Dr. Sweezy on Marx’s theories (1947)

Book Review from the September 1947 issue of the Socialist Standard

When the late Lord Keynes wrote his General Theory of Employment Interest and Money it was hailed in certain quarters as a step towards Marx in its method of analysis in respect of the problems of present day society. His conclusions revealed, however, that so far as any realistic evaluation of the nature of contemporary Capitalism was concerned, he had taken two steps away from Marxism. Undoubtedly a renewed interest in Marx’s economic teachings has been stimulated by the recent development of Capitalism and certain economists going further than Keynes have attempted to reconcile their own academic teachings with the objective analysis of Capitalist Society carried out by Marx in the middle of the last century. The results we need hardly say have been barren and, at times, ludicrous. To students of Marx, therefore, any book which sets out to present his doctrines in the light of modern capitalist evolution is of interest. Dr. Sweezy, a Harvard economist, attempts this and in some respects succeeds in his book The Theory of Capitalist Development, although in others he overwhelmingly fails.

His opening chapter on the methodology of Marx is interesting; methodology being another name for scientific method or the mode of investigation by which systematised knowledge is acquired. This involves the great importance of the process of “abstraction” which is essential to scientific method. A process which, as Sweezy says, “constitutes the method of successive approximation, or moving from the more abstract to the more concrete in a step by step fashion.” To put it another way, it is a question of going from the simple to the complex. When analysing a complex situation one must at the outset eliminate anything that is extraneous and likely to complicate the issue. To use a scientific axiom: to understand is to omit. Thus to understand the essential it is necessary to exclude what is non-essential for the purpose of the immediate investigation. A single example will illustrate our meaning. By the process of abstraction we can recognise the identical elements denoted by the objects, man, horse, bird, fish, etc., and combine them into a general concept—”vertebrate.” Thus we have the perception of a common property or identity of structure, which exists independently of their differences. To use scientific terminology, in order to arrive at this underlying relationship which exists between these different forms of life, they must be treated as an isolated process. In passing to a more detailed account, however, of the actual physical structures peculiar to their kind, factors which were arbitrarily eliminated as non-essential for the purpose of the crucial investigation, must now enter into consideration. The broad classification, vertebrate, now comes to acquire a more qualified and limited connotation the more it is brought into conformity with the totality of the various species, concretely considered. The validity of the use of abstraction is then: does it assist in helping to discover the essential relationship connecting the phenomena under investigation? That is its ultimate justification.

The same scientific principle holds good in Marxism. Marx began his analysis of capitalism by treating it as an isolated process of simple commodity relationships between capitalist and worker in which complicating factors like differences in the organic composition of capital, foreign trade, export of capital, non-capitalist regions, were deliberately excluded. Volume I of Capital can then be said to be the first stage of abstraction. Of course in capitalist society, considered from its concrete totality, commodities do not sell at their value. That socially necessary labour —the basis of value—is not a constant but ever-changing quantity. That monopolistic practices and imperfect competition distort the pattern of exchange relations, and so on. All this might seem to imply that Marx was going away from the actual conditions prevailing in capitalism but as every scientific thinker knows, scientific analysis rigorously demands such a procedure if the set of events under analysis is to be provided with an efficient cause for their happening. When ignoramuses like Schumpeter and Alexander Gray, whose books on Marxism have been recently reviewed in these columns, scream with the rest of their academic brethren about the so-called contradictions between the various volumes of Marx, they fail to see that such apparent contradictions are an integral part of the scientific method. They imply no more than various stages of abstraction for the purpose of analysing more clearly the problems of the present social system and so arriving at a thorough and comprehensive knowledge of the social forces underlying it. This is our interpretation of the guts of Sweezy’s opening chapter. There is nothing original in this explanation of Marx’s economic methodology but the author elucidates it clearly and lucidly.

Chapter 2 on Value is also instructive, the author dealing with the more abstract side of Marx’s value principle the qualitative aspect. Undoubtedly the opening chapter of Marx’s Capital volume I, has been the least understood by his critics. It was here that Marx sought to demonstrate that any theory of value to be scientifically valid must discover a homogeneous quantity which although itself no? value was nevertheless able to provide the terms by which the exchange value of commodities could be expressed. It was here that Marx’s abstract undifferentiated labour or the expenditure under socially determined conditions of production provided the clue. Thus although labour is not value itself, it constitutes nevertheless the substance of value and so enables the different kinds of concrete labour—use values—to be reduced to this element common to them all. By being made qualitatively equal they can thus be rendered quantitatively comparable as exchange values. It was Marx’s separation of labour-power and labour—his major contribution to political economy—that enabled him to elucidate his theory of value much more cogently and comprehensively than his classical predecessors, Smith and Ricardo. Marx showed that labour-power was a commodity whose value was determined like all other commodities by the amount of social labour necessary for its production and reproduction. Labour, on the other hand, was a definite expenditure of human productive activity and thus capable of objective quantitative measurement and so as a value principle is independent of mere price fluctuations. The fact that abstract materialised labour takes a commodity form is the outcome of historically conditioned social relationship of commodity owners (including, of course, buyers and sellers of labour-power). Value itself is then a social quality, quantitatively expressed in exchange value. It can be seen then, the decisive and revolutionary break Marx made from the classical economists, Adam Smith and Ricardo, who merely treated value from its quantitative side—Exchange Value.

Sweezy also discusses Marx’s Law of the tendency of the falling rate of profit. The rate of profit must not be confused with the rate of surplus value. Thus if the organic composition of capital is £9,000 constant and £1,000 variable and the rate of exploitation of the workers employed by the variable capital is 100 per cent, then the surplus value produced by the workers will be £1,000. The capitalist, however, computes his profit on the total outlay of his capital, thus the rate of profit is “surplus” divided by “constant” plus “variable” which is 10 per cent. With every increase in the ratio of constant to variable capital the rate of profit falls even if the rate of exploitation remains the same. The author does not, it seems, accept the tendency of the rate of profit to fall due to the rising organic composition of capital but seeks to show that accumulation of capital with its increasing demand for labour-power tends to raise wages, and by so reducing the amount of surplus value bring about a fall in the rate of profit. Only when the capitalists strive through the introduction of labour-saving machinery to maintain the rate of profit or to raise its former level does the rising organic composition of capital come into the picture (page 105). It is true that as accumulation expands the supply of available labour power in the market will approach exhaustion point and the price of labour power will tend to rise, at least in certain industries and among certain workers. Fresh capital, meeting less and less reserves of cheap labour power will also tend to go increasingly into constant capital (labour saving machinery, etc.), and the organic composition of capital will be raised. Nevertheless this change is dictated by the relative scarcity of labour power and it does not follow that alteration in the organic composition of capital is necessarily offset by a proportional increase in the rate of exploitation. In this case a rising organic composition of capital is associated with a fall in the rate of profit. Moreover, as Marx points out,

“Two labourers, each working 12 hours daily, cannot produce the same mass of surplus-value as 24 labourers working only 2 hours even if they could live on air and did not have to work for themselves at all. In this respect the compensation of the reduction in the number of labourers by means of an intensification of exploitation has certain impassable limits. It may, for this reason, check the fall of the rate of profit but cannot prevent it entirely.” (Capital, Vol. 3, page 290, Kerr edition)

It is true that cheapening of the elements of constant capital, increase of relative surplus value and relative overpopulation are counteracting tendencies against the decline in the rate of profit. It has been often said that Marx’s analysis gives no clear indication of which set of tendencies would prevail (although Marx himself appeared inclined to the view that a fall in the rate of profit would be associated with continued capitalist expansion and increased technical changes.) Marx, however, was the last person to deduce a falling rate of profit in a vacuum. That would have been foreign to his own scientific and historical approach. For him the dynamics of capitalist society and the interaction of the totality of class relations and interests was the dominant feature in shaping economic trends. And there the matter must rest.

