Lying unsold on the shelves

Marx 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."

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.

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 does not affect the case" (156). Once a commodity is expelled into circulation, the industrial/individual capitalist just does not care.

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 is quite a different matter 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).

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.

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).

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.

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, OR wait until later to be converted. This is the hoarding function.

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.:

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).

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.

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).

Other notes:

Page 144: A contrast between industrial/capitalist and agricultural production:

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.

Page 151: 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.

Page 153: 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?

A 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.

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.

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.

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):

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.

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."

But that is an unacceptable position too. Because the argument that Marx is too Eurocentric ignores the usefulness of Capitalfor 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.

Back, bitches.

Near the end of Chapter one, Marx demonstrates the simple idea that in the chain of

M-C (P) -C`- M`. M-C (P) -C`- M`. M-C (P) ...etc.

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.

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?

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.

What about the standpoint of total social capital? "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:

"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).

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."

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.

*

Other comments:

Pages 116 - 118: 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.

Page 120: Marx makes an argument that prioritizes exchange and markets over production itself. Or rather, he makes the midas touch argument: once you touch capitalism, you become capitalism. 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."

At the same time, Marx makes room for the possibility of uneven and combined development -- noncapitalist and precapitalist PRODUCTION for capitalist MARKETS: "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."

What is the difference between commodity production and capitalist commodity production in this sentence?

"Capitalist production first makes the production of commodities general and then, by degrees, transforms all commodity production into capitalist commodity production."

128-9: Marx on how the money form obliterates difference.

130: Money has two functions. One, to circulate; two, to "breed" more money. But this second function is actually a function of commodities, not money.

132: The antinomy between real and formal arises once again.

"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."

134: "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.

136: Marx seems to give a definition of industry as:

"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."

and

"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."

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 Volume III.