Karl Marx’s alternative to capitalism part 18 – forces and relations of production 1

We have seen the importance of production to individuals and to society and how the relations of production condition our lives and thus how changing these is fundamental to any alternative that seeks to radically transform these lives.

An alternative view is that it is not possible to ascribe any objective primacy in historical explanation to any of the multiple factors that bring about a particular event.  Since multiple factors create history and all are necessary for any particular outcome there can be no fundamental ordering or understanding of historical development.  This view therefore implies that pursuit of any alternative can have no secure foundation because any particular outcome is a combination of causes, each of which is necessary for the existence of that event and its consequences, and it is impossible to control for all these multiple causes.

It is not my purpose to go into a philosophical interrogation of this claim but to point out that Marxism demonstrates the cogency of its alternative not by the attractiveness of its ideas but by their consistency and correspondence to reality; that they explain the real world, how it develops and how it may be changed.  Its correctness therefore arises from real history which must evidence its ideas and the persuasiveness of its alternative. Marxism does not therefore impose formulas on history to which the real world must adhere but establishes the laws through which history develops by looking at history itself. The existence of such laws is demonstrated by interrogation of history itself.

Its claim is therefore that there are some things more important than others to understanding historical development and therefore fundamental in determining how it can be changed and placed under conscious human control, in so far that it can.  The claim by Marx is that it is how people cooperate to reproduce their conditions of life, and the forces of production and relations of production as the key aspects of this process, that can explain its overall development.  These aspects of history have to be identified and their mutually conditioned development explained by history and not by some theory imposed from outside.

The ‘Preface’ of 1859 contains some very short remarks setting out this view:

“In the social production of their existence, men inevitably enter into definite relations, which are independent of their will, namely relations of production appropriate to a given stage in the development of their material forces of production. The totality of these relations of production constitutes the economic structure of society, the real foundation, on which arises a legal and political superstructure and to which correspond definite forms of social consciousness . . . At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production or — this merely expresses the same thing in legal terms — with the property relations within the framework of which they have operated hitherto. From forms of development of the productive forces these relations turn into their fetters. Then begins an era of social revolution. The changes in the economic foundation lead sooner or later to the transformation of the whole immense superstructure.”

The key part of this that is often misunderstood is “relations of production appropriate to a given stage in the development of their material forces of production.”  For some this means that that forces of production have primacy in explaining historical development, in that the relations by which people come together to produce are determined by the level of development of these forces of production and that changes in these relations of production arise from the development of the productive forces.  An alternative view is that it is the relations of production, for example, of exclusive capitalist ownership of the means of production plus a working class without such ownership, and the competition among these capitalists, that is the motor of development.  In other words, two diametrically opposite views!

In the last post, I explained what was meant by the relations of production under capitalism.  Turning to the forces of production, these can be considered to be the instruments of production including technology (factories, offices, transport, machines etc. – the physical instruments used to produce material goods and ‘immaterial’ services); raw materials used in production; and labour used in production including its mode of organisation, cooperation and division of labour.

Human labour power is the most basic force of production and since relations of production are composed of people we can see that the forces and relations of production are not physically separate things but different aspects of the way individuals combine in society to produce and reproduce that society.  The most basic force of production under capitalism is therefore the working class.

There is not therefore a set of forces of production upon which a separate set of relations are imposed to make a combined mode of production.  These are two aspects of the one production process with their own features that entail the contradictory development of capitalism as a whole and explain its development.  Just as the commodities produced in capitalism have a use value – they must have some use in order to be bought and sold – and they must have an exchange value – they must have a monetary value that determines whether they are made and sold, and at what price they are sold at; so, the forces and relations of production are aspects of the one process of (re)production.

This means that production is capitalist production for profit, which is derived from the unpaid labour of the worker.  This however can only be profit if the commodities made by the worker are sold, which means the commodities must have a use value, for if they had no use they would not be purchased, and the lower the share of wages in the value created in production the greater must be the consumption of the capitalist and other parasitic classes.  The surplus value created by the worker, the unpaid labour transformed into money, allows the capitalist to purchase more instruments of labour and hire more labour power.

Production is therefore not just the production of material goods and services but the reproduction of class relationships and the relations of production. The forces and relations of production exist as a unity, as aspects of the same process.

The reproduction of classes thus involves not just the hire of labour to make a profit but assumes that the wage can function as a wage because the commodities the worker needs to consume can be purchased with money the worker receives and are thus themselves commodities produced by wage labour.  This is also the case with the instruments of labour which are not self-produced either by the capitalist, and certainly not by the worker, but are themselves commodities produced by wage labour.

Only when this is the case can we really claim that the relations of production and classes typical of capitalism are adequately developed so that the features of capitalism that we will later discuss are expressed and become typical, including separation of the worker from the means of production and their re-uniting only under the control of capitalists, who now monopolise their ownership.  Only to the extent that this is the case can we talk of capitalism and we can only know this by historical investigation.  While elements of wage labour and capital have existed for many centuries, the capitalist mode of production has not.

The first claim by Marx is that certain relations of production are appropriate to, or correspond with, a given stage in the development of the material forces of production.  But in what sense are the forces of production primary?

A second famous quote from Marx sets out in a more specific way than the 1859 Preface his views:

“The specific economic form, in which unpaid surplus-labour is pumped out of direct producers, determines the relationship of rulers and ruled, as it grows directly out of production itself and, in turn, reacts upon it as a determining element. Upon this, however, is founded the entire formation of the economic community which grows up out of the production relations themselves, thereby simultaneously its specific political form. It is always the direct relationship of the owners of the conditions of production to the direct producers — a relation always naturally corresponding to a definite stage in the development of the methods of labour and thereby its social productivity — which reveals the innermost secret, the hidden basis of the entire social structure and with it the political form of the relation of sovereignty and dependence, in short, the corresponding specific form of the state.”[i]

Marx is therefore saying that the level of productivity determines what forms of extraction of surplus from the exploited class are possible. He sets out a general relation between the level of productivity (size of surplus) and the forms of surplus labour possible given that level of productivity.  This form of surplus labour extraction is the basis for sustaining class relations in society and this class society determines the kind of political form the society takes or ‘the form of the relation of sovereignty and dependence.’

Class relations thus grow out of production so must in some way be separate from production for these relations to in turn react upon it, so that the class relations have to correspond with production.

Of course, at any particular time production takes place within class relationships but taken separately, in this sense, it may be considered as simply material production, as production of use values, as production in itself, a process between men and women and nature involving methods of labour.

This is an aspect of the actual mode of production useful in order to understand production as a whole, which also necessarily includes class relations.  The forces and relations of production therefore include the same people and the same processes but understood as different aspects of the one mode of production, aspects that are not simply conceptual but can be demonstrated through real history.

