Читать книгу A Companion to Marx's Capital - David Harvey - Страница 11

We now take on the three chapters dealing with the concepts of capital and of labor-power. These chapters, I think you’ll find, are much more straightforward and clear than those we have been through. There are times when they seem almost obvious; one wonders sometimes why we are being treated to such elaborate discussions of fairly simple ideas, particularly when in earlier chapters such difficult ideas were presented almost without explanation. To some degree this is a product of the period when Marx was writing. Anyone interested in political economy at that time would have been familiar with the labor theory of value (albeit in Ricardian form), whereas we not only are unfamiliar with it but live in times when most economists, and even some Marxists, consider it indefensible. Were Marx writing Capital today, he would have to offer a strong defense of it rather than simply state it as obvious. By contrast, the materials covered in these following chapters were more radical departures from conventional thought in Marx’s time, but appear far more familiar to us today.

We are, however, undertaking a macro-transition in the argument’s location in these three chapters, and it is useful to note this at the outset. Capital starts out with a model of exchange based on the barter of commodities, in which it was (unrealistically) imagined that equivalent socially necessary labor-times were being exchanged. Marx then moves from this C-C relation to examine how exchanges get mediated and generalized through the rise of the money form. Careful analysis of this C-M-C exchange system brings us at the end of the money chapter to identify the M-C-M form of circulation, in which money became the aim and object of exchange. In the C-M-C circuit, an exchange of equivalent values makes sense because its aim is to acquire use-values. I want the shirts and the shoes but do not need or want the apples and pears I have produced. But when it comes to M-C-M, the exchange of equivalents seems absurd. Why go through all the trouble and risk of this process to end up with the same amount of money-value at the end? M-C-M only makes sense if it results in an increment of value, M-C-M + ΔM, to be defined as surplus-value.

This raises the question: where can this surplus-value come from when the laws of exchange, M-C and then C-M, as presupposed in classical political economy, mandate an exchange of equivalents? If the laws of exchange are to be observed as the theory states, then a commodity must be found that has the capacity to produce more value than it itself has. That commodity, Marx says in chapter 6, is labor-power. This is the broad transitional story told in these three chapters. The focus begins to shift from commodity exchange to capital circulation.

There is, however, one important feature in these chapters that deserves some preliminary scrutiny. Several times already I have asked whether Marx is making a logical argument (based on a critique of the utopian propositions of classical liberal political economy) or a historical argument about the evolution of actually existing capitalism. By and large I have preferred the logical reading to the historical one, even though there may be important historical insights to be gained in considering the circumstances necessary to facilitate the rise of a capitalist mode of production (such as the work of the state in relation to the different money-forms). This manner of approach would be consistent with the methodological argument he makes elsewhere, that we can only properly understand history by looking backward from where we are today. This was his key point in the Grundrisse:

Bourgeois society is the most developed and the most complex historical organization of production. The categories which express its relations, the comprehension of its structure, thereby also allows insights into the structure and relations of production of all the vanished social formations out of whose ruins and elements it built itself up, whose partly still unconquered remnants are carried along within it, whose mere nuances have developed explicit significance within it, etc. Human anatomy contains a key to the anatomy of the ape.¹

But while “the intimations of higher development … can be understood only after the higher development is already known,” this should not delude us into seeing the prototypes of “bourgeois relations in all forms of society” or thinking “that the categories of bourgeois economics possess a truth for all other forms of society.”² Marx does not accept a Whig interpretation of history or a simple teleology. The bourgeois revolution fundamentally reconfigured preexisting elements into fundamentally new forms, at the same time allowing us to see those preexisting elements in a new light.

CHAPTER 4: THE GENERAL FORMULA FOR CAPITAL

In these three chapters, the reading of history seems to have an important independent role to play in the theorizing. He starts off chapter 4, for example, with a historical statement: “World trade and the world market date from the sixteenth century, and from then on the modern history of capital starts to unfold.” The logical starting point is given in the parallel statement that “commodity circulation is the first form of appearance of capital” (247). So the logical and historical arguments are immediately juxtaposed. We need, therefore, to pay careful attention to how these arguments work together in these chapters in order to understand how the methodological prescriptions set out in the Grundrisse are put into practice in Capital.

Marx begins by examining how capital historically confronted the power of landed property in the transition from feudalism to capitalism. In this transition, merchants’ capital and usurers’ capital—specific forms of capital—played an important historical role. But these forms of capital are different from the “modern” industrial form of capital that Marx considers central to a fully developed capitalist mode of production (247). The dissolution of the feudal order, the dissolution of the power of landed property and of feudal land control, was largely accomplished through the powers of merchant capital and usury. This is a theme you find strongly articulated also in the Communist Manifesto. Interestingly, it’s a history that assumes a logical place in Capital, because what we see in usurers’ capital in particular is the independent social power of money (and of the money holders), an independent power that he showed in the money chapter to be socially necessary within a capitalist mode of production. It is through the deployment of this independent power that usury and the usurers helped bring feudalism to its knees.

