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Capital, 1867

Parts

• Volume one, 1867: Production
  • only one to be completely prepared for Marx for publication
• Volume two: Circulation
• Volume three: Capitalism as a Whole
  • Incl banking, credit (which is like a parallel circulation next to circulation of paper money, with its own way of neutralizing bills of exchange against each other w/o having to get to real paper money at the due date), rent
  • Difficult to know what part is fictitious (will never get to paper money b/c there is no paper money to back it up)
• Volume four: Theories of Surplus Value
  • it is only commonly referred to as vol 4 by Marxist historians; not actually labeled vol 4

Bio Miscellany

• His father worried about his profligate spending, but says that Marx is so special, inventing new systems every single week, that he shouldn’t be asked to bother about such petty details
• His sister writing him to assure him that the Marx family is treating his love Jenny well
  • Notes that for 7 years he and Jenny had to wait for their families to be reconciled
• Him having written and destroyed poems, novellas, sketches
• Moses Hess says he’s the only living philosopher, a “unity” of Rousseau, Voltaire, Holbach, Lessing, Heine, and Hegel
• Letter to Arnold Ruge, 1842: reacts with disgust to an article where writer doesn’t merely “declare one’s emancipation, which is to act according to one’s conscience” but actually “yell oneself out in propaganda beforehand” which is “empty boastfulness” 24
• Intense, voracious reader, but constantly breaks things off, goes in new directions
  • Again, I remind you that Marx’s method and papers are against any idea of him making a Scientific Method that’s Perfect b/c he’s constantly revising and reconsidering and burning and starting anew. (see Marx Reader 26 Ruge’s letter to Feuerbach)
• Works so hard he’ll skip sleeping for three or four days
• A little vain, sometimes some “petty hate,” sly
• Energetic, conviction, confidence
• Apparently carried illegal arms in Cologne; one night in jail for drunken disorderly conduct
• Hairy hands, angular movements
• Witty, biting humor
• Manners defying convention
• Constant judgment! and harsh (many people complain that he’s not got enough heart)
  • Meanest said he was ambitious and just wanted power
• Thickset; sparkling eyes
• Provoking bearing; won’t accept criticism or respond to others’ comments
• Neue Rheinisch Zeitung took up his entire income and he borrowed money for it…and then he gets pushed out, losing all his money
  • Jenny has to pawn their silver, sell their furniture
• Prussian agent working from London says Marx is… 41
  • his intellect is “irresistible force”
  • cynical, poor manager of private life
  • Bohemian life, likes drinking
  • Irregular sleeping hours
  • Wild and restless, except towards family, to whom he is infinitely gentle
  • 2 rooms, all furniture tattered, dirty
    • same table for manuscripts, mending, toys, dishes, ashes
    • cavelike, dark and fumy
  • Cordial hospitality
• Eleanor Marx on Marx
  • He’s fun, happy, friendly
  • She and her siblings could’ve had no better playmate
  • They called him “the Moor” or “Old Nick”
    • They called Engels “General”
  • Said 18th Brumaire some was written “while he was acting as draughthorse” for his kids
  • Good story-teller (her favorite was a “long long story and never came to an end” 49 about a magician who owned a toyshop, but impecunious and had to sell some of his stock to Devil but eventually they come back to his shop)
    • Also read aloud Homer, Shakespeare, Arabian Nights, Don Quixote
    • He’d read what Eleanor was reading (as a child) to talk it over with her
    • Marx also knew Walter Scott, Balzac, and Fielding well
    • Marx on Christ: “the story of the carpenter’s son who was put to death by rich men” 51
  • Children would “swarm” over him at parks or Hampstead Heath
  • Painful boils at the end
  • Favorite maxim: “Nothing human is alien to me.” 53
• Marx on Inns: glad he’s housed in a real home in Margate “not in an Inn or Hotel where one could hardly escape being pestered with local politics, vestry scandals, and neighborly gossip.” 54
• An interview with Marx by R. Landor
  • “I peered cautiously into the vase on the side-table for a bomb. I sniffed for petroleum, but the smell was the smell of roses. I crept back stealthily to my seat, and moodily awaited the worst.” – when he enters Marx’s drawing room
  • Betrays their fear that the First International had deliberately orchestrated the Commune: Marx says there’s not evidence “that anything that happened was not the legitimate effect of all the circumstances of the moment” 60
    • R admits that everyone thinks it’s a secret society, and Marx says, Um our proceedings are published and you can buy them; and besides, it’s a unifying body, not a controlling central force
  • (What is the First International? “economical emancipation of the working class by the conquest of political power.” 61
• Marx Takes the Cure in Karsbad, September 1874 and 1875, where he accdg to the director, didn’t have much contact with the other folks 62
• From Chicago Tribune’s correspondent 1878
  • Conversation has great range
  • Firm conviction about socialism, not “melodramatic flight” 64

