value of value

7/27/2019 Value of Value

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REVIEW ARTICLETHE VALUE OF VALUEREREADING CAPITALBy Ben Fine and Laurence Harris .

Macmillan (Lon don, 1979), 184 pp . , 7 .95 hb . , 3 .50 pb .

By Simon Clarke .

'What we have we prize not to the worth

W h i l e s w e e n j o y i t , b u t b e i n g l a c k e d a n d l o s t ,

Why then we rack the value' (Much Ado About Nothing, iv, i) .

The CSE is now over ten years old, and in those ten years a great deal has

been achieved . T h e h istory of th e CSE, however, is divided into t wo

markedly different phases .

The first phase can be characterised by the attempt to develop an

understanding of Marx's Capital that would be relevant to the analysis of

the economics of capitalism in the second half of the twentieth centu ry .

When the CSE was established there was v irtually a theoretical void in this

area . There had already been a return to Marxist philosophy and to Marxist

history, but within economics there was no significant Marxist challenge to

the radical Keynesianism that dominated t he left .

The formation of the CSE brought together a few economists who

had a bourgeois academic training but who had to a greater or lesser extent

rejected bourgeois economics . T h ey (we) were tryin g to come to terms

with a Marxism which, they had been taught, was ent irely discredited . T h e

CSE provided an informal framework within which these economists could

break out of their isolation and so within which a Marxist debate could be

developed .

It should not be surprising that from the very beginning the CSE,

although small, brought together people from many different tendencies

and many different backgrounds . However at each st age of its develop-

ment th ere h as b een one fundamental issue th a t h as divided th e CSE .

The first task that faced the CSE was t o define the relationship be-

tween Marxism and bourgeois economics, and the fundament al issue that

dominated the first phase of the CSE's development was that of whether

or not Marxist economics was in fact distinct from bourgeois economics .

For radical Keynesians that issue was quite a simple one - Marx wasremarkable for his anticipation of Keynes, but Marxian economics could


2/17

2 CAPITAL & CLASSeasily be reformulated in Keynesian terms . T h u s t h e C S E h e l d l i t t l e i n t e r e s t

for this group and most dropped out . This was perhaps unfortunate since

Keynesian assumptions are still pervasive on the left and the issues have

n e v e r b e e n c l a r i f i e d a s s h a r p l y o r a s p u b l i c l y a s t h e y s h o u l d .

The main debate within the CSE during its first phase did not set

Keynesians against Marxists, it rather concerned the question of whether

Marx's economic results could be reformulated in terms of some variant

of general equilibrium theory, as bourgeois economists had already sought

to do, or whether such an approach was quite inconsistent with Marxism .

T h is deb ate was extremely important since it addressed not only

t e c h n i c a l e c o n o mi c q u e s t i o n s , b u t a l s o , i m p l i c i t l y a t l e a s t , t h e m o r e f u n d a -

mental question of what is Marxist economics? The att empt to reformu-

late Marx's economi cs as a form of general equilibrium theory w as impli-

citly based on the assumption that the aim of Marx's economics was to

p r o v i d e a d e t e r m i n a t e t h e o r y o f p r i c e s ( i n c l u d i n g w a g e s , r a t e o f p r o f i t a n d ,

on suitable assumptions , the rate of accumulation), expressed in a soluble

set of simultaneous equations . This attempt coincided with the culmina-

tion of the crisis of the dominant v ersion of general equilibrium theory on

the basis of which the naiv ety of Marxism had previously been established

t o t h e s a t i s f a c t i o n o f t h e b o u r g e o i s i e .

Within bourgeois economics the challenge to neo-classical theory was

led by a number of 'physicalist' theories that based their price equations

on physical production technologies instead of on the demand and supply

that were causing the problems in the neoclassical system . T h e s e ' p h y s i c a-

list' theories, including t hat of Sraffa, were based on the demonstrat ion

that any give n technology, or set of discontinuous technologies, could be

reconciled wit h uniform and stable equilibrium rates of wages and profits .

This kind of approach had a superficial similarity to Marx's, being based

c l e a r l y i n p r o d u c t i o n , a n d g a v e r i s e t o f a m i l i a r M a r x i s t r e s u l t s , i n p a r t i c u -

lar in showing, in some minimal sense, the inverse relation between wa ges

and the rate of profit . On some readings Marx's reproduct ion schemes

offered a remarkable anticipation of this kind of analysis . T h u s i t w a s n o t

surprising that att empts were made to reformulate Marx's economics in

these physicalist terms, nor was it surprising that these 'neo-Ricardian'

reformulations of Marx led to the result that Marx's category of value was

r e d u n d a n t a n d t h a t t h e s p e c i f i c r e s u l t s o f M a r x ' s a n a l y s i s , i n p a r t i c u l a r t h e

' l a w o f t h e t e n d e n c y o f t h e r a t e o f p r o f i t t o f a l l ' ( T R P F ) , w e r e f o u n d t o b e

erroneous .

The debate wi thin the CSE over the significance of Marx's economics

produced a considerable clarification of the technical economic issues,

although the more fundamental issues about the na ture of economics were

not so directly confronted and remain unresolved . I t a l s o l e d t o a h a r d e n -

ing of positions as different groups came to believe that t hey had achieved

the nirvana of truth . The neo-Ricardians reached their nirvana first . For

them Marxism at best offered a theory of the social and political context

of the capitalist economy, but Marxism had been overtaken as an economic

theory by developments in mathematics and in bourgeois economics . Marx

didn't do too badly for an innumerate beginner, but t hose who sought to

continue to defend Marx were seen as sterile dogmatists who obstruct ed


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REVIEW ARTICLE 3the development of economic science .

The neo-Ricardian interpretation was contested on a number of

grounds within the CSE . Firstly, on technical economic grounds it was

argued that Marx's categories could provide a determinate theory of prices

and that the T RPF could be given a meaningful interpretation . S e c o n d l y ,

various arguments were put forward for the necessity of retaining Marx's

concept of value, although there was little agreement as to the substance

of that concept . S o m e ( t h e ' R i c a r d i a n s ' ) i n t e r p r e t e d v a l u e a s a q u a n ti t y o f

embodied labour (like the ' neo-Ricardians' they follow Ricardo in having

a ph ysicalist th eory b ased on th e tech nology of production, b ut th ey

retain the Ri cardian concept of value as embodied labour time which the

'neo-Ricardians' discard . For neo-Ricardians the Ricardian reduction of

prices to labour time is considered to be unnecessary and gratuitous .

Whether or not Marx had a Ricardian theory of value is a very conten-

t i o u s i s s u e ) . They argued that the concept had to be retained becau se only

t h u s c o u l d t h e s o u r c e o f s u r p l u s v a l u e a n d t h e c l a s s c h a r a c t e r o f c a p i t a l i s m

be established . This is essentially an external political rather than an

interna l economic argument and for the neo-Ricardians is simply a piece of

dogmatic mystification .

Others (branded the 'Fundamentalists', whet her as an insult or a com-

pliment) were content to assert the necessity of the category of value for

an analysis of the dynamics of accumulation largely by reference to the

fundamental text s of Marx . T h i s p o s i t i o n h a d t h e g r e a t m e r i t o f s t i m u l a t -

i n g a c l o s e s t u d y o f M a r x ' s w r i t i n g s , a n d i t a l s o r e v e r s e d t h e n e o - R i c a r d i a n

challenge : instead of asking Marxism to justify itself in ter ms of the

categories of bourgeois economics, it insisted that bourgeois economics

s h o u l d j u s t i f y i t s e l f i n t e r m s o f t h e c a t e g o r i e s o f M a r x i s m . Fundamentalists

achieved their nirvana by laying hands on the sacred texts and tended to

t a k e t h e i r M a r x i s m a s a n a c t o f f a i t h r a t h e r t h a n o n t h e b a s i s o f a r i g o r o u s

demonstration of the validity of Marx's claims . The resulting dogmatism

made Fundamentalism unable to take any account of the need t o develop

M a r x ' s a n a l y s i s t o m a k e i t r e l e v a n t t o t h e a n a l y s i s o f c o n t e m p o r a r y c a p i t a l -

ism . It resulted, moreover, in a rather mechanical application of Marx's

categories t o contemporary economic phenomena . The major difference

between neo-Ricardians and Fundamentalists lay in their understanding of

crisis : f o r t h e n e o - R i c a r d i a n s t h e d e c l i n e i n p r o f i t a b i l i t y t h a t p r e c i p i t a t e s a

crisis can only come about as a result of increasing w ages, while for the

Fundamentalists it is axiomatic that it is an expression of the TRPF and

has nothing to do with the wag es struggle .

