1 The evolution of Marx’s economic ideas is reviewed by Oakley (1983, 1984, 1985) and Rosdolsky (1977). Basic concepts are explained clearly and concisely in Bottomore (1991). For a historical overview of Marxian political economy, see Howard and King (1989, 1991).
2 Meek (1973, p. 241). This bias is similar to that faced by other pioneers: ‘Those who cavalierly reject the Theory of Evolution, as not adequately supported by facts, seem quite to forget that their own theory is supported by no facts at all. Like the majority of men who are born to a given belief, they demand the most rigorous proof of any adverse belief, but assume that theirs needs none’ (Herbert Spencer, ‘The Development Hypothesis’, originally published in The Leader, 1852); I am grateful to Andrew Berry for this reference.
3 Marx’s theory is often called a (or even the) labour theory of value. This is misleading, and a better term is the original German ‘arbeitswertlehre’, or theory of labour value (Diane Elson suggests ‘value theory of labour’, see Elson 1979b). I will, however, stick to the tradition, with thanks to Alejandro Ramos-Martínez for this insight.
4 See Lipietz (1985b, p. 83).
5 ‘Political economy, in the widest sense, is the science of the laws governing the production and exchange of the material means of subsistence in human society … The conditions under which men produce and exchange vary from country to country, and within each country again from generation to generation. Political economy, therefore, cannot be the same for all countries and for all historical epochs … Political economy is therefore essentially a historical science’ (Engels 1998, pp. 185–186). For outstanding introductions to Marx’s political economy, see Fine (1989), Foley (1986), D. Harvey (1999) and Weeks (1981).
6 Mohun (1991, p. 42).
7 See Fine (1980, 1982, 1989) and Weeks (1981, 1990). Other important influences in my work include Arthur (2001), Chattopadhyay (1994), Elson (1979b), Gleicher (1983), Itoh and Lapavitsas (1999), Lebowitz (1992) and Postone (1993).
8 Heller (1976, p. 22); see also Lebowitz (1992, p. 1).
9 Elson (1979b, p. 171). More broadly, Weeks (1981, pp. 8, 11) rightly claims that ‘value theory is not primarily a theory of exchange or allocation, but a theory that reveals the class relations underlying a commodity-producing society … The theory of value that Marx developed provides at the same time (1) the revelation that capitalism is merely one form of exploitative (class) society; (2) the explanation of the historical transition from precapitalist to capitalist society; (3) a theory of the concrete operation of a capitalist economy; and (4) an explanation of why others would explain the workings of a capitalist economy in an alternative theoretical framework.’
1 Marx published few works in his lifetime, the most prominent being The Poverty of Philosophy, the Manifesto of the Communist Party, the Contribution to the Critique of Political Economy and Capital 1. Important manuscripts were edited and published only after his death, including Capital 2 and 3, the Theories of Surplus Value and the Grundrisse (see Oakley 1983).
2 Capital 1, p. 99.
3 See T. Smith (1990, p. 32; 1993a, p. 47).
4 Capital 1, p. 104. This sentence expresses Marx’s approval for the publication of the French translation of Capital 1 as a serial.
5 Letter to Engels, December 8, 1861, quoted in Murray (1988, p. 109).
6 Capital 1, p.104.
7 Arthur (2000a, p. 107 n10). See also Arthur (1993a, pp. 63–64; 1997, p. 11).
8 For a detailed analysis of Marx’s relationship to Hegel, see Zeleny (1980, chs 12–17).
9 ‘Although rigorous with himself in terms of scientific methodology, Marx submerges the methodological issues of his scientific writings’ (Murray 1988, p. 109). See also Reichelt (1995).
10 Lenin (1972, p. 319).
11 The term ‘materialist dialectics’ is explained by Ilyenkov (1982, pp. 77, 114, 162, 278).
12 See Arthur (1998, p. 11), Carver (1980, p. xi), Ilyenkov (1982, pp. 32–33, 57, 88), Kosik (1976, pp. 16–23), Lebowitz (1992, p. 2) and Ollman (1993, pp. 12–13). For an excellent overview of dialectics, see Ollman (1993, ch. 1; 1998). For an outstanding review of the history of dialectics, see Scott (1999).
13 This approach is typical of neoclassical economics. For an illuminating analysis of its logical shortcomings, see Schotter (1990, chs 4–5).
14 Mental generalisations are also known as empiricist abstractions (Gunn 1992), formal abstractions (Ilyenkov 1982, pp. 61–62) or general or abstract abstractions (Murray 1988, pp. 114, 122–129). For a critical analysis, see Ilyenkov (1977, essays 3, 5 and 10).
15 See Grundrisse, pp. 85–89, Gunn (1992, p. 23) and Ilyenkov (1977, p. 64; 1982, pp. 18–19, 29–35, 48, 60–66, 78, 85).
16 See Ilyenkov (1982, pp. 21–28, 47–48, 60–61, 76, 81–86). For similar views, see Albritton (1986, pp. 190–191), Arthur (1979, pp. 73–77; 1993a, pp. 85–86), Aumeeruddy and Tortajada (1979, pp. 5–9), Elson (1979b, pp. 145, 164), Fine and Harris (1979, p. 11), Gunn (1992, pp. 18–24), Himmelweit and Mohun (1978, p. 75), Kapferer (1980, p. 77), Lebowitz (1992, pp. 39–40), Murray (1988, pp. 114–115, 122–128), Shaikh (1982, p. 76), T. Smith (1998, p. 467) and Sohn-Rethel (1978, pp. 20, 69–70). Marx’s concept of abstraction is explained by Ollman (1993, pp. 26–33).
17 Ilyenkov (1982, p. 22). See also Brown (2001) and Ilyenkov (1977, essays 1–2).
18 Lenin (1972, pp. 360–361) claims that, in Capital, ‘Marx first analyses the simplest, most ordinary and fundamental, most common and everyday relation of bourgeois (commodity) society, a relation encountered billions of times, viz. the exchange of commodities. In this very simple phenomenon (in this “cell” of bourgeois society) analysis reveals all the contradictions (or the germs of all the contradictions) of modern society. The subsequent exposition shows us the development (both growth and movement) of these contradictions and of this society in the [summation] of its individual parts, from its beginning to its end … Such must also be the method of exposition (or study) of dialectics in general … To being with what is the simplest, most ordinary, common, etc., with any proposition … Here already we have dialectics.’
19 Ilyenkov (1982, p. 84); see also Ilyenkov (1977, p. 369) and Zeleny (1980, pp. 31–38). For Lenin (1972, p. 152), ‘law and essence are concepts of the same kind (of the same order), or rather, of the same degree, expressing the deepening of man’s knowledge of phenomena, the world, etc.’ In what follows, essence is the ‘internal law-governed structure’; this structure determines the laws of development of the concrete, which manifest themselves systematically as tendencies. The interaction between tendencies and counter-tendencies shapes the evolution of the reality (see section 1.2, Marx 1975, pp. 259–260 and Reuten 1997).
20 For Rosdolsky (1977, pp. 114–115), ‘the reader should not imagine that economic categories are anything other than the reflections of real relations, or that the logical derivation of these categories could proceed independently of their historical derivation’. Similarly, Foley (1986, p. 1) rightly argues that ‘Marx conceives of the social reality he is analyzing as a process that evolves in responses to its own internal contradictions. In other words, the phenomena he discusses cannot be understood independently of the history that produced them’.
21 For materialist dialectics ‘the question of the universal character of a concept is transferred to another sphere, that of the study of the real process of development. The developmental approach becomes thereby the approach of logic’ (Ilyenkov 1982, pp. 76–77). See also Ilyenkov (1977, pp. 354–355; 1982, pp. 83–84, 94–96).
22 ‘[T]he individual exists only in the connection that leads to the universal. The universal exists only in the individual and through the individual. Every individual is (in one way or another) a universal. Every universal is (a fragment or an aspect, or the essence of) an individual …Here already we have the elements, the germs, the concepts of necessity, of objective connection in nature, etc. Here already we have the contingent and the necessary, the phenomenon and the essence’ (Lenin 1972, p.361). See also Bonefeld, Gunn and Psychopedis (1992a, pp. xv–xvi; 1992b) and Gunn (1992, pp. 20–24).
23 See Ilyenkov (1982, pp. 217–222, 232, 244). A somewhat similar approach (‘historical logic’) is outlined by Thompson (1978, pp. 231–238). Materialist dialectics is sharply distinct from the ‘logical-historical’ method of Engels (1981) and Meek (1973), see section 2.1.1.
24 Gunn (1992, p. 23).
25 See Capital 1, pp. 133, 283–284, 290.
26 See Theories of Surplus Value 1, pp. 409–410.
27 ‘The concrete universal expressed in the concept does not … comprise in itself all this wealth [of the concrete] in the sense that it comprehends all the specific instances and is applicable to them as their general name’ (Ilyenkov 1982, p. 84). Foley (1986, p. 4) similarly argues that the addition of higher determinations ‘may produce phenomena that appear to contradict the fundamental determinations … But this type of contradiction is only apparent; as long as the explanation is consistent with the structure of the theory, the fundamental determinations continue to be valid and important in the explanation and continue to operate in the more complex situation.’
28 See Grundrisse, pp. 460–461. For Marx, ‘no phenomena, and, emphatically, no social phenomena can be understood except in their historical context. Any proposition is robbed of its sense if it is taken as an eternal verity or as a truth independent of historical circumstances’ (Baumol 1983, p. 307). More specifically, ‘It is one of the characteristics of Marxian analysis that theoretical work constantly touches on the facts of historical reality … The continuous oscillation between abstract dialectical development and concrete historical reality pervades the whole of Marx’s Capital. At the same time … the Marxian analysis detaches itself continually from the sequence and superficialities of historical reality and expresses in ideas the necessary relations of that reality’ (Zeleny 1980, p. 36). See also Albritton (1986, p. 18), Colletti (1972, p. 3), Murray (1988, p. 113) and Thompson (1978, p. 249).
29 Marx was ‘deeply suspicious of universal categories … He saw categories themselves as a product of a particular society and sought concepts that could serve to distinguish capitalism from other modes of production and thereby serve as a basis for dissecting capitalism’s internal logic. In this manner, Marx seeks to make his materialism genuinely historical’ (D. Harvey 1999, p. 6).
30 See Marx’s second thesis on Feuerbach (Marx 1975, p. 422) and Moseley (1995a, pp. 93–94).
31 See chapter 2, Fine (1980, p. 123) and Ollman (1993, p. 61).
32 Böhm-Bawerk (1949, pp. 69–70).
33 For a rebuttal of Böhm-Bawerk’s critique, see Glick and Ehrbar (1986–87, pp. 464–470), Hilferding (1949), and Ilyenkov (1977, essay 10, and 1982, pp. 62, 73–81).
34 ‘Marx did not base his concept of value on a mental construct removed from the real world and requiring all sorts of arbitrary assumptions. Rather, his argument is based upon the fact that the reduction of all types of labour to a common standard is a product of the real world itself’ (Fine 1980, p. 124).
35 Value is ‘a definite social mode of existence of human activity (labour)’ (Theories of Surplus Value 1, p. 46). In other words, ‘What makes labor general in capitalism is not simply the truism that it is the common [physiological] denominator of all various specific sorts of labor; rather, it is the social function of labor that makes it general. As a socially mediating activity, labor is abstracted from the specificity of its product, hence, from the specificity of its own concrete form. In Marx’s analysis, the category of abstract labor expresses this real process of abstraction; it is not simply based on a conceptual process of abstraction’ (Postone 1993, pp. 151–152). See also Contribution, pp. 276–277 and Grundrisse, pp. 296–297.
36 Marx’s analysis is historical not only because of the presumably transitory existence of capitalism. In contrast with Aristotle, for example, who could only speculate about the essence of value (see Capital 1, pp. 151–152), Marx lived in an advanced capitalist society and he could observe that abstract labour is the essence of value: ‘The reduction of all phenomena to “labour in general”, to labour devoid of all qualitative differences, took place … in the reality of economic relations … rather than in the abstract-making heads of theoreticians. Value became that goal for the sake of which each thing was realised in labour; it became an “active form”, a concrete universal law governing the destinies of each separate thing and each separate universal … [R]eduction to labour devoid of all differences appears here as an abstraction, but as a real abstraction “which is made every day in the social process of production” … Here labour in general, labour as such appears as a concrete universal substance, and a single individual and the single product of his labour, as manifestations of this universal essence’ (Ilyenkov 1982, p. 97).
37 For a similar argument, see Perelman (1987, pp. 198–201), Rubin (1975, pp. 109–110; 1978, pp. 130–131) and M. Smith (1994a, p. 74). T. Smith (1998, p. 468) rightly argues that: ‘As we move to progressively more complex categorizations of capital, we move to more comprehensive accounts of value as a concrete universal, subjecting ever more dimensions of social life to its imperatives … For Marx … it was not sufficient to show that value is a concrete universal in Hegel’s sense. He wanted to explain how such an alien power could come to lord over social life. Abstract labour plays a crucial role in this explanation’.
38 Murray (1988, pp. 177–179).
39 See section 8.1, M. Smith (1994a, pp. 63–65), Thompson (1978, pp. 253–255) and, especially, Rosenthal (1999, pp. 296–300; 2000, pp. 505, 513).
40 In his analysis of capital, Marx ‘distinguished (a) the conditions and presuppositions of the existence of capital, which itself creates capital by its own circulation, and (b) the conditions and presuppositions of the existence of capital which belong only to the history of the creation of capital, which are merely phases of the development of capitalism, but which disappear as soon as capital takes off on its own accord … As soon as capital has developed, money, functioning as money-capital in the hands of capitalists, is built up, and the real conditions for the capitalist process of value creation are no longer apprehended as a historical presupposition but as the consequence of the specific activity of capital; in that way it creates the presuppositions and conditions of its own further existence and growth’ (Zeleny 1980, p. 37).
