Two lectures on Marx

From the Manifesto to Sartre’s Critique

In the extract I’ve selected for you it may be worth foregrounding the main themes that emerge.
This is the portion of the Manifesto where Marx and Engels are at their most lyrical about the
achievements of modern capitalism, but also obliquely critical. Here are some of these major
themes:

The “constant revolutionizing of production” and of the whole relations of society; this they
claim generates “everlasting uncertainty” and the dissolution of all inherited “fixed, fast-frozen
relations”. “All that is solid melts into air”. Thus capitalism is a revolutionary mode of
production, even if the politics it generates is one of conservatism and extreme reaction.

The cosmopolitanism of capital; this stems from the “need for a constantly expanding market
for its products”, which they argue “chases the bourgeoisie over the whole surface of the globe”.
There are two distinct aspects here. On the one hand, the bourgeoisie must “settle everywhere
establish connections everywhere”. This was especially true of commercial capital, with
merchant firms expanding globally to create commercial bases across a whole swathe of the
globe from South America to China. But secondly, the Manifesto states that capital “has through
its exploitation of the world market given a cosmopolitan character to production and
consumption in every country”. Crucially, and this is a political point about nationalism, “To the
great chagrin of reactionists, it has drawn from under the feet of industry the national ground on
which it stood”. It has broken down the “old local and national seclusion and self-sufficiency”
and created a “universal interdependence of nations”. And returning to the theme of
technological change, they claim that a key role in this process of global integration has been
played by “immensely facilitated means of communication”.

Third, the bourgeoisie “has created enormous cities” and altered the balance between town and
countryside. This was the theme that tied in most closely with the emerging modernism of the
late 19th century. Indeed, the same expression (“enormous cities”) appears in Baudelaire’s
preface to Paris Spleen which he wrote at the same time that Marx was working on Capital, in
the early 1860s. And again the Manifesto returns to the theme of technological revolutions, by
saying that 19th century capital has “created more massive and more colossal productive forces
than have all preceding generations together”. It cites “machinery, application of chemistry to
industry and agriculture, steam navigation, railways, electric telegraphs, clearing of whole
continents for cultivation…”. (Incidentally, the modernist formulation of this theme is much
sharper in the notebooks known as the Grundrisse than it is in Capital. There Marx writes, for
example, that “the entire production process appears as the technological application of science”,
and that “general scientific labor” becomes the “determining principle of production” (pp.699–
700). Here “scientific labor” is contraposed to “direct labor”, which is what most employees are
of course employed in. These are not formulations that recur in Capital, although today with the
widespread emergence of cognitive labor in industries such as software or more widely in the so-
called “knowledge-based” economies, these passages need to be taken more seriously.)

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The next theme is alluded to briefly but developed at greater length in Marx’s Capital. The
Manifesto states that capital or the society created by it “has conjured up such gigantic means of
production and of exchange” that it “is no longer able to control the powers” of the forces it has
unleashed. The chief example cited are the commercial crises that punctuated the whole of the
early 19th century, from the 1820s to the 1850s. Here Marx and Engels moot two curious ideas;
the first is that these crises were an expression of what the Manifesto calls “the revolt of modern
productive forces against modern conditions of production”. This of course is a metaphor but the
claim being made is that capitalist relations of production are hopelessly inadequate as a form for
the rational management of the massive technical resources generated under capitalism. And
secondly, a crisis means that too much capital has been accumulated, not too little. This idea will
of course be developed more fully in Marx’s Capital, especially in the last volume which he
himself never wrote up. In the Manifesto the idea is simply expressed by saying that if society
suddenly finds itself put back into a state of depression, this is because “there is too much
industry, too much commerce”. This can easily be misunderstood to mean that there is a
material overproduction of means of production and means of subsistence, which is not what
Marx is driving at here, since he knew perfectly well that “the world [was] obviously under-
capitalized”, with not enough means of production to satisfy “even the minimal needs of the
world’s population” (Mattick, Marx and Keynes, p.70). No, what Marx meant was that in value
terms, the only ones that matter for capital, a crisis means an overproduction of capital, that is,
too much capital has been accumulated in relation to profitability or the conditions of
profitability. Here the seeming paradox is that capital can only overcome its crisis of
overaccumulation by accumulating even more once the conditions for profitable expansion have
been re-established or restored. This happens in two ways, first through an “enforced
destruction” of capital values (although misleadingly the Manifesto refers to this devaluation of
capital as the destruction of “a mass of productive forces”, which of course also happens, cf. all
those industrial ghost towns in the US and UK from the 1970s on), and then through a drive for
new markets and the more thorough exploitation of existing markets. The key point here is that
no crisis is ever final, because the bourgeoisie “gets over these crises”, but it does so by raising
the stakes even higher.