The author renders a good account of the general nature of capitalist crises although his own treatment on certain aspects of the matter must be read with circumspection. Sweezy enumerates two types of crises, one associated with the falling rate of profit and the other that he terms realisation crises, i.e., the inability of the capitalist to sell commodities at profitable prices. This last type of crisis emphasises what Sweezy calls the underconsumptionist tendencies inherent in capitalism. This “underconsumptionist ” approach seems, however, an unsatisfactory formulation of the treatment of crises. It is true that under the stimulus of capitalist accumulation the productive forces will expand and this will tend to higher wages. Nevertheless wage levels are always in the final analysis regulated by the desire of the capitalist class to maintain the customary rate of profit on their capital outlay. Moreover, as the result of the increased productivity of the worker arising out of the expansion of the productive forces, the ratio between the value of his labour power and the value of the wealth he produces is further increased, higher wages notwithstanding. His own share of the total product suffers then a relative decline. With a greater amount of surplus value in the hands of the capitalists there is a tendency for increasing investments in the means of production. Thus the expanding forces of production come into conflict with the limited consuming power based on the antagonistic character of class income distribution inherent in capitalism. To call this underconsumption is, however, to strain the meaning of the term in popular economic usage. Again this underconsumptionist aspect is merely an inevitable corollary of a more fundamental feature that is the basic conflict between the powers of production and the productive relations of capitalist society. As Marx points out,

“It is not a fact that too much wealth is produced. But it is true that there is periodical over-production of wealth in its capitalist and self-contradictory form. . . The capitalist mode of production, for this reason, meets with barriers at a certain scale of production which would be inadequate under different conditions. It comes to a standstill at a point determined by the production and realisation of profit not by the satisfaction of social needs.” (Capital, Vol. 3, page 303, Kerr edition).

Or, again, “the real barrier of capitalist production is capital itself.” (Page 293, same work).

Again Sweezy’s view that crises arise due to a shortage of labour-power which forces wages up and consequently causes the rate of profit to decline is hardly Marx’s view of the matter. In Vol. I of Capital on The General Law of Capitalist Accumulation Marx repeatedly stresses the fact that demand for labour-power does not keep step with the expansion of capital. In other words owing to the rising organic composition of capital the variable portion does not, as a means of the employment of wage-labour, keep pace with increases in the working population. Marx, of course, does not deny that the possibility of crises can arise from “labour shortage,” especially in early capitalism (page 700, Capital, Vol. I, Modern Library edition). Just as the present shortage of workers today carries distinct crisis implications. Nevertheless the appearance and growth of a surplus industrial army he held was the chief feature in the general law of capitalist accumulation. To sum up, Marx’s writings do not indicate two separate features of crises but rather that the possibilities of crises and crises themselves are indissolubly linked with the basic contradictions inherent in present day class society It is these contradictions which give to crisis under capitalism its familiar periodic character.

The chapter which criticises breakdown theories is excellent. The author shows that no such theory of final capitalist catastrophe can be logically deduced from Marx’s writings. Rosa Luxemburg, Otto Bauer and Grossman are all acutely criticised for their formulation of breakdown theories. Our own pamphlet, Why Capitalism Will Not Collapse (written during the last crisis) was a valuable contribution in showing why crises as such do not bring an end to capitalism, in answer to the spokesmen of various political parties, Communist Party included, who were noisily proclaiming the 1931 slump as the beginning of the end of the present economy.

For reasons of space we cannot adequately deal with Sweezy’s mathematical treatment of the transformation of value into prices of production for the purpose of maintaining equilibrium conditions between industries that produce means of production and those that produce means of consumption.

But surely the essence of the matter lies in the historical treatment of the development from simple commodity production to a developed capitalist economy. In simple commodity production constant capital plays little part and is, therefore, relatively unimportant. Here the law of value is directly controlling the exchange relationships. In modern capitalism different organic compositions of capitals bulk large. Seeing, however, that only the variable portion (the part employing wage labour) produces surplus value then different units of capital according to their organic composition will produce different quantities of surplus value and consequently different rates of profit. The capitalist, however, is indifferent to the ratio of means of production to variable capital and seeks the customary rate of profit on his total capital outlay. How this is brought about is due to the competition for spheres of investment in different industries, capital leaving those industries whose rate of profit is low and invading and expanding those industries where the rate of profit is high and where, as the result of this expansion, prices fall and with them the rate of profit. By this incessant competition for various spheres of profitable investment an equalisation of profit or an average rate of profit is brought about. Thus the price at which capitalists sell their goods oscillates not round their value but the price of production, i.e., the cost of production plus the average rate of profit. Nevertheless the sum of the prices of production at which commodities are produced equals their total values. Again this process does not alter the sum total of surplus value produced b the workers, the only point is its distribution according to the requirements of a profit motive economy which necessitates an equal share on a given expenditure of capital. Under developed capitalism the law of value is indirectly controlling exchange relationships, nevertheless, it must constitute the starting point of investigation for elucidating the phenomena of production prices peculiar to capitalism. This modification of value into production prices is then the result of a long drawn-out historical process and a mathematical treatment of it from the unhistorical point of view of equilibrium conditions has little significance, as Sweezy admits (page 128), “the law of value can he discovered and analysed in principle by the use of either value calculation or price calculation.”

His last chapter, “The Decline of World Capitalism” is unadulterated rubbish. He mistakenly holds the view that the world is split into two separate social systems, i.e., Socialism in Russia and Capitalism elsewhere whose fount is the U.S.A. He further holds that the social system of Russia coupled with its growth elsewhere will exercise a disintegrating effect on capitalism. Great Britain and Western Europe — presumably on the Soviet model—might go socialist at the end of the war (this book being first published in America in 1942). Bit by bit Socialism would undermine the stability and structure of Capitalism in perhaps a peaceful fashion. Thus the Fabian principle of peaceful permeation is elevated to international status. Apart from the theoretical falsification of the real issue Sweezy’s idea of “a peaceful era” following the war has been hopelessly falsified by the inter-imperialist rivalries of the great capitalist powers, U.S.A., Britain, France and Russia.

Nevertheless sections of the book provide a useful source for the better understanding of the theoretical foundations of Marxism and its application to the social problems of our time.

Ted Wilmott

Economic Theory (1971)

Book Review from the September 1971 issue of the Socialist Standard

Economic Theory in Retrospect. M. Blaug, Heinmann Education. Second Edition £2.75.

This work by Blaug, who formerly taught economics at Yale University and is now Professor of the Economics of Education at the University of London Institute of Education, will be both useful and harmful, depending on how it is used. Students who treat it as a source for “potted” versions of economic theories and accept uncritically the author’s comments on those theories will often be misled. Those who take very careful note of the author’s warnings in his Preface to the Revised edition and use the book as he intended may find it useful. Blaug writes:

“In order to encourage students to doubt all commentators, including the author of this book, this edition like the first one contains detailed Reader’s Guides to cover major works in the history of economic thought. But as some reviewers of the first edition felt that these were more welcomed as heaven-sent cribs than as stimuli to consult the original writers, I should warn readers again that the Guides are neither summaries nor precis; they are running commentaries and more concerned with what the great economists might have meant than what they actually said. In short, they are especially designed to be provocative . . .”

When it comes to Marxian economics the reader should certainly challenge some of Blaug’s comments and interpretations. A few examples will illustrate this.

Discussing Marx’s description of the poverty and inequality of the early nineteenth century, Blaug writes that “it would be absurd to believe that the conditions described . . . reflect exploitation of labour rather than the low output per head of the working population”.

Blaug’s own explanation is that “the deplorable material standards of most working people . . . had more to do with the birth pangs of industrialization than with capitalist methods of organising production”, and that “living standards of the British working class could not have been raised significantly even by a perfectly egalitarian distribution of income”.

This was and still is the line of propaganda used by the defenders of capitalism. It would be interesting if Blaug “the commentator” (as distinct from Blaug the defender of capitalism) would explain what it was other than exploitation which enabled the rich, and in many cases idle, members of the capitalist class, to avoid sharing the poverty—after all the output of most of them wasn’t even low !