The third tendency was more diffuse and less assertive than those

considered so far . I t i s t e m p t i n g t o c a l l i t ' c l a s s i c a l ' i n t h e s e n s e t h a t i t

followed the Fundamentalists in insisting on basing itself on Marx's own

analysis of C a p it a l, b u t a ls o i n si s t ed , f i r s t l y , t h a t t hi s a n a ly s i s ca n n ot b e

applied mechanically and, secondly, that the analysis has t o be developed

to take account of factors either that Marx left in parentheses or th at

expressed changes in capitalism over the past century . This tendency did

n o t t r e a t t h e t e x t s a s s a c r e d a n d s o r a i s e d t h e f u n d a m e n t a l i s s u e s f i r s t l y o f

the method of Marx's Capital : w h a t i s t h e s t a t u s o f M a r x ' s c o n c e p t s i f t h e y

cannot be applied immediately to capitalism as it actua lly exists? And,


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4 CAPITAL & CLASSsecondly, of the nature of contemporary capitalism . I t i s t h i s t e n d e n c y

that is represented by Ben Fine and Laurence Harris who achieve t heir

nirvana in the book under review .

The debate between neo-Ricardians and orthodox Marxists raised not

only the question of the nature of Marx's economics, but also that of the

status of economics as such . This question was raised by consideration of

Marx's concept of value, but was never sat isfactorily confronted in the

first phase of the CSE's dev elopment .

For Ricardians (old and new) value is a technical economic concept

in that it specifies the materi al foundation of the economy and so defines

economics as a (mechanical?) materialist and quantitative s cience . V a l u e in

t h i s i n t e r p r e t a t i o n i s e x p r e s s e d q u a n t i t a t i v e l y i n t h e a m o u n t o f l a b o u r t i m e

embodied in a commodity . For the R icardians this concept expresses the

class basis of capitalist exploitation, for neo-Ricardians it is simply a

redundant t echnical coefficient .

The more radical interpretation of the concept of value gave it more

than a st rictly economic significance . Marx's concept of value expresses

not merely the material foundation of capitalist exploitation but also, and

inseperably, its social form . Within Marxist economics this implies that

value is not simply a technical coefficient, it implies that the process of

production, appropriation and circulation of value is a social process in

which quantitat ive magnitudes are socially determined, in the course of

struggles betw een and wit hin classes . Thus the sum of value expressed in a

particular commodity cannot be identified with t he quantity of labour

embodied in it, for the concept of value refers to the s o c i a l l y necessary

labour time embodied, to abstract r a t h e r t h a n t o concrete l a b o u r , a n d t h i s

quantity can only be established when private labours are socially vali-

dated through the circulation of commodities and of capital . Thus the

c o n c e p t o f v a l u e c a n o n l y b e c o n s i d e r e d i n r e l a t i o n t o t h e e n t i r e c i r c u i t o f

capital, and cannot be considered in relation to production alone .

Moreover neither the quantity of labour embodied in the commodity,

nor the quantity of socially necessary labout time attributed to it can be

considered as technical coefficients . The social form within which labour

is expended plays a major role in determining both the quanti ty of labour

that is expended in producing a commodity with a given technology, and

the relation of this quantity to the socially necessary labour time through

the social validation of labour time . F i n a l l y , t h e t e c h n o l o g y i t s e l f c a n n o t

b e t r e a t e d a s a n e x o g e n o u s v a r i a b l e , f o r t h e p a c e a n d p a t t e r n o f t e c h n o l o g i -

cal development is also conditioned by the social form of production .

Thus considerat ion of the social form of labour cannot be tre ated as a

sociological study that supplements the hard rigour of the economist, it

is inseparable from consideration of the most fundament al economic and

e v e n t e c h n o l o g i c a l f e a t u r e s o f c a p i t a l i s m .

This more radical interpreta tion of the theory of value made little

headway in the first phase of the CSE's development, for it undermines

any attempt to formulate determinate general equilibrium systems . I n s t e a d

it is concerned with uncovering the social processes that underlie the

historical development of capitalism, processes that appear in a fetishised

form as the quantitative det ermination of economic magnitudes . F o r t h i s


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REVIEW ARTICLE 5interpretation t he study of the economy cannot remain at th e level of the

fetishised cate gories of economics . I t h a s t o p e n e t r a t e t h e s e c a t e g o r i e s , t o

provide a critique of economics, by revealing the origins of economic

developments in th e concrete acti vities of men and women engaged in

s o c i a l l i f e . T hose trained in, and wit h a professional commitment to,

bourgeois economics are not w ell equipped to make this jump . For many

of those involved in the debates in the first phase -of the CSE's develop-

ment, therefore, the shift in emphasis that wa s marked by the 1976 Con-

ference in Coventry on the Labour Process represented an abandon ment

of the rigour of economics and an opening of the doors to philistines,

s o c i o l o g i s t s , h i s t o r i a n s , a n a r c h i s t s a n d a g i t a t o r s w h o h a d n e i t h e r a n u n d e r -

standing of nor a respect for the discipline and rigour of advanced neo-

Marxist economics .

The most striking characteristic of the second phase of the develop-

ment of the CSE, inaugurated by the Coventry Conference and sealed by

going public with the founding of Capital and C/ass, has indeed been the

influx of non-economists and the desertion of many academic economists .

This development came about as a direct result of the theoretical advances

m a d e i n t h e f i r s t p h a s e o f t h e C S E ' s l i f e . The development of CSE debates

made it ab undantly clear, on th e one h and, th at Marx's Capital is not

simply an economic text, but is vita lly important for all those engaged it

t h e i n t e l l e c t u a l a n d p o l i t i c a l s t r u g g l e a g a i n s t t h e t y r a n n y o f c a p i t a l , a n d ,

on the other hand, that the analysis of accumulation could not be entrusted

t o t h e t e c h n i c a l e x p e r t i s e o f e c o n o m i s t s .

Marx's Capital was liberated from the professional economists as it

became clear that Marx's analysis provides the intellectual tools that make

i t p o s s i b l e t o r e c o n c i l e t h e c o n c r e t e n e s s a n d d i v e r s i t y o f p a r t i c u l a r s t r u g -

gles against capital in its various forms with the unity of the development

of th e movement for th e overth row of capital : th e whole of Capital i s

about the subordination of a diversity of concrete practical activities to

the imperatives of the accumulation of capital imposed as capital passes

through its circuit of self-expansion . This understanding of Capital d e -

veloped collectively with in th e CSE h as opened up a path b etween th e

dogmatism for which every particular struggle is reduced to an immediate

expression of the eternal struggle between the ideal entities of labour and

capital and the eclectic pluralism for which the only unity that particular

s t r u g g l e s c a n e v e r a c h i e v e i s a c o n t i n g e n t a n d o p p o r t u n i s t i c u n i t y . T h u s t h e

developments in the CSE have considerable political as we ll as intellectual

importance .

T h e understanding of Marx developed collectively with in th e CSE

over the past decade has only been tentative and fragmentary . I t h a s n o t

produced any easy solutions to the problems it has confronted, indeed t he

conclusion has often been that t here are no neat intellectual solutions,

there are only more clearly formulated politi cal problems . T h e e s s e n c e o f

debate in the CSE over the past few years has been the attempt to get

beyond any facile dogmatic solutions . Marx provides th e fundamental

c a t e g o r i e s w i t h i n w h i c h t o t h i n k t h e s o c i a l r e l a t i o n s o f c a p i t a l i s t s o c i e t y ,

b u t h i s w o r k d o e s n o t ( s u r p r i s i n g l y t o s o m e ) p r o v i d e a n a n a l y s i s o f t h e c l a s s

s t r u g g l e i n B r i t a i n i n t h e 1 9 8 0 ' s . To apply Marx's categories to an under-


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6CA P I T A L & CL ASS

s t a n d i n g o f t h e s t r u g g l e i n c o n t e m p o r a r y c a p i t a l i s m i n v o l v e s a d u a l p r o c e s s ,

exemplified in Marx's own work, of confronting Marx's categories with the

everyday experience of contemporary capitalisms, and especially with the

lessons learned through struggles against capital in all its forms . R e a l i s a -

t i o n o f a n e e d f o r a s u s t a i n e d u n i t y o f t h e o r y a n d p r a c t i c e i n t h i s s e n s e h a s

underlain the development of CSE working groups which, at their best,

b ring togeth er people from different b ackgrounds with different ex-

periences and different intellectual formations in order t o develop con-

crete Marxist analyses . It is through such organisations as the CSE Working

Groups that we can hope to contribut e to overcoming the gulf that has

marked the left for so long between a dogmatic theory and a pragmatic

p r a c t i c e . Bringing together different experiences within the framework of

a Marxist analysis enables us to learn from each other so that we can

d e v e l o p a s a c o l l e c t i v e o r g a n i c i n t e l l e c t u a l .

