This is the seventh set of notes for a reading group on Marx’s Capital, and includes a Volume I refresher for further reading of Volume II. There are links to earlier posts and texts that may be useful.
Figure 1 depicts the production of relative surplus value and its expansion required by capital. This process—initially theorized by Marx—has been elaborated most fully by Moishe Postone in his book, Time, Labor, and Social Domination (1993). Postone explicates a dialectic of labor and time, whereby the social labor hour and base level of productivity are moved forward in time, giving rise to a particular “treadmill” dynamic, which we refer to as the treadmill of production of value. Our use of the “treadmill” metaphor is also an intention allusion to the well-known “treadmill of production” (ToP) concept advanced by the American environmental sociologist Allan Schnaiberg. However, Schnaiberg focuses solely on the production of wealth, which he specifies in relation to the environmental impact of increasing use-value output. Our metaphor of the ToP of value, on the other hand, emphasizes the temporal dimension of Marx’s concept of capital as self-expanding value (more on this below), which, in turn, redirects focus toward the growing contradiction between wealth (measured in terms of the quantity and quality of products produced) and value (whose magnitude is a function of the expenditure of abstract labor time). logosjournal.com/...
As with most of Marx’s work the dynamics of capitalism and the interrelations of political economy. The development of modern manufacturing and divisions of labor still emphasize the relations among labor processes, and their larger relation to the formation of capital into circuits.
Capitalist Production
Co-operation
Sources of productive power of cooperation (social labor):
Co-operation implies:
Co-operation and class struggle:
Co-operation under capitalist authority:
Workers are brought together by capital
Earlier forms/results of co-operation:
Cooperation = "the fundamental form of the capitalist mode of production"
-
- = large number of workers (Handicraft becomes manufacture as number of workers grows.)
= extensive scale
= large quantities of products
= revolution in the objective conditions of the labor process, e.g., economies of scale, increasing returns to scale, fall in value per unit of output
- -- "many workers working together side by side in accordance with a plan"
-either in the same process, same kind of work
-or in different but connected processes
= a "social force", a "new power"
= a "new productive power, which is intrinsically a collective one"
= workers strip "off the fetters of [their] individuality, and develop the capabilities of [their] species"
- 1. heightens mechanical force of labour
2. extends sphere of action over a greater space, or , contracts field of production
3. sets large masses of labour to work at critical moments (e.g., harvests)
4. excites rivalry between individuals
5. creates continuity and manysideness
6. simultaneous operations
7. economizes the means of production by use in common
8. lends to individual worker the character of average social labor
- --"a directing authority" to "secure the harmonious co-operation", e.g., an orchestra
--authority
--"special function arising from the nature of the social labour process"
--"a function of the exploitation of a social labor process", i.e., valorization
- =increased resistance to the domination of capital
= increased repression of this resistance
- = "a plan drawn up by the capitalist"
= "the powerful will of a being outside them"
= "in form it is purely despotic"
= requires "officers (managers) and NCO's (foremen, overseers)"
- --they are "incorporated into capital"
--their productive power is a "free gift" to capital, costs it nothing
--their productive power appears as "inherent in capital"
--as their numbers increase so too does their resistance
- --Egyptian pyramids and such, under domination of ruling class
--early hunting peoples
--Indian communitie with common ownership of MP, indiv. rooted in tribe or community
Commentary
Marx's discussion of co-operation in this chapter served two purposes. First, he laid out the results of his studies of the concrete nature of the capitalist organization of work. Second, he laid the groundwork for continuing his analysis of the technological changes involved in capital's relative surplus value strategy. In chapter 7 he defined work in very abstract and theoretical terms, first the labor process and then valorization. In chapter 12 he launched the discussion of the capitalist strategy of reorganizing of the labor process to increase (relative) surplus value. So, in chapter 13 he began to provide an approach to understanding the qualitative changes involved in such reorganization. Reorganization is, first of all, reorganization of co-operation. To begin with, he emphasized that work under capitalism is collective. "Co-operation" concerns large numbers of workers brought together by the capitalist and put to work. He recognized that workers have cooperated collectively throughout history. Co-operation is not new under capitalism. What is new is the particular way in which co-operation is organized by the capitalists. This emphasis on co-operation follows from Marx's analysis of labor (and the resistance to labor) as the core of the social relations of capitalism. Although capitalists appear to be responsible for co-operation, and thus to "deserve credit" for this social development, Marx insisted on the long standing existence of co-operation. From that perspective, however responsible the capitalists may be for the particular form it takes, it remains a force outside, an autonomous force of labor itself which capital must constantly strive to domesticate to its own ends. Part of this force appears to be purely technical: the way in which co-operation results in increases in productivity (output per worker) so that the output of a large number of assembled workers is greater than the sum of the output of the same number of isolated workers. But even this "technical" aspect of co-operation will turn out to be immanently political and related to the dynamics of intra- as well as inter-class relationships.
