Category Archives: Marxism

Rosa Luxemburg and the Communist Manifesto

After reading Rosa Luxemburg’s “The Accumulation of Capital”, included in Verso’s second volume of her complete works I wrote a post covering her analysis that accumulation could only proceed on the basis of there being sufficient space outside the global capitalist system for it to expand into.

I recently re-read Marx’s and Engels’ Communist Manifesto (thanks to my wife, who gave me the best possible Christmas present for a radical). This was written in 1848, that is before Marx began his economic work. It is interesting therefore that Marx and Engels also point out in the Manifesto the importance of the non-capitalist economies to the growth of capitalism itself.

For example this comment on the importance of the discovery of America on the initially explosive growth of capitalism:

“Modern industry has established the world market, for which the discovery of America paved the way. This market has given an immense development to commerce… This development has, in its turn, reacted back on the extension of industry.”

(Marx and Engels 2010, p. 22)

Marx and Engels seem to have a similar mindset to Luxemburg in her analysis that capitalism needs to grow into the space outside itself in order to expand.

“The need of a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe.”

(Marx and Engels 2010, p. 25)

Along with the points Luxemburg makes about capitalism drawing even those parts of the globe that are not part of the capitalist world into its orbit.

“The bourgeoisie has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country.”

(Marx and Engels 2010, p. 25)

“The bourgeoisie… draws all, even the most barbarian, nations into civilisation… It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilisation into their midst… it creates a world after its own image.”

(Marx and Engels 2010, p. 26)

As I wrote in my earlier post I don’t think that this is the end of the story, that their are other important factors both supporting and driving the expansion of capital. But it is interesting to see support for Luxemburg’s analysis in this earlier work of Marx and Engels.

Luxemburg, Rosa The Complete Works of Rosa Luxemburg Volume II (Verso, London, 2016)

Marx, Karl and Engels, Friedrich The Communist Manifesto (Vintage, London, 2010)

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Rosa Luxemburg and Marx’s Reproduction Schema

One of Rosa Luxemburg‘s most important works is The Accumulation of Capital, written in 1913 and included in translation in the second volume of her complete works published by Verso.

Here Luxemburg unpicks in detail the reproduction schemas described by Marx in Volume 2 of Capital. Marx defines two different basic formulae. Under simple reproduction, the economy remains the same size from year to year, with just sufficient productive activity taking place to replace what is consumed. Of course this exists only in theory. Capitalism is driven by the need to continuously expand, so simple reproduction serves only to demonstrate the basic approach to the problem.

This method abstracts the economy into two basic sections. One part which produces just means of production, commodities supporting the production process. A second part which produces means of consumption, commodities which will be consumed by society. The two sections clearly need to work in close lock step. Sufficient means of production must be created to support continuing production. Sufficient means of consumption must be produced to support the population. Marx goes into mathematical detail (which I won’t duplicate here) to demonstrate how this interaction must work for the economy to function.

In reality though, capitalism is driven by expanded reproduction, or ‘accumulation’. Here a portion of surplus value is used to increase the output of the economy year on year. Marx again shows how this might work mathematically, but somehow it is never quite convincing.

This brings us to the key criticism made by Luxemburg. For the economy to expand in this way then there must be demand for the increased output of both means of production and consumption goods. Marx’s expanded reproduction schema shows production increasing. But where does the increased demand come from? An economy operating at a particular capacity simply ought not to generate the demand (backed by the ability to pay) over and above that needed for simple reproduction. Marx demonstrates mathematically how the growth of an economy should progress, but not the process by which this expansion can actually happen.

What is more the expanded reproduction schema ignores the tension between the drive to produce more and more surplus value (and therefore commodities to be consumed for their value to be realised by the individual capitalist) and capitalism’s need to curtail the capacity for consumption of the majority of the population. The schema as described by Marx implies that accumulation can continue smoothly and indefinitely in mathematical progression. This does not match the lived experience of capitalism with it’s booms and busts. The absence of a smooth growth trajectory is a fundamental part of the system. In other words there must be a flaw in Marx’s analysis.