41 Ilyenkov (1982, p. 282); see also Grundrisse, p. 776 and Arthur (2000a, p. 121). Rosenthal (1997, pp. 161–162) reaches a similar conclusion: ‘Marx’s justification for presenting the circuit of capital as he does lies not in the alleged necessity that value overcome its merely immediate being in the commodity … but rather in the more mundane fact that money actually does circulate in the manner described by it. Marx notes the empirical occurrence of such a circuit, and establishes that only a quantitative variation between the values represented by its extremes could motivate social activity with which it is associated (viz. buying in order to sell). He then sets himself the task of explaining how such an apparent augmentation of value through circulation (a) is possible and (b) is compatible with the basic “law of value” which governs the simple circulation of commodities (viz. that commodities should exchange in just such quantities as their values are equal).’
42 Marx summarises his own method in Grundrisse, pp. 100–102, 107–108, and in Capital 1, pp. 99–102. Marx’s understanding of ‘contradiction’ is discussed by Ollman (1993, pp. 15–16) and, especially, Zeleny (1980, pp. 86–88, 222–223). For Ilyenkov, materialist dialectics is ‘the science of development through inner contradictions’ (1982, p. 278). He adds that ‘The dialectical materialist method of resolution of contradictions … consists in tracing the process by which the movement of reality itself resolves them in a new form of expression. Expressed objectively, the goal lies in tracing, through analysis of new empirical materials, the emergence of reality in which an earlier established contradiction finds its relative resolution in a new objective form of its realisation’ (pp. 262–263); see also Ilyenkov (1977, pp. 329–331).
43 For Lenin (1972, p. 196), ‘The totality of all sides of the phenomenon, of reality and their (reciprocal) relations—that is what truth is composed of. The relations (= transitions = contradictions) of notions = the main content of logic, by which these concepts (and their relations, transitions, contradictions) are shown as reflections of the objective world. The dialectics of things produces the dialectics of ideas, and not vice versa.’ More generally, he claims (pp. 92–93) that ‘Logic is the science not of external forms of thought, but of the laws of development “of all material, natural and spiritual things”, i.e., of the development of the entire concrete content of the world and of its cognition, i.e., the sum-total, the conclusion of the History of knowledge of the world.’
44 See Grundrisse, p. 278. For Lenin (1972, p. 183), ‘The laws of logic are the reflections of the objective in the subjective consciousness of man.’ Lenin adds elsewhere that ‘Cognition is the eternal, endless approximation of thought to the objects. The reflection of nature in man’s thought must be understood not “lifelessly,” not “abstractly,” not devoid of movement, not without contradictions, but in the eternal process of movement, the arising of contradictions and their solution’ (p. 195, see also p. 182).
45 The word ‘sublate’ is used as the English equivalent of Hegel’s ‘Aufhebung’ (to preserve the previous category while clearing away and substituting it). ‘Supersede’, ‘suspend’ and ‘transcend’ have also fulfilled a similar role in the literature; see Hegel (1991, pp. xxxv–xxxvi, 154).
46 Capital 3, p. 103. Groll and Orzech (1989, p. 57) rightly argue that ‘Marx’s concepts have a dynamic meaning in their appearances and transformations. His categories rarely have the straightforward, unequivocal meanings so familiar to, and expected by, the modern economist. On the contrary, they usually have multiple, sometimes complementary and sometimes contradictory, meanings’. See also section 7.3, especially footnotes 25–27, Aglietta (1979, p. 16), Arthur (1997, p. 22), D. Harvey (1999, pp. 1–3), Lenin (1972, p. 225) and Zeleny (1980, ch. 2).
47 Arthur (1998, pp. 11–12).
48 See Fine (1982, ch. 1).
49 Theories of Surplus Value 3, pp. 112–113, emphasis added.
50 Capital 3, pp. 398–399, emphasis added.
51 This term was coined by Arthur (1993b) to describe such works as Murray (1988), Shamsavari (1991), T. Smith (1990), and others. An earlier source of inspiration is Lukács (1971). See also Albritton (1986, pp. 179, 181–186), Banaji (1979), Fraser (1997) and Reuten and Williams (1989).
52 Lenin (1972, p.180). To this daunting task, Murray (1988, p. 57) adds: ‘A thorough understanding of Capital requires the study of Hegel’s philosophy, the philosophy of the Young Hegelians, and Marx’s critique of the entire cycle of speculative thought.’ The accretion of endless philosophical prerequisites to Capital is regrettable because it erects barriers between readers and Marx’s text (see Mattick Jr. 1993, p. 116).
53 ‘[I]t is precisely the lessons learned from Hegel that make Capital great’ (Murray 1993, p. 37); ‘[E]lements actually incompatible with a systematic approach can also be found in Capital, primarily due to the fact that Marx’s break from classical political economy was incomplete. The systematic dialectical reading does not incorporate the whole of the book. However, I believe that it does capture the work’s unifying thread’ (T. Smith 1993b, p. 25).
54 T. Smith (1990, pp. 45–46). See also Reuten and Williams (1989, pp. 19–20); for an alternative Hegelian view, see Banaji (1979).
55 See Arthur (2000a, p. 106), Reuten (1993, pp. 92–93), Reuten and Williams (1989, pp. 4, 21–22) and T. Smith (1990, p. x; 1993a, p. 115; 1993b, p. 20).
56 Reuten and Williams (1989, p. 22). See also Arthur (1993a, p. 67), Campbell (1993) and T. Smith (1990, p. 13; 1997, p. 191). T. Smith (1998, pp. 464–465) attempts to reconstruct Capital employing eight levels of abstraction, with mixed results.
57 Arthur (1993a, p. 67). See also Reuten and Williams (1989, pp. 5, 23).
58 For Reuten and Williams (1989, p. 34), ‘although history is significant in explaining why the existent came into being, it cannot explain why it is “what it is”, how the existent is reproduced as an interconnected whole’. See also Arthur (1992, p. xiii), Murray (1988, p. 182) and T. Smith (1993a, p. 102).
59 See Saad-Filho (1997c).
60 See Clarke (1991), Holloway (1994) and Lebowitz (1994).
61 ‘Marx’s … modest attitude toward the concept leads him to ascribe … [great] importance to the “contingent”. For the “contingent”, while it may not have a place in the abstract conceptual analysis, still possesses a truth by virtue of its historical reality, and it must necessarily be incorporated in a full presentation of the social object in its concreteness’ (Fracchia and Ryan 1992, p. 60).
62 In his analysis of the tendency of the rate of profit to fall (Capital 3, part 3) Marx shows that this abstract tendency does not imply the existence of trend, because several counter-tendencies, influential at different levels, also affect the rate of profit (see Fine 1989, ch.10; 1992; and Reuten 1997).
63 Thompson (1978, p. 253) criticises Althusser’s work for similar reasons. For Althusser, ‘once capital has emerged on the page, its self-development is determined by the innate logic inherent within the category, and the relations so entailed … Capital is an operative category which laws its own development, and capital ism is the effect, in social formations, of these laws. This mode of analysis must necessarily be anti-historical … This is an extraordinary mode of thought to find in a materialist, for capital has become Idea, which unfolds itself in history.’ See also pp. 275–276, 290, 345, 355, Albritton (1999), Bonefeld (1992), Callari and Ruccio (1996), Holloway (1992) and Resnick and Wolff (1996).
64 In their critique of T. Smith’s (1999b, p. 166) claim that there is an ‘unbridgeable gulf between systematic dialectics and historical theorising’, Fine, Lapavitsas and Milonakis (2000, p. 136) rightly argue that the new dialectics’ neglect of history ‘grants unlimited degrees of freedom to the theorist when it comes to explaining particular historical phenomena. If it were so, any explanation could be made compatible with any general (systematic) theory referring to the same phenomenon … We believe that an attempt to drive a wedge between logic and history is deeply misguided. Rather, logic ought to draw upon, and to allow for, the historically specific forms in which the accumulation of capital is realised.’
65 Rosenthal (1997, p. 113).
66 Rosenthal (1997, p. 141); see also pp. 151–152, Mattick Jr. (1993) and Psychopedis (1992) and T. Smith’s (1999a) subdued response to Rosenthal.
67 Capital 1, pp. 102–103.
68 Ibid. These criticisms repeat earlier ones, for example: ‘Hegel fell into the illusion of conceiving the real as the product of thought concentrating itself, probing its own depths, and unfolding itself out of itself, by itself’ (Grundrisse, p. 101). Or, ‘The crux of the matter is that Hegel everywhere makes the Idea into the subject, while the genuine, real subject … is turned into the predicate’ (Marx 1975, p. 65); see also pp. 61–73, 80–82, 98–100. T. Smith (1993a, pp. 47, 76–77) argues that Marx had an incorrect reading of Hegel. This claim is painstakingly disproved by Rosenthal (1997). For a scathing critique of the mystical side of Hegelian Marxism, see Bradby (1982, pp. 131–132).
69 Ilyenkov (1982, p. 82).
70 Ilyenkov (1982, p. 28). ‘Hegel’s logic treated the fundamental categories of thought as pure categories independent of any contingent empirical instantiation. He presented them as systematically ordered, from simple abstract ones to more complex, and hence more concrete, ones. This system of categories was said to be “self-moving” in that one category necessarily gives rise to another contrary, or more comprehensive, one, until the most comprehensive is reached—the Absolute Idea. Hegel was an absolute idealist in so far as he seems to think that he has thereby shown the necessity of such relationships arising and developing in the real world’ (Arthur 2000a, pp. 107–108). See also Arthur (1993a, p. 64), Ilyenkov (1977, essays 5 and 7), Murray (1988, p. 116), Rosenthal (1997, pp. 151–152), Rubin (1975, pp. 91–92) and Zeleny (1980, p. 64).
71 Bharadwaj (1986, p. 5). See also Grundrisse, p. 90.
72 Marx (1989, pp. 544–545), see also p. 547.
73 ‘Hegel likes to think of the categories arising and dissolving out of their own instability; insofar as they are thought, it is by some “objective mind.” This objectivist tendency of his logic is further strengthened because its truth is meant ontologically as much as logically. The coherence of the logic is at the same time the coherence of reality’ (Arthur 1993a, pp. 67–68). See also Albritton (1999, p. 57), Colletti (1972), Fracchia and Ryan (1992, p. 59) and Lenin (1972, pp. 88–97, 146–147, 167–171, 177–180, 187, 190).
74 Scott (1999, pp. 3, 409); see also p. 61 and Mattick Jr. (1993, p. 121). In the same vein, Thompson (1978, p. 306) argues that ‘We have often been told that Marx had a “method” … and that this constitutes the essence of Marxism. It is therefore strange that … Marx never wrote this essence down. Marx left many notebooks. Marx was nothing if not a self-conscious and responsible intellectual worker. If he had found the clue to the universe, he would have set a day or two aside to put it down. We may conclude from this that it was not written because it could not be written, any more than Shakespeare or Stendhal could have reduced their art to a clue. For it was not a method but a practice, and a practice learned through practising. So that, in this sense, dialectics can never be set down, nor learned by rote.’
75 Arthur (1993a, p. 63) rightly claims that ‘science must adopt the logic proper to the peculiar character of the object under investigation.’
1 See, however, Desai (1989, 1992), Dostaler and Lagueux (1985), Elson (1979a), Fine (1986a), Fine and Harris (1979), Foley (2000), Freeman and Carchedi (1996), Howard and King (1989, 1991), Saad-Filho (1997a), M. Smith (1994a) and Steedman (1981).
2 Hodgson (1981, p. 88), for example, argues that for Ricardo and Marx ‘The embodied labour value of a commodity is defined such that the total embodied labour value of the gross output of a process equals the embodied labour value of all the inputs plus the amount of socially necessary living labour employed.’ See also Böhm-Bawerk (1949, p.109), Garegnani (1985), Meek (1973, pp. 164165), Morishima (1973, p. 15) and Nuti (1977).
3 See Dobb (1940, 1967), Meek (1973) and Sweezy (1968). This approach is critically reviewed by Arthur (1997), Postone (1993, ch. 2), T. Smith (1998), de Vroey (1982 and, especially, 1985) and Weeks (1981, chs 1–2). For a critique of the ‘surplus approach’ associated with this interpretation of Marx, see Chattopadhyay (2000), Pilling (1980, p. 57), Roberts (1987) and Roosevelt (1977).
4 Marx explains the relationship between production, circulation and distribution in Grundrisse, pp. 88–99 and Marx (1974, p. 348); see also Engels (1998, pp. 238–239).
5 Winternitz (1948, p. 277). See also Morishima (1974, p. 624) and Sweezy (1968, chs 2, 4, 7).
6 ‘The “derivation of prices from values” … must be regarded as a historical as well as a logical process. In “deriving prices from values” we are really reproducing in our minds, in logical and simplified form, a process which has actually happened in history. Marx began with the assumption that goods sold “at their values” under capitalism (so that profit rates in the various branches of production were often very different), not only because this appeared to be the proper starting-point from the logical point of view but also because he believed that it had “originally” been so. He proceeded on this basis to transform values into prices, not only because this course appeared to be logically necessary but also because he believed that history itself had effected such a transformation’ (Meek 1956, pp. 104–105); see also pp. xxiv, 152, 180–181, 241–242, 303–305. This view draws upon Engels (1981). For a critique, see Catephores (1986) and Fine (1986b); see also Brenner (1986) and Milonakis (1990).
7 See Albritton (1986, pp. 18–19) and Reinfelder (1980, p. 13).
8 ‘Ricardian’ interpretations of Marx are heavily criticised by, among others, Faccarello (1986), Ganssmann (1986), Gerstein (1986), Shaikh (1977, 1981, 1982) and works in Freeman and Carchedi (1996) and Mandel and Freeman (1984).
9 ‘[T]o regard Marx’s theory of value as a proof of exploitation tends to dehistoricise value, to make it synonymous with labour-time, and to make redundant Marx’s distinction between surplus labour and surplus value. To know whether or not there is exploitation, we must examine the ownership and control of the means of production, and the process whereby the length of the working day is fixed … Marx’s concern was with the particular form that exploitation took in capitalism … for in capitalism surplus labour could not be appropriated simply in the form of the immediate product of labour. It was necessary for that product to be sold and translated into money (Elson 1979b, p. 116). See also Fine (1982), Postone (1993, p. 54) and Rubin (1979, part 4).
