Theories of Modern Capitalism (Routledge Revivals)

Tom Bottomore

• Publisher: Routledge
• Year: 2010
• Topic: Politics & International Relations
• eBook ISBN:
  9781136971211
• Subtopic: Economic History
• Index: Politics & International Relations

First published in 1985, Theories of Modern Capitalism provides a succinct study of Marxist and non-Marxist theories of Capitalism, its recent development, and the prospects of a transition to socialism.

The study begins with a critical examination and comparison of four major theories of capitalism, in the works of Marx, Weber, Schumpeter and Hayek. This is followed by an analysis of the most recent phase of capitalism which has been conceptualised by Marxists thinkers in various ways as 'organised capitalism'', 'state monopoly', or 'late capitalism'. Finally, Bottomore considers the question of a 'transition to socialism' in the diverse interpretations which have been offered by Marxists on one side, and by Weber, Schumpeter and Hayek on the other.

Theories of Modern Capitalism will be valuable in a wide range of courses in social and political theory, and will also have an appeal to a broader readership concerned with issues of social and economic policy.

1
Marx’s Theory of the Commodity-Producing Society

Marx’s theory of modern capitalism was constructed in several stages as part of a more general theory of society. The first stage was that in which Marx, during 1842–3, formed his conception of the proletariat as a distinctive element, and a major political force, in the new type of society that was coming into existence in Western Europe. But the proletariat, as Marx noted, was a product of the industrial movement, and in order to understand fully its social situation and historical significance it would be necessary to study in detail the economic structure and development of the modern Western societies. Hence, in a second stage of his work, and guided initially by the studies which Engels had already devoted to political economy,¹ Marx embarked upon an extensive reading of the economists—in particular, Say, James Mill, List, Adam Smith and Ricardo—and filled a series of notebooks with critical comments on their writings.

The first results of these economic studies were set down in the Economic and Philosophical Manuscripts (1844), where Marx formulated a broad conception of human labour as being not only the source of material wealth—and therefore the basis of all social life—but also the means through which the human species develops its specifically human qualities and constructs particular forms of society. The distinctive nature of capitalist society, as one of these forms, is then outlined in the following terms:

Labour does not only create goods; it also produces itself and the worker as a commodity, and indeed in the same proportion as it produces goods. This fact simply implies that the object produced by labour, its product, now stands opposed to it as an alien being, as a power independent of the producer….

The third stage in the formation of Marx’s thought was the incorporation of his conception of labour into a systematic theory of the historical development of human society. This was accomplished in various writings of the mid-1840s, and notably in the manuscripts of The German Ideology (1845–6) where Marx summarized his view as follows:

This conception of history, therefore, rests on the exposition of the real process of production, starting out from the simple material production of life, and on the comprehension of the form of intercourse connected with and created by this mode of production, i.e. of civil society in its various stages as the basis of all history, and also in its action as the state. From this starting point, it explains all the different theoretical productions and forms of consciousness, religion, philosophy, ethics, etc., and traces their origins and growth, by which means the matter can of course be displayed as a whole (and consequently also the reciprocal action of these various sides on one another). (German Ideology, Vol. 1, s. 1A,2)

Similarly, in a letter to P.V.Annenkov (28 December 1846) he wrote:

What is society, regardless of its particular form? The product of men’s interaction. Are men free to choose this or that social form. Not at all. Assume a certain stage of development of men’s productive powers and you will have a particular form of commerce and consumption. Assume certain levels of development of production, commerce, and consumption, and you will have a particular type of social constitution, a particular organization of the family, of ranks or classes; in short a particular form of civil society. Assume a determinate form of civil society and you will have a particular type of political regime, which is only the official expression of civil society.

After outlining this new conception of the development of human society—which remained the foundation of his whole social theory, and was restated in the preface to A Contribution to the Critique of Political Economy (1859), where ‘the Asiatic, the ancient, the feudal, and the modern bourgeois modes of production’ were designated as ‘progressive epochs in the economic formation of society’—Marx concentrated his main scientific effort, for the rest of his life, upon the analysis of one particular historical form of society: Western capitalism.² What distinguishes bourgeois or capitalist society from other types of society is that social production here takes the form of a generalized production of commodities:

The wealth of those societies in which the capitalist mode of production prevails, appears as ‘an immense accumulation of commodities’, with the individual commodity as its elementary unit. Our investigation therefore begins with an analysis of the commodity. (Capital, Vol. 1, ch. 1)

First, Marx distinguishes the ‘two factors of a commodity’: use value (i.e. those qualities which satisfy some human want), and value (which manifests itself in the form of exchange value, i.e. the proportion in which use values of one kind are exchanged for use values of another kind, this proportion being expressed in a developed capitalist economy in terms of the ‘general equivalent’, money). He then proceeds to analyse ‘the dual character of the labour embodied in commodities’, which corresponds with these two factors: (i) the specific, qualitatively distinct, kinds of useful labour which produce particular use values, and (ii) abstract labour, or ‘human labour pure and simple, the expenditure of human labour power in general’, which creates the value of commodities. It is the conjunction in the commodity of use value and value, useful and abstract labour, that accounts for its ‘enigmatic character’, or what Marx goes on to call the ‘fetishism of commodities’; which consists in the fact that the commodity form presents the social character of labour as an objective characteristic of the products of labour themselves’, so that ‘the social relation of the producers to the sum total of their own labour appears to them as a social relation between objects’. But this is a necessary appearance, a real phenomenon in capitalist society; for useful objects only become commodities because they are the products of independently producing private individuals or groups, the social character of whose individual labour only manifests itself when exchange takes place.

