2003 article, originally published in Companion to the history of economic thought, edited by Warren Samuels, Jeff Biddle and John Davis, Oxford: Blackwell, pp. 148â66.
(For its abstract see the Abstracts of all chapters, p. 1.)
Contents
Introduction
1 On Marx and his Capital
2 The many Marxes, the many Capitals
3 Interpretations of Marxâs method in Capital
3.1 Historical Materialism
3.2 Critique
3.3 Naturalistic versus socio-historical concepts
3.4 Value-form theory
3.5 Systematic Dialectics
3.6 Conclusions
4 A synopsis of the systematic structure of Capital
Capital I: Production
Capital II: Circulation
Capital III: Destination
Summary
5 Marxâs theory and Marxian theory as a strand
References
Introduction1
Karl Marx is known for a 30-page political pamphlet, The Communist Manifesto, written in 1848 together with Friedrich Engels, and for a 2,200-page socio-economic work, Capital, published in three volumes in 1867, 1885 and 1894, the last two edited by Engels. The collected works of Marx and Engels extend to over 50 thick volumes.
Marxâs magnum opus, Capital, is an analysis of the capitalist system (the term âcommunismâ is mentioned some five times in notes; perhaps five out of 2,200 pages refer in passing to some future society). Marx wrote the work between 1857 and 1878 while living in London. British capitalism provided his main empirical material.
The changing appreciation of Capital throughout the twentieth century has been influenced by both the degree to which other works of Marx were, or could be, taken into account (§2) and, relatedly, developing methodological views (§3). A reading of the work (§4) is bound to take methodological sides.
1 On Marx and his Capital
Marx was born in 1818 in Trier and died in 1883 in London. He studied law and philosophy and received a PhD in 1841. Trained to pursue the positions of either a state official or university professor, both his studies and the repressive political climate in Prussia induced a different course. During his student years he helped fight for democratic rights, opposing the vested political regime. His subsequent writings and editorship of a liberal journal brought him into conflict with Prussian censorship. He sought refuge in Paris (1843â45), Brussels (1845â47), Cologne (1848â49), and finally, in 1849, settled in London.
In the hectic 1842â49 period, Marx studied and wrote on philosophical, political, and economic issues, and developed his materialist conception of history (§3.1). He also made contact with radical socialist groups, and met Friedrich Engels, his lifelong personal, political, and intellectual friend. In 1848, aged 30, he and Engels wrote the Manifest der Kommunistischen Partei.
From 1849 to about 1865 Marx reduced his political activities and concentrated on serious analysis of the capitalist system, combining research with journalistic work to earn his living. Many thousands of pages were drafted for his magnum opus in a creative and highly productive period. At the same time, he and his family lived in poverty. Income from Marxâs journalistic work was scarce; to survive, they relied on gifts from relatives and friends, especially Engels.
Marxâs research plans were extremely ambitious. He aimed to write a complete systematic analysis of society: economic, social, political, and historical. By 1858 he planned to write six books. The first of these came to completely occupy his mind and energies. It grew to the three volumes of Capital that we now have, together with a sequel account of political economic theories (another three volumes). Marx brought to press himself only the first volume of Capital (1867).
After its 1867 publication, Marx continually revised Volume I, especially its key value-theoretical Part One (the volumes are organised into parts). A second German edition dates from 1873 and a French edition, in instalments, from 1872â75. This process of revision should be kept in mind for those who seek consistency between Volume I and the manuscripts for Volume III, composed in 1864â65.
In the years 1865â70 and 1877â78 Marx wrote much of Volume II of Capital, without completing it. He had gotten re-involved in political activities, but his health also seriously deteriorated. As we will see below, Marxâs Capital project employs a demanding systematic methodology. Towards the end of his life, the requirements for the organisation of the work grew beyond his fading energy.
After Marxâs death, the two remaining volumes of Capital were edited from Marxâs drafts and notebooks by Engels (1885, 1894) and the sequel by Kautsky (1905â10). The drafts are in varied states of completion â the second half of both Volumes II and III consists of reorganised notebooks â and the editors inevitably had their impact on the result. In fact, Marx had considered them unfit for publication.
2 The many Marxes, the many Capitals
Developing historiographic views, as well as developing Marx scholarship, have affected the interpretation of Marxâs Capital (§3). This is not different from other authors. However, in the case of Marx especially, an additional factor is important: the time lags between the posthumous publications of his writings â as well as their translations into (for example) English. Table 1 provides examples.