For many of those who have been active in the second phase of the

CSE's development the loss of the economists has been felt to be entirely

beneficial, for the economists spend their whole time mystifying people

with incomprehensib le formulae while they completely ignore the funda-

mental issues . Those economists who remain in the CSE have been thrown

back onto the defensive and have tended to communicate only with one

a n o th e r (e v e n w h en t h e y w ri t e fo r C ap i ta l an d C l a s s ) . I t h i n k t h a t t h i s

assessment is entirely wrong and that the isolation of the 'economists'

has had a very har mful impact on the attempt to develop an integrated

M a r x i s t a n a l y s i s o f t h e p r e s e n t c a p i t a l i s t c r i s i s . Although much of the dis-

cussion in the first phase of the CSE's life was very technical, the i ssues

raised were, as I have indicated, fundamental to Marxism . Moreover out of

the debate came much clearer underst andings (from different points of

view) of the natur e of accumulation and crisis, of the concepts of produc-

t i v e a n d u n p r o d u c t i v e l a b o u r , o f t h e i s s u e s i n v o l v e d i n t h e t h e o r y o f v a l u e ,

all of which are parts of the essential foundation of any Marxi st a n a l y s i s

o f t h e p r e s e n t c r i s i s .

The changes in the CSE over the last few years have meant that very

few active members today participated in the debates of the first phase,

and those that did t alk mostly to one another . T h e r e h a s , t h e r e f o r e , b e e n

little opportunity for new members of the CSE to learn the lessons of the

past debates and so a gulf has opened up between the 'economists' and t he

'non-economists' . Thus, while in its first phase the CSE tended to neglect

the critical dimension of Marx's Capital and remain at the level of the

fetishised economic categories, there has been a tendency in the second

phase to go to the opposite extreme and t o dismiss any serious considera-

tion of the economic aspects of accumulation and crisis as mere fetishism .

This undermines any attempt to grasp the interconnections between t he

economic and the other social dimensions of the crisis or even, in the end,

to grasp the crisis concretely as a c a p i t a l i s t crisis . T h i s s e p a r a t i o n o f t h e

economists from the non-economists is especially damaging in the present

phase of the crisis as the state attempts to limit its direct role in the

r e s o l u t i o n o f t h e c r i s i s , t h r o w i n g t h e d i r e c t r e s p o n s i b i l i t y f o r r e s o l v i n g t h e

c r i s i s ba c k o n to c a p i t al . T h e r e i s t h e r e f o r e a p r e s s i n g n e e d t o r e n e w a n d t o

develop an understanding within the CSE of the contribution that Capital


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REVIEW A RTICLE 7can make to our understanding of the roots of crisis in the contradictions

e x p r e s s e d i n t h e c i r c u i t o f c a p i t a l . I t i s i m p o r t a n t t o b u i l d o n t h e a d v a n c e s

made in the first phase of the CSE's development and to make them

available to those involved in the CSE today . T h i s , p o t e n t i a ll y , i s t h e i m -

portance of the book under review .

Ben Fine and Laurence Harris's long-awaited Rereading Capital would

perhaps more accurately be called Rereading Old CSE Bulletins s i n c e i t

is based on a thorough retrospective survey of the debates that dominated

the first phase of the CSE's history . The book is ext remely important in

making accessible the results of these debates, and also in showing t he

limitations of the positions that dominated t he CSE in its first phase,

including that of Fine and Harris themselves .

The book is divided into two halves . The first half surveys t he old

CSE deb ates with ch apters on th e method of C a p i t a l , the transformation

problem, productive and unproductive labour, the TRPF and crisis . The

form of presentation is to counterpose the neo-Ricardian and Fundamen-

talist positions and then t o offer the Fine-Harris position as a way of

avoiding the complementary errors of each . On the whole Fine and Harris

are much fairer to the neo-Ricardians than to the Fundamentalists, who at

least had the merit of starting with Marx . The second half of the book

seeks to apply the lessons of the CSE debates to the analys is of the capi-

t a l i s t s t a t e , t h e p e r i o d i s a t i o n o f c a p i t a l i s m , s t a t e m o n o p o l y c a p i t a l i s m , a n d

n a t i o n s t a t e s a n d t h e i n t e r n a t i o n a li s a t i o n o f c a p i t a l .

The main characteristics of the Fine-Harris interpretation of Capital

that puts it in advance of the other interpretat ions that were current in

t h e f i r s t p h a s e o f t h e C S E ' s h i s t o r y a r e , f i r s t l y , a n e m p h a s i s o n t h e u n i t y o f

the circuit of capital, and, secondly, an emphasis on the importance of

appreciating the levels of abstraction at which different concepts are

formulated .

The emphasis on the unity of the circuit of capital is very important

in counterposing a conception of capital as process to the stat ic concep-

tions of the neo-Ricardians and the Fundamentalists . The neo-Ricardians

tend to see product ion as a purely technica l process of production of use-

values while class struggle concerns only the distribution of those use-

values that is determined in circulation . Fundamenta lists only look

systematically at production and see circulation as a passive link between

the phases of surplus value production . N e i t h e r c a n s e e t h e i n t e r a c t i o n o f

t h e p r o d u c t i o n o f s u r p l u s v a l u e a n d i t s c i r c u l a t i o n i n t h e i n t e g r a t e d c i r c u i t

of capital and so each has a very simplistic conception of accumulation

and crisis, determined only by the course of the class struggle in either

production or circulation . It is only through the examination of the unity

o f t h e c i r c u i t o f c a p i t a l t h a t i t i s p o s s i b l e t o s e e c a p i t a l a s a p r o c e s s w h i c h

t a k e s o n d i f f e r e n t f o r m s i n d i f f e r e n t p h a s e s o f i t s c i r c u i t a n d s o t o a p p r e -

ciate the concrete complexity of accumulation, class struggle and crisis .

Neo-Ricardians and Fundamentalists each have a reductionist concep-

t i o n o f c a p i t a l , e v e r y t h i n g b e i n g e i p l a i n e d d i r e c t l y b y t h e s i m p l e c a t e go r y

of class struggle in production or circulation . To get b eyond thi s reduc-

tionism it is necessary to bring out the different levels of abstraction at

which different concepts are formulated in Capital . Fine and Harris cor-


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8 CA P I T A L & CL ASS

r e c t l y i n s i s t , a g a i n s t t h e p r e v a i l i n g a c a d e m i c f a s h i o n , t h a t M a r x ' s c o n c e p t s

are not convenient fictions but are abstractions from reality . As such

different concepts are formulated at different levels of generality, the

examination of concrete capitalist societies demands that we move not

directly from the most abstract categories to the concrete, but that we

m o d i f y t h e m o s t a b s t r a c t a n a l y s i s i n t h e l i g h t o f c o n s i d e r a t i o n s t h a t e n t e r

a t l o w e r l e v e l s o f a b s t r a c t i o n . The order of abstraction is not the same as

th e order of determination however . For example, th e concept of th e

commodity is formulated at a higher level of abstraction than t he concept

of capital, but introduct ion of the concept of capital transforms our

understand ing of the circulation of commodities when commodities

become a form of capita l . Thus an understanding of the nature of Marx's

abstraction is essential to an understan ding of the circuit of capital as a

d i f f e r e n t i a t e d p r o c e s s a n d n o t a s a s i m p l e e x p r e s s i o n o f o n e o f i t s m o m e n t s .

Fine and Harris use their account of the levels of abstraction in

Capital to reconcile the interdependence of production and circulation

with their conception of the primacy of production, and it is at t his point

that their analysis reveals its shortcomings . They argue that for Marx

r e l a t i o n s o f p r o d u c t i o n a r e p r i o r t o r e l a t i o n s o f d i s t r i b u t i o n b e c a u s e i t i s

conditions in the sphere of production that determine developments in the

sphere of distribution . However they do not manage to explain why t h i sis so, and this is because they tend to neglect the critical dimension of

Capital : they treat Capital as political economy and not as a critique of

political economy . Thus they do not look systematically beyond the

economic categories to the social relations that lie behind them, instead

t h e y r e m a i n o n t h e s u r f a c e o f t h e c i r c u i t o f c a p i t a l a n d d o n o t s e e i t a s t h e

c i r c u i t o f t h e f o r m s t a k e n b y c a p i t a l i n i t s d e v e l o p m e n t a s a s o c i a l r e l a t i o n .