Blaug’s observations may also indicate that he thinks Marx aimed at egalitarian capitalism — which really is absurd. What Blaug has to meet is Marx’s proposition that in a Socialist system of society the output of useful articles will be greatly increased.

On page 279 Blaug has a fifteen line comment on Chapter 19 of Marx’s Capital Vol. I. (Chapter 17 in the Allen and Unwin translation).

Blaug writes:

“Chapter 19 plays hard and fast with the distinction between labour and labour-power. ‘Labour is the substance and the immanent measure of value, but has itself no value’.”

Blaug’s comment on this is that Marx meant “that the worker has no value, it is only his services that are valuable”.

Marx didn’t say or mean what Blaug says he meant. He was dealing with the question whether what the worker sells is his labour or his labour-power, not, as Blaug seems to think, whether the worker sells himself. In that chapter Marx argued that it is labour-power that the worker sells and that is an embodiment of value (the quantity of labour necessary for its production). It is not his labour, or work, that the worker sells.

Blaug’s quotation is immediately preceded by the following which ought to have made Marx’s view clear.

“That which comes directly face to face with the possession of money on the market is in fact not labour, but the labourer. What the latter sells is his labour-power. As soon as his labour actually begins, it has already ceased to belong to him; it can no longer be sold by him.”

Some of Blaug’s book deals with Volume II and Volume III of Marx’s Capital. Unlike Volume I, which was completed for publication in his lifetime, the later volumes (and other material published after his death) were left incomplete, some of it in the form of mere notes. Engels who edited Volumes II and III drew particular attention to this in his Prefaces. In the Preface to Vol. Ill Engels wrote, for example, “nothing was available but a first draft, and it was very incomplete”. Some of the chapters were so incomplete that Engels left them as they were being unable to take on the task of getting them in proper shape. It is therefore often difficult to decide how far Marx’s first notes were really considered judgments. Blaug is not unaware of this but seems not always to have made due allowance for it.

In his ten line comment on ten chapters of Volume III (Page 290) Blaug makes statements which, to the reader not familiar with the originals may seem to indicate that Marx in Volume III was repudiating what he wrote in Volume I about the effect of an overissue of inconvertible paper currency on the general price level.

Fortunately, in this case, Engels spotted the possibility of misunderstanding and inserted a note in Vol. III pointing out that the material in Chapter XXXIII dealt only with the position in Britain at a time when the currency was primarily gold coin and convertible Bank of England notes, and not with the different situation of an inconvertible paper currency, the latter being as stated in Volume I. The note reads a follows:

“Inconvertible bank notes are not taken into consideration at all here; inconvertible bank notes can become universal means of circulation only under conditions in which they are actually backed up by National credit, as is the case of Russia at present. In that case they fall under the laws of the inconvertible National paper money, which have been developed already in Vol. I, Chapter III 2‘ Coins and Symbols of Value‘.

The chapter of Volume I referred to set out Marx’s view that, in accordance with the labour theory of value, the doubling of an issue of inconvertible paper currency merely serves to double the price level.

Blaug deals with Keynes and the neo-Keynesians in Chapter 15 and here his method shows its weakness. In thirty pages he gives a running commentary on Keynes and his critics and commentators, indicating here and there his own reservations. It might have been more useful if he had separately provided his own considered views on Keynesian theory and its practical application in the past thirty years.

Edgar Hardcastle

Mud slinging (2026)

From the August 2026 issue of the Socialist Standard

If you ever go on social media sites that discuss Marx, it’s likely that you’ll come across a post that claims to refute/debunk his ideas. One of the common charges against Marx is that his theory of value, based on labour-time, is untenable because not all labour produces value. The evidence for this? The mud pie.

Now it’s true that, however many mud pies you make, however much labour-time you expend on that task, you won’t create any value. So surely, Marx got it wrong…. And if his theory of value falls, so does the entire edifice of Marx’s economics.

But here’s why the mud pie argument doesn’t work. References below are to Capital Volume 1.

First, we ought to remind ourselves that, at root, Marx is dealing with an issue that is key to human existence: the labour process, by which ‘Nature’s material [is] adapted by a change of form to the wants of man’ (chapter 7 section 1), a process which creates useful things, otherwise known as use-values. At a certain time in human history the results of this process take the form of the commodity.

To drive home the point, a commodity is ‘an object outside us, a thing that by its properties satisfies human wants of some sort or another’ (chapter 1, section 1).

When the commodity appears in history, so too does value and ‘Value is independent of the particular use-value by which it is borne, but it must be embodied in a use value of some kind’ (chapter 7 section 2).

Lastly, from chapter 8 ‘Value exists only in articles of utility, in objects’.

The takeaway message: Marx’s theory applies to human beings carrying out productive activity to satisfy real needs and wants, not to a child making mud pies (or sandcastles).

By the way, the people who put forwards the mud pie argument have plainly never even opened a copy of Capital, let alone read or understood it. The only reason for dealing with this infantile guff in the Socialist Standard is that the argument re-appears regularly online, presumably on the assumption that if you keep throwing mud, some of it will stick.

Budgie.

The Forum. (1909)

Letter to the Editors from the March 1909 issue of the Socialist Standard

Some Open Discussions

Statements of difficulties, criticisms of our position, contributions upon any question of working-class interest, are invited. Members and non-members of the Party are alike welcome. Correspondents must, however, be as brief as possible, as bright as possible, and as direct as possible to the point.

______0______

ENQUIRER (Manchester) submits the following queries, to which replies are appended :

(1) In “Capital” we read, “along with the surplus-population, pauperism forms a condition of capitalist production, and of the capitalist development of wealth. It enters into the faux frais of capitalist production ; but capitalism knows how to throw these for the most part, from its own shoulders to those of the working class and the lower middle class.” (p. 65 Vol I.)

This statement, and one to the effect that high or low rates do not affect the condition of the workers as rates are paid by the capitalist class, would appear to be contradictory.

____________

It only appears contradictory. The statement quoted from Marx amounts to, in effect, asserting that the capitalist class retain as much of the wealth produced as possible, making real wages keep as close to the subsistence level as is economical. The maintenance of the non-producers—whether they be “unemployed,” children, aged persons,or what not—enters into the “dead expenses” of capitalism, and while not entering into the factors determining real wages, except in the case of children, is, so far as possible, shouldered onto the workers, and largely borne by them, as witness the extent of Friendly and Benefit Societies, and Trade Unions. Even the maintenance of official paupers is, if at all manageable, transferred to a son, daughter, or other relation in the case of parents, while now the endeavour is being made to fix upon the individual the responsibility of maintaining a pauperised grandparent. Where these items are shouldered on to the workers it assists in keeping those expenses down to as low a level as possible, and incidentally, by swelling the quantity of money wages, further cloaks the extent of exploitation.

____________

(2) If it is cheaper for the capitalist class, as the payers of rates, to give old age pensions to worn-out veterans of industry rather than have them go into the poor law institutions, why have the recipients of poor law relief within a certain period prior to Jan. 1st, 1908 been debarred from receiving the old age pensions ?

____________

The present Government has the whole question of the Poor Law in the melting pot. To empty the Poor Houses would be to dislocate the Poor Law system before the alternative machinery is laid down and perfected and possibly precipitate trouble. At present there are the two systems working side by side, and the relationships are largely at the disposal of the Poor Law authorities. We cannot explain their motives. Perhaps they consider a twelve month’s course of training in soliciting charity a necessary preliminary to attempting to eke out an existance on 5s. per week.

The fact, however, that the Poor Rate is levied locally while Old Age Pensions are a national charge, is one reason why the transposition could not be made so suddenly as to complicate the question, and risk alienating the political support of any section which might be affected by the change.

____________

(3) If the capitalist class pay the rates why do they not take the credit unto themselves for so doing, instead of telling the workers that they are as much interested in the rates being kept low as the capitalists themselves ?