This brings him back to the starting point for understanding the role of money (as opposed to the commodity) in the circulation process. Money can be used to circulate commodities, it can be used to measure value, to store wealth and so on. Capital, however, is money used in a certain way. Not only is the M-C-M process an inversion of the C-M-C process, but, as Marx observed in the previous chapter, “money does not come onto the scene as a circulating medium, in its merely transient form of an intermediary in the social metabolism, but as the individual incarnation of social labour, the independent presence of exchange-value, the universal commodity” (235). The representation of value (money), in other words, becomes the aim and objective of circulation. This form of circulation, however, “would be absurd and empty if the intention were, by using this roundabout route, to exchange two equal sums of money, ₤100 for ₤100” (248). The exchange of equal values is perfectly fine with respect to use-values because it is the qualities that matter. But the only logical reason to engage in the M-C-M circulation, as we saw in chapter 3, is to have more value at the end than at the beginning. Marx laboriously arrives at the fairly obvious conclusion:

The process M-C-M does not therefore owe its content to any qualitative difference between its extremes, for they are both money, but solely to quantitative changes. More money is finally withdrawn from circulation than was thrown into it at the beginning … The complete form of this process is therefore M-C-M’, where M’ = M + ΔM, i.e. the original sum advanced plus an increment. This increment or excess over the original value I call ‘surplus-value’. (251)

With this we arrive for the first time at the concept of surplus-value, which is, of course, fundamental to all of Marx’s analysis.

What happens is that “the value originally advanced … not only remains intact while in circulation, but increases its magnitude, adds to itself a surplus-value, or is valorized … And this movement converts it into capital” (252). Here, finally, is the definition of “capital.” For Marx, capital is not a thing, but a process—a process, specifically, of the circulation of values. These values are congealed in different things at various points in the process: in the first instance, as money, and then as commodity before turning back into the money-form.

Now, this process definition of capital is terribly important. It marks a radical departure from the definition you’ll find in classical political economics, where capital was traditionally understood as a stock of assets (machines, money, etc.), as well as from the predominant definition in conventional economics, where capital is viewed as a thing-like “factor of production.” Conventional economics has in practice a hard time measuring (valuing) the factor of production that is capital. So they just label it K and put it into their equations. But actually, if you ask, “What is K and how do you get a measure of it?” the answer is far from simple. Economists come up with all kinds of measures, but they can’t agree on what capital actually “is.” It plainly exists in the form of money, but it also exists as machines, factories and means of production; and how do you put an independent monetary value on the means of production, independent of the value of the commodities they help to produce? As was shown in the so-called capital controversy of the early 1970s, the whole of contemporary economic theory is dangerously close to being founded on a tautology: the monetary value of K in physical asset-form is determined by what it is supposed to explain, viz. the value of the commodities produced³ (208–9).

Again, Marx looks at capital as a process. I could make capital right now by taking money out of my pocket and putting it into circulation to make more money. Or I could take capital out of circulation simply by choosing to put the money back into my pocket. It then follows that not all money is capital. Capital is money used in a certain way. The definition of capital cannot be divorced from the human choice to launch money-power into this mode of circulation. But this poses a whole set of problems. To begin with, there is the question of how much of an increment capital can possibly yield. Recall that one of the findings in the chapter on money was that the accumulation of money-power is potentially limitless; Marx repeats that here (235, 256–7). Its full significance, however, will only be taken up much later (in chapters 23 and 24 in particular).

A capitalist, Marx says, is “the conscious bearer … of this movement, the possessor of money becomes a capitalist. His person, or rather his pocket, is the point from which the money starts, and to which it returns.” From this it follows that “use-values must therefore never be treated as the immediate aim of the capitalist.” That is, the capitalist produces use-values only in order to gain exchange-value. The capitalist doesn’t actually care about which or what kind of use-value gets produced; it could be any kind of use-value, as long as it permits the capitalist to procure the surplus-value. The aim of the capitalist is, rather unsurprisingly, the “unceasing movement of profit-making” (254). This sounds like the plot of Balzac’s Eugenie Grandet!

This boundless drive for enrichment, this passionate chase after value, is common to the capitalist and the miser; but while the miser is merely a capitalist gone mad, the capitalist is a rational miser. The ceaseless augmentation of value, which the miser seeks to attain by saving his money from circulation, is achieved by the more acute capitalist by means of throwing his money again and again into circulation. (254)

Capital is, therefore, value in motion. But it is value-in-motion that appears in different forms. “If we pin down the specific forms of appearance”—notice this phrase again—“assumed in turn by self-valorizing value in the course of its life, we reach the following elucidation: capital is money, capital is commodities” (255). Marx now makes the process definition of capital explicit:

In truth, however, value is here the subject of a process in which, while constantly assuming the form in turn of money and commodities, it changes its own magnitude, throws off surplus-value from itself considered as original value, and thus valorizes itself independently. For the movement in the course of which it adds surplus-value is its own movement, its valorization is therefore self-valorization … By virtue of being value, it has acquired the occult ability to add value to itself. It brings forth living offspring, or at least lays golden eggs. (255)

Of course, Marx is being heavily ironic here. I mention this because I once read a dissertation that took the magical qualities of self-expansion ascribed to capital seriously. In this dense text, it is often rather too easy to miss the irony. In this instance, the “occult” qualities of capital and its seemingly magical capacity to lay “golden eggs” exist only in the realm of appearance. But it is not hard to see how this fetish construct could be taken for real—a capitalist system of production depends on this very fiction, as we saw in chapter 1. You put money in a savings account, and at the end of the year it has grown. Do you ever ask yourself where the growth came from? The tendency is to assume that this expansion simply belongs to the nature of money. We have, of course, seen periods when the savings rate has been negative, i.e., when inflation has been so high and interest rates so low that the net return to the saver had been negative (as is the case now, in 2008). But it does really appear as if your money in the bank inherently grows at the rate of interest. Marx wants to know what is hidden behind the fetish. This is the mystery that has to be solved.