Basic Notes

• He says he’s the only one to try to “Show the origin of this money-form,” the only one to see the dual nature of labor, and the only one to hold a consistent labor theory of value
• The wealth of a society within capitalism looks like an “immense collection of commodities” 125 (originally from the Contribution 1859)
• Commodity
  • An object that satisfies human need, whether physical or spiritual: Use Value
    • Comes straight out of the object’s physical properties, doesn’t depend on labor 126
  • Could either be consumed or used for another round of production
  • Must be produced as a social use-value (ie other people want it, rather than myself)
  • Must be “transferred to the other person…through the medium of exchange” 131
  • In other words, MUST have two natures, natural value (use) and value form (exchange)
    • Why the heck do you have this? It’s a form of mediation that allows for the separation of social utility from profit mongering. Thus, it’s indicative of a state of society that allows mediation, ie, a specific group of people get to have control over deciding where labor goes
  • Are of very diverse natures!
• Commodities Appear to Have Two Types of Value
  • Two types: use value, exchange value
  • “objects of utility and bearers of value” 138
  • Use-value: utility
    • Use value realized in use or consumption
    • “the material content of wealth, whatever its social form may be” 126
    • It’s the natural form
  • Exchange value: the social life of commodities b/c only appears when in relation to another commodity; it is the relative amount of socially necessary labor stored in an object; it is how commodities appear to each other
    • A proportion
    • Not inherent, not natural, but “a form of appearance” a ”’mode of expression’ of a content distinguishable from it.” 127 something that they have in common
      • what they have in common can’t be a material property b/c commodities are too diverse: so exchange value is ABSTRACTED from use value (ie use-value disappears, that is quality disappears)
      • Exchange value is representation
      • “So far no chemist has ever discovered exchange-value either in a pearl or a diamond.” 177 (this reminds me of the difference theory of language: he’s doing for the commodity what Saussure does for language)
      • Exchange-value appears to be a characteristic of the object itself, but actually it’s only a necessary marker made because of a specific mode of production develops (b/c instead of socially necessary labor we have a division between decision making and laboring—thus separating commodities and their use-value…and then exchange-value has to be born)
  • Labor: the labor congealed inside a commodity; the true source of value
    • hmm… is this ghastly? a haunting?
  • What is the true value?
    • Real value is social: reflects human relations (conditions of labor)
      • This is where value is actually created
      • Marx does not include “labor” of traders and entrepreneurs, though later critics did so
    • Exchange value is really just commodity fetishism, abstract
      • Exchange value: the material quality has been forgotten, the character of the labor involved forgotten: it is mere quantity of abstract human labor (“phantom-like objectivity” 128)
      • Exchange value is a chimera, an after-effect; it is “a definite social manner of expressing labor” rather than being natural 176
      • Where quality disappears into quantity (for example, if you have a lazy person who makes it in 4 hours, and a skilled person making it in 2, the objects won’t have two different prices! the labor that congeals in the object is abstract homogenized labor 129, units that are each the very same as the other, which for each commodity is the “socially necessary labor-time)
      • Exchange value doesn’t literally represent how much work went into it, but instead the abstracted version
      • Where the social disappears into the objective: commodities are “crystals of this social substance, which is common to them all” which gives them commodity value 128
      • Reliance on exchange value makes relations between people disappear = commodity fetishism
  • “Labor value” and “exchange value” are the dual nature of the commodity
• Definitions
  • Substance of value: labor
  • Magnitude of value: labor time
  • Form of value: exchange value
• Dual Nature of Labor
  • As use-value: to produce surplus profit for boss
  • As exchange-value: what “labor” goes in to producing the laboring person (ie food education)
  • Marx claims to be the first to discover this twofold nature
• The fact that we have so many commodities proves we have a social division of labor
  • Commodity production requires division of labor 132
  • However, mere existence division of labor itself doesn’t mean you’re automatically capitalist
• Labor IS eternally necessary in for human life itself
• “language of commodities” 143 tells us “that its sublime objectivity as a value differs from the stiff and starchy existence as a body” 144
• Why is money mysterious?
  • It is the fullest expression of exchange-value, which is the appearance that a commodity has of being directly exchangeable by its very nature, of inherently having exchange value (instead of the LABOR having value)
• Evil of Today
  • Products are made simply to create exchange value
    • We lose control over value when objects are only weighed among themselves
  • Surplus value is a cheat on labor
    • Skimmed off the top
    • Mediation between production and sale produces loophole for exploitation
  • Concentration of Capital in the hands of a few
    • Delivers the laborers into the capitalists’ clutches
  • Political economists and capitalists constantly want to force down the wages by only allowing the minimum of wages, trying to get as close to zero as possible (748)
  • More profits = terrible conditions b/c centralization of capital leads to bad housing
  • The capitalist can appropriate surplus labor
• The idea of abstract labor could only happen in a society that has produced the idea of human equality: relativism
• Labor Theory of Value
  • Price look mysterious until you uncover that congealed labor is the source of value: thus, the labor is a “secret” hidden underneath commodity 168
  • It’s historically contingent: “already possess the fixed quality of natural forms of social life before man seeks to give an account, not of their historical character, for in his eyes they are immutable, but of their content and meaning” 168
• Money form disguises “social character of private labor” 168 makes it look like relations between objects instead
  • “all the magic and necromancy that surrounds the products of labor” 169
• Why “Social?” Once people begin coordinating their labor, working for each other, exchanging stuff, it’s social