____________

The answer to the first question meets this, at any rate in part. By interesting the working class in the maintenance of the non-producers, their support is enlisted in keeping the necessary expenses as low as possible, although the fact remains that as an item over and above the bare maintenance of the individual it must encroach upon the difference between the minimum on which the individual can live plus the raw material he obtained, and the total production, and so reduce the ideal degree of exploitation towards which the capitalist class strive.

Poverty or misery: a correction (1957)

From the February 1957 issue of the Socialist Standard

In the article “Poverty or Misery” in the January issue (page 5, middle of column 2) reference was made to Mr. Strachey’s unjustifiable use of a translation which gave the word “poverty” in place of the German word meaning “misery” in a passage from Marx’s Capital. This point stands, but error was made with regard to the various editions of Capital. The editions in English of Volume I. of Capital are:—

(1) The Swan Sonnenschein edition (1886) translated by Samuel Moore and Edward Aveling, is based on the 3rd German. This was the only English edition edited by Engels.

(2) The Charles Kerr edition (1906) is the same translation as the Sonnenschein, except for incorporation of additions and revisions to text made by Engels to the 4th German edition. These amendments to text were translated by Ernest Untermann. 

(3) The Allen & Unwin edition (1938) is a facsimile reprint of the Sonnenschein. The amendments made by Engels to the 4th German edition, are printed as an appendix. It is only these amendments which Dona Torr translated. 

(4) The Allen & Unwin edition (1928) in one volume was newly translated by Eden and Cedar Paul from the 4th German edition. (It was reviewed in the Socialist Standard in March, 1929). 

Later on this edition was taken over by Dents and published as two volumes in the Everyman series.

Ed. Com.

Marx on Piece Work (1961)

From the February 1961 issue of the Socialist Standard

"Let us now consider a little more closely the characteristic peculiarities of piece-wages. The quality of the labour is here controlled by the work itself, which must be of average perfection if the piece-price is to be paid in full. Piece-wages become, from this point of view, the most fruitful source of reductions of wages and capitalistic cheating.

They furnish to the capitalist an exact measure for the intensity of labour. Only the working-time which is embodied in a quantum of commodities determined beforehand and experimentally fixed, counts as socially necessary working time, and is paid as such.

Since the quality and intensity of the work are here controlled by the form of wage itself, superintendence of labour becomes in great part superfluous. …

Given piece-wage, it is naturally the personal interest of the labourers to strain his labour power as intensely as possible; this enables the capitalists to raise more easily the normal degree of intensity of labour."

– Karl Marx, Capital, Vol. 1, Kerr Edition, pages 605-606.

Letter: The Rate of Profit (1977)

Letter to the Editors from the December 1977 issue of the Socialist Standard

The Rate of Profit

Did Marx hold that the rate of exploitation of workers increased inevitably? This appears to contradict his theory of the falling rate of profit, though I am aware he adduced counteracting tendencies that could increase the rate of profit?

Robin Cox

Haslemere

Reply:

The outstanding feature of what Marx wrote on this subject is his insistence that he was dealing only with tendencies, some working in one direction and some in the opposite direction. So at the beginning of Chapter XIV in Capital Vol 3 he wrote: “For this reason we have referred to the fall of the average rate of profit as a tendency to fall.”

The chief factor leading to a fall in the rate of profit arises from the tendency of the composition of capital to change in the direction that of every £1,000,000 capital invested a larger part takes the form of constant capital and a smaller part variable capital (wages). He illustrated this (see Chapter XIII) by showing how, with the same rate of exploitation and the same amount of surplus-value, the rate of profit on a capital of low composition would be 50 per cent. and on a capital of higher composition 20 per cent.

In Chapter XIV he listed some counter-acting tendencies, the first of which was increasing the intensity of exploitation, i.e. extracting more surplus-value from the workers.

But the capitalist cannot increase the intensity of exploitation simply because he wants to. He has to take account of the degree of resistance the workers can put up. Marx dealt with this in Chapter XIV of Value, Price and Profit. He showed that the actual rate of profit “is only settled by the continuous struggle between capitalist and labourer, the capitalist constantly tending to reduce wages to their physical minimum and to extend the working day to its physical maximum, while the working man constantly presses in the opposite direction. The matter resolves itself into a question of the respective powers of the combatants.”

That this is not just an academic question is shown by Engels in his 1892 Preface to The Condition of the Working Class in 1844, where he points out that in the fifty years since 1848 the factory workers “are undoubtedly better off” and that the condition of the workers organized in trade unions “has remarkably improved since 1848".

On the other hand a glance at Chapter XIV of Capital Vol. 3 will show that some of the factors listed by Marx as tending to raise the rate of profit are still operating.

It should also be borne in mind that in dealing with the rate of profit Marx was concerned with the workers in the productive sphere where alone value is created. This should not be confused with the different question of the proportion of annual national income received by the whole working class. In Chapter II of Value, Price and Profit Marx accepted the possibility that at that time 86 per cent. of the population received only 33 per cent, of the national income. Even if that figure exaggerated the actual degree of inequality, it is undoubtedly true that 86 per cent. of the population in this country now receive a larger proportion of national income than when Marx wrote.

Editors.

He's telling us (1977)

From the December 1977 issue of the Socialist Standard

Since the quantity of money capable of being absorbed by the circulation is given for a given mean velocity of currency, all that is necessary in order to abstract a given number of sovereigns from the circulation is to throw the same number of pound notes into it, a trick well known to all bankers. 

(Karl Marx, Capital Vol. 1, p. 136, Kerr edition)

"Boom-time" (1956)

From the October 1956 issue of the Socialist Standard

“Under the conditions of accumulation supposed thus far, which conditions are those most favourable to the labourers, their relation of dependence upon capital takes on a form endurable, or, as Eden says, “ easy and liberal." Instead of becoming more intensive with the growth of capital, this relation of dependence only becomes more extensive, i.e., the sphere of capital's exploitation and rule merely extends with its own dimensions and the number of its subjects. A larger part of their own surplus product, always increasing and continually transformed into additional capital, comes back to them in the shape of means of payment, so that they can extend the circle of their enjoyments, can make some addition to their consumption fund of clothes, furniture, etc., and can lay by small reserve funds of money.

But just as little as better clothing, food, and treatment, and larger Peculium,* do away with the exploitation of the slave, so little do they set aside that of the wage-worker.

A rise in the price of labour, as a consequence of accumulation of capital, only means, in fact, that the length and weight of the golden chain the wage-worker has already forged for himself, allow of a relaxation of the tension of it.” 

[Karl Marx, Capital, Vol. 1, chapter “The General Law of Capitalist Accumulation.” Page 676. Kerr edition, 1921.]

* Peculium: pocket-money given to slave by master.

Letter: Capital – difficult? (2010)

Letter to the Editors from the August 2010 issue of the Socialist Standard

Capital – difficult?

Dear Editors

I’m all for anything that widens the attention to Marx. But is Capital really difficult – “most give up by chapter 3”, these “undeniable difficulties” referred to (Socialist Standard, July, Book Reviews), have I missed something? Marx himself does indeed say in the introduction that, excepting the subsections of chapter 1, the reader will have no reason to complain that it is difficult to understand – to learn anything new will have to be willing to do something on their own account.

After the materialist conception of history, commodity production, the source of profit or surplus value, the add-ons of absolute and relative surplus value and the simple relationships between constant capital, variable capital, surplus value, etc, Capital is a straightforward read and after about half way it broadens out into history, philosophy, sociology and wanders through all sorts of interesting perspectives.

I’m trying to think where the “difficulties” are, have I made assumptions where I should have found more meaning? To say that Capital is difficult must already put up a deterrent to would-be readers. But there are none that are not overcome by a few moments’ thought. But maybe it’s because today, if information is not transmitted by TV or DVDs and reading is only for trash newspapers and novels, that no one now simply lies back with a book, such as Capital, for just the sake of a good read. A good read is where you take your time, think about what’s on the page, even leave it for a while, come back to it, read it through, then read in parts picked either at random or of particular interest.