10 See Bortkiewicz (1949, 1952), Dmitriev (1974), Hodgson (1973, 1981), Pasinetti (1977), Seton (1957), Sraffa (1960), Steedman (1977, 1981), Sweezy (1968, ch.7) and Tugan-Baranowsky (1905); see also Shibata (1933). For a critical review, see Ramos-Martínez and Rodríguez-Herrera (1996). The conclusions of Haberler (1966) and Samuelson (1957, 1971, 1973, 1974) are substantively identical to the Sraffian.
11 Early Sraffian developments were welcomed by traditional Marxists: ‘I would … wish to urge that this enquiry should be conducted within a rather different conceptual framework—that provided by Sraffa in his Production of Commodities by Means of Commodities … I shall try to … show how certain basic elements of this system could conceivably be adapted and used by modern Marxists’ (Meek 1973, p. xxxii); see also Dobb’s (1943) expression of support for Bortkiewicz’s work.
12 Hodgson (1981, p. 83), for example, states that ‘Although the Sraffa system is conceptually different from a general equilibrium system of the Walrasian type, or even the von Neumann model, these all have one thing in common: they do not include money. Clower has shown that money can never be introduced into a stationary-state, general equilibrium model.’
13 For a review of these difficulties from the traditional point of view, see May (1948), Meek (1956), Seton (1957), Sweezy (1968, ch. 7) and Winternitz (1948).
14 The argument that any commodity may be ‘exploited’ is presented by Brödy (1974), Dmitriev (1974), Hodgson (1981), Vegara i Carrio (1978) and Wolff (1984). Dissenters within this approach have attempted to salvage the role of labour by making the system asymmetrical because of the non-commodity aspects of labour power (e.g., Bowles and Gintis 1981). For a critique, see Glick and Ehrbar (1986–87) and M. Smith (1994b).
15 See Morishima (1974); for a critique, see Mohun (2000) and Naples (1989).
16 For detailed critiques of Sraffianism, see Fine (1980), Fine and Harris (1979, ch. 2), Gleicher (1985–86), Goode (1973), Kliman and McGlone (1988), Ramos-Martínez and Rodríguez-Herrera (1996), Rowthorn (1980, ch. 1), Savran (1979, 1980, 1984), Schwartz (1977), Shaikh (1977, 1981, 1982, 1984), M. Smith (1994a, pp. 77–94) and Yaffe (1974).
17 ‘The point is not that no abstraction is involved in the concept of embodied labour; rather it is not a social abstraction corresponding to particular historical process, but it is arbitrary, a mental convenience: an assumption that labour is homogeneous when it is plainly not’ (Himmelweit and Mohun 1978, p. 81). See also Weeks (1982b, p. 65).
18 Steedman (1977, p. 19), for example, assumes that all labour is simple and of equal intensity and training, ‘so that each individual expenditure of labour-time is an expenditure of socially necessary labour-time.’
19 ‘The search for a privileged technological input in the labor process, which determines the value of the product, comes from a misunderstanding of what value is. Abstract labour is not a privileged input into production because abstract labour is not an input into production at all … It is attached to the product (as a price tag) only because of the particular social relations in a commodity producing society’ (Glick and Ehrbar 1986–87, p. 472). See also p. 465, Ilyenkov (1982, pp. 87, 284), Lipietz (1985b, p. 90), Mattick Jr. (1991–92, p. 58) and Shaikh (1981, 1982).
20 For a devastating critique along those lines, see Rowthorn (1980, ch.1).
21 Yaffe (1974, p. 31).
22 See Shaikh (1982, pp. 71–72).
23 Gleicher (1985–86, p. 465); see also Lee (1993, p. 464).
24 See Glick and Ehrbar (1986–87, pp. 473–476), Fine (1996, p. 11), D. Harvey (1999, pp. 35–36) and Yaffe (1995, p. 95).
25 Different versions of value form analysis are proposed by Backhaus (1974) de Brunhoff (1973a, 1976, 1978c), Eldred (1984), Eldred and Hanlon (1981), Lipietz (1985a), Reuten (1993), Reuten and Williams (1989) and de Vroey (1981, 1982, 1985); for a clear presentation, see N. Taylor (2000). For a critique, see Elson (1979b), Gleicher (1985), Likitkijsomboon (1995), Moseley (1997a), Saad-Filho (1997a) and Weeks (1990).
26 Althusser (1969, 1970), Backhaus (1974), de Brunhoff (1973b, 1978b, 1978c), Rubin (1975, 1978); see also Gerstein (1986), Himmelweit and Mohun (1978) and Pilling (1972).
27 Rubin (1975, p. 114, emphasis omitted). See also pp. 63–64, 92, Benetti and Cartelier (1980) and de Brunhoff (1973a, ch. 2). For Meek (1973, p. 302 n.2), ‘“Commodity production” in the Marxian sense means roughly the production of goods for exchange on some sort of market by individual producers or groups of producers who carry on their activities more or less separately from one another.’
28 Rubin (1975, pp. 1, 22–24, 31, 47, 62–64, 70, 85, 89–94, 114, 125, 141).
29 See Aglietta (1979, p. 278), de Brunhoff (1978c), Guttman (1994, p. 20) and de Vroey (1981, p. 185).
30 Rubin (1975, pp. 96–97, 142; 1978, pp. 118–119). See also Rubin (1975 pp. 66–71, 97–99, 120, 127–130, 141–146, 150; 1978, pp. 124–125). For de Vroey (1981, p. 176), ‘Labour is first performed as private labour, initiated by an independent decision. It is transformed into social labour through, and only through, the sale of its product. When social labour is formed in this context, it is called abstract labour, the adjective referring to the operation of homogenization or abstraction achieved by exchange on the market.’ Therefore, ‘rather than being linked to a mere embodiment of labour—a technical process—value refers to the validation of private labour through the exchange of commodities against money … private labour becomes validated (ie reckoned as a fraction of social labour, serving effectively this reproduction) only in so far as its product is sold. Otherwise, private labour is a waste’ (de Vroey 1982, p. 40). See also Eldred and Hanlon (1981, pp. 26, 35), Himmelweit and Mohun (1978, pp. 73–74; 1981, pp. 232–234), Mattick Jr. (1991–92, pp. 33–35), Mohun (1991), Reuten (1995), Reuten and Williams (1989, pp. 66–70), T. Smith (1990, p. 72; 1993b, p. 21) and de Vroey (1981, pp. 176, 184; 1982, p. 46; 1985, p. 47).
31 See de Brunhoff (1978b), Reuten and Williams (1989) and de Vroey (1981, pp. 184–186; 1985, pp. 45–46).
32 Rubin realised that this argument is untenable: ‘Some critics say that our conception may lead to the conclusion that abstract labour originates only in the act of exchange, from which it follows that value also originates only in exchange’ (Rubin 1975, p. 147; see also 1978, p. 121). He attempts to evade this difficulty through the distinction between exchange as the social form of the process of production, and exchange as one phase of reproduction, alternating with production. Rubin (1975, pp. 95, 100–101, 144–151; 1978, pp. 122–124) claims that his argument that value is determined in exchange refers to the first meaning of the term, rather than the second. However, this distinction is invalid, and Rubin himself states that the relationship between the producers is established through the act, rather than the social structure, of exchange (see Rubin 1975, pp. 7–9, 61, 64, 70, 80–88, 143; 1978, p. 114).
33 See Capital 1, p. 482, Theories of Surplus Value 1, pp. 78, 409 and Theories of Surplus Value 3, p. 272.
34 Postone (1993, p. 155) rightly argues that the commodity is the material objectification of the double character of labour in capitalism; thus, it is both a product and a social mediation. The commodity ‘is not a use value that has value but, as the materialized objectification of concrete and abstract labor, it is a use value that is a value and, therefore, has exchange value.’
35 Weeks (1990, p. 8). For Marx, ‘The division of labour within manufacture presupposes a concentration of the means of production in the hands of one capitalist; the division of labour within society presupposes a dispersion of those means among many independent producers of commodities. While, within the workshop, the iron law of proportionality subjects definite numbers of workers to definite functions, in the society outside the workshop, the play of chance and caprice results in a motley pattern of distribution of the producers and their means of production among the various branches of social labour … The planned and regulated a priori system on which the division of labour is implemented within the workshop becomes, in the division of labour within society, an a posteriori necessity imposed by nature, controlling the unregulated caprice of the producers, and perceptible in the fluctuations of the barometer of market-prices. Division of labour within the workshop implies the undisputed authority of the capitalist over men, who are merely the members of a total mechanism which belongs to him. The division of labour within society brings into contact independent producers of commodities, who acknowledge no authority other than that of competition, of the coercion exerted by the pressure of their reciprocal interests, just as in the animal kingdom the “war of all against all” more or less preserves the conditions of existence of every species’ (Capital 1, pp. 476–477). See also pp. 439–441, 464–465, 1019, Capital 3, p. 172, Theories of Surplus Value 3, p.378, Contribution, pp. 321–322 and Grundrisse, p. 709.
36 ‘Those who equate price with value and, therefore, reduce value determination to exchange are in effect considering value in the context of simple commodity production, a situation in which value has no determining role’ (Weeks 1990, p. 8). See also Saad-Filho (1997a).
37 Weeks (1981, pp. 31–32, emphasis added). See also Arthur (1997, pp. 13–15), Uno (1980, p. 34) and Weeks (1990, p. 11).
38 Duménil (1980, 1983–84, 1984), Duménil and Lévy (1991), Foley (1982, 1983, 1986); see also Ehrbar (1989), Glick and Ehrbar (1987), Lipietz (1982, 1984, 1985a) and Mohun (1994). This section draws upon Fine, Lapavitsas and Saad-Filho (2000) and Saad-Filho (1996a). See also Moseley (2000a).
39 See sections 2.2.1 and 4.2, and Aglietta (1979) and Rubin (1975, 1978).
40 This is not discussed in what follows; see, however, Mohun (2000, forthcoming).
41 See Aglietta (1979, pp. 38–39, 277), Duménil (1980, pp. 13–14) and Lipietz (1982, p. 60). For Foley (1982, p. 37), the labour theory of value is ‘the claim that the money value of the whole mass of net production of commodities expresses the expenditure of the total social labor in a commodity-producing economy … The concept of value as a property of the whole mass of the net commodity product in this approach is analytically prior to the concept of price, the amount of money a particular commodity brings on the market.’ See also Foley (1986, pp. 14, 97), Glick and Ehrbar (1987, p. 303) and Mohun (1994); for a critique, see Stamatis (1998–99).
42 See Aglietta (1979, pp. 41–44), and Foley (1982). For an alternative view, focusing on the gross product, see Shaikh (1991, p. 78). Marx does not distinguish explicitly between the gross and the net product, see, for example, Capital 1, pp. 162–163, 297 and Theories of Surplus Value 2, pp. 414, 416, 538.
43 ‘If we assume that one hour of labor power sold yields one hour of labor time in production, the value of labor power will be a fraction between 0 and 1 and expresses the fraction of expended labor time the workers work “for themselves,” or the fraction of labor expended which is “paid labor.” The value of labor power is also, under the assumption that an hour of labor power yields an hour of labor time, equal to the wage share of value added’ (Foley 1982, p. 40); see also Duménil (1984, p. 342) and Lipietz (1984, pp. 352–353; 1985b, p. 92).
44 The wage rate is paid per unit of simple, unskilled labour power. Three other simplifying assumptions are made: the workers are identical to one another, they are invariably productive, and they create equal value per hour of labour power sold (see Lipietz 1982, p. 62).
45 See Duménil (1980, p. 82).
46 See Duménil (1980, pp. 62–63; 1983–84, pp. 441–442).
47 Weeks (1983, p. 220).
48 In his groundbreaking paper on the NI, Foley (1982, p. 41) invites the reader to ‘Suppose … we have a commodity-producing system in which, for one reason or another, the money prices of commodities are not proportional to labor values. One reason might be that prices deviate from labor values so that profit rates can be equalized when invested capital per worker varies over different sectors. Other reasons might be monopoly, government regulations, the exploitation of information differentials in markets by middlemen, and so on.’ Collapsing categories at distinct levels of complexity in order to apply macroeconomic identities may be useful for policy analysis, but it can be unhelpful analytically because it obscures the structures of determination of the mode of production.
49 See Foley (1982, pp. 42–43; 1986, pp. 15, 41) and Lipietz (1982, p. 75).
50 Marx was heavily critical of theories of exploitation that focused primarily upon the distribution of income; see Marx (1974, pp. 344–345) and Saad-Filho (1993a).
51 See Flaschel (1984) and Szumski (1991).
1 ‘Interpreted on very narrow terms, social reproduction includes the processes necessary for the reproduction of the workforce, both biologically and as compliant wage-labourers. More generally, social reproduction is concerned with how society as a whole is reproduced and transformed over time’ (Fine 2001, p. 32).
2 This transhistorical background is explicit in the Grundrisse, p. 108. See also Mattick Jr. (1991–92, pp. 32, 42), Perlman (1977) and M. Smith (1994a, p. 42).
3 ‘Rather than justifying the concept of value on the basis of the results to which it leads in price or distribution theory, Marx wished to demonstrate that value is a concept that has itself to be explained in terms of its correspondence to relations that exist in the real world. The relevant questions are what is value and why does it exist, for in contrast to prices, for example, values are not a simple observational fact of everyday life. Goods in a shop window have their prices displayed to the world, the same cannot and could not be true for their value. Consequently, there is a certain methodological inconsistency when prices and values are introduced simultaneously at the outset into an analysis of the relationship between them. For the two concepts have a different status, one requires justification for its existence, the other does not’ (Fine 1980, p. 123).
4 Use value is a mental generalisation expressing the capacity of certain goods to satisfy specific human needs, see Capital 1, pp. 125–126 and Marx (1977, p. 197). D. Harvey (1999, p. 5) rightly claims that ‘At the basis of Marx’s conception of the world lies the notion of an appropriation of nature by human beings in order to satisfy their wants and needs. This appropriation is a material process embodied in the acts of production and consumption … The material side of commodities is captured in its relation to human wants and needs by the concept of use value.’ For detailed analyses of the concept of use value, see Fine (2001, ch. 2), Fine and Leopold (1993, Part IV), Lebowitz (1992, p. 23) and Pilling (1980, p. 138).
