itself….[Via competition], as far as the individual capitalist is concerned, the surplus-value that he realizes depends just as much on this mutual cheating as on the direct exploitation of labour. (134)”</span><br /><br />The relation between these two rates, expressed in the commodity form, necessarily entails the mutually constituting spheres of production and circulation, and this is where Marx begins to draw the connections between the various levels/circuits. Employing the metaphor of the organic, Marx writes:<br /><br /><span style="font-style:italic;">“Capital runs through the cycle of its transformations, and finally steps as it were from its inner organic life into its external relations, relations where it is not capital and labour that confront one another, but on the one hand capital and capital, and on the other hand individuals as simple buyers and sellers once again….The original form in which capital and wage-labour confront one another is disguised by the intervention of relations that seem to be independent of this; value-value itself does not appear as having been produced by the appropriation of labour-time, but as the excess of the sale price of commodities over their cost price…(135)”</span><br /><br />We find a certain homology here: essence/internal/production/confrontation of labour-power and capital vs. appearance/external/market place/confrontation of capital and capital (competition) and buyers/sellers. “Mystification” emerges from the very dynamic/practices of the system itself, not from any kind of veil of metaphysical confusion. Additionally, the essential dynamics, through systemic imperative, move towards appearances at times, as Marx states that the <span style="font-style:italic;">“nature of surplus-value persistently impresses itself on the capitalist’s consciousness in the course of the immediate production process…by his greed for the labour-time of others. (135)”</span> In other words, the greed for profit is the appearance of a more fundamental systemic dynamic that the capitalist himself is not necessarily conscious of. On the other hand, this systemic mystification does, however, serve an ‘interest,’ albeit structurally inscribed rather than consciously formulated, that <span style="font-style:italic;">“it is actually in his [capitalist] interest to disguise these particular ratios and inner connections” (134)</span> between surplus value, price and profit. Marx then posits two short comments on why, systematically, production does not appear in the understanding of the creation of extra-value (profit) – both of which are reminiscent of Vol. I:<br /><br />(1)<span style="font-style:italic;"> “The Immediate process of production is itself simply an evanescent moment…so that any inkling of the source of his profit…appears at the most as an equally valid moment alongside the notion that the excess that is realized stems from a movement that is independent of the production process itself and derives from the sphere of circulation, a movement therefore that capital possesses independently of its relation to labour. (135)”</span><br /><br />(2) <span style="font-style:italic;">“Under the heading of costs…the extortion of unpaid labour appears simply as an economy in the payment for one of the articles that comprise these costs…(136)”</span><br /><br />This is a sort of theory of social-knowledge, wherein the system itself imparts the limits in which its own forms emerge on the level of appearance. This “inversion of subject and object” (136) is replicated at the level of price and value – and their different ratios:<br /><br /><span style="font-style:italic;">“This inverted relationship necessarily gives rise, even in the simple relation of production itself, to a correspondingly inverted conception of the situation, a transposed consciousness, which is further developed by the transformations and modifications of the circulation process proper. (136)”</span><br /><br />With these restatements of the forms of appearance of the system, wherein the excess value, inscribed in the commodity during production, appears as a sale price in excess of cost price…which is ultimately to say that: <br /><br /><span style="font-style:italic;">“even if the rate of profit is numerically different from the rate of surplus-value, while surplus-value and profit are in fact the same and even numerically identical, profit is still for all that a transformed form of surplus-value, a form in which its origin and the secret of its existence are veiled and obliterated. In point in fact, profit is the form of appearance of surplus-value, and the latter can be sifted out from the former only by analysis. (139)”</span><br /><br />The task for Marx then is to tease out this relationship, one masked by the very forms it takes, through an analysis of the differential ratios between rate of profit and rate of surplus-value; not since one is real and the other fantasy – both have their real effects – but in order to show the dynamic that emerges from between these two tendencies – both limits, (falling rate of profit) and possibilities of adjustments, once the necessary assumptions that delimit Marx’s initial theorization are discarded (think Mandel’s discussion of long-waves, or Harvey’s discussion both in the lectures and Limits.)<br /><br /><span style="font-weight:bold;">CHAPTER THREE: The Relationship between Rate of Profit and Rate of Surplus Value<br /></span><br />As I got a little lost in the equations of this chapter, let me try to tease out what I think are the main points:<br /><br />One, note that, right from the outset, in order to formulate the relational logic between these two different rates, that Marx necessarily assumes<span style="font-style:italic;"> “that the sum of profit that accrues to a given capital is the same as the total sum of surplus-value which this capital produces in a given period of circulation”</span> and that he necessarily has to ignore that <span style="font-style:italic;">“surplus-value by no means coincides in the majority of cases with profit. (141)”</span> This obviously is not how the system actually works, but to establish a base-line understanding of these two rates in relation to each other. He also has to ignore value of money, turnover, the differential rates of labor productivity, and the effects of the length of the working day, intensity of labour and wage (see 142-43). This is a massive delimitation of variables, so it should be noted that what follows are not formulas to be applied, but rather is an attempt to get to fundamental tendency that underlies phenomenal forms and their multiple variations.<br /><br />Rate of Profit:<br /><span style="font-weight:bold;">p’ = s/C = s/c+v<br />p’ = s’v/C = s’v/c+v</span><br />(wherein s’v is the ratio between surplus-value and the variable capital advanced, i.e. the rate of surplus value)<br />This then get us to:<br /><span style="font-weight:bold;">p’:s’ = v:C</span><br />Which is to say: <span style="font-style:italic;">“rate of profit is to rate of surplus-value as variable capital is to total capital.”</span><br /><br />This is all to set up a series of examples wherein different rates of profit are shown to be derived from various compositions of capital (organic composition), none of which in direct correlation to rate of . These can only be relational (i.e., social, not internal to individual circuits of capital). From these, Marx summarizes his finding by arguing that:<br /><br /><span style="font-style:italic;">“The rate of profit is thus determined by two major factors: the rate of surplus-value and the value composition of the capital.</span>” (161) He goes on to summarize his findings:<br /><br /><span style="font-style:italic;">“The rates of profit of two different capitals, or of one and the same capital in two successive different states…are equal: 1) given the same percentage composition and the same rate of surplus-value; 2) given unequal percentage compositions and unequal rates of surplus-value, if the [mathematical] product of the rate of surplus-value and the percentage of the variable part of capital (s' by v) is the same in each case, i.e., the mass of surplus-value reckoned as a percentage of the total capital (s = s'v)…” and reversely, are unequal if “given the same percentage composition, if the rates of surplus-value are unequal….(2) given the same rate of surplus-value are different percentage compositions…[and finally] (3) given different rates o f surplus-value and different percentage compositions…(p. 162).”</span><br /><br /><span style="font-weight:bold;">CHAPTER FOUR: The Effect of the Turnover on the Rate of Profit<br /></span>Remember that Marx necessarily had to delimit the multiple variables that could affect the related profit ratios described in Chapter Four – here, Engels takes it upon himself to discuss the effect of turnover. Engels notes that as Vol. II found that turnover affected the rate of surplus-value, then it necessarily follows that it affects profit rate as well. He reminds us that the <span style="font-style:italic;">“mass of surplus-value appropriated in the course of a year is therefore equal to the mass of surplus-value appropriated in one turnover period of the variable capital, multiplied by the number of such turnovers in a year. (167)</span>”As with surplus-value, then, an annual rate of profit can be noted as well,<span style="font-weight:bold;"> P’ = s’n /c. </span><br /><br /><span style="font-weight:bold;">CHAPTER FIVE: ECONOMY IN THE USE OF CONSTANT CAPITAL<br /></span>What has been emphasized in these last few chapters is the central importance of the organic composition of individual capitals in relation to a general social average. While Vol. I isolated and emphasized labour-time, and more importantly, the portion of labour that is unpaid and thus the site of surplus-value creation, Vol. III expands this into a general social relation – a relation of proportionality – which then allows for larger systemic tendencies to be ascertained. Chapter Five is important because it emphasizes the role that constant capital plays in this general relation, a component that has been somewhat de-emphasized in the general literature. What is interesting that here is that Marx accounts for the fetishistic character of constant capital within capitalist accounting; i.e., though expressed at the level of appearance as an obsession with constant capital, this is expresses (maybe not the correct word) a very real role and tendency that constant capital plays within the organic composition of capital. This chapter ends with some very interesting categories such as the “combined worker”, “universal labour”, and “communal labour” though these are not fully developed. I will note Marx’s discussion of them below…but first….<br /><br />Marx notes that there is systematically derived “<span style="font-style:italic;">need to increase fixed capital in the modern industrial system”</span> and that this <span style="font-style:italic;">“was…a major stimulus for profit-mad capitalists to prolong the working day. (170)”</span> But even in the case of the extraction of relative surplus value (vs. absolute), in other words, in the case of increasing productivity and labour intensity, a capitalist has to increase the amount of the circulating component of constant capital (i.e. raw materials) as well as increased outlay on fixed capital (machinery, buildings, etc). Thus a general tendency to build up constant capital outlays, something that was noted in Vol. I when Marx discussed technological innovation as well.<br /><br />Building off of the social character of production, and specifically its character in industrial production (i.e. the mass concentration of labor in one site), Marx also notes the economical use of industrial refuge (the re-use or re-cycling of by-products of the production process). Why is this important? Marx hints that <span style="font-style:italic;">“if surplus-value is a given factor, the profit rate can be increased only by reducing the value of the constant capital required for the production of the commodities in question.”</span> (173) Thus economizing constant capital outlays.<br /><br />The most interesting aspect that I found in this section was where Marx talks about the general effects of innovation in one sector of production and its necessary, general affect on other sectors of industry:<br /><br /><span style="font-style:italic;">“the development of the productive power of labour in one branch of production...appears as the condition for a reduction in the value and hence the costs of means of production in other branches of industry…This is evident enough, for the commodity that emerges from one branch of industry as a product enters another branch as means of production. (174)”<br /></span><br />This then leads to a condition wherein:<br /><br /><span style="font-style:italic;">“the rise in the profit rate for one branch of industry depends on the development of labour productivity in another. The benefit that accrues here to the capitalist is once more an advantage produced by social labour, even though not by the workers whom he direct exploits. (175)” </span><br /><br />This helps explain the capitalist’s class obsession with rates of constant capital (i.e., cost of machinery, buildings, infrastructure, etc) – e.g. from this important tendency/factor that constant capital plays in the organic composition of capital (see 176). And yet, to the capitalist, the <span style="font-style:italic;">“economical use of constant capital still appears…as a requirement completely alien to the worker and absolutely independent of him”</span> (177) which means not only that the development of this innovation was a product of social labor, but that this is one component in a ratio that involves variable capital. This is yet another side of fetishism, wherein “<span style="font-style:italic;">the capital relation actually does conceal the inner connection in the state of complete indifference, externality and alienation in which it places the worker vis-à-vis the conditions of realization of his own labour. (178)” </span>The necessary connection between labour productivity and the economical use of constant capital is thus concealed.<br /><br />Marx moves through factory reports that describe the detrimental effects of capitalists cutting corners on constant capital outlays (i.e., not fixing machinery, unhealthy factory environments, etc) - reminiscent of the more social-history elements of Volume One. We are being shown the real human effects of this system. Again, this all of derives from the social character of production. In this regard, Marx finishes the chapter by deploying three, somewhat under-theorized, terms:<br /><br /><span style="font-weight:bold;">-Combined worker:</span> <span style="font-style:italic;">“it is only the experience of the combined work that discovers and demonstrates how inventions already made can most simply be developed, how to overcome the practical frictions that arise in putting the theory into practice…[etc.]</span>” (198-199). This then gets divided into two elements….<br /><span style="font-weight:bold;">-Universal Labour:</span><span style="font-style:italic;"> “is all scientific work, all discovery and invention. It is brought about partly by the cooperation of men now living, but partly also by building on earlier work.”</span><br /><span style="font-weight:bold;">-Communal Labour:</span> <span style="font-style:italic;">“simply involves the direct cooperation of individuals.</span> (199)”<br /><br />We have to assume that this distinction is historically-specific, though, assumedly, they have a certain omni-historical or possibly ontological quality to them. It is reminiscent of the more anthropological sections that Marx used to begin certain sections concerning human history and labor in Vol. I. Here, however, we need to ask, how should we understand these terms? Are these terms that cut through history? At what point does the ‘combined’ or ‘universal’ character (though distinct terms) arise? And what is the analytical value of these terms – what do they allow us to ask, or what do they automatically assume?<br /><br /><span style="font-weight:bold;">CHAPTER SIX: The Effect of Changes in Price<br /></span><br />Beginning from the assumption that <span style="font-style:italic;">“everything that gives rise to a change in the magnitude of c [constant capital], and therefore of C [total capital], also brings about a change in the profit rate (201)”</span> Marx runs through the effects of changes in prices; noting the imperative for a reduction of import tariffs in order to acquire cheap, raw materials for production. This opens into a short discussion of foreign trade – but mainly concerning import/export politics and its relationship to this tendency within the proportionality between various capital’s organic compositions. <br /><br /><br />One section that I think clearly expresses what Marx is trying to tie together here is when he discusses productivity, machine cost, market contraction/expansion and the fluctuation of input prices all in relation to each other:<br /><br /><span style="font-style:italic;">“the size and value of the machines employed grows as the productivity of labour develops, but not in the same proportion as this productivity itself, i.e. the proportion to which these machines supply an increased product. Thus in any branch of industry that uses raw materials, i.e. wherever the object of labour is already the product of earlier labour, the increasing productivity of labour is expressed precisely in the proportion in which a greater quantity of raw material absorbs a certain amount of labour, i.e. in the increasing mass of raw material that is transformed into products, worked up into commodities, in an hour, for example. In proportion therefore as the productivity of labour develops, the value of the raw material forms an ever-growing component of the value of the commodity produced, not only because it enters into it as a whole, but because in each aliquot part of the total product, the part formed by the depreciation of the machines and the part formed by newly added labour both constantly decline. As a result of this falling movement, a relative growth takes place in the other component of value, that formed by the raw material, provided that this growth is not cancelled out by a corresponding decline in the raw material’s value arising from the increasing productivity of the labour applied in its own creation. (204)”</span><br /><br />I thought that this paragraph sums up nicely what is at stake, and how many variables Marx is trying to highlight in the relation of capital outlays that go into a commodity’s value and which expresses general social differentials of profit and surplus-value ratios (see p. 201-204).<br /><br />In the section entitled “Revaluation and Devaluation of Capital; Release and Tying-Up of Capital” Marx notes that he needs to account for how is appears that the rate of profit and it mass can fluctuate independently of the “movements of surplus-value”, but actually derive from this movement. Again, its both to show the connections, as well as account for the fetishistic character of an ‘independent’ movement. <br /><br />But first a clarification of terms:<br /><br /><span style="font-weight:bold;">Revaluation/Devaluation</span>: <span style="font-style:italic;">“capital present increases or decreases in value as the result of certain general economic conditions…that the value of the capital advanced to production rises or falls independently of its valorization by the surplus value it employs</span>. (206)” Note that here, we are working specifically with the general social determination of value that then affects individual capitals. <br /><br /><span style="font-weight:bold;">Release/Tying-Up of Capital:</span> The latter means that “o<span style="font-style:italic;">ut of the total value of the product, a certain additional proportion must be transformed back into the elements of constant or variable capital, if production is to continue on its old scale</span>” while “release” means that “<span style="font-style:italic;">a part of the product’s total vale which previously had to be transformed back into either constant or variable capital becomes superfluous for the continuation of production on the old scale and is now available for other purposes</span>. (206)”<br /><br />I wonder if we can connect the notion of “release” with Marx’s notion of “set-free” from Volume II – a term that Marx used to talk about the source of the funds that went into the credit pool that then could return to lubricate production during periods of capital shortages and crises?<br /><br />Anyhow, release and tying up can be related to both constant capital – in the case of constant for example, value depreciation over time of machinery, technical innovation, etc., or, in the case of variable capital, the rise of the necessary commodities for labour reproduction (what Harvey called the “commodity basket”), a fall in wages (i.e., reserve army, etc). These aspects then are the “result of the devaluation and revaluation” of the elements of capital. Its important at this point to recall the Mandel introduction when Mandel pointed to a debate in Marxian economics concerning what he called the ‘feedback’ effect – i.e., how to determine the affects of fluctuating prices on already purchased inputs. While Marx notes “i<span style="font-style:italic;">f [raw material] prices [rise], it may be impossible to replace it completely after deducting wages from the value of the commodity. Violent fluctuations in price thus lead to interruptions, major upsets and even catastrophes in the reproduction process. (213)”</span> Here we can think of this in a general process of production circuits and the intervals of capital turnovers, but as this is a process constantly in motion, with multiple circuits (money, production and commodity), involving both the sphere of production and circulation, the exact effects become difficult to work out. <br /><br />Also, we return to the question of crises and cycles here. The rest of this chapter is Marx both theorizing and then tracing specific examples (specifically the cotton crisis of 1861-65) of crises. Here, this is not systemic crises, but capital cycles emerging from specific crises in valuation and turnover. Here are some of the more important points:<br /><br />1) That the <span style="font-style:italic;">“more capitalist production is developed…and the more rapid the accumulation…the greater is the relative overproduction of machinery and other fixed capital, the more frequent the relative overproduction of plant and animal raw materials, and the more marked the previously described rise in their price and the corresponding reaction. (214)”</span><br /><br />2) With the increasing high prices of materials/machinery that comprise constant outlays, these necessarily collapse (due to a decline in demand and an expansion of production elsewhere). This then effects the reproduction of the raw materials themselves, and re-establishes the monopolies of the already established/developed areas of their production which can withstand this crash. <br /><br />I am going to skip Marx’s discussion of the Cotton Crisis of the 1860s, and rather end this with a discussion of regulation/market cycles. In Vol. I, Marx noted the contradiction in industrial capitalism wherein, at the very site of production, the factory, regulation, control, management of all aspects was the order of the day. But when anyone discussed regulation of the market (including, most importantly, the labour-market) that this was anathema to the very system. Here, in regards to raw material inputs, Marx notes the same, though momentary, contradiction:<br /><br /><span style="font-style:italic;">“All ideas of a common, all-embracing and far-sighted control over the production of raw-materials – a control that is in fact incompatible, by and large, with the laws of capitalist production, and hence remains forever a pious wish, or is at most confined to exceptional common steps in moments of great and pressing danger and perplexity – all such ideas give way to the belief that supply and demand will mutually regulate one another. (215)”</span><br /><br />Thus cycles/crises are recognized as the unfortunate, though inevitable, consequences of the supply/demand market faith (e.g., Smith) – with the only recourse taken as national import/export tariffs. <br /><br />For those particularly interested in questions of agriculture – check out the bottom of 216. Following the same line of argumentation – the incompatibility of regulation of raw material with capitalist production – Marx writes <span style="font-style:italic;">“The moral of the tale….is that the capitalist system runs counter to a rational agriculture, or that a rational agriculture is incompatible with the capitalist system (even if the latter promotes technical development in agriculture) and needs either small farmers working for themselves or the control of the associated producers. (216)”</span> Andy? Robert? <br /><br /><span style="font-weight:bold;">Chapter Seven: Supplementary Remarks<br /></span>These were disparate notes that Engels collected that pertained to aspects discussed thus far in Part One. These notes reiterate that Marx’s main task is to establish a mediated connection between surplus-value and profit (which is to say, to establish surplus-value, and thus his labour theory of value, as an operative economic category), and to account why political economy has failed to make the connection. Thus the chapter is a general statement of this position, and then a direct analysis of Rodbertus’s economic theory (see 236-237). Marx ends with restating that an <span style="font-style:italic;">“increase in the rate of profit always stems form a relative or absolute increase in the surplus value in relation to its cost of production, i.e. to the total capital advanced, or from a reduction in the difference between the rate of profit and the rate of surplus value. (237)” </span><br /><br />Lastly, and importantly, Marx explicitly states that <span style="font-style:italic;">“The value of any commodity – and thus also of the commodities which capital consists of – is determined not by the necessary labour-time that it itself contains, but by the socially necessary labour-time required for its reproduction. This reproduction may differ from the conditions of its original production by taking place under easier or more difficult circumstances.</span> (238)” Recall Mandel’s comments in the introduction in relation to the feedback/transformation debate (56-58).<br /><br />Onto Part Two…..Maxhttp://www.blogger.com/profile/09192701065753965428noreply@blogger.com0tag:blogger.com,1999:blog-3397216998476879819.post-88026514634254765652009-08-15T22:19:00.002-04:002009-08-15T22:28:10.473-04:00Mandel's Intro to Volume ThreeLet me begin with a summary of Mandel’s introduction. Mandel is a master at synthesizing and clarifying arguments, if only pointing to the existing literature and adding his own argument to the debates (after this reading is completed we should move onto his two volume work in order to better understand his own ‘reading’ of Marxian economic theory). Mandel reminds us that, whereas Volume I dealt with production – i.e., in ‘the factory’, and Volume II moves out into the question of how production is related with circulation – i.e., market, Volume III then moves to the level of the over-all dynamics of capitalism in their totality. It should be stated, though, that this is a collection of disparate notes assembled and published posthumously by Engels – thus there is a quality of incompleteness to the work which how Mandel explains the reason for so many controversies arising from this specific Volume.<br /><br /> Throughout the earlier texts we saw how Marx highlighted various points of contradiction that, though deprived of full theoretical/analytical explication due to the necessary assumptions that underlie the analysis, reveal or open into larger systemic contradictions. For example, in Vol. I, Marx showed that if one followed classical political economy, that within their own terms a gigantic social contradiction of increasing wealth and increasing proletarianization would occur. In Vol. II we saw cycles that were interwoven with turnover cycles (the infamous passage where Marx switched between the terms “cycle” and “crisis” – see page 284 of Vol II), or problems in the reproduction process of capital (e.g., Vol II, p. 157). Vol. III’s central problematic, according to Mandel anyway, is showing “<span style="font-style:italic;">that [the] inherent mechanisms [of capitalism], which cannot be overcome without abolishing private property, competition, profit and commodity prodction (the market economy), must lead to a final collapse. (11)” </span>Marx embarks on this project by, following classical political economy, theorizing the forms into which the social surplus-value (value) is distributed and the corresponding social relations.<br /><br />Marx wants to show how the ruling class “participate[s] in the distribution of the total mass of surplus-value produced by productive wage-labour, and how these specific economic categories are regulated (12)." The main divisions line up as:<br />o Ruling class (4): Industrial capitalists / Commercial Capitalists / Bankers / and Capitalist Landowners<br />o Revenue (5): wages / individual profits / commercial (and banking) profits / interest / and land rent<br />o Which can be reduced to (3) basic categories: wages / profits / land rent<br /><br />What brings this together, seemingly mediating this process, is the rate of profit and more specifically a tendency in which the rate of profit tends to equalize between all capitals. From this Marx posits his infamous theory of the tendency of the average rate of profit to decline. <br /><br />One distinction that will be important to keep in mind as we move through the text is the difference between profit and surplus value – the social surplus value which is redistributed to capitalists, thus not deriving directly from the exploitation of the labor-power that they themselves have put directly to work, and; surplus profit, which does not participate in the “<span style="font-style:italic;">general movement of equalization of the rate of profit. (12</span>)” The former clarifies the socio-economic implications of the organic composition of capital in regards to this average and percentage redistribution (15-16). Mandel expands on this category of surplus-profit later in his introduction as well (see 56-63, see in particular Mandel’s own controversial position on this, footnote 89 on p. 61). Generally speaking, this distinction thus brings to light three important points that Mandel discusses:<br /><br /> - 1) value is social and not individual in character, and thus those with lower/higher organic compositions of capital compared to the social average waste or economize (respectively) socially necessary labour. <br /> - 2) equalization is a tendency, not a permanent reality – which opens into a matrix of flux/reflux between capitals and thus introduces the issue of unevenness as a general process (uneven in growth, in technical innovation, etc<br /> - 3) And most complicated of all, the transformation problem (relation between profit and its tendencies, with surplus-value and its socially mediating function). This gets dividing into two classes of posthumous responses to Vol III:<br /><br />a) What Mandel calls the ‘feedback’ problem: wherein economists have faulted Marx for supposing (implying) that only produced commodities are being ‘transformed’ by the equalization tendency, and not the input ‘prices’ of the commodities necessary for production. Mandel responds to this by saying that Marx has been read incorrectly: “<span style="font-style:italic;">prices of production of raw materials, like all other inputs bought by capitalists currently occupied in production, are unchangeable data. They cannot vary though ups or down of current production…The capitalists have to pay a given price for thme, which does not change a posteriorir as a function of what is occurring during a given year in the field of final surplus-value redistribution. (24)”</span> Furthermore, <span style="font-style:italic;">“The formation of prices of production, i.e., the calculation of the average rate of profit, is not a constantly moving process. It is linked to the overall realization of surplus-value of all (most) of the commodities currently produced. That is why a minimum time-span must be assumed before one may speak of a new average rate of profit replacing a previous one. (24)”</span><br /><br />b) The infamous transformation problem: wherein people have tried to solve the issue of how values become prices (i.e., creating a Marxian model of a functioning capitalist economy). Mandel responds that <span style="font-style:italic;">“Values are quantities of labour, and have nothing to do with money prices as such. The equalization of the rate of profit between different branches of production occurs through the transfer of quantities of surplus value from one branch to another. Again, quantitites of surplus-value are quantities of labour (surplus labour) and not quantities of money. (27)”</span> Mandel, in his characteristic clarity, sums up the problem as such: “<span style="font-style:italic;">What is really involved in this controversy is whterh the ‘transformation problem’ concerns the immediate move from essence to appearance, in other words to the process of production and circulation in day-to-day reality, or whther – as I would strongly maintain – it is only a mediating link in the process of cognition, which does not yet deal with immediately verifiable, empirical data, i.e. market prices. (28-29</span>)” This last statement not only clarifies the issue, but also expresses Mandel’s ability to engage with debates of Marxian economics while not losing sight of the distinction between Marx’s conceptual/theoretical project and the somewhat reified project of trying to turn this into an economic system as such. <br /><br />I’m trying not to get bogged down too much in this intro, so to wrap this up, the last section of the Mandel intro that I found really helpful was his discussion of crisis-theories, including the theory of the declining rate of profit (and subsequent debates emerging from it). It is worth quoting Mandel’s summary of Marx’s theory wherein he summarizes its three components:<br /><br /><span style="font-style:italic;">“Since that [1] part of capital which alone leads to the production of surplus-value (variable capital, used to buy labour-power) tends to become a smaller and smaller part of total capital, because of the [2] fundamentally labour-saving tendency of technical progress – the gradual substitution of dead labour (machinery) for living labour – and [3] because of the gradual increase of the value of raw materials in that of total output: since, in other words, the organic composition of capital in its value expression tends to increase, there is an inbuilt tendency for the average rate of profit to decline in the capitalist system. (29-31)” </span><br /><br />I found this to be a succinct summary of the aspects of the theory. Additionally, Mandel links this to general crisis theories emerging out of Marxian theory – in particular that this tendency for the rate of profit to decline is the general crisis – understood via the notion of overproduction – which Mandel rejects, at least as a singular causal explanation. He then describes his own reading:<br /><br /><span style="font-style:italic;">“In the framework of Marxist economic theory, crises of overproduction are simultaneously crises of over-accumulation of capital and crises of overproduction of commodities. The former cannot be explained without pointing to the latter; the latter cannot be understood without referring to the former. This means that the crisis can be overcome only if there occurs simultaneously a rise in the rate of profit and an expansion of the market…(42)”</span><br /><br />His summation of the (1) disproportionality theory of crisis (Hilferding), the (2) under-consumption by the masses theory (Moszkowska) and (3) over-accumulation theories of crisis is great. For Mandel – crisis is the integration of all these aspects – not one singular causal origin that then sets the system into crisis, and shows how dynamic the system is – thus emphasizing his infamous long-wave theory of capitalism, summarizing:<br /><br /><span style="font-style:italic;">“It follows that the law of the tendency for the average rate of profit to decline is less a direct explanation for crises of overproduction properly speaking, than a revelation of the basic mechanism of the industrial cycle as such: in other words, an uncovering of the specifically capitalist, i.e. uneven, disharmonious, mode of economic growth, which unavoidably leads to successive phases of declining rates of profit, and recuperation of the rate of profit as a result, precisely, of the consequences of the previous decline. (51)”<br /></span><br /><br />Ok, off to the text (and skipping over the Engel’s Preface).Maxhttp://www.blogger.com/profile/09192701065753965428noreply@blogger.com0tag:blogger.com,1999:blog-3397216998476879819.post-33864075710675347382009-07-30T08:08:00.002-04:002009-07-30T08:14:15.679-04:00Real and Formal, againRandomly found this old NLR article from Ben Fine:<br /><br /><span style="font-style: italic;">New Left Review</span> I/109, May-June 1978<br /><br />Ben Fine<br />"On the Origins of Capitalist Development Remarks"<br /><br />Eventually he reaches a discussion of relative and absolute surplus-value in the history of capital and makes a claim that takes some fucking guts:<br /><blockquote>In short, whilst the production of relative surplus-value can develop as soon as capitalist relations are established, it can only fully flower after<i>effective</i> legislation to limit the length of the working day. <i style="font-style: italic;">In Britain, only by 1870, fully one hundred years after the industrial revolution associated with the textile industry, can it be argued that socially</i><span style="font-style: italic;"> the real subsumption of capital to labour had been accomplished. </span></blockquote><span style="font-style: italic; font-weight: bold;">This</span> is what I want to see more of. More guts to actually talk about history and Marxian theory together.andyhttp://www.blogger.com/profile/10471554437242328309noreply@blogger.com1tag:blogger.com,1999:blog-3397216998476879819.post-62792839776775594242009-07-21T02:00:00.001-04:002009-07-21T02:29:45.163-04:00Vol II, Part Three via Secondary Literature<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhDoulRguxwauBmjlpLgTjoZIzdVjV0GfFtZTzsZTREfNOt-XpCqeBPBcMH-dDzZ7RMvX_68A2LYRCSdpu6Rt8Nazdrvz1kqcCVcHZiOPb4UDvQpFSIsdAFrspV7xhaxvebWCzKjzjhxV1W/s1600-h/reproduction.jpg"><img style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 386px; height: 400px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhDoulRguxwauBmjlpLgTjoZIzdVjV0GfFtZTzsZTREfNOt-XpCqeBPBcMH-dDzZ7RMvX_68A2LYRCSdpu6Rt8Nazdrvz1kqcCVcHZiOPb4UDvQpFSIsdAFrspV7xhaxvebWCzKjzjhxV1W/s400/reproduction.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5360795401344913138" /></a><br /><br />Since I had a hard time trying to tease out the main points from these last two sections, I’ve decided to turn to secondary literature in order to assist in contextualizing or highlighting what is at stake in Part Three. As Andy’s post below does an excellent job of working through both chapters, I will focus more on the secondary literature here – pointing to themes that intersect with issues raised by Andy. Now, the main point of contention in the secondary literature can be reduced to, I believe, a debate over if the principle of “equilibrium” drives Marx’s division of the total social capital in to two departments. At a superficial level it appears that Marx is developing his own specific reproduction schema from which to counter the fallacies of political economy - in other words, we are looking at one level (though not comprehensive) of how the capitalist economy reproduces itself and what necessary conditions need to be met for accumulation/expansion to occur – i.e., a balance between the use-values AND exchange-values between one sector that produces means of production and another sector that produces consumption goods (Dept I and II). The schema, embedded with what Harvey calls ‘restrictive assumptions’, does indicate a balance, and thus the question becomes how we situate this within the larger conceptual apparatus and analytical dynamic of Capital? Some will extrapolate and extend the modular form of these chapters into quantifiable, algebraic formulas, and temporarily side step the question of contradiction or crises (or even a dialectic) by displacing these outside of the operations of the balance between departments. In other words, these two chapters are taken up as providing a schematic model upon which to develop a fuller economic model of the capitalist economy. <br /><br />Now, on one level, I think this is in fact what is going on here: that Marx had to necessarily deal with circulation and exchange at the level of social capital, and that within capitalism’s dynamic an internal basis of reproduction (equilibrium) had to be necessarily presumed within the total social capital in order to theorize accumulation/expansion. But if we fetishize these last two chapters, we are led into the realm of pure economic theory (of circulation only) – endlessly trying to quantify reproduction and locate the co-efficient that indicates a systemic crisis at the level of exchange. Harvey provides a corrective to this tendency, as he both (1) notes the ‘restrictive assumptions’ in order for balance to be posited within the moment of circulation, and; (2) how these chapters sit within Marx’s larger project. I will finish this post with a discussion of some of the points Harvey raises, but first, let me start with Moseley, since his discussion of money capital is important (tying this to Andy’s discussion below of hoards) – and more importantly it opens into a larger question of where one locates crisis in regards to the Dept. I/II schema.<br /><br /><span style="font-weight:bold;">Fred Moseley – Schemes of the reproduction of Money Capital<br /></span> In his chapter “Marx’s Reproduction Schemes and Smith’s Dogma” in The Circulation of Capital: Essays on Volume Two of Marx’s Capital, (New York:1998) Moseley argues that Part III of Vol. II is specifically targeted to debunking the fallacy that Smith posits – that the “ price of the total social product is entirely resolved into revenue” – i.e., wages plus profit and rent. Moseley works through this by arguing that Marx’s schema between Dept. I and II is not of physical quantities of inputs and outputs (resources, means of production, etc) but rather are concerned with the “<span style="font-style:italic;">reproduction of quantities of money capital. (Moseley, p. 160)”</span> This moves beyond any material or technological conditions of production and returns the total operation of multiple industrial cycles to the question of the accumulation (augmentation) of capital itself (and the money form of capital – Vol. I). The historically specific concept of money (i.e., within the categorical matrix and dynamics of capitalism) – as M-C-M’ – is contrasted to revenue which is used to purchase commodities for individual consumption; i.e., ‘revenue’ – categorically – does not entail a specific function (prior, operative, anticipated) of augmentation that is specific to capitalist accumulation. <br /><br /> At first I thought Moseley was pushing the money emphasis too far, but upon reflection this section – more than any other – emphasizes the necessary function of money; as potential capital in a hoard, of capital advanced (indicating capital ‘set-free’ into credit and other financial services), consolidated (joint-stock), as well as the continual lubrication of the process as variations in turnover times do not all converge on one reflux point (think Part II, Vol. II). In essence, the difficulty of reproduction, a collective process of multiple turnover rates internal and between a wide-variety of capitals, is assisted by the function of money and its fluid forms. Moseley highlights that one of the main assumptions of this section – one that is fundamental for this schema to operate – is that the difficulties in the discontinuous reinvestment in the replacement of means of production (Dept I) is answered by hoards built up by capitals in other sectors. Following Andy’s emphasis below, for Moseley, Marx is not emphasizing equilibrium per se, but rather is locating the methods through which the system overcomes its own inherent tendencies towards disequilibria. <br /><br />One aspect that Moseley does not cover in this chapter (though one that necessarily under-girds his analysis of the magnitude of money) is the functions specific to the money form (emphasis on form – returning to Vol. I). In this regard I want to point to one section from Part III that makes the distinction clear and what it then allows to be understood. Marx argues that:<br /><br /><span style="font-style:italic;">“the variable capital functions as capital in the hands of the capitalist and as revenue in the hands of the wage-labourer…The variable capital first exists in the hands of the capitalist as money capital; it functions as money capital in so far as he buys labour-power with it. As long as it persists in his hands in the money form, it is nothing more than given value existing in that form….(Vol. II, p. 514)” </span><br /><br />Further down on the same page Marx argues that:<br /><br />“<span style="font-style:italic;">the money that functions firstly as the money form of variable capital for the capitalist now functions in the hands of the worker as the money form of his wage which he converts into means of subsistence; i.e. as the money form of the revenue that he receives from the ever repeated sale of his labour-power….We have here the simple fact that the money of the buyer, here the capitalist, passes from his hands into those of the seller, in this case the seller of labour-power, the worker. It is not the variable capital that functions twice over, as capital for the capitalist and as revenue for the worker, but simply the same money, which exists first in the hands of the capitalist as the money form of his variable capital, hence as potential variable capital, and which, once the capitalist has converted it into labour-power, serves in the hands of the worker as the equivalent for the labour-power he has sold. However, the fact that the same money serves one purpose in the hands of the seller and another in the hands of the buyer is simply a phenomenon inherent in all purchases and sales of commoditie</span>s. (Vol II, p. 515)”<br /><br /> Returning to Moseley’s main theme – that Marx’s intention is a critique of Smith – Moseley argues that to Marx, <span style="font-style:italic;">“if Smith’s dogma were true and the total price of the total commodity product were resolved entirely into revenue, then the constant-capital consumed could not be recovered, from which it follows that the physical means of production could not be repurchased and production could not continue on the same scale.