A 27-year lag between the publication of Volumes I and III meant that Capital I had a life of its own. In 1932 (1938 and 1963 in English), two works of Marx were published that shed new light on his views on money and the capitalist labour process. In 1953 (1973 in English) the Grundrisse, an early 800-page draft of Capital in dialectical style, was published, shedding new light on both the method and content of Capital. Even in the 1990s important new manuscripts were published, and others are still forthcoming. The result is that throughout the twentieth century, and continuing to the present day, there have been many Marxes and many Capitals.
Table 1
âMany Marxesâ: dates of publication of some major works
|
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
||
|---|---|---|---|---|---|---|---|
|
First publication in German |
Years 1â3 |
First English translation |
Date of manuscript |
Years 1â4 MsâGerman |
Years 3â4 MsâEnglish |
||
|
1867 |
Das Kapital I |
19 |
1886 |
Capital I |
1861, 1863, 1865â67a |
0 |
19 |
|
1885 |
Das Kapital II |
22 |
1907 |
Capital II |
1865â70, 1877â78 |
7 |
29 |
|
1894 |
Das Kapital III |
15 |
1909 |
Capital III |
1864â65 |
29 |
44 |
|
1905â10 |
Theorien über den Mehrwert (3 vols) |
48â61 |
1952â71 |
Theories of Surplus Valueb |
1862â63 |
47 |
108 |
|
1932 |
Pariser Manuskripte |
31 |
1963 |
Economic-philosophical manuscripts |
1844 |
88 |
119 |
|
1932 |
Die deutsche Ideologiec |
6 |
1938 |
The German Ideology (Parts I & III) |
1845â46 |
86 |
92 |
|
1953 |
Grundrissed |
20 |
1973 |
Grundrissee |
1857â58 |
95 |
115 |
|
1992 |
Ãkonomische Manuskripte 1863â67 [including the Capital III manuscripts] |
â |
â |
â |
1863â67 |
125â29 |
â |
-
Work on second German edition, 1867â72; and on French edition 1872â75.
-
First Volume 1952, A history of economic theories; extracts 1951.
-
Extracts 1902â03, 1921 and 1927.
-
Earlier scarcely available edition 1939â41; its Introduction was published in 1903.
-
Extracts 1964 and 1971.
It is illusory to think that new textual âevidenceâ changes views overnight, especially for path-breaking publications. The 1953/1973 publication of the Grundrisse has only had a major impact since the mid-1980s. Keynes, himself author of the path-breaking publication The General Theory, explained the reason in its Preface: âThe difficulty lies, not in the new ideas, but in escaping from the old ones â¦â.
The early appreciation of the 1894 (English, 1909) Capital Volume III, or even the 1867 (1886) Volume I of Capital, has shaped the interpretation of Marx in all standard histories of thought, in both the first half of the twentieth century and since. As difficult as it is to write a history, it is much harder to revise a history that has become part of the received view. Whatever textual âevidenceâ arises, a range of interpretations â perhaps a moving range â will likely ensue.
Table 1 requires a general historiographic note. Columns 1â3, ordered according to dates of publication, are its core. The order of publications â impact â is relevant for a general history of thought. A history of the intellectual development of Karl Marx, or of the âmakingâ of Capital, requires an historical ordering by manuscripts dates (column 4). These are very different historiographic perspectives. (For the latter perspective, the making of Capital, Oakleyâs succinct 1983 book is very informative, even if at the time he lacked full information about Engelsâs editorial work.)
3 Interpretations of Marxâs method in Capital
Interpretations of Marxâs Capital are intimately related to interpretations of his method, of which five major aspects are examined below. Some version of the first, historical materialism (§3.1), was shared by most commentators until around 1970. The interpretation of Marxâs method in the following period is more complex. Subsequent subsections â roughly in historical order â add in these further complications, in each case building on the methodological aspect of the previous subsection.
3.1 Historical Materialism
Marx embraced, and was the originator of, a materialist conception of history (often called âhistorical materialismâ â the label is not Marxâs). Analytically and institutionally, any society can be seen as a number of domains: political and legal, cultural including education, and economic. For Marx, the development of the economic domain (the ârelations of productionâ) is key to the development of a society at large (a âsocial formationâ, such as a feudal or a bourgeois/capitalist society). What happens in the âsuperstructureâ â the juridico-political and cultural domains â is understood in terms of the âbase structureâ â the economic relations and their requirements. Two aspects are fundamental to the economic relations themselves: first, the relationship between (a) the social layer or class that does the actual work, and (b) the layer or class that has the power to live off the surplus produced by the former, and that usually also possesses the means of production that the former works upon; and second, the âforces of productionâ, the amalgamation of the labour process in relation to technology (the latter understood in grand, epochal terms).