"Manu"-facturing
Manufacturing Period = mid-16th -- last third 18th Century
1. The Dual Origin of Manufacture
2. The Specialized Worker and His Tools
3. The Two Fundamental Forms of Manufacture
The "collective worker"
Mutual interdependence
Simplification of tasks = devaluation of labor power, as V decreases, S increases
4. The Division of Labor in Manufacture and Society
5. The Capitalist Character of Manufacture
Commentary
In this chapter Marx deepens his discussion of co-operation begun in Chapter 13. He examines the organization of co-operation within the context of manufacture, the first re-organization of capitalist beyond the simple annexation of handicraft workers through the putting-out system. In the putting-out system the organization of production remains unaltered, handicraft people continue working as before using their own tools in their old ways. But in manufacturing the capitalists increasingly impose a new division of labor in which the workers become increasingly specialized, performing only one part of a larger production process involving many workers and many steps. Yet, throughout the manufacturing period it is still the handicraft worker, however specialized, who is the moving force of production, or what Marx calls "the regulating principle of social production". The word manufacturing derives from two latin roots: manus for hand and factura for making. Thus manufacturing is "making by hand" and it is the workers' control over the use of their hands which regulates the rhythm and quality of the work. Manufacturing work thus corresponds very closely to Marx's analysis of labor in Chapter 7 in which a worker uses tools to transform raw materials. This is a situation which Marx will juxtapose to "machino-facture" in which the rhythm of work will be determined largely by the machine and the worker will be both used by the tools and demoted from their central role, i.e., stripped of their power.
A major focus in this chapter is on how the capitalist bringing together of large numbers of workers leads from a simple assembling of those with handicraft skills to an ever deeper division of labor. Whether different kinds of craftspeople with complementary skills are assembled or a large number of those with the same skill, the end result, he argues, has been the same: namely an ever increasing specialization of work and tools. This division and specialization derives from the reorganization of worker activities in order to produce a larger number of products at a more rapid pace, i.e., to increase productivity or the efficiency of production (and thus relative surplus-value).
Circulation time stands in opposition to Production Time. As Marx puts it, from the perspective of circulation, production appears, as a hold up, but from the perspective of production, it is circulation that appears as an interruption. The concept of circulation and circulating capital caused great confusion for Adam Smith, Ricardo and others, that Marx clears up.
The circulation period consists of all that time when capital is not engaged in production. Even during that part of the production period when labour is not being expended, capital is still engaged in production, because it is tied up in the production process. The rate of turnover, and the annual rate of profit are calculated on that basis. But, before the production process can even begin, productive-capital in the form of buildings, machines, raw material and labour-power must first be assembled. Money-capital must be advanced for its purchase, and there may be a period of time between this money-capital being advanced, and the actual productive-capital being delivered available to take part in the production process. The further away sources of supply of those inputs, the less efficient modes of transport, the longer it will take for inputs to be delivered, and so the longer this period of circulation time will be.
[...]