</span> (Moseley, p. 172)” In other words, each cycle would be starting from scratch – non-accumulation (remember Marx’s critique of Smith wherein Smith had to sneak in the ‘fourth’ category of ‘capital’ in order to set his three-forms of revenue into motion). Thus, as Moseley argues, Marx’s model provides a standpoint (a counter-economic model) to flesh out the inconsistencies of the-then contemporary political economy. But has this schema proven useful in locating a more general systemic or social contradiction?<br /><br /> This all hinges on whether this is a schema of equilibrium – since taken in isolation, it does appear to be so (even in the chapter of accumulation). All secondary literature that I read were in unison, arguing that this is most definitely not positing equilibrium (such as how the later Neo-Keynesians would see these models as indicating equilibrium – via effective or aggregate demand). However, with the exception of Harvey, most did not try to think through social contradiction into, or along with, the Dept I/II model. Duncan Foley (1986), in his chapter on these schema, excuses social reproduction and focuses solely on the intricacies of Marx’s Dept I/II model, wherein the mathematical equations he produces seems to suggest that capitalism, though faced with crises of aggregate demand, appears to be able to sustain itself and expand. In other words, crisis needs to be found elsewhere. Fine and Saad-Filho (1988) mark a division between social reproduction and capitalist reproduction – noting contradictions in both. In the latter, they note that there are “uncertainties” that seem to point to disequilibrium in capitalist reproduction/accumulation – (1) uncertainty about the ability to extract surplus value from labour (this uncertainty obviously falls outside of the scope of Part III as we are concerned here with circulation/exchange between departments), (2) how much surplus value can be realized (actualized in the market), (3) competition leads to ever-increasing technical changes of production, (4) finance/credit allows for the overexpansion of accumulation, and (5) trading in money leading to speculation, etc. But we don’t find a direct engagement with what the balance between Dept I/II tells us about a more general crisis, one that ostensibly would be visible primarily in social contradictions.<br /><br /><span style="font-weight:bold;">David Harvey, Limits to Capital:<br /></span> Harvey (1982), however, is much more sensitive to the how the Dept I/II schema sits within Marx’s overall project as well as the necessary assumptions that automatically foreclose a much more complicated approach to the overall social capital. In regards to the latter, the main assumption is that commodities are exchanged at their values, which entails ignoring the effects of capitalist competition (leading to innovation, higher rate of exploitation, technological innovation, etc) and that commodities are sold at prices of production and not their value (this also includes labour-power). Additionally, fluctuations in the money/credit market are also set aside. More importantly however, is that Harvey emphasizes that this schema points to crises that obtain from the SOCIAL relations of capitalism:<br /><br />“<span style="font-style:italic;">[Marx] wants to disentangle the contradictions embodied in such a process [of aggregate social capital]. So he fashions a device that allows him to identify the proportionate growth rates in the different departments, in production quantities, in value exchanges and in employment which, if they are not fulfilled, will result in crises. The reason for taking so much trouble to define equilibrium is, as always, to be better able to understand why departures from that condition are inevitable under the social relations of capitalism. (Harvey, p.169-170)”</span><br /><br />Thus the necessary assumptions (what Harvey calls ‘restrictive’) in the economic models displaces the contradictions that appear in the social – in other words, Harvey emphasizes the social relations of production in relation (or delimitation) to this schema. He notes multiple discrepancies between what this schema indicates and Marx’s more general project:<br /><br />1) The necessary balances (reproduction) of inputs/outputs run counter to seeing capital as a continuous process in motion. Harvey argues: <br />“<span style="font-style:italic;">By modeling accumulation in highly simplified stock terms, Marx gains greatly in analytical tractability. But the price he pays is a departure from the very basic but much more difficult flow conception which he sought to hammer out in preceding chapters, particularly those dealing with circulation of variable capital and surplus value. (Harvey, p. 170)”</span><br /><br />2) That Marx failed to stay true to his purpose of understanding circulation between departments as an inseparable dynamic-dialectic of use value and exchange value. In other words, exchange values (circulation) have to be balanced out with use values (the basis of the disaggregation of social capital into two sectors of production). This lines up with both Moseley, who wanted to emphasize this was not a balance of material inputs/outputs but rather one of magnitudes of money, as well as Andy’s discomfort with the seeming arbitrariness of the two department distinction (see below). This then opens into a more extended discussion of the important concept of “viable technology” and a contradiction that emerges between its function (to balance use and value exchanges between departments) and technologies role in accumulation in general (see p. 170-171).<br />This is where Harvey’s work really answers a lacunae in most of the economic literature that I read on Part III of Vol II. Here Harvey emphasizes that this model of reproduction has to be read along with the model of social reproduction from Vol I., wherein the capitalist production process produces the capitalist social relations (wages laborers need to sell their labour power and purchase commodities on the market; capitalists require others’ labour power, accrue more potential capital for reinvestment and are driven by competition into innovation and higher rates of exploitation). Thus we should not isolate this model of economic reproduction (a tendency that many Marxian economists have followed to a greater or lesser degree) but try to see how it intersects with the process of social reproduction and the reproduction of social classes. Thus we can examine class relationships through these exchange-schema:<br /><br />“<span style="font-style:italic;">Capital circulates, as it were, through the body of the labourer as variable capital and thereby turns the labourer into a mere appendage of the circulation of capital itself. The capitalist is likewise imprisoned within the rules of circulation of capital, because it is only through the observance of these rules that the reproduction and expansion of constant capital and the production of further surplus value is ensured. We are, in short, looking at the rules that govern the reproduction on a progressive scale of whole social classes. (175)”</span><br /><br />Obviously this is not some type of circulation-centered emphasis (where the contradictions and thus political possibility is located merely in the realm of exchange and distribution); I think that Harvey is merely showing that though one can locate and analyze class dynamics at the level of exchange, that exchange is inseparable from (though as we will see below, in contradiction with) production – the primary site within which the social relations are reproduced. One interesting issue that Harvey points to in this regard is that the reproduction of classes glossed at the level of circulation (here through the schema) seems to posit a balance much like the economic-models of many Marxian economists. But Harvey, after pointing to Rosa Luxemburg’s critical departure from the incompleteness of the Dept I/II schema, notes that what Marx forces us to do is:<br /><br /><span style="font-style:italic;">“to consider the stark contrast between the rules regulating accumulation in the realm of production and those that regulate balanced accumulation in the realm of exchange. Read in the context of Marx’s overall project, the reproduction schemas yield most of the theoretical insights we need. Balanced accumulation through exchange is indeed possible in perpetuity, provided that technological change is confined within strict limits, provided that there is an infinite surplus of labour power which always trades at its value….[etc.] Put simply, the conditions that permit equilibrium to be achieved in the realm of production contradict the conditions that permit equilibrium to be achieved in the realm of exchange….(Harvey, p. 176)”</span><br /><br />And this contradiction between the twin-equilibrium required within the realm of production and exchange opens into a much more complex social dimension - one that is foreclosed when a circulation balance between departments is reified into algebraic equations. With his attempt to read social relations, social crisis, relations of production, within and through the level of circulation (accumulation schema), Harvey, I think, provides the most fruitful way to situate these last chapters into a larger Marxian framework, one that does not reproduce the fetishistic quality of some of the Marxian economic models glossed from the Dept I/II model.<br /><br /><span style="font-weight:bold;">Other points that emerge from this section:<br /></span><br />1) Logic at the individual circuit is generalized and/or contrasted at the general societal level:<br /><span style="font-style:italic;">“The product of an individual capital, i.e. each independently functioning fraction of the social capital endowed with its own life, may have any natural form whatsoever. The only condition is that it really should have a use form, a use-value, that stamps it as a member of the commodity world capable of circulation.” “It is different with the product of the total social capital. All material elements of the reproduction must be parts of this product in their natural form…On the assumption of simple reproduction, therefore, the value of the portion of the product that consists of means of production must be equal to the [consumed] constant portion of the value of the social capital. (Marx, 508)”</span><br /><br /><br />2) Notes on Crises and their relation to a Rise in Wages (Andy also notes this):<br /><span style="font-style:italic;">“It is a pure tautology to say that crises are provoked by a lack of effective demand or effective consumption. The capitalist system does not recognize any forms of consumer other than those who can pay, if we exclude the consumption of paupers and swindlers. The fact that commodities are un-sellable means no more than that no effective buyers have been found for them, i.e. no consumers (no matter whether the commodities are ultimately sold to meet the needs of productive or individual consumption). If the attempt is made to give this tautology the semblance of greater profundity, by the statement that the working class receives too small a portion of its own product, and that the evil would be remedied if it received a bigger share, i.e., if its wages rose, we need only note that crisis are always prepared by a period in which wages generally rise, and the working class actually does receive a greater share in the part of the annual product destined for consumption. From the standpoint of these advocates of sound and ‘simple’ (!) common sense, such periods should rather avert the crisis. It thus appears that capitalist production involves certain conditions independent of people’s good or bad intentions, which permit the relative prosperity of the working class only temporarily, and moreover always as a harbinger of crisis. (p. 487)”</span><br /><br />3) Overproduction and the possibility of Planning:<br /><span style="font-style:italic;">“Once we dispense with the capitalist form of reproduction, then the whole problem boils down to the fact that the magnitude of the part of fixed capital that becomes defunct and has therefore to be replaced in kind varies in successive years (here we are dealing simply with the fixed capital functioning in the production of means of consumption). If it is a very large one year (if the mortality is above the average, just as with human beings), then in the following years it will certainly be so much the less. The mass of raw materials, work in process, and ancillaries needed for the annual production of means of consumption – assuming that other circumstances remain the same – does not diminish on this account; and so the total production of the means of production would have to increase in one case, and decrease in the other. This can only be remedied by perpetual relative over-production; on the one hand a greater quantity of fixed capital is produced than is directly needed; on the other hand, and this is particularly important, a stock of raw materials etc. is produced that surpasses the immediate annual need….Over-production of this kind is equivalent to control by the society over the objective means of its own reproduction. Within capitalist society, however, it is an anarchic element. (544-545)”</span><br /><br />Ok, onto Volume III……..Maxhttp://www.blogger.com/profile/09192701065753965428noreply@blogger.com0tag:blogger.com,1999:blog-3397216998476879819.post-43805044037332866392009-07-15T21:40:00.004-04:002009-07-15T22:08:56.868-04:00A brief note during the interludeI'm not sure when we'll start Volume III, but we're definitely going to get there. In the meantime, I thought I'd take some time to review some notes and ideas that have forced me to revisit Volume I.<br /><br />The basic concern is the distinction between Formal and Real Subsumption. This can be broken down in the following way:<br /><br /><div style="text-align: center; font-weight: bold;">Absolute : Relative ::<br />Labor-extensive : Labor-intensive ::<br />Formal subsumption : Real Subsumption ::<br />pre-capitalist production : capitalist production<br /></div><br />The basic narrative arc is: capital encounters pre-existing modes of production and subsumes those workers to the demands of capital but without changing the nature of work itself. Any extra surplus-value is generated by working harder, or longer (what some economists call an "industrious revolution," see Kenneth Pomeranz). Once capital becomes the central, organizing motor of economic production, however, it begins to repeatedly revolutionize production by introducing techniques such as enlarged scale, machinery, overseer systems, etc. This is capitalist production proper.<br /><br />And so a few things to consider:<br /><br />1) This demonstrates that within Marx's conception, a set of producers can belong to capitalist competition and circulation without technically operating under terms of capitalist production. We saw this many times in Volume II: an individual, non-capitalist producer that belonged to a total social capital marked by a mode of production that was capitalist in the proper form. E.g. slavery in the American south competing with cotton produced by wage laborers elsewhere around the world.<br /><br />2) What does it mean to be subordinated to capital? One could always say that merchants have always existed, middlemen have always existed. What marks them as specifically capital at any one moment, if the rest of the features of capitalist production are missing? This is what I'm trying to figure out. Marx will occassionally reference how even family production that owns the means of production still can produce for merchant capitalists. This is in fact the premise of Kautsky's <span style="font-style: italic;">The Agrarian Question</span>. Still, the majority of "formal subsumption" passages assume a separation of wage laborer from means of production.<br /><br />3) The most thorough explanation is in the Appendix to the Penguin edition of Volume I, entitled "Results of the Direct Production Process." It's also part of the 1861-1863 Manuscripts, which is where most Marxist scholars attribute the concept to. So I didn't read this section the first time around reading Volume I, but I re-read it recently.<br /><a href="http://www.marx.org/archive/marx/works/1864/economic/index.htm"><br />http://www.marx.org/archive/marx/works/1864/economic/index.htm</a><br /><br />4) There are hints of history here. Besides the modular nature of Marx's descriptions, there are references to encounters between capital and pre-capital:<br /><br /><span style="font-size:85%;"><blockquote>Despite all this, the <strong>change</strong> indicated does not mean that an essential change takes place from the outset in the real way in which the labour process is carried on, in the real production process. On the contrary, it is in the nature of the matter that where a subsumption of the labour process under capital takes place it occurs on the basis of an <em>existing labour process, </em>which was there before its subsumption under capital, and was formed on the basis of various earlier processes of production and other conditions of production. Capital thus subsumes under itself a <em>given, existing labour process, </em>such as handicraft labour, the mode of agriculture corresponding to small-scale independent peasant farming. If changes take place in these traditional <em>labour processes</em> which have been brought under the command of capital, these modifications can only be the gradual <em>consequences </em>of the subsumption of given, traditional labour processes under capital, which has already occurred. The fact that the labour becomes more intensive, or the duration of the labour process is prolonged, that the labour becomes more continuous and more systematic under the eyes of the interested capitalist, etc., none of these things changes the character of the real labour process itself, the real mode of labour. This therefore forms a great contrast to the specifically <em>capitalist mode of production</em> (labour on a large scale, etc.) which, as has been shown, takes shape as capitalist production progresses, and which <em>revolutionises</em> the kind of labour done and the real mode of the entire labour process, simultaneously with the relations between the various agents of production. It is in order to mark the contrast with the latter mode of the labour process that we call the subsumption of the labour process under capital examined so far<sup class="enote"><a href="http://www.marx.org/archive/marx/works/1864/economic/footnote.htm#n230">[230]</a></sup> — which is the subsumption under capital of a mode of labour already developed before the emergence of the capital-relation — <em>the formal subsumption of labour under capital</em>. The capital-relation is a <em>relation of compulsion</em>, the aim of which is to extract surplus labour by prolonging labour time — it is a relation of compulsion which does not rest on any personal relations of domination and dependence, but simply arises out of the difference in economic functions. This capital-relation as a relation of compulsion is common to both modes of production, but the specifically capitalist mode of production also possesses other ways of extracting surplus value. If, in contrast to this, the basis is an existing mode of labour, hence a <em>given</em> level of development of the productive power of labour and a mode of labour which corresponds to this productive power, surplus value can only be created by <em>prolonging labour time</em>, hence in the manner of <em>absolute surplus value</em>. Therefore, where this is the sole form of production of surplus value, we have the <em>formal subsumption of labour under capital</em>.</blockquote></span>5) Despite that, there are reasons to believe that even if real subsumption occurs, as Antonio Negri emphasizes, one should hold out the possibility that it is incomplete, that formal subsumption and precapitalist production ("survivals" as anthropologists term it) survive. Here I think it is important to reference the only section that really discusses formal and real subsumption in the actual text of Volume I. The Chapter is number sixteen, entitled "Absolute and Relative Surplus-Value." In it, Marx describes the distinction then goes on to say that hybrid forms persist:<blockquote><br /><span style="font-size:85%;"></span><p><span style="font-size:85%;">The prolongation of the working-day beyond the point at which the labourer would have produced just an equivalent for the value of his labour-power, and the appropriation of that surplus-labour by capital, this is production of absolute surplus-value. It forms the general groundwork of the capitalist system, and the starting-point for the production of relative surplus-value. The latter pre-supposes that the working-day is already divided into two parts, necessary labour, and surplus-labour. In order to prolong the surplus-labour, the necessary labour is shortened by methods whereby the equivalent for the wages is produced in less time. The production of absolute surplus-value turns exclusively upon the length of the working-day; the production of relative surplus-value, revolutionises out and out the technical processes of labour, and the composition of society. It therefore pre-supposes a specific mode, 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 <span style="font-weight: bold;">[subsumption]</span> is replaced by the real subjection<span style="font-weight: bold;"> [subsumption]</span> of labour to capital.</span></p> <p><span style="font-size:85%;">It will suffice merely to refer to certain intermediate <span style="font-weight: bold;">[hybrid]</span> forms, in which surplus-labour is not extorted by direct compulsion from the producer, nor the producer himself yet formally subjected to capital. In such forms capital has not yet acquired the direct control of the labour-process. By the side of independent producers who carry on their handicrafts and agriculture in the traditional old-fashioned way, there stands the usurer or the merchant, with his usurer’s capital or merchant’s capital, feeding on them like a parasite. The predominance, in a society, of this form of exploitation excludes the capitalist mode of production; to which mode, however, this form may serve as a transition, as it did towards the close of the Middle Ages. Finally, as is shown by modern “domestic industry,” some intermediate forms are here and there reproduced in the background of Modern Industry, though their physiognomy is totally changed.</span></p></blockquote><p><span style="font-size:85%;"></span></p>6) Finally, <a href="http://www.ingentaconnect.com/content/bpl/anti/2007/00000039/00000004/art00010;jsessionid=35d03a9kj4dai.alexandra">as noted elsewhere by Daniel Buck</a>, the discussion of formal and real subsumption earlier appears under the heading of original accumulation in <span style="font-style: italic;">the Grundrisse, </span>written before Marx had coined these new phrases. In that sense formal/real subsumption together with original accumulation occupy the heart of the problem of history and capital, pre-capital and transition. Here is where one should start in order to think through the problem of the gap between capital's history and capital's logic:<br /><blockquote><span style="font-size:85%;">Marx apparently understood primitive accumulation and subsumption to be intimately related: he discusses the incorporation of weaver labor into the circuits of capital in the context of primitive accumulation in the Grundrisse (1973:510), but in the context of formal and real subsumption in Volume I of Capital (1976: see “Results of the immediate process of production”, especially pp 1019–1038). </span></blockquote>andyhttp://www.blogger.com/profile/10471554437242328309noreply@blogger.com0tag:blogger.com,1999:blog-3397216998476879819.post-49918229326166142552009-07-13T22:35:00.002-04:002009-07-13T23:53:34.461-04:00Mr. CapitalistMarx begins the final chapter of Volume II with two assumptions:<br /><blockquote>It is assumed in this case: 1) that this amount is sufficient under the given technical conditions either to expand the functioning constant capital or to establish a new industrial business. But it may also happen that surplus-value must be converted into money and this money hoarded for a much longer time before this process, i.e., before real accumulation, expansion of production, can take place; 2) that production on an extended scale has actually been in process previously. </blockquote>Thus, we again see the problem of hoards, except this time they are definitely voluntary interruptions to circulation: money is withdrawn so that eventually it can be spent on more means of production, more means of labor. We also see a reference to the logic of expanded reproduction itself. Specifically, each act of reproduction presupposes previous acts of reproduction and hence also subsequent acts. Expanded reproduction cannot occur ex nihilo, nor should it be seen as a one-shot deal.<br /><br />Marx discusses the hoard as a <span style="font-style: italic;">precondition</span> for expanded reproduction but also notes that in itself, withdrawn money is neither productive nor circulating capital. It is idle, only potential capital (566). The same problem with simple reproduction and fixed capital arises once more: if money is withdrawn, then the perfect equilibrium is disrupted, and eventually you wind up with capitalists who have too many unsold commodities existing alongside capitalists with money that is not being used. This will be resolved below.<br /><br />In the meantime, we should note that Marx conceives of hoards as an immanent moment to capital (569). These are unavoidable problems which must be overcome through more advanced forms of capital. Part of the problem it seems, is that the abstract models Marx has been working with have oversimplified the actuality of production and circulation's totality. On 570 and 571, Marx describes the total social capital not as a well-oiled, smoothly-functioning metabolizing machine with inputs and outputs more or less running automatically. Instead, total social capital is described as a series of "one-sided purchases" by departments I and II, purchases that <span style="font-style: italic;">may, </span>the capitalist hopes, in the end return capital to its pockets but is by no means guaranteed.<br /><br />Throughout the process of value traveling from the constant capital of department I through to the realization of commodities produced by department II, a one-sided purchase is always needed before the next step can be taken: "But inasmuch as only one-sided exchanges are made, a number of mere purchases on the one hand, a number of mere sales on the other — and we have seen that the normal exchange of the annual product on the basis of capitalism necessitates such one-sided metamorphoses — the balance can be maintained only on the assumption that in amount the value of the one-sided purchases and that of the one-sided sales tally."<br /><br />Here perhaps we can think about the significance of the section on bookkeeping earlier: to the individual capitalist and producer, the entire process is invisible. Its trading partners, far away in time and space, are indifferent to the actual exchange at hand. There is no mental conception, except in the form of bookkeeping, that can account for all of this. Which is to say, there is no guiding agency or subject who oversees the encounter between commodity, money and productive capital:<br /><blockquote><span style="font-size:85%;">The constant supply of labour-power on the part of working-class I, the reconversion of a portion of commodity-capital I into the money-form of variable capital, the replacement of a portion of commodity-capital II by natural elements of constant capital II c — all these necessary premises demand one another, but they are brought about by a very complicated process, including three processes of circulation which occur independently of one another but intermingle. This process is so complicated that it offers ever so many occasions for running abnormally.</span></blockquote>And hence Marx's famous line<blockquote><blockquote><span style="font-size:85%;">The fact that the production of commodities is the general form of capitalist production implies the role which money is playing in it not only as a medium of circulation, but also as money-capital, and en-genders certain conditions of normal exchange peculiar to this mode of production and therefore of the normal course of reproduction, whether it be on a simple or on an extended scale — conditions which change into so many conditions of abnormal movement, into so many possibilities of crises, since a balance is itself an accident owing to the spontaneous nature of this production.</span></blockquote></blockquote><blockquote></blockquote>In my mind, this is the argument about political economy Marx wants to make. Sure, there are tendencies and laws and determinate relationships, but those change and are mutable over time with changes in the development of capitalist production. What remains stubborn, however, is the randomness of it all. The fact that, rather than asking why there are imbalances of production and circulation, we should be asking why aren't there more? At this point one can introduce correctives. The state immediately comes to mind. But Marx has something else in mind: credit.<br /><br />Just as the circulation process entails a series of segmented, one-sided purchases that somehow add up to a complicated totality, it can be supplemented by credit, which will make withdrawn money productive, which will give loans to capitalists who have too many commodities and not enough money capital, in short, will facilitate an easier and smoother flow of goods. And this is done not by compiling the capital of many different capitalists and re-segmenting it into smaller amounts:<br /><blockquote><span style="font-size:85%;">The successive transformation of this virtually additional productive capital into virtual money-capital (hoard) .... is accomplished by a repeated withdrawal of money from circulation and a corresponding formation of a hoard.<br /><br />The surplus-product converted into virtual money-capital will grow so much more in volume, the greater was the total amount of already functioning capital whose functioning brought it into being. With the absolute increase of the volume of the annually reproduced virtual money-capital its segmentation also becomes easier, so that it is more rapidly invested in any particular business, either in the hands of the same capitalist or in those of others (for instance members of the family, in the case of a partition of inherited property, etc.). By segmentation of money-capital is meant here that it is wholly detached from the parent stock in order to be invested as a new money-capital in a new and independent business.<br /></span></blockquote>Finally, I'll end the analytical part of this post by drawing attention to pages 577 to 579 and then on 584. Here Marx confronts the problem that the capitalists of department II face: because less money is being circulated, withdrawn from circulation by department I, department II now faces hoards of unsold commodities. How does it get rid of them? Marx's suggestion is that it is sold to its own workers, who pay for their products with their wages. But he then goes on to show why, mathematically, that is not the case. I draw attention to this section because, I believe, Marx <span style="font-style: italic;">never actually answers</span> his own question in the course of the chapter. It is as good an indicator as any that the status of these reproduction schemes are interesting experiments but ultimately unfinished. I wish I had the mathematical credentials to play around with them more, but for now I'm putting this book down.<br /><br /><span style="font-weight: bold;">Other thoughts</span><br /><ul><li><span style="font-weight: bold;">(572-573): </span>Marx shows tat the process of expansion, at its initial stages, requires nothing more than the parts of simple reproduction. The only difference is that the money capital that would usually be circulated is instead withdrawn into hoards. Those hoards will be put to use when invested in expanded means of production and labor. In the meantime, those hoards must be overcome, possibly through credit.</li></ul><ul><li><span style="font-weight: bold;">(581): </span>Marx argues that the problem of stocks and hoards and maintaining a smooth flow of commodities and money is unique to reproduction schemas that account for both department I and II. But without department I, expanded reproduction could not occur. So really, they are immanent problems in the actual functioning of individual capitals which thus far have been described only in isolation. </li></ul><ul><li><span style="font-weight: bold;">(592): </span>Mention of companies that provide boarding to their own workers. Interesting, relevant for studies of plantations and the textile mills of early capital. </li></ul><ul><li><span style="font-weight: bold;">(596):</span> Marx reiterates that simple reproduction is "incompatible with capitalist production" from the start. He also argues that because of the rate of population, simple reproduction is impossible to maintain, since more and more unemployed workers will put pressure on capitalists to expand.</li></ul>andyhttp://www.blogger.com/profile/10471554437242328309noreply@blogger.com0tag:blogger.com,1999:blog-3397216998476879819.post-23477193146356189392009-07-13T01:28:00.004-04:002009-07-13T02:49:27.874-04:00Anybody's guessThis chapter is huge and difficult to summarize and organize coherently.<br /><br />One must first recognize the relationship between this chapter and the next. As Marx notes early, simple reproduction is a mental exercise alone, more fiction than any capitalist economy in historical reality. So why study simple reproduction? As a building block of analysis for understanding the real object of analysis: expanded reproduction.<br /><blockquote>Simple reproduction, reproduction on the same scale, appears as an abstraction, inasmuch as on the one hand the absence of all accumulation or reproduction on an extended scale is a strange assumption in capitalist conditions, and on the other hand conditions of production do not remain exactly the same in different years (and this is assumed). The assumption is that a social capital of a given magnitude produces the same quantity of commodity-value this year as last, and supplies the same quantum of wants, although the forms of the commodities may change in the process of reproduction. However, <span style="font-style: italic;">as far as accumulation does take place, simple reproduction is always a part of it, and can therefore be studied by itself, and is an actual factor of accumulation</span> (470).</blockquote>So what is Marx's approach to simple reproduction?<br /><br />He writes: "But this purely formal manner of presentation is no longer sufficient once we consider the total social capital and the value of its product." What changes when one shifts from abstract individual capital to the actual circulation of all capitals? "[T] movement is not only a replacement of values, but a replacement of materials, and is therefore conditioned not just by the mutual relations of the value componenets of the social product but equally bu their use-values, their material shape" (470).<br /><br />With this line, Marx forces us to think hard about why individual capital + individual capital is not enough to represent the complexity of total social capital. In other words, <span style="font-style: italic;">why is the sum more than just the sum?</span><br /><br />The most obvious answer is that individual capitals play specific roles in relation to each other, as elements in the total social circulation. Given this, we have to subdivide into department I and department II. It should be a given that these divisions are arbitrary and could further be divided into numberless smaller divisions. The point has been made, though: a break with individual capitals towards a consideration of social capital. However, one thing I'm a little uneasy with in this analysis is the fact that Marx wants us to think about use-value, that is, the difference between a business making machines for other businesses versus machines that make Christmas toys. This is all well and good. But all sorts of other specificities are arbitrarily elided by Marx when he makes statements indicating that all Department Is can be combined together in analysis, that the parts being made by one company can be grouped together with those of another. Other considerations of the historical record of capital are also suspended: revolutions in prices, technological changes that require abandoning old machines for new ones, the price differences between parts, spatial differences in supplies and populations, etc. (469-483).<br /><br />It seems to me that this exercise indicates that for all sorts of reasons (all sorts of <span style="font-weight: bold;">use-value-related</span> reasons), the total equilibrium of simple (and expanded) reproduction is impossible to achieve. It is "an accident," as he indicates in the next chapter. But the point of Marx's analysis at this point is, rather than indicating why the <span style="font-style: italic;">regular</span> imbalances occur is to understand under what perfect conditions an <span style="font-style: italic;">irregular</span> equilibrium could be achieved. Or can it even be achieved at all?<br /><br />What analytical value is there in <span style="font-style: italic;">allowing in</span> one element of use-value while <span style="font-style: italic;">suspending</span> all others? I believe the point is that it can help us parse out all the chaotic elements that can go wrong, to show that, <span style="font-style: italic;">even under near-perfect conditions</span>, the very facticity of an element like the distinction in departments is enough to throw a wrench into the gears.<br /><br />As far as I understand it, the heart of the matter is that the division of production into two departments, along with the attendant assumptions of wear and tear, replacement of parts creates uneven timing of investment and production which inevitably leads to hoards (see the voluntary and involuntary stock formation section in chapter six) and contradictions that must be displaced somehow through the expansion of the market.<br /><br />Below I will include the more interesting quotes from the rest of the chapter. But for now, let's examine the temporal irregularity of <span style="font-style: italic;">normal production</span> to examine how crises are immanent to it.<br /><br />First, Marx points out that while the total quantity one must spend on replacing the wear and tear of machines or dealing with the comings and goings of a seasonal labor force remain mathematically the same, the periodicity of these factors means that at certain moments, surplus-value is building and accumulating with nowhere to go, and sometimes a lot of surplus-value is needed at hand in order to be converted into constant and variable capital (526).<br /><br />Second, Marx states almost as an ontological condition that the whole collection of machines and means of production are all "of different ages, and just as each year people functioning in these branches of production die, so each year do quantities of fixed capital reach the end of their life" (528).<br /><br />Third, unless the cycle of means of production can be completed in a year, which is highly unlikely, then the year to year expenditures of an individual capitalist will look different.<br /><br />Finally, we have the hypothesis that if Deparment II needs to save up money for a new machine in the future, and if it therefore withholds a certain amount each year, spending less on constant capital (since it can keep using the machines from the last time), then Department I would have 200 extra value that it could not sell. Further, if Department II produces as many commodities as it needs to stay in business but Department I has 200 less to spend than before, then Department II has 200 worth of commodities left unsold. Hence, a simultaneous problem of overproduction on both sides(!).<br /><br />How can this be resolved? Marx spend the rest of this section trying to work it out. You can read all the prosaic math formulas on pages 530 onward, but the conclusion is basically that this scenario is impossible to resolve within the limits of simple reproduction:<br /><blockquote>The law that when reproduction proceeds normally (whether it be on a simple or on an extended scale) the money advanced by the capitalist producer to the circulation must return to its point of departure (whether the money is his own or borrowed) excludes once and for all the hypothesis that 200 II<sub>c</sub>(d) is converted into money by means of money advanced by I (533).</blockquote>Finally, we have the goods on page 542, where Marx indicates that the lack of inputs for the commodity and monetary surplus requires a foreign market to provide things commodities and customers. Such a solution is, of course, still imperfect and only defers an internal contradiction. From here, Luxemburg and Lenin . . . :<br /><blockquote><span style="font-size:85%;"><br />If II<sub>c</sub> (1) is greater than II<sub>c</sub> (2), foreign commodities must be imported to realise the money-surplus in I<sub>s</sub>. If, conversely, II<sub>c</sub> (1) is smaller than II<sub>c</sub> (2), commodities II (articles of consumption) will have to be exported to realise the depreciation part of II<sub>c</sub> in means of production. Consequently in either case foreign trade is necessary.</span></blockquote><blockquote><span style="font-size:85%;"><br />Foreign trade could help out in either case: in the first case in order to convert commodities I held in the form of money into articles of consumption, and in the second case to dispose of the commodity surplus. But since foreign trade does not merely replace certain elements (also with regard to value), it only transfers the contradictions to a wider sphere and gives them greater latitude (544).</span></blockquote><br />The summary of Marx's conclusions are on pages 542 to 545. They are the highlight of the chapter. He describes how hoards in precapitalist times are necessary to ensure the welfare of a population, but "in capitalist production however, they are an evil." This reminds us again of Marx's discussion about involuntary and voluntary stock earlier. Simple reproduction, mathematically, must become expanded reproduction. There is no other. Simple reproduction is like a square triangle.<br /><br />Okay, other thoughts . . .<br /><br /><ul><li><span style="font-weight: bold;">(487):</span> Marx argues against the thesis of underconsumption, showing that it is a logical tautology (since the function of consumers is to spend money, then the problem must be that the consumers do not have money, but that money must come from the capitalist class, which in no way helps them exit the crisis) and that historically, all crises are precipitated by higher wages and attempts to increase consumption. Take that, Keynes. </li></ul><ul><li><span style="font-weight: bold;">(488): </span>In the midst of his long section working out the contours of money capital, Marx makes his point very clear: money may change hands between capitalists and workers, but in each exchange, the worker will always have to give the money back as part of their consumption fund. So ultimately, money is just bait that reels in the value (labour-power) of the workers, who must use their wages to exchange for the commodities that they themselves made: The "general law that money advanced to the circulation by producers of commodities returns to them in the normal course of commodity circulation. From this it incidentally follows that if any money-capitalist at all stands behind the producer of commodities and advances to the industrial capitalist money-capital (in the strictest meaning of the word, i.e., capital-value in the form of money), the real point of reflux for this money is the pocket of this money-capitalist."</li></ul><ul><li><span style="font-weight: bold;">(490):</span> Marx introduces the concept of the worker who lives hand-to-mouth and hence must be paid in advances and wages frequently but in small amounts. Here, the analytical significance is that the workers' necessity for small and frequent distribution of money places a strain on the limited money supply. The amount of money in circulation, remember, is in no way determined by the total amount of value in circulation but rather by factors such as how much is paid each time and how frequently. Therefore, one can find phrases like "£1,500 are needed to circulate the equivalent value of £5,000." </li></ul><ul><li><span style="font-weight: bold;">(497):</span> Finally, Marx ends the money section by spelling out the role of merchant capital. That is, the capitalist must spend money in order to make back surplus-value. Merchant capitalists are seen as parasites because they seem totally unproductive, but all capitalists are parasites insofar as the expenditure of money in business is ultimately the same princpiple of casting out money in order to receive it back, with surplus-value added. </li></ul><ul><li><span style="font-weight: bold;">(498):</span> With the advent of Department I, Marx indicates that one can no longer assume that constant capital is converted into money, which is spent on the next cycle's means of production. Instead it must be understood as the machines themselves remain, and they can be used again as new means of production. Hence, we must understand the role of Department I in total social capital as distinct from an individual capital in isolation, who draws its means of production out of thin air. </li></ul><ul><li><span style="font-weight: bold;">(502):</span> Marx shows that Adam Smith's reified brain was only able to see commodities as revenue split into v + s (wages and profit) because he did not see department one. </li></ul><blockquote><span style="font-size:85%;">And it is this circumstance which induced Adam Smith to maintain that the value of the annual product resolves itself into v + s. This is true 1) only for that part of the annual product which consists of articles of consumption; and 2) it is not true in the sense that this total value is produced in II and that the value of its product is equal to the value of the variable capital advanced in II plus the surplus-value produced in II. It is true only in the sense that II<sub>(c + v + s)</sub> is equal to II<sub>(v + s)</sub> + I<sub>(v + s)</sub>, or because II is equal to I<sub>(v + s)</sub>.