This schema is especially significant in analysing changes in structures and their aspects, particularly their dynamic interaction during uneven development. âGrandâ history can be seen in terms of revolutionary transitions â ârestructuringâ into more fitting aspects. (Note that especially in the first half of the twentieth century this schema has often been interpreted mono-causally, running from the forces of production, instead of as a dialectic between all structures and aspects.)
Marx developed these ideas when he was 25â30 years of age. They can be seen clearly in the Manifesto. One plausible reading of Capital, or one dimension of it, is as an analysis of the economic base structure of capitalism. Note, though, that the work does not contain an explicit analysis of social class (except for a just over one page unfinished âchapterâ on classes at the end of Volume III of Capital, the term class is hardly ever used in Capital). Furthermore, even if there are a few â very few â mostly speculative references to transitional elements within capitalism, transition is not what the work is about.
3.2 Critique
Especially important in reading Capital is the methodology Marx developed alongside his materialist conception of history, namely his method of âcritiqueâ â largely acquired from Hegel (post Kant â cf. Benhabib 1986). Almost all Marxâs works carry the term âCritiqueâ [Kritik], which is distinguishable from âcriticismâ. The latter adopts a normative external criterion (ethical, aesthetic or methodological) to evaluate society or such social products as artistic and scientific endeavours. The method of critique evaluates society and social products on the basis of the norms and standards of the object of inquiry itself. An object of inquiry is analysed from within itself. Its norms and standards are taken to their logical conclusions, detecting possible inconsistencies and contradictions â as when capitalist business both lauds âmarket competitionâ and seeks to eliminate competitors and achieve monopolistic positions.
In Capital Marx addresses both a material ontological constellation and ideas about it. When the original title, Das Kapital; Kritik der politischen Ãkonomie, is translated as: Capital; A Critique of Political Economy (Penguin editions), the double meaning of the German is lost. The English translation correctly indicates that the work is a critique of a science but omits that the work is as much â in my view, in the first place â an internal critique of âthe political economyâ, an ontological constellation.
Marx scholars today accept âinternal critiqueâ as a major aspect of Marxâs method in Capital. However, controversies remain over the method and content of Capital, since other aspects are not necessarily ruled out. For example, is âMarxâsâ âlabour theory of valueâ (he never used the expression) still an external norm, or is the concept of value adopted from the object of inquiry? (See further §3.4.)
3.3 Naturalistic versus socio-historical concepts
Marx simultaneously historicises social and economic concepts â the critique is an historicised critique. Social self-understanding usually takes the current social constellation and its concepts for granted, as ânaturalâ, or as the norm (âethnocentrismâ). They are then used to evaluate history or other contemporary societies. (For example, some Americans deploy their notions of âmarketâ, âcompetitionâ, âeconomic freedomâ, âpolitical democracyâ to evaluate other societies.) Marx identified the âmainstreamâ political economy of his time as that body of self-understanding in Great Britain and France of 1850 set in ahistorical or naturalistic terms (cf. Mattick 1986).
From this perspective, Marx sometimes distinguished a trans-historical, or general-material, denotation of concepts â âgoodsâ and âworkâ â from their historical, in this case capitalist, counterpart â âcommoditiesâ and âlabourâ (Arthur 1986; Murray 1988). His aim was not to construct a second language, but to show that in the social domain naturalistic entities do not exist. No trans-historical âhuman needsâ, âutilityâ, âwealthâ, âgoodsâ, âworkâ, or âtechnologyâ exist; they are always âdefinedâ and âsubsumedâ within a socio-historical constellation (on human needs, see Campbell 1993; and on wealth and on subsumption generally, Murray 2000, 2002). Whereas J.S. Mill historicises âthe laws of distributionâ â still eternalising/naturalising âthe laws of productionâ â Marx is a complete de-naturaliser. Anything human is set in an historically specific social form.
3.4 Value-form theory
The view that Marxâs critique is an historicised critique, and that everything human takes on an historically specific social form (§3.3), is highlighted in the recent âform theoreticâ interpretation for which Capital is an exposition of the capitalist social form âvalueâ [early proponents are Eldred and Hanlon 1981 and Eldred, Hanlon, Kleiber and Roth 1982â85 who build on work by Backhaus 1969; Rubin 1972 [1923] is an important rediscovered precursor].
The general methodological idea of âform theoryâ (springing from Aristotle and Hegel â cf. Murray 1997) is that âcontentâ and âformâ necessarily go together (for both natural-physical objects and anything created by human beings). âFormâ is of the essence of content, just as much as form cannot exist without content. Any actual social formation requires an historically specific form of production and distribution (e.g. tradition, power, democratic decision-making), the capitalist form being value as expressed in monetary dimension. But isnât it the case that things â sugar, cigar or car â already have a content and form? True. In fact, it is âtruerâ than the question purports. They surely have a physical form, but from Marxâs point they necessarily also have a social form that can be distinguished but not separated from their physical being. In capitalist economies things are not merely exchanged in markets in terms of value, but are produced as values, which affects how things are qualitatively.