5 Capital 1, p. 133. For Shaikh (1982, p. 68), ‘the relation of people to nature exists only in and through definite relations of people to people; these are therefore two aspects of the same set of relations which define the mode of (re)production of social life. The production of material wealth goes hand in hand with the reproduction of social relations … while it is true that use-values may occasionally arise as the spontaneous fruits of nature (wild grapes, etc.), it is obvious that no society could exist for long without the production of use-values, that is, without labor itself.’ See also Capital 1, pp. 137, 283–284, 287, 290, Post (1996, pp. 27–28) and Shaikh (1977, p. 114).
6 ‘[L]abour-power, or labour-capacity, [is] the aggregate of those mental and physical capabilities existing in the physical form, the living personality, of a human being, capabilities which he sets in motion whenever he produces a use-value of any kind’ (Capital 1, p. 270).
7 ‘[A]s soon as men start to work for each other in any way, their labour also assumes a social form’ (Capital 1, p. 164). See also p. 134, Theories of Surplus Value 3, pp. 168–169 and Chattopadhyay (1999, p. 1).
8 See Capital 1, pp. 471–472, Rowthorn (1980, p. 31) and Lapavitsas (2000d). Marx (1977, p. 198) claims that ‘the mode of exchanging products is regulated by the mode of producing them’. There is exploitation if some people are compelled to act in ways that are systematically advantageous to others: ‘To exploit a person is to use them toward the exploiter’s ends. Exploiter status differs qualitatively, not quantitatively, from being the one exploited’ (Naples 1989, p. 149). See also Himmelweit (1991, pp. 182–184) and Schutz (1999, pp. 307–310). For a historical analysis of modes of exploitation, see Milonakis (1990, 1993–94).
9 ‘What distinguishes the various economic formations of society—the distinction between for example a society based on slave-labour and a society based on wage-labour—is the form in which surplus labour is in each case extorted from the immediate producer, the worker’ (Capital 1, p. 325). See also pp. 344–345, Theories of Surplus Value 1, p. 390, Theories of Surplus Value 3, p. 400, Grundrisse, pp. 525–527 and Post (1996).
10 ‘To Marx … the essence of capitalist property is the control of the productive process and therefore the control over laborers. Forced labor rather than low wages, alienation of labor rather than alienation of the product of labor are, according to Marx, the essence of capitalist exploitation’ (Medio 1977, p. 384).
11 Marx (1988a, p. 68). See also Marx (1976, p. 31), J. Devine (1989), Fine (1996), Hilferding (1949, pp. 130–131) and Pilling (1980, pp. 43–47).
12 Grossman (1977, p. 46). See also Capital 1, pp. 473, 949–954, Theories of Surplus Value 2, p. 528, Grundrisse, pp. 102, 776 and Marx (1989, pp. 551–552).
13 See Capital 1, pp. 733–734, Capital 2, p. 461, Theories of Surplus Value 1, p. 406 and Theories of Surplus Value 3, pp. 270–272, 491.
14 See Grundrisse, pp. 296–297 and Ilyenkov (1982, pp. 196–197). Although commodity production requires a certain level of development of the division of labour, its existence is insufficient to define the mode of production; see Lapavitsas (2000c). For a wide-ranging study of market relations, see Polanyi (1944). Labour markets are dissected by Fine (1998).
15 ‘Since the production and the circulation of commodities are the general prerequisites of the capitalist mode of production, division of labour in manufacture requires that a division of labour within society should have already attained a certain degree of development. Inversely, the division of labour in manufacture reacts back upon that in society, developing it further. With the differentiation of the instruments of labour, the trades which produce these instruments themselves become more and more differentiated’ (Capital 1, p. 473).
16 See Lapavitsas (2000d) and Shaikh (1981, p. 275). Perelman (1987, p. 142) rightly argues that ‘the authority exercised within a firm is not specific to value relationships; we would expect the same sort of management rules to apply to a slaveholder, or within limits, to a feudal lord … What is unique is the indirect authority exercised by the market within the capitalist mode of production.’
17 Mohun (1991, p. 564). For Ilyenkov (1982, p. 34), abstract labour is the ‘objective characteristic of the form which human labour assumes in developed commodity production, in capitalist production’. Shaikh (1982, p. 70) rightly argues that under capitalism, the ‘labour involved in the production of commodities produces value, while exchange merely realizes it in money form.’ See also Theories of Surplus Value 3, pp. 131, 253, Grundrisse, pp. 104–105, Arthur (2001), Cleaver (1979, p. 108), Cohen (1974, pp. 246–247), Colletti (1972, pp. 22–23, 80–84), Fine (1989 p. 10), Himmelweit and Mohun (1981, p. 225) and Shaikh (1981, p. 273).
18 ‘[C]apitalist production is commodity production as the general form of production, but it is only so, and becomes ever more so in its development, because labour itself here appears as a commodity, because the worker sells labour, i.e. the function of his labour power, and moreover, as we have assumed, at a value determined by the costs of its reproduction’ (Capital 2, p. 196); see also Capital 1, p. 733.
19 Capital 1, pp. 475–477; see also Theories of Surplus Value 3, p. 378. For Cleaver (1979, p. 164), money is ‘the magic wand by which new elements of the world are incorporated into capital … The commodity which is set equal to some quantity of money, that is, given a price, is instantly tied into the whole world of capital. How? By setting a price, it is affirmed that this use-value, having been produced by useful labor of some sort, is only one special product of that universal tool of capital’s control: work.’ See also Fine (2001, p. 33), Kliman (2000) and Shaikh (1977, p. 112).
20 Capital 1, p. 125; see also Contribution, p. 269.
21 In the first chapters of Capital 1, Marx often illustrates basic points of theory about commodity and monetary relations through examples of advanced capitalism, see, for example, pp. 237 n.52–53, 238 n.54, 327–329.
22 Capital 3, pp. 1019–1020. See also Capital 1, pp. 174, 274, 949–953, Capital 2, p. 196, Theories of Surplus Value 3, pp. 74, 112–113, Echeverría (1978, p. 376), Ilyenkov (1982, pp. 77, 80, 104, 200, 232), Likitkijsomboon (1995, p. 76), Postone (1993, pp. 5, 271, 285), Sekine (1975, p. 850), M. Smith (1994a, p. 48), Uno (1980, p. 34) and Weeks (1981, p. 11).
23 For a devastating critique of these concepts, see Fine (1998, 2001).
24 For the same reason, ‘Theories of abstinence, waiting, or intertemporal preference depend upon the sacrifice by capitalists of present consumption as the source of profits. Nobody could deny that these “sacrifices” (usually made in luxurious comfort) are a condition of profit, but like thousands of other conditions they are not a cause of profits. People without capital could abstain, wait, and make intertemporal choices until they were blue in the face without creating profits for themselves. It is not abstinence that creates capital, but capital that requires abstinence. Waiting has existed in all societies, it is even to be found among squirrels … It must always be borne in mind that it is not things, abstract or otherwise, that create economic categories … but definite social relations between people (Fine 1989, p. 25; see also Grundrisse, p. 613). The thoughtless extension of the concept of capital is part of the ‘economic imperialism’ by which neoclassical economics has been colonising the other social sciences (see Fine 1997).
25 Capital 1, pp. 1005–1006. See also pp. 247, 764, 874–875, 899–900, 927–928, Capital 2, p. 185, Capital 3, pp. 953–954, 965–968, Theories of Surplus Value 3, p. 272, Theories of Surplus Value 3, p.422, Grundrisse, pp. 86, 512, Aglietta (1979, p. 24), Bell (1977, p. 173), Chattopadhyay (1994, p. 7, 1998, p. 233), Nell (1992, p. xiii), M. Smith (1994a, pp. 62, 66) and Zarembka (2000). Nell (1992, p. 53) rightly argues that ‘capital is not a “factor of production” earning a return in virtue of its “productive contribution” at the margin. It is a social relationship; it is the way production is organized and the product appropriated. The existence of capital as self-expanding value depends upon the exploitation of wage-labor … so when multinational capital moves into new areas, formerly organized non-capitalistically, new institutional arrangements must be created. A proper “climate for investment” must be established. This means a labor force, labor discipline, protection for property in the means of production, suitable finance, and so on. These can involve major upheavals and political changes.’
26 ‘Marx’s starting point in the treatment of capital is conceiving capital as a social totality, capital representing a class opposed not so much to the individual laborers as to the wage laborers as a class’ (Chattopadhyay 1994, p. 18). See also Postone (1993, p. 351).
27 ‘To the extent that we are considering it here, as a relation distinct from that of value and money, capital is capital in general, i.e. the incarnation of the qualities which distinguish value as capital from value as pure value or as money. Value, money, circulation, etc., prices etc., are presupposed, as is labour etc. But we are still concerned neither with a particular form of capital, nor with an individual capital as distinct from other individual capitals etc. We are present at the process of its becoming. This dialectical process of its becoming is only the ideal expression of the real movement through which capital comes into being. The later relations are to be regarded as developments coming out of this germ. But it is necessary to establish the specific form in which it is posited at a certain point. Otherwise confusion arises’ (Grundrisse, p. 310). See also pp. 421, 449, 517, 852, Capital 1, p. 710 and Pilling (1980, p. 98).
28 ‘Industrial capital is the only mode of existence of capital in which not only the appropriation of surplus-value or surplus product, but also its creation, is a function of capital. It thus requires production to be capitalist in character; its existence includes that of the class antagonism between capitalists and wage-labourers … The other varieties of capital which appeared previously, within past or declining conditions of social production, are not only subordinated to it and correspondingly altered in the mechanism of their functioning, but they now move only on its basis, thus live and die, stand and fall together with this basis. Money capital and commodity capital, in so far as they appear and function as bearers of their own peculiar branches of business alongside industrial capital, are now only modes of existence of the various functional forms that industrial capital constantly assumes and discards within the circulation sphere’ (Capital 2, pp. 135–136).
29 Interest-bearing capital (IBC), whose form is M-M’, money that becomes more money (see section 8.3), does not produce profit, any more than money left inside a mattress begets more money simply by lying there. The expansion of IBC is due to transfers from productive capital, see Fine (1985–86; 1989, ch. 12), Itoh and Lapavitsas (1999, ch. 3) and Moseley (1997a).
30 Capital 1, p. 764. In other words, ‘The capitalist process of production, therefore, seen as a total, connected process, i.e. a process of reproduction, produces not only commodities, not only surplus-value, but it also produces and reproduces the capital-relation itself; on the one hand the capitalist, on the other the wage-labourer’ (Capital 1, p. 724). See also Capital 2, pp. 428–430, Fine (2001, p. 31) and Zarembka (2000).
31 This view is associated with Rosdolsky (1977, pp. 43–51), see also Moseley (1995b) and T. Smith (1999b). For a critique, see Burkett (1991), Clarke (1994), Fine (1992), Fine, Lapavitsas and Milonakis (2000) and Heinrich (1989).
32 Grundrisse, p. 414. See also pp. 421n, 650–652, Capital 1, p. 433, Bryan (1985, p. 77), Chattopadhyay (1994, p. 12), Lebowitz (1992, pp. 65–67) and Wheelock (1983).
33 See Capital 1, chs 12, 16, 17, 25.
34 See Capital 3, chs 8–15.
35 For a similar critique, see Arthur (2000b) and Fine, Lapavitsas and Milonakis (2000); see also Brenner (1986). For Marx, ‘What competition within the same sphere of production brings about, is the determination of the value of the commodity in a given sphere by the average labour-time required in it, i.e., the creation of the market-value. What competition between the different spheres of production brings about is the creation of the same general rate of profit in the different spheres through the levelling out of the different market-values into market-prices, which are [prices of production] that are different from the actual market-values. Competition in this second instance by no means tends to assimilate the prices of the commodities to their values, but on the contrary, to reduce their values to [prices of production]’ (Theories of Surplus Value 2, p. 208).
36 The ‘basis for the development of capitalist production is, in general, that labour-power, as the commodity belonging to the workers, confronts the conditions of labour as commodities maintained in the form of capital and existing independently of the workers’ (Theories of Surplus Value 1, p. 45, see also p. 78). The transformation of labour power into a commodity is the historical result of the primitive capital accumulation (see Capital 1, chs 26–32 and Perelman 1999). This process includes the elimination of the capacity of the workers to satisfy their own needs except through commodity exchanges, and the establishment of a pliant and reliable wage labour force.
37 Theories of Surplus Value 3, pp. 490–491. Nell (1992, p. 66) rightly argues that ‘Exploitation is a matter of structural coercion. Circumstances are so arranged that a large mass of people must agree to do as they are told by others in order to support themselves and their families.’ See also Cleaver (1979, p. 73) and Lapides (1998, p. 8).
38 The ‘relation between generalized commodity production [GCP] … wage labor and capitalist production is one of reciprocal implication. First … when labor becomes wage labor … commodity production is generalized. On the one hand wage labor implies GCP … On the other hand, GCP implies wage labor … Marx shows … that capitalist production is commodity production as the general form of production while, at the same time, emphasizing that it is only on the basis of the capitalist mode of production that all or even the majority of products of labor assume commodity form … Finally, the relation of wage labor and capital is also one of reciprocal implication for Marx. Capital is a production relation between the immediate producers and their conditions of production which, separated from them and passing under the control of non (immediate) producers, dominate them as capital … [T]he rest of the features of capitalism could be seen as the necessary resultants following from any one of these essentially equivalent central categories’ (Chattopadhyay 1994, pp. 17–18). See also Gleicher (1983, p. 99) and Uno (1980, p. 21).
39 ‘Capitalism, and hence capital, requires a lot more by way of the social than private property and the market … What it does depend upon is wage labour, able and willing to produce a surplus for capital. By implication, the social attached to capital takes the form of class relations. For Marxist theory, class relations in general are fundamental in distinguishing between modes of production, such as feudalism and capitalism, and, as a corollary, between different periods of history. Capital and labour confront one another as classes with the capitalist class monopolising the means of production or access to livelihood through work. Consequently, workers can only survive by selling their capacity to work for a wage that represents less in terms of labour time than is performed for the capitalist. The surplus labour performed over and above that necessary to provide the wage gives rise to what Marx termed exploitation, and provides for the profits of the capitalists’ (Fine 2001, p. 29). See also Grundrisse, pp. 509–510.