</span></blockquote><blockquote>Regarding point 2) above, Marx shows that the value of labour-power and constant capital in Department I is carried over to the means of production (dead labour as constant capital) in Department II. So it appears <span style="font-style: italic;">as though</span> all value is produced in Department II when <span style="font-style: italic;">in actuality </span>Department II is only the last step in a longer process.<br /></blockquote><ul><li><span style="font-weight: bold;">(508):</span> Marx poses the difference between Volume I and Volume II nicely as the difference between individual and total social capital: the product of an individual capital can take any form and it could go anywhere. Volume I was <span style="font-style: italic;">entirely indifferent</span> to what commodities were used for after the point of sale. With total social capital, all elements of reproduction must balance out such that the products eventually replace the original constant capital. Hence, Volume II tracks the path of consumed constant capital from Department I to II and back again to Department I. </li></ul><ul><li><span style="font-weight: bold;">(516-519)</span>: A very interesting explanation that examines the same exchange from the standpoint of capitalist and standpoint of worker. For a capitalist selling his product, it is realizing the surplus-value of a commodity. For the worker, it is merely exchanging money for equivalent capital. In each exchange, the positioning of each subject as either commodity-owner and money-owner resolves in such a way that the capitalist ultimately possesses all of the capital and the worker can only exchange at fixed rates. This leads Marx to next discuss (520) the social reproduction of classes. Not in terms of anything like ideology or politics; merely in terms of why the working class continually makes so little money compared to the capitalist. An antagonistic relationship is thus preserved. </li></ul><ul><li><span style="font-weight: bold;">(545-556):</span> The section on the reproduction of Money Capital demonstrates the problems of hoards and the necessity for money to circulate as productive capital. Several problems are raised from 549 onwards. All this concludes on page 556 when Marx writes that the irregularity of the money supply explain the rise of the merchant capital class:</li></ul><blockquote>all these different aspects of spontaneous movement had only to be noted, and made conspicuous, through experience, in order to give rise to a methodical use of the mechanical appliances of the credit system and to a real fishing out of available loanable capitals.</blockquote><br /><br />(556-564): Marx refutes Destutt de Tracy's theories of accruing profit by selling dear to demonstrate that it is logically impossible. Ultimately, the point is that in a logical system built to explain simple reproduction, one cannot simply account for profits and gains without explaining how to resolve deficits and hoards. Only expanded reproduction can do so. Onto the next chapter . . .andyhttp://www.blogger.com/profile/10471554437242328309noreply@blogger.com0tag:blogger.com,1999:blog-3397216998476879819.post-17913082574617960542009-07-12T22:55:00.005-04:002009-07-12T23:45:12.302-04:00The base of a triangle or the axis of an ellipseFrom reading secondary literature on this last section, I learned that Marx wrote the following chapter on "former presentations of the subject" long before he wrote his specific criticisms of Smith and Ricardo in Part II. In fact, at this point in the text, one begins to receive the clear impression that this is an unfinished, unedited manuscript. This becomes more evident in the next two chapters. At any rate, Marx's writing here is clear and can be followed, but the specific importance of each line is uneven and sometimes barely there at all. At the risk of doing violence to the text, let me try to speculate on the actual theoretical significance at stake here.<br /><br />He begins with Quesnay, who is chronologically situated before Smith but is really Marx's foil for Smith. Quesnay was wrong about agriculture as the source of value, but he was correct in his interpretation of production as the heart of the system and the way in which constant capital reappears in a renewed form in the commodity. Smith correctly expands value from agriculture to all realms of production, but he errs by not understanding the distinction between the pairs A) fixed and circulating capital versus B) constant and variable capital.<br /><br />Rather than going into the details of the distinction (and I missed a large part of it since I did not read part II) let me give you a table from Harvey's <span style="font-style: italic;">Limits to Capital</span>.<br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg17lkdQQW0HM92gANMn5FEwKKC1AS0SD4KtQI69oYkqzSmdr_Kkr77Ao9ErXJSMJlXH146sBdDLQJNfIIKzAUJSWxTaPaD4GKgvNsn9k1Hv3sW59PO2n8icFm_XD3QaUvZgDr0L87XuE4X/s1600-h/fixedcap.JPG"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 400px; height: 294px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg17lkdQQW0HM92gANMn5FEwKKC1AS0SD4KtQI69oYkqzSmdr_Kkr77Ao9ErXJSMJlXH146sBdDLQJNfIIKzAUJSWxTaPaD4GKgvNsn9k1Hv3sW59PO2n8icFm_XD3QaUvZgDr0L87XuE4X/s400/fixedcap.JPG" alt="" id="BLOGGER_PHOTO_ID_5357785388230526050" border="0" /></a><br /><br />As far as I understand it, the misunderstanding is no more complex than: 1) the two binaries are overlapping and hence are confusing (perhaps due to the way Smith focuses upon the immediate physical properties of capitals in motion, unable to distinguish abstractions like constant and variable capital), and 2) by not seeing constant capital, Smith misses key analytical points.<br /><br />Those key analytical points are:<span style="font-weight: bold;"> 1) </span>by not seeing constant, Smith cannot see variable capital, by not seeing variable capital, Smith does not understand how exploitation occurs in the movement of:<br /><br />M - C (CC + VC) - C' (CC + VC + SV) - M'<br /><br /><span style="font-weight: bold;">2)</span> By not understanding constant capital, Smith cannot explain where the means of production come from, which means he does not understand the division of production into two departments (in the next chapter) and he does not understand that some departments of production will require more or less turnover time than others. In other words, Smith sees every individual capitalist as an isolated cycle of fixed and circulating capital generating <span style="font-style: italic;">revenue</span>, which is then split three ways as wages, profits and rent (439).<br />However, Smith is aware of the failures of his equations; that is, he is aware that his equations cannot explain how capital (constant capital, investments) occurs. That is why "he has to smuggle in a fourth element by an indirect route, namely the element of capital." Marx then demonstrates that if Smith is going to insist that part of the "revenue" can be accounted for as capital, then Smith begs the question of where the value of that capital came from. For Marx, it is value that has been transferred from constant capital to the commodity.<br /><br />On 444, Marx argues that Smith's fixed and circulating capital, described in terms of im/mobility, really just points to the two departments of production. Those that produce means of production (machines, gadgets, etc.) and those that produce commodities for immediate consumption (food, clothing). Because the latter circulate among consumers, Smith sees them as circulating capital. What he really should have been analyzing was the process in which value is transferred from department I to department II, that is, from Smith's fixed to Smith's circulating capital.<br /><br />On 449, Marx points out a particularly vulgar part of Smith's calculus, when he argues that a commodity's <span style="font-style: italic;">original source</span> of value is its division into revenues. I'm not sure exactly what Smith was arguing, but Marx's point is clear: Smith has inverted the historical process of production such that he first sees the finished product, the commodity, and retroactively constructs exchange-value from there. It is the ultimate economics of appearances.<br /><br />On 451, Marx points out that even within Smith's own theories, the lacuna left by surplus-value emerging from variable capital is clearly detectable.<br /><br />On 456, Marx shows another grave consequence of Smith's theory: by arguing that the workers' wages are paid out as revenue resulting from the sale of the commodity, he has collapsed the whole process of exploitation and rendered it invisible. Remember, the crux of Volume I is that a mystification occurs at <span style="font-style: italic;">the time of the sale of labour-power</span>. That is, the commodity labour-power is sold at its exchange-value (the wage) in exchange for the use-value of labour-power (the ability to add surplus-value to the means of production). This site of mystification is where the worker gets paid and <span style="font-style: italic;">not</span> at the time of sale of the commodity made by the worker. If Smith were correct, a jump in prices for a product would imply a jump in wages for the worker. But that is of course never the case.<br /><br />Another conclusion Marx continually makes is that, according to Smith's formula, simple reproduction is the only possibility. If the output is equal to the inputs -- if revenue is only equal to the money paid by the capitalist -- then expanded reproduction is ruled out (457).<br /><br />On 462, a crazy paragraph that argues that within a regime of value premised upon expended labour-power, a serf in feudal times produces value much in the same way as the wage worker. Wow, this is interesting. I'll have to think about this for my own research..."The substance of value is and remains nothing but expended labour-power — labour independent of the specific, useful character of this expenditure. A serf for instance expends his labour-power for six days, labours for six days, and the fact of this expenditure as such is not altered by the circumstance that he may be working three days for himself, on his own field, and three days for his lord, on the field of the latter."<br /><br />"In this a commodity produced by a capitalist does not differ in any way from that produced by an independent labourer or by communities of working-people or by slaves."<br /><br />Finally, on 464, Marx concludes that by not describing the commodity's components as different sections of capital, Smith has tried to create a transhistorical theory of value and production. In this way, Smith's serious error is that for him "the various factors of the labour process .... appear from the start in the character masks of the era of capitalist production." In other words, a bourgeoisie economist unable to think beyond the forms of appearance of capital.andyhttp://www.blogger.com/profile/10471554437242328309noreply@blogger.com0tag:blogger.com,1999:blog-3397216998476879819.post-85271923428911561732009-07-12T22:13:00.002-04:002009-07-12T22:55:35.814-04:00Object of the inquiryChapter eighteen can easily be summarized as a perspective on where Marx has gone thus far in terms of looking at production capital from the standpoint of individual capital. A simultaneous movement is made in this last section: one from production towards accounting for circulation; and hence one from individual to total social capital.<br /><br />He begins by stating that the "determining motive" of the production process is the production and valorization of surplus-value. "On top" of production, one must add circulation, and their combination forms the "overall circuit" that is "constantly repeated afresh at definite intervals" (427).<br /><br />Circulation for Marx can be broken down into "1) The circuit of capital proper and 2) the circuit of the commodities which enter into individual consumption, consequently of the commodities for which the labourer expends his wages and the capitalist his surplus-value (or a part of it)." However, "the expenditure of this surplus-value and wages for commodities does not form a link in the circulation of capital, although at least the expenditure of wages is essential for this circulation" (428).<br /><br />This is a tricky quote to unravel. My understanding is that Marx wants to ensure we understand that spending wages is a movement of M - C, not C - M, and so no value can be realized. Circulation can only entail the movement of C - M or C - P. That is, it includes the process of turning constant capital into a commodity and selling it, and it includes tracking the value attached to capital such as labor-power and its subsequent valorization. That is, <span style="font-style: italic;">circulation only counts for the things that remain in the capitalists hands. </span>Once in the hands of the workers, capital becomes money, that is, nothing that can be self-valorized in the exchange for commodities.<br /><br />Marx then summarizes the prior work up until now:<br /><br /><span style="font-size:85%;">"In Book I the process of capitalist production was analysed as an individual act as well as a process of reproduction: the production of surplus-value and the production of capital itself...<br /><br />"In the first part of this Book II, the various forms were considered which capital assumes its circular movement, and the various forms of this movement itself. The circulation time must now be added to the working times discussed in Book I....<br /><br />"But in both the first and the second Parts it was always only a question of some individual capital, of the movement of some individualised part of social capital. However the circuits of the individual capitals intertwine, presuppose and necessitate one another, and form, precisely in this interlacing, the movement of the total social capital.<br /><br />"We have now to study the process of circulation (which in its entirety is a form of the process of reproduction) of the individual capitals as components of the aggregate social capital, that is to say, the process of circulation of this aggregate social capital."</span><br /><br /><span style="font-size:100%;">All the components must now be synthesized. </span>andyhttp://www.blogger.com/profile/10471554437242328309noreply@blogger.com0tag:blogger.com,1999:blog-3397216998476879819.post-85195864913600725432009-07-12T10:11:00.002-04:002009-07-12T11:23:10.488-04:00For the sake of their blue eyesWith these final two chapters in part one, I felt like Marx was really setting down the distinctions between the concerns of Volumes II and III, distinct from Volume I. By introducing circulation, Marx introduces two elements that, for simplicity's sake, were left suspended in his consideration of production in the first volume: time and the negotiation/struggle of selling goods. At the risk of getting ahead of myself, it seems to me that in the first volume, Marx's main goal is to enact a critique of the production sphere itself. You could call this a critique of exploitation, an explanation of his theory of value, an emphasis on production at the heart of capital economies. Whatever it is, however, it falls short of demonstrating how multiple individual capitals interact. When expanded to the level of total social capital, however, Marx's critique centers around the crisis-ridden character of capital. It seems to me that these chapters on circulation time and circulation costs are the return of the real, the concrete, in short, use-value. Because production and circulation do not, historically, run smoothly like in the models of individual capital sketched out in Volume I, all sorts of irregular interruptions can always occur, cascade and snowball into larger cyclical crises. For the reader unfamiliar with this larger theoretical trajectory, these two chapters must seem pretty boring. But from the standpoint of figuring out the categories of how to maximize valorization and then how individual capitalists are prone to errors, these chapters are important contributions to the overall flow of the argument.<br /><br /><span style="font-size:130%;"><span style="font-weight: bold;">Chapter Five</span></span> in a few bullet points:<br /><ul><li><span style="font-weight: bold;">(200):</span> Production time includes both "the period of the labour process" as well as "periodic interruptions." Thus it can be broken down into: "1) the time during which they function as means of production, hence serve in the productive process; 2) the stops during which the process of production, and thus the functioning of the means of production embodied in it, are interrupted; 3) the time during which they are held in readiness as prerequisites of that process, hence already represent productive capital but have not yet entered into the process of production."</li></ul><blockquote></blockquote><ul><li><span style="font-weight: bold;">(201): </span>The latent state of production time is often due to the natural, material properties of the product: "corn that is sown, wine that ferments in the cellar." In other words, use-value. </li></ul><ul><li>Interruptions are counted as a loss: "normal interruptions of the overall production process ... produce neither value nor surplus-value. Hence the drive towards night work."</li></ul><ul><li><span style="font-weight: bold;">(202): </span>A distinction between regular pauses (night time, weekends) and irregular interruptions (crises, embargoes). The former can still be counted towards a commodity's value. The latter adds no surplus-value. </li></ul><ul><li><span style="font-weight: bold;">(203):</span> The need for individual capitalists to employ merchants and stocks to minimize time spent on sales and circulation: "The more the metamorphoses of circulation of a certain capital are only ideal, i.e., the more the time of circulation is equal to zero, or approaches zero, the more does capital function, the more does its productivity and the self-expansion of its value increase. For instance, if a capitalist executes an order by the terms of which he receives payment on delivery of the product, and if this payment is made in his own means of production, the time of circulation approaches zero."</li></ul><ul><li><span style="font-weight: bold;">(205):</span> Interesting line that makes my head hurt: "There is a difference between C — M and M — C which has nothing to do with the difference in forms of commodities and money but arises from the capitalist character of production. Intrinsically both C — M and M — C are mere conversions of given values from one form into another. But C' — M' is at the same time a realisation of the surplus-value contained in C'. M — C however is not. <span style="font-style: italic;">Hence selling is more important than buying. </span>Under normal conditions M — C is an act necessary for the self-expansion of the value expressed in M, but it is not a realisation of surplus-value; it is the introduction to its production, not an afterword."</li></ul><ul><li><span style="font-weight: bold;">(206):</span> Spoiling is the absolute limit of a commodity's value (the revenge of use-value). </li></ul><ul><li>The need for markets and urban centers: to reduce selling time.</li></ul><span style="font-size:130%;"><span style="font-weight: bold;">Chapter Six<br /><br /></span></span><ul><li><span style="font-size:130%;"><span style="font-weight: bold;"><span style="font-weight: bold;"><span style="font-size:100%;">(208): </span></span></span><span style="font-size:100%;">An interesting analogy of labor to latent heat in chemistry. Labor produces potential value, which must still be realized in the sale. Doesn't this type of argumentation veer towards a "circulation is more important" than production type of thinking? But Marx has told us in the last chapter that in fact both are key. Nonetheless, a shift away from Volume I, where Marx wouldn't be caught dead talking about circulation on the same level of production.</span></span></li></ul><ul><li><span style="font-size:130%;"><span style="font-size:100%;"><span style="font-weight: bold;">(209):</span> The merchant enters as perhaps the first, delineated "nonproductive" worker in Marx's universe: "</span></span>a man who sells his labour. He expends his labour-power and labour-time in the operations C — M and M — C. And he makes his living that way, just as another does by spinning or making pills. He performs a necessary function, because the process of reproduction itself include unproductive functions. <span style="font-style: italic;">He works as well as the next man, but intrinsically his labour creates neither value nor product</span>." Later, Marx will refer to lawyers and doctors, too, in this category of nonproductive workers. </li></ul><ul><li><span style="font-weight: bold;">(211): </span>Great line comparing the function of the merchant to a machine: "It is as though one part of the product were transformed into a machine which buys and sells the rest of the product. This machine brings about a reduction of the product. It does not participate in the productive process, although it can diminish the labour-power, etc., spent on circulation. It constitutes merely a part of the costs of circulation."</li></ul><ul><li>Next, Marx discusses bookkeeping as a necessary mental reflection of the entire circulation process. I'm not sure what Marx is suggesting here. It is an interesting excursion into the mind of his capitalists, as Marx otherwise seems loathe to speculate about what the inside of his characters' head looks like. Unlike a merchant, which has only a one-dimensional role in the economy, bookkeeping is necessary and social, underpining the function of total social capital (212). But hasn't Marx already made the case for why merchants are also necessary in large, sprawling economies? I just don't understand the distinction he wants to make between necessary and unnecessary unproductive labor. </li></ul><span style="font-size:130%;"><span style="font-weight: bold;">Stock Formation</span><br /></span><br />Have to admit, I loved this section. Not sure why.<br /><ul><li><span style="font-weight: bold;">(214):</span> In this key, beginning introduction, Marx has complicated things greatly. He tells us that while stock costs do not add use-value, they add value added to costs. Further, while keeping stocks does nothing from the social standpoint, it still adds value to the commodities of individual capitals. So here we have suggestions that commodities may be sold at values detached from their actual use-value. That is: a hammer may cost $2 because of how useful it is, but if you add the value of keeping it in stock, it could sell for $3.50. This also asserts the primacy of labor-time as the measure of value, as opposed to use-value. </li></ul><ul><li>Marx seems to suggest a key difference between individual capital and total social capital. Where "from the social point of view" stock is just an "unproductive expenditure of labor," individual capitalists can still profit by charging more money for the hammer. Marx is suggesting there isn't more material wealth - more things - produced by stock, so there is less collective total social capital. Is he? That interpretation would see TSC as composed of material wealth, not value; of use-value, not exchange-value. That would deviate from previous understandings of TSC as nothing but the sums of value of individual capital. Hmm, maybe there is a tendency to see TSC as a drive towards producing material wealth and to see individual capitals as one of value alone. </li></ul><ul><li><span style="font-weight: bold;">(215): </span>The key concept and the contradiction of stock formation: because irregular supplies would hurt the ability of capitalists to realize value, keeping a smooth flow is paramount. For this reason, an unproductive activity is key to the realization of productive labor: "The quicker the sale is effected the more smoothly runs the process of reproduction. Delay in the form of conversion of C' — M' impedes the real exchange of matter which must take place in the circuit of capital, as well as its further functioning as productive capital. On the other hand, so far as M — C is concerned, the constant presence of commodities in the market, commodity-supply, appears as a condition of the flow of the process of reproduction and of the investment of new or additional capital."</li></ul><ul><li><span style="font-weight: bold;">(218):</span> A key footnote about cash crop economies suffering crises in the nineteenth century (hmm...).</li></ul><ul><li><span style="font-weight: bold;">(217-221):</span> Marx refutes Lalor's argument that with the development of capitalism, stocks declined. Over four pages, Marx elucidates how this is just an optical illusion that doesn't see how the quantity of stocks sitting in any one place has been reduced, while the speed, intensity and geographic scope of commodity circulation has skyrocketed such that the overall amounts of commodities in circulation have increased. They simply are no longer kept in the same simple commodity stock form (they are instead more likely to be in forms of productive capital or the individual consumption fund). </li></ul><ul><li>A great many historical changes are implicated and quickly reviewed by Marx here, especially on pages 219 to 220: increased intensity of production (machinery); speed and cheapness of transfer (transportation and communication); regular flow of money in the face of irregular conversion of capital (the credit system); and the diversification of raw material production (cash crop economies in agrarian societies).</li></ul><ul><li><span style="font-weight: bold;">(221):</span> Marx suggests there is a shift from producing for consumption (<span style="font-style: italic; font-weight: bold;">supply and demand</span>) towards one of simply "produce, dammit!" "With the development of capitalist production, the scale of production is determined less and less by the direct demand for the product and more and more by the amount of capital available in the hands of the individual capitalist, by the urge of self-expansion inherent in his capital and by the need of continuity and expansion of the process of production."</li></ul><ul><li>With this shift, an inversion of priorities has taken place. With the emphasis on smooth flow of operations, merchants and capitalists' number one enemy was scarcity, so hoarding stocks was imperative for profit. With scarcity less of a threat, capitalists now focus upon <span style="font-style: italic; font-weight: bold;">new</span>ness, both in the sense of perishable commodities and new technology. Hoarding stock thus loses its appeal. </li></ul><ul><li><span style="font-weight: bold;">(223):</span> Signs of crisis begin to emerge again. One sign emerges in Marx's constant invocation of continual supplies as the imperative facing all capitalists. I kept thinking, why exactly is a constant supply so important? Is there something else besides the danger of selling out one's own product? I suppose that today, selling out one's product is not such a big danger. It happens all the time at the bakeries and stores here (in Tokyo) that replenish stocks from scratch daily. In an earlier time, I'm sure that the atmosphere of unregulated competition made such moments much more dire: "Constancy and continuity of the process of circulation, and therefore of the process of reproduction, which includes the process of circulation, are safeguarded only by the formation of such supplies." Anyway, the point is that there is <span style="font-style: italic;">an unpredictable encounter between what the capitalist has and what the consumer wants to buy. </span>The model of equilibrium is already put into question.</li></ul><ul><li><span style="font-weight: bold;">(224): </span>The second dimension of crisis is, of course, overproduction. This arises in Marx's distinction between voluntary and involuntary stock. Involuntary indicates a capitalist has too many commodities because it just cannot find the consumers to take them off its hands. Uh-oh. And with the mystification of the credit system ("give me a loan on this car even though I don't have a job") and the general ambiguity in appearance between an intentional and unintentional stock ("no, see, these toys are going to sell any day now, just you wait"), overproduction crises can compound and multiply pretty quickly.</li></ul><ul><li><span style="font-weight: bold;">(225):</span> the three costs of stock formation are: "The costs of supply formation consist: 1) of a quantitative diminution of the mass of the products (for instance in the case of a flour supply; 2) of a deterioration of quality; 3) of the materialised and living labour required for the preservation of the supply."</li></ul><span style="font-size:130%;"><span style="font-weight: bold;">The Transport Industry</span></span><br /><br /><ul><li>Here Marx concludes that transportation, like merchants, are a necessary loss to surplus-value that in the end helps capitalists realize more value out of their commodities. Interestingly, Marx delineates two dimensions of the transportation sector. On the one hand, it is part of production (construction of railroads, boats, etc.) and is also a wing of circulation (229). <span style="font-size:130%;"><span style="font-size:100%;">Obviously, this is a key section for future reference in thinking about the geographical implications of capital accumulation.</span></span></li></ul><ul><li><span style="font-size:130%;"><span style="font-size:100%;">To end this post, I thought I'd include this great line: "A house that is sold by A to B circulates as a commodity, but it does not get up and walk" (226). </span><span style="font-weight: bold;"><span style="font-weight: bold;"></span></span></span></li></ul><span style="font-size:130%;"><span style="font-weight: bold;"><br /><br /></span></span>andyhttp://www.blogger.com/profile/10471554437242328309noreply@blogger.com0tag:blogger.com,1999:blog-3397216998476879819.post-54450999185471681332009-07-07T21:28:00.002-04:002009-07-07T21:33:38.408-04:00Towards Accumulation: Chapters 18 and 19.Chapter 18: Introduction to Part III<br /><br />I want to move through these preliminary chapters of Part III in order to get to Marx’s discussion of Simple Reproduction and Accumulation (Ch. 20 and 21). Chapter 18 begins with a great summation of the various components of Marx’s study thus far – showing how the forms in Part One and the processes (turnovers) of Part Two point to a much larger social process – approached here via the concepts of social capital. Following Marx’s mode of analysis in Volume I, wherein the commodity opened into a much larger social process of capitalist production, here Marx writes that:<br /><br /><span style="font-style:italic;">“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. (427-428)</span>”<br /><br />The problem then becomes how to think this general social process of commodity production and circulation in a general social form. In this regard, Marx writes:<br /><br /><span style="font-style:italic;">“the circuits of individual capitals are interlinked, they presuppose one another and condition one another, and it is precisely by being interlinked in this way that they constitute the movement of the total social capital. (429)”</span><br /><br />Here, it almost seems as if Marx is saying the total social capital IS the sum of its individual parts, but as was noted multiple times before, the determinative factors are at the level of the social (socially necessary labour time, surplus-value being transcendent of an individual capital, etc.). This problem leads to a discussion of two points of the role of money in this interlinking of individual capitals: (1) provides the means in which each individual capital begins the process [appearing as a ‘prime mover’] and; (2) that this advanced money stands “in <span style="font-style:italic;">a different ratio to the productive capital that it sets in motion</span>” (430) Regarding the first point, Marx makes an interesting point, one that brings us back to the question of logical explication and actually economic-description: <br /><br /><span style="font-style:italic;">“Commodity production presupposes commodity circulation, and commodity circulation presupposes the representation of commodity in money, monetary circulation; the duplication of commodities into commodities and money is a law of the emergence of the product as a commodity. Capitalist commodity production, for its part, whether we consider it socially or individually, similarly presupposes capital in the money form, or money capital, both as the prime mover for each business when it first begins, and as a permanent driving force. Circulating capital, especially, presupposes the constantly repeated appearance, at short intervals, of the motor of money capital. (431)”</span><br /><br />Now this obviously is a discussion of the internal logic of capital – thus not one of origins per se – though I think it can possibly be tied to our discussion of the problem of primitive accumulation at the end of Vol I. More importantly however, is that this accounts for the fetishization of money capital in political economy, wherein the effect of the process (augmented value) at the level of appearance (money), is taken as the prime mover. It is both the necessary means (capital advanced) and objective goal (profit) of the entire process. <br /><br />Regarding the second point, that the advanced capital stands in a different ratio from the productive capital it set in motion, Marx time and time again reminds us that this process in no way is affected by the amount of money in circulation – in other words, money does not provide an ultimate limit (economically nor logically) to this process. The limit at the level of the individual capital is overcome, as we saw in Part II, by credit and joint-stock companies – which again open into a discussion of social capital determining the functioning of its constitutive individual processes. On this second point, see pp. 443-443.<br /><br />Chapter 19: Former Presentations<br />Engels assembles here sections wherein Marx reviews how political economy has attempted to understand the general social process of capitalist accumulation. Once again, Marx begins by showing how Quesnay had correctly found the ‘source’ of accumulation within labour – albeit limited to agriculture, and how his terms (avances primitives and avances annuelles) being “fixed” and “circulating” capital in Smith. On a side note, Marx goes back and forth on Smith; both showing how he inadvertently pointed to essential processes of capitalist accumulation, but also reducing his work to simplistic – at one point exclaiming that the only advance effected by Smith’s translation of Quesnay’s terms was bringing in ‘capital.’ <br /><br />Rather than working through the extensive analysis of Smith’s understanding of accumulation, Marx’s critique seems to be that the three forms of ‘revenue’ in Smith: wages, profit and rent do not open into how accumulation can occur, and in this regard, Smith has to sneak in a fourth element – that of capital (see 439). To take one short example, Marx critiques Smith for overlooking that “i<span style="font-style:italic;">f capital is to come in as revenue, then capital must previously have been spent</span>. (440)” In his summary beginning on page 461 (concerning revenue and commodities), Marx shifts the discussion to his own analysis – arguing that the “<span style="font-style:italic;">substance of value is and remains nothing more than expended labour-power – labour independent of its particular useful character – and value production is nothing but the process of this expenditure.</span> (462)” <br /><br />Marx finishes by noting that Ricardo, Ramsay, Say, Proudhon, Storch, Sismondi, Mill and others were unable – for various reasons - to move beyond Smith’s conceptual system, and thus “<span style="font-style:italic;">Smith’s confusion</span>” remains as “<span style="font-style:italic;">an article of orthodox belief in political economy.</span> (467)” Now onto the Simple Reproduction and Accumulation…..Maxhttp://www.blogger.com/profile/09192701065753965428noreply@blogger.com1tag:blogger.com,1999:blog-3397216998476879819.post-76120378182789867322009-07-03T05:08:00.005-04:002009-07-03T05:27:55.706-04:00Combined and uneven development and Total Social CapitalI read Max's post on part one several months ago and remembered that he argued "all three circuits come together in the fourth chapter." And while that is true on some level -- analytically, at least -- I feel like the short chapter three on commodity capital is really the key to understanding the three circuits.<br /><br />I want to do some theoretical speculation in this post. I want to avoid redundant summarization but I feel like chapter three is too important not to summarize at least a bit. If you're uninterested in summarization, skip to the next part.<br /><br /><span style="font-size:130%;"><span style="font-weight: bold;">1. Why is third figure, the circulation of commodity capital, distinct from figures I and II (money and productive capital)?</span></span><br /><br />Marx is constantly differentiating figure III from I and II, and I started numbering all the different ways he does so. Ultimately, they are related but heuristically we can see perhaps four:<br /><blockquote>a) "First, in this case the total circulation with its two antithetical phases opens the circuit, while in the Form I the circulation is interrupted by the process of production and in Form II the total circulation with its two complementary phases appears merely as a means of effecting the process of reproduction and therefore constitutes the movement mediating between P ... P."</blockquote>I take this to mean that C' is caught between P and M where P and M, in theory, could end at P and M without further reproduction.<br /><span style="font-size:100%;"></span><blockquote><span style="font-size:100%;">b) "Secondly, when circuits I and II are repeated, even if the final points M' and P' form the starting-points of the renewed circuit, the form in which M' and P' were produced disappears."<br /></span></blockquote>This is pretty self-explanatory. But it requires a bit more of an understanding of why P and M are inward-looking circuits, which I'll try to explain a bit more below.<br /><blockquote>c) "As commodity-capital it is always two-fold. From the point of view of use-value it is the product, in the present case yarn, of the functioning of P whose elements L and MP, coming as commodities from the sphere of circulation, have functioned only as factors in the creation of this product. "</blockquote>This is not a big one, but I guess you could think "M = x-value" and "P=u-value" and C combines both x and u-values.<br /><blockquote>d) "C is presupposed twice outside the circuit. The first time in the circuit C' — M' — C { L+MP . This C, so far as it consists of MP, is commodity in the hands of the seller; it is itself commodity-capital, so far as it is the product of a capitalist process of production; and even if it is not, it appears as commodity-capital in the hands of the merchant. The second time, in the second c of c — m — c, which must likewise be at hand as a commodity so that it can be bought."<br /><l+mp this="" consists="" itself="" far="" product="" capitalist="" process="" and="" even="" if="" is="" appears="" capital="" hands="" in="" the="" second="" of="" c="" m="" which="" must="" likewise="" at="" hand="" as="" a="" commodity="" so="" that="" it="" can="" be=""><l+mp this="" consists="" itself="" far="" product="" capitalist="" process="" and="" even="" if="" is="" appears="" capital="" hands="" in="" the="" second="" of="" c="" m="" which="" must="" likewise="" at="" hand="" as="" a="" commodity="" so="" that="" it="" can="" be=""></l+mp></l+mp></blockquote>This is not so much a logical distinction as it is a deeper theoretical implication emanating from the first two. So let's talk about that a bit. <l+mp><br /><span style="font-size:130%;"><br /><span style="font-weight: bold;">2. Why is the circulation of commodity capital critical, and what is total social capital?</span></span><br /><br />In theory, the circuits M and P could die with the second M or second P. That actually is too psychologizing; rather, one must emphasize that with M and P, the circulations are isolated from one another. As Marx says, P-P' implies that production is the "purpose of the process." M-M' is at least more honest in implying that valorization is the purpose, but it fails to take into account the whole circuit of P.<br /><br />Think of it this way. If you only dealt with money, as most of us do, we could presume that zero production occurs, but logically we know it happens somewhere. But we just can't see it. If we only dealt in production, say as workers who never have a chance to personally spend the money we earn, we would know that commodity transactions occur, but we would have no idea how it happens.<br /><br />In other words, M and P circuits represent standpoints in the total circuit that need to be connected, and C is the best way to connect them.<br /><br />One really easy way to think about this is to look closely at the total process:<br /><br /><div style="text-align: center;">Figure I: M - C' - P - C'' - M'<br />Figure II: P - C' - M - C'' - P<br />Figure III: C' - M - C - P - C''<br /></div><br />For every M or P, C appears three times! C is always in transition between M or P, always in anticipation to be valorized, always the mediator between two isolated standpoints. C does all the traveling.<br /><br />I think we can argue that unlike M or P, C is outward looking beyond individual capital circuits in two ways.<br /><br /><span style="font-weight: bold;">A) Temporally.</span> Every C is always in anticipation of future realization in money, and it always contains valorization from the past. It implies a history that is non-existent in P and M circuits.<br /><br /><span style="font-weight: bold;">B) Spatially. </span>The quote I use to demonstrate point d) above speaks to this. From the standpoint of individual commodity capital, other commodity capitals must exist in order to enter as a capital to be bought (labor-power and means of production, where do these workers come from? who made these machines for them to use? These questions must be answered); and they must come in the form of commodities to be bought by the individual capitalist for its individual consumption. Who feeds workers, what keeps them reproducing?<br /><br />This movement outwards thus implies a key concept which, I believe, symbolically moves Volume II beyond the abstract, individual focus of production: total social capital. What is total social capital?<br /><blockquote>But just because the circuit C' ... C' presupposes within its sphere the existence of other industrial capital in the form of C (equal to L + MP) — and MP comprises diverse other capitals, in our case for instance machinery, coal, oil, etc. — it clamours to be considered not only as the general form of the circuit, i.e., not only as a social form in which every single industrial capital (except when first invested) can be studied, hence not merely as a form of movement common to all individual industrial capitals, but simultaneously also as a form of movement of the sum of the individual capitals, consequently of the aggregate capital <span style="font-weight: bold; font-style: italic;">[translated also as "total social capital"] </span>of the capitalist class, a movement in which that of each individual industrial capital appears as only a partial movement which intermingles with the other movements and is necessitated by them. </blockquote>TSC is thus contrasted to particular, individual capitals. It is the regulatory framework within which the accumulation of capital occurs. What is the significance of this?<br /><span style="font-size:130%;"><br /><span style="font-weight: bold;">3. Combined and Uneven Development</span><br /></span><br />To return to my previous post about Geoff Eley, and to which Max responded, I think the question about how slavery and non-wage labor fits into the histories of capitalism is best answered by distinguishing between individual and total social capital. Consider the <a href="http://www.ingentaconnect.com/content/brill/hm/2003/00000011/00000003/art00004">Jairus Banaji article</a> which argues that unfree labor has been, contra most Eurocentric and developmentalist accounts, part of the history of capital accumulation. The reason people say "capitalism as a system can't perform underneath a regime of slavery" stems from a conceptual conflation of individual with TSC:<br /><blockquote>Regarding the related issue of whether capital can exploit workers who are truly unfree (who represent bondage in Kant’s sense), the major problem with Brass’s way of handling this thesis, apart from his definition of unfree labour, is that <u>the needs of individual and social capital are conflated throughout his argument. Brass conceives capitalism entirely from the standpoint of individual capital, ignoring the fact that the logic that regulates capitalist economy is, necessarily, that of the total social capital. Thus, the real issue of theory here is whether we can sensibly visualise the accumulation of capital being founded on unfree labour (in the strict sense just noted) at the level of the expansion of the total social capital. And the obvious res pons e is , no, since the mobility of labour is essential to the mechanism of capital at this level.</u> (80)<br /></blockquote>Banaji could have written this paragraph more easily, so allow me to try to translate: Yes, of course slavery cannot function as the underlying framework for total social capital. Total social capital is still premised upon free (as in, free to move; not free to decide) labor. But given that total social capital, there is always the possibility of the entrance <i>from the outside</i> of commodities produced in non-free labor situations. Hence, slave-produced cotton on the world market in competition with cotton produced under superficially free conditions. Banaji says as much on the next page:<i><br /></i><blockquote><i> </i>Thus the overworking of slaves in the Southern states of the American Union was, [Marx] tells us in <span style="font-style: italic;">Volume I,</span> a question of the ‘production of surplus-value itself ’.58 In the <span style="font-style: italic;">Grundrisse,</span> he refers to ‘[t]he fact that we now not only call the plantation owners in America capitalists, but that they are capitalists’ 59 and implies that these ‘anomalous’ forms of capitalist enterprise could exist because capitalism as a whole was based on free labour. <u>(My interpretation of this is: the American slave owners are capitalists because they are part of the total social capital.)