In a traditional interpretation of Capital, Marx introduces in its first chapters a âlabour theory of valueâ â building on the Classical Political Economy of Smith and especially Ricardo â âvalueâ being a naturalistic concept, reckoned in a labour-time dimension. In this interpretation, Marx presents a âpositiveâ theory of value. Hence the materialist internal critique aspect of Marxâs method must, for this part of Capital at least, be de-emphasised (note that the âlabour-time theoryâ interpretation antedates the critique interpretation). For this traditional interpretation, later parts of Capital set out how concrete market phenomena can be âreconciledâ with this âpositiveâ theory.
For value-form theory, this first part of Capital is a key materialist critique text. When commodities are produced for sale â a specific characteristic of capitalism â the concrete, utility-producing character of labour is completely secondary to the producer; labour matters to the extent that it is value-producing âabstract labourâ, a mere expenditure of time. This same text also shows how value (the abstract time facet of labour) is necessarily expressed in abstract monetary terms â and in monetary terms only. Later parts of Capital set out even more complex forms, culminating in the profit form of value, in which things are not merely produced as values, but specifically according to the measure and success-norm of capital: profit and the rate of profit.
How can we appraise these two opposing interpretations? To any reader of Capital it will be obvious that for Marx value is not simply determined by labour-time. The discussions of changing productivity and intensity of labour throughout Volume I problematise such a notion. Nevertheless, Marx often uses the simplified notion as an analytic reference point. Thus, whereas Marxâs value-form theory is a fundamental break from Classical Political Economy, he maintains remnants of a Ricardian labour-time theory of value (Backhaus 1969).
I think that the âlabour-time theory of valueâ interpretation cannot be maintained because too many texts are inconsistent with it. The same applies, however, to a comprehensive monetary value-form interpretation. There are two lines of reasoning within Capital. Marx shares the fate of those who made a fundamental break (a césure), or a paradigm shift, from past conceptions. New conceptions must be formulated in the inherited language. Initial breaks must be partial, inconsistent, or flawed, and need to be completed by researchers following up the break. This, however, does not make the partial break less of an accomplishment (Reuten 1993; for a different view, see Murray 2000).
3.5 Systematic Dialectics
Also controversial is a final methodological interpretation, arising in the middle of the 1980s, which views Capital as Systematic Dialectics. Historical Dialectics describes the evolution and succession of distinct social formations; Systematic Dialectics theorises about one particular social formation, such as the capitalist system, setting out the whole of its object of inquiry as a completely endogenous system, or at least its necessary components and processes.
A major impetus for this interpretation was the 1953/1973 publication of Marxâs Grundrisse, a rough draft of Capital that was, as mentioned in §2, more so than Capital written in a dialectical style. As indicated, a publication, such as the Grundrisse in this case, will not change inherited interpretations overnight. A second impetus was the dedication by a number of scholars (some stimulated by the Grundrisse reading) to the study of the HegelâMarx connection (cf. Burns and Fraser 2000). As the studies of Marxâs Grundrisse and Hegelâs Systematic-Dialectical works converged, the new interpretation of Capital gradually emerged. [For beginnings, see Banaji 1979, Arthur 1986, and Murray 1988. A comprehensive Systematic-Dialectical interpretation is Smith 1990; cf. his 1993a, 1993b. See Mattick 1993 for critique of the interpretation. For general accounts of the methodology of Systematic Dialectics, not necessarily related to Capital, see Reuten and Williams 1989, pp. 3â36, Arthur 1998, and Reuten 2000.]
A Systematic Dialectic operates on several conceptual levels, from abstract and simple to concrete and complex. Its starting point is also an entry into its whole object of inquiry, formulating that whole both abstractly and simply. Gradual concretion and increasing complexity are achieved at subsequent levels of abstraction; at a final level of âabstractionâ, the complexity of concrete empirical reality should be attained.
An un-theorised, or naive, empirical reality is the beginning of research. From that, after a complex and creative investigation, the initial highest level of abstraction is reached â the starting point of the systematic presentation (indicated in the previous paragraph). Thus, empirical reality (at first naive, in the end systematically theorised) is both the beginning and the end of the research. A rough outline of this process from the empirical to the abstract to the concrete is found in one of Marxâs few methodological texts (Marx 1903).