40 D. Harvey (1999, p. 35). For Cleaver (1979, p. 72), ‘The generalized imposition of the commodity-form has meant that forced work has become the fundamental means of organizing society—of social control. It means the creation of a working class—a class of people who can survive only by selling their capacity to work to the class that controls the means of production’.
41 Leadbeater (1985, p. 617). For Fine and Harris (1979, p. 56), ‘Marx’s distinction between productive and unproductive labour is, in fact, one which is simple to understand. If labour directly produces surplus value it is productive; if not, it is unproductive. This criterion has the corollary that only labour which is performed under the control of capital, … and in the sphere of production, is productive. For detailed analyses, see Capital 1, pp. 643–644, 667, 734–735, 1038–1049, Capital 2, pp. 225–226, Theories of Surplus Value 1, pp. 46, 152–165, 172–173, 202, 213, 288–289, 393–406, Grundrisse, pp. 308, 632–633, Cullenberg , Fine and Harris (1979, ch. 3), Fine and Lapavitsas (2000, p. 364), Mohun (1996, forthcoming), Moseley (1994), Rubin (1975, ch. 19), Savran and Tonak (1999) and Weeks (1984).
42 Rubin (1975, p. 269), see also Capital 3 pp. 406–408, 413–416. Even though unproductive workers do not produce surplus value, they are exploited because they work for longer than the value represented by their wage, see Foley (1986, pp. 120–122).
43 See Clarke (1980), Nell (1992, p. 39), Roberts (1997, pp. 498–499) and, especially, Cleaver (1979).
1 For simplicity, all workers are presumed productive unless stated otherwise; see section 3.2.
2 ‘The specific economic form in which unpaid surplus labour is pumped out of the direct producers determines the relationship of domination and servitude, as this grows directly out of production itself and reacts back on it in turn as a determinant … It is in each case the direct relationship of the owners of the conditions of production to the immediate producers … in which we find the innermost secret, the hidden basis of the entire social edifice’ (Capital 3, p. 927).
3 There are significant difficulties for the empirical estimation of the rate of exploitation, because of the influence of the accounting conventions, taxes, savings, unproductive labour, and so on. See, however, Cockshott and Cottrell , Dunne (1991), Maniatis (1996), Mohun (1996, forthcoming) and Shaikh (1998).
4 By definition, the capitalists command only investment and luxury goods, even if these goods are identical to the necessities consumed by the workers. This ex post distinction between luxuries and necessities is similar to the distinction between consumption and investment goods in the national accounts.
5 Weeks (1981, pp. 64, 71–72). It follows that: ‘The rate of surplus value exists as a social aggregate, independently of any particular industry. This follows from the social nature of the value of labour power, so that it is incorrect to conceive of the rate of surplus value varying across industries and the aggregate to be a mere weighted average of rates in different industries’ (p. 170). For a contrasting view, see Duménil (1980, pp. 76–77) and Gerstein (1986, p. 65).
6 ‘Surplus value presents itself (has its real existence) in a surplus-produce in excess of the quantity of products which only replace its original elements, that is, which enter into its production costs and—taking constant and variable capital together—are equal to the total capital advanced to production’ (Theories of Surplus Value 1, p. 213). See also pp. 389–390 and Capital 1, pp. 978, 992.
7 Weeks (1981, p.15). This definition implies that the surplus is independent from the level and composition of the output. For Wright (1981, p. 150), ‘Exploitation can thus be defined as a social relationship within which surplus labour is appropriated through the domination of labour and the appropriation of surplus products. Since labour once performed is materially embodied in the products of labour, we can speak in shorthand of exploitation as the process of appropriation of surplus labour.’ See also Chattopadhyay (1994, p. 6; 2000) and Lapides (1998, p. 181).
8 Postone (1993, p. 125) rightly argues that in ‘capitalism social labour is not only the object of domination and exploitation but is itself the essential ground of domination.’ See also Chattopadhyay (1994, p. 14) and Milonakis (1993–94).
9 See M. Smith (1994a, pp. 52–54), Rubin (1975, pp. 67, 78, 168, 251), Shaikh (1982, p. 69) and de Vroey (1981, p. 195).
10 Capital 1, p. 680. Weeks (1981, p. 45) rightly argues that the ‘appropriation of unpaid labor—direct and obvious in systems of slavery and serfdom—appears as the exchange of equivalents under capitalism; this façade of equality reflects a façade of private property for all, and conceals the fact that the only property of the worker is his or her capacity to labor. Further, this “property” alienable by the worker can only be sold to capitalists. The law of exchange under capitalism is as follows: capitalists exchange at value and appropriate surplus value and accumulate; workers exchange at value and surrender unpaid labor.’ For Marx’s own exposition of his theory of surplus value, see Capital 1, pp. 263–270, 300–302, 317–320, 668–672, Capital 2, p. 461, Theories of Surplus Value 1, pp. 45–46, 315 and Marx (1988b, p. 85; 1998, p. 47). See also Aglietta (1979, pp. 46–47), Chattopadhyay (1994, p. 20; 1998, p. 235), Roberts (1996, pp. 206–207) and Shaikh (1977, pp. 120–121).
11 ‘In their attempts at reducing the working day to its former rational dimensions, or, where they cannot enforce a legal fixation of a normal working day, at checking overwork by a rise of wages … working men … set limits to the tyrannical usurpations of capital. Time is the room of human development. A man who has no free time to dispose of, whose whole lifetime, apart from the mere physical interruptions by sleep, meals, and so forth, is absorbed by his labour for the capitalist, is less than a beast of burden. He is a mere machine for producing Foreign Wealth, broken in body and brutalised in mind. Yet the whole history of modern industry shows that capital, if not checked, will recklessly and ruthlessly work to cast down the whole working class to this utmost state of degradation’ (Marx 1998, pp. 60–61).
12 See Capital 1, pp. 430–437, 645–646, Theories of Surplus Value 1, p. 216, Theories of Surplus Value 2, p. 266, Aglietta (1979, p. 55), Foley (1986, p. 50), and Lapides (1998, p. 192).
13 ‘From one standpoint the distinction between absolute and relative surplus-value appears to be illusory. Relative surplus-value is absolute, because it requires the absolute prolongation of the working day beyond the labour-time necessary to the existence of the worker himself. Absolute surplus-value is relative, because it requires a development of the productivity of labour which will allow the necessary labour-time to be restricted to a portion of the working day. But if we keep in mind the movement of surplus-value, this semblance of identity vanishes. Once the capitalist mode of production has become the established and universal mode of production, the difference between absolute and relative surplus-value makes itself felt whenever there is a question of raising the rate of surplus-value. Assuming that labour-power is paid for at its value, we are confronted with this alternative: on the one hand, if the productivity of labour and its normal degree of intensity is given, the rate of surplus-value can be raised only by prolonging the working day in absolute terms; on the other hand, if the length of the working day is given, the rate of surplus-value can be raised only by a change in the relative magnitudes of the components of the working day, i.e. necessary labour and surplus labour, and if wages are not to fall below the value of labour-power, this change presupposes a change in either the productivity or the intensity of labour’ (Capital 1, p. 646).
14 This section draws upon Fine (1998) and Fine, Lapavitsas and Saad-Filho (2000).
15 Capital 1, p. 274. See pp. 275–276, 430–431, 655, Capital 2, pp. 290–291, 458, Theories of Surplus Value 1, p. 45, Marx and Engels (1998, pp. 29–30). See also Bandyopadhyay (1981), Medio (1977, p. 384) and Steedman (1977, p. 41).
16 For devastating critiques of the textual basis of this approach, see Baumol (1992), Lapides (1998) and Lebowitz (1992).
17 Capital 2, pp. 290–291, see also p. 245, Theories of Surplus Value 1, p. 315 and D. Harvey (1999, p. 47). Lebowitz (1992, p. 17) rightly claims that ‘Nothing could be further from Marx than the belief in a fixed set of necessaries. From his earliest days, Marx rejected a concept of “Abstract Man” and stressed the emergence of new human needs with the development of society’.
18 Foley (1982, p. 43). See also Duménil (1980, pp. 31, 77; 1984, p. 341), Foley (1986, p. 36) and Lipietz (1982, p. 75).
19 ‘The wage … [is the] working-class power to impose its needs, and the extent of that power is only determined by the class struggle itself (Cleaver 1984, p. xxiv). See also D. Harvey (1999, pp. 52–54).
20 Theories of Surplus Value 3, p. 94; see also Theories of Surplus Value 2, p. 418.
21 Fine (1980, pp. 22–23). See also Capital 1, pp. 712–713, Theories of Surplus Value 1, p. 315, Gleicher (1989), Rowthorn (1980, pp. 38–39) and Saad-Filho (1996a).
22 Fine (1989, pp. 52–53).
23 Meek (1973, p. 215).
24 The following paragraphs draw on Fine, Lapavitsas and Saad-Filho (2000). De Brunhoff (1978a, p. 12) rightly claims that ‘it is often the case that attempts to produce a theory of wages lead to two conflicting positions either by tying the wage to the value of labour-power and seeking to produce a more or less accurate quantitative estimate of its value, or by considering the wage as an “exogenous variable”, dependent upon struggles over the share of the social product. The “economism” of the bundle of goods perspective and the “socio-logism” of the struggle over distribution approach can both find some basis in one or another of Marx’s formulations.’
25 Theories of Surplus Value 2, p. 419. See also Weeks (1984).
26 ‘[T]he development of new needs for workers under capitalism means that … each new need becomes a new requirement to work, adds a new burden. Each new need becomes a new link in the golden chain which secures workers to capital. The creation of new needs for workers … “is an essential civilizing moment, and on which the historic justification, but also the contemporary power of capital rests” … In short, the existence of unfulfilled social needs underlies the worker’s need for more money, her need for a higher wage’ (Lebowitz 1992, pp. 25, 30). See also pp. 27–29, P. Harvey (1983), Lapides (1998), Ong (1980, pp. 266–267) and Rowthorn (1980, ch. 7).
27 See Fine (1998), Fine and Heasman (1997) and Fine and Leopold (1993); for an assessment, see Saad-Filho (2000b).
28 See Capital 1, pp. 763, 770–771, 790.
1 See Saad-Filho (1993a, 1997a); see also Lee (1990).
2 Systems of provision are discussed by Fine and Leopold (1993); commodity chains are analysed by Gereffi and Korzeniewicz (1994).
3 Capital 1, pp. 439–441, emphasis added. See also pp. 442, 453, 953–954, Aumeeruddy, Lautier and Tortajada (1978, p. 54), Elson (1979b, pp. 137–138) and Thompson (1967). Lebowitz (1992, pp. 67, 69, see also p. 78) rightly argues that collective work increases the productivity of labour, and capital reaps the benefits: ‘any co-operation and combination of labour in production generates a combined, social productivity of labour which exceeds the sum of individual, isolated productivities … Thus, in capitalism, the productive forces of social labour—collective unity in co-operation, combination in the division of labour, the uses of the forces of nature and the sciences—appear as productive forces of capital, the mediator. What capital secures is the productive power of socially combined labour, which appears as a productive power inherent in capital.’
4 Capital 1, pp. 464–465. In other words, ‘Every kind of capitalist production … has this in common … it is not the worker who employs the conditions of his work, but rather the reverse, the conditions of work employ the worker. However, it is only with the coming of machinery that this inversion first acquires a technical and palpable reality. Owing to its conversion into an automaton, the instrument of labour confronts the worker during the labour process in the shape of capital, dead labour, which dominates and soaks up living labour-power’ (Capital 1, p. 548). See also pp. 468–469, 1012 and Aglietta (1979, p. 113).
5 By definition, firms within the same branch or sector produce the same use values.
6 ‘If we take spinning, for example, we see that it may be performed at a rate that either falls below or rises above the social average … But if the spinning is carried out with a degree of intensity normal in this particular sphere, e.g. if the labour expended on producing a certain amount of yarn in an hour = the normal quantity of yarn that an hour’s spinning will produce on average in the given social conditions, then the labour objectified in the yarn is socially necessary labour. As such it has a quantitatively determinate relation to the social average in general which acts as the standard, so that we can speak of the same amount or a greater or smaller one. It itself therefore expresses a definite quantum of average labour’ (Capital 1, p. 1019).
7 ‘If our “anyone” makes a thing which has no use value for other people, his whole force does not produce an atom of value; and if he insists on producing by hand an object which a machine produces twenty times cheaper, nineteen-twentieths of the force he puts into it produces neither value in general nor any determinate magnitude of value’ (Engels 1998, p. 240).
8 ‘The labour-time required for the production of the cotton, the raw material of the yarn, is part of the labour necessary to produce the yarn, and is therefore contained in the yarn. The same applies to the labour embodied in the spindle, without whose wear and tear the cotton could not be spun … Hence in determining the value of the yarn, or the labour-time required for its production, all the special processes carried on at various times and in different places which were necessary, first to produce the cotton and the wasted portion of the spindle, and then with the cotton and the spindle to spin the yarn, may together be looked on as different and successive phases of the same labour process. All the labour contained in the yarn is past labour; and it is a matter of no importance that the labour expended to produce its constituent elements lies further back in the past than the labour expended on the final process, the spinning’ (Capital 1, p. 294).
9 Capital 1, pp. 660–661. See also p. 987 and Theories of Surplus Value 3, pp. 307–308.
10 Capital 1, p. 135. See also p. 306, Contribution, pp. 272–273, Marx (1976, p. 9), P. Harvey (1983) and Rubin (1975, pp. 156, 161).
11 See Böhm-Bawerk (1949, pp. 81–84) and Meek (1973, pp. 240–241).
12 See, respectively, Meek (1973, pp. 171–176) and Rosdolsky (1977, ch. 31); and Hilferding (1949), Roncaglia (1974) and Rowthorn (1980, ch. 8). For a critical survey, see Lee (1990). See also Attewell (1984), J. Devine (1989), Fine (1998), Gerstein (1986), Giussani (1986), D. Harvey (1999, p. 61), P. Harvey (1985), Itoh (1987), Marglin (1974) and Tortajada (1977).