Fine and Harris's formulation is described by Marx himself as 'an

extremely brilliant conception', 'an attempt to portray the whole produc-

tion process as a process of reproduction, with circulation merely as the

form of this reproductive process ; and the circu lation of money only as a

p h a s e i n t h e c i r c u l a t i o n o f c a p i t a l . . . ' (TSV 1, p . 3 3 4 ) . However Marx was

not here abandoning his usual modesty, he was praising the achievements

of the physiocrats . The physiocrats had an acute understanding of the

material foundation of the reproduction of capital, an unders tanding

which was diluted by Adam Smith, because they began 'with that branch

of production which can be th ought of in complete separation from and

independently of circulation, of exchange ; and wh ich presupposes ex-

change not betw een man and man but only between man and nature'

( i b i d , p . 5 7 ) . The isolation of production from exchange is only possible

because the physiocrats, and Fine and Harris (neo-physiocrats?), neglect

the social form of production, looking only at the relations 'betw een man

and nature' .

The essential point is not simply that production is determinant with-

i n t h e c i r c u i t o f c a p i t a l ( a l t h o u g h i t i s t r u e t h a t i n s o m e s e n s e p r o d u c t i o n

i s s o d e t e r m i n a n t ) , i t i s t h a t t h e w h o l e c i r c u i t i s t h e c i r c u i t o f c a p i t a l , of

v a l u e i n m o t i o n , t h e f e t i s h i s e d f r o m o f a l i e n a t e d l a b o u r , a n d s o i s p r e m i s e d

on the class relation between labour and capital . Thu s product ion and

circulati on are not inde pend ent spheres between which relations of depen-


9/17

REVIEW ARTICLE 9dente or interdependence can subsequently b e e s t a b l i s h e d , t h e y a r e

d i f f e r e n t i a t e d moments o f t h e c i r c u i t o f c a p i t a l w h i c h i s i t s e l f a t o t a l i t y .

T h e y a r e , s p e c i f i c al l y , d i f f e r e n t i a t e d f o r m s o f t h e s o c i a l r e l a t i o n s b e t we e n

c a p i t a l a n d l a b o u r . T h e c i r cu i t o f c ap i t a l is n o t a s tr u ct u re , but a p r o c e s s .

The crucial conceptual distinction that underlies C a p i t a l i s t h a t

b e t w e e n u s e - v a l ue a n d v a l u e , t h e f o r m e r c a t e g o r y e x p r e s s i n g t h e m a t e r i a l

f o u n d a t i o n o f p r o d u c t i o n , t h e l a t t e r i t s s o c i a l f o r m . M a r x ' s c r i t i q u e o f

political economy focuses time and again on the confusion between use-

v a l u e a n d v a l u e , a n d t h i s c o n f u s i o n s t i l l m a r k s F i n e a n d H a r r i s ' s c o n c e p -

t u a l i s a t i o n o f t h e r e l a t i o n b e t w e e n p r o d u c t i o n a n d c i r c u l a t i o n .

I f w e c o n s i d e r t h e p r o d u c t i o n a n d c i r c u l a t i o n o f u s e - v a l u e s t h e t w o

spheres can be de fined independently of one another : a c e r t a i n d e t e r -

m i n a t e q u a n t i t y o f u s e - v a l u e s i s f i r s t p r o d u c e d a n d t h e n e x c h a n g e d o n e f o r

another. H o w e v e r a s s o o n a s w e c o n s i d e r t h e p r o d u c t i o n a n d c i r c u l a t i o n o f

v a l ue , w h i c h is t h e b as i s f or o u r u n d er s t an d in g o f t he s o ci a l f or m o f p r o-

duction, it becomes impossible to consider production and circulation

independently of one another . Labour time is expended in production,

b u t t h i s l a b o u r t i m e i s o n l y s o c i a l l y v a l i d a t e d i n c i r c u l a t i o n , s o v a l u e c a n -

n o t e x i s t p r io r t o e x c h a n g e , w h i l e s u r p l u s v a lu e d e p en d s o n t h e r e l a t i o n

between the result of two exchanges (of money capital for labour power

and of commodity capita l for money) . Thus value cannot be determined

w i t h i n p r o d u c t i o n , i n d e p e n d e n t l y o f t h e s o c i a l v a l i d a t i o n o f t h e l a b o u r

expended within circulation : c i r c u l a t i o n i s t h e s o c i a l f o r m w i t h i n w h i c h

a p p a r e n t l y i n d e p e n d e n t p r o d u c t i v e a c t i v i t i e s a r e b r o u g h t i n t o r e l a t i o n w i t h

one another and ha ve the st amp of value imposed on them . However

v a l u e c a n n o t b e d e t e r m i n e d i n c i r c u l a t i on e i t h e r , f o r c i r c u l a t i o n i s t h e

f o r m i n w h i c h t h e s o c i a l m e d i a t i o n o f p r i v a t e l a b o u r s t a k e s p l a c e a n d t h e

l a t t e r p r o v i d e t h e m a t e r i a l f o u n d a t i o n o f t h e s o c i a l d e t e r m i n a t i o n o f v a l u e .

T h u s t o i s o l a t e p r o d u c t i o n f r o m c i r c u l a t i o n , e v e n a n a l y t i c a l l y , i s t o i s o l a t e

independent productive activities from one another, and so to deprive

p r o d u c t i o n o f i t s s o c i a l f o r m . T o i s o l a t e c i r c u l a t i o n f r o m p r o d u c t i o n , o n

t h e o t h e r h a n d , i s t o i s o l a t e t h e s o c i a l r e l a t i o n s b e t w e e n p r o d u c e r s f r o m

t h e i r m a t e r i a l f o u n d a t i o n . I t i s i n t h i s s e n s e t h a t p r o d u c t i o n a n d c i r c u l a -

tion can only be seen as moments of a whole, as the development of the

c o n t r a d i c t o r y u n i t y o f v a l u e a n d u s e - v a l u e w i t h w h i c h C a p i t a l b e g i n s . T h e

argument holds with added force when we turn to surplus value, and so

capital, which de pends in addit ion on the commodity form of labour

power .

T h e i d e a t h a t t h e c i r c u i t o f c a p i t a l i s a t o t a l i t y o f w h i c h p r o d u c t i o n

and circulation are moments is not a metaphysical idea, although Marx

d o e s s a y t h a t t h e c o m m o d i t y a p p e a r s t o b e ' a v e r y q u e e r t h i n g , a b o u n d i n g

i n m e t a p h y s i c a l s u b t l e t i e s a n d t h e o l o g i c a l n i c e t i e s ' (C a p i t a l , I , p . 7 1 ,

1967 Moscow edit ion) . T h e t o t a l i t y i s n o t s i m p l y a c o n c e p t u a l t o t a l i t y ,

an Hegelian idea imposed on reality, it is real and it has a concrete

e x i s te n c e . I t s r e a l i t y i s t h a t o f t h e c l a s s r e l a t i o n b e t w e e n l a b o u r a n d

c a p i t a l , a n d i t s e x i s t e n c e i s t h e e v e r y d a y e x p e r i e n c e o f m i l l i o n s o f d i s -

p o s s e s s e d w o r k e r s .

I f w e l o o k o n l y a t t h e i m m e d i a t e f o r m s o f e x i s t e n c e o f t h e r e l a t i o n

b e t w e e n c a p i t a l a n d l a b o u r w e c a n n o t f i n d a c l a s s r e l a t i o n . W i t h i n c i r c u -


10/17


lation capitalists and workers enter as individuals engaged in a free and

equal exchange of commodities . Thus there are no class relations here .

Within production again we find only individual relationships between

individ ual capitalists and the group of workers under their command.

Certainly workers have a common interest against t heir own capitalists,

and workers have a common interest against capitalists as a w hole . B u t a

common interest is not sufficient to define an especially privilege d class

r e l a t i o n : thus workers in a particular bran ch of industry also have a

common interest with t he capitals which employ them but this does not

d e f i n e a c l a s s r e l a t i o n , n o r d o e s i t u n d e r m i n e t h e p r i o r i t y o f c l a s s r e l a t i o n s .

A class relation is not defined subjectiv ely by the existence of a common

i n t e r e s t , i t i s a n o b j e c t i v e s o c i a l r e l a t i o n t h a t e x i s t s i n de p e n d e n t l y o f , a n d

p r i o r t o , a n y p a r t i c u l a r i n t e r e s ts .