But, neither money-capital nor commodity-capital participate in the production process. They stand in opposition to it, in the overall circuit of industrial capital. Neither money-capital, nor commodity-capital can constitute fixed or circulating capital. They represent only capital that is itself in circulation. The period of that circulation constitutes the circulation time of the capital. The combination of the production time, and the circulation time, of industrial capital, is its total turnover time. The number of times this capital turns over during the year is its rate of turnover. boffyblog.blogspot.com/…
The time that capital is confined to the sphere of production and the time that capital actually exists in the production process are not equivalent terms: the former may be, and often actually is, longer than the latter. Here, rather than interruptions in the labour process itself, we are dealing with interruptions arising from the nature of the product and its production in which the product requires chemical, physical, etc. changes during which the labour process is suspended.
One example (Marx gives more) would be the fermentation and maturation period necessary in the production of wine. The greater the difference between working time and production time, the greater the turnover period is extended. This phenomenon is particularly pronounced in the agricultural sector.1This difference between working and production times affects circulating and fixed capital in the following ways. In the former case, in that the timing of the reflux of circulating capital occurs according to natural conditions, its outlay is unevenly distributed over the production period. In the latter case, interruptions in the time that fixed capital is productively engaged results in a dearer product, since value is transferred to the product not in function of the time during which the fixed capital operates, but in that of the time in which it loses value. Depreciation of dead means of labour will also occur. In agriculture, means to shorten the difference between working and production time (diversification, crop rotation require and increased outlay on circulating capital.
I Selling Time
The turnover time of capital is the sum of its production time and its circulation time. All the factors which differentiate the circulation periods of different capitals invested in different branches of industry so far considered (the distinction between fixed and circulating capital, variations in the working period, discrepancy between production time and working time) pertain to the former.
We also need to take account of the effects on turnover time of capital of differences in the latter sphere.2 A constant factor influencing variation in selling time is the simple time taken by the journey to market. The most decisive part of circulation time is the time that capital exists in the form of the finished commodity product, i.e. the time required for the sale of the finished product.3
In the period in which capital is transformed from the money form into the elements of production it must persist for a greater or lesser period in the state of money capital, to the extent that a certain quantity of the total capital advanced always exists in this state, since, as money capital is transformed into productive capital, it is added to by the influx from circulation. ‘Thus a definite portion of the capital advanced always exists in the state of money capital, i.e. in a form pertaining not to its sphere of production but rather to its sphere of circulation. ’Improvements in the speed of communication shorten the absolute period of the migration of commodities, but not the relative differences between different commodity capitals.
Increases in the frequency of communication permit the distribution of the reflux over shorter periods of time. Changes in the frequency and volume of transport, themselves arising from the needs of determinate places of production, in turn effect local shifts in the circulation time of commodities or alter the distribution of already existing local variations. The development of capitalist production and the concomitant development of means of transport introduce the need to work for increasingly distant markets. In function of this the mass of commodities actually in transit, and hence that part of social capital tied up in commodity form, grow, as does that part of social wealth laid out on the means of transport, and the fixed and circulating capital necessary to keep them in operation. A longer circulation time also supposes a greater risk of a change in price in the selling market occurring.
II Time of Purchase4
Earlier, Just as the simple distance from the market prolongs the time in which capital is confined to the form of commodity capital, this same factor also delays the reflux of money, thus delaying the transformation of money capital into productive capital.51
We saw that how the time of purchase and the distance from sources of raw materials conditions the time for which and quantity in which raw materials need to be kept available in the form of productive stock, thus determining – independently of the scale of production – both how much capital needs to be advanced at a stroke and for how long. In the same way, the timing in which raw materials appear on the market also determines the terms of purchase of these raw materials, and hence the time in which capital persists in the money form. The point here is that, independently of the quantity in which money capital needs to be advanced to purchase the elements of 2 production, it always flows back little by little; one part (i.e. that not spent on wages), always has to accumulated as a reserve fund, therefore. The next chapter will consider how different circumstances arising from the production and circulation processes influence the existence of capital advanced in the money form.