• Critique of P E
  • Their “Robinson Crusoe” stories are irrelevant historically, ie Ricardo “slips into the anachronism of allowing the primitive fisherman and hunter to calculate the value of their implements in accordance with the annuity tables used on the London Stock Exchange in 1817.” 169
  • Doesn’t know “the form of value which in fact turns value into exchange-value” 174 (money). The problem is that if you don’t understand that, then you “make the mistake of treating it as the eternal natural form of social production” 174
    • The redundancy of the “vulgar economists” who ruminate on details that P E long ago established reveals that they believe what P E has said as “self-evident and nature-imposed necessity as productive labor itself” 175
      • Then compares their viewpoint on pre-capitalist economies to the view of the Church about pre-Christian religions: ie they got the “truth” wrong, and they call “Artificial” what they don’t believe in, while calling “Natural” what they believe in
      • This connex Marx of philosophy w/Marx of economy: a common fallacy, a mode of thinking, the belief in social givens as eternal and natural
• Problem with capitalism for rational Enlightenment values: “the process of production has mastery over man, instead of the opposite” 175
• Commodity Fetishism
  • “at first sight an extremely obvious, trivial thing. But its analysis brings out that it is a very strange thing, abounding in metaphysical subtleties and theological niceties.” 163
    • analysis leads to metaphys?
    • as use value, nothin special; but as a commodity, it “transcends sensuousness”
    • as part of labor, nothing special, either
  • “in relation to all other commodities, it stands on its head, and evolves out of its wooden brain [talkin bout a table] grotesque ideas, far more wonderful than if it were to begin dancing of its own free will” 163-4
    • Remember, Marx says something stands on its head when it presents to be the source of something when in reality it is the product of something else
  • Wherefore Mystery?
    • “the equality of the kinds of human labor takes on a physical form” so that “finally the relationships between the producers, within which the social characteristics of their labours are manifested [ie we rely on each other; ie it’s a portion of my labor], take on the form of a social relation between the products of labor” 164
      • restated: “commodity reflects the social characteristics of men’s own labor as objective characteristics of labour themselves” 164-5
    • they seem like the source of value, when really they were created by human labor
      • inside turns outside: social relations between people appear as social relations between things; it’s a “substitution”
    • hence, the commodity has both sensual (material) qualities and suprasensual (social) qualities
  • happens immediately when produced as commodities
    • why? the object looked like it was produced by independent people not working w/each other
    • Commodity Fetishism thus the product of a certain social organization of labor
  • Compares it to religion, where the images of your brain you endow with their own life, calling them gods, imagine that they can enter into relationships with you and other gods
    • Like with religion, it mediates: it comes between two people, two producers: “the labour of the private individual manifests itself as an element of the total labour of society only through the relations which the act of exchange establishes between the products, and, through their mediation, between the producers.” 165
      • Restated: the act of exchange is the only time when private labor of individual looks like social labor (which is what it truly is); relations between producers are thus only made through the mediation of commodities
    • The final effect: work should be about direct relations between producers, but instead the situation means that there are “material relations between persons and social relations between things” 166
      • Why? B/c looks like commodity is the only thing that keeps people together, yet the objects have value accdg to their relations w/other objects
  • Only happens when exchange is so important to a society that “allow[s] useful things to be produced for the purpose of being exchanged, so that their character as values has already to be taken into consideration during production.” 166
    • Thus, objects are produced not b/c they are useful, but because of the “Social relations between things,” that is, exchange value
  • Attitude of Producers that results in C F
    • Twofold: their labor must “satisfy a definite social need” and must be exchangeable for every other kind of labor that is “equality…between different kinds of labor” 166
    • Result: “they equate their different kinds of labour as human labour….without being aware of it” 166-7
      • In choosing profession, they debate about its exchange value, thinking that the products themselves have their own value; that the exchange proportions arise from the material properties of the object 167
    • Upshot: Value is mysterious, “a hieroglyph,” “does not have its description branded on its forehead” 167
      • “Their own movement [the producers’] within society has for them the form of a movement made by things, and these things, far from being in their control, in fact control them” 167-8
      • Kind of unreadable language, even though he says “scientists” are making the “belated scientific discovery” of the source of objects’ value (ie labor theory of value), but nonetheless people still perceive the objects in fetishistic manner
  • The Truth Marx Cares About: in this particular historical moment in this culture, “the specific social chatracter of private labours carried on independently of each other consists in their equality as human labour” (part of republicanism of Marx, so this couldn’t have happened w/out Enlightenment ideals, I’m guessing) 167
    • “for the characteristic which objects of utility have of being values is as much men’s social product as is their language” 167
  • Quality reduced to Quantity
    • Instead of understanding heterogeneity of labor, you see the “quantity” (“continually being reduced to the quantitative proportions in which society requires them” 168) as the literal quantity of human labour hours required seems like a “regulative law” that is “a secret hidden” under movement of commodities b/c the commodities are so diverse that their relations to each other looks accidental
  • Commodities Look Natural
    • Right before they enter circulation, the commodities “already possess the fixed quality of natural forms of social life
    • Money form “conceals the social nature of private labour” 168, so that what’s truly a relationship between WORKERS looks like one between OBJECTS