With a book like Capital, you can play with it, pick up on the secret of primary accumulation or the swindle of the national debt or the conditions of the working class in medieval times or contemporary times and so on.

I’ve just returned to Capital after thinking again about “most give up before chapter 3”. Well, even if that’s true, having got that far the basics are covered and the rest expands on that basis.

Please don’t continue this idea that Marx is difficult, it’s less difficult than a cookery recipe or flat-pack instructions. It’s a good read just taken as that but the explanations and ideas that come off the page are even now mind-blowing and change your own conception and perspective of the world around you. It applies not only to its time but to current events and explains these.

And if I want to know how much land the “free” peasants were entitled to, and how even that and the common was thieved off them in later times, it’s a history book in its own right. So where’s the problem, please explain.

Stuart Gibson, 

Dorset

Reply: 

The “undeniable difficulties” of the early chapters of Capital are so undeniable that, as you say, Marx felt it necessary to warn his readers of them in the introduction to his great work. William Morris, hardly an intellectual sluggard, said the book caused him “agonies of confusion of the brain”. But the difficulties are mostly over by the end of the third chapter, and the rest of Capital is, we agree, fairly straightforward but rewarding reading – Editors.

Engels' review of Capital (1983)

From the March 1983 issue of the Socialist Standard

Universal suffrage has added to the already existing parliamentary parties a new one, the Social-Democratic Party. In the last elections to the North-German Reichstag it nominated its own candidates in most large towns, in all factory districts, and six or eight of its deputies were returned. In comparison with the last election but one it has developed considerably greater strength and it can therefore be assumed that, for the present at least it is still growing. It would be folly to wish to continue to pass over in splendid silence the existence, activity and doctrines of such a party in a country in which universal suffrage has laid the final decision in the hands of the most numerous and poorest class.

However divided and unsettled the few Social-Democratic deputies may be among themselves, it can be assumed with assurance that all groups of that party will welcome the present book as their theoretical bible, the arsenal from which they will draw their most substantial arguments. On these grounds alone the book already deserves particular attention. Rut its contents too are such as will arouse interest. Whereas Lassalle's main argumentation — and in political economy Lasalle was but a disciple of Marx — is confined to continual repetition of Ricardo's so-called wages law, we have before us a work which treats the whole relation of capital and labour in its connection with the whole of economic science with indisputably rare erudition and which sets as its ultimate aim "to lay hare the economic law of motion of modern society”, and thereby, after obviously sincere investigations carried out with unmistakable knowledge of the subject, comes to the conclusion that the whole “capitalist mode of production” must be abolished. We should, however, like further to draw attention to the fact that, apart from the conclusions, the author in the course of his work presents quite a number of the major points of economics in a completely new light and in purely scientific questions arrives at results which are greatly at variance with current economics and wInch orthodox economists must seriously criticise and scientifically refute if they do not wish to see the doctrine they have so far professed founder. In the interest of science it is desirable that a polemic should develop very soon in specialised journals precisely on these points.

Marx begins by expounding the relation between commodity and money, the most essential of which was already published some time ago in a special work. Then he goes on to capital and here we have the cardinal point of the whole work. What is capital? Money which is changed into a commodity in order to be changed back from a commodity into more money than the original sum. When I buy cotton for 100 talers and sell it for 110 talers I preserve my 100 talers as capital, value which expands itself. Now the question arises: where do the 10 talers which I gain in this process come from? How does it happen that as a result of two simple exchanges 100 talers becomes 110. For economics presupposes that in all exchanges equal values are exchanged. Marx then considers all possible cases (fluctuation in prices of commodities, etc.) in order to prove that in the conditions assumed by economics the creation of 10 talers surplus-value out of the original 100 talers is impossible. Yet this process takes place daily and the economists have not yet given us an explanation for it. Marx provides the following explanation: the puzzle can be solved only if we find on the market a commodity of a quite peculiar kind, a commodity whose use-value consists in producing exchange-value. This commodity exists — it is labour-power. The capitalist buys labour-power on the market and makes it work for him in order in turn to sell its product. So we must first of all investigate labour-power.

What is the value of labour-power? According to the generally known law, it is the value of the means of subsistence necessary to maintain and procreate the labourer in the way established in a given country and a given historical epoch. We assume that the labourer is paid the entire value of his labour-power. Further we assume that this value is represented by six hours’ work daily, or half a working-day. But the capitalist asserts that he has bought labour-power for a whole working-day and he makes the labourer work twelve hours or more. With a twelve-hour working-day he therefore acquires the product of six hours' work without paying for it. From this Marx concludes: all surplus-value, no matter how it is divided, as profit of the capitalist, ground-rent, taxes, etc. is unpaid labour.

From the manufacturer's interest to extract as much unpaid labour as possible every day and the contrary interest of the labourer arises the struggle over the length of the working-day. In an illustration which is very much worth reading and which takes up about a hundred pages, Marx describes the origin of this struggle in English modern industry which, in spite of the protests of the free-trade manufacturers, ended last spring in not only factory industry but all small establishments and even ail domestic industry being subjected to the restrictions of the Factory Act, according to which the maximum working-day for women and children under eighteen — and thereby indirectly for men too in the most important branches of industry — was fixed at 10½ hours. At the same time he explains why English industry did not suffer, but on the contrary gained thereby, as the work of each individual won more in intensity than it lost in duration.

But there is another way of increasing surplus-value besides lengthening the working-day beyond the time required for the production of the necessary means of subsistence or their value. A given working-day. let us say of twelve hours, includes, according to our previous assumption, six hours of necessary work and six hours used for the production of surplus-value. If a means is found to cut the necessary working-time down to five hours, seven hours remain during which surplus-value will be produced. This can be achieved by a reduction in the working-time required to produce the necessary means of subsistence, in other words by cheapening the means of subsistence, and this in turn only by improving production. On this point Marx again gives a detailed illustration by investigating or describing the three main levers by which these improvements are brought about: 1) co-operation, or multiplication of power, which results from the simultaneous and systematic joint work of a number of workers; 2) division of labour, as it took shape in the period of manufacture proper (i.e. up to about 1770); finally. 3) machinery by the help of which modern industry has since developed. These descriptions are also of great interest and show astonishing knowledge of the subject even down to technological details.

We cannot enter into further details of the investigation on surplus-value and wages: we merely note, in order to avoid misunderstandings, that, as Marx proves by a number of quotations, orthodox economics is not unaware of the fact that wages are less than the whole product of work. It is to be hoped that this book will provide Messrs, the orthodox economists with the opportunity of giving us closer explanations on this really surprising point. It will be appreciated that all the factual proofs that Marx gives are taken from the best sources, mostly official parliamentary reports. We take this opportunity of supporting the suggestion, made indirectly by the author in the Preface, that in Germany too a thorough inquiry into the condition of the workers in the various industries be made by government officials — who, however, must not be prejudiced bureaucrats — and that the reports be submitted to the Reichstag and the public.

The first volume ends with a study of the accumulation of capital. This point has often been written about, although we must admit that here too much of what is given is new and that light is shed on the old from new sides. The most original is the attempted proof that side by side with the concentration and accumulation of capital. and in step with it, the accumulation of a surplus working population is going on, and that both together will in the end make a social upheaval necessary, on the one hand, and possible on the other.

Whatever opinion the reader may have of the author's socialist views, we think that we have shown him that he is here in presence of a work which stands well above the usual Social-Democratic publications. To that we add that with the exception of the strongly dialectical things on the first 40 pages, the book, in spite of all its scientific rigour, is very easy to understand and because of the author's sarcastic manner, which spares no one, is even interestingly written.

