Marx’s Capital – Philosophy and Political Economy. Geoff Pilling 1980
Chapter 3. The Concepts of Capital
A common objection to Marx’s notion of ‘capital in general’ is that it does not deal with the concrete reality of capitalism. It is an abstraction which cannot deal with concrete matters like the rate of profit for a particular firm. (This is Hodgson’s position). Again, the problem to be resolved here is not so much one concerning economics, but philosophy. It is a fallacy to think that because abstractions (such as that of capital in general) are formed through the penetration of the appearance of things, deeper into the essence of the phenomena concerned, this renders such abstractions unreal. On the contrary, they have a powerful objective existence precisely because, as abstractions, they embrace the wealth of all the phenomena concerned. Attacking all those who wanted to raise what was immediately given in perception to the status of the sole source of knowledge, Hegel says,
And Lenin’s comment on this passage is significant in considering the method exemplified by Hodgson.
It was because abstraction, if accurate, does not get away from the pulse of development but comes closer to it that Marx said, specifically of ‘capital in general’:
as distinct from the particular real capitals, is itself a real existence ... capital in this general form, although belonging to individual capitalists, in its elemental form of capital, forms the capital which accumulates in the banks or is distributed through them . . . while the general is therefore on the one hand only a mental mark of distinction it is at the same time a particular real form alongside the form of the particular and individual. (Grundrissse, pp. 449-50)
We are, of course, once again considering the relationship between the ‘individual’ ‘particular’ and the ‘general’. The notion of capital in general is not arrived at via a mechanical summation of each unit of capital; it is no mere abstraction based upon some dead uniformity found in each individual capital. The total social capital consists of the contradictory ensemble of all individual capitals in their dynamic interrelations. Dealing with the movement of this social capital, Marx says,
However the circuits of the individual capitals intertwine, presuppose and necessitate one another, and form, precisely in this interlacing, the movement of the total social capital. Just as in the simple circulation of commodities the total metamorphosis of a commodity appeared as a link in the series of metamorphoses of the world of commodities, so now the metamorphosis of the individual capital appears as a link in the series of metamorphoses of the social capital.
And what is true of individual capitals is true of particular forms of capital (fixed, circulating, etc.). The total social capital is not an arithmetical addition of these forms:
Capital as a whole, then, exists simultaneously, spatially side by side, in its different phases. But every part passes constantly and successively from one phase, from one functional form, into the next and thus functions in all of them in turn. Its forms are hence fluid and their simultaneousness is brought about by their succession. Every form follows another and precedes it, so that the return of one capital part to a certain form is necessitated by the return of the other part to some other form. Every part describes continuously its own cycle, but it is always another part of capital which exists in this form, and these special cycles form only simultaneous and successive elements of the aggregate process. (II, p. 104)
And in its development this total social capital (capital in general) asserts itself against the individual owner of capital.
If social capital experiences a revolution in value, it may happen that the capital of the individual succumbs to it and fails, because it cannot adapt itself to the conditions of this movement of values. The more acute and frequent such revolutions in value become, the more does the automatic movement of the now independent value operate with the elemental force of a natural process, against the foresight and calculation of the individual capitalist, the more does the course of normal production become subservient to abnormal speculation, and the greater is the danger that threatens the existence of the individual capitals. (II, p. 106)
Thus the concept of capital in general is an essential abstraction for understanding the movement and general tendencies of the capitalist mode of production. And it is important to stress once more that we are dealing with a tendency, a movement, not with capital in a state of dead repose (it can never, of course, exist in such a state). In its actual contradictory development capitalism more and more brings out the power of social capital against the individual unit of capital. This is brought out clearly in the case of the banking and credit system. For through credit and banking all the actual and potential capital of society is placed at the disposal of industry and commerce. And here lies the driving force to a higher form of society (socialism) within the capitalist mode of production. For banking and credit
does away with the private character of capital and thus contains in itself, but only in itself, the abolition of capital itself . . . banking and credit thus become the most potent means of driving capitalist production beyond its own limits, and one of the most effective vehicles of crisis and swindles. (III, p. 593)
It is, however, in share capital that the real character of aggregate social capital is most openly revealed. For in this form capital has worked itself up to its final form, in which it is posited, not only in itself, in its substance, but is posited also in its form as social power and product’ (G, p. 530). The contrast here between capital ‘in itself’ and its ‘posited existence’ is as Rodolsky points out (Rosdolsky, 1978, p. 49) drawn from Hegel’s logic. This understanding that capital in general must itself be seen as a particular form of capital, having a definite social power, is derived from Hegel’s insistence that the general was a category which was itself at the same time necessarily an individual and a particular.