Marx identifies neither these levels of abstraction in Capital nor how to get from one level to the next. So this must all be inferred in this interpretation of Capital.
The grand systematic of Capital is in terms of its three volumes: (I) âThe production of capitalâ (from the commodity to money to capital, and from the production of capital through surplus-value to the accumulation of capital); (II) âThe circulation, or, the organic interconnections of capitalâ; and (III) âThe destination and concrete shapes of capitalâ (profit and the rate of profit, and competition and the distribution of the fruits of capital into profits of enterprise, interest and rent). The three volumes are each made up of parts, which provide more detailed levels of abstraction.
Levels of abstraction are conceptual terrains. In dialectics, concepts are not fixed â as in conventional âlinear logicâ (cf. Arthur 1997) â but manifest ongoing conceptual progress from one level of abstraction to another. An axiomatic translation of one level into another is inconsistent with the methodology. In general, when a level of abstraction insufficiently captures the whole, the process is driven forward. Capturing the whole means formulating âa systemâ that can, in principle, reproduce itself endogenously. At each operating level of abstraction, the âdiscoveryâ of its endogeneity limits pushes the process to a new, richer, more complex level. Such a level is institutionally more complex and requires new categories and concepts. With it come both a reconceptualisation and the concretion of the conclusions of earlier levels of abstraction.
To some extent the method may be envisioned as one of successive approximation (Sweezy 1968 [1942]) â but only with the major proviso precluding fixed definitions (they only apply at their own level of abstraction). Indeed, a recurrent reconceptualisation occurs. A succinct example comes from Marxâs Results (1933, p. 969), when he contemplates Volume I of Capital:
Originally, we considered the individual commodity in isolation, as the direct product of a specific quantity of labour. Now, as the result, the product of capital, the commodity changes in form (and later on, in the price of production, it will be changed in substance too).
Earlier he had written (p. 954):
The commodity may now be further defined as follows: ⦠The labour expended on each commodity can no longer be calculated except as an average, i.e., an ideal estimate. ⦠When determining the price of an individual article it appears as a merely ideal fraction of the total product in which the capital reproduces itself.
The manuscripts for the final versions of the three volumes of Capital that we have are dated in âoddâ order (Table 1). Inasmuch as Marx reworked and reconceptualised his manuscripts for Volume I, this would have affected the re-study of the levels of abstraction in Volumes II and III. The three volumes of Capital are not only in different states of draft (ranging from mere notes to final versions), but, more important for a Systematic Dialectic, in different states of conception. It is thus especially important to remember, for a Systematic-Dialectical interpretation of Capital, that its last two volumes cannot be seen as conceptually final.
3.6 Conclusions
By 2000 Marx scholars have largely agreed that Capital analyses its object of enquiry from within, aiming to drive the objectâs (capitalâs) own standards and processes to their logical conclusions. Marxâs method of critique is largely an historicised critique. Whether it is a totally historicised critique â as highlighted in the value-form interpretation â is disputed. While most Marx scholars also agree that some type of conceptual development, or at least âsuccessive approximationâ, exists in Capital, whether it is as rigorous as the Systematic-Dialectical interpretation claims is disputed.
All of these different overall interpretations of Capital can find confirmations in Marxâs texts. However, there is increasing evidence, from §3.1 to §3.5, falsifying each successive position. We might thus say that Capital is a rich heuristic source of a variety of different reconstructive theoretical approaches.
4 A synopsis of the systematic structure of Capital
A synopsis of the general structure of Marxâs Capital must be informed by some methodological interpretation. The present synopsis relies on the most recent Systematic-Dialectical interpretation, not pushed too far, and with dialectical jargon avoided. Most Marx scholars will recognise the general outline of this structure â if perhaps not all details. The general scheme of the structure â see Table 2 on p. 26 â has some affinity with a sophisticated schema of Arthur (2002a).
Table 2
The systematic of Capital
|
Capital |
A |
B |
C |
|---|---|---|---|
|
What it is |
How it works |
The resulting process |
|
|
Volume I Its production How it arises |
Parts 1 and 2 From commodity to money; from money to capital |
Parts 3â6 Production process of capital |
Part 7 Accumulation of capital (Annex, Part 8) |
|
Volume II Its circulation How it operates |
Part 1 Capital as circuit |
Part 2 Turnover of capital |
Part 3 Extended social reproduction of capital |
|
Volume III Its destination How it culminates |
Part 1 Measure of capital â profit-form and profit rate |
Part 2 Competition and movement of capital; formation of general profit rate |
Part 3 Cyclical evolution of the profit rate Parts 4â6 Industry, commerce, finance, landed property (Reflection, Part 7) |
The Table 2 scheme implies that, for example, the answer to the question âWhat is it?â at the first level (I-A) is insufficient. Subsequent levels (II-A, III-A) provide reconceptualisation and concretion. The same applies to the question of âHow it worksâ (I-B to III-B) and âThe resulting processâ (I-C to III-C). This involves a âverticalâ conceptual progress; we also have a âhorizontalâ conceptual progress (from I-A to I-B etc.). Below, each entry is considered in turn, with extra space devoted to the first (I-A).