The foundation of the social relation between capital and labour lies

outside both production and circulation, th us outside th e circuit of

capital, in the se paration of the labourer from the means of production

and subsistence . Or rather this foundation lies not outside the circuit of

c a p i t a l , i t s u f f u s e s t h e c i r c u i t a s a w h o l e . Thus the real foundation of the

u n i t y o f t h e c i r c u i t o f c a p i t a l a s t h e t o t a l i t y o f t h e d i f f e r e n t i a t e d ( e c o n o -

mic) forms of the class relation betw een capital and labour lies in the

separation of the labourers from the means of production and subsistence,

a separation that is in turn reproduced only in the circuit of capital as a

whole . Thus Marx does not discover the class relation between capital and

l a o u r i n t h e s p h e r e o f c i r c u l a t i o n , b u t n o r d o e s h e f i n d i t i n t h e s p h e r e o f

production, he only discovers it when he comes to consider t he unity of

production and circulation in the reproduction of capital, in part VII of

volume I of Capital after he has considere d the moments of the whole

s e p a r a t e l y i n t h e p r e v i o u s s e c t i o n s . I n p a r t V I I o f v o l u m e I , a n d i n p a r t I o f

volume II, Marx reassesses the results of the previous analysis by locating

these apparently indepen dent moments within t he whole as forms of the

c l a s s r e l a t i o n .

The class relation between capital and labour is quite distinct from

other social relations because it is constituted prior to the circuit of

c a p i t a l , i t i s t h e s o c i a l p r e c o n d i t i o n f o r t h a t c i r c u i t . O t h e r s o c i a l r e l a t i o n s

that deve lop on the basis of common economic interests are determined

within t h e c i r c u i t o f c a p i t a l , a n d so presuppose the class relation between

capital and labour . T h i s a p p l i e s t o t h e r e l a t i o n s b e t w e e n d i f f e r e n t c a p i t a l s ,

between different sections of the w orking class, and to relations within

which workers may even identify with capitalists . M o r e o v e r t h e d i s p o s e s s -

i o n o f t h e l a b o u r e r i s n o t o n l y t h e b a s i s o f t h e w o r k e r s ' e n t i r e s o c i a l e x i s -

tence, and so the basis on which workers enter not only production and

c i r c u l a t i o n , b u t a l s o e n g a g e i n l e i s u r e a c t i v i t i e s , e n t e r p o l i t i c a l r e l a t i o n -

ships, and conceptualise their relationships with the social and natural

conditions of th eir existence . Dispossession is thus a total social

experience, an experienc e not only of exploitation, but also of social,

political and even natural domination . T h e c r u c i a l f e a t u r e o f t h e c a p i t a l -

l a b o u r r e l a t i o n i s not t h a t i t i s d e f i n e d i n p r o d u c t i o n , b u t t h a t i t i s p r i o r t o

both production and circu lation as the social precondition for human exis-

t e n c e w i t h i n a c a p i t a l i s t s o c i e t y . Production and circulation are therefore


11/17

R E V I E W A R T I C L E 1 1

i n t h i s v e r y c o n c r e t e s e n s e m o m e n t s o f a t o t a l i t y , p a r t i c u l a r c o m p l e m e n -

t a r y f o r m s o f a s i n g l e s o c i a l r e l a t i o n .

I t i s c e r t a i n l y t r u e t h a t w i t h i n t h e t o t a l i t y p r o d u c t i o n i s t h e d o m i n a n t

moment . T h i s i s n o t , h o w e v e r , b e c a u s e e v e r y t h i n g t h a t ha p p e n s i n c i r c u -

l a t i o n i s d e t e r m i n e d b y w h a t h a p p e n s i n p r o d u c t i o n , b e c a u s e a s F i n e a n d

H a r r i s r e c o g n i s e , c i r c u l a t i o n r e a c t s b a c k o n p r o d u c t i o n . I t i s b e c a u s e t h e

totality of which production and circulatoin are moments is a totality

within which social relations are produced and reproduced by means of

t h e p r o d u c t i o n a n d c i r c u l a t i o n o f u s e - v a l u e s . I t i s b e c a u s e t h e c a p i t a l i s t

a n d w o r k e r l e a v e t h e c i r c u i t a s t h e y e n t e r e d i t , t h e o n e i n p o s s e s s i o n o f t h e

m a t e r i a l m e a n s o f p r o d u c t i o n a n d s u b s i s t e n c e, t h e o t h e r w i t h n o t h i n g , t h a t

the social relation between them is reproduced . Thus while, on the one

h a n d , t h i s s o c i a l r e l a t i o n i s r e p r o d u c e d t h r o u g h b o t h p r o d u c t i o n a n d c i r c u -

l a t i o n , s o t h a t b o t h a r e e q u a l l y m o m e n t s o f t h e s o c i a l r e l a t i o n b e t w e e n

l a b o u r a n d c a p i t a l , o n t h e o t h e r h a n d t h e m a t e r i a l d i m e n s i o n o f t h i s r e p r o -

d u c t i o n i s t h e p r o d u c t i o n a n d c i r c u l a t i o n o f u s e - v a l u e s , a n d t h e q u a n t i t y

of use-values available to circulation is determined within production .

T h u s t h e d o m i n a n c e o f p r o d u c t i o n w i t h i n t h e c i r c u i t o f c a p i t a l c o m e s t o

t h e f o r e w h e n w e c o n s i d e r t h e m a t e r i a l a s p e c t o f t h e r e p r o d u c t i o n o f c a p i -

t a l is t s o c ia l r e l a t io n s . H o w e v e r t h i s m a t e r i a l a s p e c t o n l y a c q u i r e s i t s s i g n i f i -

c a n c e w h e n c o n s i d e r e d i n r e l a t i o n t o i t s s o c i a l f o r m . Thus the dominance

o f p r o d u c t i o n w i t h i n t h e c i r c u i t o f c a p i t a l c a n o n l y b e c o n c e p t u a l i s e d i n

r e l a t i o n t o t h e c i r c u i t of c a p i t al a s a w h o l e . T h e u n i t y o f t h e t w o a s p e c t s

o f t h e c i r c u i t o f c a p i t a l i s i n s e p a r a b l e : t h e c i r cu i t o f c ap i t a l is t h e c ir c u i t o f

t h e p r o d u c t i o n a n d r e p r o d u c t i o n o f m e a n s o f p r o d u c t i o n a n d s u b s i s t e n c e ,

o n t h e o n e h a n d , a n d o f s o c i a l r e l a t i o n s , o n t h e o t h e r . B u t i t i s a l s o c o n t r a -

d i c t o r y : the expanded reproduction of the means of production and sub-

s i s t e n c e p r e j u d i c e s t h e r e p r o d u c t i o n o f t h e c a p i t a l i s t s o c i a l r e l a t i o n .

This point is not only of methodological or of sociological impor-

t a n c e . I t i s n e i t h e r a n o t h e r w a y o f l o o k i n g a t t h e s a m e t h i n g , n o r a n a d d i -

tional dimension to be added to a previously completed analysis . I t h a s

v e r y c o n s i d e r a b l e s u b s t a n t i v e i m p l i c a t i o n s . I t s s u b s t a n t i v e s i g n i f i c an c e c a n

b e i n d i c a t e d b y c o n s i d e r i n g t h e s p e c i f i c t o p i c s t h a t F i n e a n d H a r r i s d i s c u s s ,

a l t h o u g h i t s h o u l d b e a d d e d t h a t d e s p i t e t h e i r p h y s i o c r a t i c f o r m u l a t i o n o f

t h e c i r c u i t o f c a p i t a l t h e y d o i n p r a c t i c e p u s h b e y o n d s u c h a c o n c e p t i o n

w h e n i t c a n n o t b e s u s t a i n e d .

The second chapter of the book looks at the transformation problem .

The basic argument is that values an d prices of production relate to

d i f f e r e n t l e v e l s o f a b s t r a c t i o n . T h e r e i s a g o o d e x p o s i t i o n o f t h e t e c h n i c a l

i s s u e s , a n d t h e t r e a t m e n t o f t h e n e o - R i c a r d i a n s i s e x c e l l e n t , b u t t h e w e a k -

n e s s n o t e d a b o v e r e c u r s : F i n e a n d H a r r i s d o n o t p r o v i d e a c o n v i n c i n g j u s t i -

f i c a t i o n o f v a l u e a n a l y s i s n o t l e a s t b e c a u s e t h e y d o n o t m a k e c l e a r w h a t

they mean by value . T h e n e e d f o r v a l u e t h e o r y i s r e l a t e d t o t h e p r i m a c y o f

production . Price theory cannot handle production in abstraction from

e x c h a n g e a n d s o c a n n o t t h e o r i s e t h e c l a s s s t r u g g l e , t h e r e v o l u t i o n i s i n g o f

t h e m e a n s o f p r o d u c t i o n , o r t h e d i s l o c a t i o n o f p r o d u c t i o n a n d e x c h a n g e i n

c r i s i s .

