Karl Marx and the Classics

An Essay on Value, Crises and the Capitalist Mode of Production

John Milios, Dimitri Dimoulis

• Publisher: Taylor & Francis
• Year: 2018
• eBook ISBN: 9781351752725
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

This title was first published in 2002: By exploring Marxian value theory and its relevance to present issues of economic analysis, such as the circuit of social capital, the quantity theory of money, instability and economic crises, and economic exploitation and its ideological disguise, this volume investigates the conceptual links between Marxian and Classical Political Economy. The book poses and discusses questions that have yet to be tackled thoroughly in the English-language Marxian literature, such as Marx's theoretical inconsistencies and the role of Engels as editor and "interpreter" of Marx's writings. In doing so, this excellent text provides a much-needed contemporary re-evaluation of the work of one of the world's most enduring writers.

Part I:
Value and Money

1

Introduction: On the Object of Marx’s “Critique of Political Economy”

1. Marx’s Mature Economic Writings

The aim of this introductory chapter is to compendiously illustrate the position that Marx’s mature economic writings acquire in the author’s overall theoretical work, in order then to posit the questions, which this book will try to investigate: the relation of Marx’s theoretical analysis to Classical economic theory on the one hand, and its significance as a tool for gaining an insight into contemporary capitalist economies on the other.

As stated in the Preface, Marx’s mature economic writings contain the following works: the Manuscripts 1857-58, (Grundrisse, Foundations of the Critique of Political Economy - Marx 1993, MEGA II, 1.1); the book A Contribution to the Critique of Political Economy (Marx 1971, MEGA II, 1.2); the Manuscript 1861-63 (comprising nearly 2,500 printed pages -MEGA II, 3.1-3.6, a part of which was published as the Theories of Surplus Value - Marx 1971); the Manuscripts 1863-67 (containing all drafts of the three volumes of Capital. A Critique of Political Economy -MEGA II, 4.1 and 4.2); and Volume one of Capital (first published in 1867 -MEGA II, 5). In the second (1872-73) edition of Volume one of Capital (Marx 1990), Marx revised Part one of the book, entitled “Commodities and Money”. Volumes two and three of Capital were edited and published by Engels in 1885 (Marx 1992) and 1894 (Marx 1991) respectively.

2. The Theoretical Background: Marx’s Theory of History (Class Struggle and the Modes of Production)

The economic theory of Marx is firmly embedded in his theory of History as the theory of class struggles, which he had formulated and developed jointly with Frederick Engels since the mid 1840s.

Starting from his Theses on Feurbach (1845), Marx rejects the entire tradition of theoretical-philosophical humanism (the conception that the individual or human nature determines the form and the evolution pattern of societies). He wrote: “Feuerbach resolves the religious essence into the human essence. But the human essence is no abstraction inherent in each single individual. In its reality it is the ensemble of the social relations” (6^th Thesis on Feuerbach). On this basis Marx formulated his concept of class struggle as the motive force of social evolution: “The history of all hitherto existing society is the history of class struggles” (The Communist Manifesto, Marx-Engels 1985: 79).

This approach creates certain relations of theoretical rupture but also continuity between Marx’s analyses and Classical Political Economy:

On the one hand, Marx draws away from all forms of humanist-anthropological foundation of Political Economy, which comprehend commodity exchange and the social division of labour as the outcome of human nature;¹ on the other hand, however, he adopts the definition of classes introduced by Classical Political Economy, as a point of departure for the formulation of his own class-theory:² The specific position that each “individual” acquires in the social relations of production constitutes the initial condition which determines their class integration.

Marx, however, is not restricted to this position. He identifies, isolates, and develops the “relationist element” which contains the position of the Classical Economists, and in this way, he formulates a new theory of social relations, and of classes as the main element of these relations. Marx developed the position of the Classical Political Economists in two directions (see also Milios 2000):

a) He demonstrated the element of class antagonism, of the conflicting interests between the main classes of capitalist society and particularly between the capitalists and wage-labourers. Even further, he grasped the unity between the competing classes of society, the unity and coherence of society, in terms of social-class power:

Power no longer constitutes the “right of the sovereign,” or the “power of the state” in relation to (equal and free) citizens, but a specific form of class domination. Power is always class power, the power of one class, (or a coalition of classes), of the ruling class, over the other, the dominated classes of society. This power, which stabilises on the basis of dominant social structures, is reproduced within class antagonism, within the struggle of the classes. The specific unity of society is, therefore, inseparable from the unity of the specific class power, which is insured within the class struggle.³

