Notes from Michael Heinrich on Capital

Michael Heinrich’s “Introduction to the Three Volumes of Karl Marx’s Capital” is a fascinating short introduction to Marx’s ‘critique’. There are a number of key insights which I want to capture here.

Chapter three goes into detail on the nature of value. Heinrich draws a distinction between what he calls a traditional Marxist ‘substantialist’ view and value as developed as a social relation through the act of exchange. In the ‘substantialist’ view value is understood as a property of each individual commodity, created during production. In Heinrich’s view this is not what Marx is getting at. Instead value is determined by “socially necessary” labour time, and what is socially necessary can only be determined in exchange where the individual labour of producers is compared to the total labour of society.

“abstract labour is a relation of social validation existing only in exchange… value is not at all a property that an individual thing possesses in and of itself.”

“The substance of value… is something only obtained by things when they are set into relation with one another in exchange.”

(Heinrich 2012, p.53)

“this social relationship between people appears as a relationship between things: it is no longer people who stand in a specific relationship with one another, but commodities.”

(Heinrich 2012, p.73)

This emphasis on value as a social relation and not an eternal property of individual commodities chimes well with Marx’s statement that under capitalism, commodities represent:

“the definite social relation between men themselves which assumes here, for them, the fantastic form of a relation between things.”

(Marx 1990, p.165)

Heinrich defines the substantialist view as a ‘pre-monetary’ theory of value, one which sees value as part of the commodity and money as a passive practical way to simplify the process of exchange. Marx’s theory is rather a ‘monetary’ one. Commodities cannot be related to each other without the value form that is money.

In chapter 7 Heinrich touches on the equalisation of the rate of profit, something which I felt I didn’t really understand on a first reading of Marx, defining the link between the amount of surplus value generated and the actual profit received by an individual capitalist. If commodities actually exchange at or near their true value then different rates of surplus value must mean that capitalists in different branches of production receive differing rates of profit.

As explained by Heinrich rates of profit are equalised in process similar to “supply and demand”. Assuming that capital is able to move between different branches of production, then individual capitalists will gravitate away from areas with lower rates of profit and towards those with higher rates. As supply increases in the areas with higher profit rates, prices will fall and vice versa. The result establishes an average or general rate of profit. To the individual capitalist this process disguises surplus value as the actual source of profit, making it appear that profit is a premium added to the cost of producing it.

“The actual profit of an individual capital… thus seems on the one hand to depend upon objective conditions (market prices) and on the other hand on the subjective skill of the capitalist in producing at a low cost of production. The fact that profit rests on the appropriation of surplus value is not apparent.”

(Heinrich 2012, p.147)

Most importantly of all, this transition from value to price is a transition from one level of description to another. To see the dialectic whole from a different angle. Value mediates the relationship of individual labour to the labour of the whole of society. Price and profit mediate the relationship of individual capital to the total social capital. They are different poles of the same social relationship.

Heinrich argues that Marx has not proven that the rate of profit is bound to fall over the long term (Heinrich 2012, p.151) on the basis that while it is likely that the organic composition of capital is increase, Marx assumes that the rate of surplus value will remain at least stable thereby leading to a falling rate of profit. In fact it is possible that the rate of surplus value may increase, or at least fall more slowly than the organic composition of capital rises either one of which will mean that the rate of profit does not fall.

On crises Heinrich outlines an “underconsumptionist” view. The unrestricted nature of production struggles to realise value in a world where the income of most people is constrained.

“The tendency for an unlimited extension of production confronts an ability to consume in society that is limited in a variety of ways.”

(Heinrich 2012, p.172)

“a potentially unlimited reproduction confronts a limited consumption… The consequence is a tendency towards the overproduction of commodities… and the over-accumulation of capital.”

(Heinrich 2012, p.173)

This leads to crisis as value cannot be realised in the market, leading to the destruction of social wealth but also conversely an increase in the rate of profit for the remaining capitals and a eventually a renewed upturn often driven by technological changes which improved profitability.

In the final chapter, Heinrich offers some thoughts on how Marx envisaged a communist society working. This is of interest as a rule Marx did not write much about what would come after capitalism. For Heinrich there are two key differences. First that society is no longer based on exchange. Capital, commodities, and money no longer exist. Second humanity is emancipated from a social structure that develops a life of it’s own and impose itself upon each individual. The social relations which generate fetishism must disappear with society organised as an “association of free men”.

Heinrich contrasts this with traditional Marxism-Leninism based on changing distribution patterns which remains dependent on a central authority, with the people becoming a passive object of the party’s policies.