I t i s t r u e t h a t p r i c e t h e o r y c a n n o t g i v e a M a r x i s t a c c o u n t o f t h e s e

phenomena, but that is not the point . F o r p r i c e t h e o r y t h e s e p a r a t i o n o f

C&CfO -B


12/17

12 CAPIT A L & CLASS

production from exchange in this way is an artificial and arbitrary separa-

t i o n , s o t h e M a r x i s t a n a l y s i s i s a r b i t r a r y t o o . Moreover it cannot be argued

that the category of value relates to considerations of production in iso-

lation from exchange unless one adopt s a physicalist conce pt of value as a

technologically determined quanti ty of labour . As Fine and Harris recog-

nise, however, the social charact er of labour is only validated through ex-

change, so value cannot be considered in isolation from exchange . Thus

attention has t o be focussed not primarily on production, but on the cir-

c u i t a s a w h o l e .

T h e e s s e n t i a l p o i n t i s s u r e l y t h a t t h e c o n c e p t o f v a l u e i s n o t n e c e s s a r y

so long as Marxism is seen as a t echnical economic theory concerned only

with the production and distribution of use-values . The concept of value

expresses the critical, dialectical power of Marx's theory, directing our

attention beyond the apparent separation of production and exchange to

t h e i r f u n d a m e n t a l u n i t y a s f o r m s o f c a p i t a l i s t c l a s s r e l a t i o n s . T h e p o i n t i s

n o t t h a t v a l u e i s a c o n c e p t e x p r e s s i n g a b s t r a c t i o n f r o m e x c h a n g e , i t i s t h a t

both the production and the di stribution of the social product are only

determined within th e class relation between capital and labour . T h u s t h e

n e c e s s i t y o f v a l u e e x p r e s s e s t h e p r i m a c y o f t h i s c l a s s r e l a t i o n , n o t t h e p r i -

macy of production .

The transformation of value into price does not, therefore, express

some purely economic relationship between production and circulation, it

expresses the distinction between the distribution of the social product

between capital and labour, and the redistribution of the surplus product

w i t h i n t h e c a p i t a l i s t c l a s s w h i c h t a k e s p l a c e t h r o u g h t h e e q u a l i s a t i o n o f t h e

rate of profit and the formation of rent, interest and the profit of enter-

p r i s e . Thus it expresses the fundamental difference between relations

b e t w e e n c l a s s e s a n d r e l a t i o n s w i t h i n c l a s s e s . T h i s f u n d a m e n t a l d if f e r e n c e i s

not compromised by the secondary economic consideration tha t the

e q u a l i s a t i o n o f t h e r a t e o f p r o f i t c a n a l s o e f f e c t a d e g r e e o f r e d i s t r i b u t i o n

between classes .

T h i s i s n o t s i m p l y a t e c h n i c a l p o i n t . M a r x ' s a b s t r a c t i o n i s n o t b a s e d o n

the logical or empirical primacy of production . It is based on the dis-

covery that the class relation betw een capital and labour is centred on the

exchange of labour power for capital and the subordination of social pro-

duction to the production of surplus value . This is t he core of Marx's

th eory of C a p i t a l , and it is on this basis t hat Marx could develop his

c r i t i q u e o f p e t i t - b o u r g e o i s s o c i a l i s m t h a t s a w t h e e v i l s o f c a p i t a l i s m a s t h e

result of the subordination of production to the market . T h i s h a s o b v i o u s

p o l i t i c a l i m p l i c a t i o ns f o r t h e t r a n s i t i o n t o s o c i a l i s m : s o c i a l i s m c a n o n l y b e

achieved by abolishing the class relation between labour and capital . I t

cannot be achieved by abolishing the social character of labour or the

e q u a l i s a t i o n o f t h e r a t e o f p r o f i t .

The chapter on productive and unproductive labour is in this respect

better than that on the transformation problem because it is not possible

to defend Marx's distinction on purely economic grounds . T h u s t h e c r i t i -

cism of Marx's distinction offered by the neo-Ricardians and t he Funda-


13/17

REVIEW ARTICLE 1 3m e n t a l i s ts a r e t h a t t h e d i s t i n c t i o n d o e s n ' t r e l a t e e i t h e r t o t h e t h e o r i s a t i o n

o f t h e r a t e o f p r o f i t o r t o t h e t h e o r i s a t i o n o f a c c u m u l a t i o n .

The neo-Ricardia ns point out that the expenditure of unproductive

labour still involves th e performance of surplus labour and so can

indirectly support the rate of profit even t hough it does not directly

produce surplus value . T h e Fundamentalists, on th e ot h er h and, h ave

noted that some of Marx's productive labour (that in luxury product ion)

does not produce surplus value in a form that can be accumulated . F i n e

and Harris therefore argue correctly that the distinction between pro-

ductive and unproductive labour refers to the form i n w h i c h s u r p l u " s l a b o u r

is expended, that is to say whether or not it is performed under the domi-

n a t i o n o f c a p i t a l i n t h e p r o d u c t i o n o f s u r p l u s v a l u e , a n d s o i s t h e s t a r t i n g

point for analysing the role played by economic agents in society . The

differentiation is therefore seen as a social and not a technical economic

one . This does not mean th at problems do not remain : i n p a r t i c u l a r i t i s

not clear that it is helpful to lump together workers who do not work

directly under the domination of capital, on the one hand, and workers

who work under the domination of capital but in the sphere of circulation,

on the other, into the same category of unproductive labour . Fine and

Harris tend to see Marx's analysis as more finished than Marx's tentative

comments could justify .

In looking at the law of the ten dency of the rate of profit to fall

Fine and Harris again organise t heir discussion around the th eme of the

primacy of production . Again they give an account of the debate that is

clear and concise (especially good on the technical, organic and value

composition of capital) . Their position is again that of defenders of what

they take to be Marx's position . H o w e v e r t h i s i s n o t s o e a s y i n t h e c a s e o f

the TRPF eve n if one remains at the level of economic argument . I n p a r t i -

cular Fine and Harris are not convincing in defending Marx's separation of

the law and t he counteracting tendencies by attributing t he former to pro-

duction and the latter to exchange . The problem is that the counteracting

tendencies are not all effects of exchange . I n p a r t i c u l a r t h e p r o d u c t i o n o f

relative and absolute surplus value is not a feature of exchange, while the

production of relative surplus value is an inseparable part of the rising

technical composition of capital, although like all value it is only

realised th rough exch ange .

The question we have to face is why did Marx not consider the pro-

duction of relative surplus value in association with the law as such? Marx

h i m s e l f i s n o t a t a l l c l e a r o n t h i s p o i n t a n d t h e r e i s c o n s i d e r a b l e f o r c e i n

the argument that Marx for some reason neglected to take relative surplus

v a l u e i n t o a c c o u n t , f o r h e d o e s n ' t c o n s i d e r i t s y s t e m a t i c a l l y e i t h e r i n a s s o -

ciation with the law or with the counteracting tendencies . T o b e c o n s i s t e n t

we surely have to consider relative surplus value as an aspect of the TRPF

and not of the counteracting tendencies . W i t h i n t h e c i r c u i t o f c a p i t a l t h i s

means that the TR PF effectively says that a capitalist who increases the

technical composition of capital must increase the rate of exploitation in

order to avoid the adverse impact of a higher technical composition of

c a p i t a l o n t h e r a t e o f p r o f i t ( t h i s s t i l l b e g s t h e q u e s t i o n o f h o w w e m e a s u r e


14/17

14 CAPIT A L & CLASS

t h e t e c h n i c a l composition o f c a p i t a l ) . These indeed are the t erms in

which Marx discusses the introduction of new machinery in volume I :

t h e s i g n i f i c a n c e o f t h e T R P F i s n o t d e t e r m i n e d b y t h e p r i m a c y o f p r o d u c -

t i o n i n a b s t r a c t i o n f r o m t h e c i r c u i t o f c a p i t a l , b u t b y t h e p r i m a c y o f t h e

c l a s s r e l a t i o n b e t w e e n l a b o u r a n d c a p i t a l i n r e l a t i o n t o t h e c i r c u i t a s a

whole . This, moreover, is how the workers experience the phenomenon

d e s c r i b e d b y t h e l a w o f t h e T R P F .