The ability of this production to support any class society, the scope and extent of this class society and the potential to abolish class society altogether, depends upon the productive forces creation of a surplus and the extent of this surplus production.

[i] Marx goes on to say that “This does not prevent the same economic basis — the same from the standpoint of its main conditions — due to innumerable different empirical circumstances, natural environment, racial relations, external historical influences, etc. from showing infinite variations and gradations in appearance, which can be ascertained only by analysis of the empirically given circumstances.”

Back to part 17

Karl Marx’s alternative to capitalism part 17 – social classes

The relations established when people produce together is fundamental to the overall position they occupy in society. These relations of production are therefore fundamental to all the social and political questions faced by individuals.

Yet in mainstream conceptions of politics these fundamental relations do not exist – rent, profit and wages are all the expressions of relations of production but they are simply treated as a given, and the distribution of population in receipt of them also simply assumed.  Instead of examining the foundations of society, what already exists is simply assumed to be natural.

The class categories that are employed, such as ‘middle class’, are politically loaded to express either neutrality between those who work and those who own capital, and/or beg the question of what these people are in between.  Old class categories such as A, B, C1, C2, D and E are recognised as outdated even in their own terms while newer categories such as these don’t explain anything, while smothering fundamental divisions.  In Britain, and also Ireland, cultural expressions of class such as speech come to represent class, again without explaining it. Politics, as marketing, packages people into all sorts of random categories, from ‘squeezed middle’ to ‘just about managing’ to ‘people who get up early in the morning’ and ‘hard working families.’   How could real alternatives to what exists arise from such misconceptions?

All these categories appear as more or less random aspects of the lives of working people who above all else have to work for a living but cannot be categorised as such, cannot be informed that their fundamental characteristic is one of class defined by relations of production.  Other divisions heaped upon them, such as those based on religion or race, help make this a reality while these and other basic divisions such as sex overlay such division, adding, reinforcing and obscuring all at the same time but never replacing or eradicating.

Identification of new categories of social existence – be they defined in workers’ roles as consumers, the ‘affluent worker’, or as producers, ‘professionals’ or ‘precariat’ – might reflect some reality of capitalist development but never at the most fundamental level.

Marx doesn’t reject the reality behind these categories but sees their elaboration as the working out of the contradictory development of capitalism:

‘Incidentally, . . . although every capitalist demands that his workers should save, he means only his own workers, because they relate to him as workers; and by no means does this apply to the remainder of the workers, because these relate to him as consumers. In spite of all the pious talk of frugality he therefore searches for all possible ways of stimulating them to consume, by making his commodities more attractive, by filling their ears with babble about new needs. It is precisely this side of the relationship between capital and labour which is an essential civilising force, and on which the historic justification—but also the contemporary power—of capital is based.’ (Marx, Grundrisse)

This property of capitalism is not incidental, as Marx notes, ‘the simple concept of capital has to contain its civilising tendencies etc. in themselves; they must not, as in the economics books until now, appear merely as external consequences. Likewise, the contradictions which are later released, demonstrated as already latent within it.’

The unavoidable development of capitalism by its nature contains contradictions that are fundamental to it, and being fundamental, involve progress that presages its supersession by an alternative social system, based on its massive increase in the productivity of labour.  This gives rise to variations in the roles of workers in production and to their relation to, and aspirations for, the fruits of the productivity of labour in their role as consumers.

The relations of production therefore define the classes which individuals belong to, even if they have not the slightest notion that this is the class position they occupy or even misinterpret their class interests, whether due to racism, nationalism or whatever.  In reality most people do understand that they occupy a particular class position, and are members of a class, although fewer then define themselves and their social and political interests with class politics consistent with this position.

This is truer of individuals within the working class than capitalist class, whose members generally have a much higher level of consciousness of their membership of their class and appreciation of what political interests they therefore must pursue as a result. While socialists usually concern themselves with the point of view of the oppressed and exploited class and their political ideas; when it comes to the consciousness of the exploiting classes, the decisive role of production and productive relations on the form of political consciousness is much more apparent.

The rich are more conscious of their wealth and its source, because they have it, than those who actually created it but do not.  They are more conscious of who they continue to get it from, and their competitors for it, from within their class and from other classes.

This, however, does not also prevent some of them from misinterpreting their class interests or making erroneous political calculations. Not everything individual capitalists do reveals their essential ‘true’ nature and ‘true’ interests.  This is one reason why socialists should not simply seek the opposite of what one political representative or section of the capitalist class happens to advance at any particular time, but seek to identify and advance the political interests of the whole working class independently, taking account of the whole constellation of class relations.

Today, we only need to think of the numerous and varied state, state-sponsored and private think tanks proclaiming the benefits of capitalism, forecasting its development, developing policies for it and providing consultants to implement changes, to appreciate the level of class consciousness of the capitalist class, and also its variety of outlooks.

Classes are therefore collectives and not simply an addition of atomised individuals.  Atomised individuals as such do not exist, as we are all products of families, friends, work colleagues, and those we interact with on a daily basis.  More than that, our lives are products of millions of people we will never meet who set rules by which we live, through laws, regulations and standards.

Literally millions of people impact on our lives in a way that we take for granted most of the time, as we must or we would spend our time thinking of nothing else.  The cooperation among millions of people to ensure our society works, produces and consumes, that we may continue to live, grows and grows every year.

When we enter the world we do not choose how we do so and do not choose to which class we belong.  Only in young people’s sci-fi films, such as ‘Divergent’, is it possible to pick how one wants to live in society and the role we want to play.  Our position in society constrains our choices and conditions how we lead our lives, so determining our view of the world, which we can never look at totally afresh, free of any preconceptions.  What we can do is become as conscious as possible of what these are.

When Marxists therefore define a society as capitalist we mean certain things which must be studied in order to be fully understood.  Even the idea of capitalism as an example of a particular set of relations of production must be determined through research and study involving understanding the practical reality of individuals’ everyday lives.  The limits of such explanation must be determined in the process, and cannot be taken as completed or timeless without need for continual rethinking and development, just as the world changes and develops itself.

In capitalism, the relations of production define the existence of a class that has to sell its labour power in order to live and, in order that they produce for society, that they be combined with the means of production.  These means of production include factories, offices, transport, shops, warehouses, docks, mines and all machinery and equipment of every kind that workers employ when they work.  The latter are owned by a separate class of capitalists, and sometimes the state rather than private corporations.