There is, he says, one moment in this circulation process that we always come back to and that therefore appears to be more important than the others, and that is the money moment: M-M. Why? Because money is the universal representation and ultimate measure of value. It is therefore only at the money moment—the moment of capitalist universality—that we can tell where we are in relation to value and surplus-value. It’s hard to tell that just looking at the particularity of commodities. “Money therefore forms the starting-point and the conclusion of every valorization process” (255). In Marx’s example, the conclusion should yield ₤110 from the ₤100 the capitalist started out with:

The capitalist knows that all commodities, however tattered they may look, or however badly they may smell, are in faith and in truth money, are by nature circumcised Jews, and, what is more, a wonderful means for making still more money out of money. (256)

Remarks of this sort have been grist for a significant debate over Marx’s supposed anti-Semitism. It is indeed perfectly true that these kinds of phrases crop up periodically. The context of the time was one of widespread anti-Semitism (e.g., the portrayal of Fagin in Dickens’s Oliver Twist). So you can either conclude that Marx, coming from a Jewish family that converted for job-holding reasons, was subconsciously going against his past or unthinkingly echoing the prejudices of his time, or, at least in this case, you can conclude that his intent is to take all the opprobrium that was typically cast on Jews and to say that it really should be assigned to the capitalist as a capitalist. I will leave you to your own conclusions on that.

Back in the text we find Marx still chipping away at the fetishistic surface appearance:

But now, in the circulation M-C-M, value suddenly presents itself as a self-moving substance which passes through a process of its own, and for which commodities and money are both mere forms. But there is more to come: instead of simply representing the relations of commodities, it now enters into a private relationship with itself, as it were. It differentiates itself as original value from itself as surplus-value, just as God the Father differentiates himself from himself as God the Son … Value therefore now becomes value in process, money in process, and, as such, capital. (256)

That’s the next step in the fundamental definition of capital: value in process, money in process. And how different this is from capital as a fixed stock of assets or a factor of production. (Yet it is Marx, not the economists, who gets criticized for supposedly static “structural” formulations!) Capital “comes out of circulation, enters into it again, preserves and multiplies itself within circulation, emerges from it with an increased size, and starts the same cycle again and again” (256). The powerful sense of flow is palpable. Capital is process, and that is that.

Marx briefly returns to merchants’ capital and usurers’ capital (his historical, rather than logical, starting point). While industrial capital is what he is really concerned with, he has to recognize that there are these other forms of circulation—merchants’ capital (buying cheap in order to sell dear) and interest-bearing capital, through which a seeming self-expansion of value can also be accomplished. So we see different possibilities: industrial, merchant and interest-bearing capital, all of which have the M-C-M + ΔM form of circulation. This form of circulation, he concludes, is “the general formula for capital, in the form in which it appears directly in the sphere of circulation” (257). It is this form of circulation that has to be put under the microscope and scrutinized in order to demystify its “occult” qualities. So: does capital lay its own golden eggs?

CHAPTER 5: CONTRADICTIONS IN THE GENERAL FORMULA

Marx begins the search for an answer by examining the contradictions within the M-C-M + ΔM form of circulation. The fundamental question is quite simply this: where does the increment, the surplus-value, come from? The rules and laws of exchange in their pure form (as presupposed in utopian liberalism) say there has to be a rule of equivalence in the transitions from M to C and in C to M. Surplus-value cannot, therefore, be derived from exchange in its pure form. “Where equality exists there is not gain.” In practice, of course, “it is true that commodities may be sold at prices which diverge from their values, but this divergence appears as an infringement of the laws governing the exchange of commodities.” These laws are those presupposed in the classical political-economic model of perfectly functioning markets. “In its pure form, the exchange of commodities is an exchange of equivalents, and thus it is not a method of increasing value” (260–1).

Faced with this conundrum, the capitalists and their economists, like Condillac, tried to attribute the increase to the field of use-values. But Marx rejects this. You can’t suddenly appeal to use-values to cure a problem that derives from the equivalence of exchange-values.

If commodities, or commodities and money, of equal exchange-value, and consequently equivalents, are exchanged, it is plain that no one abstracts more value from circulation than he throws into it. The formation of surplus-value does not take place. In its pure form, the circulation process necessitates the exchange of equivalents. (262)

But Marx knows full well that “in reality processes do not take place in their pure form” so he then goes on to “assume an exchange of non-equivalents.” This gives rise to a number of possibilities. For one, the seller has “some inexplicable privilege … to sell his commodities above their value.” But this doesn’t work, when you start to think about the relationship between buyers and sellers in generalized markets, any more than it works to say that the buyer has a privilege to purchase commodities below their value. “The formation of surplus-value [cannot] be explained by assuming that commodities are sold above their value,” or “are bought at less than their value” (262–3).