</u> In <span style="font-style: italic;">Theories of Surplus Value</span>, he writes that the ‘business in which slaves are used in conducted by capitalists’, though this is qualified by saying that here the capitalist mode of production ‘exists only in a formal sense’.60 Finally, in <span style="font-style: italic;">Volume III </span>of <span style="font-style: italic;">Capital,</span> he writes, ‘Where the capitalist conception prevails, as on the American plantations, this entire surplus-value is conceived as profit’,61 and, in <span style="font-style: italic;">Volume II, </span>slaves are described as ‘fixed capital’. (81)</blockquote><br />Now, this raises the conceptual question of how one defines what is TSC and what is merely one particular individual capital within the TSC. Doesn't this give rise to homogenization, precisely when the concept of TSC vs. individual capital seems to explain how a diversity of production regimes can co-exist? This is an important question.<br /><br />One way I've resolved this in my head is to rely upon a statement from one of the champions of the concept of uneven and combined development, <a href="http://www.marxists.org/archive/mandel/1969/nicolaus/us2.html">Ernest Mandel:</a><br /><blockquote>There is only one basic driving force which compels capital in general to step up capital accumulation, extraction of surplus value and exploitation of labour, and feverishly to look for profits, over and above average profit: <u>this is competition.</u><br /></blockquote>What unites slave and free cotton is nothing but the competition between the two on the world market. To the extent that the average profit against which an individual capital must exceed is determined by the most advanced techniques, say industrial production, then all other modes of production are thus placed into the framework of industrial production as the regulator of total social capital. Once an industry becomes totally uncompetitive, then it withdraws or goes bankrupt, in either case it no longer interacts with the other individual capitals in the circulation of the commodity circuit.<br /><br />Hints at the existence of uneven and combined development, i.e. the competition between commodities produced under radically different conditions, can be found in chapter four:<br /><span style="font-size:85%;"><blockquote>Within its process of circulation, in which industrial capital functions either as money or as commodities, the circuit of industrial capital, whether as money-capital or as commodity-capital, crosses the commodity circulation of the most diverse modes of social production, so far as they produce commodities. <u>No matter whether commodities are the output of production based on slavery, of peasants (Chinese, Indian ryots). of communes (Dutch East Indies), of state enterprise (such as existed in former epochs of Russian history on the basis of serfdom) or of half-savage hunting tribes, etc.</u> — as commodities and money they come face to face with the money and commodities in which the industrial capital presents itself and enter as much into its circuit as into that of the surplus-value borne in the commodity-capital, provided the surplus-value is spent as revenue; hence they enter in both branches of circulation of commodity-capital. <u>The character of the process of production from which they originate is immaterial. They function as commodities in the market, </u>and as commodities they enter into the circuit of industrial capital as well as into the circulation of the surplus-value incorporated in it.<u> It is therefore the universal character of the origin of the commodities<span style="font-weight: bold; font-style: italic;"> [also translated as: "characterized by the many-sided character of its origins],</span> the existence of the market as world-market, which distinguishes the process of circulation of industrial capital. </u></blockquote></span>Marx's point is here is not that they follow the same conditions of production but rather that they compete. They compete as commodity capital; hence, the unity of total social capital must be thought at the level of the commodity.<br /><span style="font-size:130%;"><br /><span style="font-weight: bold;">4. Other thoughts on Chapter Four.</span></span><br /><br />Sorry this post is huge. There is not a lot to add from this chapter since I think the main points are covered in Chapter Three.<br /><br />It is noteworthy that Marx is constantly talking about how the circulation and production processes are interrupted and not internally connected. At one point, Marx writes that the continuity of individual capitals is interrupted on three levels: their quantities, division of portions (I assume how they are invested, consumed and utilized differently) and temporal variations (seasonal work, etc.). Thus Marx is setting the stage for crisis theory, although he will not go into the details yet. He simply points out there is no reason for the market to work. Disequilibrium, not equilibrium, should be the presumed state of affairs.<br /><br />Near the end, Marx also begs the question of where laborers come from, how the world market has actually worked outside of abstract models (the question of histories).<br /><br />To cap off this post, I thought I would highlight this line:<br /><blockquote>As a matter of fact capitalist production is commodity production as the general form of production. <u>But it is so and becomes so more and more in the course of its development only because labour itself appears here as a commodity,</u> because the labourer sells his labour, that is, the function of his labour-power, and our assumption is that he sells it at its value, determined by its cost of reproduction. To the extent that labour becomes wage-labour, the producer becomes an industrial capitalist. For this reason <u>capitalist production (and hence also commodity production) does not reach its full scope until the direct agricultural producer becomes a wage-labourer.</u></blockquote>One could interpret this to say "capitalism is ONLY when wage-labor appears and the divorce between labor and the means of production are complete." But could one interpret the line "full scope" to suggest that there is such a thing as capitalist production as a less than full scope? The semiproletarianization of some in a system (a total social capital) determined by the real subsumption and proletarianization of others? <span style="font-style: italic;"></span><i><br /></i></l+mp>andyhttp://www.blogger.com/profile/10471554437242328309noreply@blogger.com1tag:blogger.com,1999:blog-3397216998476879819.post-89884228772258356382009-07-03T03:57:00.003-04:002009-07-07T21:09:41.245-04:00Vol II, Part Two in 10 Pages or Less. My Brain Hurts.<span style="font-weight:bold;">Part Two: The Turnover of Capital</span><br />Returning to the text after a six month break has proven to be a little challenging; especially considering this section is rather dry in its object of analysis and Marx’s own method of presentation. Unfortunately I fear that I replicate the rather dry form/content under discussion here in my own engagement with it.<br /><br />At the most general level, if you look at the Contents page of Vol. II, you notice that Marx is moving through: (1) the specific and interrelated forms/circuits of capital – money, productive and commodity – each with their own necessary function within the dynamic of capital, yet in their interrelatedness, capital cannot be reduced to any one circuit (e.g., see Ch. 4); (2) into circulation (costs) which poses then question; (3) of turnover of capital and the interrelated yet specific temporalities of its components (Fixed/Circulating, production time vs. working period, general circulation, variable capital (and importantly, the location of surplus-value within this temporal dynamic), etc, into finally; (4) the reproduction of total social capital. One can see a similar move here that Marx conducted in Volume One: where the commodity form – the ‘hieroglyph’ of capitalism – opened into ever larger and expansive forms and processes. The task here then is to connect the multiple forms, circuits, and turnovers of capital into a larger and more general process of accumulation and expansive dynamic.<br /><br />Though somewhat buried in my discussion here, I should emphasize that Marx continues his immanent critique of political economy in order to not only to show the errors of political economy (here, Smith’s conflation of fixed/circulating capital and the displacement of the constant/variable capital component) but to also account for how/why these conflations or lacunae are necessary appearances of the socio-economic form. In other words, that these are not merely falsities, but falsities that are necessary at the level of political economy, industrial book-keeping, accounting, etc. Having read Postone recently, he would differentiate these two into two categorical levels of Marx’s understanding of capital: one of the deep structure of capital (value, labour-power, etc) and the appearances in everyday (prices, wages etc). Thus Marx is working within the conceptual apparatus of political-economy, working through its categorical logic in order to expose spaces through which a deeper structure of socio-economic categories are operating. It’s as if these forms are latent in political-economy itself, without the necessary move to bring these to the fore. With that......<br /><br /><span style="font-weight:bold;">Chapter Seven: Turnover Time</span> <br />Marx begins by summarizing what was discussed in Chapter Four – namely the dynamics of each specific circuit of capital and their unique qualities. He reminds us that C’...C’ “<span style="font-style:italic;">does not begin the process as capital advanced, but as capital value already valorized, as the total wealth existing in the form of commodities, of which the capital value advanced forms only a part. (234)”</span> This is important as the commodity circuit necessarily entails prior augmentation – and thus an open and dynamic process of valuation (prior, present and anticipated). While the other circuits were necessary to the overall process due to the specific qualities of their forms and fetishistic effects, they, taken in themselves, appear segmented into a series of similar yet singular circuits; i.e., their beginning component (e.g., P for production, M for money advanced) did not explicitly entail prior augmentation – thus not containing within their specific circuit the opening out and multiplicity of the other circuits. Once again, the commodity stands in as a primary form that contains (or mediates/structures) larger processes.<br /><br />In contrast to this emphasis on the commodity circuit, Marx returns to the question of how political economy fails to understand the complexities of the interrelated circuits in one dynamic – reminding us that poli-econ and industrialists have fetishized M…M’. This is not just an error though, but is a necessary and real ‘appearance’ (i.e., necessary for the operation of calculation – what Marx earlier had called <span style="font-style:italic;">“a symbolic reflection in the imagination”</span> p. 211). <br /><br />With that, Marx begins by defining his concepts. Following classical political economy, turnover here is understood as when “<span style="font-style:italic;">the circuit of capital...is taken not as an isolated act but as a periodic process…The duration of this turnover is given by the sum of its production time and its circulation time.</span> (235)”<br /><br />He ends this short chapter by noting that while the day “forms the natural measuring unit for the function of labour-power” (think of Ch. 10 of Vol. I), so “the year forms the natural measuring unit for the turnovers of capital in process. (236)” One question would be, why? Additionally, how can we think of this fiscal-year (derived obviously from industrial production) in relation to other temporal forms of capitalism (the temporal compression of financialization, etc)?<br /><br /><span style="font-weight:bold;">Chapter Eight: Fixed/Circulating Capital</span><br />Building off and clarifying the categories of political economy, Marx notes the distinction between fixed and circulating (or ‘fluid’) capital by noting that fixed entails that a <span style="font-style:italic;">“part of its value always remains fixed in it as long as it continues to function, and remains distinct from the commodities that it helps to produce”</span> while the latter are <span style="font-style:italic;">“all other material components of the capital advanced” (23</span>8). Towards the end of the chapter he makes this distinction clearer: “<span style="font-style:italic;">The elements of fluid capital are just as permanently fixed in the production process – if this it to be continuous – as are the elements of fixed capital. But while the elements of the form that are fixed in this way are steadily renewed in kind (the means of production by new items of the same kind; labour-power by ever-repeated purchases), the elements of fixed capital are neither themselves renewed as long as they last, nor does their purchase have to be repeated</span>. (248)” If I understand this specific distinction correctly, the key point is that fixed capital traverses multiple production processes (the slow wear of a machine which is incrementally transferring its value to a commodity over successive production cycles) as distinguished from the capital outlay which is exhausted within the single production circuit process. Tying together these two forms of capital outlays, both necessary for the production, will allow Marx to pose problems related to the hoard, credit, joint-stock companies, etc.<br /><br />However, more important than the distinction within fixed/circulating capital, is the distinction between variable/constant capital and fixed/circulating capital – which Smith, Ricardo and others failed to comprehend. Here, he tentatively notes that political economy’s conflation of the two sets emerges from the following points (both originally from Smith); (1) physical immobility is misunderstood as the sole determination of fixed capital, and; 2) that the circulation of value is confused with an inherent property of the material itself – <span style="font-style:italic;">“as if things, which are never capital at all in themselves, could already in themselves and by nature be capital in a definite form” (241)</span> We will see this repeated again and again in the later chapters.<br /><br /><br /><span style="font-weight:bold;">Chapter 9: Overall Turnover of Capital Advanced</span><br />The logical problem that needs to be answered is, if there are multiple turnovers of fixed/circulating capital, it is “<span style="font-style:italic;">necessary…to reduce the separate turnovers of the various parts of the fixed capital to a similar form of turnover, so that these differ only quantitatively, in the duration of their turnover (262)”</span> – in other words, to generalize turnover cycles. <br /><br />This then reveals the necessity of credit (actual and apparent variations of turnovers) as well as business cycles/crisis:<br /><span style="font-style:italic;">“The result is that with the cycle of related turnovers, extending over a number of years, within which the capital is confined by its fixed component, is one of the material foundations of the periodic *cycle* [German text has ‘crisis’ here] in which business passes through successive periods of stagnation, moderate activity, over-excitement and crisis. The periods for which capital is invested certainly differ greatly, and do not coincide in time. But a crisis is always the starting-point of a large volume of new investment. It is also, therefore, if we consider the society as a whole, more or less a new material basis of the next turnover cycle. (264)”</span><br /><br />If we had more time, it might be useful to think this along with other theories of the ‘business cycle’ and its relation to credit, but that would take us well beyond our general discussion. Another point for consideration is what concept of crisis is being posed here? Obviously, here, crisis actually sustains the system (similar to Schumpeter’s ‘creative destruction’) – where large capital outlays in fixed capital underwrite more specific and periodic interruptions and/or crises of production/circulation. These crises in turn spawn new outlays of fixed capital.<br /><br /><span style="font-weight:bold;">Chapter 10 and 11: The Physiocrats, Smith and Ricardo</span><br /><br />Marx then works through the classical theories of fixed and circulating theories in relation to turnover:<br /><br /><span style="font-weight:bold;">Quesnay:</span><br />Quesnay proposes the categories of avances primitives and avances annuelles, which Smith would later render as fixed, and circulating respectively. Although Quesnay correctly sees this distinction as internal to production itself (productive capital), he fails to see that this distinction extends beyond agriculture – i.e., the only production that Quesnay sees as ‘productive’ or value creating. It’s interesting to note Marx’s admiration for Quesnay though, as the first person that tried to systematically comprehend the production process – and correctly saw valuation coming from production itself, albeit via agriculture.<br /><br /><span style="font-weight:bold;">Smith</span>:<br />Smith generalizes these terms, extending them to the economy as a whole, yet with some fundamental errors. Without reproducing the extended criticism that Marx levels at Smith’s theory, suffice it to note that Marx’s main criticism is that Smith fetishizes the fixity (materiality) and circulation (fluidity) of some elements of production and circulation, failing to clarify his terms. Marx argues that he fetishizes these forms <span style="font-style:italic;">“as if…[these] characteristic[s] belonged to these things materially, by nature, and did not rather derive from their specific function within the capitalist production process. (281)” </span><br /><br />More importantly, however, this confusion over fluid/fixed capital then gets more muddled in relation to the capital outlay for labour in the production process. Ultimately Smith does not understand wages as circulating capital; rather he finds the commodities that constitute the means of subsistence for the worker as fixed. <br /><br />“<span style="font-style:italic;">…it is only within the production process that the value laid out on labour-power is transformed (not for the worker, but for the capitalist) from a definite, constant quantity into a variable one, and the value advanced in capital value, in capital, is thereby transformed for the first time into self-valorizing value. But because it is not the value laid out on labour-power that Smith defines as a fluid component of the productive capital, but rather the value laid out on the worker’s means of subsistence, it is impossible for him to understand the distinction between variable and constant capital, and thus the capitalist production process in general. The characteristic of this part of capital as variable capital in opposition to the constant capital laid out on the objective elements of product formation is buried underneath the characteristic that the part of capital laid out on labour-power belongs to the fluid part of the productive capital with respect to the turnover. This burial is made complete in so far as in place of labour-power it is the workers’ means of subsistence that are counted as an element of productive capital. (291-92)”</span><br /><br />In other words, this confusion/conflation of various components of fixed and circulating capital WITHIN productive capital, and Smith’s extension of this out into the market, confuses both the dynamic internal to production (and the internal forms of productive capital) and its relation to circulation (i.e., commodity capital). Those following Smith would fail to see capitalist valuation as effected by labour power in the production process, set in motion by variable capital. This is where Ricardo’s labor theory of value comes in – though, as Marx notes here, it replicates Smith’s basic confusion over fixed/circulating.<br /><br /><span style="font-weight:bold;">Ricardo:</span><br />Ricardo inherits Smith’s conflation of fixed and circulating capital with constant and variable capital. Marx argues that following Smith, Ricardo and other classical economists <span style="font-style:italic;">“no longer distinguished at all between the portion of capital laid out on wages and the portion of capital laid out on raw material, and only formally distinguished the former from constant capital in terms of whether it was circulated bit by bit or all at once through the product. The basis for understanding the real movement of capitalist production, and thus of capitalist exploitation was thus submerged at one blow. All that was involved, on this view, was the reappearance of values advanced. (297)”</span> <br /><br />In other words, the categorical distinctions – between fixed/circulating, between that set and the constant/variable set, and the distinction between productive and circulating capital – had delimited the ability to see the relationship between value and labour-power. In one of the more powerful statements from these chapters, Marx argues that without the concept of variable capital, the distinction between value (both as process and objectified) and labour power (the subject of valuation) is lost: <span style="font-style:italic;">“if we are to speak of a material difference that affects the circulation process, this is simply that it follows from the nature of value, which is nothing other than objectified labour, and from the nature of self-acting labour-power, which is nothing other than self-objectifying labour, that labour-power constantly creates value and surplus-value as long as it continues to function; that what presents itself on its side as movement, as the creation of value, presents itself on the side of its product in a motionless form, as created value. (300)”</span><br /><br />Along with this obscuring of the valuation process in the conflation of his own categories, Ricardo continues the material fetishism that was seen in Smith earlier – namely the fetish that <span style="font-style:italic;">“transforms the social, economic character that things are stamped with in the process of social production into a natural character arising from the material nature of these things. (303)”</span><br /><br />Marx ends the chapter on Ricardo with a general statement on the errors of classical political-economy following Smith (304-5):<br />(1) <span style="font-style:italic;">“The distinction between fixed and fluid capital is confused with the distinction between productive capital and commodity capital. (304</span>)”<br />(2) <span style="font-style:italic;">“All circulating capital is identified with capital laid out or to be laid out on wages.”</span><br />(3) The confusion over variable/constant capital and its relation to fixed/circulating capital is eventually reduced to merely fixed/circulating capital. Constant and variable capital is lost.<br /><br /><br /><span style="font-weight:bold;">Chapter 12, 13 and 14: The Working Period, Production Time and Circulation Time</span><br /><br /> In these chapters Marx distinguishes between multiple temporal periods part and parcel of the larger turnover cycle: (1) working period (not to be confused with the working day), (2) production time, and finally (3) circulation time – each illuminating specific tendencies or compositions of capital outlays. Generally speaking, turnover time, thus, is understood as <span style="font-style:italic;">“the sum of its production time and its circulation time. (309)”</span><br /><br /><br /><span style="font-weight:bold;">(1) Working Period</span><br />Distinct from the working day (Vol. 1, Ch. 10) the “working period” is “<span style="font-style:italic;">the number of inter-related working days required, in a particular line of business, to complete a finished product. (308)”</span> This is important because the production process includes multiples interruptions, disturbances or crises – ones that are not recorded within the category of the ‘working day’. This then allows for an analysis of the differential transfer (from means) and creation of (labour) value to commodities over different working periods. <br /><br />The category of the working-period enframes the relationship between fixed and circulating capital within the production process and allows for an analysis of the differential relationship between the two. For example, Marx, introducing the notion of “reflux,” explains that:<br /><span style="font-style:italic;">“According to the duration of the working period, and thus also the period till a commodity ready for circulation is completed, the portion of value that the fixed capital surrenders layer by layer to the product mounts up, and the reflux of this portion of value is delayed. This delay, however, does not necessitate a renewed outlay of fixed capital. The machine continues to operate in the production process whether the replacement for its wear and tear flows back quicker or more slowly in the money form. It is different with circulating capital. Here not only must capital be tied up for a longer time, in proportion to the duration of the labour process, but new capital must continually be advanced for wages, raw and ancillary materials. The delayed reflux this has a different effect in the two cases. Whether the reflux is slower or quicker, the fixed capital continues to operate. The circulating capital, on the contrary, becomes unable to function when the reflux is delayed, if it is tied up in the form of unsold, or unfinished and not yet saleable products, and there is no additional capital to renew it in kind. (314)”</span><br /><br />I quoted this as I think this is a clear explanation of these categories within Marx’s larger project. Related to the differential capital outlays that the ‘working-period’ illuminates, Marx also notes the role of credit in this dynamic, and the by-product of concentration and acceleration: <br /><span style="font-style:italic;">“If the shortening of the working period is thus generally bound up with an increase in the capital advanced for this shorter time, so that the amount of capital advanced increases to the degree that the time of advance is shortened, we should remember that, apart from the total volume of social capital available, it comes down to a question of the extent to which the means of production and subsistence, i.e. disposal over them, are fragmented, or united in the hands of individual capitalists, i.e., the extent reached by the concentration of capital. In so far as credit mediates, accelerates and intensifies the concentration of capital in a single hand, it contributes to shortening the working period, and with this also the turnover time. (313)”</span><br /><br /><br /><span style="font-weight:bold;">(2) Production Time</span><br />Production time is the working day plus those interruptions or natural developments (chemical reactions, fermentation, etc) necessary for the creation of a final commodity. This differentiates how the productive capital is actually applied in the production process, here as two periods: <span style="font-style:italic;">“a period in which the capital exists in the labour process, and a second period in which its form of existence – that of an unfinished product – is handed over to the sway of natural processes, without being involved in the labour process. (317)</span>” In other words, <span style="font-style:italic;">“the working period and the production period do not coincide (317).”</span> This divergence illuminates variations in different production processes (industry proper, transport, agriculture, etc) and how specifically the outlay of circulating capital is unique to that specific branch.<br /><br />Here Marx reintroduced the role of the productive stock and its function in relation to the variations in production time. What’s interesting is that, just as credit allows for the extension of turnover time, this often takes the form of a productive stock – adding yet another intersection between multiple (synchronic) circuits, here, one between an extended production process and the market conditions that affect the acquisition of this stock. The reason I think this is important is this is yet another sight that makes this a general form of multiple capitals in relations to each other – here linking production and circulation; in other words, we move out of the realm of an individual capital circuit and into a much larger (and determinative) social process. This also sets the stage for the later discussion of how Dept I and Dept II are related. Anyway, here, after discussing market conditions, transport, proximity to market, etc Marx writes: <br /><br /><span style="font-style:italic;">“All these circumstance affect the minimum capital that must exist in the form of productive stock, and thus the period of time for which advances of capital have to be made, and the volume of capital that has to be advanced at once. This volume, which also has an effect on the turnover, is determined by the longer or shorter time for which circulating capital is tired up in the form of productive stock, as only potentially productive capital. On the other hand, in so far as the extent of this stagnation depends on the greater or lesser possibility of rapid replacement, on market conditions, etc. it itself arises from the circulation time, from circumstances that pertain to the circulation sphere. (323)” </span><br />This also opens the possibility of the onset of crisis not so much from overproduction, but of the inability to replenish the productive stock in an extended production time. <br /><br /><br /><span style="font-weight:bold;">(3) Circulation time</span><br />Circulation time is understood as a dual process: selling time (as commodity capital) and buying time (conversion into money capital). As for the former, Marx notes again that it is essential that an individual capital finds an outlet for their commodity capital; in effect they are exposed to market conditions – not is the outlet itself necessary for the reproduction/accumulation of capital, but that within the time it takes to deliver the commodity, market conditions (prices) can fluctuate. Under the rubric of selling time, Marx outlines multiple factors that affect the relative difference of selling time between individual capitals: distance of market, means of communication and transport (<span style="font-style:italic;">“the speed of movement in space is accelerated, and spatial distance is thus shortened in time” p. 327</span>), etc. However, the most interesting aspect is how this takes on a general social process of successive waves of goods constantly entering/exiting the market. For those interested in social geography, Marx’s description on pages 328-329 of this process – both of acceleration and spatial concentration – is interesting. As Marx connects selling time (commodity capital) to its necessary component, buying time (money capital), he makes the following observation:<br /><br /><span style="font-style:italic;">“If the progress of capitalist production and the consequent development of the means of transport and communication shortens the circulation time for a given quantity of commodities, the same progress and the opportunity provided by the development of the means of transport and communication conversely introduces the necessity of working for ever more distant markets, in a word, for the world market. The mass of commodities in transit grows enormously, and hence so does the part of the social capital that stays for long periods in the stage of commodity capital, in circulation time – both absolutely and relatively. A simultaneous and associated growth occurs in the portion of social wealth that, instead of serving as direct means of production, is laid out on means of transport and communication, and on the fixed and circulating capital required to keep these in operation. (329)”</span><br /><br /><br />As for buying time – Marx notes that the spatial distance between production and market not only causes a delay of selling time, but also a delay of the conversion of capital back into its money form (or at least its destination as a reinvestment in the new production circuit). He notes how if trade between nations occurs, not only do the products have to reach market, but the payment also has to return to the site of production – thus a delay before that money returns to begin a new production cycle – what he calls the <span style="font-style:italic;">“delayed reflux of money”</span> 331). Marx notes that because of this delay, credit is essential for keeping the continued process of capitalist production going – above and beyond the double-delay in circulation time. It is interesting to think how the financialization of the world economy has affected this process, both in the emphasis of finance speculation, but also through technology harnessed. How do contemporary production circuits experience this differential at the level of selling/buying time that Marx is emphasizing here? Is the latter obliterated, while the former remains (Wal-Mart production in the SOE’s of China, etc)? What crisis-possibilities can we imagine now through Marx’s understanding of circulation time?<br /><br />Finally, Marx notes that political-economy often overlooks this constant process of capital moving through its multiple forms (money, productive and commodity) and that the money form’s constant presence in this process – as credit, at purchase, etc - is “<span style="font-style:italic;">very necessary for the understanding of the bourgeois economy. (333)”</span><br /><br /><span style="font-weight:bold;">Chapter 15: Effect of Circulation Time on the Magnitude of the Capital Advanced</span><br /><br />The problem here is “<span style="font-style:italic;">the influence of circulation time on the valorization of capital”</span> (334). I found this chapter mind-numbing, with Marx working through the intricate differences between the composition of capital and its forms within various turnover scenarios. For those interested, you can jump to page 355 for the results of his analysis. <br /><br />The most important aspect in this exposition is that, as a general rule, capital is set free via the turnover process (and necessarily so as it functions to continue reproduction). Marx traces this process as capital moves through its various forms and, more importantly, the composition of its forms within a larger process of reproduction. He summarizes:<br /><br /><span style="font-style:italic;">“as far as he total social capital is concerned, considering the fluid part of this, the setting-free of capital is the rule, while the simple mutual replacement of portions of capital functioning successively in the production process must form the exception. For the equality of working period and circulation period, or the equality of circulation period and a whole number of working periods, in other words a regular proportion between the two components of the turnover period, has nothing at all to do with the nature of the case, and can therefore occur, by and large, only exceptionally….A very significant portion of the social circulating capital, which is turned over several times in the year, will thus periodically exist in the course of the annual turnover cycle in the form of capital set free. (355)”</span><br /><br />Why is this important? This “set-free” capital – or the social circulating capital – becomes the credit in which the system can maintain itself at the level of interruptions/delays at the level of multiple individual capitals. Additionally, Marx notes how the contraction of the turnover period creates a ‘surfeit’ of money capital. In a passage that differentiates between relative surplus and surfeit money capital, Marx writes:<br /><br /><span style="font-style:italic;">“We can see from this how a surfeit of money capital can arise – and not only in the sense that the supply of money capital is greater than the demand for it; the latter is never more than a relative surplus, which is found for instance in the depressed period that opens the new business cycle after the crisis is over. It is rather in the sense that a definite part of the capital advanced is superfluous for the overall process of social reproduction (which includes the circulation process), and is therefore precipitated out in the form of money capital; it is thus a surplus which has arisen with the scale of production and prices remaining the same, simply by a contraction in the turnover period. The mass of money in circulation, whether this is larger or smaller, does not have the slightest influence on this. (358)”</span><br /><br />This chapter ends with Marx looking at various cases of how price is affected by circulation/turnover fluctuations. I have to admit that I glossed over this section as I am more interested in the ‘transformation problem’ (value into price) that so many have harped on (Bohm-Bawerk, Sweezy), rather than the fluctuation of price in relation to circulation/turnover fluctuations. But maybe I missed something important…..Andy?<br /><br /><span style="font-weight:bold;">Chapter 16: The Turnover of Variable Capita</span>l<br /><br />Returning to the distinction between fixed/circulating capital and variable/constant capital, Marx notes that:<br /><br /><span style="font-style:italic;">“What these two parts of the circulating capital – the constant and the variable – have in common, and what distinguishes them from fixed capital, is not that the value they have transferred to the product is circulated by commodity capital, i.e. circulates through the circulation of the product as a commodity. A portion of the product’s value, and hence of the product itself circulating as a commodity, of the commodity capital, always consists of the wear and tear of the fixed capital, or the part of the fixed capital’s value that it has transferred to the product in the course of production. The difference is rather that the fixed capital continues to function in the productive process in its old shape through a longer or shorter cycle of turnover periods of the circulating capital (=circulating constant+circulating variable capital), while any single turnover has as its precondition the replacement of the entire circulating capital that enters the circulation sphere from the production sphere in the shape of commodity capital. (370)”</span><br /><br />With this restated distinction, Marx then turns to dealing with variable capital’s function/transformation within the turnover period. The most important section being where Marx distinguishes, within the component of advanced capital, that surplus-value is ONLY produced when applied. This is Marx’s answer to Ricardo/Smith and others who had conflating the fixed/circulating and variable/constant distinction:<br /><br /><span style="font-style:italic;">“The circumstances that differentiate the ratio between the advanced and the applied variable capital affect the production of surplus value – at a given rate of profit – only in so far as they differentiate the amount of variable capital which can actually be applied in a definite period of time, e.g. in one week, five weeks, etc. The variable capital advanced functions as variable capital only to the extent that it is actually applied; not during the time for which it remains advanced in reserve without being applied. But all circumstances that differentiate the ration between advanced and applied variable capital can be summed up in the difference in turnover periods (determined by a difference either in working periods or in circulation periods, or in both). The law of surplus-value production is that, with the same rate of surplus-value, equal amounts of functioning variable capital create equal masses of surplus-value. So if equal amounts of variable capital are applied by capitals A and B for the same space of time at the same rate of surplus-value, then they must produce equal amounts of surplus-value in this time, no matter how different may be the ratio between the variable capital applied in the time in question and the variable capital advanced during the same time, and hence how different also the ration between the mass of surplus-value produced and the total variable capital advanced, rather than that actually applied. (374-5)”</span><br /><br />From this distinction between advanced and applied, Marx moves into various examples of how this effects the turnover of variable capital, which leads him to posit an equation outlining the annual rate of surplus value, or S’: S’ = s’vn/v = s’n, wherein s’ = real rate of surplus-value, v=variable capital advanced and n=annual number of turnovers. Thus if there is only one turnover in the year (n=1), you get S’=s’ x 1 = s’. In other words, turnover affects the annual rate of surplus-value even if the mass of surplus value remains the same across individual capitals. To clarify the definition of advanced, Marx reminds us that this <span style="font-style:italic;">“capital value is always advanced and not genuinely spent, in that one this value has gone through the various phases of its circuit</span> [e.g., M – P – C – back to M] <span style="font-style:italic;">it returns again to its starting-point, and moreover, it does so enriched with surplus-value. This is what characterizes it as advanced. (382)”</span><br /><br />In the section on the turnover of individual variable capital, Marx reminds us that based on the turnover period, and the resulting augmentation of value through this circuit, that in its own turnover cycle, it is a completely NEW value created; a different value, yet still in the same form (variable capital – see 386).<br /><br />The last few pages of this chapter has some really interesting observations related to the turnover of variable capital:<br /><br />a) Marx suggests that in a communist society (a rare projection for him) through planning <span style="font-style:italic;">“the society must reckon in advance how much labour, means of production and means of subsistence it can spend, without dislocation, on branches of industry which, like the building of railways, for instance….” “In capitalist society, on the other hand, where any kind of social rationality asserts itself only post festum, major disturbances can and must occur constantly…(390)”</span> <br /><br />b) The notion of effective demand emerges to show how “prices rise, both for the means of subsistence and for the material elements of production. During this time, too, there are regular business swindles, and great transfers of capital. (390)” On the next page, Marx ties effective demand, wages, and the reserve army of workers into the fluctuations of prices, demand and wages. <br /><br />c) In a long footnote Engels includes some cursory notes on contradiction and crisis that Marx had jotted down. It reads: <span style="font-style:italic;">“Contradiction in the capitalist mode of production. The workers are important for the market as buyers of commodities. But as sellers of their commodity – labour-power – capitalist society has the tendency to restrict them tot heir minimum price. Further contradiction: the periods in which capitalist production exerts all its forces regularly show themselves to be periods of over-production; because the limit to the application of the productive powers is not simply the production of value, but also its realization. However the sale of commodities, the realization of commodity capital, and thus of surplus-value as well, is restricted not by the consumer needs of society in general, but by the consumer needs of a society in which the great majority are always poor and must always remain poor. This however belongs rather to the next Part. (391)”</span><br /><br /><span style="font-weight:bold;">Chapter Seventeen: the Circulation of Surplus-Value</span><br /><br />Here Marx is trying to logically explicate accumulation within the conceptual apparatus he has outlined thus far. This provides a transition into Part Three, which will deal with simple reproduction and accumulation at the level of society. <br /><br />Marx is outlining an expanding and accelerating system of interconnected turnovers; where one capital emerges from a turnover cycle with real accumulation (in money) this then becomes the basis for credit to someone else. Marx returns to the stages of the development of the surplus money capital: in its most basic form, the latent hoard – but in its expanded social form – social capital (most clearly expressed in credit). <br /><br />Marx then moves into preliminary outlining simple reproduction and accumulation (i.e. capitalization of surplus-value)<br /><br /><span style="font-weight:bold;">Simple Reproduction:</span><br />Surplus value is consumed unproductively by its <span style="font-style:italic;">“owners, the capitalists. (399)”</span> However, the bulk of this section seems to be a working through of the problem of reproduction in regards to the assumption that <span style="font-style:italic;">“the total quantity of money must be equal to the quantity of money required for circulation plus a sum of money existing in the hoard form which increases or decreases according to the contraction or expansion of circulation…(403)”</span> In other words, if money is hoard, or value unproductively consumed by the capitalist class, from where does the money come from that replaces/sustains reproduction? In critiquing Tooke, Marx argues that the <span style="font-style:italic;">“question is not: here does surplus-value come from? But rather: were does the money come from which it is turned into? (404)</span>” Tooke and other have failed to deal with this question – and Marx provides a curious answer – the problem itself does not exist:<br /><br /><span style="font-style:italic;">“the general answer has already been given: if a mass of commodities of x times £1,000 is to circulate, it in no way affects the quantity of money needed for this circulation whether the value of this commodity mass contains surplus-value or not, or whether the mass of commodities is produced under capitalist conditions or not. Thus the problem itself does not exist.” He continues later “there does exist, from the standpoint of capitalist production, the semblance of a special problem. For here it is the capitalist, the man who casts the money into circulation, who appears as the point of departure. The money that the worker spends in payment for his means of subsistence existed previously as the money form of the variable capital, and was therefore originally cast into circulation by the capitalist as a means of purchase or payment for labour-power. (407-9).”