Marx was right about workers and wages (2024)

From the December 2024 issue of the Socialist Standard

In an article for Mises Wire on 14 September a certain Allen Gindler sets out his view as to ‘Why Marx Was Wrong about Workers and Wages’.

We are told that ‘the Marxist approach to labor, which treats it as a commodity to be controlled by the state, is fundamentally flawed and dangerous to human liberty’. But Marx never advocated that, in a socialist society, ‘labour’ should be a commodity controlled by the state. In fact, he thought that in socialism ‘labour power’ should cease to be a commodity — something bought and sold on a market — and endorsed the slogan ‘Abolition of the Wages System’. The very fact that the wages system features in ‘ostensibly Marxist societies’ such as ‘the Soviet Union, China under Mao, and Cuba’ shows that they were not the sort of society that Marx envisaged replacing capitalism. They would more accurately be described as forms of ‘state-run capitalism’, but certainly not socialism.

‘By labour power or capacity for labour,’ wrote Marx, ‘is to be understood the aggregate of those mental and physical capabilities existing in a human being, which he exercises whenever he produces a use-value of any description’ (Capital, chapter 6).

This is a human capacity which exists in all forms of human society — humans work, and must work, to produce the useful things they need to survive. It is part of the human condition.

Labour power is not the same as ‘labour’ which is the product resulting from the exercise of human labour power:

‘When we speak of capacity for labour, we do not speak of labour, any more than when we speak of capacity for digestion, we speak of digestion’ (chapter 6).

‘What economists therefore call value of labour, is in fact the value of labour-power, as it exists in the personality of the labourer, which is as different from its function, labour, as a machine is from the work it performs’ (chapter 19).

Under capitalism labour power is bought and sold and so is treated as a commodity, even if a peculiar one. Gindler cites Karl Polanyi in The Great Transformation as arguing that labour power is a ‘fictitious commodity’ in the sense that ‘it is not produced for sale but is an inherent aspect of human life’. He misses Polanyi’s point which is not that it is a mistake to call labour power a commodity but that he was criticiszing such ‘an inherent aspect of human life’ being treated as a commodity, as something bought and sold on a market. Marx himself made the same point.

Similarly, Marx would not have disagreed with Mises himself that ‘labor cannot be treated as a commodity in the same way as goods and services because it is intrinsically linked to human choice and action.’ Textually, Marx wrote that ‘in contradistinction therefore to the case of other commodities, there enters into the determination of the value of labour-power a historical and moral element’. In fact, the whole Marxian concept of the economic class struggle is based on the purveyors of labour power being humans who choose and act and struggle to get the highest price for what they are selling and to be treated with some degree of dignity.

This distinction between ‘labour power’ and ‘labour’ is fundamental to Marx’s theory of wages and surplus value, but Gindler seems to be completely unaware of this, using the two words interchangeably as if they meant the same. He writes:

‘If labor power is a commodity, it is a very strange one indeed. According to Marx, this commodity is always sold below its value. In other words, workers are constantly selling their ability to work for less than it is worth, generating surplus value for the capitalist. But this raises a fundamental question: if labor is a commodity, why is it the only commodity that is consistently sold below its cost?’

In his writings on the economics of capitalism in the 1840s before Capital was published in 1867, Marx did accept the general view then prevailing amongst opponents of capitalism that workers were exploited through being forced to sell their ‘labour’ below its proper price. But further research and thought in the 1850s led him to make a distinction between labour power and its product (labour), and this is the view he puts in Capital. What workers sell is their labour power and, normally, at its value reflecting what it cost to create (what workers have to buy to keep themselves in working order and raise future workers to replace them in due course).

Marx’s theory of worker exploitation is based precisely on workers selling their labour power at its value. Surplus value arises as the difference between the value of labour power and the value of what workers produce. Actually, Gindler got it right in his opening paragraph when he wrote that ‘Marx argues that, under capitalism, workers are forced to sell their labor power to capitalists, who exploit them by paying wages that are less than the full value their labor produces’.

Gindler is not alone in mistakenly thinking that what workers sell for wages is their labour. It was made by all economists before (and in fact after) Marx. He tries to prove his point by introducing a self-employed plumber:

‘A plumber who owns their own tools and operates independently does not sell their labor power to a capitalist; instead they provide a service directly to customers and charge a fee for their work.’

According to him, in Marxist theory ‘this self-employed plumber would somehow be selling their labor power below its value’. But he had just said that the plumber does not sell his labour power! In fact, what self-employed plumbers sell is a commodity (their plumbing work) in which their labour is embodied and at a price which covers its cost of production plus the extra value their labour added. They get the full value of what they are selling.

Gindler apparently thinks that employed workers are in the same sort of position as a self-employed worker; that employed workers are each selling the product of their labour to their employer and getting the full price for it. Leaving aside the question of where, then, would the employer’s profits come from, Gindler needs to ask himself why self-employed plumbers sell their product at a higher price than the price that employed plumbers get from their employer for supposedly selling the same product. The embarrassing answer for him is that self-employed plumbers are selling the product of their labour while employed plumbers are selling their labour power with the product of their labour appropriated by their employer.

Adam Buick

New translation of Das Kapital (2024)

Book Review from the October 2024 issue of the Socialist Standard

Capital. Critique of Political Economy, volume 1. By Karl Marx. Translated by Paul Reitter. (Princeton University Press. £24.50.)

The fruit of five years’ work, Paul Reitter’s new translation of Das Kapital was published last month. It lives up to its claim to be a translation into colloquial (American) English, especially as regards the descriptive and historical parts. It really does read like something written this century as opposed to the now rather clunky original 1887 translation by Samuel Moore and Edward Aveling under Engels’s direction.

However, there are some words that cannot be said to be colloquial, in particular valorization, metabolize and subsumption which don’t appear in the 1887 translation and, in the case of the first two, could not have done. They first appeared in the 1976 Penguin translation by Ben Fowkes. Reitter has added a fourth — thingly. The 1887 version translates them as, respectively, ‘production of surplus value’, ‘material change (or circulation)’, and ‘subjection’. These are clearly more colloquial. As to thingly, this was translated as ‘material’, but most people will probably read it as ‘thingy’, which won’t be too wide of the mark.

Reitter has taken great care and there can be no doubt that his translations here are an accurate literal translation of the native German words, but, as with all translations, the question is who is the translation for. At one time Capital was read and studied in the working class movement. Now, unfortunately, it is read mainly by academics in the field of Marx studies. For them, such words present no problem and interpreting their meaning provides ample room for learned disputations, and, for those whose first language is English, puts them in a position to follow the arguments by those whose first language is German. Fair enough, but they don’t make it easier for ordinary working-class militants who want to understand how capitalism works and how they are exploited.

Metabolism is now acceptable and perhaps subsumption too but not valorization. It hardly existed in 1887 and is now used, in economics, to mean the same as ‘monetarization,’ making money out of something. Of course this is what capital is used for too but so are many other things that have nothing to do with workers being used to produce surplus value for capitalists (and all to do with putting a price on everything). The word ‘valorization’ blunts, even obscures, that what’s involved is the exploitation of workers.

For example, in Reitter’s (and Fowkes’s) translation, the title of the chapter which introduces the concept of surplus value is ‘The Labor Process and the Valorization Process’. In the 1887 translation it’s ‘The Labour Process and the Process of Producing Surplus Value’. Further, even of itself, ‘valorization’ doesn’t bring out in a clear and immediately comprehensible way what Marx was getting at. The 1887 translation defines capital as ‘self-expanding value’, which conveys the idea of capitalist production as a spontaneous process of producing surplus value. For Reitter, it is ‘self-valorizing value’. Thus, Reitter’s ‘capital’s life process is nothing but its own movement as self-valorizing value’ (p. 280) compares unfavourably, in terms of easier understanding, with 1887’s ‘the life-process of capital consists only in its movement as value constantly expanding, constantly multiplying itself’ (end of the chapter on ‘The Rate and the Mass of Surplus-Value’).