He then briefly considers the problem of what we now call effective demand, which was at the time mainly articulated by Malthus (although it is surprising that Marx doesn’t reference Malthus’s key text on the matter, Principles of Political Economy) (264–5). Malthus argued that there was a definite tendency toward a deficiency of aggregate demand in the market for the surplus commodities that capitalists produce in order to procure surplus-value. Who has the purchasing power to buy the commodities? The capitalists are reinvesting, so they are not consuming as much as they could. The workers cannot consume the totality of the product, because they are being exploited. So Malthus concluded that there was an important role for a class of landowners—or as Marx would call them, bourgeois parasites of all kinds—who did the benevolent thing of consuming as much as they could in order to keep the economy stable. Malthus thereby justified the perpetuation of a nonproductive consuming class (in the face of the Ricardian critique that also dismissed them as nonproductive parasites).

Malthus modified his argument somewhat by suggesting that this class of consumers could also be outside the nation—and that foreign trade and even foreign tribute (silver payments to an imperial power, for example) would also help solve the problem. This latter is one of Rosa Luxemburg’s major arguments, that the necessary effective demand in a capitalist system (which she felt Marx hadn’t sufficiently addressed in Capital) ultimately can only be guaranteed by establishing some relationship to the outside—in short, by imposing imperialist extractions of tribute. The British imperialist logic that led to the Opium Wars reflected this: there was a lot of silver in China, so the idea was to sell Indian opium to the Chinese, get all that silver out in that lucrative sale, and thereby pay for all the goods that were being produced in Manchester and sent to India. When the Chinese resisted opening their doors to the opium trade, the British response was to knock them down with military force.

Marx delivers a scathing dismissal of the idea that there is a class of consumers somewhere or other who get their value from God-knows-where, and who can somehow generate the surplus-value from within or from outside the system of capitalist social relations. Everyone (even members of the parasitic classes) within capitalism, he says, has to get their value from somewhere, and if they get their value from within the system then it is from appropriating values from others (like capitalists or workers) who are responsible for its production. The problem of surplus-value production cannot be solved by appeal to the market, and we most certainly cannot justify for this reason the perpetuation of a nonproductive class of consumers. Nor, in the long run, can foreign trade do the trick; at some point, the principle of equivalence has to prevail (265).

These passages on effective demand are problematic in certain respects, and Rosa Luxemburg provides a compelling challenge to Marx on this point, arguing that imperialism directed against noncapitalist social formations provided a partial answer to the effective demand problem.⁴ There has been debate over these issues ever since. But in these passages Marx is simply concerned with how surplus-value is produced, not with how it might be paid for and realized through consumption. The surplus-value has to be produced before it can be consumed, and we cannot appeal to processes of consumption in order to understand its production.

So these ideas on effective demand cannot explain how surplus-value is produced, particularly if we “keep within the limits of the exchange of commodities, where sellers are buyers, and buyers are sellers.” Now, at first blush this seems an odd remark, given his earlier dismissal of Say’s law. Nor does it seem to help when he adds that “our perplexity may perhaps have arisen from conceiving people merely as personified categories, instead of as individuals” (265), though we will see why he takes this path shortly. It is here, I think, that we encounter a real tension in Marx’s text between his reliance on critique of the utopian tendencies of classical political economy and his desire to understand and illuminate for us the nature of actually existing capitalism. Marx is, in effect, saying that we have to seek an answer to the surplus-value origin problem in a geographically closed and perfected capitalist mode of production; in that ideal state, appeals to parasitic classes, consumerism or foreign trade have to be ruled out. He will later be explicit about these assumptions in Capital; here he tacitly invokes them by rejecting all external solutions. He dismisses effective-demand issues in general as irrelevant at this point in the analysis because here, in Volume I, he is concerned with production alone. Only in Volume II will he take up the problems of realization of values in the market and the world of consumption.

All this rules out any examination at this point in the analysis of geographical expansions, spatial fixes, imperialism and colonialism socially necessary to the survival of capitalism. He simply assumes a perfected and closed capitalist system, and it is on these terms alone that the origin of surplus-value is to be explained. While this assumption restricts the range of his theoretical capacity (particularly with respect to understanding the actual historical and geographical dynamics of capitalism), it deepens and sharpens his analysis. As I have shown elsewhere—particularly in The Limits to Capital and Spaces of Capital⁵—these broader questions were of deep concern to Marx when he sought to address the grander project of understanding the state, foreign trade, colonialism and the construction of the world market. But at this point in Capital, he is solely concerned to show that the production of surplus-value cannot arise out of market exchange regardless of what historical or geopolitical conditions may prevail. Some other way has to be found to solve the contradiction of how to produce a non-equivalence (i.e., the surplus-value) from the exchange of equivalents.

This adoption of such a narrow focus also explains why Marx momentarily switches to looking at individuals rather than social roles. Individuals can indeed best others by selling above value, and this indeed can and does happen all the time. But when looked at systemically and in aggregate social terms, the effect is simply to rob Peter to pay Paul. An individual capitalist may cheat another and get away with it, but then somebody’s gain is somebody else’s loss, and there is no aggregate surplus-value. A way must therefore be found for all capitalists to gain surplus-value. A healthy or properly functioning economy is one in which all capitalists earn a steady and remunerative rate of profit.