</span> <br /><br />The worker’s payment for his means of subsistence is only secondary (think of Smith’s error outlined before) – rather <span style="font-style:italic;">“In point of fact, paradoxical as it may seem at the first glance, the capitalist class itself casts into circulation the money that serves towards the realization of the surplus-value contained in its commodities. But note well: it does not cast this in as money advanced, and therefore not as capital. It spends it as a means of purchase for its individual consumption. Thus the money is not advanced by the capitalist class, even though this class is the starting-point of its circulation. (409)”</span><br /><br />Here is a great example of Marx’s mode of immanent critique – where taking the problem posed by Tooke and others as, at one level, a false question, but accounting for why there is a ‘semblance’ at the level of appearance (i.e., political economy). <br /><br /><span style="font-weight:bold;">Accumulation and Expanded Reproduction</span><br />Marx makes the (logical) transition to accumulation by positing a historical moment of development:<br /><br /><span style="font-style:italic;">“Hence the increased supply of precious metals from the sixteenth century onwards was a decisive moment in the historical development of capitalist production. In so far as we are dealing with the further supply of money material needed on the basis of the capitalist mode of production, we can say that on the one hand surplus-value is cast into circulation in the product without the money for its conversion, while on the other hand surplus-value in gold is cast into circulation without its previous transformation from product to money. (418)”</span><br /><br />The distinction between unproductive surplus-value (capitalist consumption) and productive surplus-value (reinvestment) is a matter of application since it exists in both forms. <br /><br />Towards the end of this section Marx returns to the necessary function of credit in expanded reproduction, and this can only happen with a diversification of forms of surplus-value (what was called ‘capital set free’) into various bearers of value, since expansion would clearly run into limitations of metallic money production/circulation. Marx notes that capitalists <span style="font-style:italic;">“all possess a certain money fund which they cast into the circulation sphere as means of circulation for their consumption, and of which each receives a certain part back again from the circulation sphere. But this monetary fund is then precisely a circulation fund, acquired by the conversion into money of surplus-value…(422-423)</span>. Specific examples are: (1) bank deposits, (2) government bonds and (3) shares. He argues “<span style="font-style:italic;">In all these cases, there is no storage of money, and what appears on the one hand as storage of money capital appears on the other hands as the continuous real expenditure of money. Whether the money is spent by the person it belongs to, or by other people, by people in debt to him, does not affect the situation. (423)” </span><br /><br />This rather short section on understanding the circulation of surplus-value in regards to accumulation (in contrast to simple reproduction) sets us up for Part Three – The Reproduction and Circulation of the Total Social Capital.Maxhttp://www.blogger.com/profile/09192701065753965428noreply@blogger.com0tag:blogger.com,1999:blog-3397216998476879819.post-66859508679573777872009-06-28T23:38:00.001-04:002009-06-28T23:43:12.712-04:00Lying unsold on the shelvesMarx ends this chapter by saying "The circuit of productive capital is the form in which classical Political Economy examines the circular movement of industrial capital."<br /><br />I interpreted this chapter as how individual, industrial capitalists view the circuit of capital. It is important to bear this in mind, as money takes on a different function than it did in the last chapter, which was viewed from the standpoint of circulation and the market.<br /><br />But Marx clearly writes at one point that productive capital is indifferent to circulation. For instance: "For as soon as C' has been sold, been converted into money, it can be reconverted into the real factors of the labour process, and thus of the reproductive process. Whether C' is bought by the ultimate consumer or by a merchant for resale <span style="font-weight: bold; font-style: italic;">does not affect the case"</span> (156). Once a commodity is expelled into circulation, the industrial/individual capitalist just does not care.<br /><br />This indifference is detrimental to the capitalist, expressed most clearly in the form of crisis. Marx seems to presage his later remarks in volume III on the tendency of the falling rate of profit. For here, he simply limits himself to a few comments on how a focus on production to the exclusion of circulation and non-production factors (e.g. the market) can produce crisis. And crisis for Marx represents the most scathing critique of classical political economy's idea that supply and demand regulates the economy, or that production is always simple and premised upon the consumption and hence minimal existence of producers: "And this is something very different from production and even commodity production, which has for its end the existence of the producer. A replacement — commodity by commodity — thus contingent on the production of surplus-value <span style="font-style: italic; font-weight: bold;">is quite a different matter</span> from the bare exchange of products brought about merely by means of money. But the economists take this matter as proof that no overproduction is possible" (155).<br /><br />The exclusive focus on exchange-value over use-value results in capitalists producing without regard for external conditions. Products begin to lie unsold, prices are slashed, it snowballs and hence "crisis breaks out." It is interesting to note that in the early twentieth century, a debate existed over whether this phenomenon should be labeled underconsumption or overproduction. The stakes are pretty simple: one blames consumers, one blames producers. If you side with the Marxian stand that these things are determined by the logic of production and not a logic of consumption, then you probably wind up with some variation of the overproduction thesis. Again, Marx goes into this with more detail in Volume III.<br /><br />For now it enough to ask why there is this chain effect of price slashing and crises. Why won't supply and demand correct itself? It is because, as producers, the capitalists' exclusive concern is not to correct an overall imbalance between production and consumption; their concern has to do with "the absolute necessity of transforming commodities into money." This is, simply, competition: "the constant enlargement of his capital becomes a condition for its preservation" (159).<br /><br />It is important to note here NOT that historical reality is really so simple as to be determined by a single force or mechanism. It is rather to say that, among the several tendencies acting upon the economic and social, there is the tendency of industrial capitalists, and we need sufficient analytical rigor to separate and analyze that logic as one of many several logics overdetermining given historical circumstances.<br /><br />This is related to the change of tone when discussing money. Money has only limited functions for the capitalist: as the end of the process (at which time, it expects money to do nothing) and at the beginning of the process (at which time, it converts the money into commodities like labor power and means of production). Looking at the latter as the primary function of money for the capitalist, money can do one of two things: convert itself into mp or L,<span style="font-style: italic; font-weight: bold;"> OR</span> wait until later to be converted. This is the hoarding function.<br /><br />But is this money as converter/hoarde a different money than the money which circulated in chapter one? Nope. MATERIALLY, they are the same thing. They play different functions but remain the same, and hence we must be careful not to reify money as money outside of money for production, money for commodities, etc. etc.:<br /><blockquote>Here the money-function and the commodity-function are at the same time functions of commodity-capital, but solely because they are interconnected as forms of functions which industrial capital has to perform at the different stages of its circuit. It is therefore wrong to attempt to derive the specific properties and functions which characterise money as money and commodities as commodities from their quality as capital, and it is equally wrong to derive on the contrary the properties of productive capital from its mode of existence in means of production" (161).</blockquote><br />But based on the interior logic of money and commodities, we do not see production. Money and commodities, reified as objects, cannot express the surplus-value and dead labor contained in them. They are only "money which breeds money"; money always appears as only M, and never M' or M+m.<br /><br />By upholding the process behind money, as well as the implication that money is merely an evanescent form of capital, the reified and fetishized appearance suddenly changes. Marx even calls this a "critique": "The semblance of independence which the money-form of capital-value possesses in the first form of its circuit (the form of money-capital) disappears in this second form, which thus is a critique of Form I and reduces it to merely a special form" (154).<br /><br />Other notes:<br /><br /><span style="font-weight: bold;">Page 144:</span> A contrast between industrial/capitalist and agricultural production:<br /><blockquote>This part of value does not enter into the circulation. Thus values enter into the process of production which do not enter into the process of circulation. The same is true of that part of C' which is consumed by the capitalist in kind as part of the surplus-product. But this is insignificant for capitalist production. It deserves consideration, if at all, only in agriculture.<br /></blockquote><span style="font-weight: bold;">Page 151:</span> A meditation on the temporality of the circuit (that each segment must be completed before moving onto the next) and the possibility that such temporality can be changed with the advent of loans and advances.<br /><br /><span style="font-weight: bold;">Page 153: </span>Marx remarks on the presumed stability of the market, which is something outside the capitalists' control. Does this imply that the capitalists require the intervention of non-economic forces, such as the state, to regulate markets?andyhttp://www.blogger.com/profile/10471554437242328309noreply@blogger.com0tag:blogger.com,1999:blog-3397216998476879819.post-15349418304969690152009-06-28T06:40:00.002-04:002009-06-28T06:44:49.132-04:00A response to Max's post.I have only skimmed the rant and the stuff about chapter one. I think the most important stuff is contained in the rant.<br /><br />I haven't read the Thompson but I have read the Althusser lately and understand it better. Logic vs. history is important, and it shows up most clearly in the moments when Marx says things like "so it is presupposed that somehow labor was separated from the means of production" but he refuses to speculate on how that happened. That is of course the lacuna for primitive accumulation and the historical backdrop to these economic models.<br /><br />I think the more one reads historical work, the more one can pick fights with Marx's arguments about the spread of capital and the function of capital throughout the world. It almost seems like one could use two highlighters to break down the text: blue for capital's logic and green for capital's history. And you could contest the green sections while fully accepting the blue. Or use the green to contest the blue. Is this a dishonest mode of reading? At any rate, I agree that the division between history and logic is, unsurprisingly, well and alive.<br /><br />I think that this distinction is perhaps what lies behind, for example, the recent call by Geoff Eley for looking closer at histories of capitalism. Namely, he argues that Marx and most Marxists presume capital's pure form to be free labor in urban settings. But if you look at the historical record of the last two centuries, those instances are a minority, at best (sorry for what I'm about to do):<br /><br /><blockquote>Once we revise our understanding of the early histories of capital accumulation by acknowledging the generative contributions of slavery and servitude, in fact, we have already begun questioning the presumed centrality of waged work in manufacturing, extractive and other forms of modern industry for the overall narrative of the rise of capitalism. By shifting the perspective in that way, we effectively relativize wage labour’s place in the social histories of working-class formation and open our accounts of the latter to other regimes of labour. By that logic, the claim of waged work to analytical precedence in the developmental histories of capitalism no longer seems secure. As it happens, in fact, the de-skilling, de-unionizing, de-benefiting, and de-nationalizing of labour via the processes of metropolitan deindustrialization and transnationalized capitalist restructuring in our own time have also been undermining that claim from the opposite end of the chronology, namely from a vantage-point in the present. Today the social relations of work are being drastically transformed in the direction of the new low-wage, semi-legal, and deregulated labour markets of a mainly service-based economy increasingly organized in complex transnational ways. In light of that radical reproletarianizing of labour under today’s advanced capitalism, I want to argue, the preceding prevalence of socially valued forms of organized labour established after 1945, which postwar social democrats hoped so confidently could become normative, re-emerges as an extremely transitory phenomenon. The life of that recently defeated redistributive social- democratic vision of the humanizing of capitalism becomes revealed as an extremely finite and exceptional project, indeed as one that was mainly confined to the period between the postwar settlement after 1945 and its long and painful dismantling after the mid 1970s. </blockquote><br />So what? One response to Eley has been: "Well if you had been an Asian/non-European historian for the last twenty years, you would've known this all along, genius."<br /><br />But that is an unacceptable position too. Because the argument that Marx is too Eurocentric ignores the usefulness of <span style="font-style: italic;">Capital</span>for understanding places that, although not a purely capitalist PRODUCERS, are nonetheless enmeshed in capital MARKETS (I made this distinction in my last post). And then combined and uneven development, etc. etc.andyhttp://www.blogger.com/profile/10471554437242328309noreply@blogger.com1tag:blogger.com,1999:blog-3397216998476879819.post-15134324129573120802009-06-28T05:54:00.004-04:002009-06-28T06:01:55.818-04:00Back, bitches.Near the end of Chapter one, Marx demonstrates the simple idea that in the chain of<br /><br /><div style="text-align: center;">M-C (P) -C`- M`. M-C (P) -C`- M`. M-C (P) ...etc.<br /></div><br />that one could either begin with M (money capital) and end with M`; C (commodity capital) and end with C`; or P and end with P.<br /><br />Is it simply arbitrary how one chooses to break up this series? Isn't it the case that all of these elements merely mutually presuppose one another in an unending cycle of reproduction?<br /><br />Marx writes that M-C is "not the presupposition, but is rather posited or conditioned by the production process. However, this holds only for this individual capital." In other words, gathering money is a form of preparation, but if you gather money you better damn well have a production process at hand to convert that money into commodities and more money. A capitalist won't get a loan without an idea of how to use that money to make more money. But this is from the standpoint of an individual capitalist.<br /><br />What about the standpoint of <span style="font-style: italic;">total social capital?</span> "The general form of the circuit of industrial capital is the circuit of money capital, insofar as the capitalist mode of production is presupposed" (143). Why is this so? I can only guess it has something to do with this line:<br /><blockquote>"The circuit made by money-capital is therefore the most one-sided, and thus the most striking and typical form in which the circuit of industrial capital appears, the capital whose aim and compelling motive — the self-expansion of value, the making of money, and accumulation — is thus conspicuously revealed (buying to sell dearer)" (140). </blockquote>What does Marx mean? Only money has the ability to mask the changes done to it, to obliterate the past. When you turn one hundred into $102 does not appear as the $100 principal + $2 increment. It appears as $102. It appears, in fetishized form, as "money breeding money."<br /><br />On another level, it makes sense that in capital, the imperative is to make money for money's sake, not to produce for production's sake, not to make commodities for commodities' sake. When we speak of total social capital, we are talking about the competition between individual capitals. What drives competition? Not the scarcity of commodities or the imperative to produce. It is the imperative to accumulate wealth.<br /><br /><div style="text-align: center;"><span style="font-size:130%;">*</span><br /></div><br />Other comments:<br /><br /><span style="font-weight: bold;">Pages 116 - 118: </span>Marx comments that the M-C-P-C`-M` chain presumes the prior separation between free workers and the means of production. This is the gap filled by primitive accumulation. But it also begs the question (sorry, I'm importing my own intellectual interests here) of what about commodity production that does not presume free labor? Bonded labor, slavery, etc? I suppose those forms assume the separation from the means of production, but they do not presuppose the same iterated process of reproduction that signifies free, wage labor.<br /><br /><span style="font-weight: bold;">Page 120: </span>Marx makes an argument that prioritizes exchange and markets over production itself. Or rather, he makes the midas touch argument: <span style="font-style: italic;">once you touch capitalism, you become capitalism.</span> This is the argument of both the development and underdevelopment schools: "wherever it takes root capitalist production destroys all forms of commodity production which are based either on the self-employment of the producers, or merely on the sale of the excess product as commodities."<br /><br />At the same time, Marx makes room for the possibility of uneven and combined development -- noncapitalist and precapitalist <span style="font-weight: bold;">PRODUCTION</span> for capitalist <span style="font-weight: bold;">MARKETS</span>: "at first apparently without affecting the mode of production itself. Such was for instance the first effect of capitalist world commerce on such nations as the Chinese, Indians, Arabs, etc."<br /><br />What is the difference between commodity production and capitalist commodity production in this sentence?<br /><blockquote>"Capitalist production first makes the production of commodities general and then, by degrees, transforms all commodity production into capitalist commodity production."<br /></blockquote><span style="font-weight: bold;">128-9: </span>Marx on how the money form obliterates difference.<br /><br /><span style="font-weight: bold;">130:</span> Money has two functions. One, to circulate; two, to "breed" more money. But this second function is actually a function of commodities, not money.<br /><br /><span style="font-weight: bold;">132: </span>The antinomy between real and formal arises once again.<br /><blockquote>"The change in value pertains exclusively to the metamorphosis P, the process of production, which thus appears as a real metamorphosis of capital, as compared with the merely formal metamorphosis of circulation."<br /></blockquote><span style="font-weight: bold;">134:</span> "The yarn cannot be sold until it has been spun." Capital can only take on one appearance at a time. They are mutually exclusive. This implies the need for temporal sensitivity.<br /><br /><span style="font-weight: bold;">136:</span> Marx seems to give a definition of industry as:<br /><blockquote>"The capital which assumes this forms in the course of its total circuit and then discards them and in each of them performs the function corresponding to the particular form, is industrial capital, industrial here in the sense it comprises every branch of industry run on a capitalist basis."</blockquote><div style="text-align: center;">and<br /></div><blockquote></blockquote><blockquote>"Industrial capital is the only mode of existence of capital in which not only the appropriation of surplus-value, or surplus-product, but simultaneously its creation is a function of capital."</blockquote><br />How do we understand this in relation to industry's other: agriculture? What escapes capital in agriculture? Land? The soil? It'll be interesting to see in <span style="font-style: italic;">Volume III.</span>andyhttp://www.blogger.com/profile/10471554437242328309noreply@blogger.com0tag:blogger.com,1999:blog-3397216998476879819.post-88673383939921476662008-12-17T16:13:00.002-05:002008-12-17T16:26:24.932-05:00The Forest Lost Among the Trees<span style="font-weight:bold;">Part One: Chapters I – VI</span><br />First, allow me a momentary tangent:<br /><br />With these first chapters of Volume II I got the immediate sense that we are now going to be taken through the intricacies of capital’s multiple forms and dynamics at a depth not undertaken in Volume One. Yet, following Mandel’s argument in the introduction, I find that the conventional approach to Volume II – that this is the dry, “economic” component of the series – is somewhat misleading. Connecting Mandel’s views with the last few Harvey lectures, I think we can approach Volume Two as Marx now having to necessarily expand into the realm of multiple capital circuits in interaction (i.e., the market, not just market-consumption, but competition and the production of means of production as commodities, realization of value, labour market, etc) in order to view capitalism in its general and complicated form. The category or function of the “social” appears to be absent in this analysis, since we are not taken through factory inspector reports or Marx’s scathing indignation against the sycophants of capital. But this does not, of course, mean that we have entered into the realm of a pure, abstract economic model being constructed – Marx is still conducting an immanent critique OF political economy – or at least that is what I will argue here. Which brings us back to the earlier questions posed in this blog, ones that, I think, should be on our minds when are moving through this volume as well – i.e., is Marx developing a counter-economic model? A ‘higher’ model of political economy? Or is political economy being approached as ideology? Are the ‘appearances’ that political economy assume as its conceptual components – ones derived from the everyday dynamics of exchange, labour, money transactions, etc – point to a reality that has been only partially understood by political economy, i.e. remaining at the level of appearances? Or is political economy masking the reality of the commodity form with natural law and Crusoe?<br /><br />Extension of tangent to outside reading:<br />I want to quickly connect this with something I just finished reading - E.P. Thompson’s diatribe against Althusser and his students (“The Poverty of Philosophy”, 1978). Thompson’s entire argument is structured around the logic/history binary that has emerged in this blog – and I think that its safe to say this is one of the major dividing points within Marx’s own writings. Thus, I think this binary IS THERE in the argument itself (whether at the mode of analysis, or method of presentation), and it will continue to be a useful entry-point into these later volumes as long as we don’t reproduce the analytical dead-ends of humanism vs. economics, or empiricism vs. theory that the Althusser/Thompson debate exemplifies. <br /><br />One of the more intriguing ideas that Thompson argues is that Althusser’s privileged “later-Marx” (i.e., Capital) expresses a “trap” that Marx himself could not escape and one that Althusser reifies into a static structure. For Thompson, Marx had gotten “trapped” in the very political economic mode that he hoped to untangle – a diversion from Marx’s life-long attempt to develop historical materialism (emphasis on historical) by a detour into the conceptual realm of political economy (emphasis on static-model). In other words, once Marx entered into the realm of political economy in order to critique its constitutive concepts (value, rent, price, market, tax, wage, interest, etc), these very concepts began to drive his work into a closed conceptual system. Thompson sees this as a conflict between historical materialism, an unfinished project for Marx (and a necessarily always unfinished project because of the transitory nature of its object - history) and the closed conceptual model of poli-econ in his later work. <br /><br />I bring this up because the circuits that Marx works through in the first few chapters (money, productive, and commodity capital) seem to be reified at an abstract level where necessary assumptions both internal and external to these circuits have to be accepted in order for them to be explicated within their own logic (e.g., things are sold for their value, no market limitations, that buyers are available for sellers, etc – refer to the later Harvey lectures in Volume One where he discusses the function of these assumptions). Chapter Four addresses this issue somewhat. But these necessary assumptions indicate that we are working within the self-logic of capital, not necessarily the actual manifestation of these circuits in historical time (even though time seems to be a primary concern here – e.g., “circuit”). Can the two speak to each other? Of course, or we wouldn’t even be reading this. But I am still struggling with my own understanding of the implications of Marx’s oscillation between history and logic, and where, if any, these two tendencies contradict or reinforce each other. I think this makes Capital an immensely dynamic text – one that can go in multiple directions –each productive in their own right. Ok, the tangent is over.<br /><br /><br /><span style="font-weight:bold;">SECTION ONE:</span><br /> A suggestion for those just beginning these first chapters of Vol II.; the analysis culminates in chapter four, within which the three circuits of capital come together into a theoretical whole. I had spent hours trying to understand the intricate differences of each circuit (chapters one through three), and in the end I lost sight of the forest among the trees. Anyhow, Marx’s objective is clearly expressed at the beginning of Chapter four:<br /><br /> <span style="font-style:italic;">“[If] we take all three forms together, then all the premises of the process appear as its result, as premises produced by the process itself. Each moment appears as a point of departure, of transit, and of return. The total process presents itself as the unity of the process of production and the process of circulation; the production process is the mediator of the circulation process, and vice versa. (180)”</span><br /><br />Additionally, we get a further explanation of why circuit III (circuit of commodity capital: C’…C’) is the circuit that allows a fuller analysis of the total process – since it begins with the assumption of augmented capital (C’) and ends with augmented capital (C’), while encompassing the other circuits as mediating processes. This aligns with the argument posed in the first chapters of Vol. I; namely, that it is only when commodity production emerges as the universal form of production that the historical ‘moment’ of capitalism is located.<br /><br />Generally speaking then, we have moved into the project of trying to think of the process as an organic, albeit contradictory, whole, one quite different from the last chapters of Vol I., consisting of an expansion into a much larger social process involving multiple and intertwined capitals. So before going any further, I want to discuss the specifics of each circuit of capital:<br /><br /><span style="font-weight:bold;">CHAPTER ONE: THE CIRCUIT OF MONEY-CAPITAL</span><br />So the M-C…P…C’-M’ circuit of money capital expresses and/or hides certain aspects depending on where the analysis enters into the circuit – for this can be understood within its own multiple processes as:<br /><br />1) M-C-L/mp…P….C’-M’<br />2) M-C, C’-M’<br />3) M….M’, C….C’ <br />4) M-C…..P….C’(C+c)/M’ (M+m)<br />5) Etc.<br /><br />Each of these express their own ‘appearances’ or functions within the dynamics of the circuit, and can affect the analysis when one enters into a specific level of the circuit(s). These are not isolated sub-circuits, of course, but various durations within a larger process – and moving out from the simple circuits of Vol I (individual circuit of both simple reproduction and expanded accumulation) through these more generalized circuits of Volume II, we are moving towards a complex process of that appears to be more than the sum of its individual circuits.<br /><br />Here, in regards to the money-capital circuit, we return to themes that came up in Volume One: that capitalist accumulation appears as the valorization of value (M….M’), but that this requires use-values (or commodities) to bleed out of the circuit (chapter three); the fetishistic function of the money-form; etc – all of which are engaged at a much deeper logical analysis than the social manifestations discussed in Volume One.<br /><br />It is important to note that Marx writes of all three of these (money, productive and commodity capital) as forms with their own unique and necessary functions. In regards to money-capital:<br /><br /><span style="font-style:italic;">“As money capital, it exists in a state in which it can perform monetary functions, in the present case the functions of general means of purchase and payment….Money capital does not possess this capacity because it is capital, but because it is money. (112)”</span><br /><br />This then produces certain fetishistic expressions, such as when money operates as wages (L-M-C); where at the level of appearance, it is an equal, monetary transaction for labour power. Yet, as Marx explored in Volume I, not only is this tautological (value being measures by value), but also that labour-power actually adds more value (surplus –value) to the commodity via production:<br /><br /><span style="font-style:italic;">“This irrationality is rather overlooked. The irrationality consists in the fact that labour as the value-forming element cannot itself posses any value, and so a certain quantity of labour cannot have a value that is expressed in its price, in its equivalence with a certain definite quantity of money. We know, however, that wages are simply a disguised form, a form in which the price of a day’s labour-power, for example, presents itself as the price of the labour set in motion in the course of a day by this labour-power, so that the value produced by this labour-power in six hours’ labour, say, is expressed as the value of its twelve-hour functioning of labour. (113)”</span><br /><br />More importantly, at the level of the total circuit, the money-form elides the other necessary components of its own transformations, appearing as M….M’:<br /><br /><span style="font-style:italic;">“Since the mediating effect of its history is obliterated in the simply existence of this sum of money, and every trace of the specific difference which the various component parts of capital possess in the production process has vanished, the only remaining distinction is the crude, non-conceptual distinction between a ‘principal’….At the conclusion of its process the realized capital therefore appears as a sum of money, within which the distinction between principal and surplus expresses, in a naïve, non-conceptual manner, the capital relation. (129)”</span><br /><br />Or later:<br /><br /><span style="font-style:italic;">“The formula M-C…P…C’-M’, with the result M’=M+m, contains in its form a certain deception; it bears an illusory character that derives from the existence of the advanced and valorized value in its equivalent form, in money. What is emphasized is not the valorization of the value, but the money form of this process, the fact that the more value in the money form is finally withdrawn from the circulation sphere than was originally advanced to it…(141)” </span><br /><br />These two paragraphs, I think, summarize the most important aspect of the chapter, that in M…M’-M…M’-M….M’ circuit, whereby valorized value is perpetually recapitalized (but only in the form of M, never M’), glosses over the necessary aspect of valorization in the production process (think of this in regard to the circuit of commodity capital; C’…C’). <br /><br />Two things I wanted to throw out for discussion are:<br /><br />1) Its interesting to take the notion of an ‘interruption’ that appears in these first few chapters. Here, P itself is the interruption, and yet it does seem to be the necessary ‘motor’ for valorization/re-capitalization. In Chapter Two, <C’-M’, M-C> forms the ‘interruption’ of productive capital (P….P[P’]). I wonder what other ways we might think about the notion of an ‘interruption’ beyond the theoretical function internal to Marx’s exegesis. For instance, in the discourse of “post-modernity”, post-industrial society, post-this, post-that, etc. that possibly the interruption is mapped spatially – where the analytical optic has been enamored with the service-based economies and financial windfalls of Wall Street, overlooking the fact that this is still valorized in the process of global production (special economic zones anyone?). Think of this in regards to our current financial meltdown and the necessary implication of so-called “emerging markets” in this chain-reaction. Which brings me to a related, but more complicated issue…<br /><br />2) On the same page as the quotation above (p. 141), this appearance (M….M’ with P as mere interruption) is located in the specific schools of earlier economic thought, namely the Monetary System and the Mercantile System. Although this is the translator’s note, the info from the Grundrisse on these economic schools (see footnote on 141) returns us to a question posed many times before: Are these discursive systems of political economy, or are they actual economic systems (state or otherwise) that operated within their terms? If political-economists are the sycophants of capital (an actual system and a its particular conceptual express), does Mercantilism relate to, or is the ideological effect of, a unique monetary system? In other words, money is not, of course, capitalism, thus was money operating as a means of purchase and sale in a different stage of capitalist development? Marx utilizes the Monetary and Mercantile System as an example of reproducing the fetishistic character of M-C-M’ (or more particularly, M…M’) – in other words, reproducing the appearances of M…M’. But does not mercantilism constitute an ‘actual’ stage of monetary development, rather than an incomplete comprehension of the circulation of capital in its fully ‘developed’ logical form? Is this not conflating early modes of monetary theory, in relation to their own respective historical time, with the higher abstraction of capitalism’s forms, here represented by the abstract logic of the circuit of money-capital? I can feel Andy rolling his eyes 5000 miles away. Sorry Andy.<br /><br /><br /><br /><br /><span style="font-weight:bold;">CHAPTER TWO: THE CIRCUIT OF PRODUCTIVE CAPITAL</span><br />Here we move into the formula expressing the circuit of productive capital:<br /><br /> P….C’-M’-C….P<br />Which, as we saw earlier with M….M’, can be entered at specific moments, or broken down into other sub-sequences, such as:<br /><br />1) Simple Reproduction: <br />M-C…P…C’ (C+c) – M’ (M+m) {in other words, P….P}<br /> > where m continues into c (capitalist consumption or reserve fund)<br /> > and C continues into the production process (C-L/mp)<br /><br />a) these can themselves be isolated into their own trajectories, such as c – m – c (surplus value in commodity, realized in money form, consumed by capitalist) and C-M-C-L/mp… for the continuation into simple reproduction<br /> <br />2) Accumulation<br />P…C’-M’-C’-L/mp…P’...etc {in other words, P…P’}<br /> > which entails that the earlier trajectory of c-m-c does not exist since surplus value is re-capitalized and not consumed/reserved.<br /><br />It is within the particularity of this circuit that we can (logically) locate simple reproduction: c-m-c (consumption), which we could not do when following the circuit of money-capital. Yet, as I will argue below, and something Marx only discusses in passing in a later chapter, simple reproduction is historically impossible yet logically necessary for the explication of capitalist accumulation (-we return to the ‘pre-history’ of capitalism: not actual history, but the ghostly logic of its dynamics when not expanding in accumulation – which of course, is impossible by its own definition).<br /><br />As we saw in the circuit of money-capital, the augmented P in the second circuit never appears as P’, but as P thus {money-capital: M-C…P…C’-M’. M-C…P} and {productive-capital: P…C’-M’…P}. What happens is that as P occupied the position of an “interruption” in M-C-M’, here C’-M’/ M-C operates as a durational interruption that is not emphasized in this circuit (and yet, still necessary – as all of these circuits necessarily assume the other). Marx writes:<br /><br /><span style="font-style:italic;">“…here the entire circulation process of industrial capital, its whole movement within the circulation phase [M-C and C’-M’], 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, i.e. in the form of its new beginning. (144)”</span><br /><br />At first I assumed that the productive would be the privileged circuit – since it indicates ‘production’ and thus the site in which value becomes valorized (surplus value), but interestingly, Marx argues that just as money appears automatically augmented in M…M’, the same is assumed in P….P’, as productive capital does not necessarily express the valorization in the process of production; only that prior surplus-value has been recapitalized (in other words, indicating a prior augmentation rather than augmentation itself). To work through how Marx presents this dilemma:<br /><br /><span style="font-style:italic;">“This origin [i.e., the origin of augmented money, or M’] was obliterated in its form as money capital just beginning its circuit. It is just the same with P’, as soon as it functions as the point of departure for a new circuit. (p. 160)”</span><br /><br />And farther down the page:<br /><span style="font-style:italic;">“In the circuit of P...the process of valorization is already complete as soon as the first stage, the production process, has taken place, and once it has passed through the second stage C’-M’ (the first of the circulation stages), capital value and surplus-value already exist as realized money capital, as M’, which in the first circuit appeared as the final extremity. (160)”</span><br /><br />Lastly, and important to the internal (and self-referential) logic of this circuit:<br /><span style="font-style:italic;">“In P…P’, P’ does not express the fact that surplus-value is produced, but rather that the produced surplus-value is capitalized, i.e. that capital has been accumulated, and hence P’, as opposed to P, consists of the original capital value plus the value of the capital accumulated through its movement. (160)”</span><br /><br />Thus P…P’ doesn't move us any closer to how value is valorized, only that P’ stands in for more components of the production process (mp/L) set into motion due to earlier augmentation/recapitalization. <br /><br />What I think is important to note in this regard is that Marx is trying to show capital in its many forms, and that its own logic is determinative, not the forms themselves (even though necessary). Capital needs to be in the form of money-capital for specific processes (wages, means of payment, purchase, etc), in productive-capital (in order to express increased mp/L) and, as we will see in the next chapter, commodity-capital. The forms do not determine this process, but are subsets within a larger dynamic of capital accumulation (see 161). <br /> <br />Additionally, all these forms, while isolated for analytical purposes, and each containing their own special functions and silences (e.g. fetishism of money-form, etc), each presume the others – thus they never are isolated; they merely express earlier processes or anticipate later ones – a major theme that will be further theorized in chapter four. As we saw earlier, P’ (augmented productive-capital) is merely expressing augmented capital put back into the accumulation process. <br /> <br />A few remaining points that I wanted to emphasize for Chapter Two: <br />1) Temporal dimensions of these circuits:<br />- See Marx’s comments on the temporality of wages and past labour/future labour on 151-152 – I think this is where we move out of a singular circuit into the larger dynamics of social relations and processes. For instance, the subsets of the circuit M-C and C-M can be separated in time and space:<br /><br /><span style="font-style:italic;">“The difference in time between the execution of C-M and that of M-C may be more or less considerable. Although, as the result of the act C-M, M represents past labour, M can represent for the act M-C the transformed form of commodities that are not yet present on the market at all, but will be there only in the future, since M-C does not need to take place until C has been produced afresh. (151-152)”</span><br /><br />Further down, Marx discusses capitalist consumption as well as labour’s subsistence purchases in temporal terms (this is one of the most interesting passages of the chapter):<br /><br /><span style="font-style:italic;">“this money [m] is not only the monetary form of the workers’ past labour, but also a draft on simultaneous or future labour that will only be realized, or is supposed to be realized, in the future. The worker may use it to buy a coat that will only be made one week later. This is in particular the case with the very large number of necessary means of subsistence that must be consumed almost immediately, the moment they are produced, if they are not to spoil. In the money with which his wage is paid, therefore, the worker receives the transformed form of his own future labour or that of other workers. With one part of his past labour the capitalist gives him a draft on his own future labour. It is his own simultaneous or future labour which forms the as yet non-existent reserve stock with which his past labour is paid for. (152)”</span><br /><br />2) Whether or not simple reproduction can be historically understood or if this is for analytical purposes only.<br /> - Marx stipulates that his analysis of simple reproduction rests upon certain assumptions, such as that “the entire surplus-value goes into the personal consumption of the capitalist. (145)” But in capitalism’s own definitional terms, how could this occur? I don’t think Marx is assuming this as a preparatory stage towards accumulation, but rather, as a logical hypothesis from which to then understand actual accumulation. <br /><br />However, within Marx’s analysis we do learn of certain tendencies or forms based on the function of labour’s and capital’s consumption – one being mediated by wages, the other of the surplus-value produced in the production process. For instance, Marx emphasizes that, in the terms set out here (i.e. simple reproduction), crises that emerge concerning commodities in the market are not crises of demand, but of the “demand for payment” (156); in other words, a crisis within the capital circuit:<br /><br /><span style="font-style:italic;">“At this point the crisis breaks out. It first becomes evident not in the direct reduction of consumer demand, the demand for individual consumption, but rather in a decline in the number of exchanges of capital for capital, in the reproduction process of capital. (157)”</span><br /><br />Although this is in terms of simple reproduction, I wonder if this potential crisis can permeate expanded accumulation as well? <br /><br />3) Expansion of Business, Latency, and Temporal Interruption<br />Marx begins by arguing that:<br />“<span style="font-style:italic;">If m is to serve as money capital in a second independent business alongside the first, it is clear that is can be invested in this only if it possess the minimal magnitude required for such business. (162)”</span><br /><br />It is interesting to note that the “required for such business” brings us back to that open question of a ‘certain stage of development’, expressed earlier at the societal level, but here as internal to a realm of industry, market conditions, etc.<br /><br />More interestingly, however, is that the accumulation of money (m, not consumed, but not directly put directly back into an immediate circuit) is latent in its preparation of expansion of business, and the spatio-temporal aspects of this process. Marx writes:<br /><br /><span style="font-style:italic;">“Thus the accumulation of money, the formation of a hoard, appears here as process that temporarily accompanies an extension of the scale on which industrial capital operates. Temporarily, because as long as the hoard persists in its state as a hoard, it does not function as capital, does not participate in the valorization process, but remains a sum of money that grows only because money available to it without any effort on its part is cast into the same coffer. (163)”</span><br /><br />This money, money that is “interrupted” (163), is understood as “latent money capital” since by the terms of the circuit, it can only be that if presupposing the investment into a new outlet. This is expressed as the “reserve fund” (164), which “serves as a reserve fund to cope with disturbances in the circuit. (165)”<br /><br />The reason this last section drew my attention is that what could possibly be the contemporary reserve fund within a single firm? While the idea functions at a logical level rather than an actual exposition of how to run a firm here, its interesting to tie this in with the current freezing of credit markets – where the commercial paper market acts as a ‘general reserve fund’ and points to the financialization of the process of capital innovation, etc. Maybe there is a way to think this along with Schumpeter’s earlier writings on business cycles and credit.