• Surplus Value

Basic info about Marx: notes from Ernest Mandel’s intro to Marx, in Palgrave 1990

• Bio
  • B. 5 May 1818 of lawyer converted to Protestantism for political purposes (make it easier to live in Prusia) and Dutch-Jewish mom
  • Education: Trier gymnasium; universities @ Bonn and Berline; doctoral thesis 1841 (on epicurean philosophy)
    • Part of Young Hegelians; friend of its leader Bruno Bauer; infl by Feuerbach’s The Nature of Christianity
  • Married to Jenny von Westphalen (daughter of high official) 1843
• Journalism/Between University and London
  • 1842: editor of Rhenisch Zeitung in Cologne; found it liberal and turned it radical; banned 1843
  • 1843: Moves to Paris w/Jenny to be around the center of political action in Europe; meets Engels
    • Publishes A Critique of Hegel’s Philosophy of Right
  • 1844: still in Paris, studies history and political economy, infl by socialist/working class groups; writes 1844 Paris Manuscripts, where he first shows communism (ie communal ownership of means of production)
  • 1845: expelled from France, goes to Brussels, joined by Engels
    • 1845-6: works on German Ideology, Theses on Feuerbach (not published), which introduces hist mat
    • 1846: Misere de la Philosophie (in French), Poverty of Philosophy, against prominent socialist Proudhon; begins to work w/Communist League
  • 1848: Communist Manifesto; when revolution breaks out, expelled from Belgium, goes to France, then to Cologne
    • in Cologne during revolutionary fervor, publishes Neue Rhenisch Zeitung
  • 1849: After Rev is defeated, paper banned and him expelled. Goes to London.
• London
  • Lots of studying at British Museum, incl Parliament Blue Books; political economy, present state of Britain and its workers; enthology; technology, economic history; mixes w/union leaders to get them into international workers’ issues
  • 1851: Gets job as correspondent for New York Daily Tribune (takes up a lot of his time, as does the practical organization stuff, explaining why he can’t get some projects done; also bad health family troubles)
  • 1852: disappointed w/disappearance of revolutionary action and Communist League quiescence, publishes The Eighteenth Brumaire of Louis Bonaparte, “scathing” and “the balance sheet of his political activity” 2
  • 1855: eldest son dies in his arms (of the seven kids, three survived: Jenny and Laura, who were active in French labor movement, marrying socialist leaders; and Eleanor, who stayed involved in the movement in Britain
  • 1859: A Contribution to the Critique of Political Economy
  • 1864: Creation of the International Working Men’s Association, the First International (which Marx and Engels lead)
  • 1867: First volume of Das Kapital (meanwhile, lots of work with the IWMA, esp 1865-71) (vols II and III published posthumously by Engels who edited them; there’s a so-called vol 4, the Theories of Surplus Value which critiques other economists
  • Growing illness
  • 1881: wife dies
  • 1883: he dies, 14 March