The next theme, the fifth one, involves the claim that the modern working class expands in
proportion to the expansion of capital. This is almost certainly the site of maximum optimism in
the Manifesto, and Marx and Engels can hardly be blamed for not anticipating, in 1848, the
technical changes and corporate strategies through which capital (that is, managements) would
seek to reduce the size and organization of the working class (what Marx later calls “the
tendency of capital to reduce as much as possible the number of workers employed”, Capital,
vol.1, p.420) many decades later. Related to this theme of the growing strength of the modern
working class are two further subthemes; the Manifesto notes, firstly, that under mechanized
production the worker “becomes an appendage of the machine”, “enslaved by the machine”; and
secondly, masses of labourers are congregated into great factories where the organization of
work acquires a despotic, almost military-like character. These are issues that relate to the nature
of modern industrial labour and of the kind of shopfloor regimes through which capital seeks to
enforce a maximal production of surplus-value. They are the sort of themes that labor historians
like David Montgomery and sociologists like Serge Mallet would explore in the 1960s and later.
Both relate to the loss of control that is endemic to the nature of industrial work under capitalism
(from the standpoint of workers, of course). Mallet himself, writing in the sixties, argued that

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automation redefines the nature of struggles for control, since it is no longer the labor process
that matters in the automated sectors but the prospects of the company as a whole and the way it
is managed financially. Mallet therefore saw the workers in automated enterprises as what he
called a “new working class”.

The Manifesto then adumbrates the story of how the further growth of capitalism will mean the
proletarianization of large strata of the middle classes, both smaller businesses and their
owners as well as self-employed craftsmen and peasants. This became a major focus of debate in
Germany in the 1920s because it was used to explain the rise of fascism in terms of the support
extended to the Nazis by what Marxists call the traditional petty bourgeoisie (that is,
shopkeepers, farmers, and so on). In 1848 Marx and Engels are predicting that modern society
will polarize into two major fundamental classes, capitalists on one side, workers on the other,
and that the middle class will effectively cease to exist as the accumulation of capital progresses
over time. As if to offset this dismal prediction of the extinction of the middle class, the
Manifesto immediately returns to the previous (fifth) theme, asserting that with the development
of industry the working class “not only increases in number, it (also) becomes concentrated in
greater masses”, so that its strength grows “and it feels that strength more”. This certainly
happened, especially with the rise of mass-production workforces from the 1920s and 1930s, but
as I said the Manifesto can hardly be blamed for not anticipating the sort of strategies through
which more modern types of management would seek to manage and overcome the potential
threat of large, concentrated masses of workers. The Manifesto’s vision of an “ever expanding
union of the workers” did come true to a large extent in so far as unions expanded from the end
of the 19th century, although even here the picture turned out to be more complicated, both
because different kinds of trade unionism went with different industries and with their
characteristic forms of technology and skill classifications, and because managements were later
able either to fragment the unions or to decimate them with “restructuring”. Union densities
declined sharply throughout the advanced capitalist world once the great stagnation of industrial
capital set in in the 1970s and managements began to declare redundancies on a massive scale.