The Marxist theory of History thus constitutes a theory of class power within class struggle. The classes are defined exclusively on the field of class struggle (Poulantzas 1973 and 1973-a). This means that the classes shall be perceived mainly as social relations and practices and not as “groups of individuals”. Class practices have therefore, according to Marxist theory, an objective dimension, independently of whether or not there is the capacity (in each circumstance) to acquire consciousness of their common social interests, of those who are part of classes that are oppressed and subject to exploitation. In fact, a crucial element of class power is its capacity to avert the realisation of common class interests by those who belong to classes that are being dominated or are sustaining economic exploitation (Dimoulis 1994).⁴

b) Parallel to the construction of the theory of class power, within the context of class struggle, Marx perceives that specific societies consist of a mosaic of social - class relations, which do not all belong to the same type of social coherence (the same type of class power). They constitute, rather, the specific historical result of the evolution of society, which, as a rule allows the “survival” of elements with roots to previous types of social organisation, to previous historical systems of class power (e.g. feudalism).

Marx seeks and isolates, in this way, those elements of social relations which: 1) Comprise the specific difference of capitalism, and discerns this from the corresponding elements of other types of class domination (and of the corresponding social organisation). 2) Constitute the permanent, “unaltered” nucleus of the capitalist system of class domination, independently from the particular evolution of each specifically studied (capitalist) society. This means that to each specific type of economic domination and exploitation corresponds to a specific type of organisation of political power and the domination of a specific type of ideological forms.⁵

Thus a new theoretical object emerges: the (capitalist) mode of production. On the basis of the theoretical analysis of the mode of production, each particular class society can thus be studied in depth (each particular class social formation).

3. The Capitalist Mode of Production as the Keystone of Marx’s Analysis of the Capitalist Economy and Society

The notion of the capitalist mode of production refers to the causal nucleus of the totality of capitalist power relations, the fundamental social-class interdependences which define a system of social power (a society) as a capitalist system.

It is established in the capital-relation initially on the level of production: in the separation of the worker from the means of production (who is thus transformed into a wage-labourer, possessor only of his labour-force) and in the full ownership of the production means by the capitalist: the capitalist has both the power to place into operation the means of production (which was not the case in pre-capitalist modes of production) as well as the power to acquire the final surplus product.

The (capitalist) mode of production does not, however, constitute exclusively an economic relation but refers to all of the social levels (instances). In this is also contained the core of (capitalist) political and ideological relations of power. In it, there is thus articulated the particular structure of the capitalist state. Consequently, it is revealed that the capitalist class possesses not only the economic, but also the political power; not because the capitalists man the highest political offices of the state, but because the structure of the political element in capitalist societies, and more especially of the capitalist state (its hierarchical - bureaucratic organisation, its “classless” function on the basis of the rule of Law etc.) corresponds to and insures the preservation and reproduction of the entire capitalist class domination. Similarly it becomes apparent that the structure of the dominant bourgeoisie ideology (the ideology of individual rights and equal rights, of national unity and of the common interest, etc.) corresponds to the perpetuation and the reproduction of the capitalist social order and of the long-term interests of the capitalist class. The dominant ideology thus constitutes a process of consolidation of capitalist class interests, precisely through its materialisation as a “modus vivendi,” as a “way of life” not only of the ruling, but in an altered form, of the ruled classes as well.⁶

In order that the labourer is transformed into a wage-earner, the “ruler” must give way to the modern constitutional state and his “subjects” must be transformed, on the judicial-political level, into free citizens:

This worker must be free in the double sense that as a free individual he can dispose of his labour-power as his own commodity, and that, on the other hand, he has no other commodity for sale, i.e. he is rid of them, he is free of all the objects needed for the realisation of his labour-power (Marx 1990: 272-73).

In pre-capitalist modes of production, in contrast, the ownership of the means of production on the ruling class was never complete. The ruling class had under its property the means of production, i.e. it acquired the surplus product, but the working-ruled classes still maintained the “real appropriation” (Poulantzas 1973: 26) of the means of production (the power to put them into operation). This fact is connected to significant corresponding characteristics in the structure of the political and ideological social levels as well. Economic exploitation, that is the extraction of the surplus product from the labourer had as its complementary element direct political coercion: the relations of political dependence between the dominant and the dominated, and their ideological (as rule, religious) articulation,⁷ which results in shaping certain forms of consensus of those subjected to exploitation towards the existing social order, thus reducing the use of direct violence by those possessing power.