<br /><br /><br /><span style="font-weight:bold;">CHAPTER THREE: THE CIRCUIT OF COMMODITY-CAPITAL</span><br />Marx begins by differentiating the first two forms with this last form of the commodity-capital circuit:<br /><span style="font-style:italic;">“C’ can therefore never open a circuit as mere C [as the others did, e.g., as M or P], as merely the commodity form of the capital value. As commodity value, it always has a dual aspect. From the point of view of use-value, it is the product of the function of P,…whose elements L and mp, emerging from circulation commodities, have only functioned to fashion this product. Secondly, from the point of view of value, it is the capital value P plus the surplus-value m produced in the function of P…It is only in the circuit of C’ itself that C=P= the capital value can and must separate itself from the portion of C’ in which surplus-value exists, from the surplus product in which the surplus-value is hidden… (169)”<br /></span><br /><br />Here, then, is the commodity-form analyzed in Volume One, set in motion and providing the analytical means through which to understand the perpetual valorization of value via its dialectic (use-value / exchange-value). More explicitly, Marx argues later:<br /><br /><span style="font-style:italic;">“What differentiates the third form from the two earlier ones is that it is only in this circuit that the valorized capital value, and not the original capital value that has still to be valorized, appears as the starting-point of its own valorization. C’, as capital-relation, is here the point of departure, and thus has a determining effect on the whole circuit, in so far as this concludes , even in its first phase, both the circuit of the capital value and that of the surplus-value…(173)”</span><br /><br />This is the “permanent condition for the reproduction process” (174), one that comprises the entire process of circulation and production within its internal transformations. Additionally, and most importantly, C’…C’:<br /><br /><span style="font-style:italic;"> “presupposes in its description the existence of another industrial capital in the form C (=L+mp)…it itself demands to be considered not only as the general form of the circuit, i.e. as a social form in which every individual industrial capital can be considered….hence not only as a form of motion common to all of the sum of individual capitals, i.e. of the total social capital of the capitalist class, a member in which the movement of any individual industrial capital simply appears as a partial one, intertwined with the others and conditioned by them. (177)”</span><br /><br />In other words, in the circuit of C’…C’ we have the possibility of thinking of this process as a general process of interrelated capitals – a social form. It can be thought of both at the level of an individual capital circuit, but also expands outwards to enframe as well as necessarily assume, the generalized social process. This poses the question for Volume II:<br /><br /><span style="font-style:italic;">“It is necessary to make clear how the metamorphoses of an individual capital are intertwined with those of other individual capitals, and with the part of the total product that is destined for individual consumption. (178)”</span><br /><br />Marx closes this chapter with a brief mention of this circuits own, specific fetishistic effect – that it appears that valorization is merely the circulation of commodities (e.g. classical political economy). Which raises an interesting paradox – that this circuit captures, or at least opens into, the possibility of ‘thinking’ the social process in its totality, also replicates the fetish of political economy. Is this to say that political economy, at the level of its utilized ‘appearances’, posed the analysis of capitalism in a potentially correct, yet partial, form? Thus does that make Capital a ‘completion’ of political economy?<br /><br /><br /><span style="font-weight:bold;">CHAPTER FOUR: THE THREE FIRGURES OF THE CIRCUIT</span><br />Marx puts these three circuits together and posits that, on one level, their internal differences are merely subjective (analytical?):<br /><span style="font-style:italic;">“the entire distinction [of the three circuits] presents itself as merely one of form, a merely subjective distinction that exists only for the observer. (181)”</span><br /><br />But taken together, the dynamic of these three circuits is not the sum of their parts, but rather it is “the valorization of value as the determining purpose, the driving motive. (180)” By page 183 Marx develops a very interesting temporal form – succession and coexistence, wherein immediate succession (linear dynamic) is held together through a synchronic process of abstract coexistence (unity). For instance:<br /><br /><span style="font-style:italic;">“All portions of the capital go through the circuit in succession, and, at any on time, they find themselves in various stages of it. Thus industrial capital in the continuity of its circuit is simultaneously in all of its stages, and in the various functional forms corresponding to them. (182)”</span><br /><br />And…<br /><span style="font-style:italic;">“The real circuit of industrial capital in its continuity is therefore not only a unified process of circulation and production, but also a unity of all its three circuits. But it can only be such a unity in so far as each different part of the capital runs in succession through the successive phases of the circuit, can pass over from one phase and one functional form into the other; hence industrial capital, as the whole of these parts, exists simultaneously in its various phases and functions, and thus describes all three circuits at once. The succession [Nacheinander] of the various parts is here determined by their coexistence [Nebeneinander], i.e. by the way in which the capital is divided…(183)”</span><br /><br />We have, then, entered the analytical level of the process as a whole (synchronically intertwined capitals and the multiplicity of their linear circuits). Marx spends the next few pages working out the implication of this notion of simultaneity in succession, which, he argues is not solely for analytical purposes, but constitutes a social dynamic:<br /><br /><span style="font-style:italic;">“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. Those who consider the autonomization [Verselbstständigung] of value as a mere abstraction forget that the movement of industrial capital is this abstraction in action. (185)”</span><br /><br />This also opens into possibilities of thinking systemic crisis simultaneously at the level of the individual circuit and its relation within the total process:<br /><span style="font-style:italic;">“Every delay in the succession brings the coexistence into disarray, every delay in one stage causes a greater or lesser delay in the entire circuit, not only that of the portion of the capital that is delayed, but also that of the entire individual capital. (183)”</span><br /><br />Crisis, which was located at specific points of individual (logical) processes in Volume One (refer to Harvey’s last lecture) are now posed at the level of the entire process. In addition, Marx enters this total process through the question of value (assumed as expressed in its price) and the systemic effect of a fall or rise. (187-188) and the abstraction into money/world-money (189-190).<br /><br />One aspect that I found very interesting was that even products produced in other modes of production enter into the production/circulation process of capitalism (i.e., as raw material, consumption items, etc), it does not matter to capital’s logic – i.e., capitalist forms obliterate this (external) difference:<br /><br /><span style="font-style:italic;">“Whatever the origin of the commodities that go into the circulation process of industrial capitalism…whatever therefore may be the social form of the production process which these commodities derive – they confront industrial capital straight away in its form of commodity capital, they themselves having the form of commodity-dealing or merchant’s capital; and this by its very nature embraces commodities from all modes of production. (190)”</span><br /><br />One final note on this chapter is that Marx (belatedly) states that reproduction (surplus being consumed by capitalist) is impossible both theoretically (“For capitalism is already essentially abolished once we assume that it is enjoyment that is the driving motive and not enrichment itself” 199) and technically (the necessity of a reserve fund to counteract market fluctuations). <br /><br /><span style="font-weight:bold;">CHAPTER FIVE: CIRCULATION TIME</span><br />If we accept that a circuit’s turnover time is “equal to the sum of its production time and its circulation time (200)”, then the problem of circulation time needs to be posed. Mutually exclusive to production time, Marx argues that:<br /><br /><span style="font-style:italic;">“it is clear that the longer [capital’s] aliquot parts remain in the circulation sphere, the smaller must be the part that functions at any time in the production sphere. The expansion and contraction of the circulation time hence acts as a negative limit on the contraction or expansion of the production time, or of the scale on which a capital of a given magnitude can function. (203)”</span><br /><br />From this comes political economy’s misrecognition of the circulation process as the site of valorization via circulation time. In other words, by posing the question as a related, yet mutually exclusive aspect in regards to valorization, Marx has both accounted for why political economy has only assumed the appearances of circulation, as well as the “actual” process of valorization in relation to circulation time. This does not mean that circulation is secondary – since Marx does concede the agents of circulation (merchants, or lets say, the sales department) are “just as necessary” to the total process (205). <br /><br />The last paragraph of this chapter re-states the argument so-far in the terms of the commodity-form analysis of Volume One (the dialectic between use-value and exchange-value) – see 205-206.<br /><br /><br /><span style="font-weight:bold;">CHAPTER SIX: THE COSTS OF CIRCULATION</span><br />This chapter is divided up between “pure circulation costs” (buying and selling time, book-keeping, replacement of money in circulation), “costs of storage” (stock formation and the commodity stock proper) and finally transportation costs.<br /><br /><span style="font-weight:bold;">Pure Circulation Costs</span>:<br />Buying and Selling Time: The labour involved in the buying and selling of commodities (i.e., traders), this labour – which should be painfully obvious by this point – does not create any value, although they do provide the necessary function of realizing the value of a commodity. This is understood as a functional mediation between two forms of value (commodity form – money form). For Marx’s long exposition of the merchant’s function, see 208-211. <br /><br /><span style="font-weight:bold;">Book-Keeping</span>: Firstly, Marx discusses the conditions in which book-keeping emerges:<br /><br />“<span style="font-style:italic;">The movement of production, and particularly of valorization – in which commodities figure only as bearers of value, as the names of things whose ideal value-existence is set down in money of account – thus receives a symbolic reflection in the imagination. (211)”<br /></span><br />Compared to selling/buying, or what Marx deems “unproductive expenditure of labour-time” (212), book-keeping becomes more necessary as commodity production becomes the general form since it is the “supervision and the ideal recapitulation of the process. (212)”<br /><br /><span style="font-weight:bold;">Money:</span> Secondly Marx goes into a discussion of metallic money and that as a necessary form within the circulation of commodity production/circulation, a “part of the social wealth [e.g., metallic money]…has to be sacrificed to the circulation process. (214)” This line of reasoning could open into an interesting discussion of national-space and currency policies, but as it is posed here, there’s not much here to tease out.<br /><br /><span style="font-weight:bold;">Costs of Storage: </span><br />The key to this section is that while the previous aspects were merely phenomena of the circulation sphere (i.e., unproductive), costs of storage can be extensions of the production process and thus could be approached as anticipated within the surplus-product/surplus value. A huge theoretical lacunae arises here, since now we have two qualitatively different types of value-adding labour – one in production, and one an extension of production, but without the logical exegesis performed in Vol I. Anyhoo..here is what I understood from this section….<br /><br /><span style="font-weight:bold;">Stock Formation in General</span>: Stock formation is merely the commodity-stock within the C-M and M-C circuits – and since the production circuit requires that a “mass of commodities (means of production) is constantly present on the market” this commodity stock is a necessary (and a re-occurring) condition of production – this, again, is a logical premise posed internal to the logic of the circuits rather than a historically understood point.<br /><br />Furthermore, as Marx stipulated in the introduction of this section, costs of storage are anticipated in the value of commodities – in their necessary delay within the transformation from commodity value into money value (i.e. circulation, C-M):<br /><br /><span style="font-style:italic;">“the value of commodities is conserved, or increased, only because the use-value, the product itself, is transferred under certain objective conditions that cost an outlay of capital, and subjected to operations in which additional labour works on the use-values. The calculation of the commodity value (the book-keeping for this process) and the buying and selling, on the contrary, do not operate on the use-value in which the commodity value exists. (216)”</span><br /><br />And later…. <br /><span style="font-style:italic;">“The use-value is not increased or raised; on the contrary, it declines. But its decline is restricted, and it itself is conserved. The value that is advanced and exists in the commodity is also not increased here. But new labour, both objectified and living, is added to it. (217)”</span><br /><br />Marx then moves into a discussion of how the commodity stock has been misunderstood by Adam Smith and Lalor – see 217-220. This opens into spatio-temporal considerations of production and circulation, as well as national magnitude of social wealth (see 220) which I won’t get into. But what is important is that Marx has differentiated between the general commodity stock (and its three forms: productive stock, individual consumption fund and commodity stock) and the commodity stock proper. The general commodity stock of a society or nation is assumed to be locatable and understood in its three relative forms through history, or as a index of a social/historical form of production – i.e., how these are understood and measured give certain indices of spatio-temporal aspects of what went into the production of a specific commodity as well as its circulation within a larger space (or, in individual consumption, restricted space). Compare this with…..<br /><br /><span style="font-weight:bold;">The Commodity Stock Proper</span>: Here, the difference is that:<br /><br /><span style="font-style:italic;">“the commodity stock therefore grows with capitalist production. We have already seen that this is only a change of form for the stock, i.e. that the stock increases in commodity form because it decreases in the form of direct production or consumption stock. There is simply a changed form of the stock.” But as “capitalist production develops, the scale of production is determined to an ever less degree by the immediate demand for the product, and to an ever greater degree by the scale of the capital which the individual capitalist has at his disposal, by his capital’s drive for valorization and the need of his production process for continuity and extension. (221)”</span><br /><br />I may be wrong, but it seems that the same analytical logic that we saw in Volume One, where by at a certain quantitative level we get a qualitatively different form (Hegel) is applied here as well – in the differentiation between the general commodity stock (and its three forms) and the commodity stock proper. In other words, with the magnitude, speed and spatial dispersion of production and commodity circulation that results from capitalist production, we now are supplied with a new category – the commodity stock proper. <br /><br />But this is not Marx’s objective here – this is to discover to what extent the expenses accrued as “stocks are socially concentrated (222)” and as the interruption and spatio-temporal distanciation within the value transformation (C-M) goes back into the value of commodities.<br /><br />He answers this with a general law on 225: “all circulation costs that arise simply form a change in form of the commodity cannot add any value to it.” He continues that they “are simply costs involved in realizing the value or transferring it from one form into another. The capital expended in these costs (including the labour it commands) belongs to the faux frais of capitalist production. The replacement of these costs must come from the surplus product, and from the standpoint of the capitalist class as a whole it forms a deduction of surplus-value or surplus product (226).<br /><br />Ok, I feel I lost sight of the forest amongst the trees again, but what can you do. Now onto section two…….Maxhttp://www.blogger.com/profile/09192701065753965428noreply@blogger.com0tag:blogger.com,1999:blog-3397216998476879819.post-58262405331355990262008-11-17T18:55:00.003-05:002008-11-17T19:16:16.111-05:00Primitive Accumulation, Transition and ColonialismSo some concluding remarks on these final chapters. The more I think about the text in its entirety, and the relation of these last few chapters to the argument that had been developed thus far, more questions emerge than are answered, which is a sign of a productive reading. Anyhoo….<br /><br />For such a loaded concept, the Chapter on Primitive Accumulation was surprisingly short. Starting from Neil Smith and Harvey’s take on this last section, the later empirical surveys of enclosure, the Poor Laws, etc are directly juxtaposed to the Smithian conceptualization of a utopian market that Marx had previously been working within. Here, history, ‘actual’ history, is juxtaposed to the universal claims of property, natural rights and Bentham, which constituted the discourse of political economy. <br /><br />So problem number (1): we can say, following Harvey, that on one level Marx has moved from a theoretical analysis of political economy into the realm of history in order to counter any claims of equality, natural outgrowth, natural basis for property, etc. But what are the implications of this inversion of the analytical narrative? Earlier Marx worked through an immanent critique where the argument was that if Adam Smith’s free market was allowed to function in its own terms, we would <span style="font-weight:bold;">arrive</span> to the accumulation models given in Chapter 25 - the result being the polarities of increasing capital accumulation and increasing misery (not a mutually exclusive relationship – but one produced through labor in capitalist production through time)? Here, however, the misery was explicit in its ‘<span style="font-weight:bold;">origin</span>’ – and has only been dampened by its sublimation into what Marx called the “silent compulsion of economic relations” (p. 899 - subsistence commodity consumption for the worker, competitive pressure for the capitalist). The misery has always been and is there, except now, with the history of primitive/originary accumulation, it is encapsulated within a ‘moment’ when it becomes possible to locate it analytically. Left at this, capitalism is book ended by a miserable and unequal situation that all are aware of (original Bloody legislation > possible Systemic crisis), but internal to its processes as accumulation drives on, the violence seems to be veiled as natural conditions that are self-legitimated. <br /><br />A tangential question is what are the implications of moving in and out of an immanent critique of political economy? It seems here that the result is that political economy becomes merely “ideology” – in Marx’s terms, the economists are the ‘sycophants’ of capitalism. But now, what happens to the conceptual apparatus that he has left us, one developed out of a critique of political economy? Is this a corrective to political economy? Is this a higher development of political economy? In all honesty, I am not particularly invested in these sorts of questions, but they did come to mind when reading.<br /><br />Issue number (2): I think one of the problems with the concept of ‘primitive accumulation’ is that it might be overstated – and this overstatement can be understood within the context of Marx’s presentation. Primitive accumulation is a rendering of Smith’s ‘original accumulation’. Thus, still taking the concepts of political economy in order to ‘deconstruct’ them (lack of a better term, sorry Derrideans), Marx shows that the state was central, that - while still situated in an earlier legal structure - what occurred was actually illegal, and that force/violence/etc was necessary in the process. But does this actually mean that Marx has a new and applicable concept of ‘primitive accumulation’? <br /><br />In this regard, the chapter starts with a logical sequence of ‘presuppositions’ (see Andy’s citation below) – which, at a logical level of M-C-M’ - there does seem to be a need for a ghostly M (potential capital – yet not in circulation, and thus not capital) to be available in a different form of wealth (aristocratic, feudal, etc). But more important to Marx’s own conceptual apparatus is the important argument that primitive accumulation is when independent laborers, no matter if they are serfs or in corvee system, etc, are separated from their own means of production. Thus it is not primitive accumulation in a monetary sense, but the creation of a labor market. Thus, primitive accumulation has more to do with simple reproduction described in Chapter 23 (having to do with the reproduction of the relations of production) than the original circulation of capital – only in so far that the labor market is the central manifestation of capital once in circulation (i.e., the source of valuation). <br /><br />As you can see from my own circular confusion, I think the question of ‘origins’ is a bunk one, and one that capital, understood at the abstract level in Marx’s terms, can never be known. In my reading, the most interesting aspect of this short chapter is that the logical analysis of models of accumulation, of exchange and circulation, of the dialectical forms of the commodity, money, etc that constitute the bulk of Volume One are, to a certain degree, foreclosed within their own conceptual boundaries; an episteme that is hard to approach the “non-history” / “pre-history” / “transition to” within its own terms. The problem is that, as Marx states at the very beginning of this chapter, primitive accumulation is a necessary presupposition of the entire process – both in the endless series within a circuit of accumulation, or at the level of social production, etc. The logic itself requires primitive accumulation, but when you think about it, it can never be known without presupposing what it conceptually anticipates.<br /><br />Does this mean that the history of the emergence of capitalism cannot be known? Of course not, as Marx himself clearly shows in the last few chapters. The records are there, the magistrates, factory inspectors, the political battles, the statistics on pauperism, the emergence of classical political economy, etc is the archive of this history. But the concept of ‘primitive accumulation’ has problems that need to be thought through. One final example of the problems inherent in the concept is revealed in Marx’s own presentation: Marx goes through the “history of primitive accumulation” in the last chapters– an analysis that covers about 400 years of history. Thus primitive or original accumulation cannot be pinpointed, but only understood at the level of massive social transformations, population movements, urbanization, peripheral industrialization, etc. In other words, only at the level of the very general. Thus the interesting thing is thinking about the connection between (1) at the logical level there is the presupposition of a singular or isolated origin in which the spiral of accumulation emanates from through time, but: (2) at the level of history, it is a durational “moment” – a process that never actually disappears - which Harvey theorizes as “accumulation by dispossession.” <br /><br />Or, to approach from a different direction, what can be known through the analytical concept of primitive accumulation (or for that matter, “transition”) if not what is already presupposed in the historical narrative? I think that the most useful aspects of the concept can be found in the multiple “levers” of accumulation that emerge at different points from 1450 through to the 19th Century; the state, taxation, public debt, etc. These are, of course, not limited to an ostensible historical period of ‘transition’, but comprise a genealogy of capitalism’s own constitutive elements. The question becomes, at what point does their conjuncture constitute the “capitalist” moment? <br /><br />One final comment is that it is, following Harvey, very interesting to ask why Marx would end this text with a discussion of colonialism. We would assume that this would be an attack on the emergent imperialist forms of the mid-19th Century (as Andy noted, British imperialism in India being the most explicit example). But Marx here is <span style="font-weight:bold;">ONLY</span> discussing settler colonialism, thus this chapter is merely about the economic situation in America and Australia. Thus what I believe Marx is doing is, following his method of analysis throughout Volume One, is merely arriving at certain tendencies within capitalism through a critique of conventional political economy, here, represented by Wakefield. Wakefield’s project was to answer why capital investment was difficult in these settler colonies, and through Wakefield’s comments, Marx shows that it is the instability of the labour market (i.e., plenty of land for potential labour to cultivate, no compulsion to sell labour or concentrate the means of production, etc) that did not allow industrial capitalism to fully lay its determinative roots. In other words, this chapter is the logical extension of the preceding chapters – the settler-colonial situation is juxtaposed to a process that has a<span style="font-style:italic;">lready occurred</span> in Europe whereby the compulsions inherent to capitalist accumulation were fully borne out (labour forced to sell labour-power, pauperism criminalized, means of production secured by an elite through property laws, etc). What are not explored are the connections between colonialism (settler or imperialistic) that were logically and historically related to capitalism (think classical imperialism theories like Hobson, Lenin, Luxemburg, or current divergence theorists like Pomeranz). Interesting that Harvey did not make that distinction but rather linked this up with later theorists like Rosa Luxemburg, since they are not related (different form of colonialism, and also different analytical function within the respective arguments).<br /><br />Speaking of transition, onto Vol II.Maxhttp://www.blogger.com/profile/09192701065753965428noreply@blogger.com3tag:blogger.com,1999:blog-3397216998476879819.post-58229004694097583732008-11-16T13:45:00.000-05:002008-11-16T13:48:46.842-05:00Max's Falling Rate of Adding Anything Useful To Our DiscussionChapter 25 is the culmination of, if not of the entire argument in Vol I, at least of the trajectory beginning with the principle of cooperation (Ch. 13); moving through the division of labour, into machinery, and now the logical explication of the dynamics of these various factors within capitalism encapsulated in the concepts of <span style="font-weight:bold;">technical composition, value composition, and organic composition of capital</span>. As Andy has already discussed at length, Marx directly states that there is a contradictory tendency working within capitalism’s dynamics whereby, as the organic composition of capital rises (i.e. C=constant V=variable, C/V, thus an increasing ratio of constant capital reducing the amount expended on variable capital), then, if we take the rate of profit as P=s/v over 1+c/v, you have a falling rate of profit as the organic composition rises. <br /><br />Here, the falling rate of profit is declared a “law”, but in Volume Three it is reduced back to a “tendency” – something that has produced a massive amount of debate within Marxian economics. If one takes the ‘Falling Rate of Profit’ thesis at face value, as an IMMANENT law within capitalism, one of its EMMINENT collapse, then you have a teleology that can inform a politics (if you could call it that, maybe a ‘faith’ is more appropriate) where the conclusion is already prefigured in the present. But, as Harvey argues at the end of lecture 11, it is important to note that Marx is working through an abstract logic of capitalism, through the concepts that political-economy of the time had developed, to show that, at a certain level of abstraction, if the market operated as Smith and others theorized, we would get the polarization of wealth / pauperism within in its own terms. Ricardo and others recognized a ‘Falling Rate of Profit’ as well, but located it outside of capitalism, in population, in natural resource depletion, etc., while Marx located it within the very dynamics outlined by classical political economy. <br /><br />This, I think, is one productive way of reading this chapter; that rather than a descriptive analysis of how capitalism has developed historically, and re-ordered social production in time and space, it is, at one level, a working through of the discourse of political economy. This is NOT however, to separate political economy as (subjective) discourse from the real social developments as objective reality with no inter-relation between the two. Marx seems to be moving towards the objective (in his terms) through the concepts developed by the appearances that actually shape social reality – remember throughout the text Marx constantly argues that political-economy has taken the concepts from everyday life, from the appearances that capitalism requires. Thus fetishism is a necessary aspect of the logic of the system, and working through this fetishism is necessary to see how the system actually works. We could discuss how much Marx assumes an epistemological possibility that is equal to a coming-into-consciousness…something that one could read, as in the following passage:<br /><br /><span style="font-style:italic;">“Thus as soon as the workers learn the secret of why it happens that the more they work, the more alien wealth they produce, and that the more the productivity of their labour increases, the more does their very function as a means for the valorization of capital becomes precarious; as soon as they discover that the degree of intensity of the competition amongst themselves depends wholly on the pressure of the relative surplus population; as soon as, by setting up trade unions, etc., they try to organize planned co-operation between the employed and the unemployed in order to obviate or to weaken the ruinous effects of this natural law of capitalist production on their class, so soon does capital and its sycophant, political economy, cry out at the infringement of the ‘eternal’ and so to speak ‘sacred’ law of supply and demand. (p. 793)”</span><br /><br />Two interesting points about this passage: (1), yes, unionization, political activism, etc is assumed to be predicated upon an ‘understanding’ of this system – which of course can be easily countered by the labor politics that embody the very logic of capital, and; (2) the necessary appearances of capitalism that political economy assumes – the very concepts that Marx takes-up based on an assumption their social effectivity – are reduced to mere ‘ideology’ of the capitalists. <br /><br />Ok, so back to the chapter. As Harvey outlined in the lecture, there are two models of accumulation explicated in this chapter; one expresses the falling rate of surplus-value that can be re-capitalized due to the absorption of labor reserves and thus a rise in wages, and another where technological innovation enters into the circuit, reducing the demand for labour, produces a surplus population, increases the rate of exploitation and thus increases the rate of accumulation. Here are the sequences:<br /><br />Model One: <br />Accumulation of Surplus Value » Portion of S.V. re-capitalized » Generates increase demand for labour power » Absorption of Surplus Population » Rising Wages » Less Surplus Value » Less Surplus Value Accumulated for Recapitalization<br /><br />Model Two:<br />Accumulation » Portion of S.V. re-capitalized » New Technologies » Reduces Demand for Labour » Produces Surplus Population » High-Rate of Exploitation » Increase in Capital Accumulation<br /><br />So what is being expressed is that through the organizational and technological innovations that are driven by the drive to accumulate, you can have a reduction in labour, yet its rate of exploitation increases from the pressure of the industrial reserve army produced by the process. Marx notes that this is yet another contradiction of the logic – that labour produces capital and thus drives the process of accumulation that constitutes capitalism, and yet, through this process, creates the conditions for its increasing superfluity. Abstracted from this, then, is the general contradiction that Andy discussed, the polarity of increasing wealth with increasing poverty. <br /><br />Again, however, we return to the importance of reading this as an internal tendency if the logic is isolated in its own abstract terms. Harvey argues that the “external interactions” interrupt this logic so much that one can never state a general law with any certainty. What he means by ‘external’ interactions, and something that opens into a whole other set of interesting questions, is that the two models mentioned above seem to be within a firm, or within, lets say a branch of industry, which allows for us to trace a singular circuit. But Marx himself moves into questions of concentration/centralization (see Andy’s helpful summary of this discussion below) that brings in the question of multiple interactions, the pressure of competition, the fluidity of interactions, etc into the analysis. <br /><br />Thus Harvey notes multiple ways in which both the (1) rising organic composition of capital and (2) the falling rate of profit can easily be impinged and rectified. Thus these laws or models are not the end-all of the analysis, but are ways through which Marx locates specific tendencies at certain levels of the system, that then can be utilized in sociological or historical analysis, but only in relation with multiple other factors. For a great example of what these ‘other’ factors are, check out the last 20 minutes of the Harvey lecture when he discusses the absorption of the latent population within the last thirty-years which, when viewed in specific locations, actually inverted the organic composition of capital. In other words, these tendencies could never fully express themselves; they only 'appear' at a level of abstraction, both within the fetishisms of the everyday and the economic utopia of political economy. This does not require us to throw out the baby with the bathwater, because these are tendencies, ones that can be located in capitalism’s history, but again, ones that have to be taken in relation to other factors, tendencies, obstacles, etc.<br /><br />Ok, lets finish this bastard. Onto the last chapters.Maxhttp://www.blogger.com/profile/09192701065753965428noreply@blogger.com0tag:blogger.com,1999:blog-3397216998476879819.post-78645876726350370832008-11-11T21:45:00.004-05:002008-11-16T11:47:58.933-05:00Chapters Ten through Twenty-FourTwo reasons for the delay in my response: (1) I wanted to catch up on Harvey’s lectures as I find them extremely useful for grasping the basics of Marx’s argument. So I would just sit in a café in Japan listening to the audio on an Ipod for hours on end; and then, (2) a family emergency in late September brought me back to California. Now things have returned to normal and I can return to the lectures/texts, although I fear that my understanding of this text and my ability to formulate anything useful to our general discussion has suffered from my break from both. So I think the only thing I can do is to spit out some random comments on 14 chapters and try to get back to where Andy, et al have left off…<br /><br />Firstly, Harvey’s outline – one wherein Marx’s analysis is charted as a series of elements and tensions that are embedded in specific concepts (concepts that do not synthesize these contradictions but themselves come into contradiction within their own relations spawning further concepts, etc, etc.) – was EXTREMELY helpful for me and I urge others to refer to the first few lectures for this helpful outline. <br /><br />Secondly, Harvey touched on what had become (for better or worse) a point of discussion on this blog; namely, is Marx, at specific points in the text, making an historical or logical argument? Harvey first brings this up in Lecture Two, when talking about the necessary function/emergence of money from generalized commodity exchange. Here, Harvey argues that this is not an historical argument (i.e. a history of monetary development) but rather is providing the conceptual tools in which to understand that history – a great answer to our (my?) dilemma. <br /><br />A further note on the logic/history question is that since Marx’s critique is immanent to the conceptual matrix of the-then political economists, there is a reality (for a lack of a better term) to analyzing the economic logic since the concepts deployed ARE, to varying degrees, expressive of the appearances of capitalism itself. In other words, the logic is immanent to the ideological self-understanding of the historical formation of capitalism. This doesn’t help with questions of ‘transition’ per se, but at least we enter the problem by seeing the necessary relationship between the logic outlined here and the history Marx is working through as co-constitutive of capital at various levels. Ok, so onto the chapters…<br /><br />CHAPTER TEN: One thing that struck me about this chapter is that we have an explicit shift into an actual historical analysis – whereby the ‘working day’ becomes the analytical concept through which to understand factory laws, politics and the social experience of industrial production. All the main concepts, both of the preceding chapters (constant and variable value, degree of exploitation, the rate of surplus value, etc) and the upcoming chapters (rate and mass of surplus value, productivity. etc) are applied or prefigured in Marx’s discussion of the ‘working day.’ One concluding paragraph in particular contains themes that I found particularly useful to think through: <br /><br /><span style="font-style:italic;">“We see then, that, apart from extremely elastic bounds, the nature of the exchange of commodities itself imposes no limit to the working-day, no limit to surplus-labour. The capitalist maintains his rights as a purchaser when he tries to make the working-day as long as possible, and to make, whenever possible, two working-days out of one. On the other hand, the peculiar nature of the commodity sold implies a limit to its consumption by the purchaser, and the labourer maintains his right as seller when he wishes to reduce the working-day to one of definite normal duration. There is here, therefore, an antinomy, right against right, both equally bearing the seal of the law of exchanges. Between equal rights force decides. Hence is it that in the history of capitalist production, the determination of what is a working-day, presents itself as the result of a struggle, a struggle between collective capital, i.e., the class of capitalists, and collective labour, i.e., the working-class.” (p. 344)</span><br /><br />Within the logical dynamics of capitalism discussed up to this point, we again see Marx extending the earlier distinction between use-value and exchange value, emphasizing here the tension between the tendential expansion of value (valorization of value; M-C-M’) and the limitations located in the realm of utility/physical reproduction (Note - The concept of “limits” might be something we can tag for further discussion, as this seems to be a central way in which people have reconceptualized the Marxian project; natural limitations [environmental Marxists of the 1970s], human limitations [Malthusians, or, in a different way, Polanyi], or cultural limitations [cultural life-worlds that are retained internal/outside of capitalist-exchange-relations]). Marx seems to employ it at times like this in order to highlight the social, political and/or legal results of this process (i.e., the battle over time, over the working day). In other words, this inherent contradiction to the logic of capitalist reproduction is expressed in the realm of the political. Harvey argues that this is where class politics first emerges explicitly in the text – that Marx is pointing out that when equal rights meet in the market (legal seller / legal buyer), then force decides. <br /><br />Skipping to CHAPTER THIRTEEN: A general discussion of cooperation (as a principle that capitalism inherits from manufacture) leads into the next chapters related to division of labour, manufacture and machinery. Here Marx is dealing with the unique qualities and revolutionary character of the cooperation of social labor found within this historical form – something that is qualitatively different from earlier historical forms of social-cooperation. As Andy pointed to, the quantitative amassing of labor for industrial production (in Marx’s terms, let’s say the extensive extraction of surplus value, i.e. question of magnitude) marks, at a certain point, a qualitatively historical epoch; the revolutionary character of, and necessity of this form of production to, capital. What I think Marx is trying to do is counter those who attribute the unleashing of social productive power to solely capital; rather he wants to acknowledge the possibilities (where ‘species being’ functions in his argument) but still show the human degradation that this is carried out through.<br /><br />Another interesting point which I think is important for those interested in social geography is a theme that is introduced here, and one expanded in the division of labour section of the next chapter; that of the spatial mapping of capitalist relations. On 446, Marx writes:<br /><br /><span style="font-style:italic;">“On the one hand, co-operation allows work to be carried on over a large area; for certain labour processes, therefore it is required simply by the physical constitution of the object of labour [Marx lists various infrastructural projects here – ones that necessitate long-term capital outlays]…On the other hand, while extending the scale of production renders possible a relative contraction of its arena. This simultaneous restriction of space and extension of effectiveness, which allows a large number of incidental expenses (faux frais) to be spared, results form the massing together of workers and of various labour processes, and from the concentration of the means of production. (446)”</span><br /><br />Harvey comments later that where production had previously been sequential, now it was simultaneous in space – constituting a new concept that appears in the text - the ‘collective worker’. <br /><br />CHAPTER FOURTEEN:<br />So as Marx moves from the principle of cooperation into the division of labour, we see a further explication of the dual tendencies of concentration/extension, specialization/generalization, and interestingly, independence/dependence that mark capitalism. An important point that kicks off section two is where Marx hints at the dynamics of historical change; that a higher form of productive development still contains elements of the ‘old’, yet set in motion within a new social dynamic: <br /><br /><span style="font-style:italic;">“Manufacture, in fact, produces the skill of the specialized worker by reproducing and systematically driving to an extreme within the workshop the naturally developed differentiation which it found ready to hand in society. (458-459)”</span><br /><br />And reiterated later:<br /><br /><span style="font-style:italic;">“The different stages of the process, previously successive in time, have become simultaneous and contiguous in space. Hence a greater quantity of finished commodities is produced within the same period. This simultaneity, it is true, arises from the general co-operative form of the process as a whole; but manufacture not only finds the conditions for co-operation ready to hand; it also, to some extent, creates them by subdividing handicraft labour. On the other hand, it only accomplishes the social organization of the labour process by riveting each worker to a single fraction of the work. (464)</span><br /><br />This understanding of history (or, more precisely, the history of social production) extends into the emergence of industrial capitalism out of basic manufacture as well, where capitalism, a qualitatively new historical form, works with what already constitutes the productive forces and relations of society (concentration and division of labour). Thus what appears to be a mere extension of an earlier productive principle is actually utilized within and determined by a new social formation. <br /><br />The passage above also points to a distinction that Marx makes between the division of labour in the workshop (manufacture) and the division of labour in society (artisan/handicraft); the result is a very different form of social production, and as Andy pointed to, this is where class conflict functions within the factory. It is not an historical delineation since, as Harvey emphasized, these emerge in hybrid forms – outsourcing or artisan production continuing on the periphery of industrial centers. Also, the social division of labor (the dispersal of production through space) and the division of labour in the factory (the concentration of labour in space) are in a necessary relation to each other – the equilibrium of production in each factory is the necessary condition of possibility for the anarchy of the market that connects these production centers. <br /><br />To extend this theme into the realm of class politics, Marx makes the distinction between the two types and their respective social results:<br /><br /><span style="font-style:italic;"> “Division of labour within the workshop implies the undisputed authority of the capitalist over men, who are merely the members of a total mechanism which belongs to him. The division of labour within society brings into contact independent producers of commodities, who acknowledge no authority other than that of competition of the coercion exerted by the pressure of their reciprocal interests…The same bourgeois consciousness which celebrates the division of labour in the workshop….denounces with equal vigor every conscious attempt to control and regulate the process of production socially, as an inroad upon such sacred things as the rights of property, freedom and the self-determining ‘genius’ of the individual capitalist. (477)”</span><br /><br />He concludes with:<br /><br /><span style="font-style:italic;">“While the division of labour in society at large, whether mediated through the exchange of commodities or not, can exist in the most diverse economic formations of society, the division of labour in the workshop, as practiced by manufacture, is an entirely specific creation of the capitalist mode of production. (480)”</span><br /><br />As Andy commented, Marx is showing the necessary relationship between industrial manufacture and the dynamics of surplus extraction. This brings us to a concluding paragraph on 485, where Marx summarizes the results of his logical analysis and links the division of labour with his earlier discussion of the cooperative principle:<br /><br /><span style="font-style:italic;">“Co-operation based on the division of labour, in other words, manufacture, begins as a spontaneous formation. As soon as it attains a degree of consistency and extension, it becomes the conscious methodical and systematic form of capitalist production. (485)”</span><br /><br />This raises a number of interesting questions – What does Marx mean by spontaneous? More precisely, how far can we ‘push’ spontaneity within, lets say, the polarities of teleology and/or contingency? I read this section as Marx attempting to show the emergence of certain forms of production, the resulting effects on labour and the production process, etc that are not logically prefigured in their ‘origin’. In other words, cooperation does not necessarily beget division of labour, manufacture, and machinery, but these latter principles of production emerge from various tendencies at specific points of development. To cite another passage that summarizes this historical dynamic:<br /><br /><span style="font-style:italic;">“…manufacture was unable either to seize upon the production of society to its full extent, or to revolutionize that production to its very core. It towered up as an artificial economic construction, on the broad foundation of the town handicrafts and the domestic industries of the countryside. At a certain stage of its development, the narrow technical basis on which manufacture rested came into contradiction with requirements of production which it had itself created. (490)”</span><br /><br />Enter the machines….