Finally Marx:

“emphasises the massive development of productivity on the basis of science and technology, as well as the comprehensive development of the abilities of the workers as essential preconditions for the transition to a communist society.”

(Heinrich 2012, p.223)

Heinrich, Michael An Introduction to the Three Volumes of Karl Marx’s Capital (Monthly Review Press, New York, 2012).

Marx, Karl Capital, A Critique of Political Economy (Penguin, London, 1990)


Review: An Introduction to the Three Volumes of Karl Marx’s Capital

This is a superb summary of the key points made by Marx across the three volumes of Capital. Heinrich is clear from the start that he seeks to avoid the simplifications of the one-time ‘orthodox’ Marxism-Leninism of the defunct Soviet Union. The analysis is sharp, succinct, and up to date.

This is not a companion to the book itself, in the way that David Harvey’s two volume “Companion” is. What Harvey provides is a walkthrough, a genuine companion on the road as you work through each chapter. His goal is to encourage you to read Marx as a work of literature and on his own terms.

By contrast Heinrich takes you away from the book itself to summarise and draw out the principle conclusions. He looks beyond the debates of the past within organised communism to assess Marx’s analysis from a modern dispassionate perspective. His section on the development of value within capitalism as a social relation I found especially insightful. Heinrich also does an excellent job of drawing together the three volumes to explain what Marx is attempting in each, while showing how they join to create a overarching analysis.

The focus throughout is on the categories and structures of Marx’s economics rather than his philosophical approach. Heinrich specifically attacks the use of the word ‘dialectics’ in simple Marxism-Leninism as a way of saying ‘this is complex’. Bertell Ollman’s “Dance of the Dialectic” would make a useful companion work, covering as it does Marx’s method rather than the specifics of his economic analysis.

In brief, a superb short outline of Marx’s economic analysis as laid out in the three volumes of Capital.

Heinrich, Michael An Introduction to the Three Volumes of Karl Marx’s Capital (Monthly Review Press, New York, 2012).

The ‘moments’ of Marx

David Harvey’s most recent book is a superb short introduction to the analysis laid out by Marx in Capital, almost like a summary of his ‘Companion’ to the three volumes of Capital (Harvey 2010, Harvey 2013).

One of the concepts that I really like about Harvey’s analysis is the idea of there being seven different aspects or ‘moments’ to Marx’s analysis in Capital. I think this fits well with the outline of Marx’s use of dialectics given by Ollman. In particular, Harvey writes that to see any one aspect as dominant or determining misses the point:

The grand contest as to whether the productive forces or social relations should be viewed as the prime mover of capitalist development misses the point. It fails to situate Marx’s study of technology in the context of the totality of relations that constitute a capitalist social formation. It also assumes, for no good reason, that there must be a prime mover.

(Harvey 2017, p. 112).

The analysis of capital should be seen as a totality in all it’s complexity. To help with this Harvey takes a footnote from volume 1 (Marx 1990, p. 493 note 4) to identify seven ‘moments’, each representing a different angle from which to view the structure of capital.

These seven moments are:

  • Relation to nature;
  • Technology;
  • Modes of production;
  • Social relations;
  • Reproduction of daily life;
  • Mental conceptions of the world;
  • Institutional arrangements (added by Harvey).

(Harvey 2010, p. 195)

The most important thing here is to see these elements not as a list, but as the separate facets of a single structure. Something like the faces of a seven sided dice, or seven different windows onto the interior of the same building. The structure itself is a single building, a united whole, which we can view from each of these angles and gain a slightly different perspective through each. Each one interacts with all the others, and any comprehensive analysis must account for all of them.

To argue that any one of these determines the nature of society therefore misses the point. Each one expresses an element of the whole. As Harvey notes:

No one moment prevails over the others, even as there exists within each moment the possibility for autonomous development… All these elements coevolve and are subject to perpetual renewal and transformation as dynamic moments within the totality.

(Harvey 2010, p. 196).

This it seems to me is the essence of Marx’s dialectical analysis. A complex and multi-faceted whole, that can be approached from a number of different angles each of which provides insight and helps us to approach the whole but none of which actually constitute or determine that whole. It provides a framework or reference for analysis, and therefore a key element in Marx’s relevance for today.

Harvey, David Marx, Capital, and the Madness of Economic Reason (Profile Books, London, 2017).

Harvey, David A Companion to Marx’s Capital Volume 1 (Verso, London, 2010).

Harvey, David A Companion to Marx’s Capital Volume 2 (Verso, London, 2013).