Just as there are no individuals who can properly be understood apart from the world they inhabit, with its many other individuals, so classes cannot be understood at the individual level.  A worker may negotiate a pay rise with an employer, but what makes the worker a member of a class is that they cannot survive without selling their capacity to work to a capitalist.  Similarly, a capitalist is just such a person because they own the office or factory and the worker does not.  They have the money to pay the worker for her capacity to work on their behalf.  This work is carried out not because of the consumption needs of the capitalist but because he wants to make a profit from the labour performed by the worker.

A well-paid worker, or someone who considers themselves middle class, can hire childminders or even a few hours of a person to clean their house, but they will never get rich doing so because the childminder or cleaner is not paid in order to make a profit.  The money paid in wages to the childminder or cleaner is not therefore capital aimed at procuring profit.  No matter how well paid the worker is, she will not be better off financially from having paid wages to childminders or cleaners.

The capitalist on the other hand will hope to make a profit and become richer through paying wages to his workers, who can indeed be childminders or cleaners, whose services are sold to others, and who are paid less by the capitalist than the value of the labour they perform on his behalf.

The worker on the other hand, no matter how affluent she is likely to become, cannot abstain from selling her labour power because she has no other source of income.  For the vast majority neither savings nor family support can substitute for their wage or salary.

In such a society, the need to sell one’s labour power exists because the ability to cosume at the prevailing standard of living expected in that society cannot be achieved through the worker labouring on her own behalf or through ownership of capital in any form, be it money or material means of producing commodities.

At the beginnings of capitalism peasants or farmers who owned or had customary rights to land could provide for themselves and did not need to sell their ability to work to someone else.  Capitalism sometimes drove them from their land in order to make them dependent on selling their labour power to capitalists.  Ironic then, that capitalist ideologues condemn workers for not standing on their own two feet while their system originates, and can only stand on its feet, through depriving the labouring population of its independent ownership of the means of production.

These are the characteristic relations of production under capitalism.  These relations dominate people’s lives because they determine what they do eight or more hours a day; what income and security they can provide for their families; what levels of consumption they can aspire to; and what general social characteristics they will share with neighbours and friends.  In short, all these social characteristics are entwined with the relations of production, which are therefore infused into every aspect of our lives.  Our culture as expressed in everyday behaviour is not reducible to our relations of production but neither is it separate from these relations, which define the fundamental social relationships of which our daily lives consist.

This is what is meant by the first section, quoted in an earlier post, of the ‘Preface’ of 1859 drafted by Marx:

“In the social production of their existence, men inevitably enter Into definite relations, which are independent of their will, namely relations of production appropriate to a given stage in the development of their material forces of production. The totality of these relations of production constitutes the economic structure of society, the real foundation, on which arises a legal and political superstructure and to which correspond definite forms of social consciousness. The mode of production of material life conditions the general process of social, political and intellectual life. It is not the consciousness of men that determines their existence, but their social existence that determines their consciousness.”

Back to part 16

Forward to part 18

Karl Marx’s alternative to capitalism part 16 – the production of life

Marx’s alternative is undoubtedly the most radical alternative to capitalism, which can mislead some to reject it on the grounds that it must therefore be utopian.  Years of reaction have drastically reduced expectations among those who oppose the worst aspects of capitalism and much of the anti-capitalism of the last few decades has not actually been anti-capitalist at all, never mind socialist.

In fact, it is the far-reaching character of Marx’s alternative that makes it a real alternative because it is based on capitalism’s own revolutionary character, a character that encompasses its civilising mission and the repeated crises that demonstrate its contradictions and potential for replacement.

The depth and comprehensiveness Marxism seeks is both a barrier to its initial acceptance and absolutely necessary in order to understand its presentation of an alternative to capitalism.  Many come to reject capitalism through its immediate exploitation and cruelty, through appreciation of its inhumanity and destruction, understanding this opposition in terms of moral judgements that stand apart from the crude and degrading material requirements of the system.

Marxism by contrast starts from these material requirements, ones that are required of any social system, but which take a particular social form within capitalism.  It seeks to understand both requirements and particularly how the working of capitalism paves the way for its supersession.  Marxists do not therefore condemn capitalism only for its cruelty, destruction, exploitation and inhumanity, but also because, in its development of the needs and capacities of humanity, these are in turn restricted and disfigured by it, when capitalism itself has created the grounds for all these needs to be met and capacities to be developed.  If this were not the case there would be little point in opposing an exploitation or oppression that was inescapable and could not be replaced.  At the same time, Marxism realises that what is required is replacement of the system, not mere adjustment or reform.

Exploitation and oppression is built into the structure of capitalism, and is at the core of Marx’s understanding of historical development including the development towards socialism.

For Marx “History does nothing, it “possesses no immense wealth,” it “wages no battles.” It is man, real living man, that does all that, that possesses and fights; “history” is not a person apart, using man as a means for its own particular aims; history is nothing but the activity of man pursuing his aims.” (Marx and Engels ‘The Holy Family’).  And by ‘man’ we should understand all of humanity.

This means that both the oppressive and civilising characteristics of capitalism are not something disembodied, inflicted upon humanity from without.  Both aspects arise from the actions of humanity itself resulting from the form of society inhabited, given to it and which it only imperfectly understands.

“Man can be distinguished from animals by consciousness, by religion or anything else you like. They themselves begin to distinguish themselves from animals as soon as they begin to produce their means of subsistence.”(Marx and Engels ‘The German ideology’)

Humanity is therefore ‘a tool-making animal’.  Direct and individual acquisition, or appropriation of naturally occurring items, that can be consumed directly by nonhuman primate populations, differs from the social production through the expenditure of energy among human populations. This capacity comes to define and redefine human organisation.

“Labour, then, as the creator of use-values, as useful labour, is a condition of human existence which is independent of all forms of society; it is an eternal natural necessity which mediates the metabolism between man and nature, and therefore human life itself” (Marx, Capital Volume I). People must work no matter what type of society they live within; how they do this defines the human community within which they exist.

Those that work with nature to ensure the continued existence and reproduction of humanity, at whatever level of development it has achieved, act upon external nature and change it, and in this way simultaneously change their own nature.

“When the worker co-operates in a planned way with others, he strips off the fetters of his individuality, and develops the capabilities of his species.”  (Capital Volume I)  For Marx, humanity, in the shape of those who work, who will liberate it from oppression and exploitation, “must pass through long struggles, through a series of historic processes, transforming circumstances and men.”

Of course, if they do not, workers can become “apathetic, thoughtless, more or less well-fed instruments of production . . . degraded to one level mass of broken wretches past salvation.”  We constantly come across the extremes of both: working people who inspire and those whose apathy and ignorance dismays and demoralises.