13 See Attewell (1984, pp. 115–117), Fine (1998, chs 7–10) and Lapides (1998, p. 189).
14 See P. Harvey (1985, pp. 84–90).
15 P. Harvey (1985, p. 90). For Nell (1992, p. 56 n. 4), ‘Concrete labor is the practical work of producing use-values; abstract labor is the condition of being exploited, measured as the amount of time in simple labor equivalents spent working in that status. A good deal of academic labor has been expended on the question of determining the reduction of skilled to simple labor. It is not clear that such labor is socially necessary; Marx regarded the reduction as exogenous to value theory.’
16 In other words, the higher profitability of firms with more advanced technology is due to the greater value-creating capacity of their own employees, rather than transfers from their competitors. For a contrasting view, see Indart (n.d.).
17 Capital 3, p. 1021.
18 New technologies also allow firms to introduce new goods or to improve the quality of existing goods. However, these aspects of competition are ignored here because they merely replicate the same processes across new markets.
19 ‘Capital therefore has an immanent drive, and a constant tendency, towards increasing the productivity of labour, in order to cheapen commodities and, by cheapening commodities, to cheapen the worker himself’ (Capital 1, pp. 436–437).
20 Capital 1, p. 492.
21 Postone (1993, p. 332); see also pp. 47–48. Broadly speaking, capital controls the workers in three ways: (a) capital owns the means of production, whereas the workers must seek paid employment in order to survive; (b) having purchased the workers’ labour power, capital claims the right to control the labour process in its entirety; (c) ownership of the means of production and control over the production process allow capital to influence strongly the state, economic policy, the legal system, and other social institutions. These forms of domination are invariably contested; for example, the workers constantly strive for alternatives to paid employment and subordination in the workplace, seek higher wages and better working conditions, and may engage in collective activity in order to defend their interests in the production line and elsewhere. See also Bahr (1980, p. 102), Brighton Labour Process Group (1977) and Marglin (1974).
22 ‘Capital’s priority for automation is to attack those stages of the productive cycle which have the most space for workers to hold down their own pace of work, those sites with the most “porosity of labour” -be it clerical offices, paint, trim and assembly shops, or stock rooms. It is this selectivity which defines the threat posed to working class collective power by restructuring’ (Levidow and Young 1981, p. 2). See also Capital 1, pp. 486, 508.
23 Nell (1992, p. 54). In other words, ‘The process of industrialization, as it achieves more and more advanced levels of technological progress, coincides with a continual growth of the capitalist’s authority. As the means of production, counterposed to the worker, grow in volume, the necessity grows for the capitalist to exercise an absolute control’ (Panzieri 1980, p. 48). See also Capital 1, pp. 526–527, 553–554 and Uno (1980, pp. 30–31).
24 ‘[W]e propose to take all the important decisions and planning which vitally affect the output of the shop out of the hands of the workmen, and centralise them in a few men, each of whom is especially trained in the art of making these decisions and in seeing that they are carried out, each man having his own particular function in which he is supreme, and not interfering with the functions of other men’ (Frederick W Taylor, cited in Sohn-Rethel 1978, p.151). For a Marxian critique, see P. Taylor (1979) and Wennerlind (2000).
25 ‘[The industrialists aim to stop any] process which requires peculiar dexterity and steadiness of hand from the cunning workman, and put it in the charge of a mechanism so self-regulating, that a child may superintend it. The grand object therefore of the manufacturer is, through the union of capital and science, to reduce the task of his workpeople to the exercise of vigilance and dexterity [appropriate to a child]’ (Andrew Ure, Philosophy of Manufactures, cited in Cooley 1981, p. 60).
26 ‘As the case studies proliferate, the evidence accumulates against a technological-determinist reading of organizational history and in favor of a conflict approach that views organizational structures as embodiying strategies for controlling workers’ behavior’ (Attewell 1984, p. 119). See also Bowles and Gintis (1977, p. 180), Brighton Labour Process Group (1977), Cleaver (1979, 1992), Lebowitz (1992), Marglin (1974), Naples (1989, p. 149), Postone (1993), Sohn-Rethel (1978) and Wennerlind (2000).
27 Capital 1, pp. 562–563, see also pp. 489–492. For modern accounts of the role of technology in social conflicts, see Levidow and Young (1981, 1985) and Slater (1980).
28 Capital 1, p. 545, see also pp. 470–471.
29 See Attewell (1984, p. 96) and D. Harvey (1999, pp. 59, 109).
30 Capital 1, pp. 1013–1014. See also pp. 1021, 1024, 1034, 1039–1040 and Gleicher (1985–86, p. 466).
31 See D. Harvey (1999, pp. 108–109).
32 Brighton Labour Process Group (1977, p. 19). See also Attewell (1984), Coombs (1985), Schwarz (1985) and Spencer (2000).
33 Bahr (1980, p. 106). See also Braverman (1974), Elger (1979) and Laibman (1976).
34 Capital 1, pp. 294–295; see also Capital 2, p. 186 and Theories of Surplus Value 3, p. 279.
35 Capital 3, p. 238. For similar statements, see Capital 1, pp. 129–130, 317–318, 676–677, Capital 2, pp. 185–188, 222–223, 366–368, Capital 3, p. 522, Theories of Surplus Value 1, pp. 232–233, Theories of Surplus Value 2, p. 416, Theories of Surplus Value 3, p.280, Grundrisse, pp. 135, 402, 657, and Marx’s letter to Engels dated 14 September 1851 (cited in Rosdolsky 1977, p. 318 n. 3). For an exhaustive survey of Marx’s texts, see Moseley (2000b). See also, inter alia, Gleicher (1989, p. 77), D. Harvey (1999, p. 15), Mattick Jr. (1991–92, pp. 37–38), Perelman (1993, p. 89), Reuten and Williams (1989, p. 71), Saad-Filho (1997a), Shaikh (1977, p. 113n), M. Smith (1994a, pp. 96–98; 1994b, pp. 119–122) and Wolfstetter (1973, p. 795).
36 Theories of Surplus Value 1, p. 96; see also Capital 2, pp. 196, 458.
37 See, for example, Cohen (1981) and Mirowski (1989).
38 See Capital 1, pp. 307–308 and Theories of Surplus Value 3, p. 167.
39 ‘You are altogether in the wrong track, if you think that he [the worker] loses a single moment of his working day in reproducing or replacing the values of the cotton, the machinery and so on. On the contrary, it is because his labour converts the cotton and the spindles into yarn, because he spins, that the values of the cotton and spindles go over to the yarn of their own accord. This is a result of the quality of his labour, not of its quantity’ (Capital 1, pp. 335–336). See also Aglietta (1979, pp. 44–45, 53, 276).
40 Constant capital is the value of the machines and other material (non-labour) inputs used up in production. Circulating capital is the value of the inputs consumed in each turnover, including constant and variable capital (wage costs) and the depreciation of fixed capital. Fixed capital is the value of the material inputs that last longer than one turnover, e.g., buildings and machinery. Fixed capital depreciates in two different ways, physically, when it is used (or simply by ageing, e.g., corrosion), and technically, if new machines, etc., can produce the output at lower cost (see Perelman 1987, ch. 5 and Weeks 1981, pp. 174–186).
41 Capital 1, p. 295. See also pp. 312, 317–318, 957, 985–986, Theories of Surplus Value 1, p. 109, Theories of Surplus Value 3, p. 280 and de Vroey (1981, p. 180).
42 Marx (1988b, pp. 79–80).
43 See Capital 3, p. 374.
44 ‘[I]n addition to the material wear and tear, a machine also undergoes what we might call a moral depreciation. It loses exchange-value, either because machines of the same sort are being produced more cheaply than it was, or because better machines are entering into competition with it. In both cases, however young and full of life the machine may be, its value is no longer determined by the necessary labour-time actually objectified in it, but by the labour-time necessary to reproduce either it or the better machine. It has therefore been devalued to a greater or lesser extent’ (Capital 1, p. 528). See also p. 318, Capital 2, pp. 185, 250, Theories of Surplus Value 2, p. 495 and Theories of Surplus Value 3, p. 154.
45 Perelman (1993, p. 88). See also Postone (1993, pp. 289–295).
46 ‘[A] large part of the existing capital is always being more or less devalued in the course of the reproduction process, since the value of commodities is determined not by the labour-time originally taken by their production, but rather by the labour-time that their reproduction takes, and this steadily decreases as the social productivity of labour develops. At a higher level of development of social productivity, therefore, all existing capital, instead of appearing as the result of a long process of capital accumulation, appears as the result of a relatively short reproduction period’ (Capital 3, p. 522). See also Capital 2, pp. 187–188, Capital 3, p. 356, Theories of Surplus Value 2, p. 416, Theories of Surplus Value 3, p. 389 and de Vroey (1981, p. 182).
47 Perelman (1999, pp. 724–725).
48 See Campbell (1998, p. 141), Fine (1980, ch. 4, 1989, ch. 9) and Perelman (1990, 1993, 1996, 1999).
49 Perelman (1999, p. 723). In other words, ‘the effect of competition is both to force the introduction of new methods of production and to restrict the ability of enterprises … to gain from technical change’ (Weeks 1992, p. 20). See also Aglietta (1980).
50 There are three reduction problems in Marx’s theory of value and, correspondingly, three transformation problems. First, the value-equalisation of concrete labours performed in the same sector, or normalisation. Second, the translation of technical into value differences, or synchronisation. Third, the averaging out of these averages across different branches of the economy, or homogenisation. Only the third problem has been discussed extensively in the literature (see below, chapter 7 and Reuten 1999, p. 110).
51 For Elson (1979b, pp. 136, 138), ‘the labour-time that can be directly measured in capitalist economies in terms of hours, quite independent of price, is the particular labour-time of particular individuals … This is not the aspect objectified as value, which is its social and abstract aspect … The social necessity of labour in a capitalist economy cannot be determined independently of the price-form: hence values cannot be calculated or observed independently of prices … Thus far from entailing that the medium of measurement of value must be labour-time, the argument that labour-time is the (immanent) measure of value entails that labour-time cannot be the medium of measurement. For we cannot, in the actual labour-time we can observe, separate the abstract from the concrete aspect.’ See also Gerstein (1986, p. 52) and Roberts (1996, p. 203).
52 Capital 1, p. 187.
53 Capital 1, p. 196.
54 Capital 3, p. 202. See also pp. 288–289, Capital 3, pp. 286, 774–775, Theories of Surplus Value 1, pp. 231–232 and Shaikh (1984, p. 266 n. 10).
55 Capital 3, pp. 288–289. In other words, ‘Price … is distinguished from value not only as the nominal from the real; not only by way of the denomination in gold and silver, but because the latter appears as the law of the motions which the former runs through. But the two are constantly different and never balance out, or balance only coincidentally and exceptionally. The price of a commodity constantly stands above or below the value of the commodity, and the value of the commodity itself exists only in this up-and-down movement of commodity prices. Supply and demand constantly determine the prices of commodities; never balance, or only coincidentally; but the cost of production, for its part, determines the oscillations of supply and demand … On the assumption that the production costs of a commodity and the production costs of gold and silver remain constant, the rise or fall of its market price means nothing more than that a commodity, = x labour time, constantly commands > or < x labour time on the market, that it stands above or beneath its average value as determined by labour time’ (Grundrisse, pp. 137–138). See also Marx (1989, p. 537), Rosdolsky (1977, pp. 89–93), Shaikh (1981, pp. 276–278), Shamsavari 1991, p. 256), Uno (1980, p. 79) and, especially, Rubin (1975, pp. 180–185, 203–209, 224).
56 Capital 3, p. 352, emphasis added.
57 Theories of Surplus Value 2, pp. 295–296.
58 See Capital 3, p. 275, Shaikh (1977, pp. 106, 121; 1982, p. 72), de Vroey (1981, p. 191) and Yaffe (1974, pp. 33–34).
1 The interpretation in this chapter derives from, and substantiates, previous work by Fine (1983) and Saad-Filho (1993b). See also Aglietta (1979, p.56), Cleaver (1992), Fine and Harris (1979, ch. 4), Fine (1989, ch. 10; 1990; 1992), Meacci (1992) and Weeks (1981, ch. 8).
2 Sweezy (1968, p.66).
3 See Bortkiewicz (1949), Desai (1989, 1992) and Seton (1957).
4 See Morishima (1973).
5 See Okishio (1974).
6 See Bortkiewicz (1952), Howard (1983), Lipietz (1982), Meek (1956; 1973, p. 313) and Winternitz (1948).
7 See Roemer (1979).
8 Shaikh (1977, p. 123); see also Shaikh (1973, p. 38).
9 See Foley (1986, p. 45), Mage (1963), M. Smith (1994a, p. 149) and Wright (1977, p. 203).
10 See Groll and Orzech (1987, 1989); see also Fine (1990).
11 See Capital 1, pp. 136–137, 332, 431, 773, 959 and Capital 3, p. 163.
12 Capital 3, p. 244. See also Theories of Surplus Value 2, pp. 455–456.
13 Theories of Surplus Value 3, p. 387. ‘Organic’ indicates the ‘intrinsic’ composition of capital. When analysing the general rate of profit (see chapter 7), Marx says: ‘Because the rate of profit measures surplus value against the total capital … surplus value itself appears … as having arisen from the total capital, and uniformly from all parts of it at that, so that the organic distinction between constant and variable capital is obliterated in the concept of profit’ (Capital 3, p. 261, emphasis added).
14 Theories of Surplus Value 3, p. 382. See also Theories of Surplus Value 2, pp. 216, 219.
15 Theories of Surplus Value 3, pp. 383–386, various paragraphs; see also Theories of Surplus Value 2, pp. 316–311.
16 Theories of Surplus Value 1, pp. 415–416.
17 See D. Harvey (1999, p. 126) and Weeks (1981, pp. 191–201).
18 Theories of Surplus Value 3, p. 386. Alternatively, ‘With capitals in different branches of production—with an otherwise equal physical [technical] composition—it is possible that the higher value of the machinery or of the material used, may bring about a difference. For instance, if the cotton, silk, linen and wool {industries} had exactly the same physical composition, the mere difference in the cost of the material used could create such a variation’ (Theories of Surplus Value 2, p. 289).
19 Capital 3, p. 244, emphasis added.
20 See Fine (1989, pp. 62–63).
21 Capital 3, pp. 900–901.
22 ‘[W]e immediately see, if the price of the dearer raw material falls down to the level of that of the cheaper one, that these capitals are none the less similar in their technical composition. The value ratio between variable and constant capital would then be the same, although no change had taken place in the technical proportion between the living labour applied and the quantity and nature of the conditions of labour required’ (Capital 3, p. 900).