This is not to dismiss the usefulness of Reitter’s work. Not at all. You just need to read ‘expansion of value’ every time the words ‘valorization’ or ‘valorize’ occur. His translation reads well and is accompanied by 50 pages of very useful end-notes to explain his choice of words as well as Marx’s citations (in Latin, Greek, French and Italian) and references to now obscure persons. It will stand the test of time and can be recommended for those who want to read in modern English Marx’s own exposition of his abstract-labour theory of value and his description, from a working-class point of view, of how the working class in England came into being, its working and living conditions in and up to the 1860s, and struggles to limit the working day.

It is unfortunate that the publishers haven’t let readers simply read Marx in his own words. Instead they have chosen to introduce the new translation with both a 15-page Foreword and a 30-page Editor’s Introduction, both claiming to set out what Marx meant. Both are decidedly unhelpful and undermine the rest of the book. The Preface is mainly gibberish by someone who dismisses as ‘fantasy’ what she calls ‘a perfectly rational, controlled and transparent communist political economy on the far side of a capitalist epoch’; according to her, Capital is a work of philosophy, a ‘deep ontological and epistemological critique of capitalism’. The Editor, too, sees Marx as basically a philosopher and opines that in Capital ‘nowhere really does Marx condemn the capital system or call for revolution’. But, then, both of them are philosophers who only want to interpret the world.

Reitter’s translation is of the 2nd German edition (1873), the 1887 translation is of the 3rd German edition (1883) while Fowkes’s was of the 4th German edition (1890). So now all three German re-editions are available in English. Not that there is any significant difference between them. One inconvenience, though, is that the chapter numbers in Reitter’s translation don’t always correspond to those in the other two which readers in English of Marx have become used to.

Adam Buick

Blogger's Note:

The April 1980 issue of the Socialist Standard carried a review of Ben Fowkes' translation of Capital by the same reviewer.

Karl Marx on . . . (1976)

From the June 1976 issue of the Socialist Standard

. . . Prices

“If the quantity of paper money issued be double what it ought to be, then, as a matter of fact, £1 would be the money-name not of ¼ of an ounce, but of ⅛ of an ounce of gold. The effect would be the same as if an alteration had taken place in the function of gold as a standard of prices. Those values that were previously expressed by the price of £1 would now be expressed by the price of £2.”

(Capital Vol. 1, p. 104, Unwin edn.)

. . . Inflation

“The state puts in circulation bits of paper on which their various denominations, say £1, £5, &c., are printed. In so far as they actually take the place of gold to the same amount, their movement is subject to the laws that regulate the currency of money itself. A law peculiar to the circulation of paper money represents gold. Such a law exists; stated simply, it is as follows: the issue of paper money must not exceed in amount the gold (or silver as the case may be) which would actually circulate if not replaced by symbols.”

(Capital Vol. 1, p. 103, Unwin edn.)

Socialism in Debate. Part 3. (1914)

From the July 1914 issue of the Socialist Standard

As mentioned in our April issue, it was brought to our notice that Mr. G. W. Daw, Conservative agent for Wandsworth, had stated publicly that Socialists are reluctant to open the columns of their journals to pronounced opponents. We therefore offered Mr. Daw space in this journal for three months to set out his case. The following is the outcome.

Link to Part 2.

The Case Against Socialism. 

Mr. Daw’s Third Contribution.

Marx on machinery.

Karl Marx, in his work, “Das Capital,” explains to the world the economic basis not of Socialism, but of existing forms of industrialism, as viewed from a Socialist standpoint. In his discursive analysis and criticism of labour he seeks to fit existing conditions to preconceived theories, which may be summed up in the statement that the capitalist employers obtain all their surplus-value, viz., profit, from unpaid labour, and that without such labour, wealth would be non­ existent; that the amount of socially necessary human labour expended on a commodity alone determines its value in exchange for any other commodity. On this question of value he fails to realise that it is not objective but subjective. In other words, value is not a property inherent an the article, but a condition of mind which values a commodity when it is not an actual necessity, in which case supply and demand are the dominating factors. If these premises are wrong, how is it that gold is more valuable than silver? The difference in the labour necessary to obtain them does not account for the difference in value. This is admitted in a different form by Marx himself, when he says: “Nothing can have value without being an object of utility. If the thing is useless, so is the labour contained in it; labour does not count as labour, and therefore creates no value.” It is a perfectly fair deduction to draw from Marx’s own proposition, that utility, and not labour, is the basis of the exchange-value of commodities.

The cost of production is the point below which value cannot fall, at least, not permanently. But even the cost of production, does not depend on human labour alone. Steam propelled machinery is both producer of commodities and of wealth by reason of its facilitating transport. Now, it is impossible for such an observant mind not to have perceived this; but whilst unable to ignore the fact, Marx evades the obvious conclusion. “Modern industry,” he writes, “raises the productiveness of labour to an extraordinary degree; it is by no means equally clear that this increased productive force is not on the other hand, purchased by an increased expenditure of labour.” What is certainly obvious is that whilst Marx felt bound to acknowledge that machinery had increased productiveness to an “extraordinary degree,” he was what we should call in common parlance, “in a regular fix.” Here was an outside productive medium which could not be claimed as human labour or skill. He could only venture a guess that its use necessitated the employment of more human labour. Was this supposition correct? Was this increased production the result of an equal increased amount of human labour? I will let Marx answer for himself:

“If it be said that 100 million people would be required in England to spin with the old spinning wheel the cotton that is now spun by 500,000 people, this does not mean that the mules took the place of those millions who never existed. It means only this, that many millions of workpeople would be required to replace the spinning machine.” (p. 429.) 

Yes, to “replace the spinning machine.” Marx here gives away his case against machinery. The difference in the output by the employment of machinery is admitted by him to be equal to the labour of 99½ million people. As that quantity of human labour “never existed,” from whence does it come? Steam power applied to machinery. But mark well how cleverly Marx endeavours to obscure the issue. It is smart, but not straightforward.

After this it is useless for the philosopher to inform any practical man that “machinery, like every other component part of constant capital, creates no new value, but yields up its own value to the product that it serves to beget. In as far as the machine has value, and in consequence imparts that value to the product, it forms an element in the value of that product,” and here follows a conclusion which is absurd: “Instead of being cheapened, the product is made dearer in proportion to the value of the machine.” Two inferences are to be drawn from this statement: (1) That the manufacturer, by employing machinery, increases the cost of his goods, and so, by dispensing with the machine, he would cheapen the cost of production. (2) That the manufacturer employing cheaper, and consequently less efficient machinery, would have an advantage over a rival using more expensive machinery.

Machinery supplants the human skill and labour-power, so that, to quote the S.P.G.B. Manifesto, the worker has “lost his skill as craftsman and become a machine minder.” The skill and labour-power is derived from the machine, whilst the man has become in many instances a mere minder, or overlooker. If the capitalist exploits anything it is the machine. Yet on the following page of this manifesto we are gravely informed that wealth is produced by “labour-power” and is produced “by the working class alone.” If it be not true, Socialists say, take away the workers and where would the capitalist and his machinery be? This is plausible, but not conclusive reasoning.

To realise the fallacy of such an argument we may retort by asserting that without light no one could work, therefore all wealth is due to light. In order to give labour the foremost place as sole producer, Marxists are driven to adopt a process of reasoning which is not in accordance with facts. In the passage I have quoted from Marx, he admits the existence of a quantity of commodities from the machine spinning looms which cannot be accounted for by human labour-power. But he says it is impossible for profit to come from the machine itself beyond its own deperishment, which must be comparatively small. He ignores the fuel, which imparts an energy and labour force which is beyond all comparison with the labour expended in mining. Marx’s contention is that the profit the employer makes is from the unpaid human labour only. If that be so, then the manufacturers must be fools, for they are continually seeking to use more machinery to supplant human labour and thus lessen the profits; but, as the late Harry Quelch admits in one of his pamphlets: “It is to the capitalists’ interest to employ as few men as possible.”