However, it is work itself, which by definition working people must by and large perform, which forces upon them, by necessity, considerations that can lift them above apathy and degradation.  Work is therefore central to how human society is structured, how it reproduces itself, how it develops new forms, how it understands itself, and how it can change human perceptions and desires for potential new forms of social organisation.

So, what is particular about human labour?  “[Let us] presuppose labour in a form in which it is an exclusively human characteristic. A spider conducts operations that resemble those of a weaver, and a bee puts to shame many an architect in the construction of her cells. But what distinguishes the worst architect from the best of bees is this, that the architect raises his structure in imagination before he erects it in reality. At the end of every labour-process, we get a result that already existed in the imagination of the labourer at its commencement. He not only effects a change of form in the material on which he works, but he also realizes a purpose of his own that gives the law to his modus operandi, and to which he must subordinate his will. And this subordination is no mere momentary act. Besides the exertion of the bodily organs, the process demands that, during the whole operation, the workman’s will be steadily in consonance with his purpose. This means close attention. The less he is attracted by the nature of the work, and the mode in which it is carried on, and the less, therefore, he enjoys it as something which gives play to his bodily and mental powers, the more close his attention is forced to be” (Marx, Capital Volume 1)

To the extent that the worker is compelled to labour for a purpose that is not hers, that she may even oppose or detest, such labour is against her nature as a conscious being and her freedom to express her consciousness in whatever way she wishes.  Her views and awareness of compulsion and lack of freedom, which she will see as inhuman and against her human nature, may lead to resistance and ultimately revolt against such a society that entails such constraints.

Since labouring is a social activity – no one can or does work alone – the rebellion by a worker against the drudgery and oppression of work reflects not just the constraints on the realisation of this worker’s own purposes but the purposes of everyone with whom she works, the purposes of her fellow workers, and in an extended sense of all those who work, the working class as a whole.  This is true whether she is conscious of her membership of a class or not.  Thus does capitalism, at a very basic level, engender opposition to its inhuman workings.  The more accomplished its civilising role has been, the more conscious will workers be of constraints and more capable of seeking to remove them.

This recognition of the most fundamental need of people to work together upon nature to ensure their existence at whatever level of development they have reached is sometimes viewed as so fundamental that it has no specific or practical significance for understanding contemporary problems and issues.  But a moments’ thought disposes of this.

“All production is appropriation of nature on the part of an individual within and through a definite form of society.”  “Human life has from time immemorial rested on production, and, in one way or another, on social production, these relations we call, precisely, economic relations.”  So not just the products of labour, or how that work takes place, but also the form of society itself is determined by the relations in which people come together to labour in production.

Unemployment, the threat of it and insecurity it evokes; the lack of decent work and of low pay; of poor conditions, pensions and welfare rights; of zero hours’ contracts, food banks and reliance on benefits; the allocation of the labour of society that does not value or provide for sufficient health and education.  All these aspects of society are simply elements of how humanity allocates its labour in order that humanity maintain its existence in the fashion that it has been born into. How people work and produce together is therefore fundamental.  For Marx material production “is the basis of all social life, and therefore of all real history.” (Capital Volume 1 p 286)

Marx describes the general process in his booklet ‘Wage, Labour and Capital’:

“In the process of production, human beings work not only upon nature, but also upon one another. They produce only by working together in a specified manner and reciprocally exchanging their activities. In order to produce, they enter into definite connections and relations to one another, and only within these social connections and relations does their influence upon nature operate – i.e., does production take place.”

“These social relations between the producers, and the conditions under which they exchange their activities and share in the total act of production, will naturally vary according to the character of the means of production. With the discovery of a new instrument of warfare, the firearm, the whole internal organisation of the army was necessarily altered, the relations within which individuals compose an army and can work as an army were transformed, and the relation of different armies to another was likewise changed.”

“We thus see that the social relations within which individuals produce, the social relations of production, are altered, transformed, with the change and development of the material means of production, of the forces of production. The relations of production in their totality constitute what is called the social relations, society, and, moreover, a society at a definite stage of historical development, a society with peculiar, distinctive characteristics. Ancient society, feudal society, bourgeois (or capitalist) society, are such totalities of relations of production, each of which denotes a particular stage of development in the history of mankind.”

Back to part 15

Forward to part 17

Karl Marx’s alternative to capitalism part 15 – the Preface of 1859

The Preface to ‘A Contribution to the Critique of Political Economy’ of 1859 is a short couple of pages but, as perhaps one of the most vital expositions of Karl Marx’s interpretation of history, it has not unexpectedly been the subject of much controversy. Since Engels said of Marx, at his graveside, that one of his two fundamental contributions was the materialist theory of history, it would appear that the controversy is quite important.  An interpretation provides not only the grounds and principles upon which we can understand history but also how we can change it.

A second reason is that this Preface of 1859 appears not to be entirely consistent with that other famous declaration of the principles lying behind the course of history, set out in ‘The Communist Manifesto’, that the history of all hitherto existing society is the history of class struggles. The 1859 preface only mentions classes twice and doesn’t mention them in the context of class struggle at all; so not only does it seem that class struggle is not central to historical development but it scarcely matters.

So, before I go on, let’s quote the relevant section of ‘The Preface’:

“In the social production of their existence, men inevitably enter into definite relations, which are independent of their will, namely relations of production appropriate to a given stage in the development of their material forces of production. The totality of these relations of production constitutes the economic structure of society, the real foundation, on which arises a legal and political superstructure and to which correspond definite forms of social consciousness. The mode of production of material life conditions the general process of social, political and intellectual life. It is not the consciousness of men that determines their existence, but their social existence that determines their consciousness.”

“At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production or – this merely expresses the same thing in legal terms – with the property relations within the framework of which they have operated hitherto. From forms of development of the productive forces these relations turn into their fetters. Then begins an era of social revolution. The changes in the economic foundation lead sooner or later to the transformation of the whole immense superstructure.”

“In studying such transformations it is always necessary to distinguish between the material transformation of the economic conditions of production, which can be determined with the precision of natural science, and the legal, political, religious, artistic or philosophic – in short, ideological forms in which men become conscious of this conflict and fight it out. Just as one does not judge an individual by what he thinks about himself, so one cannot judge such a period of transformation by its consciousness, but, on the contrary, this consciousness must be explained from the contradictions of material life, from the conflict existing between the social forces of production and the relations of production.”

“No social order is ever destroyed before all the productive forces for which it is sufficient have been developed, and new superior relations of production never replace older ones before the material conditions for their existence have matured within the framework of the old society. Mankind thus inevitably sets itself only such tasks as it is able to solve, since closer examination will always show that the problem itself arises only when the material conditions for its solution are already present or at least in the course of formation.”