However much we twist and turn, the final conclusion remains the same. If equivalents are exchanged, no surplus-value results, and if non-equivalents are exchanged, we still have no surplus-value … It can be understood, therefore, why, in our analysis of the primary form of capital, the form in which it determines the economic organization of modern society, we have entirely left out of consideration its well-known and so to speak antediluvian forms, merchants’ capital and usurers’ capital. (266)

It may have been historically true, as Benjamin Franklin observed, that “war is robbery, commerce is cheating” (267). Clearly, in the origins of capitalism, there was a lot of predation, fraud, robbery and stealing of surplus-values from around the world. And Marx does not deny the historical significance of that. The same applies to usurers’ capital even in the face of long-standing and in some instances ultra-strict taboos against charging interest. Islamic law, for example, forbids charging interest. Probably not so well known, but up until the mid-nineteenth century, the Catholic Church had a prohibition on charging interest, and this had tremendous significance. For instance, at that time in France, conservative Catholics often compared investment houses to bordellos and viewed financial operations as a form of prostitution. There are some great political cartoons from that era that satirize this. One I used in Paris: Capital of Modernity depicts a young woman trying to entice this older and quite horrified man into this investment house, saying, “My rate of return is good for whatever amount you wish to invest. I’ll treat you very gently.”⁶

So merchant’s capital and usurers’ capital (or interest-bearing capital) both had important historical roles. But, Marx concludes,

in the course of our investigation, we shall find that both merchants’ capital and interest-bearing capital are derivative forms, and at the same time it will become clear why, historically, these two forms appear before the modern primary form of capital. (267)

These forms of capital circulation, he is saying, had a historical existence before industrial capital arrived on the scene. But, as we’ll see, industrial capital is going to be the form of capital that defines a capitalist mode of production in its pure state. And once that industrial capital becomes dominant, it needs the merchant to sell the product, and it needs interest-bearing capital to be able to switch investments around to deal with the problems of long-term fixed capital investment and so on. In order for that to happen, the primary form of capital circulation has to subdue both finance capital and merchants’ capital to its particular needs. In Volume III of Capital, Marx will take up the question of how this happened and with what consequences.

From our present perspective it is important to evaluate the positionality of merchants’ and interest-bearing capital within capitalism in general. Certainly a plausible case can be made that they went from being hegemonic and dominant in the sixteenth and seventeenth centuries to becoming subservient to industrial capital during the nineteenth century. But many would now argue—myself included—that finance capital has become dominant again, particularly since the 1970s. If so, it is up to us to assess what this means and what it portends.

This is not a matter we can take up here, however. For our purposes, what is important to note is that Marx presumed (and this was probably correct at the time) that the circulation of capital in its industrial form had become hegemonic, and therefore it was within that framework that the question of surplus-value production had to be resolved. He therefore concludes:

Capital cannot therefore arise from circulation, and it is equally impossible for it to arise apart from circulation. It must have its origin both in circulation and not in circulation … We therefore have a double result … The transformation of money into capital has to be developed on the basis of the immanent laws of the exchange of commodities in such a way that the starting-point is the exchange of equivalents. The money-owner, who is as yet only a capitalist in larval form, must buy his commodities at their value, sell them at their value, and yet at the end of the process withdraw more value from circulation than he threw into it at the beginning. His emergence as a butterfly must, and yet must not, take place in the sphere of circulation. These are the conditions of the problem. Hic Rhodus, hic salta! (268–9)

Which in rough, colloquial translation means, “Here is the ball, now run with it.”

CHAPTER 6: THE SALE AND PURCHASE OF LABOUR-POWER

The contradiction turns out to be easy to resolve. It is given away in the title of this chapter. Marx sets the argument up as follows:

In order to extract value out of the consumption of a commodity, our friend the money-owner must be lucky enough to find within the sphere of circulation, on the market, a commodity whose use-value possesses the peculiar property of being a source of value, whose actual consumption is therefore itself an objectification … of labour, hence a creation of value. The possessor of money does find such a special commodity on the market: the capacity for labour … in other words labour-power. (270)

Labor-power consists of the physical, mental and human capacities to congeal value in commodities. But in order to be itself a commodity, labor-power has to have certain characteristics. First, “in order that its possessor may sell it as a commodity, he must have it at his disposal, he must be the free proprietor of his own labor-capacity, hence of his person.” So the idea of the free laborer becomes crucial—slavery and serfdom will not do. The laborer cannot give up his or her person; all he or she can do is to trade the physical, mental and human capacities to create value. “In this way he manages both to alienate … his labour-power”—that is, to pass it over to somebody else—“and to avoid renouncing his rights of ownership over it” (271).

So the capitalist cannot own the laborer; all the capitalist owns is the capacity to labor and to produce value for a certain period of time.

The second essential condition which allows the owner of money to find labour-power in the market as a commodity is this, that the possessor of labour-power, instead of being able to sell commodities in which his labour has been objectified, must rather be compelled to offer for sale as a commodity that very labour-power which exists only in his living body. (272)

Laborers, in other words, are not in a position to work for themselves.

For the transformation of money into capital, therefore, the owner of money must find the free worker available on the commodity-market; and this worker must be free in the double sense that as a free individual he can dispose of his labour-power as his own commodity, and that, on the other hand, he has no other commodity for sale, i.e. he is rid of them, he is free of all the objects needed for the realization … of his labour-power. (272–3)

The laborer must, in short, already be dispossessed of access to the means of production.