23 Theories of Surplus Value 3, p. 381.
24 For example: ‘in this part of the work we … assume in each case that the productivity of labour remains constant. In effect, the value-composition of a capital invested in a branch of industry, that is, a certain proportion between the variable and constant capital, always expresses a definite degree of labour productivity. As soon, therefore, as this proportion is altered by means other than a mere change in the value of the material elements of the constant capital, or a change in wages, the productivity of labour must likewise undergo a corresponding change’ (Capital 3, pp. 50–51, emphasis added).
25 Capital 1, p. 162. Alternatively, ‘The organic composition of capital is the name we give to its value composition, in so far as this is determined by its technical composition and reflects it’ (Capital 3, p. 245).
26 Although the three compositions change simultaneously, in logical terms the TCC changes first, and this shift is reflected by the OCC and, subsequently, the VCC.
27 In the Grundrisse Marx was already aware of this, but he had not yet defined the concepts necessary to to develop the analysis of the composition of capital: ‘if the total value of the capital remains the same, an increase in the productive force means that the constant part of capital (consisting of machinery and material) grows relative to the variable, i.e. to the part of capital which is exchanged for living labour and forms the wage fund. This means at the same time that a smaller quantity of labour sets a larger quantity of capital in motion’ (p. 389, emphasis omitted). In p. 831 he adds: ‘The fact that in the development of the productive powers of labour the objective conditions of labour, objectified labour, must grow relative to living labour … appears from the standpoint of capital not in such a way that one of the moments of social activity—objective labour—becomes the ever more powerful body of the other moment, of subjective, living labour, but rather … that the objective conditions of labour assume an ever more colossal independence, represented by its very extent, opposite living labour, and that social wealth confronts labour in more powerful portions as an alien and dominant power’ (see pp. 388–398, 443, 707 and 746–747). See also Chattopadhyay (1994, pp. 37–38), Fine (1989, pp. 60–63), D. Harvey (1999, pp. 127–128), Reuten and Williams (1989, p. 120) and Uno (1980, pp. 52–53).
28 See section 5.2, Carchedi (1984, 1991), Fine (1990, 1992), Moseley (2000b) and Weeks (1981, ch.8).
29 Theories of Surplus Value 2, p. 495. See also Capital 2, p. 185, Theories of Surplus Value 3, p. 154 and Bologna (1993b).
30 Capital 1, pp. 773–774. See also Capital 3, pp. 317–319, 322–323.
31 Capital 1, p. 781. Moreover, ‘Since the demand for labour is determined not by the extent of the total capital but by its variable constituent alone, that demand falls progressively with the growth of the total capital, instead of rising in proportion to it, as was previously assumed. It falls relatively to the magnitude of the total capital, and at an accelerated rate, as this magnitude increases. With the growth of the total capital, its variable constituent, the labour incorporated in it, does admittedly increase, but in a constantly diminishing proportion’ (Capital 1, pp. 781–82).
32 See Fine (1989, ch. 10; 1992).
1 The literature on the transformation is vast, and there is neither need nor space for a survey here. See, however, Desai (1989, 1992), Dostaler and Lagueux (1985), Elson (1979a), Fine and Harris (1979, ch. 2), Freeman and Carchedi (1996), Howard and King (1991, chs 12–14), Laibman (1973), Mandel and Freeman (1984), Mohun (1995), Schwartz (1977), Steedman (1981) and Sweezy (1949).
2 See, for example, Böhm-Bawerk (1949), Samuelson (1957, 1971) and Steedman (1977).
3 See chapter 2 and Arthur and Reuten (1998), Baumol (1974, 1992), Duménil (1980), Fine (1986a), Foley (1982, 1986), Kliman and McGlone (1988), Moseley (1993), Moseley and Campbell (1997), Ramos-Martínez and Rodríguez-Herrera (1996), Shaikh (1977, 1981, 1982), Wolff, Roberts and Callari (1982, 1984) and Yaffe (1974).
4 This reading develops the approach first proposed by Fine (1983); see also Fine (1980, pp. 120–121; 1989, pp. 76–77) and Saad-Filho (1997b). For similar (though not necessarily identical) views, see Albritton (1984, pp. 165–166; 1986, pp. 60–61), Likitkijsomboon (1995, pp. 95–96), Postone (1993, p.271), Reuten (1993, pp. 101–102), Rubin (1975, pp. 223, 231, 241, 247–248) and T. Smith (1990, pp. 167–168, 170–172).
5 See Capital 3, pp. 42, 49, 50, 247.
6 See Capital 3, p. 161.
7 Capital 3, p. 243, emphasis added. See also Theories of Surplus Value 2, p. 384.
8 Capital 3, pp. 237–238, emphasis added. Marx recognises explicitly that several factors may influence the profitability of capital. Assuming equal rates of surplus value, ‘the amount of surplus-value produced by capitals of equal size varies firstly according to the correlation of their organic components, i.e., of variable and constant capital; secondly according to their period of circulation in so far as this is determined by the ratio of fixed capital to circulating capital and also {by} the various periods of reproduction of the different sorts of fixed capital; thirdly according to the duration of the actual period of production as distinct from the duration of labour-time itself, which again may lead to substantial differences between the length of the production period and circulation period. (The first of these correlations, namely, that between constant and variable capital, can itself spring from a great divergency of causes; it may, for example, be purely formal so that the raw material worked up in one sphere is dearer than that worked up in another, or it may result from the varying productivity of labour, etc.)’ (Theories of Surplus Value 2, p. 28). However, for him the quantity of labour in motion is analytically the most important cause of differences in profitability (see below). See also pp. 23, 28, 175–178, 198, 381–391, 426–427, Capital 3, pp. 142–145, 246–248, Theories of Surplus Value 3, p. 177, Marx (1985, pp. 22–24), Himmelweit and Mohun (1978, pp. 70, 77) and Rubin (1975, p. 231).
9 Ben Fine (1983, p. 522) was the first to point out this essential feature of Marx’s transformation: ‘Because Marx discusses the transformation problem in terms of the organic composition he is concerned with the following problem: what is the effect on prices of differences across sectors in the quantities of raw materials worked up into commodities irrespective of the value of those raw materials? The transformation problem as traditionally concerned would wish to take account of differences in the values of raw materials. Usually, following on from this, account is also taken of the differences in the prices of raw materials (which differ from the differing values).’ Fine concludes (p. 523) that ‘Marx did not get wrong the problem that he posed, although it differs from the one which he is presumed to have failed to solve.’
10 ‘When the rate of surplus-value … is given, the amount of surplus-value depends on the organic composition of the capital, that is to say, on the number of workers which a capital of given value, for instance £100, employs’ (Theories of Surplus Value 2, p. 376, emphasis added).
11 See Nell (1992, p. 55).
12 Capital 3, p. 254, emphasis added.
13 See Capital 3, pp. 137, 146, 243–246, D. Harvey (1999, p. 127) and Rubin (1975, pp. 231–247).
14 Capital 3, pp. 248–249. Alternatively, ‘As a result of the differing organic compositions of capitals applied in different branches of production, as a result therefore of the circumstance that according to the different percentage that the variable part forms in a total capital of a given size, very different amounts of labour are set in motion by capitals of equal size, so too very different amounts of surplus labour are appropriated by these capitals, or very different amounts of surplus-value are produced by them. The rates of profit prevailing in the different branches of production are accordingly originally very different’ (p. 257). See also Capital 1, pp. 421, 757, Capital 3, pp. 137–138, and Theories of Surplus Value 3, p. 483.
15 See Capital 3, pp. 257–258, 298–299, 312–313, Theories of Surplus Value 2, pp. 29, 64–71, 190, Theories of Surplus Value 3, pp. 73, 87 and Grundrisse, pp. 435, 547, 760. In other words, differences in the profit rates between capitals in the same sector arise because they produce distinct quantities of value per hour, while the equalisation of profit rates of capitals in distinct branches is due to value transfers: ‘What competition within the same sphere of production brings about, is the determination of the value of the commodity in a given sphere by the average labour-time required in it, i.e., the creation of the market-value. What competition between the different spheres of production brings about is the creation of the same general rate of profit in the different spheres through the levelling out of the different market-values into market-prices, which are [ prices of production] that are different from the actual market-values. Competition in this second instance by no means tends to assimilate the prices of the commodities to their values, but on the contrary, to reduce their values to [prices of production] that differ from these values, to abolish the differences between their values and [prices of production]’ (Theories of Surplus Value 2, p. 208). See also pp. 126, 206–207, Shaikh (1982, p. 77) and Weeks (1981, ch. 6, 1982a).
16 See Capital 3, p. 257, Theories of Surplus Value 2, p. 190, Grundrisse, p. 767, Duménil (1980, pp. 10–14; 1984, p. 343), Foley (1986, p. 8), Lagueux (1985, p. 121), Roberts (1987, pp. 89–90), de Vroey (1981, p. 190; 1982, p. 45), Wolff, Roberts and Callari (1984, p. 128).
17 ‘Values cannot be literally transformed into prices because the two play theoretical roles at different levels of explanation; for each commodity there is thus both a value and a price’ (Mattick Jr. 1991–92, p. 40). See also Hilferding (1949, p. 159), Rubin (1975, pp. 176, 250–257), Weeks (1981, p. 171) and Yaffe (1995, p. 85). In this sense, procedures that focus upon the aggregate equalities miss the point of the transformation.
18 See Fine (1980, p. 125); for a forceful statement, see de Vroey (1982, p. 45).
19 Capital 3, pp. 261–262.
20 This has been recognised by the more careful interpreters of Marx. See, for example, Baumol (1974, p. 53), Schefold (1998), Shaikh (1984, p. 44) Shamsavari (1987) and Yaffe (1974, p. 46).
21 See Capital 3, p. 142, Foley (1983, p. 9), Mattick Jr. (1991–92, pp. 51–52) and Uno (1980, p. 95 n. 5). In the traditional approach, the value of money is determined by the conditions of production of the money commodity (gold). Differences between them and the economy’s average create a discrepancy between the ‘intrinsic’ value of the monetary unit and its expression in exchange, that blurs the aggregate equalities. The use of fixed capital in gold production can make this form of determination of prices very difficult to handle mathematically, robbing the traditional approach of its intuitive appeal and recourse to the use of money as a neutral unit of account.
22 Lack of understanding of these features of Marx’s approach is partly responsible for the results of procedures following Bortkiewicz (1949, 1952). For example, Desai (1992, p. 17) complains that Marx’s ‘omission to mention the physical commodities being produced by these [five] spheres still creates a problem. Thus it is not clear where the various ci and vi used by these spheres come from. Also when we get pi, the production price, it is not in terms of per unit of output but in terms of hours of labour embodied in the commodity. This is not the price we see in the market-place … In a way, Marx “erases” the physical input-output step in going from values to prices.’
23 See Bortkiewicz (1952, p. 56), Hodgson (1973) and Samuelson (1971, p. 418).
24 ‘One must … reject the assertion that Marx thought prices had to be deduced from values via his transformation calculation. Marx knew very well that his ‘prices of production’ were the same as the ‘natural values’ of classical economics … Thus, he does not accuse the classical authors of having erred in deducing their price relationships without using Marxian values in the process. Rather, the charge repeatedly reasserted is that they dealt only with “this form of appearance” … To Marx, prices and values are … not the same thing. Values are not approximations to prices nor a necessary step in their calculation. Rather, one is a surface manifestation, while the latter is intended to reveal an underlying reality’ Baumol (1992, p. 56). See also Duménil (1983–84, p. 434).
25 Capital 3, pp. 308–309. In other words, the cost price, previously the value of the inputs, is now their price: ‘It was originally assumed that the cost price of a commodity equalled the value of the commodities consumed in its production. But … [as] the price of production of a commodity can diverge from its value, so the cost price of a commodity, in which the price of production of others commodities is involved, can also stand above or below the portion of its total value that is formed by the value of the means of production going into it. It is necessary to bear in mind this modified significance of the cost price, and therefore to bear in mind too that if the cost price of a commodity is equated with the value of the means of production used up in producing it, it is always possible to go wrong’ (Capital 3, pp. 264–265, emphasis added). See also pp. 1008–1010, Theories of Surplus Value 3, pp. 167–168, Mattick, Jr. (1991–92, pp. 18–19, 47–51) and Yaffe (1974, p. 46). The italicised passage highlights the shift in the concept of cost price (see section 1.1).
26 See Capital 3, pp. 259–265, 308–309, 990–920.
27 The concepts of price of production and general rate of profit are modified again when Marx discusses commercial capital, see section 1.1 and Capital 3, pp. 398–399.
28 Capital 3, p. 300. See also p. 268, Capital 1, pp. 678–679 and Marx (1998, p. 38).
29 Capital 3, pp. 967–968.
30 ‘It is often claimed that aggregate surplus-value is redistributed such that capitals … share in it in accordance with the amounts of capital exchanged for both labour-power and the means of production; this redistribution is supposed to occur through differences between values and prices of production. But there is no real world state which exists prior to such redistribution. Of course competition distributes aggregate surplus-value according to total capital advanced, but there is no redistribution. The process of redistribution is not a real world process, but a conceptual one which is symbolic of the theoretical transition required between concepts of a different order’ (Himmelweit and Mohun 1978, p. 83). See also p. 98, Capital 3, pp. 311, 428–429, Himmelweit and Mohun (1981, p. 248), Salama (1984, pp. 227–233) and de Vroey (1982, p. 48). For contrasting views, see Duménil (1984), Foley (1982, p. 44), Shaikh (1977, p. 126; 1991, p. 78) and Winternitz (1948, p. 277).
31 See, for example, Bortkiewicz (1949, p. 201; 1952, p. 9), Desai (1989), Dobb (1967, pp. 532–533), Duménil (1980, pp. 8, 22–23, 51), Lipietz (1982, p. 64), Meek (1956, p. 98; 1973, pp. xxi, 191), Sweezy (1949, p. xxiv; 1968, p. 115), de Vroey (1982, p. 47) and Winternitz (1948, p. 278).