The mode of production, therefore, describes the specific difference of a system of class domination and class exploitation. In a given society there may exist more modes (and forms) of production, and therefore a complex class configuration. The articulation of different modes of production is contradictory and is always accomplished under the domination of one particular mode of production.⁸ The domination of one mode of production (and particularly of the capitalist mode of production) is connected to the tendency toward the dissolution of all the other competing modes of production.

The question posited by Marxist analysis is under what conditions precapitalist social structures are replaced by the capitalist mode of production, or to what extent they may constitute an impediment to capitalist development. Many authors have portrayed Marx as an advocate of a “linear evolutionism”, according to which all countries will inevitably go through the same stages of economic and social evolution, from pre-capitalist forms to developed capitalism, culminating in socialism. Although such formulations can be found in the work of Marx and Engels, the “linear evolutionism” does not prevail in the economic writings of Marx’s maturity. Marx recognises mainly the possibility of capitalism emerging as a consequence of class struggle and he outlined the prerequisites for such a historical development. The final domination or the deflection of this tendency is not a given a priori; its outcome is always determined by existing social relations of power. In most cases, the break-up of the pre-capitalist modes of production takes the form of agricultural reform, precisely since it involves modes of production, which are mainly based on pre-capitalist property relations in the land (Milios 1989).⁹

4. The Question of Value Theory

As argued above, the socio-economic concept of the (capitalist) mode of production modifies the Classical theory of economy and social classes, and constitutes the basis of Marx’s unique theory of History (as the history of class struggles). Furthermore, it is formulated, from the first moment of its introduction, on the view that the economy forms the basis, in the last instance, of the whole class society - with property relations vis-à-vis the means of production the keystone of class identity: “Capital [is] that kind of property which exploits wage labour, and which cannot increase except upon conditions of begetting a new supply of wage labour for fresh exploitation” (Marx-Engels 1985: 96-7).

This explains why Marx always considered economic theory to be the foundation of his whole theoretical edifice. In this framework, Marx needed to formulate a value theory in order to vindicate his theory of class exploitation and his key-notion, the capitalist mode of production. However, until 1857 Marx had not yet developed his own value theory. His whole analysis of class struggle, class exploitation and the capitalist mode of production was thus initially derived from the Ricardian theory of value. In 1847 he wrote:

Ricardo expounded scientifically (...) the theory of present-day society, of bourgeois society (...) Ricardo shows us the real movement of bourgeois production, which constitutes value. (...) The determination of value by labour time, is, for Ricardo, the law of exchange value (...) Ricardo establishes the truth of his formula by deriving it from all economic relations, and by explaining in this way all phenomena, even those like ground rent, accumulation of capital and the relation of wages to profits, which at first sight seems to contradict it; it is precisely that which makes his doctrine a scientific system (Marx-internet, The Poverty of Philosophy, Chapter 1: A scientific discovery).

Marx’s rupture with the humanist-anthropological premises of Classical Political Economy seemed to merge well with the Classical (Ricardian) value theory. According to the main postulate of the Classical (Ricardian) theory of value as “labour expended”, commodities are exchanged with each other at relative quantities reflecting the relative quantities of labou...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Preface
• Part I: Value and Money
• 1 Introduction: On the Object of Marx’s “Critique of Political Economy”
• 2 Marx versus Ricardo (Marx’s Theory of Value)
• 3 Money and Capital (Marx’s Theory of Money and the Circuit of Capital)
• Part II: Theory of Value and Ideology
• 4 The Question of “Commodity Fetishism”
• Part III: Theory of Value and Prices: Marx’s Ambivalence Towards Classical Political Economy
• 5 Social Capital and the General Rate of Profit
• 6 Theory of Value and Ground Rent (Smith-Ricardo-Marx: Converges and Disputes)
• Part IV: The Circuit of Social Capital, The Profit Rate and the Economic Crises
• 7 The “Law of the Falling Tendency in the Rate of Profit”
• 8 The Historic Marxist Controversy on Economic Crises and its Theoretical Significance
• 9 Defining a Marxist Theory of “Overaccumulation Crises”
• 10 Epilogue: On the Character of Marxian Theory, “Ricardian Marxism” and the Role of F. Engels
• Bibliography
• Index