Marx, Karl Capital, A Critique of Political Economy Volume 1 (Penguin, London, 1990).

Review: Marx, Capital and the Madness of Economic Reason

A while ago I read the three volumes of Marx’s Capital in tandem with the first and second volumes of David Harvey’s “Companion to Marx’s Capital”. Harvey is of course also well known for his series of online video lectures on Capital, which formed the basis for the “Companion” books.

In some ways this book feels like a shortened version of the longer work. It is a superb short introduction to the thought of Marx in all it’s complexity. Harvey builds the book around the basic principle that for Marx Capital is ‘value in motion’ and uses the hydrological cycle to illustrate how this works in practice. His emphasis on contradiction and conflict in the thought of Marx is a great counter to the ‘standard’ deterministic version of Marxism.

Harvey works through the various transformations that capital progresses through in moving from production to circulation to realisation (and then back into production) spiralling upwards driven by the need to accumulate. He draws out the dialectical nature of these transformations, riven by contradiction and the possibility of crises. This leads to the final chapter where Harvey begins the process of connecting this analysis to the current political conjunction. In particular he draws out how the dramatic growth of China demonstrates an acceleration in the challenges modern capital presents both to the continuation of a working economy and to a sustainable climate.

Harvey also discusses the creation of ‘anti-value’. One aspect of modern capitalism has been the creation of vast quantities of debt representing claims of the present on the future, determining the continuation of the production of surplus value in the need to service the debt that has been built up in the past. And yet the creation of this debt has been necessary to pulling capital out of its periodic crises, and in particular following the great recession of 2007-8.

Harvey does not shy away from exposing the complexities of Marx’s thought. In this the book is similar to the pair of “Companion” books. The goal is to encourage us to engage with Marx’s thought as an insightful way of thinking about the current state of affairs, as an analysis that helps us to understand the way things are, and emphatically not as a dogma that must be revered without being changed. Harvey does a superb job of outlining Marx’s framework, where it reflects the challenges we face today and where it needs further thought or revision.

In brief, as a short introduction to the modern value of Marx’s work this book is invaluable without ever being dogmatic. Perhaps the dissolution of ‘actually existing’ communism frees us to make better use of what Marx can tell us about modern political economy. If so, there is no better introduction than David Harvey’s latest work.

Lukacs, Dialectics, & Monbiot

I’ve been reading Tactics and Ethics by Georg Lukacs (see my review elsewhere), and among a number of interesting short essays are reviews of the collected letters of both Ferdinand Lassalle and Moses Hess. Lukacs’ criticism of the theoretical positions of both these thinkers, in particular Hess, gives him a platform to discuss Hegel’s dialectics and their influence on the thought of Marx.

Lukacs’ fundamental point is that a dialectical approach to history is one that emphasises progress and change. Modern society is founded on what has come before, and has a trajectory towards what it is going to be. The current structure of society is just one moment in its progress from what was and into what will be. While Hegel may have been misguided in basing this progress on the development of the ‘world spirit’, his basic approach was correct in seeing society as a progress from the past to the future with the present as simply one point along the path.

It is this connection of the  current structure of society both to it’s past as the ground on which it stands and to it’s future as the point towards which it is developing which marks Hegel’s profound contribution. A similar point is made about Marx’s approach by Bertell Ollman’s Dance of the Dialectic in particular in the segment on studying history ‘backwards’ (Ollman, 2003). It is something which when written down seems so obvious that it needs no emphasis.

And yet it is this point which Lukacs describes Hess as missing, with his emphasis instead on moral judgement, on the ‘malevolence of a handful of privileged individuals’ (Lukacs, 2014 p.223) and the way things ‘ought’ to be. Hess separates theory from practice by describing a theory of what needs to change that is separated from society as it exists now.

This is a debate that continues to this day. A recent article by George Monbiot based on his latest book talks about building a vision of a future society around how humans ‘ought’ to be based on an assumed natural state if only society could see past capitalism. Monbiot misses entirely that any future society must stand securely on the foundations of where we are now rather than on a ‘return’ to some pure human nature before capitalism. Progress will only be made when it is based on changing society as it is.

Lukacs underlines the importance of a dialectical approach, one that joins theorising about how the world is to how it must be changed. One of Marx’s most important statements is and remains the eleventh thesis on Feuerbach:

The philosophers have only interpreted the world, in various ways; the point is to change it.