To recap, the great themes of the Manifesto in the pages I’ve foregrounded are— Marx’s
conception of capital as a relentlessly disruptive, revolutionary force; the notion that capital is
inherently cosmopolitan; its reference to the growth of the new urban civilization created by it, to
the conjuring of massive productive forces that the social relations of capital are unfit to control,
to the unrestrained expansion and self-organization of a modern working class, and, finally, the
progressive extinction of the middle classes or of all those strata that stand between capital and
labour. Later in the Manifesto, when they come to mapping their version of communism within
the landscape of radical politics as it existed in France and England in the 1840s, they argue,
“The working men have no country”. “National differences, and antagonisms between peoples,
are daily more and more vanishing, owing to the development of the bourgeoisie, to freedom of
commerce, to the world market, to uniformity in the mode of production and conditions of life”.
Both here and in the earlier passage about capital giving “a cosmopolitan character to production
and consumption in every country”, there is a strongly implied critique of nationalism as a
political ideology that is seriously out of sync with the new society that is emerging around mid
century.

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As late as 1843 Marx himself had only a “vague conception of class antagonism”, so it’s
important to realize that his ideas evolved rapidly from 1844 on when he moved to Paris and
came into direct contact with the workers’ movement there. (It was in Paris that Marx met
Engels for the first time.) By the mid-1840s he and Engels had come around to seeing
communism as “the real movement which abolishes the present state of things” and identified
this movement with the various struggles waged by workers conceived collectively as the
“modern oppressed class”. It is these ideas that surface again in the Manifesto where the
workers’ movement is seen as a plurality of “working-class parties” and the communists are seen
not as a separate party “opposed to other working-class parties” but as the most advanced section
of all the various parties who stand for the abolition of private property and for the conquest of
political power by the proletariat, that is, by the great mass of the dispossessed in modern
society, whether they have jobs or not. (By “private property” the Manifesto says it means “class
property”, that is, strictly only ownership of means of production that are used as capital and
therefore as a source of capitalist exploitation, not all property tout court. This clarification is
crucial.) Marx saw communism emerging from the real movement of society and by the 1850s
he was quite emphatic that any attempts to explode the existing order would be “quixotic” unless
society already contained within itself the “material conditions” for a “classless society”
(Grundrisse, p.159).

Now the conception of the Communist Manifesto as a modernist work was most overtly argued
by Marshall Berman in his brilliant book All That is Solid Melts into Air (1981). He described the
Manifesto as “the archetype of a century of modernist manifestos and movements to come”, “an
archetype of modernism”, and referred to the “paradoxes at the heart of the Manifesto”. Marx
and Engels were doing two things simultaneously, engaging in a sort of celebration of capital in
terms not wildly different from those used by Baudelaire just two years earlier , and exposing
capitalism as a regime founded on wage-slavery, that is, on the dispossession of the majority of
the population, their dependence on capital (on employers as a class) and their subordination to
work routines that involved loss of autonomy, monotonous, even “repulsive” labour and the
control of effort-intensity by a growing managerial hierarchy. It was nothing short of prophetic
that the Manifesto could describe the coercive nature of industrial work with such penetration
well before the latter part of the 19th century when these trends began to intensify.

I hope all this conveys some sense of how nuanced Marx’s conception of capitalism was, not
simply pure condemnation or blind rage towards it but what he thought of as a materialist
understanding, that is, both an appreciation of why and how it represented a huge advance in
strictly historical terms as well as a sustained critique of the kinds of social and economic
oppression it embodied. The heart of the system lay in its structural dependence on having
masses of labour power available for exploitation (precisely what the term “expolitation” meant
would be defined later when Marx came to working on Capital) , which in turn presupposed that
the greater mass of the population in any modern society lacked means of subsistence of their
own so that wage dependence or dependence on the labour market was a more or less universal
human condition, even as wealth became increasingly concentrated in the hands of a ever smaller
minority. Today much of this critique is rearticulated in terms of the massive and growing
inequalities that characterize most societies in the world. Marx was able to show where the true
wellsprings of such inequality lay, namely, in capitalism and the social functions of wage-labor

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and capital connected with it. Critiques of contemporary inequality that ignore capitalism are
simply not credible. This is as true of India today as it is of the US.