“In broad outline, the Asiatic, ancient, feudal and modern bourgeois modes of production may be designated as epochs marking progress in the economic development of society. The bourgeois mode of production is the last antagonistic form of the social process of production – antagonistic not in the sense of individual antagonism but of an antagonism that emanates from the individuals’ social conditions of existence – but the productive forces developing within bourgeois society create also the material conditions for a solution of this antagonism. The prehistory of human society accordingly closes with this social formation.”

So why should the short couple of pages of ‘The Preface’ be so important to understanding the course of historical development and therefore to the contradictions within capitalism that give birth to the alternative and so explain what this alternative to capitalism is?

The most recent biography of Marx by Gareth Stedman Jones (Karl Marx Greatness and Illusion) spends little time analysing specifically the claims of Marx in relation to history within the Preface, which is rather remiss since he acknowledges it as one of a rather small number of canonical texts by Marx upon which 20th century Marxist organisations were built.  The impression given is that it was written when “Karl’s judgements at this time were increasingly disordered, perhaps even touched by delusion, with mood changes ranging from unreal euphoria through uncontrolled paranoia to fantasies of revenge.”

We are informed that Marx had, in his own words, been “overwhelmed with work’” and had to deal with what Jones describes as “continuing health problems, his wife’s shattered nerves” and “financial desperation.”  Jenny Marx had been unable to post the manuscript of ‘The Critique’ – “as I haven’t even a farthing for postage or insurance”.  She was “‘a nervous wreck’, haunted “by the spectre of final and unavoidable catastrophe.”

An earlier explanation for the ostensible inconsistency, between Marx’s view of history as one of class struggle and it apparently being missing from the Preface, formed the thesis of an article published in 1969: ‘Background and Ulterior Motive of Marx’s “Preface” of 1859’.

This argued that the absence of the role of class struggle within the Preface arose from Marx’s desire to get the book published against the constraints of the Prussian censor, who would undoubtedly be expected to prohibit publication of a text by the notorious Marx in which class struggle and revolution featured prominently.  The argument is that Marx decided to publish anyway despite the Preface hiding, if not silencing, his previous views on their importance.  Its careful wording was therefore an attempt to pull the wool over the eyes of the censor with the consequence perhaps that some wool was pulled over the eyes of the reader, even taking into account whatever ‘hints’ were hidden behind otherwise soothing formulations.

Why he should seek to do so is partially explained by his extended absence in exile from Germany, his political home and home to his biggest and most important band of followers, to which he was prevented from returning to from London, and for whom he could only influence and continue to be recognised from publications.

These had been very few and not recent, having struggled to get published for some years.  Even when he had got published, as with ‘Revelations Concerning the Communist Trial in Cologne’ in 1853, almost all copies were confiscated by the police.  Thus, the argument goes, that the rather abstract and bloodless language of ‘The Preface’ owed a lot to Marx’s desperation to avoid the censor and get published, in so doing establishing a foot in a door which might lead to further publication.

Unfortunately, ‘A Contribution to the Critique of Political Economy’ was a publishing failure and not read much today either, another vantage point from which to minimise the importance of the Preface.  Nevertheless, it is argued that the publication of the Preface, for which the whole book is more remembered, meant that Marx felt compelled to defend it, or at least not repudiate it – “lest he destroy his own credibility” – and therefore saddling himself with “high-sounding phrases” that obscured and obfuscated his real goals for generations to come.

In some ways these criticisms are examples of academic approaches to Marx which, despite their erudition, fail to understand the real motives of the man and his political objectives.  Despite a keenness to understand his writings in context, they misunderstand the context so that his personal circumstances are used to prop up an explanation or failure to find complete formulations of the appropriate academic rigour is considered to undermine the sense of what he has written.

So Marx was either slightly unhinged at the time or he hid what he really wanted to say, so we can, to a greater or lesser extent, ignore what he did say.

Yet Stedman Jones acknowledges that Marx’s motive was directly political: “to win a scientific victory for our party’, ‘party’ here meaning those followers of Marx and his ideas however organised.

It is scarcely conceivable that a man who dedicated his life to the political objectives of the working class; who sacrificed so much of himself and his family through his political activity and intellectual endeavours; who sought to do this during this particular time of his life through intensive study to elaborate the theory and politics of the working class; that he should sacrifice all this by writing something which rather than elucidate, actually obscured his politics and his theory. To believe such an explanation lies behind the words of ‘The Preface’ is hardly credible.

The themes of ‘The Preface’ were ones written before, in ‘The German Ideology’, so unless we are expected to believe that this writing was also the product of a ‘disordered’ approach, “perhaps even touched by delusion. . . unreal euphoria [and] uncontrolled paranoia”, we must assume he knew what he was doing.

It is equally inconceivable that, having struggled to get his views published, he would, when he eventually got the opportunity, publish something that he didn’t profoundly believe encapsulated his views.

This is so because it is the conciseness and sharpness of this summary of the Marx view of historical development that has led to the Preface’s influence on later generations of Marxists.  Notwithstanding his undoubted desire to work round the censor, he would not have allowed this to result in his writing presenting something with which he did not agree.  What would be the point in that?

The view that Marx might have wanted in any way to repudiate ‘A Contribution to the Critique of Political Economy’ doesn’t appear to withstand scrutiny.  Martin Nicolaus in ‘The Unknown Marx’ wrote that “Only once in his life did he speak with a tone of achievement and a sense of accomplishment about one of his works. Only once did he announce that he had written something which not only encompassed the whole of his views, but also presented them in a scientific manner. That occasion was in the Preface to the Critique of Political Economy (1859) . . .”

If he wanted to retreat in any way from this work why did he quote from it in the first sentence of the first chapter of his most famous work, Capital Volume 1, the first of a number of references, and defend ‘The Preface’ in a footnote within the same chapter?

It is all the more necessary to appreciate the particular importance of ‘The Preface’ because it has been noted that, unlike the usual role of a preface, which sets out the purpose and scope of the rest of a book, this preface was part autobiographical sketch and part summary of views that were not the subject of the rest of the book.  He obviously felt it important to set out this summary of his views and identify himself closely with it.

So, let’s go through the relevant section above to see what it implies for Marx’s view about the alternative to capitalism and how such things as productive forces and productive relations are fundamental to it.

Back to part 14

Karl Marx’s alternative to capitalism – part 14

The socialist society envisaged by Karl Marx can only be built on the achievements of capitalism and what has been called its civilising mission.  This progress rests on an enormously increased productivity of labour, which has reached such a level that the productive forces of society now realistically promise a society that more and more meets the needs of all its members, with inequality and insecurity vastly reduced and material poverty eliminated.