Lukacs, Georg Tactics and Ethics (Verso, London, 2014)

Ollman, Bertell Dance of the Dialectic (University of Illinois Press, Urbana, 2003)

Review: The First International and After

The final volume in the set of three covering Marx’s “political” writings published by Verso, this covers the period of the First International. Similar to the first two volumes this shows Marx grappling with the tactical issues of the day. Although this means that many of the articles included in the book cover quite specific topics – and therefore might seem somewhat limited in more general interest – in fact they show Marx as anything but the doctrinaire ideologue he is often portrayed to have been. Instead it shows him carefully managing the various sectional interests in order to maintain a coherent programme across the movement.

In particular Marx insists on the need to maintain a revolutionary goal. Whatever tactics are suitable to the situation at hand, the working class movement must not lose sight of the need to overthrow the existing system and replace it with something else in the end.

Marx’s argument with Bakunin during the revolution is an interesting follow on, making it clear that Marx believed that a political programme is a necessary part of a revolutionary movement. It is not sufficient to pursue a purely ‘economic’ agenda looking to improve working conditions. The movement must remain engaged with the political struggle too.

This is complimented by the other section which is particularly interesting which includes “The Civil War in France”, Marx’s writing on the Paris Commune. This covers some of his most specific statements on the subject of the state, what a “dictatorship of the proletariat” might mean in practice, how the working class might go about dismantling the capitalist state, and what might come afterwards in practice.

All this means that it is a volume with a great deal of relevance to the modern left wing and is worth reading for the intersection it presents between the building of an engaged daily working class movement on top of a strong foundation in an economic analysis of capitalism and the state.

Marx and the state

I wrote about some of the tactical points brought out in the articles in the third volume of Marx’s political writing published by Verso in an earlier post. The other important work of Marx’s in this book is “The Civil War in France” where he analyses the Paris Commune, Europe’s most significant revolutionary event since 1848. The seizure of power by the Paris workers prompts Marx to think about the nature of the state, the impact of its seizure by the working class, and the nature of state power after the revolution.

For Marx the structure of the state is inherently connected to the nature of the economic system on which it is based. So in the “Critique of the Gotha Programme” he says:

“…the various states… have this in common, they all stand on the ground of modern bourgeois society although the degree of capitalist development varies.”

(Marx 2010, p. 355)

And in “The Civil War in France”:

“[the state’s] political character changed simultaneously with the economic changes of society.”

(Marx 2010, p. 207)

However Marx’s attitude to this capitalist state seems deeply ambiguous. On the one hand while Marx portrays the make up of the state as being broadly determined by developments in the wider society and economy, he also gives the impression that it is separate from it with an element of independence. It is not simply the tool of the ruling class. Characterising the state of the French late Second Empire he says:

“it was the only form of government possible when the bourgeoisie had already lost, and the working class had not yet acquired, the faculty of ruling the nation.”

(Marx 2010, p. 208)

In other words implying that it is an independent ruling entity dominated by a ruling class perhaps, but not an organic part of that ruling class. It is therefore a mechanism that the working class could perhaps take over and operate for its own purposes.

On the other hand, he is clear that the state is something that must be overcome by the revolution and is not simply a set of mechanical levers that can be taken over and operated by the working class:

“…the working class cannot simply lay hold of the ready made state machinery, and wield it for its own purposes.”

(Marx 2010, p. 206)

And of the specific progression of the Second Empire:

“the state power assumed more and more the character of the national power of capital over labour, of class despotism.”

(Marx 2010, p. 207)

Marx outlines how the Paris Commune represents a clear break and a separate form to the bourgeois state of the Second Empire. A “working body” where the representatives were revocable and paid workers’ wages and supported by a National Guard of the people rather than a professional army. By constituting a new structure outside the existing state the Commune represented an opportunity for truly revolutionary change.

“It was essentially a working class government, the produce of the struggle of the producing against the appropriating class, the political form at last discovered under which to work out the economical emancipation of labour.”

(Marx 2010, p. 212)

“The Commune was therefore to serve as a lever for uprooting the economical foundations upon which rests the existence of classes, and therefore of class rule.”


(Marx 2010, p. 212)

Here Marx seems to be saying that the state is not an independent entity to be taken over by the working class movement and used for its own purposes. Instead the existing state is inextricably linked to the domination of the capitalist class, and therefore rather to be wholly overthrown and replaced by a new and separate structure.

This is crucially important for deciding the strategy of a movement aiming at the fundamental transformation of society. Should it work within the existing ‘rules of the game’ or seek to subvert them? In “The Civil War in France” Marx is writing about a specific contemporary event rather than outlining theory and this obviously colours his approach, but well worth studying for all that.

Marx, Karl The First International and After (Verso, London, 2010)