<br /><br />CHAPTER FIFTEEN:<br />Harvey splits this chapter into two lectures, and frames his discussion by the concepts that emerge in footnote 4 on page 493. For Harvey, the concepts of <span style="font-weight:bold;">technology / nature / production process / reproduction of daily life / social relations / concepts-ideas</span> form moments of a social totality that is not expressive (Hegelian), static, nor driven by a sole determining moment. What I found useful about this was that Harvey understood these as forming an analytical apparatus through which to approach history, that when an invention or transformation occurs in one area (lets say, technological, or a major shift in cultural forms) then this, understandably, affects the other realms – something similar to the Althusserian notion of over-determination I guess without the psychoanalytic connotations. Harvey’s aim is to counter the conventional reading of Chapter Fifteen as indicative of a certain technological-determinism in Marx’s analysis. I can’t imagine how that could be formulated if one started by reading the text from the beginning, but there are times in this chapter, taken in isolation, where it appears that technology is driving the process. But as we saw with the sections quoted above, Marx finds spontaneous formations, that are then driven by their own internal tendencies/tensions, that then produce the conditions for other developments – all of which speak to an extremely complicated array of social relations, labour processes, scientific innovations, trends in daily life, etc that all converge and diverge at specific points in time.<br /><br />So since this is an extremely long chapter, I will focus on just a few points. Returning to how Marx emplots history via qualitative changes – I think you can locate these within the 'moments' that Harvey pointed to. For example, Marx belabors the point that in manufacture, the “organization of the social labour process is purely subjective”, while with industrial production, it is an “entirely objective organization of production, which confronts the worker as a pre-existing material condition of production. (508)” It is from the materiality of the machine that the “cooperative character of the labour process [emerges as]…a technical necessity.” (508) So the qualitative historical change is marked in both the moments of technology and the production process. Additionally, machinery allows for the entire family to be directly integrated into the industrial process (reproduction of ‘daily life’) – as well as the “intellectual degeneration” (523) that comes along with machine production. As we saw with manufacture coming into contradiction with the necessities that it itself had created – industrial production contains its own dynamic of “perpetual motion” which comes into “certain natural limits in the shape of the weak bodies and the strong wills of its human assistants. (526)” Again the question of limits – here understood as bodies and wills – comes into play. This gets expressed politically as the shortening of the working day – but alas – this is not a victory for labour – for Marx writes:<br /><br />“<span style="font-style:italic;">The shortening of the working day creates, to begin with, the subjective condition for the condensation of labour, i.e. it makes it possible for the worker to set more labour-power in motion within a given time. As soon as that shortening becomes compulsory, machinery becomes in the hands of capital the objective means, systematically employed, for squeezing out more labour in a given time</span>. (536 – see also 542 for a further discussion)”<br /><br />Not only does machinery increase the intensity of surplus-value extraction, but it also disciplines labor. The earlier term of the ‘collective worker’ is transmuted into the metaphor of the master and their ‘hands.’ <br /><br /><span style="font-style:italic;">“The special skill of each individual machine-operator, who has now been deprived of all significance, vanishes as an infinitesimal quantity in the face of the science, the gigantic natural forces, and the mass of social labour embodied in the system of machinery, which, taken together with those three forces, constitutes the power of the ‘master’. This ‘master’, therefore, in whose mind the machinery and his monopoly of it are inseparably united, contemptuously tells his ‘hands’, whenever he comes into conflict with them…The technical subordination of the worker to the uniform motion of the instruments of labour, and the peculiar composition of the working group, consisting as it does of individuals of both sexes and all ages, gives rise to a barrack-like discipline, which is elaborated into a complete system in the factory…(549)”</span><br /><br />The qualitative marking of historical development is also located in the shift from formal to real subsumption – i.e. a move from artisanal production of machinery to machine-produced machinery – in other words, within the ‘moment’ of the production process itself. Thus to round this chapter out, in contrast to a reading of technological determinism, this chapter came out of Marx’s discussion of the contradictions manufacture produced, ones of technical necessity, that were answered by industrial production. Thus this history is understood through the theme of technology. But while there is an historical and necessary relationship between industrial production and capitalism, the determining factor is not increased output itself, but that that output is objectified labour-time, which is necessary with the reproduction of capitalism (M-C-M’). <br /><br />CHAPTER 16: Jesus Christ this is a lot to go through in one sitting. Ok, Harvey argues that Chs 16 and 17 are reiterations of earlier arguments Marx has already made – but I found that Ch. 16 approached the concept of surplus value in a very different way, relying on the concepts of nature, man and human evolution. Take for instance this long passage (pasted from Marxist.org so the translation might be a little different):<br /><br />"<span style="font-style:italic;">Thus we may say that surplus-value rests on a natural basis; but this is permissible only in the very general sense, that there is no natural obstacle absolutely preventing one man from disburdening himself of the labour requisite for his own existence, and burdening another with it, any more, for instance, than unconquerable natural obstacle prevent one man from eating the flesh of another. [2] No mystical ideas must in any way be connected, as sometimes happens, with this historically developed productiveness of labour. It is only after men have raised themselves above the rank of animals, when therefore their labour has been to some extent socialised, that a state of things arises in which the surplus-labour of the one becomes a condition of existence for the other. At the dawn of civilisation the productiveness acquired by labour is small, but so too are the wants which develop with and by the means of satisfying them. Further, at that early period, the portion of society that lives on the labour of others is infinitely small compared with the mass of direct producers. Along with the progress in the productiveness of labour, that small portion of society increases both absolutely and relatively. [3] Besides, capital with its accompanying relations springs up from an economic soil that is the product of a long process of development. The productiveness of labour that serves as its foundation and starting-point, is a gift, not of nature, but of a history embracing thousands of centuries</span>. (from Marxists.org, page 647 in Fowkes translation.)"<br /><br />This reads a little differently then how the concept of surplus-value has been formulated before.<br /><br />CHAPTERS 17 and 18: Harvey points out that in these chapters Marx is showing the strategic variations in capitalist accumulation – where variations in the relationship between length of working day, intensity of labour and the productivity of labour can be changed in order to increase value extraction. This does not necessarily require an a priori comprehension of this logic, but that it can occur through regular economic mechanisms. This carries over into Chapter 18, where, Marx shows, among other things, how the value of labour can be driven down through seemingly ‘economic’ forces. Starting with the socially necessary labour time concept, the bundle of commodities that determine the value of labour-power (not their quantity but their value) can be driven down through increased labor productivity – thus driving down labour-value itself. It's a basic concept, but one that I never fully grasped. See 659 for a summary and the discussion on 661-662 that extends this theme.<br /><br />CHAPTER 19: What Marx discussed earlier in as the necessary difference between value and price (refer back to the price-form on 195 – 198) emerges here in relation to wages, as the price-name for remuneration of labour-power, but not the value of labour itself. Here is what Marx originally said about the price-form:<br /><br /><span style="font-style:italic;">“The price-form, however, is not only compatible with the possibility of a quantitative incongruity between magnitude of value and price, i.e., between the former and its expression in money, but it may also conceal a qualitative inconsistency, so much so, that, although money is nothing but the value-form of commodities, price ceases altogether to express value. Objects that in themselves are no commodities, such as conscience, honour, etc., are capable of being offered for sale by their holders, and of thus acquiring, through their price, the form of commodities. Hence an object may have a price without having value. The price in that case is imaginary, like certain quantities in mathematics. On the other hand, the imaginary price-form may sometimes conceal either a direct or indirect real value-relation; for instance, the price of uncultivated land, which is without value, because no human labour has been incorporated in it.</span>” (copied from Marxists.org – roughly page 196 in the Fowkes translation)<br /><br />Thus the incongruity of price and value is a necessary incongruity that allows for the anarchy of the market, while value has to assume a fictive equilibrium in order to be determined. In regards to wages, the ‘price-name’ of labour remuneration, Marx writes:<br /><br />“<span style="font-style:italic;">That which comes directly face to face with the possessor of money on the market, is in fact not labour, but the labourer. What the latter sells is his labour-power. As soon as his labour actually begins, it has already ceased to belong to him; it can therefore no longer be sold by him. Labour is the substance, and the immanent measure of value, but has itself no value….In the expression “value of labour,” the idea of value is not only completely obliterated, but actually reversed. It is an expression as imaginary as the value of the earth. These imaginary expressions, arise, however, from the relations of production themselves. They are categories for the phenomenal forms of essential relations. That in their appearance things often represent themselves in inverted form is pretty well known in every science except Political Economy.</span> (from Marxists.org, roughly 677-678 in Fowkes translation)”<br /><br />Thus labour has no value, and could never have value since it is itself the measure of value – the price name masks this contradiction, and as with elsewhere, this is not a creation of political economy, but rather “imaginary expression” that is nonetheless necessary to the day-to-day exchanges of commodities, including labour-time. <br /><br />CHAPTERS 20 and 21: Marx goes into the differences of time-wages and piece-wages. These are incremental differences, that although they have their own unique characteristics, still breakdown into a part of the labour expended being unpaid for, i.e. surplus labour. Marx writes:<br /><br /><span style="font-style:italic;">“Just as, with time-wages, it does not matter whether we assume that the labourer works 6 hours for himself and 6 hours for the capitalist, or half of every hour for himself, and the other half for the capitalist, so here it does not matter whether we say that each individual piece is half paid, and half unpaid for, or that the price of 12 pieces is the equivalent only of the value of the labour-power, whilst in the other 12 pieces surplus-value is incorporated</span>. (From Marxists.org, roughly page 693 in Fowkes translation)”<br /><br />One interesting aspect that comes up in the Harvey lecture, and one you often hear repeated, is that labour is often convinced that a piece-wage will secure a higher wage, but that when everything is taken together, the actual working-day is extended beyond the terms of what it would have been under a time-wage. In this sense, the increment of a piece-wage returns us back to the question of time (intensification or extension, see 694-695 for an interesting discussion of this). <br /><br />CHAPTER 22: As Harvey indicates, from this short chapter come themes that would later develop into unequal exchange, unequal development and or dependency theory, whereby national variations in the “average intensity of labour” (701) allow for a strategic maneuvering to extract more surplus value based on these differentials. For example, he writes that:<br /><br /><span style="font-style:italic;">“In proportion as capitalist production is developed in a country, so, in the same proportion, do the national intensity and productivity of labour there rise above the international level. The different quantities of commodities of the same kind, produced in different countries in the same working time, have, therefore, unequal international values, which are expressed in different prices, i.e. in sums of money varying according to international values. The relative value of money will therefore be les in the nation with a more developed capitalist mode of production than in the nation with a less developed capitalism. (702)”</span><br /><br />Although my initial reaction was to note ‘developmentalism’ in the column of my book, when you read this section, its clear that it is capital that is setting the standards for comparison and/or a gradation of development internal to its own logic and standards. We can see similarities with other points of Marx’s argument in conjunction to this chapter: (1) the extension of money from generalized commodity production went as far as the concept of world-money (240), where here the necessary condition for a concept such as ‘world-money’ and generalized world-trade would require that a universal time is established through which these differentials emerge. This is the epistemological basis for socio-economic comparison. (2) As with his concept of the ’collective worker’ this extends throughout the world now, that although there is a delineation internal to a nation or society that has its own unique intensity of labour, this intensity is in relation to other areas, thus one can think of the ability to make these economic formulations as one indication of, lets say, class formation in a certain country. This might get us out of a never-ending search for class-formation in industrial production or living standards; one based rather on the economic differentials rather than production techniques or urbanization, etc. (3) Lastly, its important to note that as Marx jumps from the imaginary relation between an individual capitalist and individual laborer in the market, we are talking about a social totality, and this social totality extends beyond the nation. Thus was also seen in Chapter 15 when he discussed the methods by which capital solves the ‘glut’ problem – dumping in the colonies. This expansion becomes necessary for the next chapters.<br /><br />PART SEVEN (INTRO, CHAPTERS 23 and 24): As Andy already indicated, Harvey points out this is the culmination of Marx’s argument in Volume One. The conceptual pieces are all in place, and although he has touched upon the process of accumulation/reproduction before (Chapters 3 through 5; C-M-C and M-C-M’), this is a direct analysis of its own tendencies and dynamics. It is important to reiterate what Harvey and Andy have both mentioned: that Marx had to assume certain impossible things in order to first explicate the logic of capitalist dynamics. These three assumptions are:<br /><br />1) All commodities are sold at their value (i.e., the market does not impinge)<br />2) That he cannot deal with the fragmentation of surplus-value into rent, taxes, profit, interest, etc. In other words, he is anticipating dealing with rent, finance capitalism, etc in volume three of Capital.<br />3) As if capital is a closed system – there is no export/import in relation to other production areas. As Andy emphasized – it is a closed system.<br /><br />Uno Kozo comes to mind when reading these necessary assumptions. <br /><br />A few aspects that I think are important:<br /><br />One is that Marx explicitly shifts now to an entire social process, a totality of social production, rather than an abstract meeting of individual labor and capital in the market. While it was prefigured in the preceding chapters, it becomes a necessary assumption when dealing with simple reproduction and extended accumulation. Important to note is that there has been a functional shift, from the historically specific concept of socially necessary labour time (and the value of the commodity bundle that constitutes subsistence) to a concept of a transhistorical labour-fund. This allows Marx to highlight how the worker comes into the capitalist dynamic twice:<br /><br />First through productive consumption – i.e. the transfer of value of the means of production and the object of labour to the commodity – not to mention the addition of more value through the act of labour itself.<br />Secondly through individual consumption, the surplus value (capital) objectified in the commodity of the commodities produced which reproduces the necessary component of the M-C-M’ process, namely, labour.<br /><br />Harvey has a great graph that explains this process in Lecture Ten that outlines the logic of this argument. I’ll quote from Capital itself where Marx lays this out:<br /><br /><span style="font-style:italic;">“The labourer consumes in a two-told way. While producing he consumes by his labour the means of production, and converts them into products with a higher value than that of the capital advanced. This is his productive consumption. It is at the same time consumption of his labour-power by the capitalist who bought it. On the other hand, the labourer turns the money paid to him for his labour-power, into means of subsistence: this is his individual consumption. The labourer’s productive consumption, and his individual consumption, are therefore totally distinct. In the former, he acts as the motive power of capital, and belongs to the capitalist. In the latter, he belongs to himself, and performs his necessary vital functions outside the process of production. The result of the one is, that the capitalist lives; of the other, that the labourer lives</span>. (from Marxists.org, top of 717 in the Fowkes translation)”<br /><br />In other words, it is through the body of the laborer (Harvey’s term) that the relations of capitalist production are reproduced. This secondary (individual) consumption has to be understood at the social level, whereby labour, which is not directly involved in this labour process, is still “an appendage of capital as the lifeless instruments of labour are (719)” through their social consumption. <br /><br />Chapter 24 is an extension of this argument, whereby Marx is answering how extended accumulation can occur (in contrast to various classical theories of expansion). For Marx, capital accumulation entails the transformation of surplus-value into capital (M-C-M’-C-M’-C-M’ etc) – perpetual investment, production, returns, reinvestment, etc. At some point, if we assume an imaginary original quantity of capital (Mill’s property-rights theory) then that would be consumed by capital at some point in the process, and the system would be reproducing and expanding itself only through the endless process of valorization in the production process, i.e. surplus value. To quote Marx’s summary:<br /><br /><span style="font-style:italic;">“General result: by incorporating with itself the two primary creators of wealth, labour-power and the land, capital acquires a power of expansion that permits it to augment the elements of its accumulation beyond the limits apparently fixed by its own magnitude, or by the value and the mass of the means of production, already produced, in which it has its being.</span> (From Marxists.org, page 752 in Fowkes)<br /><br />Thus capital accumulation, as a temporal process, moves beyond any limit of its own objective magnitude. One paragraph in particular drives this the social and temporal ramifications home:<br /><br /><span style="font-style:italic;">“All the powers of labour project themselves as powers of capital, just as all the value-forms of the commodity do as forms of money. With the growth of capital, the difference between the capital employed and the capital consumed increased. In other words, there is an increase in the value and the material mass of the instruments of labour…</span>(756)” <br /><br />Marx concludes the paragraph with the following argument:<br /><br /><span style="font-style:italic;">“This free service of past labour, when it is seized on and filled with vitality by living labour, accumulates progressively as accumulation takes place on a larger and larger scale. </span> (757)”<br /><br />Again interesting to think about the creation of space in this process; the endless extension of infrastructure, which requires long-term capital outlays but which also compresses the production process between spaces. We are seeing a more detailed analysis of the spatio-temporal dynamics of capitalism once we shifted to the realm of social reproduction and accumulation.<br /><br />Lastly, the principle of competition is important to the argument - refer to Andy's comments below.<br /><br />On to Chapter 25……Maxhttp://www.blogger.com/profile/09192701065753965428noreply@blogger.com0tag:blogger.com,1999:blog-3397216998476879819.post-62354222512747651752008-09-25T09:24:00.007-04:002008-09-25T11:22:34.961-04:00The beds never get coldThis post will necessarily fail to do justice to the significance of so-called primitive accumulation in <span style="font-style: italic;">Capital</span>. In a way, I am afraid to even write about it, for a few reasons. First, any google search for primitive accumulation will generate pages upon pages of analysis of the concept, which, although seemingly obscure, academic and definitionally relegated to the past, may be more relevant than ever (or, the fifteenth century). A good place to start is <a href="http://www.csuchico.edu/%7Emichael/">Michael Perelman's work,</a> featured in a good issue from <a href="http://www.commoner.org.uk/index.php?p=5">the Commoner on the topic of enclosure</a> (not foreclosure, although that is certainly relevant too) (Other reads: Jason Read's <a href="http://www.ingentaconnect.com/content/routledg/rm/2002/00000014/00000002/art00002">essay</a> which has become a book and the chapter on the universal history of capital in <a href="http://books.google.com/books?id=4KCfPtku4qAC&dq=anti-oedipus">Anti-Oedipus</a>).<br /><br />Secondly, I think that although only lightly treated in <span style="font-style: italic;">Capital,</span> primitive accumulation is the bridge to more nuanced, updated analyses of capital and neoliberalism today, prominently argued by David Harvey, such as uneven geographical development and the relationship between the rural and the urban, the peasant and the proletariat, ecological concerns, etc. Once one becomes familiar with recent scholarship emphasizing the spatial distribution of capital, uneven development, development of underdevelopment, post-development studies, colonial economy and post-colonial whatever, etc., it is almost too easy to re-read all of these concepts back into Marx. But that would give too little credit to the work of trying to rethink these concepts years later, work which to this reader is far more salutary than those who read Marx literally, as though what was true in 19th century England was and is true for the rest of the world ever since.<br /><br />Finally, this is a difficult section to write about because there seems to be an imbalance between, on the one hand, all of the theoretical vibrancy and potential lying dormant in it and, on the other hand, the lack of much actual substantive material carried forward and cross-applied by latter day theorists. What I mean is, most everyone will talk about Marx's so-called primitive accumulation by circling around the concept itself and the famous first paragraphs of chapter twenty-six: <blockquote><span style="font-size:78%;">We have seen how money is changed into capital; how through capital surplus-value is made, and from surplus-value more capital. But the accumulation of capital pre-supposes surplus-value; surplus-value pre-supposes capitalistic production; capitalistic production presupposes the pre-existence of considerable masses of capital and of labour-power in the hands of producers of commodities. The whole movement, therefore, seems to turn in a vicious circle, out of which we can only get by supposing a primitive accumulation (previous accumulation of Adam Smith) preceding capitalistic accumulation; an accumulation not the result of the capitalistic mode of production, but its starting point.</span></blockquote>But what everyone ignores is the <span style="font-style: italic;">actual beef </span>of this last section: a slow, gradual reconstruction of the primitive accumulation of peasants in England, through the creation of a capitalist class, enclosing land, banishing farmers to cities, creating an industrial reserve army, the commoditization of everyday life, etc.<br /><br />Upon first reading this section, one could easily believe it a historical text more than a theoretical one. And perhaps this returns to an earlier question raised by many<span style="font-style: italic;"></span>: does Marx make logical arguments or does he make empirically historical ones? If one were a historian (let's just suppose) how does one digest this last chapter about the ongoing (but let's set that aside for a second) prehistory of capitalism and its constant transition into capital? One could be as literal as possible and <a href="http://books.google.com/books?id=1MAjAAAAMAAJ&q=transition+from+feudalism+to+capitalism&dq=transition+from+feudalism+to+capitalism&client=firefox-a&pgis=1">try to reconstruct the primitive accumulations of every part of the world</a> (or at least Europe) in sociological terms ("rent in kind? check."); or, one could say that all we need to know about primitive accumulation is the definition Marx explicitly gives on page 875: "So-called primitive accumulation, therefore, is nothing else than the historical process of divorcing the producer from the means of production. It appears as 'primitive' because it forms the pre-history of capital, and of the mode of production corresponding to capital" -- and then ignore all the details about the history of enclosure and proletarianization in England and simply tell a completely different story, preserving only the basic skeletal remains of that concise definition. More radically, one could also say, given that primitive accumulation <span style="font-style: italic;">has happened, </span>let's deal with the results of it and bypass altogether the question of how it occurred.<br /><br />As one could guess from my tone, none of these approaches seem satisfactorily nuanced to me, but on the other hand, each option represents in its extremity a viable position to take or at least bear in mind going forward. The problem is that their irreconcilability -- no, their singularity results in an expansive gap within which to form one's own approach (which one would no doubt have to justify against all others) towards thinking so-called primitive accumulation with regards to the present, or at least, with regards to different histories beyond the one given in volume one.<br /><br />Obviously, no answer to these questions in this post; just some frustration. A good frustration.<br /><br />The last point I want to make revisits something I wrote earlier about how capital is constantly revolutionizing itself, a position sprinkled throughout this and other texts from Marx. The idea alone should give one pause when trying to define what exactly is capital, since one of its characteristics is to be cutting edge, which really means completely unstable. In that sense, if one were to carry in mind a simple timeline version of the transition from precapital to capital as a bisected path of linear time:<br /><br /><br /><div style="text-align: center;">---- (prehistory ) --- || -- (capital) ------<br /></div><br />Well, that's just untenable right? <span style="font-weight: bold;">The goalposts are</span><span style="font-style: italic;"><span style="font-weight: bold;"> always moving.</span> </span>And yet, doesn't Marx seem to write this last section as though capital were a state of conditions that could be isolated in history? Doesn't he, periodically at least, write in the bankrupt sociological mode that reduces capital from a <span style="font-weight: bold;">total </span>set of relationships into a <span style="font-weight: bold;">checklist</span> of landmark developments to be tracked down and framed as commensurable factors in historical equations, like opposable thumbs or birth control? Hmm, maybe. The overall message of <span style="font-style: italic;">Capital</span> is overwhelmingly against that interpretation, but for clarity's sake Marx does list traits of capital as though they were timeless characteristics, bastardized by people who think in terms of timeless social science (e.g. the development school).<br /><br /><br />To perhaps guard against the idea of capitalism as a binaristic transition, one should pay extra attention to the last chapter on colonies, which contains one of the most explosive passages in all of volume one:<br /><span style="font-size:85%;"><blockquote>In Westrn Europe, the homeland of political economy, the process of primitive accumulation has more or less been accomplished. Here the capitalist regime has either directly subordinated to itself the whole of the nation's production, or, where economic relations are less developed, it has at least indirect control of those social layers which, <span style="font-style: italic; font-weight: bold;">although they belong to the antiquated mode of production, still continue to exist side by side with it in a state of decay.</span><span style="font-weight: bold;"> </span>To this ready-made world of capital, the political economist applies the notions of law and of property inherited from a pre-capitalist world, with all the more anxious zeal and all the greater unction, the more loudly the facts cry out in the face of his ideology.<br />It is otherwise in the colonies (931).</blockquote></span>I do not really care about the Wakefield or Hegelian views on American colonies to which Marx was primarily responding, and so much of this chapter is kind of a disappointment to someone who anticipated Marx to rip into the overseas imperial expeditions of the British (1867 wasn't yet the height of imperialism though, which probably explains the relative silence).<br /><br />However, I am interested in the fact that Marx explicitly argues for the co-existence of multiple temporalities <span style="font-style: italic; font-weight: bold;">within </span>a single socio-economic system; not the colonies and metropole but the feudal and the capitalist dimensions of the English classes. But, you know, let's extrapolate. Where earlier one could easily read Marx's accounts of Manchester industry and think "well this doesn't apply to me, I can ignore this analysis," Marx here is saying that even though you think a part of the world is outside or unconnected to or inculpable for the misery and exploitation of another part of the world; or if you think the unevenness of the global economy is incidental to development and could be corrected by the market -- Marx is saying that's wrong. These multiple temporalities, where capital means one mode of production in one area and another mode in another, are ultimately welded together. This is a continuation of earlier arguments that manufacture and pre-industrial production in Marx's time had been transformed by their dependency on the industrial home market, united by "invisible threads."<br /><br />So, to recap, earlier Marx lays the groundwork to say that capital is uneven in its temporality. Constantly in flux, constantly self-revolutionizing, what is properly capitalistic today may be outmoded tomorrow. But he also lays the groundwork for its uneven spatiality: feudal here, cutting edge there, rich here, poor there, etc. etc. And then think of the permutations of space and time. In short, we have an analysis that tries to cut up its object and expose as many differentiations and variations as possible. What sustains it in the end is an analytical framework which argues that these differences and varieties are both the result and the basis for the motor of capital: its exploitation of labor. And from the outset, all of these uneven developments have already been accounted for as merely <span style="font-style: italic; font-weight: bold;">internal differentiations </span>of a larger entity, which, if it didn't encompass the world before, is possessed by an ontological necessity to constantly accumulate and expand, to constantly push itself towards the edges of real subsumption.<br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh8_Taf0Q9ws18Wb6smT8fhHv2wTfHKXl5IqhUgeMgVEtZDGLjF5F-q6NVLPrf_2hxJQ5g08XIvDjqyzW2OuWx384Jv1HGWq4lo3YctkgMh84NssfeLIA1PBnoUasuxAH_iJDZ72fe-Rd9E/s1600-h/2365963202_46da5210b6.jpg"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh8_Taf0Q9ws18Wb6smT8fhHv2wTfHKXl5IqhUgeMgVEtZDGLjF5F-q6NVLPrf_2hxJQ5g08XIvDjqyzW2OuWx384Jv1HGWq4lo3YctkgMh84NssfeLIA1PBnoUasuxAH_iJDZ72fe-Rd9E/s400/2365963202_46da5210b6.jpg" alt="" id="BLOGGER_PHOTO_ID_5249976317895746050" border="0" /></a>andyhttp://www.blogger.com/profile/10471554437242328309noreply@blogger.com1tag:blogger.com,1999:blog-3397216998476879819.post-61584862829872062512008-09-22T03:35:00.008-04:002008-09-22T05:35:30.800-04:00The dice are loadedChapter twenty-five is over one hundred pages long, and it represents the culmination of Marx's argument about capitalist economic dynamics in volume one. If you believe Harvey and, also, the presentation of the book itself. This chapter ends on a very empirical note, about sixty pages of examples from various districts in England and in Ireland. The next section, on the topic of primitive accumulation, seeks to explain how capital grew to such extreme heights. The presentation of history of course has ramifications for the logical and abstracted descriptions of economics as a science, but Marx will no longer explore with as much depth the ways in which the various factors of capital will collude in order to produce contradictory crises and unspeakable violence. This is the chapter that pulls it together best.<br /><br />The first four sections provide the theoretical basis for the concluding empirical descriptions, and if I'm not mistaken, the third and fourth sections are not entirely distinct. Further, Harvey argues that the first two sections are not necessary to reach the conclusions of the third, but I'm not sure myself. But at any rate, here are the steps Marx takes:<br /><span style="font-size:78%;"><blockquote>Section 1. The Increased Demand for Labour Power that Accompanies Accumulation, the Composition of Capital Remaining the Same<br /><br />Section 2. Relative Diminution of the Variable Part of Capital Simultaneously with the Progress of Accumulation and of the Concentration that Accompanies it<br /><br />Section 3. Progressive Production of a Relative Surplus Population or Industrial Reserve Army<br /><br />Section 4. Different Forms of the Relative Surplus Population. The General Law of Capitalistic Accumulation</blockquote></span>In the first section, Marx argues that the accumulation process eternally preserves the class relationship between workers and capitalists because of exploitation, the conversion of surplus-value into capital, wage labor, etc. Nothing new: "...the mechanism of the accumulation process itself not only increases the amount of capital but also the mass of the 'labouring poor,' i.e. the wage-labourers, who turn their labour-power into a force for increasing the valorization of the growing capital, and who are thereby compelled to make their relation of dependence on their own product, as personified in the capitalist,<span style="font-style: italic; font-weight: bold;"> into an eternal relation</span> (765, italics added).<br /><br />Next, Marx distinguishes between the concepts of concentration and centralization, which he defines in a bit of a counter-intuitive manner. Concentration is merely the fact of extended accumulation by one company in isolation, like a spiral that spins outwards but with no regard for others. But eventually, these growing companies will collide with one another, and they can't simply keep accumulating infinitely without some companies being eaten and others eating them. Centralization is Marx's term for this. It describes a process wherein capitals are attracted to one another, where capital grows not by simply creating wealth <span style="font-style: italic;">ex nihilo</span> (that is, from workers or from credit) but rather by eating the capital of others. So which capital b/eats which capital? Generally the one able to steal all the business by selling cheaper commodities, that is, the capital with greater productivity. And hence "this depends in turn on the scale of production. Therefore the larger capitals beat the smaller" (777). As a general rule, contra the self-regulating dream of supply and demand, the free market breeds unfair competition and monopolies.<br /><br />Third, Marx pays attention to the drive for productivity , resulting in more capital invested in machines which obviate the need for labor. In other words, variable capital goes down, constant capital goes up. The contradiction of course is that, <span style="font-weight: bold;">with competition, the exchange-value of these commodities will soon be canceled out by the technical advances of other capitals, even as use-values are increased; meantime, the rate of surplus-value has decreased because the source of surplus-value, that is, exploited labor, has been decreased relative to the total mass of capital invested. </span>In other words, profit will fall as use-values rise.<br /><br />Harvey has a good exposition on whether or not this falling profit is a law, a tendency, a tendency of law, a law of tendency, etc. It's worth listening to, around the 43:30 mark and again at the 81:40 mark:<br /><br /><embed src="http://blip.tv/play/Acq3CI6MUA" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" height="270" width="320"></embed><br /><br /><br />It's also worth checking out <a href="http://homepage.newschool.edu/%7EAShaikh/crisis_theories.pdf">a summary of crisis theories</a> from <a href="http://homepage.newschool.edu/%7EAShaikh/">Anwar Shaikh</a>, an economist at the New School, one of the better to have written on this (for a better bibliography, read Harvey's <span style="font-style: italic;">Limits to Capital</span> and search for "falling rate of profit" in the index).<br /><br />Harvey takes a pretty good position on the<span style="font-style: italic;"> truthiness</span> of Marx's law: the contradiction of technology that displaces labor as the source of exploitation is always a disruptive force in capitalist development, and Marx's descriptions of this process are accurate, but they are not predetermined as an economic law insofar as, well, even though profit has fallen throughout history, people have found new ways to generate more profit, and there is still profit to be made today (by the way, I'm going to resist the temptation to write about the massive fuckup that is the current financial crisis, but the connections between the present day and Marx's thoughts on credit, finance capital and deregulation are readily evident).<br /><br />Not only does capital shoot itself in the foot by displacing labor, Harvey concludes, but it also generates a condition that is worse for the worker. When there is more supply of labor than there is demand, workers' wages decrease, and more exploitation can be squeezed out of employed workers who are expendable and superfluous to the actual production process. De-skilling and machinery are a big part of this. And of course, one of the lessons of neoliberalism has been that when the inevitable crises do occur, the capitalist classes will try generate more capital, that is, more surplus-value, by squeezing wages down even further; and they get away with it because of the pressure exerted by the industrial reserve army in the backdrop ("Sure you can quit, but I'm just going to hire that guy instead when you leave").<br /><br />Marx thus ends on the most crushing note of the capitalist process, that is, the way in which it produces and fixes a relation between superfluous working classes and the capital they have become dependent upon, even as the capital displaces them from any sort of political, economic security. In my mind, I couldn't help think of the somewhat trendy yet completely de-historicized attention paid recently to such populations, given various names by various theorists: Agamben and homo sacer; Foucault and biopolitics; Subaltern studies; the various decontextualized others of Levinas and other literary critics; etc. etc. Isn't it necessary to re-assert the history of how such populations are reproduced by particular socio-economic dynamics? Isn't it incumbent to demonstrate the underlying, broadly encompassing processes that unify these snapshots scattered across and time and place? Unfortunately, it doesn't seem to happen much.<br /><br />My final thought on this chapter and on Marx's argument as a whole is that it seems very difficult to pin down precisely a single concept the process that holds the key to its effectiveness. This is perhaps why the left has been fighting with itself for so long over what to do about capital. It's not just about exchange-value, it's not just about machines or money, it's not just about wages or time, although all of those factors are very much integral to the history of the modern world.<br /><br />What really strikes me about Marx's presentation is that capital's strongest weapon is that it grows. When it grows, it displaces people who are forced to rely upon capital to survive, and the more it grows, not only do the alternatives disappear but more pressure is exerted upon the worker and the capitalist classes to adhere ever more stringently to capital's laws. Capital becomes personified.<br /><br />In the case of wages, workers' wages will only go down once it becomes clear that alternatives for non-wage based labor have disappeared. In the case of the organic composition of capital (variable and constant capital ratios), only when industries fight one another in such a deadlock will the pressure for technological changes enabling greater productivity actually generate faster, better, bigger machines.<br /><br />If there were a name for this dynamic, it would be the dynamic of competition. But competition is an empty term, a formal one that lacks any actual commentary on who is competing with whom, what draws them together, who wins and why they win. Again, in order to explain why it works, one must start explaining the different, interacting levers of action that spur accumulation, centralization and crises.<br /><br />At some point, Marx will make arguments about capital that is not yet fully mature, stages in production that cannot yet generate systemic crises or throw laborers into a state of floating insecurity. For example, on 785:<br /><blockquote><span style="font-size:85%;">This peculiar cyclical path of modern industry, which occurs in no earlier period of human history, was also impossible when capitalist production was in its infancy. The composition of capital at that time underwent only very gradual changes . . . . Even though the advance of accumulation was slow in comparison with that of the modern epoch, it came up against a natural barrier in the shape of the exploitable working population; this barrier could only be swept away by the violent means we shall discuss later.