Discussing Aristotle’s notion of the soul as determined in three ways (as ‘nutrient’, ‘sensitive’, and ‘intelligent’ which correspond with plants, animals and humans) Hegel writes:
Aristotle says of them, with perfect truth, that we need look for no one soul in which all three are found and in which a definite form is conformable with any one of them. This is a profound observation, by means of which truly speculative thought (dialectics) marks itself out from thought which is merely logical and formal. (Hegel, Lectures on the History of Philosophy)
Hegel goes on from this to give the example of the relationship of the triangle to other definite figures, such as the square and parallelogram. Only these ‘definite figures’, says Hegel, are ‘truly anything’:
For what is common to them, the universal figure, is an empty thing of thought, a mere abstraction. On the other hand, the triangle is the first and truly universal figure which appears in the square, etc. as the figure which can be led back to the simplest determination. Therefore, on the one hand, the triangle stands alongside the square, pentagon etc. as a particular figure, but- and this is Aristotle’s main contention – it is the truly universal figure. (p. 185)
Let us look at this question of abstraction and the production of concepts in relation to a specific question: the law of value. We shall deal with this law in more detail later, so here we will content ourselves with a brief resume of Marx’s findings. The discovery of the essential nature of this concept belongs to Marx. He points out that the property of value can be abstracted only by examining the relationships entered into by commodities during the course of their exchange. In this process of exchange, commodities are rendered equal despite their different qualitative character. Or more precisely: the very fact that they do have different qualitative characteristics alone makes it possible to establish an equality between them. (There is no basis or future in exchanging boots for boots!) Marx shows that a ‘third’ factor alone makes it possible to establish a relationship of equality between two quite distinct commodities, and this third factor is their value. ‘Therefore the common substance that manifests itself in the exchange-value of commodities, whenever they are exchanged is their value’ (I, p. 46). And Marx proceeds to make clear that the emergence of this category, value, and therefore man’s ability to conceptualise it, is related directly to human practical activity. It was on the basis of commodity exchange alone that the category value was formed, but it required a highly developed stage in the growth of such exchange before it was possible to discover this category. ‘Although an abstraction, this is an historical abstraction which could only be evolved on the basis of a particular economic development of society’ (Marx and Engels, Selected Correspondence, p. 48).
The point Marx is here making can be stated as follows: while the conditions reflected in the simple or accidental form of value alone prevailed it was impossible to abstract the concept of value. For while exchange remained limited and sporadic it could still be concluded that the exchange of commodities was regulated solely by the luck or cunning of the people concerned. It was not possible to establish the necessity, the law, of these exchanges. And the same is true with the developed, or expanded value form. Only with the emergence of the universal form of value was it possible to abstract the concept of value. Only when scientists were able to infer on the basis of their investigations that all commodities can be exchanged for each other in certain proportions was it possible to begin to conclude that there must be something in common between them, a common substance, namely ‘value’. But, and this point must be emphasised in the light of considerable confusion about Marx’s concepts, we have only arrived at the point of identifying a common property amongst commodities (value). This in no way necessarily means that the essential nature of this property has been discovered. The abstraction of a new property in a series of phenomena does not yet mean that we are necessarily able to grasp the essential nature of this property, even though the process of forming scientific concepts must always include this stage. At this stage of the formation of the concept of value we can define value only as an ‘abstract object’, as a general feature of commodities that are exchanged for one another. In this connection Engels writes: ‘Marx summarises the actual content common to things and relations and reduces it to its general logical expression. His abstraction therefore only reflects, in rational form, the content already existing in the things’ (Marx and Engels, Selected Correspondence, p. 357).
To arrive at an adequate concept of value it was necessary to discover the origin and source of this common property. And this was only revealed on the basis of further investigation, particularly of the category labour. Marx showed that value is nothing else but the embodiment of human labour in the abstract, the quantity of which is measured by socially necessary working time. It became possible to get to the essence of value, to define this concept adequately only in the conditions of capitalist production, where the equality and equivalence of all forms of labour was revealed, when the predominant social relationship between people became their relationship as commodity owners, when the producers were finally separated from the means of production and labour power itself became a commodity.