Theories

• Contradictions of capitalism
  • Main ur-contradiction: social labor looks like private labor under capitalism
    • We don’t recognize it as social (cooperation)
    • Goods are at once products of social labor and private labor
    • But we don’t see and can’t understand the role of private labor until after the commodity has circulated (thus the unity of production and consumption)
• What do we find out when we do examine it?
  • Commodities circulate as capital
  • Marx calls in vol 2 “the reproduction and circulation of the total social capital” 16
    • that is, each movement of capital embedded in larger system of multiple capitals, larger system of total social capital

• Historical Materialism
  • “Marx’s main contribution to the social science” (not incl economics) 4
  • Social labor always determined “within a given framework of specific, historically determined, social relations of production” which “in the last analysis” determine all other social relations 4
    • These modes of production become stabilized and won’t change qualitatively without a revolution
    • Infrastructure determining superstructure: law, politics, art, religion, philosophy, morality; they are MOSTLY determined by infrastructure, but not wholly.
      • Each domain has its own immanent dialectical movement that, unlike the material conditions of life, needn’t be reproduced perfectly; however the movement is often actually a class movement at heart
  • Relations of production: total sum of human relations involved in reproducing the material conditions of life, which go beyond the workplace
    • Class relations “overdetermine” individual relationships (that is at many diff levels and diff ways): and class struggle is a permanent factor in human histroy
  • Individual freedom? Yes, but you are limited by the ideology you grew up in, and your personal choice may not be enough to affect larger, global trends
    • Human beings make history, but they do have false consciousness: they don’t know why they’re acting (and the hidden reason often class)
  • Classes: You have the producing class and the class that appropriates the surplus production of the former class: that is how the ruling class rules (they get surplus, which they partly use to create a superstructure that maintains their right of appropriation) and why there’s a fight (for economic and material conditions of life, which have been siphoned off)
    • Class struggle extends to superstructure and all forms of politics; even to literary struggle!
  • Uneven Development
    • Each mode of production will have residuum of old mode of production (small biz, handicraftsman), as wells as a germ of the future mode of production
    • Other ideologies DO exist alongside the ideology of the ruling class, which is still the dominant ideology
    • Sometimes revolution comes to superstructure before infrastructure (explaining why socialism is academic first)
  • Time for a revolution?
    • Well you have to have the material and economic conditions for socialism: you have to be advanced enough to assure every person the necessities of life
    • Mandel: “The real measuring rod is leisure time, not in the sense of ‘time for doing nothing’ but in the sense of time freed from the iron necessity to produce and reproduce material livelihood, and therefore disposable for the free development of individual talents, wishes, capacities, potentialities, of each human being.” 5
      • Me: shows how much they need the “individual” rhetoric of Engl…but then again so do the modernists (see their beloved Stirner, who looks more like Marx than we’d like in this instance)
      • If only a fraction of your population can do this, then your society is poor
    • Once you do have society productive enough for everyone to have some leisure, then there’s no need for classes anymore: the whole rationale for class struggle is that the only way for someone to get leisure is to wrench the productivity of many people; but when everyone can have access to it, then there’s no need to hog and thus start a fight
    • Extension to the State: as the ruling class arrogates capital for itself, the State arrogates the political action which in theory was supposed to be for everyone. Political alienation.
      • Thus, the state must go away! Dictatorship of proletariat meant to be temporary
• His Economic Approach
  • Not just an economist: trying to combine all social sciences (positivist?)
  • “There are no eternal economic laws” “no economic laws separate and apart from specific relations between human beings” at a specific moment in history and specific place 9; hence “historical relativist”
    • Doesn’t like it when P E tries to present economic laws without understanding the human actors within: “try to discover the specific relations between human beings which they hide” 9 hence “demystifying”
  • Darwin Comparison
    • Very frequent and common, on the basis of Marx’s so-called “genetic structuralism”
    • Mandel: But what Marx really cares about is the IMMANENT laws of each structure
  • The key to societies: social labor. It’s their organization of the conditions for reproducing life that knits people together. Hence, he cares about economics
    • Problems begin when decision making about what is socially necessary labor (what kind of work to do) is monopolize by one group: then, you have “private labors” and commodities (rather than just useful or pleasant objects) which then have to pass a test to prove they’re socially necessary: a market economy.
      • Looks like mediation to me
  • Marx as perhaps an anti-Simmel: “Marx’s scientific rigour, his effort at a systematic and all-sided analysis of the phenomena of the capitalist economy” 11
    • Perhaps Simmel and Marx represent dual trends of modernity, two diff approaches to understanding, what Janet has presented to us as analytical v hermeneutic
• Marx’s Ideas that Have Been Completely Accepted
  • Economics at heart of political struggle
  • Historical development as product of material changes
  • Capitalism will inevitably create crises
  • (Within economics, Marx is a part of the great classical writers like Smith and Ricardo)