References to Capital are by volume number and page number. References to the secondary literature are provided for the most controversial issues only. For various methodological aspects of Capital see Moseley (ed.) 1993 and Moseley and Campbell (eds) 1997; recent articles with further references on the three volumes can be found in Bellofiore and Taylor (eds) 2003, Arthur and Reuten (eds) 1998, Campbell and Reuten (eds) 2002, and Bellofiore (ed.) 1998.
DIV-1-4-1
I-A What is capital? â How it arises
âCapitalâ might be a sum of money, a quantity of means of production, or an investment in commodities. All such âshapesâ of capital have in common that they are value forms. For Marx âthe commodityâ is the elementary shape of the value-form. Therefore he starts with its analysis (Capital I, Part One), turning in succession to money and capital.
There are two aspects to Part One. First, Marx seeks in âvalueâ a reference point for all his Volume I analysis. The problem of a suitable reference point has troubled all great economists, from Petty through Smith, Ricardo and onward to Keynes and later. A main problem in understanding Marxâs text is that he seeks (cf., §3.2) an endogenous reference point, one internal to his object of enquiry. (In contradistinction to external constructs, such as â later on in history â index numbers, or Sraffaâs standard commodity.)
Secondly, Marx seeks not a naturalistic, but an historically specific social reference point (cf., §3.3); one that applies to a society in which commodities are systematically produced with a view to sale (I, pp. 138â9, 153â4, 174). The two aspects appear to combine into one problematic, posing an even greater difficulty for the text.
The reference point for value is âabstract labourâ measured by labour-time (I, p. 129). (Therefore Marxâs theory has often been interpreted as a âlabour theory of valueâ.) Simultaneously, Marx posits, first, that value exists only in a âvalue-relation or an exchange relationâ and, secondly, that it is manifested in the value form par excellence, the money form (I, 138â9, 152, cf., 255). Indeed, throughout Capital, Marx always expresses value and value entities in monetary terms (£âs). (Thus it seems that Marx adopts a monetary measure of value.) I think, then, that we must accept that there is an ambiguity here, which can only be resolved in a reconstructive way (see, e.g., Backhaus 1969; Bellofiore 1989; Reuten 1993; Smith 1998; Bellofiore and Finelli 1998; Arthur 2002b).
Note that, like the concept of capital, the concept of money â as introduced in Part One, is developed throughout Volumes IIâIII. Marx starts from a notion of commodity money; this is procedural within a âsuccessive approximationâ approach (cf. Campbell 1997, 1998, 2002; Williams 2000).
Marx develops the (level I) concept of capital in sequence from an analysis of the commodity and money. Part Two of Capital I introduces capital proper. Marxâs answer to the question âWhat is capital?â, towards the end of this Part, is abstract and formal: it is inherent to capital that it expands âin movementâ: âThe movement of capital is ⦠the unceasing movement of profit-makingâ (I, pp. 253â4). It is a movement from money (M) into more money: M ⦠M +
the subject of a process in which, while constantly assuming the form in turn of money and commodities, it changes its own magnitude, throws off surplus-value from itself considered as original value, and thus valorises itself independently. For the movement in the course of which it adds surplus-value is its own movement, its valorisation is therefore self-valorisation. (I, p. 255)
So capital is a movement of self-valorisation, of throwing off surplus-value. (Note that Marx has âbracketedâ the notion of âprofitâ and replaced it by the more abstract notion of âsurplus-valueâ. Later on (III-A) we will see âsurplus-valueâ transformed into âprofitâ and the latter again in the sum of âprofit of enterpriseâ, interest and rent. Before examining the processes of that distribution â in Volume III â Marxâs concern is to explain the abstract total. In Volume I (and II) he proceeds from the temporary assumption that each capitalist owns means of production and requires no hiring or borrowing of land, dwellings, or external finance (I, p. 710).)
Part Two closes by formally introducing a particular commodity and commodity market, that of labour-power, the existence of which is predicated on workersâ lack of means of production. It includes a brief introduction to the value of labour-power; that is, the wage that in principle should be sufficient to reproduce the labour-power â âsufficientâ depending on physical, historical, and moral elements (I, pp. 272â5).