Within capitalism, progress inevitably involves increased exploitation since exploitation of labour is how this society increases productivity.  But progress there has undoubtedly been and without it socialism would not be possible.

Capitalism has created this possibility but capitalism now stands in its way.

When I first became interested in socialist politics in the mid-seventies I used to visit the Communist Party bookshop on High Street in Glasgow.  I remember picking up a CP pamphlet extolling the virtues of the ‘socialist’ countries of Eastern Europe and the USSR.  It set out the daily calorific intake of the average citizen in a number of these countries with East Germany the top performer.

Even at the time this jarred and seemed somewhat disappointing.  I was by no means rich.  I lived in a tenement with an outside toilet and shared a bedroom with my sister, while my mother slept in the living room.  But I never once thought that I was going to suffer from a lack of calories; in fact I barely thought about food and was too busy running around to worry about it.

Now of course, in the space of less than a lifetime, a problem in the most developed capitalist societies is not a lack of calories for the average working class person, which I knew from my Scottish granny had been a problem in the past, but too many calories!

Reading some material on inequality and its effects, as argued in the book ‘The Spirit Level’, I came across some quotes that illustrated how very different the problem is now.  Now the stereotypical poor person is overweight or obese, or rather the latter are nearly always working class or poor, while the equivalent rich person is slim and healthy.  The capitalist food and drink industry specialises in feeding fatburgers and sugar-filled drinks to the poor while offering exotic sounding pulses, vegetables and bottled water in delicatessens for the discerning middle class.

I exaggerate of course; this is a distorted caricature albeit with a grain of truth, but the most important truth is that in many countries, for the vast majority of the population, an adequate food supply is not a problem.  Problems with its supply lie elsewhere, including in the exploitation of the humanity and nature that ensures its production.

While the productive forces of society more and more are capable of offering increased economic security, freedom from social stress and worry, and a promise of a fulfilling life, capitalism is more and more demanding that this promise can be offered for only some and on more and more unacceptable terms.  These terms include zero hour contracts, massive increases in debt, an absence of rights in the workplace and increasing threats to political rights outside it.  Working into your seventies is now the prospect for those in their youth and young adulthood.

Nevertheless, despite all this, it is unquestionable that progress has been made.  Had it not, then on what grounds could we claim that all these impositions and threats are unnecessary?  That an alternative is eminently possible?

A second aspect of this progress is that because it is capitalist progress it is accompanied by repeated crises, which can lead to sometimes dramatic falls in living standards for some, and constant insecurity and increased exploitation for many others; who are required to work longer and harder and with relatively less remuneration while having less and less security over their employment.

The financial crisis has come and many think it has also gone, with the answer to it being austerity and the bankers going back to business as usual.  Severe world-wide recession threatened after 2008, followed by crisis in the Eurozone and crises in developing countries as commodity prices fell.  This was only partially offset by continued growth in China, which is now also threatened by a similar credit boom and overcapacity

From being the fastest growing country in the west, the UK is now slowing dramatically while the Irish State, although it crashed, is now supposedly booming.  These booms and busts make crisis appear a constant threat, the boom period demonstrating the legitimacy of capitalism and the bust demonstrating the difficulty of, and for, an alternative.

For many these crises are proof that the contradictions of capitalism are insurmountable, are intrinsic to the system and cannot be escaped.  Just as progress under capitalism is built upon exploitation, so it is also achieved through crises.  It is crises that most violently reorganises production and ensures its further development.  Crises therefore not only express the irrationality of capitalism but also its rationality, its ability to achieve further development through destruction.

The most common alternative understanding is one that proposes that the system can be cleansed of its most irrational aspects while also ensuring that the growth that characterises capitalism can continue, and even increase.  The private greed that disfigures the system can be ameliorated by the state, which can be regarded as the representative of society as a whole and can act on its behalf.  Freeing this state from direct and indirect control of the 1% is therefore the most important task.

Marxists question this alternative and point out that inequality is not primarily a feature of market outcomes, of inequality of income, of working conditions, employment, housing and general welfare.  It is a question of utter and complete inequality in the conditions of production that generates income inequality and all the other inequalities that condition the general welfare of the majority of society.  What is distributed, and is considered fair distribution, is determined by how the wealth of society is produced in the first place.

Marx put it like this – “before distribution can be the distribution of products; it is (1) the distribution of the instruments of production, and (2), which is a further specification of the same relation, the distribution of the members of society among the different kinds of production. (Subsumption of the individuals under specific relations of production).  The distribution of products is evidently only a result of this distribution, which is comprised within the process of production itself and determines the structure of production.”

If the means by which the wealth in society is produced is not owned in common, by everyone, but by a small number so becoming a separate class, then the distribution of income and wealth that flows from this production will primarily benefit this class.

This is why we have massive increases in productivity and material wealth but it is accompanied by increased exploitation and inequality. Why it is accompanied by crises, in which private appropriation of the fruits of production, and of the means of production itself, conflict with the greater and greater cooperation required to make this production possible.

Nor do Marxists believe that the state is the true representative of society as a whole.  It is not ‘captured’ by the 1%, its functions are determined by the structure of society as a whole, by the fact that the means of production belong to a separate tiny class.  The state can adjust, within limits, inequality of income, housing and working conditions but it cannot fundamentally adjust the ownership of production that is the guarantee of general inequality.  In acting to defend the regular and ordered functioning of society, it must by this fact alone defend society’s fundamental structure, lest any radical change threaten its stability or the stability of the state itself.

And even if this were not the case, the argument for a socialism based on ownership of production by the state has floundered on the experience of the ‘socialist’ states in Eastern Europe and the USSR, which, before their collapse, could boast that their system fed their people.

Marx’s alternative is not based on the state, which is the instrument of capitalist rule, but is based on the progress that capitalism has created, it development of the productivity of labour and most importantly on the labour itself that performs this productive work.  Marx’s alternative is therefore based on the working class and its potential to control society.

Crises demonstrate the necessity of an alternative but in themselves do not create that alternative.  They can demonstrate what is wrong, but it is what it is possible to replace this system with that is the question.  Only if the contradictions which give rise to crises contain within themselves their progressive resolution is it possible for there to be a progressive alternative to capitalism.  So, what is the nature of the contradiction that Marx identified that promises that a fundamentally different society is possible?

Back to part 13

Forward to part 14

Free trade and Socialism part 4 – Karl Marx on Free Trade ii

Much of the previous post setting out the circuit of capital accumulation is basic to the understanding of Marxists, although many would now not appreciate Marx’s view that socialists should not seek to destroy capitalism by simply trying to prevent it from working – by putting up barriers to trade and thus frustrate the conversion of money into commodities and commodities into money: M – C and C’ – M’.