In other words all concepts, far from being generated in thought, are a reflection of man’s practice. It is this practice which is the indispensable basis on which all theoretical categories arise. That this is so can be seen if we consider the role which Aristotle played in the attempt to discover the nature of value. ‘[Aristotle] the great thinker who was the first to analyse so many forms, whether of thought, society or Nature, and amongst them also the form of value’ (I, p. 59). After pointing out that Aristotle’s genius allowed him to grasp that the money-form was only a further development of the simple form of value (in this respect at least it can be said that Aristotle was ahead of nineteenth-century political economy), Marx goes on to note that Aristotle in addition saw that it was also the case that if two commodities were exchanged it necessarily followed that they were qualitatively equal to each other. Marx here quotes Aristotle: ‘Exchange cannot take place without equality, and equality without commersurability’ (I, p. 59). At this point, says Marx, Aristotle stopped. He found it impossible to conceive of any commensurability between such qualitatively different commodities. Now Marx proceeds to make what is a crucial remark which directly bears upon the matters we have been considering. ‘Aristotle therefore, himself, tells us, what barred his way to further analysis, it was the absence of any concept of value (I, p. 59; author’s italics). Aristotle lacked a concept of value. His profound insight that when commodities exchange they do so on the basis of some commensurability and further his understanding that money, the universal value form grows out of the particular (the commodity) were by themselves an inadequate basis for the formation of a concept of value. Marx tells us the specific conditions which prevented even the genius of Aristotle from arriving at the value concept. They lay in the social relations of production and particularly in the conditions of labour in the ancient world. Marx says in a passage which reveals the barrenness of the approach taken by Althusser and others:
There was however an important fact which prevented Aristotle from seeing that to attribute value to commodities is merely a mode of expressing all labour as equal human labour, and consequently as labour of equal quality. Greek society was founded upon slavery, and had therefore, for its natural basis, the inequality of men and their labour powers. The secret of the expression of value, namely, that all kinds of labour are equal and equivalent, because and so far as they are human labour in general, cannot be deciphered, until the notion of human equality has already acquired the fixity of a popular prejudice. This, however, is possible only in a society in which the great mass of the products of labour takes the form of commodities, in which consequently, the dominant relation between man and man is that of owner of commodities. The brilliancy of Aristotle’s genius is shown by this alone, that he discovered, in the expression of the value of commodities, a relation of equality. The peculiar conditions of society in which he lived, alone prevented him from discovering what ‘in truth’ was at the bottom of this equality. (I, p. 60)
This passage serves once again to indicate why it was only with the eighteenth century that real strides forward were made in deciphering the value-relationship. Only when the notion of human equality (and the equality of human labour-power) had, because of definite economic conditions become established as a prejudice in men’s minds, could the secret of value be discovered. Here also lies the clue to seeing not only why the eighteenth century should bring such advances towards the solution to problems which had engaged man from the ancient world onwards, but at the same time why these advances were of a limited nature. It was precisely because the commodity form of wealth was becoming all pervasive and universal that it was treated as a ‘prejudice’ to use Marx’s word. The existence of generalised commodity production (which constituted the basis for all its advances) was taken axiomatically by political economy, a fact requiring no investigation. It could not grasp the point that the ability to go beyond Aristotle was rooted entirely in these objective conditions. As Lenin notes in connection with the syllogism:
So the emergence and development of the value concept, like all concepts, was bound intimately with man’s social practice. Let us, however, consider more closely how the concept of value actually took shape in the minds of the eighteenth-century political economists. Because here is a very good example of the actual process by which concepts are formed. It was William Petty who, in the modern world, made the most significant steps towards an adequate conceptualisation of value. And this is how Petty posed the matter: ‘If a man can bring to London an ounce of silver out of the Earth in Peru, in the same time that he can produce a bushel of Corn, then one is the natural price of the other.’ (William Petty, A Treatise on Taxes and Contributions, 1667, quoted by Marx). In other words, in practice (in spite of any logical precepts and axioms which it may have professed) political economy did not arrive at the value category by seeking something abstractly identical in each and every commodity (which general usage long previously had united in the term ‘value’). On the contrary, it began with one particular relationship (the case of silver and corn or in Smith’s case beaver and deer). This was the simplest economic relationship – simplest because historically the first. It then tried to move from this particular relationship to a more general one – money, capital, profit, etc. And this was undoubtedly the correct, scientific method. Marx levelled no criticism against political economy in this particular direction. The political economists groped their way empirically and spontaneously towards a general conception of value. But having once arrived at the concept, they attempted to verify the conception according to the canons of formal logic, relying on Locke, as we have already noted.