I-B How capital works â how it arises
Capital, we saw, is a movement of self-valorisation, of throwing off surplus-value. The middle part of Volume I considers ânot only how capital produces, but how capital is itself producedâ (I, p. 280). How can surplus-value be explained? Recall M â C â M´. âThe change in value of the money ⦠cannot take place in the money itself ⦠The change must therefore take place in the commodity â¦â (I, p. 270). Hence the key to M â C â M´ lies in C. Marx next shows that the production process is the site where the value of C is turned into C´.
In the exchange M â C, capital in money-form is turned into capital in commodity form: means of production and labour-power. Labour-power is exchanged against the wage, and labourers sell their labour potential. During production, labour is âsubordinatedâ to capital: âthe worker works under the control of the capitalist ⦠the product is the property of the capitalist and not that of the workerâ (I, pp. 291â2). Because the means of production are static elements, a change in C can only be engendered by the active living element: labour. Labour alone can generate a surplus-value beyond the wage. In labour resides the potential to produce a surplus-product, or, in value-terms, surplus-value. Marx calls the ratio between the amount of surplus-value and the capital laid out in wages the ârate of surplus-valueâ or the âdegree of exploitation of labour-power by capitalâ (I, pp. 320â7).
The body of the middle part of Capital I, which is more than 400 pages long, consists of a detailed analysis of methods and (organisational) techniques for increasing the rate of exploitation. Throughout, Marx uses the labour-time reference point. Nevertheless, as previously indicated, all of his value entities are expressed in monetary terms (£âs); the same applies to all his numerical examples (cf. Elson 1979a).
I-C Capitalâs resulting process â how it arises
âEarlier we considered how surplus-value arises from capital; now we have to see how capital arises from surplus-value. The employment of surplus-value as capital, or its reconversion into capital, is called accumulation of capitalâ (I, p. 725). In Part Seven, Marx shows how capitalâs growth results in three simultaneous dynamic processes: (1) the propagation of a reserve army of unemployed labour, especially by way of the introduction of labour-expelling techniques of production pressing down the wage rate; (2) cyclical growth of capital; and (3) centralisation of capital.
The final Part Eight provides an historical account of the conditions of the buying and sale of labour-power: ownership of the means of production by capitalists. This is the precondition for the I-A starting point, and so rounds off this level of analysis as a circle.
DIV-1-4-2
II-A What is capital? â How it operates
In I-A, Marx treats capital as âmovementâ. Indeed, all of Volume I describes movement, resulting in expanded movement (valorisation and accumulation). In Part One of Volume II this is made explicit. Capital is shown to be a continuous movement through four manifestations/shapes, together constituting the circuit of capital:
â M âEâ C [MP; LP] ..... P ..... C´ âEâ M´ â
Capital in the shape of âmoney capitalâ (M) is transformed in the exchange process (âEâ) into the shape of âproduction capitalâ (C); specifically, means of production (MP) and labour-power (LP). The latter work up the former in the process of production (···) where we have the shape of âcapital in processâ (P); this constitutes a metamorphosis into valorised âcommodity capitalâ (C´), with C´ different qualitatively from C, as well as quantitatively in value terms (C´> C). Finally, another exchange transforms the expanded commodity value C´ into a monetary value equivalent M´, the shape of expanded âmoney capitalâ. The process can now resume on an expanded scale â wherein capital is accumulated.
II-B How capital works â How it operates
Until Part Two, capital has been implicitly treated as an expanding flow (fixed capital as introduced in Volume I was set to zero). Now Marx explicitly distinguishes circulating from fixed capital. It is shown how capital as movement works in production in terms of length of production periods and turnover-times of capital. âTimeâ is key to capital. Speeding up any of the phases of the circuit means that a given quantity of capital can turn around more production.
II-C Capitalâs resulting process â how it operates
Part Three presents the circulation of capital in the context of the economy as a whole. Using a two-sector âmodelâ, Marx specifies dynamic interconnections pertinent to economic growth and conditions for balanced growth. These conditions are very severe and the implication is that balanced growth is possible, though unlikely.
DIV-1-4-3
III-A What is capital? â How it culminates
Part One of Volume III considers surplus-value (flow) in relation to total capital invested (stock) and introduces the key capitalist profit form: âA sum of value is ⦠capital if it is invested in order to produce a profit â¦â (III, p. 126). This involves a conceptual transformation of both âsurplus-valueâ and âcapitalâ such that the rate of profit measures the valorisation of capital. Profit and the rate of profit are capitalâs continuity measures.