Marx’s commentary on freedom is really apposite to our own times. What did it mean, for example, when President George W. Bush went on and on about bringing freedom to the world? He used the words “freedom” and “liberty” in his Second Inaugural Address some fifty times. On Marx’s critical interpretation, this would mean that Bush was mobilizing a campaign to free as many people in the world as possible of any direct control over, or access to, the means of production. Yes, indeed, individual laborers will have rights over their own body and individual legal rights in the labor market. In principle they have the right to sell their labor-power to whomsoever they choose and the right to buy whatever they want in the marketplace with the wages they receive. Creating such a world is what the capitalist form of imperial politics has been about for the past two hundred years. Indigenous and peasant populations were dispossessed of access to the means of production and proletarianized wholesale across the globe. In more recent neoliberal versions of this same process, more and more social strata in populations all around the world, including in the advanced capitalist countries, have been dispossessed of their assets, including independent access to means of production or other means of survival (e.g., pensions for older workers or state welfare payments).

The ideological and political ironies involved in the promotion of this “double-edged” form of bourgeois freedom are not lost on Marx. Today we are sold a bill of goods on the positive aspects of freedom and forced to accept as inevitable or even natural the negative aspects. Liberal theory is founded on doctrines of individual rights and freedoms. From Locke to Hayek and onward, all the ideologists of liberalism and neoliberalism have asserted that the best defense of such individual rights and liberties is a market system founded on private property and the bourgeois rules of independence, reciprocity and juridical individualism that Marx described (and, for purposes of inquiry, accepted) in chapter 2.

Since it is hard to protest against universal ideals of freedom, we are easily persuaded to go along with the fiction that the good freedoms (like those of market choice) far outweigh the bad freedoms (such as the freedom of capitalists to exploit the labor of others). And if it takes a little repression to dispossess people of their access to means of production and to ensure the sustenance of market freedoms, then that is justified as well. Pretty soon we find ourselves in the midst of McCarthyism or Guantánamo Bay without an oppositional leg to stand on. Woodrow Wilson, that great liberal president of the United States who sought to found the League of Nations, put it this way in a lecture he delivered at Columbia University in 1907:

Since trade ignores national boundaries and the manufacturer insists on having the world as a market, the flag of his nation must follow him, and the doors of the nations which are closed against him must be battered down. Concessions obtained by financiers must be safeguarded by ministers of state, even if the sovereignty of unwilling nations be outraged in the process. Colonies must be obtained or planted, in order that no useful corner of the world may be overlooked or left unused.

Marx’s essential ideological objective is to pinpoint the duplicity that lies at the heart of the bourgeois conception of freedom (much like he questioned Proudhon’s appeal to bourgeois conceptions of justice). The contrast between George Bush’s rhetoric of liberty and freedom and the reality of Guantánamo Bay is exactly what we should expect.

But how did the laborer come to be “free” in this double sense? Why the free worker approaches the capitalist with his labor in the market, Marx observes, “does not interest the owner of money … And for the present it interests us just as little” (273). Here Marx simply assumes that proletarianization has already occurred and that a functioning labor market already exists. But he does, however, want to make “one thing” clear:

Nature does not produce on the one hand owners of money or commodities, and on the other hand men possessing nothing but their own labour-power. This relation has no basis in natural history, nor does it have a social basis common to all periods of human history. It is clearly the result of a past historical development, the product of many economic revolutions, of the extinction of a whole series of older formations of social production. (273)

That the wage-labor system had specific historical origins has to be acknowledged, if only to press home the point that the category of wage labor is no more “natural” than that of the capitalist or of value itself. The history of proletarianization will be taken up in greater detail later, in part 8. For now he simply wants to assume a full-fledged labor market already exists. He nevertheless acknowledges,

The economic categories already discussed similarly bear a historical imprint. Definite historical conditions are involved in the existence of the product as a commodity … Had we gone further, and inquired under what circumstances all, or even the majority of products take the form of commodities, we should have found that this only happens on the basis of one particular mode of production, the capitalist one. (273)

The capitalist mode of production, not other modes of production, we are reminded, is Marx’s exclusive focus.

The commodity production that has in the past existed in various forms, alongside the monetary circulation that historically has also existed in many forms, is clearly related in Marx’s mind to the rise of wage-labor forms. None of these evolutions is independent of the other in the rise to domination of a capitalist mode of production. Again, the historical and logical arguments intertwine. The socially necessary relation that logically binds commodity production to monetization and both in turn to the commodification of wage labor has distinctive historical origins. The wage system and the labor market that to us appear obvious and logical almost certainly did not appear so even toward the end of European feudalism.