This point can be reformulated in the following way, in attempting to arrive at a concept of value, political economy did, in its best representatives, proceed scientifically from the simple and abstract to the more concrete. But it saw this movement as purely mechanical. The general; according to this conception, had to reproduce exactly and wholly every particular. Each particular, in mechanical addition, was to explain the whole. Society was merely an aggregation of each individual, a position which does in fact express the essence of bourgeois individualism. Here is revealed one of the weaknesses of purely mechanical thought as against the truly dialectical. This is why we have stressed that dialectics sees the relationship between the particular (in this case the exchange of two individual commodities) and the universal as a law of tendency in which the universal can only approximately and one-sidedly embrace the wealth of all the individuals.
Hegel expressed this same thought when he attacked the empirical method for its over-concern with analysis and its lack of an adequate regard for synthesis. In insisting that the whole is not to be regarded as a mere summation of its separate parts Hegel says, specifically in connection with empiricism:
Thought had to proceed to the concrete through a dialectical combination of abstraction, or, as Marx puts it, ‘The method of advancing from the abstract to the concrete is only the way of thinking by which the concrete is grasped and reproduced in our own mind as concrete’.
But some care is needed if this passage – often quoted by writers on Marx’s method – is to be understood correctly. For it might be thought that science can start from some arbitrary definitions which it then proceeds to ‘concretise’. However, we know that the abstractions from which Marx started (and indeed from which every thinker starts) were not arbitrary but the result (to use Engels’ phrase from another context) ‘of a long and wearisome development of philosophy and science’. We draw attention to this point once more if only to combat that view which would separate Marx absolutely from the previous body of political economy, to make him an a-Ricardian. (This is the characterisation of Marx made by a follower of Althusser- see de Brunhoff, 1974. According to this view Marx was an a-Ricardian because he had an entirely different object in his studies – he was an historical materialist, not a political economist.) But such a view of history is essentially sterile: history is chopped up into rigidly discrete periods, with all question of transition and development excluded. Speaking of Spinoza, Hegel says,
In other words, the ‘refutation’ of a philosophical system does not mean discarding it, but actually taking it forward; not replacing it by another, one-sided system, but incorporating it into something richer. It is therefore quite wrong to treat Marx’s relationship to classical economics as though he were merely interested in a different object – Marx only got to this ‘object’ through tackling the political economists on their own terrain. In this sense English political economy was a necessary stage in the elaboration of dialectical and historical materialism, an indispensable ‘component’ of Marxism as Lenin puts it. Thus it is in no way a question of Marx starting from a series of different abstractions from those of Ricardo. This would have provided no basis for his dialectical negation of political economy.
Marx stood on the shoulders of his predecessors in political economy. The work of the seventeenth-century political economists, and particularly the work of Petty, was indispensable for Marx’s later development. These economists tended
But while the latter path (the movement from the abstract to the concrete) reflected the only valid method it would have been impossible without the first path (the movement from the concrete to the abstract). Thus, although Hegel attacked empiricism for its one-sided emphasis upon analysis, analysis is none the less an indispensable element in human thought. It was only after a mass of material had been sifted and analysed that the science could move forward. The point is this: although thought moves from the abstract to the concrete ‘this is by no means the process through which the concrete itself comes into being’. The abstractions from which political economy began presupposed a concrete and definite form of society ‘Hence in the theoretical method, too, the subject, society, must always be kept in mind as the presupposition’. It is important to keep this point always in mind, otherwise we can fall into the idealist illusion that concepts merely grow out of concepts, forgetting that all concepts presuppose and are rooted in a definite form of human practice. Just as the capitalist thinks that money breeds money and is uninterested in the material basis for this process so the professional ideologist tends always to see his knowledge as the beginning and the end of his life activity. This is the most basic prejudice of all idealisms. Marx’s revolution (and here we are specifically concerned with his revolution in political economy, although the same is true of his work in philosophy and history) came after a long, contradictory, series of efforts by many great minds to grasp the nature of the new social relations involved in the emergence of capitalism. Marx was able to synthesise all these efforts into a new conception and from the standpoint of this new conception grasp the relationship of these earlier efforts to his own work. Hegel expressed this idea about the growth of knowledge and the elaboration of new concepts when he wrote:
The beginning of the new spirit is the outcome of a widespread revolution in manifold forms of spiritual culture; it is the reward which comes after a chequered and decisive course of development, and after much struggle and effort. It is a whole, which after running its course and laying bare all its content, returns again to itself; it is the resultant abstract notion of the whole. But the actual realisation of this abstract whole is only formed when those previous shapes and forms, which are now reduced to ideal moments of the whole, are developed anew again, but developed and shaped within this new medium and with the meaning they have thereby acquired. (Hegel, Phenomenology of Mind)
We have looked at the general nature of Marx’s concepts, stressing always the material-practical basis of these concepts. We shall next say something in more detail about the manner in which Marx actually develops his major concept for the investigation of modern society, namely the concept of capital itself. This will involve us in a review of the content and method of the early chapters of Capital. Let us, therefore, say something of a preliminary nature about this key concept. For Marx the understanding of this category was a vital condition for any proper investigation of modern society. ‘Capital is the all-dominating economic form of bourgeois society – it must form the starting-point as well as the finishing-point’. This point is repeated with even more emphasis in the same work when Marx says,
The exact development of the concept of capital [is] necessary since it is the fundamental concept of modern economics, just as capital itself whose abstractly reflected image [is] its concept [is] the foundation of bourgeois society. The sharp formulation of the basic presuppositions of the relation must bring out the contradictions of bourgeois production as well as the boundary where it drives beyond itself. (p. 331)
Now in what respect was capital ‘fundamental’ to and ‘all-dominating’ within bourgeois society? In this sense; it was the category which contained implicitly all the lower, less concrete categories, categories which were its presuppositions, its historical and theoretical bases. To grasp the nature of capital, therefore, was the necessary pre-condition for understanding the lower economic relations (value, money) out of which capital had historically and logically grown and developed. To ‘define’ capital adequately meant to grasp conceptually the origin and emergence of this basic relation of modern economy. Only if this were done would it prove possible to understand the necessary connections between all these economic categories, that is to understand the path of transition from one category to another. As the Manifesto in particular so brilliantly demonstrates, the historical mission of capital was to bring all pre-capitalist economic forms under its sway. To the extent that these earlier relations continue to survive, they do so always in a truncated and distorted manner.
Given that capital now dominated all pre-capitalist social relations, this meant that these earlier relations could not be grasped except in their organic and living relations to capital in modern society. At one point, Marx says it would seem to be correct to investigate the economic categories in the order in which they had historically evolved, just as by analogy, it might appear correct to deal with the anatomy of the ape before that of man. As far as political economy goes, this would seem to suggest that one ought to deal first with rent (landed property) then interest (mercantile capital) and only finally profit. But such a method, says Marx, would be ‘impossible and wrong’. The economic categories must not be considered in the same sequence in which they were historically decisive
So capital was the central category and this is why landed property (assumed as zero in Volume I) is left out of account until the concept of capital has been ‘sharply formulated’. But here we face a seeming paradox. For in the investigation of modern society, Marx starts not with capital but with the commodity. Only later (from Chapter 4 onwards) does he begin to deal with capital. This paradox is explained by reference to the distinction, drawn by Marx, between the mode of presentation of his theoretical work and the path of inquiry which had enabled him to present his material in abstract form. We know that Marx continuously grappled with the ‘mode of presentation’, in particular with those sections of Chapter 1 dealing with the value form. As Marx himself tells us:
This warning must be taken seriously. In Capital (and especially its opening chapters which will now be our immediate concern) we are not dealing with a ‘mere a priori construction’; this is only the appearance of the thing. Marx had to derive the concept of capital and this process of derivation involved much patient work over a long number of years. The fruits of this uncompleted work can be seen in Capital. But, and this has been one of our main points one cannot take the fruit without a study of the conditions under which it was grown and developed. Thus those who see the categories of the opening chapters of Capital as the product of an illegitimate juggling with a few Hegelian phrases are far wide of the mark. Marx’s categories are ‘a product of the working up of observation and conception into concepts’.
This ‘working up’ of observation and conceptions into the concepts which alone could grasp the contradictory driving forces of bourgeois society, which could grasp the fundamental, inner connection of this mode of production constitutes the enduring, revolutionary essence of Marx’s whole work. ‘Once the interconnection is grasped, all theoretical belief in the permanent necessity of existing conditions collapses before their practical collapse’ (Marx to Kugelmann, July 1868, in Marx and Engels, Selected Correspondence, p. 252). The manner in which Marx revealed these driving contradictions will be our next concern.