III-B How capital works â how it culminates
The profit-form brings a new dynamic (III, pp. 263, 267, 275); Part Two shows how the profit rate measure works. Since for capital its particular physical content does not matter (bread, spirits or bibles), another aspect of capitalâs movement is its flow to branches where it attains the highest profit rate. Thus competition between capitals produces an averaging of the profit rate. Concomitantly we have a further commodification of workers who must move âfrom one sphere to another and from one local point of production to anotherâ (III, p. 298).
With the profit-form, the concept of price developed in Volume I is modified. After this, however, Marx surprisingly tries to make quantitative translations between the conceptual levels, comparing the transformed profit-form entities with a calculation prior to the profit form. In this Marx underscores the dynamic introduced at this level. The literature on the interpretation and reconstruction of this âtransformationâ is enormous; for references, see Moseley 1993, Mohun 1994, Foley 2000, Bellofiore 2002, Laibman 2002, and various articles in Bellofiore (ed.) 1998, Vol. 1.
III-C Capitalâs resulting process â how it culminates
Part Three presents the resulting dynamic of diachronic change in the average rate of profit through the profit-enforced introduction of cost-reducing techniques of production. These generate cyclical rate-of-profit increases to the initiating capital and a simultaneous cyclical average rate-of-profit decrease, as reversed in cyclical restructuring of capital (for this interpretation, see Reuten 2002a, 2004Â â cf. Lebowitz 1976; Fine and Harris 1979; Groll and Orzech 1987).
No longer restricted to undifferentiated âindustrial capitalâ, Parts Four to Six show capital separated into functionally different and conflicting factions: industrial, commercial, financial, and real estate. Profit now separates and is distributed as profit of enterprise, interest and rent (Moseley 2002). The final Part Seven is a draft for further concrete manifestations of the whole. It also emphasises Marxâs fundamental point that capitalism is an historically specific and mutable mode of production that conceals its class structure (Mattick 2002; Murray 2002).
Summary
In Capital the one-dimensionality of the capitalist social form â the value-form as expressed monetary terms â is the basis for capital as a âmovement of self-valorisationâ. Volume I treats the aspect of self-valorisation as movement and Volume II movement in macrosocial context. In Volume III these aspects are articulated in the working of the profit-form and the âconcrete abstractionâ of a dimensionless rate of profit â money over money. That non-dimensionality, indifferent to content, drives the base structure of a capitalist society.
5 Marxâs theory and Marxian theory as a strand
The main interpretations of Marxâs work should be distinguished from the twentieth century growth of âMarxian theoryâ as one strand alongside, in economics, the institutionalist, neoclassical, post-Keynesian, and others (for a historiography, see Howard and King 1989; 1992). Marxian theory and institutionalism share an interdisciplinary emphasis, although Marxian theory is a multidisciplinary project conducted by philosophers, economists, political scientists, sociologists, social geographers, and historians.
Current Marxian theory includes three types of research. A first type, nearest to Marxâs work, is empirical research based on Marxâs theory (such as the long run development of the macroeconomic profit rate â e.g., Moseley 1991; Duménil and Lévy 1993; Wolff 2001). Even more complicated than in mainstream economics, the concepts behind the statistical data differ from the theoretical concepts. Of course, such empirical studies involve interpretation of Marxâs theory.
If one finds Marxâs work to be inconsistent or unsatisfactory, a second type is theory reconstruction. Reconstructive work ranges across all fields of Marxâs writings (particularly all components of Table 2). Methodological work is a facet of this type (see, e.g., the contributions in Albritton and Simoulidis (ed.) 2002).
A third type is non-reconstructive theory development. For example, elements of business cycle theory â corresponding to their level of analysis (column 3 of Table 2) â are found in all three volumes of Capital. Building on those elements, contemporary Marxian business cycle researchers may seek for an empirically testable theory of the cycle; this has requirements other than those intended, or at least reached, by Marx (for references, see Reuten 2002b). Other examples are economic policy research (not reached in Capital) or, more generally, the study of the institutional conditions surrounding the accumulation of capital in different historical periods of capitalism (âphasesâ, or âsocial structuresâ, or âregimesâ of accumulation; see the contributions in Albritton et al. 2001).
Although much of this work has drifted away from Capital, or at least beyond it, we nevertheless see in the former considerable reference to the latter (critically or complimentarily). This is an interesting aspect of Marxâs status within the history of thought. It is also a fascinating aspect of the study of the history of thought generally, namely that it can serve as a rich heuristic source of inspiration for current ideas.
I am grateful for comments by Chris Arthur, Mark Blaug, Gerald Levy, Paul Mattick, Patrick Murray, Tony Smith, Nicola Taylor and the editors of this book, especially Warren Samuels and John Davis.
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