1 Marx’s theory of money is analysed by Arnon (1984), de Brunhoff (1976, 1978b), Campbell (1997, 1998), Fine and Lapavitsas (2000), Foley (1975, 1983), Hilferding (1981), Itoh and Lapavitsas (1999), Lapavitsas (1994, 2000a, 2000c) and Lapavitsas and Saad-Filho (2000). See also Fine (1989, pp. 70–71), Gleicher (1983, p.100), Ilyenkov (1982, pp. 189–196, 260–279), Messori (1984), Mollo (1999), Reuten and Williams (1989, pp. 65, 84–89), Rosdolsky (1977, part II), Rosenthal (1997, chs 11, 15), Saad-Filho (1993a) and Weeks (1981, ch. 4).
2 See Capital 1, p. 182.
3 Fine and Lapavitsas (2000, p. 370).
4 See Capital 1, pp. 247–257, Capital 2, pp. 163–164, Capital 3, pp. 576–577, 592, Theories of Surplus Value 3, pp. 475, 490, Contribution, pp. 304–309, Bologna (1993c, pp. 8–9), Fine (1985–86, p. 388, 1989 pp. 79–80) and Likitkijsomboon (1995, p. 101).
5 ‘The first main function of gold is to supply commodities with the material for the expression of their values, or to represent their values as magnitudes of the same denomination, qualitatively equal and quantitatively comparable. It thus acts as a universal measure of value, and only through performing this function does gold, the specific equivalent commodity, become money … Money as a measure of value is the necessary form of appearance of the measure of value which is immanent in commodities, namely labour-time’ (Capital 1, p. 188). See also pp. 184–196, 204 and Grundrisse, p. 794. De Brunhoff and Ewenczyk (1979, pp. 49–50) rightly argue that as ‘measure of value and standard of prices, money gives a price form to commodities; it expresses the value of commodities in quantities of the money commodity (gold), and relates at the same time these magnitudes to a fixed unitary quantity of weight of gold, that is the standard of prices. The monetary name––the price form––expresses at the same time these two functions.’
6 The convenience of metallic currencies, including ductility, durability, and high density of value, is explained in the Contribution, pp. 290–291 and Grundrisse, pp. 166, 174–186, 387; see also A. Smith (1991, I, ch. 4).
7 See Capital 1, pp. 189–190.
8 See Fine (1986a), Mandel and Freeman (1984) and Schwartz (1977).
9 For a detailed review, see Saad-Filho (1993a). For further details, see Bologna (1993a,b) and Cartelier (1987).
10 ‘[M]oney … must increase just exactly and precisely as fast as all other marketable commodities put together; for if it do not do this, every commodity multipliable by the exercise of human industry faster than money itself … will fall in money-price; and from that instant, the greatest and most important principle in Political Economy … – Production the cause of Demand is expelled from our commercial system’ (Gray 1848, p. 69).
11 ‘[B]y the adoption of the plan of exchange that is here described, goods of every kind would be made to pay for each other. Selling would be merely the act of lodging property in a particular place; buying would be merely the act of taking of it back again; and money would be merely the receipt which every man would require to keep in the interim between the period of selling and that of buying’ (Gray 1831, p. 86).
12 See, inter alia, Capital 1, pp. 181, 188, Contribution, pp. 320–323 and Grundrisse, pp. 115, 125, 135–139, 213.
13 Grundrisse, p. 139.
14 See Capital 1, pp. 211–212 and Contribution, pp. 324–332. Since there is no a priori guarantee that the value of any specific commodity will be realised, the need to sell implies the possibility of non-sale, or the formal possibility of crises (see Theories of Surplus Value 2, ch. 17, Bell and Cleaver 1982, Clarke 1994 and Perelman 1987).
15 Capital 1, p. 226. See also pp. 222–227, Capital 3, p. 649, Contribution, pp. 344–350, Grundrisse, pp. 209–213, de Brunhoff (1976, pp. 31–33) and Lapavitsas (2000a). More generally, ‘New forms of money only appear very gradually, and are at first rarely seen as complementary to the existing forms: they appear more as “promises of money” that are a technical device to make (real) money circulate. But as this technique spreads, its use, which was initially seen as a way of economizing on money, becomes more and more difficult to distinguish from “real” monetary use. The perspective then switches round, and the instrument is soon recognized as money. The hierarchy of money forms is thus evolutionary and the limits of money somewhat blurred; some instruments may be analyzed both as means of accelerating the circulation of money and as fully-fledged monetary forms’ (Lévy-Garboua and Weymuller, in Lipietz 1985a, p. 90).
16 See Capital 3, pp. 432–437, 670, 701–708, Campbell (1998, pp. 137–138, 148–149), Uno (1980, p. 110) and, especially, Itoh and Lapavitsas (1999, chs 1–2) and Lapavitsas (2000b).
17 ‘ Credit … is the means by which the capital of the whole capitalist class is placed at the disposal of each sphere of production, not in proportion to the capital belonging to the capitalists in a given sphere but in proportion to their production requirements––whereas in competition the individual capitals appear to be independent of each other’ (Theories of Surplus Value 2, p. 211). See also p. 482, Capital 3, pp. 431–436, 566–571, 626–627, 637–640, 658, 741 and Fine (1989 pp. 79–89).
18 The following paragraphs draw upon Fine, Lapavitsas and Saad-Filho (2000) and Lapavitsas (2000a). See also Capital 1, pp. 213–220, Capital 3, pp. 578–580, 663–664, 674, Contribution, pp. 338–342, 394–396, Grundrisse, pp. 813–814, 869–870, Campbell (1998, p. 145), D. Harvey (1999, p. 12) and D. Lavoie (1986). Money supply is analysed by de Brunhoff (1971, 1978b) and Lapavitsas and Saad-Filho (2000).
19 See Ricardo (1951, ch. 27; 1966) and Schumpeter (1954, part II, ch. 6 and part III, ch. 6).
20 See Contribution, pp. 352–356, Cottrell (1997) and Lapavitsas (2000a). De Brunhoff (1976, pp. 35–37) claims that Marx rejects the QTM entirely.
21 Marx analyses convertible money, inter alia, in Capital 1, pp. 222–227, Capital 3, p.649, Contribution, pp. 402–403 and Grundrisse, p. 132; see also Foley (1975, 1983, 1998).
22 See Capital 3, pp. 569, 572, de Brunhoff (1978a, pp. 44–45), Clarke (1994) and Lapavitsas and Saad-Filho (2000, pp. 324–326). Itoh and Lapavitsas (1999, ch. 6) identify two types of financial crisis, those that derive from and exacerbate industrial crises, and those that originate purely from the activities of the credit system.
23 Lapavitsas and Saad-Filho (2000) and Mollo (1999) show that Marx’s notion of money endogeneity is broader than the better known post-Keynesian approaches outlined in Minsky (1975, 1986) and Moore (1988).
24 See Capital 3, pp. 418, 653–676, 685, 738, Fine (1985–86), Guttman (1994, ch. 5), D. Harvey (1999, pp. 292–293), Lianos (1987, pp. 42, 53 n. 9) and Mandel (1968, pp. 254–259).
25 Marx was fully aware of the existence of valueless forms of money, including John Law’s system and the French Assignats. He does not, therefore, presume that only commodity money must exist, or that it is somehow a necessary feature of capitalism. To put it bluntly, ‘money may be dirt, although dirt is not money’ (Capital 1, p. 204). However, he does not explain how valueless money measures value.
26 ‘The fact that money has necessarily to be a commodity is not a matter of faith, but is based on strong theoretical foundations, laid out by Marx in the Grundrisse … if one admits that values of commodities may be measured without reference to abstract labour as a standard, one has to admit also that values of commodities are not determined by its content in abstract labour … Marxist authors should not let themselves be misled by the easy inductivist procedure of concluding that the money-commodity does not exist because it is not immediately visible’ (Germer 1997, pp. 94, 99, 102). See also Germer (1999, p. 2), D. Harvey (1999, p. 245 n. 6), D. Lavoie (1983, p. 55, 1986, p. 155), Loranger (1982b, p. 495) and Rosdolsky (1977, pp. 83, 139).
27 See de Vroey (1985, pp. 45–46), Mattick (1978), Reuten and Williams (1989, p. 65) and Williams (1998, 2000).
28 See Saad-Filho (1996b, 1997a).
29 Labour power and other commodities not produced for profit are exceptions, see sections 2.2.1 and 4.2.
30 Capital 3, p. 300.
31 At a more concrete level of analysis, including distinct turnover times, the exchange value of money is influenced by the relationship between old and new values across the economy, and by the rate of technical change in each sector.
32 This section draws upon Saad-Filho (2000a); see also Howard and King (1991, ch. 16).
33 For simplicity, inflation is identified with a sustained increase of the price level accompanied by changes in relative prices. This definition is insufficient for many reasons, among them because it ignores ‘hidden’ inflation (when technical progress fails to reduce prices, given the quality of the goods).
34 See Moseley (1999).
35 Conflict theories are surveyed by Burdekin and Burkett (1996) and Dalziel (1990). See also Armstrong, Glyn and Harrison (1991), Boddy and Crotty (1975, 1976), Cleaver (1989), P. Devine (1974, 2000), Glyn and Sutcliffe (1972), Gordon (1981), Green and Sutcliffe (1987), Jacobi et al. (1975), M. Lavoie (1992, ch. 7), Marglin and Schor (1990), Morris (1973), Palley (1996), Rosenberg and Weisskopf (1981), Rowthorn (1980, chs 5–6), Sawyer (1989, pp. 359–372) and Weintraub (1981). For a critique, see de Brunhoff (1982), Fine and Murfin (1984, ch.7), Kotz (1987), Weeks (1979) and Wright (1977). Inflation can obviously induce distributive conflicts, but these will be ignored here.
36 ‘When unemployment … was reduced to a level which threatened the capitalist power of exploitation of the working class … inflation provided for a time … a substitute for the industrial reserve army as capitalism’s way of maintaining its power of exploitation. Eventually, working-class reaction to the inflationary substitute for unemployment helped produce a rapid acceleration in the rate of inflation’ (Morris 1973, p. 6).
37 See Fine and Leopold (1993).
38 The classic example of this synthesis is Baran and Sweezy (1966); see also Best (1972), Bryan (1985), Dollars and Sense (1978), Dowd (1976), Gamble and Walton (1976), Morris (1972), Sherman (1972, 1976a,b), Spero (1969), Sweezy and Magdoff (1979, 1983, drawing on Steindl 1952), Szymanski (1984) and Zarifian (1975). For a critique, see Aglietta (1979, pp. 26–28), Semmler (1982), Weeks (1982b) and Wright (1977). Clarke (1988) dissects the ‘Keynesian state’, and Bleaney (1976) critically examines theories of underconsumption.
39 For Morris (1972, pp. 18–19), rising inflation was due to the ‘endless stimulation of the moribund monopoly capitalist system by ever stronger injections of monetary and fiscal anti-depressant drugs.’
40 See Hilferding (1981, ch. 15), Kalecki (1990c) and Sawyer (1985, ch. 2); for a Marxian critique, see Fine and Murfin (1984). Bleaney (1976, pp. 225–226) rightly argues that it is ‘a severe problem, in writing about modern underconsumption theories, that their influence seems to have far exceeded the extent of their theoretical exposition’.
41 See, however, Mandel (1968, p. 527) and Sweezy (1974). Sweezy claims that Baran (1973) identifies the inflationary danger in Keynesian economics: government deficit financing is not sustainable in the long run because most government spending is unproductive (e.g., military expenditures). These expenditures are potentially inflationary because they increase the ratio between money and commodities (see below).
42 See Sherman (1972); for a critique, see Weisskopf et al. (1985). Sweezy and Magdoff (1979, p. 9) tautologically claim that ‘while monopoly capital may not be the direct cause of major upward movements of prices, it is nevertheless the necessary condition for their occurrence … If monopoly is not the motor, it is nonetheless the sine qua non of the extraordinary inflation of the current decade as well as of the preceding upward spirals.’
43 The monopoly capital school has been heavily criticised by most Marxists for its use of the concept of economic surplus instead of surplus value; see section 2.1 and Weeks (1977, 1982b).
44 Aglietta (1979), Boyer (1986, ch. 10), de Brunhoff (1978a, pp. 45–48), de Brunhoff and Cartelier (1974), Ergas and Fishman (1975), Fine (1980, ch. 4), Lipietz (1985a), Loranger (1982a, 1989), Mandel (1975, ch. 13), Mattick (1978), Orléan (1982) Reuten and Williams (1989, pp. 84–87, 95–98, 148–156), de Vroey (1984) and Weeks (1981, pp. 145–148). A similar approach is outlined by Toporowski (2000), emphasising the role of capital markets. For a fuller analysis, see Saad-Filho (2000a). Many post-Keynesian writers (e.g., Moore 1988) argue that if the money supply is endogenous there cannot be excess supply of money. For a counter-argument, see Hilferding (1981, ch. 5) and Lapavitsas and Saad-Filho (2000).
45 De Vroey (1984).
46 For a similar argument, see Kalecki (1997) and Sawyer (1985, ch. 6).
47 This view is similar to Minsky’s (1986), which reinforces de Vroey’s (1984) argument about the potential compatibility between the extra money approach and post-Keynesian analyses.
48 For a taste of the vast literature, see Arestis and Howells (1996), Cottrell (1994) and Dow (1996); for a critique, see Lapavitsas and Saad-Filho (2000).
49 See Loranger (1982b) and Nell and Deleplace (1996).
50 See Kalecki (1990a, 1990b, 1997) and Messori (1991).
51 See Minsky (1975, 1986), Dymski and Pollin (1994) and Mollo (1999).
52 See Grou (1977), Marazzi (1977) and Mattick (1978). For an application to the Brazilian economy, see Saad-Filho and Mollo (forthcoming) and Saad-Filho and Morais (2000).
1 Important counter-tendencies are the diffusion of technical innovations among competing firms, the potential ability of smaller capitals to undermine the existing technologies through invention and experimentation, and foreign competition.
2 Theories of Surplus Value 3, p. 447, brackets omitted.
3 Grundrisse, pp. 708–709, see also pp. 704–706 and Capital 3, pp. 357–359.
4 Contribution, p. 264.