So what about Sartre’s Critique? If the Manifesto is in one obvious sense a proclamation of
hope for humanity because it identifies a revolutionary mode of production (capitalism) that for
the first time in history creates the conditions for emancipation from scarcity and sees in the
modern working class the inexorable agency of that emancipation, Sartre’s Critique is the
antithesis of all that; not in the sense that Sartre never identified with the revolutionary left that
emerged from the Manifesto as its enduring legacy, he did (at least to the extent that anyone
could in the conditions of defeat and fragmentation that marked the history of that left from the
1930s till well after the post-war period; the biggest defeat was of course Stalinism), but in the
deeper sense that he saw himself elaborating a Marxist anthropology , if one can call it that, that
reversed the optimism of the Manifesto by foregrounding the “structures” that resist, subvert or
deviate human action. In the Critique Sartre pulls off a double operation. On the one hand, he
suggests convincingly that human history is unintelligible outside the postulate of freedom, the
certainty that we are, as individuals, essentially free, that is, capable of making choices and
actively pursuing them in the conditions that confront us; on the other hand, he argues,
seemingly in contradiction to this, that isolated individuals are largely powerless against the
forces that constrain and dominate their freedom, turning it around against them in devious and
subtle ways and forcing them to live in conditions that none of them, individually, chose. Now if
“praxis” is Sartre’s favorite term for the first moment, that of the translucidity of free individual
action, of our freedom as practical organisms, the “practico-inert” is his state-of-the-art term for
the second, “anti-dialectical” moment of materiality, a domain or dimension of our lives and thus
of history for which Sartre has numerous other terms such as “worked matter”, the inversion of
praxis, the anti-dialectic, the dimension of passivity, etc. This, if you like, is Sartre’s way of
recasting Marx’s notion of alienation, except that in the Critique he is saying that the whole
human-made world, all of “materiality” or of human history, is reification or alienated labor.
There are numerous examples to illustrate this peculiar dialectic that turns freedom around
against itself—women trapped in marriages they chose for themselves, revolutions that devour
their makers, the climate catastrophe that is now rapidly unfolding from decades of rampant
industrial expansion, and so on. In the notes on Sartre I’ve tried to suggest some of the ways in
which the Critique helps to throw light on the “monstrous forces” that emerge from the practico-
inert field, that is, throw light on the world as a “place of violence, darkness and witchcraft”
dominated by forces that we have created or helped to create, individually and collectively, and
which are then seemingly beyond human control, certainly beyond the control of our freedom as
individuals.

In terms of its implications for conventional Marxist theory, it is the middle portions of the first
volume of the Critique, those dealing with what Sartre calls “collectives”, “series” and “groups”,
that are the most interesting and they have barely been exploited. Sartre’s notion of class is a
case in point. These portions of the book add up to just over 500 pages (say, from pp.153 to 663
of the Verso translation), so it’s pointless to even attempt a summary here. Among those pages
his chapters on “Collectives” and on “The Institution” are probably the most important in the
book. They are densely argued but rich in examples. They also throw up some crucial ideas—
notions such as worked matter, counterfinality, series or gatherings, seriality as the structure of
every “public”, the group as a negation of seriality, “manipulated seriality” as the heart of fascist

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politics, extero-conditioning as the perpetual action of groups on series (cf. the mass media),
“other-direction” , pogroms as the “passive activity of a directed seriality” (p.653), the State as
an ensemble of organized groups, the institution as a degraded group that has reintroduced the
practico-inert into its internal life; and so on. There is a long analysis of French colonialism in
Algeria where the distinction between oppression and exploitation is nicely developed. And
finally, against activist notions of class which habitually refer to classes doing this, that and the
other, it is the materiality of class that stands out in Sartre’s work. Although he agrees that
“realities such as class…do not have a unique and homogeneous kind of being but…exist and
create themselves on all levels at once” (p.67) (in other words, groups can emerge within classes
and transcend the series within them, yet no group has ever organized the class as a whole),
classes are inorganic social objects, that is purely passive syntheses that embody our common
being-outside-ourselves in matter. For workers especially class is their “prefabricated reality”, a
sort of destiny that awaits them from birth so that even the choices they make as practical
organisms (that is, as free individuals) are simply ways of confirming their membership of the
class or, as he puts it, “producing their class-being” (p.238-9). If a woman worker decides to
have an abortion because she can’t support a larger family, then this free decision of hers simply
executes the sentence passed on her at birth by the fact that she was born into a working-class
family. The work workers do inside the factory would be “active passivity”, that is, physical
operations that are, say, carefully executed but performed purely in response to the “exigencies”
of worked matter (here, of the machine). This is equally true of employers in so far as their
decisions are determined from the outside by their competitors, that is, within a practico-inert
field (capital accumulation) riven by otherness (alterity), where each employer is forced to
replicate the decisions of the “others”, either anticipating those choices (adoption of a new
machine, for example) or counter-attacking them. And of course the same is true of all activity
within offices or within state institutions such as the police, the army, and the bureaucracy. Here
the “exigencies” are not those of the machine on the shopfloor but of the whole inert structuring
of the organization, of its hierarchy, its job descriptions, even the “culture” that has evolved as a
purely practico-inert determination of this field, e.g. the inert practices of fabricating evidence
against the accused or of (habitually) shooting civilians in fake encounters. (Much of the
violence within the state has this unshakeably “inert” character, as does the state itself.)

