A Companion to Marx's Capital

As was shown in the so-called capital controversy of the early 1970s, the whole of contemporary economic theory is dangerously close to being founded on a tautology: the monetary value of K in physical asset-form is determined by what it is supposed to explain, viz. the value of the commodities produced3 (208–9).

But now, in the circulation M-C-M, value suddenly presents itself as a self-moving substance which passes through a process of its own, and for which commodities and money are both mere forms. But there is more to come: instead of simply representing the relations of commodities, it now enters into a private relationship with itself, as it were. It differentiates itself as original value from itself as surplus-value, just as God the Father differentiates himself from himself as God the Son…Value therefore now becomes value in process, money in process, and, as such, capital. (256)

Capital is process, and that is that.

Failure to recognize the historical specificity of the bourgeois conception of rights and duties leads to serious errors. It is for this reason that Marx registers...a vigorous indictment of the anarchist Proudhon... Proudhon in effect took the specifics of bourgeois legal and economic relations and treated them as universal and foundational for the development of an alternative, socially just economic system. From Marx's standpoint, this is no alternative at all since it merely re-inscribes bourgeois conceptions of value in a supposedly new form of society. This problem is still with us, not only because of the contemporary anarchist revival of interest in Proudhon's ideas but also because of the rise of a more broad-based liberal human rights politics as a supposed antidote to the social and political ills of contemporary capitalism. Marx's critique of Proudhon is directly applicable to this contemporary politics. The UN Universal Declaration of Human Rights of 1948 is a foundational document for a bourgeois, market-based individualism and as such cannot provide a basis for a thoroughgoing critique of liberal or neoliberal capitalism. Whether it is politically useful to insist that the capitalist political order live up to its own foundational principles is one thing, but to imagine that this politics can lead to a radical displacement of a capitalist mode of production is, in Marx's view, a serious error.

For Marx, capital is not a thing, but a process—a process, specifically, of the circulation of values.

For this reason I get impatient with people who depict Marx’s dialectic as a closed method of analysis. It is not finite; on the contrary, it is constantly expanding, and here he is explaining precisely how. We only have to review what we have already experienced in reading Capital; the movement of its argument is a perpetual reshaping, rephrasing and expansion of the field of contradictions.

Here Marx simply assumes that proletarianization has already occurred and that a functioning labor market already exists. But he does, however, want to make “one thing” clear: Nature does not produce on the one hand owners of money or commodities, and on the other hand men possessing nothing but their own labour-power. This relation has no basis in natural history, nor does it have a social basis common to all periods of human history. It is clearly the result of a past historical development, the product of many economic revolutions, of the extinction of a whole series of older formations of social production.

If everybody in the world suddenly decided not to use their credit cards for three days, the whole global economy would be in serious trouble. (Recall how we were all urged to get out our credit cards after 9/11 and get back to shopping.) Which is why so much effort is put toward getting money out of our pockets and keeping it circulating.

If we were to consult the archaeological and historical records, many would now probably hold that the money-form didn’t arise the way that Marx proposes at all. I am inclined to accept that argument, but then on top of it say the following—and this comes back to Marx’s interest in understanding a capitalist mode of production. Under capitalism, the money-form has to be disciplined to and brought into line with the logical position that Marx describes, such that the money-form reflects the needs of a system of proliferating exchange relations. But by the same token (forgive the pun), it is the proliferation of commodity-exchange relations that disciplines any and all preceding symbolic forms to the money-form required to facilitate commodity-market exchange. The precursors of the money-form, which can indeed be found in the archaeological and historical record of coinage, have to conform to this logic to the degree that they get absorbed within capitalism and perform the function of money. At the same time, it should be clear that the market could not have evolved without that disciplining taking place. Though the historical argument is weak, the logical argument is powerful.

It is only the expression of equivalence between different sorts of commodities which brings to view the specific character of value-creating labour, by actually reducing the different kinds of labour embedded in the different kinds of commodity to their common quality of being human labour in general. (142)

It is therefore only at the money moment—the moment of capitalist universality—that we can tell where we are in relation to value and surplus-value.

Marx inverted Hegel’s dialectics and stood it right side up, on its feet.

Marx’s critique of free markets and free trade can shed as much devastating light on our own actually existing capitalism as it did for the capitalism of Marx’s own time and place.

Marx wrote his dissertation on Epicurus, and he was familiar with Greek thought. Aristotle, as you will see, provides a frequent anchor for his arguments.

Once you can hang a price tag on something, you can in principle put a price tag on anything, including conscience and honor, to say nothing of body parts and children.

One of the curious things about our educational system, I would note, is that the better trained you are in a discipline, the less used to dialectical method you're likely to be. In fact, young children are very dialectical; they see everything in motion, in contradictions and transformations. We have to put an immense effort into training kids out of being good dialecticians. Marx wants to recover the intuitive power of the dialectical method and put it to work in understanding how everything is in process, everything is in motion. He doesn't simply talk about labor; he talks about the labor process. Capital is not a thing, but rather a process that exists only in motion. When circulation stops, value disappears and the whole system comes tumbling down.

The accumulation of money as unlimited social power is an essential feature of a capitalist mode of production. When people seek to accumulate that social power, they start to behave in a very different way. Once the universal equivalent becomes a representation of all socially necessary labor-time, the potentialities for further accumulation are limitless.