--—
To a certain degree the content of this chapter overlaps with that of chapter 5 (Karl Marx, Capital, vol. 2 (Harmondsworth,1978) [hereafter C2], pp. 200-206), which was extracted from a different manuscript.2 Where I insert my own subheads they appear, as here, in sans serif type.3 As well as, of course, the time spent on the market actually awaiting sale.4 C2, p. 331, italicisation added.5 C2, pp. 219-20
The task of the next two chapters is to consider ‘the influence of circulation time on the valorisation of capital.’2
I Effect of Applying Additional Capital To Maintain Production during Circulation Period3
First Example If we assume:• a commodity capital that is the product of a working period of nine weeks;• that the value of the product be equal to the circulating capital (raw materials, wages and ancillary materials)advanced for its production, i.e. we disregard – abstract from – the value transferred from the wear and tear of the fixed capital and the surplus-value added;• that this value be £900;• and a circulation period (independently of why) of three weeks; then, after nine weeks production time (equal to working time),4 during which the weekly outlay is £100, production is at a standstill until the completion of the turnover time, i.e., for the three weeks circulation time. For production to be continuous, therefore, a new turnover period must begin in week 10. If the scale of production is to be maintained, an additional circulating capital, of £300, is necessary.5 The sequence of operations is as follows. first turnover period: With regard to the first nine-week working period, the turnover of the capital here advanced is completed by the start of week 13. During the last three weeks of the 12-week period an additional capital of£300 is deployed, opening a second nine-week working period. second turnover period: At the start of week 13, £900 has returned and is ready to start a new turnover. But a new turnover period began in week 10: the additional capital of £300 has been transformed into product. By the start of week 13, this second turnover period has six weeks yet to run: £600 of the original £900 now enters production, while £300 is set free to play the same role as the original £300 of additional capital in the first turnover period. At the end of week 6 of the second turnover period (week 18 in total) the second working period concludes. The £900 laid out in the period flows back three weeks later, at the end of week 9 of the1
We should note here Engels’ remarks later in the chapter (Karl Marx, Capital, vol. 2 (Harmondsworth, 1978) [hereafter C2],pp. 359-60): ‘The preparation of this chapter for publication has involved no small difficulties. Despite Marx’s firm grasp of algebra, he was never at ease in reckoning with figures, [...] and in his turnover calculations Marx became confused, [...] [suchthat] he ascribe[d] an importance to [...] a matter of little importance. I refer to what he calls the “setting free” of money capital.’ ‘Setting free’, i.e. that capital in money form that flows back from circulation in immediately superfluous quantities is the object of Marx’s exposition on pp. 343-60.
But it is not the case that this chapter is itself superfluous for being misguided, nor that the section just referred to is without value. Nor is Anthony Brewer being entirely fair when he comments that ‘Marx gets enmeshed in a series of rather unnecessary numerical examples’, and that ‘Engels, as editor, comments on these and reports that what he published is only an abridged version of a worse mess that Marx left him.’ (A Guide to Marx’s Capital (Cambridge,1984), p. 103) There is, as we shall see, much of importance in this chapter; and even the disputed section, in which Marx shows that maintaining production continuously, even in the case of a single capitalist producing a single product, requires the presence of more than one capital value, each of which circulates interdependently on the other, each subject to the limits of quantity and quality that Marx investigates in the first part of the volume.
Schema 2: Division and Release of Capital
If production time exceeds circulation time the capital need only be divided into two parts so that the circulation phase of the parts of capital facilitate continual valorisation
"It is furthermore assumed that products are exchanged at their values and also that there is no revolution in the values of the component parts of productive capital. The fact that prices diverge from values cannot, however, exert any influence on the movements of the social capital. On the whole, there is the same exchange of the same quantities of products, although the individual capitalists are involved in value-relations no longer proportional to their respective advances and to the quantities of surplus-value produced singly by every one of them. As for revolutions in value, they do not alter anything in the relations between the value-components of the total annual product, provided they are universally and evenly distributed. To the extent, however, that they are partially and unevenly distributed, they represent disturbances which, in the first place, can be understood as such only as far as they are regarded as divergences from unchanged value-relations, but in the second place, once there is proof of the law according to which one portion of the value of the annual product replaces constant, and another portion variable capital, a revolution either in the value of the constant or that of the variable capital would not alter anything in this law. It would change merely the relative magnitudes of the portions of value which function in the one or the other capacity, because other values would have taken the places of the original ones." (CII 397f).
www.marxists.org/...