Labor Theory of Value

• Agrees with the classical economists that labor is the beginning of value, but diff from them in saying that labor is the source of ALL value. Period.
• Labor Theory of Value, defined
  • “an objective economic law operating behind the backs of all people, all ‘agents’...which in the final analysis regulars the economic” 12
    • Sure, we have a big law here, but it’s pretty much his only big one
  • What fragment, a fraction of ALL potential social labor that this particular object required (socially necessary labor for this object divided by TOTAL social labor in a given time)
  • Skill does matter: it takes time to develop a skill, so the time of a skilled laborer represents not only the time to produce object, but also the time gaining skill (so, one hour of his labor = that one hour plus say 30 minutes of training = 1.5 hrs)—this is the “reduction problem” of labor
  • Thus, it’s social b/c determined by everyone’s output
  • It’s objective b/c depends on labor IN object, not subjective evaluation of good
• Sure, consumption and the market matter, but only because production responds to what happens during c0nsumption. And that’s when the actual changes occur.
• Is it an invisible hand? Kind of, except here’s the critique of Smith and other classical economists
  • “this operation is not eternal, not immanent in ‘human nature,’ but created by specific historical circumstances…” 12
    • You see, “abstract human labor” depends on a specific social circumstance, where people are forced to sell their labor potential as a commodity
  • “neither leads to the maximum growth nor to the optimum of human wellbeing for the greatest number of individuals” 12-3
  • Transformation Problem
    • The problem of “transforming” values into “production prices”
      • Many people reject Marx’s labor theory of value cuz they reject his way of dealing with this issue
    • In simple commodity production, labor is value quite simply. In capitalist commodity production, the producer can’t decide what to produce, so the decision is given to someone else, which allows “mobility of capital” (can travel to lowest cost of production)
      • The price of production is an average price in the industry (each firm’s ACTUAL cost of production may be higher or lower), so sometimes value (actual labor input into this specific object) doesn’t match price of production (average value)
      • The problem: given this mismatch, can you really say labor produces value?
    • Mandel: Marx already solved it in Grundrisse: The value always equals price of production; the difference is in the DISTRIBUTION of profit
      • Less efficient firms will get knocked out of biz b/c they are WASTING socially necessary labor.

Theory of Rent

• An interesting statement in this section: “the normal time-span for essentially modifying the value of commodities is the business-cycle, from one crisis of over-production (recession) to the next one.” 15
  • It defines crisis as overproduction. And says overproduction leads to a re-evaluation.
  • Can that work for all crises? Something was overproduced and you need to adjust its value and find something else that’s now got value?
• Market value: a mediating concept that says market price won’t necessarily be the average cost of production, but instead depends on the amount of saturation or under-production of certain item in market, which will determine the next cycle of production
• Market value is generally very unstable b/c of mobility of capital—but sometimes it ain’t mobile, and that’s where rent comes in
• Why not mobile? Scarcity (natural conditions get in your way) or obstacles like private ownership of land
  • It doesn’t “Add” value somehow to have difficult land or scarce material; instead, it just makes the fraction of labor required bigger, thus causing it to have more value
  • Land-based operations like agriculture and mining have market prices determined by the least efficient firms, that is, the cheapest price is made.
    • Thus there’s a huge chance for profit for those efficient firms: this surplus profit is “differential rent.” It’s bad b/c then it just gives profits to landowners.
    • When mechanization makes these industries more effective, rent “withers” 17

Theory of Money

• The universal equivalent (162); a commodity that serves as money b/c only IT now is seen as the expression of value (ie it only has social validity as expression of value)
• Objects can be exchanged b/c they have a certain quanta of labor embodied in them. Hence, “commodity theory of money:” that a commodity like gold can act as universal exchange medium b/c it too has labor embodied in it
• “Paper money, bank notes, are a money sign representing a given quantity of the money-commodity” 19
  • When it looks like inflation, that is you have to give more money for something, doesn’t mean that the value of money-commodity (gold) has changed but instead that the representation in “money price” has changed
    • More anti-Absolute Law: “the rejection by Marx of any mechanical automatism between the quantity of paper money emitted on the one hand, and the general dynamic of the economy…on the other”
    • You see, “inflation” really reflects a whole spectrum of economic activities that are having trouble (rate of profit, productivity, market values)