</span> </blockquote>In a footnote inserted into the French edition on the next page:<br /><blockquote><span style="font-size:85%;">But only after mechanical industry had struck root so deeply that it exerted a preponderant influence on the whole of national production; only after foreign trade began to predominate over internal trade, thanks to mechanical industry; only after the world market had successively annexed extensive areas of the New World, Asia and Australia; and finally, only after a sufficient number of industrial nations had entered the arena -- only after all this had happened can one date the repeated self-perpetuating cycles, whose successive phases embrace years, and always culminate in a general crisis, which is the end of one cycle and the starting-point of another (786).</span></blockquote>These paragraphs suggest to me that capital's force lies in its imperative for growth, which comes not from a single source but rather from the mutual reinforcement from competition among many different sources. This is more than simply saying it cancels out other alternatives; it makes any decision to seek an alternative irrational and suicidal. Even if competition destroys itself, the stakes are too high to allow that destruction to occur, for capital is too mutually dependent to simply allow anyone to leave, cough, bailout (sorry). Competition, more than simply fixing a relationship of exploitation or drawing a line between the haves and have nots, regulates that line and manipulates it in order to maximally intensify exploitation to its logical limit. Much like the self-regulating supercomputers behind hedge fund schemes, capital is less about subjective and more about objective limits and forces. Even if it is regulated, that regulation, definitionally, only aids and abets that extremism. And it ends in scenes as ugly as this:<br /><span style="font-size:85%;"><blockquote>Capital acts on both sides at once. If its accumulation on the one hand increases the demand for labour, it increases on the other the supply of workers by 'setting them free,' while at the same time the pressure of the unemployed compels those who are employed to furnish more labour, and therefore makes the supply of labour to a certain extent independent of the supply of workers. The movement of the law of supply and demand of labour on this basis completes the despotism of capital (793).<br /><br /><span style=";font-family:";font-size:12;" lang="EN-US" ><!--[if gte vml 1]><v:shapetype id="_x0000_t75" coordsize="21600,21600" spt="75" preferrelative="t" path="m@4@5l@4@11@9@11@9@5xe" filled="f" stroked="f"> <v:stroke joinstyle="miter"> <v:formulas> <v:f eqn="if lineDrawn pixelLineWidth 0"> <v:f eqn="sum @0 1 0"> <v:f eqn="sum 0 0 @1"> <v:f eqn="prod @2 1 2"> <v:f eqn="prod @3 21600 pixelWidth"> <v:f eqn="prod @3 21600 pixelHeight"> <v:f eqn="sum @0 0 1"> <v:f eqn="prod @6 1 2"> <v:f eqn="prod @7 21600 pixelWidth"> <v:f eqn="sum @8 21600 0"> <v:f eqn="prod @7 21600 pixelHeight"> <v:f eqn="sum @10 21600 0"> </v:formulas> <v:path extrusionok="f" gradientshapeok="t" connecttype="rect"> <o:lock ext="edit" aspectratio="t"> </v:shapetype><v:shape id="_x0000_i1025" type="#_x0000_t75" style="'width:153pt;"> <v:imagedata src="file:///C:\DOCUME~1\User\LOCALS~1\Temp\msohtml1\01\clip_image001.png" title="" croptop="19488f" cropbottom="6130f" cropleft="7051f" cropright="34288f"> </v:shape><![endif]--><!--[if !vml]--><br /></span><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgLzoOViY8M-mGxMgxrhyphenhyphenP5XjqFmVP76eExekTBSTqjTh2dl4F5Lrntb5ECjTO5DjK6MHF_n9ZweOSMNH9BZJK5AqpH6VOR9jfNPW00c1scieDIXp1R4FCyowvFCvP03tV0iu1wP-2U7Kl-/s1600-h/314135925_33c2b2b803.jpg"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgLzoOViY8M-mGxMgxrhyphenhyphenP5XjqFmVP76eExekTBSTqjTh2dl4F5Lrntb5ECjTO5DjK6MHF_n9ZweOSMNH9BZJK5AqpH6VOR9jfNPW00c1scieDIXp1R4FCyowvFCvP03tV0iu1wP-2U7Kl-/s400/314135925_33c2b2b803.jpg" alt="" id="BLOGGER_PHOTO_ID_5248776889836700370" border="0" /></a><br /></blockquote></span>andyhttp://www.blogger.com/profile/10471554437242328309noreply@blogger.com0tag:blogger.com,1999:blog-3397216998476879819.post-43155838789090255012008-09-14T11:22:00.005-04:002008-09-14T13:00:52.633-04:00Runs the shibboleth<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhB-diEeezPfR6WYyAEsHXu9QDusyo-2ZSAokhJUSONhvN7TUuTc59I3rLTbrYFh1rD2kEInlbJm3tknCQQYVwqaG_pp5-sAELvnvA_qgendNq8ca3AFP4QWBhOcGtzgXDan2yPwrA-z6MQ/s1600-h/Statue_sanders.jpg"></a><span class="Apple-style-span" style="font-size:medium;">What I want to talk about by the end of this post is the (non?)-distinction between a theory of capital focused primarily upon accumulation as the agent of history versus labor. It is a distinction I have read and heard before, if not explicitly, then at least implicitly, in debates about how to understand capital. Related to this is the question, of course, of how to </span><span class="Apple-style-span" style="font-style: italic;"><span class="Apple-style-span" style="font-size:medium;">do something</span></span><span class="Apple-style-span" style="font-size:medium;"> about the system and its logic, a topic about which I don't think I'll have the guts to speak about until many more years of thinking about these problems. . . .</span><div><span class="Apple-style-span" style="font-size:medium;"><br /></span></div><div><span class="Apple-style-span" style="font-size:medium;">The following is meant to be an exposition on chapters sixteen through twenty-four, conforming </span><a href="http://davidharvey.org/2008/08/capital-class-10/"><span class="Apple-style-span" style="font-size:medium;">to Harvey's division</span></a><span class="Apple-style-span" style="font-size:medium;">, but I mainly will talk about chapters 23 and 24 because the prior ones seem to repeat arguments, and I didn't find very much continuity between them and the later ones. I think I should re-read the chapter on money and watch Harvey's lecture on it, because that seems to be the only key insight that arises from his discussion of wages.</span></div><div><span class="Apple-style-span" style="font-size:medium;"><br /></span></div><div><span class="Apple-style-span" style="font-size:medium;">So let's begin with a point that is reiterated throughout these chapters and which appeared earlier, too: <span class="Apple-style-span" style="font-weight: bold;">volume one is primarily a simple model. </span>He says he will assume that commodites are sold at value, that there is always an equilibrium between the prices of commodities and their value, that there is no overproduction or underconsumption, there are no taxes, no interest, no landholding, no banks, no tariffs or export and transportation issues. It's a closed system.</span></div><div><span class="Apple-style-span" style="font-size:medium;"><br /></span></div><div><span class="Apple-style-span" style="font-style: italic;"><span class="Apple-style-span" style="font-size:medium;"><debate mode=""></debate></span></span><span class="Apple-style-span" style="font-size:medium;"></span><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="font-size:medium;">In his defense:</span></span><span class="Apple-style-span" style="font-size:medium;"> this is not a bad thing because for understanding the larger schema of things, one must understand the basic elements and how they push things along, beneath the surface of more complicated financial formula. There will be time in volumes two and three for that. </span><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="font-size:medium;">Offense:</span></span><span class="Apple-style-span" style="font-size:medium;"> this is a good thing because Marx can prove that</span><span class="Apple-style-span" style="font-style: italic;"><span class="Apple-style-span" style="font-size:medium;"> even when</span></span><span class="Apple-style-span" style="font-size:medium;"> the system is at its simplest and runs smoothly according to the tenets of classical political economy, it results in exploitation. </span></div><div><span class="Apple-style-span" style="font-size:medium;"><br /></span></div><div><span class="Apple-style-span" style="font-size:medium;">Within this simplified model, Marx observes that value oscillates between two hands but essentially remains the same: labor and capital. If we assume capital exists, then its next stage is to buy labor-power (as exchange-value), which gives the capitalist the right to all the labor expended by workers (as use-value), which results in commodities sold on the market (as an exchange-value greater than the wages), pocketed as surplus-value, which ultimately becomes reinvested as more capital. Old story right? <span class="Apple-style-span" style="font-weight: bold;"><xv> UV -> XV></xv></span> Exchange-value is a ruse for the use-value of labor, and it is this oscillation that allows for the sleight of hand. As in chapter one, he writes: "Not a single atom of his old capital continues to exist" (715).</span></div><div><br /></div><div><span class="Apple-style-span" style="font-size:medium;">It has vanished into the undifferentiated commodity form.</span></div><div><span class="Apple-style-span" style="font-size:medium;"><br /></span></div><div><span class="Apple-style-span" style="font-size:medium;">Marx also returns, seemingly for the first time since chapter one, to the obvious question of -- so where did all that capital originally come from? </span></div><div><blockquote><span class="Apple-style-span" style="font-size:medium;">From our present standpoint it therefore seems likely that the capitalist, once upon a time, became possessed of money by some form of primitive accumulation [urspr</span><span class="Apple-style-span" style=" line-height: 33px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px; "><span class="Apple-style-span" style="font-size:medium;">ü</span></span><span class="Apple-style-span" style="font-size:medium;">ngliche akkumulation] (714).</span></blockquote></div><div><span class="Apple-style-span" style="font-size:medium;">More on this later, of course. Instead of harping on primitive accumulation, though, Marx more logically says that since at the end of the cycle, surplus-value is converted into capital, we should think of the originary capital invested in labor-power as simply past labor. </span><span class="Apple-style-span" style="font-style: italic;"><span class="Apple-style-span" style="font-size:medium;">Dead labor. </span></span><span class="Apple-style-span" style="font-size:medium;">Labor extracted from the capitalist is then used to pay the laborer again and again and again. It is a never-ending cycle.</span></div><div><span class="Apple-style-span" style="font-size:medium;"><br /></span></div><div><span class="Apple-style-span" style="font-size:medium;">Marx then spends time developing two big ideas. First, he argues that even in a static system, such a process of using labor to feed labor cements the division between the working and capitalist classes. If the process iterates repeatedly, the worker winds up with no surplus, and the capitalist piles up the surplus. Thus the formation of classes. Even when the worker gets a wage and spends it on food for its family,</span><span class="Apple-style-span" style="font-style: italic;"><span class="Apple-style-span" style="font-size:medium;"> it is still doing it to support the capitalists who profit from their consumption <span class="Apple-style-span" style="font-style: normal;">(in two ways: the food gives the worker energy to work, and the profits from food probably go to the capitalist):</span></span></span></div><div><span class="Apple-style-span" style="font-style: italic;"><span class="Apple-style-span" style=" font-style: normal; line-height: 24px; "><blockquote><span class="Apple-style-span" style="font-size:small;">By converting part of his capital into labour-power, the capitalist augments the value of his entire capital. He kills two birds with one stone. He profits, not only by what he receives from, but by what he gives to, the labourer. . . . The consumption of food by a beast of burden does not become any less a necessary aspect of the production process because the beast enjoys what it eats.(717-718).</span></blockquote><span class="Apple-style-span" style="font-size:medium;">Next, Marx spends chapter 24 asking why the capitalist doesn't just use the surplus-value to consume things and live a nice life. Why does surplus-value necessarily become more capital? His answer is that capital is a spiral and that in order to survive it must grow, and if you aren't growing then you are dying. In the mind of the capitalist, it becomes stated as an imperative to</span></span></span></div><div><span class="Apple-style-span" style="font-style: italic;"><span class="Apple-style-span" style=" font-style: normal; line-height: 24px; "><blockquote><span class="Apple-style-span" style="font-size:small;">Accumulate, accumulate! That is Moses and the prophets! 'Industry furnishes the material which saving accumulates.' Therefore, save, save,</span><em style="word-spacing: 0.2em; "><span class="Apple-style-span" style="font-size:small;">i.e</span></em><span class="Apple-style-span" style="font-size:small;">, reconvert the greatest possible portion of surplus-value, or surplus-product into capital! Accumulation for accumulation’s sake, production for production’s sake: by this formula classical economy expressed the historical mission of the bourgeoisie in the period of its domination (742).</span></blockquote></span><span class="Apple-style-span" style="font-style: normal;"><span class="Apple-style-span" style="font-size:medium;">Accumulate to accumulate, produce to produce, labor to labor, value to value. On the one hand, it is a self-referential and nihilistic position (insert the need for religion and some sort of spiritual reassurance that something external and greater has a plan for all of us), and on the other hand, in its self-referentiality, it is limitless in its prospects. Ask capital when it plans to stop using resources and widening the rich-poor gap, and it wouldn't even understand those terms.</span></span></span></div><div><span class="Apple-style-span" style="font-size:medium;"><br /></span></div><div><span class="Apple-style-span" style="font-size:medium;">The other passage that I think is worth quoting is on the page before:</span></div><blockquote><div><span class="Apple-style-span" style="font-size:small;">[I]n so far as he is capital personified, [the capitalist's] motivating force is not the acquisition and enjoyment of use-values, but the acquisition and augmentation of exchange-values. He is fanatically intent on the valorization of value; consequently he ruthlessly forces the human race to produce for production's sake . . . Only as a personification of capital is the capitalist respectable (739).</span></div><div></div></blockquote><div>Now to try to bring this together. <br /></div><div><span class="Apple-style-span" style="font-size:medium;"><br /></span></div><div><span class="Apple-style-span" style="font-size:medium;">It seems to me that the last two quotes -- 'accumulation for accumulation' and 'capital personified' -- while not at all facetious reveal Marx's writing mode as a model. In extreme cases we have absolute bastards like the ones he writes about, but really what you probably find in real life are people whose intentions aren't completely evil but, when it comes down to it, share the tenets of capital personified. If one were to reduce someone's role and position in an economy to their most fundamental logics and actions, then you wind up with capital personified.</span></div><div><span class="Apple-style-span" style="font-size:medium;"><br /></span></div><div><span class="Apple-style-span" style="font-size:medium;">So this is how one can come to the conclusion that the agent of capital is capital itself. As </span><a href="http://www.journals.uchicago.edu/doi/full/10.1086/ahr.113.2.393"><span class="Apple-style-span" style="font-size:medium;">William Sewell has claimed a few times,</span></a><span class="Apple-style-span" style="font-size:medium;"> taking a cue from Moishe Postone, the social horizon of the modern era has been the accumulation of capital. Here is a line from his article that has stuck with me for months:</span></div><div><span class="Apple-style-span" style=" line-height: 18px; "><blockquote><span class="Apple-style-span" style="font-size:small;">I would tend to emphasize the endless accumulation of capital as forming the crucial underlying dynamic of capitalism, with class and class struggle figuring more as a context and outcome of the dynamic of accumulation. In capital-centered Marxist theories, the endless accumulation of capital produces changing historical configurations of political power, spatial relations, class struggles, intellectual forms, technology, and systems of economic regulation that endure for a certain time until they are dismantled by their own contradictions and replaced by new configurations.</span></blockquote></span><span class="Apple-style-span" style="font-size:medium;">The opposition in this quote lies between Sewell's emphasis on capital accumulation versus Geoff Eley's emphasis on class. The opposition</span><span class="Apple-style-span" style="font-style: italic;"><span class="Apple-style-span" style="font-size:medium;"> seems to be</span></span><span class="Apple-style-span" style="font-size:medium;"> between a theory that sees history moving forward by the actions of the capitalist class (who accumulate) versus a theory that sees history moving forward by the actions of the working class (who get exploited). Eley's position is similar to the position taken by the editors of the </span><span class="Apple-style-span" style="font-style: italic; "><span class="Apple-style-span" style="font-size:medium;">Re/thinking Marxism </span></span><span class="Apple-style-span" style="font-size:medium;">journal, </span><a href="http://books.google.com/books?id=R-EYP5uW5eEC"><span class="Apple-style-span" style="font-size:medium;">Resnick and Wolff.</span></a><span class="Apple-style-span" style="font-size:medium;"> An oversimplified version of Eley's and R/W's theses would be that in all social phenomena, since capitalist exploitation is involved, class is involved. Class overdetermines everything, and even though there are variations in class dynamics, it is always present and hence almost transhistorical (within the historical limits of capital).</span></div><div><span class="Apple-style-span" style="font-size:medium;"><br /></span></div><div><span class="Apple-style-span" style="font-size:medium;">After reading these last few chapters, I think that I am willing to agree with Sewell but with the need for a fuller explanation. Something paradoxical emerges from these chapters. On the one hand, the only governing principle of accumulation is completely lifeless and abstract. No single person is giving the orders to accumulate, businesses full of greedy people run themselves into the ground trying to accumulate more than their peers, and well-intentioned people also do bad things to other people because they see it as the only way for them to survive. Would they do this if they had the total freedom to choose how to live their lives? Hard to say but probably not as unanimous as it appears today. No one is really running the show. </span></div><div><span class="Apple-style-span" style="font-size:medium;"><br /></span></div><div><span class="Apple-style-span" style="font-size:medium;">On the other hand, where could capital come from if it does not come from the workers? Capital is simply a disguised form of dead labor, which emerges from living labor itself. You cannot have capital without the workers, but then of course you could not have a working class without an exploitative one. So it is a system that depends upon the life and blood of those who form the basis of value. These processes of class, labor and accumulation seem incredibly, inextricably intertwined. How could one choose?</span></div><div><span class="Apple-style-span" style="font-size:medium;"><br /></span></div><div><span class="Apple-style-span" style="font-size:medium;">And then add to the formula the fact that Marx is writing in full modular mode. What he writes is very powerful and resonates strongly with everything we experience by simply living in this world economy, but it is definitely a simplified version, and if that's the case is he underestimating the role of any alternative logics outside that authorized by capital? In his above exposition of how the worker is reproduced as a figure within capital, Marx seems to suggest that even when we think we are not at work -- resting, eating, complaining about our jobs -- we are simply refueling for more work, a socially necessary element for capital's functioning. Which would suggest we are always at capital's mercy.</span></div><div><span class="Apple-style-span" style="font-size:medium;"><br /></span></div><div><span class="Apple-style-span" style="font-size:medium;">As Harvey says in his podcast, the modular mode for Marx is necessary because capital is a shape-shifting force that cannot be represented in a single, fully complex moment but must be stripped down to a governing logic that grafts itself on top of historically specific situations. Other logics do exist and co-exist with capital, but it's just that capital seems to appropriate and make use of those logics in different ways in each instance and somehow in the end remains, at its heart, intact. </span></div><div><span class="Apple-style-span" style="font-size:medium;"><br /></span></div><div><span class="Apple-style-span" style="font-size:medium;">So is capital accumulation the only logic? Probably not. And could capital exist without labor and without reproducing classes? Nope. But those classes are much more a result of capital than they are a pre-existing historical agent. Capital gives, and capital can take away. I think that's Sewell's point, and it's a more dynamic formulation than the crappy cultural studies model of looking for reified class distinctions (along with gender and race and sexuality and caste and religion and whatever) outside of history. </span></div><div><br /></div><div><br /></div><div><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhB-diEeezPfR6WYyAEsHXu9QDusyo-2ZSAokhJUSONhvN7TUuTc59I3rLTbrYFh1rD2kEInlbJm3tknCQQYVwqaG_pp5-sAELvnvA_qgendNq8ca3AFP4QWBhOcGtzgXDan2yPwrA-z6MQ/s1600-h/Statue_sanders.jpg"><img src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhB-diEeezPfR6WYyAEsHXu9QDusyo-2ZSAokhJUSONhvN7TUuTc59I3rLTbrYFh1rD2kEInlbJm3tknCQQYVwqaG_pp5-sAELvnvA_qgendNq8ca3AFP4QWBhOcGtzgXDan2yPwrA-z6MQ/s400/Statue_sanders.jpg" border="0" alt="" id="BLOGGER_PHOTO_ID_5245917881993902034" style="display: block; margin-top: 0px; margin-right: auto; margin-bottom: 10px; margin-left: auto; text-align: center; cursor: pointer; " /></a></div><div><span class="Apple-style-span" style="font-size:medium;"><br /></span></div><div><br /></div>andyhttp://www.blogger.com/profile/10471554437242328309noreply@blogger.com0tag:blogger.com,1999:blog-3397216998476879819.post-66081028964439870632008-09-05T03:13:00.005-04:002008-09-05T08:15:08.228-04:00About today -This is a gigantic chapter, the subject of two videos by David Harvey, and so my own coverage will necessarily be too light. I have a few bullet points in my notebook that I will try to develop and transcribe here, but I'm not really sure how this post will go. Excuse the frenetic appearances.<br /><br />I thought a good starting point that would pick up on the theme of the last post would be a quote that bleeds between pages 568 and 569 on the contradictions of the social organization of capital rendered by new technology:<br /><span style="font-size:85%;"><br /><blockquote>Since therefore machinery, considered alone, shortens the hours of labour, but, when in the service of capital, lengthens them; since in itself it lightens labour, but when employed by capital, heightens the intensity of labour; since in itself it is a victory of man over the forces of Nature, but in the hands of capital, makes man the slave of those forces; since in itself it increases the wealth of the producers, but in the hands of capital, makes them paupers-for all these reasons and others besides, says the bourgeois economist without more ado, it is clear as noon-day that all these contradictions are a mere semblance of the reality, and that, as a matter of fact, they have neither an actual nor a theoretical existence.<br /></blockquote><br /></span>This short list encompasses Marx's own argument that as new technologies seemingly benefit everyone by making the production of greater use-values more efficient, more abundant and less strenuous on all, it is counter-balanced by the dynamics of exchange-value, that is, competition, which drives down prices and forces capitalists to continue investing more into their fixed and variable capital, that is, to continue exploiting labor in order to create a profit. The crux is that any profit one gains is always a comparative profit - no matter how nice and shiny your machines, if everyone else has the same machine, then you will not make a profit.<br /><br />The result of this dual movement is that more use-values are created but exploitation continues because of the gap between use and exchange-value, which regulates wages as well as a host of other capitalist practices for managing investment. More broadly, one could say that on the one hand, capitalism is a liberating force that really opens up all sorts of possibilities that, for the sake of argument, a slave or feudal society would not allow. Never did a pauper become a king, never did a king text message with a 3G iPhone, never did a slave-owner in Mississippi eat Kobe Beef flown in from halfway around the world. Hierarchically, spatially, temporally, the limits of economic activity become transformed and the distance between extremes proportionally shrinks as capital loosens existing segmentations. On the other hand, capital that depends upon technology also deepens one's servitude in a single function in a larger net of specialized labor. A former shoemaker now only makes soles or the heel or the laces, a former textile weaver now only makes fabric or turns the fabric into a particular cut, or assembles cuts into modular-sized clothing. One is basically <span style="font-style: italic; font-weight: bold;">de-skilled </span>in order to maximize co-operation, the theme of the last chapter.<br /><br />One basic connection between these two movements is that the relative leveling of skill converts all jobs into relative commensurability. The minimum wage evaluates a job at McDonald's the same as a job at a supermarket. A security guard in a school is the same as a security guard at a courthouse. A job assembling parts in one factory is the same as assembling parts in another factory which produces completely different finished products. Ah, see how the commodity form is interwoven into this logic of work? So on the one hand, specialization occurs, but on the other hand, the commensuration of specialized jobs logically extends infinitely to any other numbers of jobs.<br /><br />In a somewhat bizarre and jarring passage, Marx speaks of this process, albeit only briefly, as a positive development. Or, properly dialectically, negative and positive (so bad it's good). Here is a condensed version from page 618, with some reading markers:<br /><blockquote><span style="font-size:85%;"><br />But if Modern Industry, by its very nature, therefore necessitates variation of labour, fluency of function, universal mobility of the labourer, on the other hand, in its capitalistic form, it reproduces the old division of labour with its ossified particularisations. <a name="a226"></a>We have seen how <span style="font-weight: bold; font-style: italic;">this absolute contradiction </span>between the technical necessities of Modern Industry, and the social character inherent in its capitalistic form, dispels all fixity and security in the situation of the labourer; how it constantly threatens, by taking away the instruments of labour, to snatch from his hands his means of subsistence, and, by suppressing his detail-function, to make him superfluous, We have seen, too, how this antagonism vents its rage in the creation of that monstrosity, an industrial reserve army, kept in misery in order to <a name="a227"></a>be always at the disposal of capital; in the incessant human sacrifices from among the working-class, in the most reckless squandering of labour-power and in the devastation caused by a social anarchy which turns every economic progress into a social calamity. <span style="font-weight: bold; font-style: italic;">This is the negative side. </span>But if, on the one hand, variation of work at present imposes itself after the manner of an overpowering natural law, and with the blindly destructive action of a natural law that meets with resistance at all points, Modern Industry<span style="font-style: italic; font-weight: bold;">, on the other hand,</span> through its catastrophes imposes the necessity of recognising, as a fundamental law of production, variation of work, consequently fitness of the labourer for varied work, consequently the greatest possible development of his varied aptitudes. It becomes a question of life and death for society to adapt the mode of production to the normal functioning of this law. Modern Industry, indeed, compels society, under penalty of death, <span style="font-style: italic; font-weight: bold;">to replace</span> the detail-worker of to-day, grappled by life-long repetition of one and the same trivial operation, and thus reduced to the mere fragment of a man, <span style="font-style: italic; font-weight: bold;">by the fully developed individual, </span>fit for a variety of labours, ready to face any change of production, and to whom the different social functions he performs, are but so many modes of giving free scope to his own natural and acquired powers.</span><!--458--></blockquote>What I find puzzling about this quote is just <span class="Apple-style-span" style="font-style: italic;"><span class="Apple-style-span" style="font-weight: bold;">how</span></span> such a fully developed individual is to be brought about. I understand the capital leads to specialization and that specialization forces workers to do various jobs throughout their lives in order to live. But what stake does capital have in actually creating individuals who can do multiple jobs, vitiating the need for specialized workers? It seems like while there will be exceptional workers who learn multiple skills, the majority of the population must necessarily stay wed to their specialized job in order for production to occur. I suppose this is the problem of actually existing socialism.<br /><br />In fact, this section contains many passages which can be traced to Marx's <span style="font-style: italic;">Communist Manifesto</span> days and to the politics and rantings and ravings of latter day socialists. Marx also argues that the abolition or concealment of former boundaries - gender, age, family - marks class as both a predominant and universal dimension of social existence, something in itself revolutionary (a double sense of revolution, I think, or at least a 1.5 sense. Not revolution in the CC/C/P way, but that's not unrelated to the sense in which capital revolutionizes economic organization):<br /><blockquote><span style="font-size:85%;"> However terrible and disgusting the dissolution, under the capitalist system, of the old family ties may appear, nevertheless, modern industry, by assigning as it does an important part in the process of production, outside the domestic sphere, to women, to young persons, and to children of both sexes, creates a new economic foundation for a higher form of the family and of the relations between the sexes. (621)</span></blockquote>What is the "higher form" here? It's very ambiguous. Ultimately, I think one can say that any positives Marx found in this economic order would only come about with its own dissolution, not simply because Marx disliked capital but also as a scientific observation of the historical tendencies of successive technologies. Contrast this with the article linked in my last post, where Mr. Prasad believes that the forces of neoliberal capital in India will help the depressed castes, not by tearing down capitalism but by allowing the castes to thrive within it. It is a similar argument to Marx's: class and economics will overcome other categories (gender, family, caste), but Prasad seems to believe there is something stable or neutralizing about this process. That is, unlike Marx, he does not see the future upheaval of this liberating economic order, an upheaval necessitated by the inner dynamics of its own growth.<br /><br />To backtrack a bit, I also wanted to point out that this contradictory tendency of both liberating and segmenting one's economic position is also a good response to those who argue that capital is what allows for X, Y, Z success story to occur. Much like Mr. Prasad's examples, such success stories are undeniable and are a strong incentive for any of us to work hard at our jobs. I think it is a bit of an intellectual blackmail to say it's either incentives/success or no-incentives/stagnancy. I think the first counter-argument should be the one in the NYT article itself, that as a general tendency those success stories are exceptions. And second, well, I'm not sure, we'll need to figure out some better socialist model before figuring out how to re-frame the question.<br /><br />Next point. As Harvey points out for much of the first video on this chapter, <a href="http://www.marxists.org/archive/marx/works/1867-c1/ch15.htm#a4">the footnote on page 493</a> provides a glimpse into a properly holistic perspective on the economy, one that takes into account the multiple categories of social life intimately connected to properly economic activity. Harvey jumps up and down over this footnote, so you should just watch the video. Even before re-reading the footnote I noticed that this chapter represents what many today would call the "cultural studies" or even "social history" side of Marx. He delves into discussions of how the economy effects changes in the family like alcoholism, de-skilling, the end of education, the liberation of women and children, the shift from an individual to family wage, etc. I think the categories laid out in the footnote, although very useful, are a bit fetishized by Harvey, who repeats them throughout his discussion, classifying everything into the categories of technology, mental conceptions (WTF does this mean?), etc.<br /><br />But the question of technology laid out in the footnote are helpful in answering a question that ran through my head while reading the chapter: what is the relationship between technology, capital and history? In a simple phrasing, "is technology always bad and inevitable?" Or is it the people who use the technology? On the one hand yes, on the other hand, no. As Marx writes in the footnote, "Technology discloses man’s mode of dealing with Nature." That is, it is not technology itself but how humans have positioned themselves in relationship to nature that is paramount. Unsure what nature means, but I'm assuming one's relationship with other humans, with animals, with raw materials and resources, perhaps what one could today call ecological concerns.<br /><br />But I say yes and no because in different sections of this chapter, Marx seems to go in either direction. He seems to disagree with the Luddite response of destroying every machine in sight and instead endorses the realization that one must "distinguish between machinery and its employment by capital, and therefore to transfer their attacks from the material instruments of production to the form of society which utilizes those machines" (555). This is a pretty good quote that Harvey spends some time on. However, it seems, at least superficially, to be contradicted by a later quote: "The principle, carried out in the factory system, of analysing the process of production into its constituent phases, and of solving the problems thus proposed by the application of mechanics, of chemistry, and of the whole range of the natural sciences, <span style="font-weight: bold;">becomes the determining principle everywhere</span>" (591).<br /><br />While I know this second line is only a phrase that does not overturn the entirety of Marx's social theory, I am not so sure he is not a technological determinist. One could obviously make the statement that Marx always foregrounds the social organization of capital and production and that technology is almost incidental to the way labor is organized. Of course it makes no sense to say machines enslaved humans; rather, it was the class of capitalists who used machines to enslave them. And so when Marx says machines become a determining principle, he does not mean that machines themselves determine the factory but rather that labor itself was qualitatively changed by new practices and that machines became the centerpiece of those new practices. <div><br /></div><div>A lot is at stake in this question, because if one were to argue fully that machines are incidental to capital, then one could dismiss all those naysayers who say "Marx was right about the industrial age but he is wrong about the information age." But then, Marx is still quite specific about industrial machines in accomplishing something historically unique in the reification of human labor:<br /><br /><span style="font-size:85%;"><blockquote>But it is only in the factory system that this inversion for the first time acquires technical and palpable reality. By means of its conversion into an automaton, the instrument of labour confronts the labourer, during the labour-process, in the shape of capital, of dead labour, that dominates, and pumps dry, living labour-power. The separation of the intellectual powers of production from the manual labour, and the conversion of those powers into the might of capital over labour, is, as we have already shown. finally completed by modern industry erected on the foundation of machinery (548).</blockquote></span><br />There is something unique about the machines of the industrial age that separate them from the tools of manufacture. What distinguishes them is not a specific technical difference, for Marx barely names any specific machine, but rather the social relation instantiated by them: from a subjective relationship to one of objectification. <span style="font-style: italic;">But a specific level of technology and machinery was still required for the total inversion to occur</span>. So Marx is ambiguous here. It is a social question. But not social alone. But not technological alone. Perhaps one could argue that Marx, as a good historian, simply was foregrounding those recent inventions as being important to that specific historical stage and not making such a large metaphysical statement about technology and capital in general. But I still think that -- although I am more than inclined to buy the "social" version of Marx -- there is a lingering "technological" question that remains.<br /><br />The last point I want to make is quite broad. This is a large chapter that is easy to get lost in, and I certainly benefited from patchy re-readings and listening to the Harvey lectures. It helps to begin with and continually return to looking at the section headings:<br /><blockquote style="font-weight: bold;"><span style="font-size:78%;"><br /></span><table border="0" cellpadding="3%" cellspacing="3%" width="96%"><tbody><tr class="alt"><td class="index" width="90%"><span style="font-size:78%;">Chapter XV Machinery and Modern Industry</span></td><td class="size" width="10%"><span style="font-size:78%;">374</span></td></tr> <tr><td class="index" width="90%"><p class="indexb"><span style="font-size:78%;">Section 1. The Development of Machinery</span></p></td><td class="size" width="10%"><span style="font-size:78%;">374</span></td></tr> <tr><td class="index" width="90%"><p class="indexb"><span style="font-size:78%;">Section 2. The Value Transferred by Machinery to the Product</span></p></td><td class="size" width="10%"><span style="font-size:78%;">389</span></td></tr> <tr><td class="index" width="90%"><p class="indexb"><span style="font-size:78%;">Section 3. The Proximate Effects of Machinery on the Workman</span></p></td><td class="size" width="10%"><span style="font-size:78%;">397</span></td></tr> <tr><td class="index" width="90%"><p class="indexd"><span style="font-size:78%;">a. Appropriation of Supplementary Labour Power by Capital. The Employment of Women and Children</span></p></td><td class="size" width="10%"><span style="font-size:78%;">398</span></td></tr> <tr><td class="index" width="90%"><p class="indexd"><span style="font-size:78%;">b. Prolongation of the Working Day</span></p></td><td class="size" width="10%"><span style="font-size:78%;">406</span></td></tr> <tr><td class="index" width="90%"><p class="indexd"><span style="font-size:78%;">c. Intensification of Labour</span></p></td><td class="size" width="10%"><span style="font-size:78%;">412</span></td></tr> <tr><td class="index" width="90%"><p class="indexb"><span style="font-size:78%;">Section 4. The Factory</span></p></td><td class="size" width="10%"><span style="font-size:78%;">420</span></td></tr> <tr><td class="index" width="90%"><p class="indexb"><span style="font-size:78%;">Section 5. The Strife Between Workman and Machine</span></p></td><td class="size" width="10%"><span style="font-size:78%;">430</span></td></tr> <tr><td class="index" width="90%"><p class="indexb"><span style="font-size:78%;">Section 6. The Theory of Compensation as Regards the Workpeople Displaced by Machinery</span></p></td><td class="size" width="10%"><span style="font-size:78%;">440</span></td></tr> <tr><td class="index" width="90%"><p class="indexb"><span style="font-size:78%;">Section 7. Repulsion and Attraction Of Workpeople by the Factory System. Crises in the Cotton Trade</span></p></td><td class="size" width="10%"><span style="font-size:78%;">450</span></td></tr> <tr><td class="index" width="90%"><p class="indexb"><span style="font-size:78%;">Section 8. Revolution Effected in Manufacture, Handicrafts, and Domestic Industry by Modern Industry</span></p></td><td class="size" width="10%"><span style="font-size:78%;">462</span></td></tr> <tr><td class="index" width="90%"><p class="indexd"><span style="font-size:78%;">a. Overthrow of Co-operation Based on Handicraft and on the Division of Labour</span></p></td><td class="size" width="10%"><span style="font-size:78%;">462</span></td></tr> <tr><td class="index" width="90%"><p class="indexd"><span style="font-size:78%;">b. Reaction of the Factory System on Manufacture and Domestic Industries</span></p></td><td class="size" width="10%"><span style="font-size:78%;">464</span></td></tr> <tr><td class="index" width="90%"><p class="indexd"><span style="font-size:78%;">c. Modern Manufacture</span></p></td><td class="size" width="10%"><span style="font-size:78%;">466</span></td></tr> <tr><td class="index" width="90%"><p class="indexd"><span style="font-size:78%;">d. Modern Domestic Industry</span></p></td><td class="size" width="10%"><span style="font-size:78%;">468</span></td></tr> <tr><td class="index" width="90%"><p class="indexd"><span style="font-size:78%;">e. Passage of Modern Manufacture, and Domestic Industry into Modern Mechanical Industry. The Hastening of This Revolution by the Application Of the Factory Acts to Those Industries</span></p></td><td class="size" width="10%"><span style="font-size:78%;">473</span></td></tr> <tr><td class="index" width="90%"><p class="indexb"><span style="font-size:78%;">Section 9. The Factory Acts Sanitary and Educational Clauses of the Same Their General Extension in England</span></p></td><td class="size" width="10%"><span style="font-size:78%;">483</span></td></tr> <tr><td class="index" width="90%"><p class="indexb"><span style="font-size:78%;">Section l0. Modern Industry and Agriculture</span></p></td><td class="size" width="10%"><span style="font-size:78%;">505</span></td></tr></tbody></table></blockquote>Marx begins with some general remarks on the historical relationship of pre-capitalist and capitalist forms, which are coeval with pre-machine and machinery economies (the main distinction being that social thing I just talked about), then he takes the reader through a superficially linear development that is constantly interrupted with contradictions and opposite movements. Finally, he ends with the domestic industry and agriculture, something I'm interested in for research purposes. These sections really deal with this question: what happens to all those economic sectors that are not industrialized and not mechanized? Do they remain the same as before, pristine and untouched? Obviously not. So how are they utilized by the new pace of the machine economy?<br /><br />For one, the workers are still expected to generate the quantity of raw materials adequate to the pace of machines. This might mean simply buying things from more and more farms for only one factory, but that's all right because there is no need to provide land or machines for those domestic industries, which are funded by the manufacturers themselves. The consequence is that they are de-centralized and hence weakened in any class struggle. Karl Kautsky also argued that the persistence of small household farms could be explained by the fact that, not fully given over to commodity production, such households could be exploited yet still survive by growing their own food and relying upon the unpaid labor of family members. That is, they could be underpaid because they could rely upon the pre-capitalist elements of their domestic arrangements. How does one classify this? Semi-capitalist? Petty capitalist?<br /><br />Marx then ends by arguing that not only does this destroy some harmonious social metabolism between people but it also saps dry the fertility of the soil. In a way this could be seen as a pre-environmentalist Marx. In another way, a romanticist and humanist Marx. But perhaps he is just of the opinion that, like all forms of fixed capital, land will be worn out if mistreated by those who use it to produce things. And that this expense is not factored into the cost of production of raw materials, for which the farmer is paid like a wage laborer but which also requires an investment that is only expected of someone with as much money as a member of the capitalist class. That is, they are given the responsibility of miniature capitalists but only given the means of a laborer.<br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhJSHKZMQRS4qcXkf_nHiMXyKQR8LihZbxh1UuUcaprVejSINw5KSCN5nyrBm9l0vyvw-HElqrbEFSx0p_euxZS4Noll44PMAATPE7xY3IPVoSajCT_bqEypznxzfSOE81qma1Ta3NyvDkh/s1600-h/coconut+fruit+sushi.jpg"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhJSHKZMQRS4qcXkf_nHiMXyKQR8LihZbxh1UuUcaprVejSINw5KSCN5nyrBm9l0vyvw-HElqrbEFSx0p_euxZS4Noll44PMAATPE7xY3IPVoSajCT_bqEypznxzfSOE81qma1Ta3NyvDkh/s400/coconut+fruit+sushi.jpg" alt="" id="BLOGGER_PHOTO_ID_5242453425616052674" border="0" /></a></div>andyhttp://www.blogger.com/profile/10471554437242328309noreply@blogger.com0