Introduction to Marx’s Capital

Of course, very few people have read Capital, and certainly even fewer have taken the trouble to
go through all three volumes of it. Yet even in this select minority it is not well known that
Marx’s original plan for the work on capital comprised a series of books, of which the one that
now bears the name Capital was simply one early portion. In his draft notes towards what
became volume 1 of Capital (volume 1 was published in 1867), that is, in the seven notebooks
called the Grundrisse and compiled in the winter of 1857/8, Marx sketched the overall plan of
his work in at least two passages. That these passages differ in the way this plan is described
shows how fluid his thinking was on the subject of his projected work. So “Architecture” in my
title for this talk can have two rather distinct meanings. It can mean the place the three volumes
called Capital occupy within the original plan for his work as a whole. This, if you like, is the
looser meaning of the architectural metaphor. On the other hand, and perhaps more precisely, it

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can and should also mean the architecture of the book itself (that is, of the three volumes which
exist, of which only the first was ever formally completed by Marx), in other words, it can mean
the way Marx saw himself structuring his exposition of Capital.

In the first of those two Grundrisse passages Marx describes the books as “sections” and lists a
total of five of these. He says, “In this first section, where exchange values, money, prices are
looked at, commodities always appear as already present. The determination of forms is simple”.
In other words, by this first section Marx meant what eventually became Part One of volume 1
where he deals with the forms of value and with money. The commodity presents itself as it
appears “on the surface of developed society”, that is, simply as something that is bought and
sold and disconnected from the network of relations that might explain how it got to the shop.
The technical term for this is “simple circulation”. It presupposes capital but is not yet posited,
that is internally shown to be, a product of capital, that is, of a whole web of capitalist economic
relations that stretch from banks and factories to transport companies and commercial firms. The
language (presuppose/posit) is that of Hegel. After saying, “The determination of forms is
simple”, in other words, that the exposition begins with the simple circulation of commodities,
Marx continues, “The internal structure of production therefore forms the second section”. This
of course is what later becomes the bulk of volume 1 of Capital, that is, everything from Parts
Two to Seven of that volume . And after that the first Grundrisse passage moves rapidly across
the following floors of Marx’s projected architecture; he writes, “the concentration of the whole
in the state [is] the third; the international relation the fourth; the world market the conclusion, in
which production is posited as a totality together with all its moments, but within which, at the
same time, all contradictions come into play. The world market then, again, forms the
presupposition of the whole as well as its substratum” (Grundrisse, pp.227-8). In short, Marx
intended to cover capital, the state, and world economy in a succession of books. When he says,
“the world market forms the presupposition of the whole”, he means that in reality capital is a
globally integrated system but it is the task of science, say of his work, to arrive at this as a
result, to show what it means for capital to be able to accumulate as a worldwide system.