Marx’s intention was to reveal the specific form of the social labour process in a capitalist society, as may be seen very clearly from a note on his theory of value which he wrote towards the end of his life: ‘…the “value” of the commodity only expresses in a historically developed form what also exists in all other historical forms of society, even though in another form; namely, the social character of labour, in so far as it exists as the expenditure of “social” labour power’.³ But Marx’s analysis of capitalism was not only guided in this way by his conception of historical stages of development; it was also based upon other elements in his general social theory, and notably the theory of classes. For Marx, capitalism was only one of the forms of class society, which he characterized in general terms as follows:

The specific economic form in which unpaid surplus labour is pumped out of the direct producers determines the relation of domination and servitude, as it emerges directly out of production itself and in its turn reacts upon production…. It is always the direct relation between the owners of the conditions of production and the direct producers which reveals the innermost secret, the hidden foundation of the entire social edifice, and therefore also of the political form of the relation between sovereignty and dependence, in short, of the particular form of the state. The form of this relation between owners and producers always necessarily corresponds to a definite stage in the development of the methods of work and consequently of the social productivity of labour. (Capital, Vol. 1, ch. 47)

The analysis of capitalism has therefore to be pursued further, in order to show, with respect to this specific form of society, precisely how unpaid surplus labour is pumped out of the direct producers;⁴ and Marx proceeds to argue that in capitalist society labour power itself becomes a commodity, but one which has the unique property of being able to add more value to other commodities, when it is expended in production, than its own value, which is determined (in a manner similar to that of any other commodity)⁵ by the abstract labour socially necessary for its maintenance and reproduction. This peculiarity of labour power as a commodity Marx summarizes in his conception of ‘necessary’ and ‘surplus’ labour, the former being that which broadly maintains the aggregate sum of labour power (though the required sum may fluctuate), the latter being the source of ‘surplus value’ which is appropriated by the owners of the conditions (or means) of production and is partly consumed by them, partly accumulated as capital.

From this analysis there also appears another distinctive feature of capitalism; namely, that the extraction of surplus labour (for which Marx uses the term ‘exploitation’ as a technical expression) here takes place as a more or less purely economic process, whereas in earlier forms of society, based upon the labour of slaves or serfs, it required some kind of extra-economic compulsion. But this also means that exploitation is less apparent; for, while the slave or serf experiences directly the fact that a part of the product of his labour is appropriated by a dominant group, the wage-worker is engaged in a process of production in which he/she apparently exchanges labour for other commodities (via the wage) at its real value, and the mechanism by which a surplus product is generated and appropriated is obscured.⁶ Hence the need, according to Marx, for a scientific analysis of the capitalist economy in order to reveal, beneath the surface appearance, its fundamental structure and mode of operation, and the crucial importance in such an analysis of the distinction between ‘labour’ and ‘labour power’.

Marx’s model of the basic elements of a ‘purely capitalist society’⁷ was not the conclusion of his theory, but the starting point for a comprehensive study of the real historical development of modern capitalism. This involved examining, in particular, the development of production by machinery (machinofacture), the centralization and concentration of capital, economic crises, and the evolution of class conflict.

Marx regarded the advent of machinofacture (including the production of machines by machines) as marking the mature phase of the capitalist mode of production in which there is a ‘real subsumption of labour under capital’;⁸ that is, the dominance of machinery in the labour process, incessant transformation of the labour process, and the imposition of strict factory discipline, so that the worker becomes ‘a living appendage’ of the lifeless machine and ‘it is not the worker who employs the means of labour, but on the contrary, the means of labour employ the worker’ (Capital, Vol. 1, ch. 13). Two factors determine the development of machinofacture. One, evidently, is the progress of technology (i.e. the industrial revolution) based upon science, which Marx continually emphasizes, in conformity with his general view of the determining influence of the forces of production in the historical process. From this aspect capitalism is described in glowing terms as an immense advance in human productive powers:

The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive powers than have all preceding generations together. Subjection of nature’s forces to man, machinery, application of chemistry to industry and agriculture, steam navigation, railways, electric telegraphs, clearing of whole continents for cultivation, canalization of rivers, whole populations conjured out of the ground—what earlier century had even a presentiment that such productive forces slumbered in the lap of social labour? (Communist Manifesto, s. 1)

What Marx emphasizes particularly in his analysis of machinofacture is its basis in the growth of scientific knowledge, and its influence in extending and making more evident the social character of labour; there develop, he says

on an ever-extending scale, the co-operative form of the labour process, the conscious application of science, the planned exploitation of the earth, the transformation of the instruments of labour into instruments which can only be used in co-operative work, the economizing of all means of production by their use as the means of production of combined, socialized labour, the entanglement of all peoples in the net of the world market, and with this, the international character of the capitalist system. (Capital, Vol. 1, ch. 24)

These ideas, as we shall see, play an important part in Marx’s analysis of the later phases of capitalist development, and of the transition to socialism.

The second f actor in the extension of production by machinery is the competition among capitalists. In elabora...

Table of contents

• Controversies in Sociology
• Contents
• Theories of Modern Capitalism
• Introduction
• 1 Marx’s Theory of the Commodity-Producing Society
• 2 Max Weber on Capitalism and Rationality
• 3 Schumpeter’s View of Capitalist Dynamism and Decline
• 4 Capitalism, Individualism and Freedom
• 5 Imperialism and the Stages of Capitalist Development
• 6 From Capitalism to Socialism?
• Bibliography
• Index