The British imperialist logic that led to the Opium Wars reflected this: there was a lot of silver in China, so the idea was to sell Indian opium to the Chinese, get all that silver out in that lucrative sale, and thereby pay for all the goods that were being produced in Manchester and sent to India. When the Chinese resisted opening their doors to the opium trade, the British response was to knock them down with military force.

the labour-time necessary for the production of labour-power is the same as that necessary for the production of those means of subsistence; in other words, the value of labour-power is the value of the means of subsistence necessary for the maintenance of its owner.

There is a big difference between the circulation of money as a mediator of commodity exchange and money used as capital. Not all money is capital. A monetized society is not necessarily a capitalist society. If everything revolved around the C-M-C circulation process, then money would be merely a mediator, nothing more. Capital emerges when money is put into circulation in order to get more money.

The rise of monetary exchange leads to socially necessary labor-time becoming the guiding force within a capitalistic mode of production. Therefore, value as socially necessary labor-time is historically specific to the capitalist mode of production. It arises only in a situation where market exchange is doing the requisite job.

These passages on effective demand are problematic in certain respects, and Rosa Luxemburg provides a compelling challenge to Marx on this point, arguing that imperialism directed against noncapitalist social formations provided a partial answer to the effective demand problem.4 There has been debate over these issues ever since.

The UN Universal Declaration of Human Rights of 1948 is a foundational document for a bourgeois, market-based individualism and as such cannot provide a basis for a thoroughgoing critique of liberal or neoliberal capitalism. Whether it is politically useful to insist that the capitalist political order live up to its own foundational principles is one thing, but to imagine that this politics can lead to a radical displacement of a capitalist mode of production is, in Marx’s view, a serious error.

This boundless drive for enrichment, this passionate chase after value, is common to the capitalist and the miser; but while the miser is merely a capitalist gone mad, the capitalist is a rational miser.

This is an absolutely vital point that cannot be overemphasized: value is immaterial but objective. Given Marx’s supposed adherence to a rigorous materialism, this is, on the face of it, a surprising argument, and we have to wrestle a bit with what it means. Value is a social relation, and you cannot actually see, touch or feel social relations directly; yet they have an objective presence. We therefore have to carefully examine this social relation and its expression.

This is what the bourgeois political economists have done: they have treated value as a fact of nature, not a social construction arising out of a particular mode of production. What Marx is interested in is a revolutionary transformation of society, and that means an overthrow of the capitalist value-form, the construction of an alternative value-structure, an alternative value-system that does not have the specific character of that achieved under capitalism. I cannot overemphasize this point, because the value theory in Marx is frequently interpreted as a universal norm with which we should comply. I have lost count of the number of times I have heard people complain that the problem with Marx is that he believes the only valid notion of value derives from labor inputs. It is not that at all; it is a historical social product. The problem, therefore, for socialist, communist, revolutionary, anarchist or whatever, is to find an alternative value-form that will work in terms of the social reproduction of society in a different image. By introducing the concept of fetishism, Marx shows how the naturalized value of classical political economy dictates a norm; we foreclose on revolutionary possibilities if we blindly follow that norm and replicate commodity fetishism. Our task is to question it.

This translates into a hypothesis about actually existing capitalism: that the more it is structured and organized according to this utopian liberal or neoliberal vision, the greater the class inequalities. And there is, it goes without saying, plenty of evidence to support the view that the rhetoric of free markets and free trade and their supposed universal benefits to which we have been subjected these past thirty years have produced exactly the result that Marx would expect:

Thus Marx begins his attack on the liberal concept of freedom. The freedom of the market is not freedom at all. It is a fetishistic illusion. Under capitalism, individuals surrender to the discipline of abstract forces (such as the hidden hand of the market made much of by Adam Smith) that effectively govern their relations and choices. I can make something beautiful and take it to market, but if I don’t manage to exchange it then it has no value. Furthermore, I won’t have enough money to buy commodities to live. Market forces, which none of us individually control, regulate us. And part of what Marx wants to do in Capital is talk about this regulatory power that occurs even “in the midst of the accidental and ever-fluctuating exchange relations between the products.” Supply and demand fluctuations generate price fluctuations around some norm but cannot explain why a pair of shoes on average trades for four shirts. Within all the confusions of the marketplace, “the labour-time socially necessary to produce [commodities] asserts itself as a regulative law of nature. In the same way, the law of gravity asserts itself when a person’s house collapses on top of him” (168). This parallel between gravity and value is interesting: both are relations and not things, and both have to be conceptualized as immaterial but objective.

Woodrow Wilson, that great liberal president of the United States who sought to found the League of Nations, put it this way in a lecture he delivered at Columbia University in 1907: Since trade ignores national boundaries and the manufacturer insists on having the world as a market, the flag of his nation must follow him, and the doors of the nations which are closed against him must be battered down. Concessions obtained by financiers must be safeguarded by ministers of state, even if the sovereignty of unwilling nations be outraged in the process. Colonies must be obtained or planted, in order that no useful corner of the world may be overlooked or left unused.

Yes, indeed, individual laborers will have rights over their own body and individual legal rights in the labor market. In principle they have the right to sell their labor-power to whomsoever they choose and the right to buy whatever they want in the marketplace with the wages they receive. Creating such a world is what the capitalist form of imperial politics has been about for the past two hundred years.