The second passage in the Grundrisse that sketches a plan for his work (one which was far from
ever being completed) is rather different in the way the topics are laid out. Here capital makes up
about half the paragraph, with divisions such as “Accumulation”, “Competition of capitals”,
“Concentration of capitals”, “Capital as credit”, “Capital as share capital”, and so on. And then
books or sections on wage labour, the state, and “finally the world market”. And by 1859 there
was a further revision; the famous preface to his Contribution to the Critique of Political
Economy, a work devoted largely to money, announces, “I examine the system of capitalist
economy in the following order: capital, landed property, wage-labour, the State , foreign trade,
the world market”.

It follows that not only is Capital itself incomplete (after all, volumes 2 and 3 were simply
compiled by Engels from Marx’s notes), but the projected work as a whole, unimaginably
ambitious in scope, never came even close to completion, since Marx intended at one stage to
cover issues like the state and the world market. The crucial point here is that in all these
successive drafts it was capital that formed the starting-point, the cornerstone, of the whole
edifice.

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 Volume One starts then with the purely abstract forms of capitalism, among which the most
abstract are those that Marxists usually refer to as “forms of value”. The value relation between
two or more commodities appears initially as something purely quantitative, i.e. so much of one
commodity exchanges for so much of another. But already on the third page of Capital Marx
describes this purely quantitative relation, namely, “exchange-value”, as the “mode of
expression” or “form of appearance” “of a content distinguishable from it”. This content is what
Marx calls “value” pure and simple. Thus the duality that runs through much of his analysis in
Capital, from these very first pages, is not so much between use-value and exchange-value but
between use-value and value. Exchange-value, he insists, is simply the mode of expression of
value. As values commodities are merely “congealed quantities of homogeneous human labour”;
“As crystals of this social substance, which is common to them all, they are values” (p.128). [But
let’s be careful here. A whole strand of Marxist theory going back to I.I. Rubin in the 1920s
insisted that Marx is not saying that value is labor , he is saying that labor “takes the form of
value” or is “expressed in value”. Thus at the end of Chapter One Marx will write, “Political
economy has indeed analysed value and its magnitude…and has uncovered the content
concealed within these forms. But it has never once asked the question why this content has
assumed that particular form, that is to say, why labour is expressed in value” or why the
quantity of labor-time is “expressed in the magnitude of the value of the product” (p.174). Rubin
himself usefully distinguished three aspects here; the substance of value, which is labor (or more
correctly, what Marx calls abstract labor), the measure of its magnitude, which is labor-time, and
finally, the form of value or the property that the products of labor acquire , socially and
historically, of being exchangeable with one another. The value-form is Marx’s expression for
this general characteristic of exchangeability which the classical economists simply took for
granted. Marx then goes on to deduce money and capital as forms of value from Chapter 3
onwards. This deduction of forms, so to speak, shows how deeply Marx was influenced by his
reading of Hegel.]
“Socially necessary labour time” is the time required to produce any use-value under normal
conditions of production (p.129); it is this average or socially necessary labor time that
determines the magnitude of value of any article
Abstract/concrete labour: the “twofold nature of the labour contained in commodities” (p.132);
the labour that creates value is what Marx calls “abstract labour”; as a use-value a commodity is
a product of concrete labor, that is, of some specific kind of labor, such as the labor of coal
miners, machine tenders, women assembling iPhones, and so on; however, as the source or
substance of value labor lacks any of these special or concrete characteristics, it is purely
“abstract” or “universal” labor;
Now value is only apparent to us in the shape of exchange-value and this is what Marx turns to
next, describing a series of value-forms expressed as equations between commodities.
The relative and equivalent forms of value: 20 yards of line = 1 coat, or x commodity A is worth
y commodity B; Marx claims the “whole mystery of the form of value lies hidden in this simple
form” (p.139); the latter called “the commodity in which value is being expressed” (p.140);
The coat counts as the “form of existence of value, as the material embodiment of value”
(p.141);
“Human labour-power in its fluid state…creates value but is not itself value. It becomes value in
its coagulated state”, that is, as a “congealed mass of human labour” (p.142);
“the natural form of commodity B becomes the value-form of commodity A” (p.144);