The righting of the wrongs of capitalism can only be achieved by replacing the system of production and thus the way the reproduction of society takes place.  Since the precondition for this is the full development of capitalism, including creation of the working class as the immense majority of society, this cannot be done by seeking to make capitalism either not work, or seek to make it work differently from how it actually does and must work.

None of this prevents socialists fighting for reforms within capitalism, in order that workers’ lives are made better, but this objective cannot rely on the good intentions of the state and cannot even rely on the effects of trade union struggle.  As Marx puts it:

“the working class ought not to exaggerate to themselves the ultimate working of these everyday struggles [over wages]. They ought not to forget that they are fighting with effects, but not with the causes of those effects; that they are retarding the downward movement, but not changing its direction; that they are applying palliatives, not curing the malady.”

“They ought, therefore, not to be exclusively absorbed in these unavoidable guerilla fights incessantly springing up from the never ceasing encroachments of capital or changes of the market. They ought to understand that, with all the miseries it imposes upon them, the present system simultaneously engenders the material conditions and the social forms necessary for an economical reconstruction of society. Instead of the conservative motto: “A fair day’s wage for a fair day’s work!” they ought to inscribe on their banner the revolutionary watchword: “Abolition of the wages system!”

“ . . . Trades Unions work well as centers of resistance against the encroachments of capital. They fail partially from an injudicious use of their power. They fail generally from limiting themselves to a guerilla war against the effects of the existing system, instead of simultaneously trying to change it, instead of using their organized forces as a lever for the final emancipation of the working class that is to say the ultimate abolition of the wages system.”

So, restrictions on trade, as far as Marx was concerned, were not progressive and did not alter the basic relations of capitalist society.   And, of course, Marx was under no illusions as to what these relations were and what they entailed:

“To sum up, what is free trade under the present condition of society? Freedom of Capital. When you have torn down the few national barriers which still restrict the free development of capital, you will merely have given it complete freedom of action. So long as you let the relation of wage-labor to capital exist, no matter how favorable the conditions under which you accomplish the exchange of commodities, there will always be a class which exploits and a class which is exploited.”

“It is really difficult to understand the presumption of the free traders who imagine that the more advantageous application of capital will abolish the antagonism between industrial capitalists and wage-workers. On the contrary. The only result will be that the antagonism of these two classes will stand out more clearly.”

“Do not be deluded by the abstract word Freedom! Whose freedom? Not the freedom of one individual in relation to another, but freedom of Capital to crush the worker.”

This did not mean Marx sought to shackle capital, as those who seek to reform capitalism think can be achieved, or that its reactionary consequences can be fought by isolating their country from its international development – like leaving the ‘neoliberal’ EU and frustrating the globalisation of capital.

In concluding his speech on free trade Marx said this:

“Do not imagine, gentlemen, that in criticising freedom of commerce we have the least intention of defending protection. One may be opposed to constitutionalism without being in favor of absolutism.”

“Moreover, the protective system is nothing but a means of establishing manufacture upon a large scale in any given country, that is to say, of making it dependent upon the market of the world; and from the moment that dependence upon the market of the world is established, there is more or less dependence upon free trade too. Besides this, the protective system helps to develop free competition within a nation. Hence we see that in countries where the bourgeoisie is beginning to make itself felt as a class, in Germany for example, it makes great efforts to obtain protective duties. They serve the bourgeoisie as weapons against feudalism and absolute monarchy, as a means for the concentration of its own powers for the realization of free trade within the country.”

“But, generally speaking, the protective system in these days is conservative, while the free trade system works destructively. It breaks up old nationalities and carries antagonism of proletariat and bourgeoisie to the uttermost point. In a word, the free trade system hastens the Social Revolution. In this revolutionary sense alone, gentlemen, I am in favor of free trade.”

Unfortunately, today this approach is rejected by many calling themselves Marxist, who seek not only to protect “old nationalities” but actually to promote them, through for example support for Scottish separation. For them, the combined and uneven development of capitalism must be addressed through national separation on a more perfect basis, which unfortunately for those fooled by this scenario does not exist.

These Marxists might seek a way to demure from Marx’s words by stating that his views were particular to its time, when free trade represented the free development of a capitalism that was in some sense progressive as against reactionary feudal restrictions on free markets and development of the forces of production.

While this was certainly the situation that Marx quotes in the passage above, the current pursuit of national solutions against the development of international capitalist economic and political arrangements such as the EU, is equally reactionary since it also seeks to turn the clock back.

The defeats to the working class and socialism experienced in the twentieth century have been internalised into a predilection to state what you are against, with nothing beyond eschatological declarations of the need for revolution as something to say about what you are for.

So, in this view, socialism is to be built not on the foundation of capitalism and its achievements but on its collapse.  Capitalism must go back to national forms because the working class has failed to build itself an international unity, while this left fails to understand how impossible it would be for the working class to develop an international movement while capitalism is restricted within national economic and political forms.

The left that rails against free trade does not pause to think that the development of free trade within countries, such as Marx referred to above in relation to Germany, created exactly the same sort of circumstances for many workers as the freedom afforded to international trade does today. Yet these socialists are so limited by nationalism that they would find it incomprehensible to advocate restrictions on trade within countries.  As internationalists however, they should seek the minimisation of differences between the working classes of the different nations through the processes Marx stated above.

For many socialists internationalism has taken on a purely moralistic character because they reject the material foundations upon which it can become an immediate material need for workers.  This material need, an interest in fighting international capitalism can only be created through international capital accumulation creating an international working class more and more exposed to the reality that the system that exploits them and which they must resist is international and therefore the alternative to it must also international; there is no question of the alternative being a backward step in the socialisation of production.  As Marx says, this international development of capitalism “pushes the antagonism of the proletariat to the extreme point.  In a word, the free trade system hastens the social revolution.”

Back to part 3

Free Trade and Socialism part 3 – Karl Marx on Free Trade i

When Karl Marx reviewed his career in 1859 he highlighted four works that he had written – The Poverty of Philosophy, Communist Manifesto, Wage-Labour and Capital and a pamphlet on Free Trade.  The last was given as a speech in 1848 at a time when the Corn Laws had recently been repealed in Britain, a sign of the triumph of industrial capital over landed interests, who had stood in the way of free trade and the interests of manufacturers in reducing wages through cheaper food imports.

Since the purpose of free trade was to reduce the price of corn upon which workers depended, and so allow a reduction in their wages, it might seem that Marx would either oppose the repeal of these Corn Laws or at best take the view of “a plague on both their houses”, and take no side between industrial capital and landlords.  As Marx noted:

“The English workers have very well understood the significance of the struggle between the landlords and the industrial capitalists.  They know very well that the price of bread was to be reduced in order to reduce wages, and that industrial profit would rise by as much as rent fell.”