Despite the criticism that has been directed at the T RPF it has

enjoyed unprecedented popularity in the last few years . F o r m a n y

M a r x i s t s t h e T R P F i s t h e m o s t f u n d a m e n t a l e x p r e s s i o n o f t h e b a s i c c o n t r a -

d i c t i o n o f c a p i t a l i s t s o c i e t y . It is worth asking how important Marx con-

sidered th e T RP F to b . I t h i n k i t i s s i g n i f i c a n t t h a t a l t h o u g h M a r x

m e n t i o n s t h e p r e s s u r e o f a r i s i n g t e c h n i c a l c o m p o s i t i o n o f c a p i t a l o n t h e

r a t e o f p r o f i t i n v o l u m e I , w h i c h w a s w r i t t e n a f t e r v o l u m e 3 , h e d o e s n o t

g i v e i t a n y e p o c h a l s i g n i f i c a n c e . O n t h e o t h e r h a n d i n v o l u m e I t h e ' a b s o -

l u t e g e n e r a l l a w o f c a p i t a l i s t a c c u m u l a t i o n ' i s n o t a l a w t h a t p r e c i p i t a t e s a

c r i s i s o f p r o f i t a b i l i t y f o r c a p i t a l , i t i s t h e t e n d e n c y f o r c a p i t a l t o c r e a t e

r e l a t i v e s u r p l u s p o p u l a t i o n a n d s o t o c r e a t e a c l a s s t h a t h a s n o t h i n g t o l o s e

b u t i t s c h a i n s . I t s h o u l d n e v e r b e f o r g o t t e n t ha t f o r M a r x a c r i s i s i s t h e

m e a n s b y w h i c h c a p i t a l a t t e m p t s t o r e s o l v e i t s c o n t r a d i c t i o n s o n i t s o w n

t e r m s .

T h e l a s t c h a p t e r o f t h e f i r s t p a r t o f t h e b o o k , o n t h e t h e o r y o f c r i s i s ,

moves a bit further away from Capital . T h e t r e a t m e n t i s v e r y b r i e f a n d

i n c l u d e s a g o o d d i s c u s s i o n o f t h e d i s t i n c t i o n b e t w e e n t h e c a u s e s o f t h e

c r i s i s a n d i t s f o r m , o n w h i c h t h e c r i t i q u e o f n e o - R i c a r d i a n i sm i s b a s e d ,

a n d a g a i n s t t h e F u n d a m e n t a l i s t s c o r r e c t l y i n s i s t s o n t h e n e e d t o c o n s i d e r

t h e r e l a t i o n s b e t w e e n p r o d u c t i o n a n d c i r c u l a t io n a n d t h e r o l e o f c r e d i t i n

t h e c y c l e . F i n e a n d H a r r i s ' s o w n a c c o un t , h o w e v e r , i s v e r y w e a k , p i c k i n g

up on their identification of the difference between the TRPF and the

counteracting tendencies with t he difference between production and

c i r c u l a t i o n , a n d s o a r g u i n g t h a t a c r i s i s i n v o l v e s a d i s l o c a t i o n b e t w e e n t h e

two spheres . T h e a r g u m e n t i s s k e t c h y , a b s t r a c t a n d m e c h a n i s t ic .

The second part of the book is on the w hole much weaker than t he

f i r s t a s t h e ' s t r u c t u r a l i s t ' t e n d e n c i es t h a t w e r e i n t h e b a c k g r o u n d i n t h e

f i r s t h a l f c o m e t o t h e f o r e . F i n e a n d H a r r i s i n s i s t o n w o r k i n g w i t h a m o d e l

o f s o c i e t y a s a s t r u c t u r e o f s t r u c t u r e s , i n s t e a d o f a s a t o t a l i t y o f p r o c e s s e s .

T h u s , a s w e h a v e s e e n , t h e c i r c u i t o f c a p i t a l i s g e n e r a l l y s e e n a s a s t r u c t u r e

i n w h i c h p r o d u c t i o n i s i n s o m e i l l - d e f i n e d s e n s e d o m i n a n t o r d e t e r m i n a n t ,

i n s t e a d o f b e i n g s e e n a s a p r o c e s s . A m o d e o f p r o d u c t i o n i s t h e n s e e n a s

being composed of levels : t h e e c o n o m i c , p o l i t i c a l a n d i d e o l o g i c a l , a n d

a g a i n i t i s n o t c l e a r w h a t t h e s e l e v e l s a r e , h o w t h e y a r e d e f i n e d , o r h o w

t h e y a r e d i f f e r e n t i a t e d f r o m o n e a n o t h e r . A s o c i a l f o r m a t i o n i s t h e n m a d e

u p o f a n u m b e r o f m o d e s o f p r o d u c t i o n , b u t a g a i n i t i s n o t c l e a r h o w t h e s e

m o d e s r e l a t e t o o n e a n o t h e r . T h i s ' s t r u c t u r a l i s t ' m o d e l i s q u i t e i n c o n s i s t e n t

with Fine and Harris's discussion of the nature of Marx's abstraction,

t h o u g h i t i s , u n f o r t u n a t e l y , n o t i n c o n s i s t e n t w i t h t h e i r t e n d e n c y t o n e gl e c t

t h e c r i t i c a l d i m e n s i o n o f Capital .

T h i s p o i n t e m e r g e s c l e a r l y i n F i n e a n d H a r r i s ' s c h a p t e r o n t h e s t a t e ,

w h e r e t h e s t r u c t u r a l i s t m o d el i s i n t r o d u c e d . T h u s i n s t ea d o f c o n t i nu i n g th e


15/17

REVIEW ARTICLE 15d i s c u s s i o n f r o m t h e f i r s t p a r t o f t h e b o o k i n t e r m s o f l e v e l s o f a b s t r a c t i o n

(which now only get an occasional mention), seeing political interv ention

in and around the circuit of capital as a form of capitalist domination

defined at a lower level of abstraction than that of the circuit of capital

itself, Fine and Harris switch t o the levels model, leaving the 'economy'

b e h i n d a s t h e y t u r n t h e i r a t t e n t i o n t o t h e ' s o c i a l ' , a s i f t h e y h a d n ' t b e e n

w r i t i n g a b o u t s o c i a l r e l a t i o n s a l l a l o n g . T h u s F i n e a n d H a r r i s c a n s e r i o u s l y

suggest that 'the analysis of the economic laws of motion of capitalism can

b e u n d e r t a k e n i n a b s t r a c t i o n f r o m t h e s o c i a l r e p r o d u c t i o n o f c l a s s r e l a t i o n -

s as a whole . I n s h o r t , t h e e c o n o m i c r e p r o d u c t i o n o f c a p i t a l a n d t h e s o c i a l

reproduction of capitalism are to be distinguised, although the latter both

i n c l u d e s t h e f o r m e r a n d i s e s s e n t i a l f o r i t ' ( p . 9 4 ) . The so-called economic

laws of motion of capitalism are for Marx quit e simply the social reproduc-

tion of class relations as a whole, so how can the former be analysed in

abstraction from the latter? Of course the analysis of Capital does not

exhaust our understanding of the social relations of a capitalist society,

but in deepening our underst anding, making it more concrete, and relating

it to a particular society, we are not moving from the 'economic laws of

motion' to 'social reproduct ion', we are moving from an abstract to a more

concrete considera tion of social reproduction . T h e l a s t q u a l i f y i n g c l a u s e i n

the quote above indicates that Fine and Harris are aware of this, but they

don't seem to realise that that c lause undermines the previous paragraph .

The struct uralist formulation of the problem of the stat e immediately

sets up the academic division of labour that the CSE has, in its collective

activity, sought to undermine and threat ens to reproduce the isolation of

the 'economists' and t he 'economic illiteracy' of the 'non-economists' .

If it is the case t hat we can separate t he reproduction of economic from

that of social relations then there is no need for economists to worry

about social matters, or for non-economists to worry about the economy .

Yet the great merit of Fine and Harris's book in its better moments is

p r e c i s e l y t h a t i t i s t r y i n g t o o v e r c o m e t h i s d i v i d e . Thus the chapter on the

state tries hard t o relate capital to the state, and offers quite a good

methodological critique of Gough's neo-Ricardian approach to the stat e,

but is basically riddled wit h confusions and contradictions, most seriously

in their discussi on of the work of Holloway and Picciott o (where, inciden-

tally, they criticise Holloway and Picciotto for things that I have writt en

and me for things that they have w ritten, just to add to the confusion) .

Their own position is extremely confused because, to their credit, they are

trying to overcome the obstacles that their structural model poses to an

understanding of the relation between capital and the sta te .