Marx devotes much space to the careful analysis of the processes of labour applied to production, and makes endless comparisons; but he is, strange to say, silent on one very important point in his investigation.

While admitting that steam power enters into competition with muscle, he does not attempt to explain what peculiar property there is in human labour-power and skill (differing from the machine), by which he says it imparts three or four times the sum paid in wages by the employer. In one passage of his work Marx admits that “so soon as the handling of this tool becomes the work of a machine, then, with the use-value, the exchange-value too of the workman’s power vanishes” (p. 431). “But machinery acts as a competitor who gets the better of the workman and is constantly on the point of making him superfluous” (p. 436); further on he is compelled to admit that the “immediate result of machinery is to augment surplus-value and the mass of products in which surplus-value is embodied” (p. 446). After making these admissions Marx evades the logical conclusion and follows with a disquisition on surplus-value as if it came from human labour-power alone, conveniently dropping all further reference to steam power, and he concludes by asserting that all surplus-value, whatever particular form it may subsequently crystallise into, is in substance the materialisation of unpaid labour. Perhaps some Marxist will now explain why the employer’s surplus value comes from the human worker and practically nothing from the machinery. And when he has done so, he may then proceed to explain how it is that, if the employer’s profits depend on the surplus-value of the labour he employs, he so often fails in his business.

G. W. Daw.

——————————

The Socialist Reply.

Our opponent’s first point is that Marx failed to realise that “value is not objective but subjective,” and the illustration of the relation of gold to silver is taken with the totally inaccurate assertion that: “The difference in the labour necessary to obtain them does not account for the difference in value.” Then what does ? As Marx has already shown (“Capital,” p. 7), much more labour-time on the average is required to produce an ounce of gold than an ounce of silver ; hence the greater value of the former.

No matter what value a capitalist may “subjectively” place upon the commodities he owns, he finds the exchange-relationships determined by the general social conditions of production, without the slightest reference to his personal views in the matter at all. In fact, Mr. Daw admits this when he says: “The cost of production is the point below which value cannot fall, at least, not permanently.” This certainly contradicts any idea of “subjective” value determining exchange.

Again, as Marx has so well shown (“Capital,” p. 3, and “Value, Price, & Profit,” pp. 19-20), “supply and demand” only decide fluctuations of price. These fluctuations are about the line of value. Can our opponent tell us what decides the point at which equilibrium is reached when supply and demand equal each other if it is not the average labour-time under the prevailing conditions of production?

Mr. Daw is quite at sea in handling the quotation from Marx on utility. Utility is the subject, but not the measure, of value. A masterly exposition of this, with a splendid illustration of the factor of weight, is given on pages 25-26 of “Capital.”

Our opponent might just as well argue that volume, instead of density, is the basis of weight, because all things possessing weight have volume. But, as the old phrase has it, “a pound of feathers is as heavy as a pound of lead” ; and just as volume is not considered in determining weight, so utility is not considered in measuring value. One simple illustration will make this clear. Bread is immensely more useful—or possesses greater utility—than gold, yet its exchange value is enormously less. Why? Only one explanation answers the question—the amount of labour-power embodied in a given weight of gold is far greater than that embodied in the same weight of bread.

We are told, however, that “even the cost of production does not depend on human labour alone. Steam propelled machinery is both producer of commodities and of wealth [sic] by reason of its facilitating transport.”

In our last reply (June “S.S.”) we pointed out how machinery of any kind is useless without labour-power. It is quite true—as pointed out there—that the discovery of the mechanical powers and of the control of certain natural forces, increases the productivity of labour-power, but as claimed in the opening paragraph of our first reply, in the May “S.S.,” the only people who operate this machinery and manipulate these forces are the members of the working class. They, then, are obviously the ones exploited, as without them the machinery would be idle.

So far is it from being “useless” for Marx to say that “machinery, like every other component part of constant capital, creates no new value, but yields up its own value to the product it serves to beget,” that it is just this that is tabulated on every balance sheet of every industrial firm in ordinary business.

If a machine costs a thousand pounds and lasts on an average ten years, then each year’s balance sheet will show an item of 10 per cent. (or £100) under the heading of “Depreciation” for that machine. This amount is counted in the cost of production, and divided among the number of commodities turned out during the year. Thus no more than its own value is imparted to the articles by the machine. But now take the labourers. What they receive is always less than the value they turn out, and it is the only item on the balance sheet showing such a difference—such a surplus.

Mr. Daw’s misunderstanding of Marx in the other quotation given is simply extraordinary. The “increased expenditure” of labour mentioned by Marx refers, of course, to the greater speed and intensity with which the individual is burdened, as shown in page after page of the section quoted from. See, in particular, pages 391 to 417. Marx never maintained the absurdity that Mr. Daw tries to place on him, that a machine required more labourers to produce the same amount of wealth in a given time. No one showed the contrary more clearly. See pages 430 to 448 of “Capital.” And Mr. Daw is treading on very thin ice when he refers to Marx’s statements being “smart, but not straightforward,” as the quotation that he refers to as “after this” occurs 26 pages before, i.e., on page 383. Here Marx—as every reader of the section knows—is comparing the cost of modern machinery with the old handicraft tools, and it is obvious to the poorest intelligence, that the product of a day’s working with a modern machine has more value transferred from that machine than the product of a day’s working with hand tools has. Or to quote the same page, “it is as clear as noon-day that machines and systems of machinery . . . are incomparably more loaded with value than the implements used in handicraft.” The day’s product is therefore dearer, but the number of products being so much greater, each individual article is cheaper. As shown above, however, the best division of time to take is the average life of the machine, and compare the two methods upon that basis.

The above shows how stupid and childish are the “two inferences” our opponent attempts to draw from Marx’s statement.

Our previous contribution shows the absurdity of Mr. Daw’s statement that the capitalist “exploits the machine.” But we are told that by our reasoning it can be shown that all wealth “is due to light.” What a pity it is for Mr. Daw’s illustration, that men work in so many dark places, such as mines, and so on. Any schoolboy could see that light is not the essential factor in wealth production in the economic sense. Light exists where no wealth is produced, but on the other hand no wealth is produced where labour-power does not exist. Twist as they may the defenders of capitalism cannot find a single loophole in the Socialist case, as all the wriggles of our opponent show.

To say Marx “ignores the fuel” is met, among countless other instances, by page 384, where Marx refers to this and the other “forces furnished by nature without the help of man.”

The manufacturers only seek “to use more machinery” because, as shown in “Capital” on the pages given, and in our own contributions, it enables them to more fully exploit the workers employed. To say that Marx “does not attempt to explain what peculiar property there is in human labour-power and skill by which it imparts three or four times the sum paid in wages,” shows either an ignorance of what Marx said, or a deliberate dodging of what he wrote. The point is dealt with in numerous portions of Marx’s writings, and is specially analysed in pages 166 to 180 of “Capital.” Anyone—opponent or friend—who is interested, is advised to read the chapter entitled, “The Labour Process” for a complete answer to Mr. Daw. The peculiar thing about labour-power, as Marx proves, is that it is “a source not only of value, but of more value than it has itself.” (“Capital,” p. 175.)

The only “admission” about the quotation from page 446, is that machinery enables the capitalists to rob the workers of greater quantities of wealth than previously, an “admission” that all Socialists cheerfully agree to. There is no dropping of any “logical conclusion” by Marx, but only the fuller working out of that conclusion by examination from various sides.

Several Marxists have already shown both “how” and “why” surplus value “comes from the human worker and practically nothing from machinery.” The best instance is to be found in pages 156 to 180 of a book called “Capital,” written by a person named—Karl Marx.

The chief reason for failures in business is the fact that the big concern with the large capital, having the greater powers of exploitation, is able to beat the relatively small competitor out of existence. But it must be carefully noted that, though individuals may fail here and there, the capitalist class not only do not fail, but grow richer year by year.

Ed. Com.

Link to Part 4.