Marx did not in Capital, Vol. II, use any drawings, but dealt with figures "to facilitate the understanding" (CII 402) of his analysis of the exchange-relations between the two departments of social production. We try to illustrate the interconnections, using Marx's figures from CII 407f (and 514ff) in the following schema for simple reproduction.
The reproduction schema has fifteen numbered items of which four are only of concern when considering extended reproduction.
No.1 Payment of wages for the families of labourers in department I/ selling of labour-power to be used by the capitalists for one year.
No.2 The families of labourers in department I buy means of life from department II with the money received in wages (No.1) (SG 114).
No.3 Department II buys elements of circulating constant capital from department I with the variable capital (No.1) of department I, spent on means of life (No.2).
No.4 Department II buys the rest of the circulating constant capital, that has been productively consumed during the year from department I.
No.5 The capitalists of department I buy an equal value (as expended in No.4) in means of private consumption from department I.
No.6* Department II buys additional circulating constant capital from department I.
No.7* The capitalists of department I buy an equal value (as expended in No.6) of means for their individual consumption from department II in return.
No.8 Department II buys those elements of fixed capital, that were used up during the year, from department I (SG 115).
No.9 The capitalists of department I buy at equal value (as expended in No.8) of means for their individual consumption from department II in return.
No.10* Accumulation funds of department I.
No.11 Replacement of the productively consumed constant capital of department I out of the product of department I.
No.12* Accumulation funds of department II.
No.13 Payment of wages for the families of labourers in department II/ selling of labour-power to be used by the capitalists for one year.
No.14 The families of labourers in department II buy means of life with the money received in wages (No.13) from department II.
No.15 Innerdepartmental circulation of means of individual consumption for the capitalists of department II equal in value to the surplus-value produced in department II.
(* Only in expanded reproduction)www.marxists.org/...
So Thier sets out to turn this round: “I do my best to offer enough concrete examples and jargon-free descriptions to clarify the points, which will help you keep climbing with minimal huffing and puffing.” She succeeds admirably. This book is aptly named A People’s Guide to Capitalism.
I think part of the reason for Thier’s achievement is that she is an activist in the labor movement and not an academic economist. In my experience, academic Marxist economists are usually lacking in ability to explain clearly Marxist political economic ideas to others. Thier refers to her own experience:
“when I first picked up a book on economics, I made it about two pages in before I broke down in tears, feeling hopeless that I could ever understand economics. The capitalist system in general, and economics in particular, are purposefully mystified. Analyzing how capitalism works is left to “the experts,” and if things look a little askew to you, well, that must be because you don’t know any better. This is doubly and triply so for working-class people, women, people of color, and other oppressed constituencies who are daily barraged with the message that we cannot hope to comprehend complex systems and ideas, let alone hope to impact.”
Thier says that her book “aims to follow the content and arc of Marx’s Capital. Capital’s three volumes were written to provide a theoretical arsenal to a workers’ movement for the revolutionary overthrow of the system—and to do so on the most scientific foundation possible.” But Thier rightly starts with the history of the emergence of capitalism before moving onto theory (the opposite of Marx’s approach in Capital). She deftly outlines the main concepts of Marxist economic theory, interspersed with excellent box insets on various key issues that stand on their own as insightful explanations. The subjects in these insets include: Marx on nature; the theory of marginal utility versus Marx’s value theory; how capitalism wastes so much resources; what is a bitcoin?; capitalism as a mode of production and so on.
climateandcapitalism.com/...