Theory of Surplus Value

• “Marx himself considered his theory of surplus value his most important contribution to the progress of economic analysis” 20
  • Both allows Marx to create capitalism within an historical context AND to investigate it in its specificity: although all modes of production in a class society, surplus profit is what creates the upper class, this surplus comes in diff forms
    • Unpaid labor (slavery; the Asiatic mode of production); appropriated goods (feudal); or money (capitalism)
    • Surplus profit = unpaid labor. This is the exploitation theory.
      • How? What Mandel calls the “Deduction theory of ruling class income:” Income from production minus wages = surplus.
      • It’s a mode of distributing the labor that’s already occurred
• Not only how ruling class came about, but also why there’s class struggle
• Capitalist Form of Surplus Profit
  • Begins in 15th c in Western Europe and then spreads internationally
  • Producers cut off from means of production, including land
  • B/c they cannot directly produce, they must present themselves out for hire
  • Owners of means of production thus say they own the products
• Labor Power as a Commodity
  • Capitalism presupposes this 21
  • Labor commodity (the person), 2 kinds of value
    • Exchange value of labor: What’s necessary to reproduce this person (food, shelter, children)
    • Use value of labor: What new value the labor commodity can produce (ie, surplus value over and above the it cost, that is when use value exceeds the exchange value)
• Buying Labor POWER, not Labor
  • If capitalist bought pure labor, it would be simple to see the theft of the labor (ie I produced 100 nails but you only paid me for 50)
  • Instead, capitalist buys the labor power, but will only pay for its exchange value (like any other capitalist exchange)
• Where’s the problem?
  • ONE, That the worker is FORCED beyond any choice to sell labor, whereas the capitalist has room to wiggle, so thus he is forced to sell labor at unfair terms b/c of press of necessity.
    • He’s got to have food and rent money, whereas capitalist has got surplus and can wait it out.
    • This is the “institutional inequality” that is “masked…by juridical equality” esp for P E 22
  • ALSO, B/c your labor was turned into a commodity, you are forced to pay the market price, not what “new value” you create
    • Remember there’s a time diff for Marx between the buying of raw materials (ie labor) and the time of production (when the labor’s actually consumed). They’re separate. Thus, the laborer comes in at the first stage, and has no say in the second stage.
• Why can’t unions solve the problem by controlling the supply of labor by people combining?
  • B/c of the reserve army of laborers: the unemployed; the currently-not-engaged-in-modern-capitalism (the peasants, small shop-keepers, professionals, handicraftsmen, tradesmen); and women (and children)
    • Remember, not just in your country but anywhere capital can move
    • This reserve army of workers will neutralize your powers of combination but adding to supply of workers willing to accept the terms
  • What does this do? For capitalists, assures their power; but what it actually does is create and sustain CRISES: as capitalists vacillate to find the lowest price of labor, they cause unemployment, and when the normal mass of workers is starved to the point of capitulation, then the capitalists shrug off the reserve army, causing THEM to be unemployed.
    • It’s a cycle of periodic deprivation.
    • “This process does not correspond to any ‘natural economic law’ (or necessity), nor does it correspond to ‘immanent justice.’ It just expresses the inner logic of the capitalist mode of production…” 23
• This is NOT the “iron law of wages” that Malthus, Ricardo, and other P E (incl socialist Lassalle): where wages are the barest minimum for life
  • Instead, for Marx wages involve the PHYSICAL maintenance of life PLUS the SOCIALLY ACCEPTED necessities of life (which are flexible and dependent on historical context, ie relativist)

Capitalism’s Laws of Motion

• These are Marx’s “most impressive scientific achievement” 24
  • Maybe you can divide Marx into a scientific Marx and a hermeneuticist Marx?
• 1) The Capitalist’s Compulsion to Accumulate 25
  • Use surplus labor extracted from wage labor to continue increasing pool of capital
  • Constantly want more capital b/c of competition. Uncertainty of profit (who knows if they’ll actually buy yr products)= want more capital, not just profit itself
• 2) Constant Technological Revolution 26
  • To cut production costs
• 3) “Constant Drive” and “Unquenchable Thirst” for Surplus-Value
  • Thus, accumulation is always the upping of the capitalist ante, the rate of accumulation to increase
  • Two kinds, absolute surplus-value (you make them work more hours) and relative surplus-value (make them work harder and through machines)
    • First is the first one to come on historical stage
    • Second one is more recent and more important now
      • Esp in attempt to trade workers for machines
• 4) Capital Concentrates and Centralizes
  • Concentrates: Successful firms have surplus which makes more capital which makes more surplus. etc
  • Centralizes: Smaller businesses and independent workers are swallowed up into big companies
• 5) Increase of “Organic Composition of Capital” 27
  • When investment in constant capital (buildings, machines, raw materials) is MORE than investment in variable capital (workers)
  • Why? It saves labor
• 6) Decline of Rate of Profit 27
  • Surplus value divided by total capital used: that’s rate of profit
  • There are ways to get around it: employing more workers, using more capital; adopting new technology; changing organization of labor
• 7) Inevitable Class Struggle 28
  • More surplus = more exploitation = more awareness
  • Has been proven historically accurate if you look at union activity globally
• 8) Increase of Social Polarization 29
  • Rich get richer etc
  • Work gets homogenized: fewer independent workers, so more proletarians are made.
• 9) More Objective Socalization of Labor 29
  • Labor getting more and more planned and organized on huge scale
  • Capitalism begins anarchically, with smaller resources and no real knowledge about what you’re getting into, but as it goes on, more knowledge, planning, and organization
  • And cooperation: it’s the way that capitalism prepares for its downfall
• 10) Inevitable Crises 30
  • Overproduction will always happen, will always cause crisis; and it is THE CAUSE OF CAPITALIST CRISES (that’s why it matters, Shawna!)
  • 21 cycles since Marx designated first one (1825): about 7.5 years each
  • Cycle
    • Interruption: overproduction happens; goods can’t find buyers, so production stagnates
    • Spirals Down: low sales cause firing and collapse of biz, thus lowering purchasing powers of people, thus lowering available capital, etc
    • Key Moment: purchasing power higher than output (consumers can buy again)
    • Production Again: production increases, which ends in surplus and reinvestment until over-investment and overproduction