The historical conditions of [capital’s] existence are by no means given with the mere circulation of money and commodities. It arises only when the owner of the means of production and subsistence finds the free worker available, on the market, as the seller of his own labour-power. And this one historical pre-condition comprises a world’s history. Capital, therefore, announces from the outset a new epoch in the process of social production. (274)

Labor-power is, however, a peculiar commodity, a special commodity unlike any other. First and foremost, it is the only commodity that has the capacity to create value. It is laborers whose socially necessary labor-time is congealed in commodities, and laborers who sell their labor-power to the capitalist. In turn, the capitalist uses this labor-power to organize the production of surplus-value. Note, however, that the form in which labor-power circulates is C-M-C (laborers take their labor-power into the market and sell it in return for money, which then permits them to buy the commodities they need to survive). So the laborer, remember, is always in the C-M-C circuit, while the capitalist works in the M-C-M’ circuit. There will therefore be different rules for how they think about their respective situations. The laborer can be content with the exchange of equivalents because it is use-values that matter. The capitalist, on the other hand, has to solve the problem of gaining surplus-value out of the exchange of equivalents.

So what is it that fixes the value of labor-power as commodity? The answer is complicated because labor-power is not a commodity in the usual sense, not only because it alone can create value but also because the determinants of its value are different from those of shirts and shoes both in principle and in the details. Marx mentions the differences with scarcely any elaboration:

The value of labour-power is determined, as in the case of every other commodity, by the labour-time necessary for the production, and consequently also the reproduction, of this specific article. In so far as it has value, it represents no more than a definite quantity of the average social labour objectified in it … For his maintenance he requires a certain quantity of the means of subsistence. Therefore the labour-time necessary for the production of labour-power is the same as that necessary for the production of those means of subsistence; in other words, the value of labour-power is the value of the means of subsistence necessary for the maintenance of its owner. (274)

The value of labor-power is fixed, therefore, by the value of all of those commodities that are needed to reproduce the laborer in a given state of life. We add up the value of the bread, the value of the shirts and the shoes and all the other things necessary to sustain and reproduce laborers, and the total is what fixes the value of labor-power.

It seems a simple enough calculation, seemingly no different in principle from any commodity. But how are “needs” determined? Needs distinguish labor from all other commodities. First off, in the course of laboring, “a definite quantity of human muscle, nerve, brain etc. is expended, and these things have to be replaced.” If the laborers are required for a certain kind of laboring (e.g., down in a coal mine) they may need, say, more meat and potatoes to sustain their laboring. Furthermore, “his means of subsistence must therefore be sufficient to maintain him in his normal state as a working individual.” Again, what is “normal”? There are “natural needs … such as food, clothing, fuel and housing” that “vary according to the climatic and other physical peculiarities of his country” (274–5). Workers’ needs are different in the Arctic than in temperate zones. But then comes the really big shift:

On the other hand, the number and extent of his so-called necessary requirements, as also the manner in which they are satisfied, are themselves products of history, and depend therefore to a great extent on the level of civilization attained by a country; in particular they depend on the conditions in which, and consequently on the habits and expectations with which, the class of free workers has been formed. In contrast, therefore, with the case of other commodities, the determination of the value of labour-power contains a historical and moral element. (275)

The implication is that the value of labor-power is not independent of the history of class struggles. Furthermore, “the level of civilization” in a country will vary according to, for example, the strength of bourgeois reform movements. The respectable and virtuous bourgeois are from time to time appalled to witness the poverty of the masses and, feeling guilty, conclude that it is unacceptable in a decent society that the mass of the people live in the way they do. They insist on the provision of decent housing, decent public health, decent education, decent this and decent that. Some of these measures can be seen as self-interested (because, for example, cholera epidemics do not stop at class borders), but there is no bourgeois society anywhere that does not have some sense of civilized values, and this sense plays a crucial role in determining what the value of labor-power should be.

Marx is appealing to the principle that there is a totality of commodities that sets the terms for what counts as a reasonable wage in a particular society at a particular time. He does not discuss any such particulars. Instead we can proceed with the theoretical inquiry as if the value of labor-power is fixed and known, even as the datum is perpetually moving and in any case has to be flexible, reflecting such other features as the reproduction costs of the laborer, from training and the reproduction of skills to raising a family and reproducing the working class (its qualities as well as its quantities) (275–6).

There is one other peculiarity of labor-power as a commodity that is worthy of note. The capitalist enters the marketplace and has to pay for all the commodities (raw materials, machinery, etc.) before putting them to work, but with labor-power the capitalist hires the labor-power and pays its providers only after they have done the work. In effect, the laborer advances the commodity of labor-power to the capitalist, hoping to get paid at the end of the day. This does not always happen, however; firms that declare bankruptcy can renege on wages (277–8). In contemporary China, for example, a large proportion of the labor force in certain industries (construction) and certain regions, particularly the North, have been denied their wages, prompting widespread protests.

Marx’s point here is that the notion of an acceptable standard of living for the laborer varies according to natural, social, political and historical circumstances. Obviously, what is acceptable in one society (say, contemporary Sweden) is not the same as in another (contemporary China), and what was acceptable in 1850 in the United States is not acceptable today. So the value of labor-power is highly variable, depending not only on physical needs but also on conditions of class struggle, the degree of civilization in the country and the history of social movements (some of which go far beyond what the workers themselves might directly struggle for). There may be social democratic parties that insist on universal healthcare, access to education, adequate housing, public infrastructure—parks, water, public transportation, sanitation—as well as full employment opportunities at a minimum wage. All these things can be considered fundamental obligations of civilized countries, depending on the social and political situation.