The structura list temptations also weaken the . next chapter on the

p e r i o d i s a t i o n o f c a p i t a l i s m . T h e t h e s i s i s t ha t c a p i t al i s m c a n b e p e r i o di s e d

i n t o s t a g e s o n t h e b a s i s o f s t a g e s i n t h e s o c i a l i s a t i o n o f p r o d u c t i o n a n d s o

the development of social relations, including politic al relations and the

form of state . T h e s t a g e s t h a t r e s u l t a r e t h e f a m i l i a r o n e s o f l a i s s e z - f a i r e ,

monopoly capitalism and state monopoly capitalism . The problem is two-

f o l d : theoretically Fine and Harris don't have any consistent way of rela-

t i n g s o c i a l i s a t i o n o f p r o d u c t i o n t o o t h e r s o c i a l a n d p o l i t i c a l d e v e l o p m e n t s .

Thus they t end to pick out certain economic, political and ideological


16/17


c h a r a c t e r i s t i c s and simply to a s s e r t t h a t there i s some correspondence

b etween th em . Empirically there is the problem that the featu res that

supposedly collectively characteris e each phase are not necessarily as

c l o s e l y a s s o c i a te d w i t h o n e a n o t h e r , n o r a s w e l l - d e f i n e d , a s F i n e a n d H a r r i s

would like . Thus we cannot draw a clear dividing line between a phase in

which absolute surplus value production is dominant and a phase in which

absolute surplus value comes to dominate, for once capitalism's prehist ory

is completed the two are very closely associated with one another . Thus

the chapter fails as a convincing t reatment of the periodisation of capi-

talism, but it does contain many suggestive comments about the connec-

tions between different aspects of the development of British capitalism at

p a r t i c u l a r s t a g e s i n i t s h i s t o r y .

The following chapter on State Monopoly Capitalism takes off from

the previous one, since it is describing the current stage of capitalism .

Again the analysis is crude and does not convince the reader that state

monopoly capitalism can be defined as a distinct st age of capitalist de-

velopment . On the one hand, it is not clear at w hat point monopoly

capitalism becomes state monopoly capitalism, nor whether the dev elop-

ment from one to the other is either nece ssary or irreversible (obviously

a v i t a l i s s u e t o d a y ) . T h e d e f i n i t i o n o f s t a t e m o n o p o l y c a p i t a l i s m i s i n t e r m s

of th e predominance of th e state in economic reproduction, b ut th is

i n c l u d e s t h e r e g u l a t i o n o f c r e d i t , f i s c a l p o l i c y , n a t i o n a l i sa t i o n , a n d v a r i o u s

other forms of interven tion . It is, therefore, not clear what marks the

q u a l i t a t i v e l e a p f r o m o n e s t a g e t o t h e n e x t .

O n t h e o t h e r h a n d , i t i s n o t c l e a r t h a t a p a r t i c u l a r l e v e l o f s t a t e i n t e r -

vention in the economy necessarily has the political implications marked

out for it b y Fine and Harris . For example, th e argument th at state

involvement in economic struggle politicises the latter and so requires

s o c i a l d e m o c r a c y t o k e e p w o r k i n g c l a s s p o l i t i c s w i t h i n a r e f o r m i s t s t r a i g h t -

jacket is h ardly convincing wh en social democracy is not necessarily

associated with stat e monopoly capitalism . I f t h e s i m p l e c o r r e l a t i o n s t h a t

F i n e a n d H a r r i s p r o p o s e d o n o t h o l d , i t i s d i f f i c u l t t o s e e w h a t p o i n t t h e r e

is in defining state monopoly capitalism as a specific stage of capitalist

development . Nevertheless the chapter does contain some very good dis-

cussion of specific issues, in particular of the importance of the con-

cepts of productive and unproductive labour to an understanding of the

p o s s i b i l i t i e s o p e n t o s t a t e w o r k e r s , a n d e s p e c i a l l y t h e d i s c u s s i o n o f i n f l a -

tion, where Fine and Harris argue for the need to analyse inflation in the

c o n t e x t o f t h e c i r c u i t o f c a p i t a l . T h i s i s i m m e d i a t el y r e l e v a n t t o a M a r x i s t

analysis of monetarism, which needs to be understood as an inter vention

i n t h e c i r c u i t o f c a p i t a l t h r o u g h i t s e f f e c t o n m o n e y c a p i t a l .

The last chapter of the book is on imperialism and the nation st ates .

The different stages of internationalisation of capital give a different

periodisati on of capital from that already considered . T h e r e a r e t h e r e f o r e

t w o p e r i o d i s a t i o n s : competitive, m o n o p o l y and state monopoly

capitalism, on the one hand, and t he international isation of commodity,

financial and productive capital, on the other . These do not necessarily

coincide with one another, so that there is a complex interaction of the

t w o . However it is very difficult to see how th is analysis could b e


17/17

REVIEW ARTICLE 1 7defended, for there i s no way in which an adequat e account of the

c e n t r a l i s a t i o n o f c a p i t a l a n d t h e i n c r e a s i n g l y i n t e r v e n t i o n i s t r o l e o f t h e

s t a t e , t h a t m a r k s t h e f i r s t p e r i o d i s a t i o n , c o u l d b e c a r r i e d o u t i n d e p e n d e n t -

l y o f a n a c c o u n t o f t h e i n t e r n a t i o n a l i s at i o n o f c a p i t a l a n d t h e i n t e r v e n t i o n -

i s t s t a t e a s a n a t i o n a l s t a t e . The separation Fine and Harris make is an

e n t i r e l y a r t i f i c i a l o n e .

I h a v e w r i t t e n a t s u c h l e n g t h , a n d b e e n s h a r p l y c r i t i c a l o f F i n e a n d

H a r r i s ' s b o o k b e c a u s e i t i s a v e r y i m p o r t a n t b o o k t h a t s h o u ld b e c a r e f u l l y

r e a d b y a l l t h o s e w i t h r e s p o n s i b i l i t i e s a s M a r x i s t i n t e l l e c t u a l s ( a n d t h a t

doesn't just mean academics) . I t i s a d i f f i c u l t b o o k i n p l a ce s , a n d s o m e o f

t h e a r g u m e n t i s t e c h n i c a l , b u t M a r x i s t i n t e l l e c t u a l s h a v e a n o b l i g a t i o n n o t

to indicate what I consider some of those weaknesses to be, but these

w e a k n e s s e s i n t h e f o r m s o f c o l l e c t i v e i n t e l l e c t u a l a c t i v i t y i n w h i c h w e a r e

i n v o l v e d , w h i c h h a v e s t i l l n o t o v e r c o m e t h e b o u r g e o i s a c a d e m i c d i v i s i o n

of labour . Fine and Harris have attempted to surmount this divide, but

s t i l l , I h a v e s u g g e s t e d , r e m a i n l a r g e l y w i t h i n t h e f e t i s h i s t i c c a t e g o r i e s o f

p o l i t i c a l e c o n o m y . I t i s v e r y i m p o r t a n t , h o w e v e r , t h a t t h e r e s p o n s e t o t h e ir

b o o k i s n o t a d i s m i s s i v e o n e o n t h i s c o u n t . The book should not be seen

s i m p l y a s a s u r v e y o f o l d d e b a t e s , b u t s h o u l d b e u s e d a s t h e b a s i s o n w h i c h

to enrich new ones . I t i s t o b e h o p e d t h a t t h e r e c e n t p u b l i c a t i o n b y C S E

B o o k s o f t h e i m p o r t a n t c o l l e c t i o n o n v a l u e e d i t e d b y D i a n e E l s o n w i l l g i v e

t h o s e n e w d e b a t e s a f r e s h i m p e t u s .

published February 28

CAPITALISM, CONFLICT AND INFLATIONE ssays in Political E conomy

Bob Rowthorn

The theoretical and historical essays collected in this volume,

by one of the most influential of a new generation of Marxist

economists, cover major areas of concern and debate among

c o n t e m p o r a r y e c o n o m i s t s . Includes 'Marx's Theory of

Wages', 'Skilled Labour in the Marxist System', 'Rosa Luxem-

burg and the Politi cal Economy of Militarism' as well as

essays on neo-Ricardi anism and Marxism, the economics of

imperialism, and Ernest Mandel .

272pp ; hardback 8 . 5 0 .

a new collection

MARX AND ENGELS :PRE-CAPITALIST SOCIO-ECONOMIC FORMATIONSBrings together in one volume Marx's and Engels's most

important writings on pre-capitalist societies and on the revo-

lutionary transition from one social formation to anoth er .

604pp ; hardback 3 .00

LAWRENCE & WISHART 39 Museum Street,London WC1A 1 LQ .

value of value

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