Business Week, Avenue of The Americas, New York City, should urge its writers to do their homework. In its issue of July 17, 1978, the Economics department does a review (or comment) on a new attack on Marxian economics, co-authored by four British self-styled Marxists (Barry Hindess, Paul Hirst, Athar Hussain, Anthony Cutler) entitled Marx's ‘Capital’ and Capitalism Today. The magazine’s caption reads: “A Marxist Assault on Marx” and the writer wastes no time in displaying his own ignorance of the barest essentials of the Marxian system.
Item: . . . the labour theory of value . . . holds that products are worth as much as the amount of labour that goes into producing them.
Stated thus the proposition is easy to refute. Why would a “product” (commodity) with more labour incorporated in it because of inferior production technique have more value in the market than a similar commodity produced with modern efficiency? It would not and Marx knew this. That is why he insisted upon using the phrase “socially necessary labour time” and explained it with thoroughness as the average labour time needed to produce an article under normal conditions of production and with the average degree of skill and intensity prevalent at the time. Commodities are not produced for some intrinsic pleasure in production but to sell and realise profit for their owners. Competition in the market place dictates that labour time in the factories be socially necessary.
But this is by no means the worst of the Business Week article. The writer, by an exercise of common horse sense, could nave attacked the credibility of the “Marxist” professors by exposing their naïveté. It does not necessarily follow that one must be pro-Marx to expose faults in anti-Marxist critiques.
Item: ‘There is no such thing as a general theory of prices or production,’ says Hirst of the University of London. ‘The way in which firms make calculations depends on each particular situation,’ he adds.
But of course individual firms must be concerned with one particular problem: achieving profitable increase in capital expended. A knowledge and understanding of general theories of the source of such increase is unnecessary to achieving one’s goal although factory managements succeed best that learn how best to milk their work force. Somehow, even without book knowledge, they realise that the source of their profits is not the prices of their commodities in the market place but the value over and above wages paid, created gratis by the workers.
Except that this seems to be what bothers the professors most about Marxian economics. Capitalism, they contend—according to Business Week—is not one enormous factory. Marxists, they say, neglect such areas of activity as the huge service sector and the vital banking system:
Item: But the most glaring error in Marxist economics, they say, has been to ignore the role that money, credit, and financial institutions play in the economy . .For example, they point to the variety of financial activity in which companies engage, such as foreign exchange speculation, in addition to production. And they further argue that the expanded role of government monetary authorities and their influence on the banking system, as well as the availability of credit, play a key role in how much profits companies earn. Indeed, government now has the clout to bail out companies that would otherwise go out of business were competition to prevail.
Indeed! The most glaring error of the professors— and of such experts as are found in the Economics department of Business Week—is the ignoring of the role that class has always played in capitalism. The total national capitalist, from away back, and the total international capitalist, in this country, have functioned as the final arbiters in the affairs of individual companies and industries through their states and their international financial and political institutions.
But what has all that to do with the source of profits? Long before the times of Marx, certain economists (Benjamin Franklin among them), observed that what took place in the market was an exchange of equal values. Whence, then, came the profit? Having the clout to determine whether or not a business will survive is not the same thing as producing profit. Such is obviously not the function of banks and governments.
And then the confusion of Business Week and the British “Marxists” becomes confounded because, accepting the myth of socialist nations (Russia, China, Poland, Cuba, etc.) they blame the “marked slowdown in economic growth” of some, such as Russia and Poland, on a blind adherence to Marxist economics.
Item: ". . . By adhering to a narrow interpretation of Marx’s theories, these nations have pursued one-dimensional development programmes, pumping up production in such industries as steel and heavy machinery, while neglecting to improve agricultural yields, expand the production of consumer goods, or provide better cultural and recreational services. According to some Marxists, these countries have sacrificed the socialist ideal for the sake of rapid industrial growth.”
Now why should anybody believe that Marx’s Capital offers a programme or an understanding of how production can be organised within the relationships of wage labour and capital in a manner as to benefit all, or anything more than a minority, of the population? Certainly there were no nations professing to be Marxist or socialist in Marx’s time, no national propaganda machines teaching that wage-labour and capital relationships can be socialist as well as capitalist. He did not have that idiocy to contend with and there is nothing in Capital to indicate that he foresaw such a turn of events.
Yet the woods and streets are filled with true believers of that myth, from plain men and women on the street to economics professors and business magazine writers. The answer to the question of why these “socialist” economies fail to equal those of the more traditional capitalism is not nearly so important as why or how state capitalism gets tied to the analysis in Capital and touted as socialism.
The emphasis of most “socialist” nations on production of capital goods and heavy industry (China and Cuba are cited as exceptions where the “socialist ideal,” presumably, has not been “sacrificed for the sake of rapid industrial growth”—despite the overt attempts of both nations to overcome backwardness) indicates only that they are by very nature capitalist. What is the number one object of capitalist production? As Marx so well put it:
Accumulate, accumulate! That is Moses and the prophets! . . . Therefore, save, save, i.e. reconvert the greatest possible portion of surplus-value, of surplus-product into capital! Accumulation for accumulation’s sake, production for production’s sake: by this formula classical economy expressed the historical mission of the bourgeoisie, and did not for a single instant deceive itself over the birth-throes of wealth. But what avails lamentation in the face of historical necessity? (Capital, Vol. 1, p. 652 Kerr Ed.)
Whether by traditional bourgeoisie or state bureaucracy functioning as bourgeoisie the primary object still holds.
And yet, out of this concentration on production for the sake of more production eventually must come a mass realisation that the floodgates of abundance for all—the socialist ideal—can be opened simply by abolishing the relationships of wage labour and capital and introducing a world wide system of production for use. That is the message of Capital and Marxism generally.
Harry Morrison
(WSP-US Boston)
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