The upshot is that labor-power is not a commodity like any other. It is the unique creator of value at the same time as a historical and moral element enters into the determination of its value. And this historical and moral element is subject to influence by a wide array of political, religious and other forces. Even the Vatican has produced powerful encyclicals on the conditions of labor, and the theology of liberation, when it was at its height in Latin America, played a key role in fomenting revolutionary movements in the 1960s and 1970s that focused on the standards of living of the poor. So the value of labor-power is not a constant. It fluctuates not only because the costs of subsistence commodities vary but also because the commodity bundle needed to reproduce the laborer is affected by all these wide-ranging forces. Plainly, the value of labor-power is sensitive to changes in the value of the commodities needed to support them. Cheap imports will reduce that value; the Wal-Mart phenomenon has thus had a significant impact on the value of labor-power in the United States. The hyperexploitation of labor-power in China keeps the value of labor-power down in the United States through cheap imports. This also explains the resistance, in many quarters of the capitalist class, to putting barriers to entry or tariffs on Chinese goods, because to do so would be to raise the cost of living in the US, leading to a demand from workers for higher wages.

Marx, having briefly mentioned issues of this sort, shunts them aside to conclude that, “nevertheless, in a given country at a given period, the average amount of the means of subsistence necessary for the worker is a known datum” (275). Marx fixes what he concedes is fluid and in perpetual flux as the “known datum” in a given country at a given time. How reasonable is this move? Theoretically, it permits him to move on to explain how surplus-value can be produced, but it does so at a price.

In most national economies, ways have indeed been found to determine what this datum might be. Legislation concerning a minimum wage, for example, recognizes the importance of a fixed datum in a given place and time, while the politics over whether to raise it or not is an excellent illustration of the role political struggle plays in determining the value of labor-power. Local struggles in recent years over a “living wage” also illustrate the idea of both a general datum and social struggle over what the datum should be.

An even more interesting parallel with Marx’s formulation exists in the determination of the so-called poverty level. In the mid-1960s, Mollie Orshansky devised a method to define the poverty level by fixing it in terms of the money needed to buy that particular commodity bundle deemed necessary for the reproduction of, say, a family of four at some minimally acceptable level. This is the sort of known datum that Marx is referring to. Since the 1960s, however, there has been incessant debate regarding this definition, which became the basis of public policy (e.g., welfare and Social Security payments). Exactly what the market basket of commodities should be—how much for transportation, how much for clothing, how much for food, how much for rent (and do you really need a mobile phone nowadays?)—became a matter of controversy. The figure for a family of four now stands at more than $20,000 a year. The right wing says we have all along been looking at the wrong bundle and thereby overestimating poverty; in high-cost locations like New York City, however, studies suggest the level should be $26,000 or so. Obviously, historical, political and moral arguments are going to factor in here.

Let us return to the idea of the circulation of labor-power through the C-M-C circuit and the difference between that and the capitalists working in the C-M-C + ΔC circuit. Marx comments:

The use-value which the [capitalist] gets in exchange manifests itself only in the actual utilization, in the process of the consumption of the labour-power … The process of the consumption of labour-power is at the same time the production process of commodities and of surplus-value. The consumption of labour-power is completed, as in the case of every commodity, outside the market or the sphere of circulation. (279)

And now follows the large shift in perspective:

Let us therefore, in company with the owner of money and the owner of labour-power, leave this noisy sphere, where everything takes place on the surface and in full view of everyone, and follow them into the hidden abode of production, on whose threshold there hangs the notice ‘No admittance except on business’. Here we shall see, not only how capital produces, but how capital is itself produced. The secret of profit-making must at last be laid bare. (279–80)

Marx then concludes with a swinging indictment of bourgeois constitutionality and law. Leaving the sphere of circulation and exchange means leaving that sphere constitutionally set up as “a very Eden of the innate rights of man.” The market is “the exclusive realm of Freedom, Equality, Property and Bentham.”

Freedom, because both buyer and seller of a commodity, let us say of labour-power, are determined only by their own free will. They contract as free persons, who are equal before the law … Equality, because each enters into relation with the other, as with a simple owner of commodities, and they exchange equivalent for equivalent. Property, because each disposes only of what is his own. And Bentham, because each looks only to his own advantage. The only force bringing them together, and putting them into relation with each other, is the selfishness, the gain and the private interest of each. Each pays heed to himself only, and no one worries about the others. And precisely for this reason, either in accordance with the pre-established harmony of things, or under the auspices of an omniscient providence, they all work together to their mutual advantage, for the common weal, and in the common interest. (280)

Marx’s deeply ironic description of the standard form of liberal bourgeois constitutionality and market law brings us to the final phase of transition in his argument:

When we leave this sphere of simple circulation or the exchange of commodities, which provides the ‘free-trader vulgaris’ with his views, his concepts and the standard by which he judges the society of capital and wage-labour, a certain change takes place, or so it appears, in the physiognomy of our dramatis personae. He who was previously the money-owner now strides out in front as a capitalist; the possessor of labour-power follows as his worker. The one smirks self-importantly and is intent on business; the other is timid and holds back, like someone who has brought his own hide to market and knows he has nothing else to expect but—a tanning. (280)

These further reflections on bourgeois rights, echoing the duality of the supposed freedom of the laborer, provide a segue in the argument into a consideration of the far less visible moment of production that occurs, typically, in the factory. And it is into this realm that we will follow Marx next.