Marx assumes throughout that the economy in question is a fully self contained capitalist one with only two classes – capitalists and workers – and this is where Luxemburg identifies the critical point. Capital has since the beginning existed in a world which includes significant elements operating in non-capitalist ways, whether it is left over peasants and handicraft workers in the same country or colonies and developing countries overseas. Throughout it’s history capitalism has not been the closed system that Marx assumes in the reproduction schema.

Luxemburg gives two reasons why this is important. First the existence of a market outside capitalism itself creates the safety valve that is missing in the schema. This is where the demand comes from that allows the system to move beyond simple reproduction, allowing surplus value to be turned into capital and reinvested in expanding production.

“the surplus value that is to be capitalized and the corresponding part of the capitalist mass of products cannot possibly be realized within the capitalist sphere, and must therefore at all costs find purchasers outside this sphere, in social strata and formations not engaged in capitalist production.”

(Luxemburg 2016 p. 259)

The progressive growth in production also implies a growth in the workforce and allowing the world outside capitalism to be included in the theory makes clear where these additional workers come from – that is the ranks of peasants and others who are progressively brought into the world of waged work.

“It must be able to draw on other social reservoirs of labor-power not previously under the command of capital, which are added to the wage proletariat as required.”

(Luxemburg 2016 p. 260)

This is an aggressive and destructive process. Marx discusses “primitive accumulation” as something that kick starts the beginning of capitalism. Luxemburg asserts that in fact this continues all around us. In her time it was the growth of colonies and imperialism. In ours we might see it in the extension of commodity exchange to areas of life not previously touched by capitalism such as childcare.

“the accumulation of capital as a historical process, in all its relations, is contingent upon noncapitalist social strata and forms.”

(Luxemburg 2016 p. 263)

Luxemburg explicitly states then that when capital is no longer able to expand outwards into the non-capitalist world, when the whole globe is fully incorporated into capitalism, that the system will no longer be tenable and must collapse.

“Yet the more violently, forcefully, and thoroughly imperialism brings about the decline of noncapitalist civilisations, the more rapidly in removes the very basis for hte accumulation of capital. As much as imperialism is a historical method to prolong the existence of capital, objectively it is at the same time the surest way to bring this existence to the swiftest conclusion.”

(Luxemburg 2016, p.325)

Although there is much that is valuable in Luxemburg’s thinking, I think there are two basic problems.

First that the century of capitalism since Luxemburg wrote this has shown it’s ability to find new spaces for exploitation. To the extent that her analysis is correct, it does not imply the approach of the ultimate crisis of capitalism that she is seeking to demonstrate. It simply confirms the system’s dynamic nature, its ability to find new outlets and opportunities for primitive accumulation. Nothing from the last hundred years suggests there is any inherent limit to this.

Second and more significantly I think that Luxemburg misses Marx’s point. David Harvey points out that the expanded reproduction schema is constructed in such precise terms that it is hard to believe that Marx is not trying to point out that securing such a smooth path to accumulation is highly unlikely. Marx’s schema demonstrates the expanded reproduction is mathematically possible. But think about all the different processes that have to align in order for this to work: wages we must be suppressed to maintain profits, but sufficient to support realisation; the relation between producing means of production and means of consumption which must be just right to avoid overproduction as a result of disproportionality.

Obviously the schemas are totally unrealistic, and Marx has cooked the figures to fit his case. But are the schemas so unrealistic as to reveal nothing about the nature of the stresses, strains and contradictions, as well as the dynamic capacities, of a capitalist mode of production? If not, what are the schemas intended for?

(Harvey 2013, p. 368)

In other words the schema is an analytical tool rather than a statement of categorical truth. Something which allows us to examine what mechanisms the system must possess for it to function, how they must mesh together, and more importantly where they might jar and clash. Luxemburg is therefore undoubtedly right to point out how difficult it is for expanding capital to realise itself in the market, and no doubt aggressively exploiting the remaining non-capitalist segments is part of how capitalism solves this. But so is debt, speculation, and the loss of value or destruction of individual capitals which guessed the market wrong. The system is fundamentally not stable. Marx’s toolbox can help us to understand where and how that instability appears and its impact.

Luxemburg, Rosa The Complete Works of Rosa Luxemburg Volume II: Economic Writings 2 (Verso, London, 2016)

Marx, Karl Capital A Critique of Political Economy Volume 2 (Penguin, London, 1992)

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

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).

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)

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)