Theory of Crises

• Mandel: “all basic contradictions in of the capitalist mode of production come into play in the process leading to a capitalist crisis” 31
• Marx never saw production and consumption as separate, but rather saw them as both actors in a unified process.
  • Production can never be “emancipated” from consumption 33
  • If you produce it, you haven’t realized value until ya sell it.
• Because “capitalist growth is always disproportionate growth” (that is investment in one sector but not in another) 32, you have one area over-investing, losing its touch w/existing demand
• Credit too can play a part in the crisis: it has relative autonomy
• The End Times of Capitalism won’t happen as a mere result of these types of crises; they will be accompanied by the working class becoming aware and organized b/c of increased exploitation 34

After Capitalism

• Stage One: Socialism
  • Few consumer goods, allocated strictly accg to your work output
  • This is the incentive to keep working
  • Eradicate exchange value and value: all is about USE and NEEDS
  • Direct producers “associate” together (not the state!) to direct production
    • Production isn’t begun b/c of what some capitalist decides he wants. It’s what WE need now.
• Stage Two: Communism
  • Lots of consumer goods
  • No incentive needed to get people to work
• Why? New organization of labor
  • No more division of labor, between manual and intellectual
  • No more country v city division
  • labor will be “meaningful many-fold activity, making possible all-round development of each individual’s human personality”
  • Structure: “free federation of producers’ and consumers’ communes” 34

Random/Further Reading

• Clara Zetkin (leader of international woman’s movement; helped create German Communist Party); 1857-1933 (anti-war, sees it as plunder and protecting imperialism)
  • “the working-class never will sell for the dish of lentils of reforms its primogenital right to the social revolution.”
  • “The Workers’ International Festival” 1899 (referring to suggested May Day demonstrations that would help laborers but not be as good as revolution (ie don’t get too excited: let’s see this as a means to an end, not the end: make sure you are celebrating the revolution as a whole on May Day)
  • don’t ever believe the upper class will GIVE you your rights: we must seize them ourselves
• Rosa Luxemburg (pro mass strike, anti WWI, executed by German gov) 1871-1919
  • Believed Dreyfus affair showed bourgeoisie breaking up
• James Connolly, part of Easter Rising, helped create Irish Socialist Republican Party
• Alexandra Kollontai (Bolshevik revolutionary; first female ambassador; wrote about women’s issues too)
• In a certain sense it’s wrong to call Marx a materialist in the accepted sense of the word: he doesn’t so much want to see workers in well-lit, comfortable factories with good ventilation and ample breaks, receiving fair wages and going home to a comfortable, hygienic home with a good hot meal…but instead wants to let every person aspire to the conditions of idealist philosophy when translated into a philosophy of living, that is, to have a space to find yourself.
• Marx, Hermeneuticist
  • Science v Hermeneutics
    • Science: the creation of absolute laws which are universally and eternally applicable, often using quantification as the basis for proving objectivity (ie a lack of bias and a firm base in facts)
    • Hermeneutics: facts are not the same as values, and there is interpretation needed to understand the truth
  • Marx, scientist: cares about laws
  • Marx, hermeneuticist: he makes a major step for relativism when he thinks up hist mat, a theory of relativism b/c you must consider a context before you try to understand meaning, plus the general refutation of eternal laws as such
  • Marx may not look like a hermeneuticist (esp b/c he called himself a scientist) next to Simmel, but then again next to Adam Smith he sure inches closer to Simmel.