Perhaps, in fact, Marx would oppose this strategy of the workers’ most immediate, growing and more important class enemy and oppose free trade?

Today a similar situation arises in the debate over leaving the European Union.  Why should workers concern themselves with either side of a debate over a European free trade arrangement when again it is one carried on between different fractions of the class enemy?

After all, it is argued that the EU is irreformably neoliberal, although those that argue this often point out that it hasn’t always been such; although this also immediately raises the issue that some sorts of capitalist arrangements are better for workers than others – an anti-austerity policy is better than a neoliberal one for example.

For others, as I have noted, it all “depends”, and the question of free trade is bound up with a range of other issues, often involving development of less industrialised countries, national oppression, “unfair” trade and super- exploitation of workers in less developed countries.  However none of this prevents one from forming a view on the question of free trade itself and facing the implications for workers of such a policy.

This was the approach taken by Marx.  In doing so he was abundantly clear what the nature of the argument was for free trade put forward by the economists representing industrial capital:

“The whole line of argument amounts to this: Free trade increases productive forces. When manufactures keep advancing, when wealth, when the productive forces, when, in a word, productive capital increases, the demand for labour, the price of labour, and consequently the rate of wages, rises also.”

“The most favourable condition for the workingman is the growth of capital. This must be admitted: when capital remains stationary, commerce and manufacture are not merely stationary but decline, and in this case the workman is the first victim. He goes to the wall before the capitalist. And in the case of the growth of capital, under the circumstances, which, as we have said, are the best for the workingman, what will be his lot? He will go to the wall just the same.”

“The growth of capital implies the accumulation and the concentration of capital. This centralisation involves a greater division of labour and a greater use of machinery. The greater division of labour destroys the especial skill of the labourer; and by putting in the place of this skilled work labour which any one can perform, it increases competition among the workers.”

“This competition becomes more fierce as the division of labour enables a single man to do the work of three. Machinery accomplishes the same result on a much larger scale. The accumulation of productive capital forces the industrial capitalist to work with constantly increasing means of production, ruins the small manufacturer, and drives him into the proletariat . . .”

“Finally, the more productive capital grows, the more it is compelled to produce for a market whose requirements it does not know—the more supply tries to force demand, and consequently crises increase in frequency and in intensity. But every crisis in turn hastens the concentration of capital, adds to the proletariat. Thus, as productive capital grows, competition among the workers grows too, and grows in a far greater proportion. The reward of labor is less for all, and the burden of labor is increased for some at least.”

For some modern Marxists many of these words of Marx make no sense – how many today would repeat his remark that “the most favourable condition for the workingman is the growth of capital”?  How many would welcome the increased accumulation of capital though it leads to crises and increased concentration of capital, because it adds to the proletariat?  When was the last time the growth of capital was welcomed even though it increases competition among workers?

Instead the depredations of capital are opposed on the basis that the effects of capitalism can be much reduced through trade union action, its evils ameliorated through state intervention, while confused notions are retained that revolution will spring naturally from capitalist crises and destroy the same state that introduced the reforms.

On only one aspect of his argument has it been widely accepted that it is not the job of socialists to prevent the development of capitalism, and this is the view that workers must be protected from the replacement of their labour by opposing the increased use of machinery.  As Marx notes – “there is no kind of manual labour which may not any day be subjected to the fate of the hand-loom weavers” whose labour was replaced by machinery, with the consequence that “the hand-loom weavers are on the verge of that state beyond which human existence can hardly be sustained. . .”

Yet today the view that free trade should be opposed in principle to protect workers from capitalist competition would be more widely held than the views expressed above.

For Marx, free trade was a moment in the accumulation of capital, as he set out in Capital Volume II in chapters one to three.  In the circuit of money capital, Marx sets out that money (M) is exchanged for commodities (C) which are then exchanged for another sum of money (M).  Obviously this has no purpose for a capitalist unless the second sum of money is larger than the first, or why bother?

Since at each stage in the exchange of money for a commodity and the commodity for money it is the exchange of equivalents, no one is short-changed, so where could a profit arise?  As Marx explains, the commodities purchased by money by the capitalist include machinery, raw materials etc. and labour power, which all go to create the newly created commodities which the capitalist sells for a larger amount of money than spent on buying the commodities used in production.  The increased value of the commodities sold for money by the capitalist arises in production so that in the circuit M – C – M’, the second M’ is larger than the first M and the whole point of the circuit for the capitalist becomes clear.

The sum of money M’ is larger than the original amount of M invested and the increase arises in production, from the employment of labour power, which is remunerated by wages.  Again the assumption is that wages equate to the value of labour power so that we again have an exchange of equivalents and no one is ‘cheated’.  The worker will receive wages to a value that will allow her or him to turn up for work every day in such a condition as will allow her or him to produce to the efficiency, quality and standard required in the particular society that exists at that time and place, and will allow new generations of workers to do the same.

However the value created by the worker in production, through their labour, is greater than the value they are paid in wages for their capacity to work, which is their handing over to the capitalist of their labour-power that the capitalist can direct with a view to producing a profit.  The circuit of capital is therefore better set out as M – C . . P . . C’ – M’; where the first C in the circuit includes the purchase of labour power for wages, P equals production carried out by the worker; the second C’ are the commodities produced by the worker and the second sum of money M’ includes the additional value created in production and included in the second C’. This is the output of production that can then be sold for a bigger sum of money that now includes the profit of the capitalist.

The inequality in capitalism, including different levels of exploitation and power, and the resulting insecurity, stress and degrees of poverty are a result of what arises in production and the class relations that are founded in this production.  To seek to right the wrongs of capitalism through opposition to trade, through trying to make it ‘fair’, or to seek to limit in any fundamental way the inequality and exploitation that capitalism gives rise to through changes to trade, is to miss the point.  All these are a result of the class relations resting in production.  To seek to limit trade is to seek to disrupt C’ – M’; to disrupt the accumulation of capital – or to make it ‘fair’ – when the problem lies within the whole circuit of capital, with the existence of production based on capital itself.

As Marx explained, in all the exchanges within this circuit we have the exchange of equivalents; before the commodities denoted as C’ are produced for sale other commodities, including machinery, raw materials and labour power are also sold and purchased.  Trade unions try to determine the level at which labour power is sold through fighting for “a fair days’ work for a fair days’ pay”, but even they cannot overturn the way capitalism works and cannot fundamentally alter the drive for profit that animates the circuit of capital. Trade unions can no more make capitalism fair than demands for fair trade can prevent exploitation or inequality in the class relations based on production.

Back to part 2

Forward to part 4