"Economists have every incentive to mystify their craft and to dress up their political judgments as scientific fact. Hadas Thier's A People's Guide to Capitalism is a thorough and accessible corrective, and sure to be an important primer for generations of activists." —Bhaskar Sunkara, founding editor of Jacobin
“A People’s Guide to Capitalism is a breath of fresh air on the left. Avoiding the obscure jargon of economics, Hadas Thier provides a rich, accessible introduction to how capitalism works. Ranging from exploitation at work to the operations of modern finance, this book takes the reader through a fine-tuned introduction to Marx’s analysis of the modern economy. Along the way, Thier combines theoretical explanation with contemporary examples to illuminate the inner workings of capitalism. In addition, A People’s Guide to Capitalism reminds us of the urgent need for alternatives to a crisis-ridden system.” David McNally, Cullen Distinguished Professor of History and Business at the University of Houston.
www.leftwingbooks.net/...
Wealth and Poverty Do Not Determine Class
This does not just extend to workers engaged in the production of physical goods. Teachers and nurses must sell their labor in order to provide services, and thus are part of the working class.
As Marx argued: “If we may take an example from outside the sphere of material production, a school-master is a productive worker when, in addition to belaboring the heads of his pupils, he works himself into the ground to enrich the owner of the school. That the latter has laid out his capital in a teaching factory, instead of a sausage factory, makes no difference to the relation.”
It is in this sense that Marx and Engels wrote that the “proletarian is without property.” “Proletarians” is another word for workers; and private property does not mean personal belongings, like your TV or laptop, but the means of production — the buildings, machinery, software, equipment, tools, and other materials owned by capitalists.
Marx wasn’t saying that workers literally have nothing, although that is often and increasingly true. He meant that we are without any means to produce and reproduce our livelihoods, and therefore we are at the mercy of capitalist exploitation. A construction company has mechanical shovels, drills, and dozers, which allow them to exploit laborers and turn a profit. I have a shovel, which I can use to grow flowers or tomatoes.
Historian Geoffrey de Ste. Croix put it this way:
- [Class] is the collective social expression of the fact of exploitation, the way in which exploitation is embodied in a social structure. . . Class is essentially a relationship—just as capital, another of Marx’s basic concepts, is specifically described by him. . . as “a relation,” “a social relation of production,” and so forth. And a class (a particular class) is a group of persons in a community identified by their position in the whole system of social production, defined above all according to their relationship (primarily in terms of the degree of control) to the conditions of production (that is to say, to the means and labor of production) and to other classes.
Using this definition, we see that wealth and poverty do not determine class. Rather, they are manifestations of it.
The bosses are thus not defined by the degree of their extravagance. At the same time, society’s poor do not represent an “underclass” who, due to lack of employment or wealth, stand outside of society. Poverty is an integral part of the experience of the working class, and — as has been all too brutally proven by the current crisis — unemployment is just a stone’s throw away for most workers.
Even before the pandemic hit, almost half the US population could not pay their bills if they missed one paycheck, and one in four people reported foregoing health care treatment because they could not afford it. A quarter of the population had jobs that were defined as low-wage. Add to this bleak picture the mountains of student debt carried by tens of millions of people and a rising cost of living, and it is very clear just how intrinsic poverty is to the fabric of American society. Now with thirty million people without a job and forty million potentially facing homelessness in the coming months, the brutally thin line between working and destitution could not be more clear.
Capitalism in fact requires that there be some level of unemployment at all times, or as Marx termed it, a “reserve army of laborers.” The bosses depend on this reserve army of laborers to ensure that there is always someone else willing to take your job, and can thus discipline the paid workforce into acquiescing to the terms set by employers.
High levels of unemployment are a cruel feature of every downturn in the economy, but even when “times are good,” unemployment is still a painful reality for millions. What mainstream economists consider “full employment” is in fact about 5 percent unemployment. The introduction of new machinery, a growing labor force due to demographic or migration changes, regular changes in the structure of the economy (what is and isn’t produced, and where), can all contribute to unemployment during the “best” of times.
jacobinmag.com/...
www.dailykos.com/...
The Wealth Distribution. In the United States, wealth is highly concentrated in relatively few hands. As of 2013, the top 1% of households (the upper class) owned 36.7% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 52.2%, which means that just 20% of the people owned a remarkable 89%, leaving only 11% of the wealth for the bottom .