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About the “mysteriousness” of the equivalent form M. writes, “the coat…is endowed with the
form of value by nature itself”; the money commodity seems to enjoy the “property of direct
exchangeability” by nature (p.149);
The total or expanded form of value is simply a series of equations where the value of the linen,
for example, is expressed in terms of innumerable other commodities (p.155);
The general form of value is that under which the value of all other commodities is expressed by
their equation with a single other commodity so that, for example, “the physical form of the linen
counts as the visible incarnation …of all human labour” (p.159); “A single commodity…has the
form of direct exchangeability with all other commodities” (p.161);
The money form is thus deduced as the universal equivalent form or “general form of value as
such” (p.163);
The fetishism of commodities; in this section Marx describes the “determination of the
magnitude of value by labour-time” as a “secret” hidden under the endless fluctuation of prices
(p.168); M. here describes capitalism as a “social formation in which the process of production
has mastery over man” (p.175);
In Chapter 3 , the chapter on money, M. assumes that “gold is the money commodity”; he then
discusses the three functions (or aspects or “determinations”) of money, as (1)“measure of
values”, (2) “means of circulation”, and (3) money as such or money as the general
representative of wealth; the analysis is both clear and subtle—thus coin or paper money are
discussed under means of circulation as mere “symbols of value”, that is, symbols of the money-
commodity (gold), in the actual process of circulation , while money as “means of payment” (the
elementary form of credit) and world money are taken up under the third aspect, viz., money as
such;
Part 2 is called “The Transformation of Money into Capital” and begins with the distinction
between money as money and money as capital; two quite distinct and opposed circuits or
cycles are involved here, in the first the transformation of the commodity (C) into money (M)
and then back again from money to commodity (C—M—C); in the second the transformation of
money into commodities, then of those commodities back into money, hence M—C—M; but
Marx argues, quite sensibly, that the cycle M—C—M would be pointless unless something
differentiated the first M from the second M; that differentiation is found in a purely “quantitive”
feature, namely that more money is withdrawn from circulation than was thrown into it, so that
the true formula of the second circuit is M—C—M´; “This increment or excess over the original
value I call ‘surplus-value’”, and Marx then frames the scientific problem as knowing where it
comes from (p.251); the addition of this “surplus-value” in the process of circulation is called
“valorization” of value (p.252); if the simple circulation of commodities (that is, selling simply
in order to buy) has an end outside itself in the sphere of consumption, “the circulation of money
as capital is an end in itself”, Marx argues, and there is no limit to the movement of capital, that
is, to its constant expansion through the “valorization of value” (p.253);
As the bearer of this process or movement the capitalist is simply “capital personified”; whereas
the miser saves his money from circulation, the capitalist augments value “by means of throwing
his money again and again into circulation” (p.254-5);
Marx calls this the “self-valorization” of value (p.255), since, as he says, “value is here the
subject” of its own circulation, asserting its “identity with itself” in the shape of money;
Value becomes “money in process, and, as such, capital” (p.256); M. calls this circuit “the form
of circulation in which money is transformed into capital” (p.258); the challenge for Marx is to
explain how surplus-value is formed even as commodities exchange at their values (p.263);

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“circulation creates no value” (p.266); “something must take place in the background which is
not visible in the circulation itself” (p.268); M. expresses this by saying, “Capital cannot
therefore arise from circulation, and it is equally impossible for it to arise apart from circulation”
(p.268); this contradiction is resolved as follows: the owner of money “must be lucky enough to
find within the sphere of circulation, on the market, a commodity whose use-value possesses the
peculiar property of being a source of value”; this Marx identifies as the capacity for labour or
what he calls “labour-power” (p.270), the sum total of those capabilities which we set in motion
when we produce anything at all; the availability of labour-power in large masses on the market
is “the product of many economic revolutions” (p.273);
M. now examines labour-power more closely, stating that its value “is the value of the means of
subsistence necessary for the maintenance” of the worker who is, formally speaking, its owner
(p.274); (Marx assumes that the buying and selling of labor-power is based strictly on a
voluntary contract; in other words, he abstracts from a situation where capitalists might be
buying and selling enslaved labor-power); the value of labour-power contains a “historical and
moral element”, meaning that wages vary according to the living standards that are culturally
ingrained or presupposed in different countries (p.275); but it is always equal to the “value of a
definite quantity of the means of subsistence” or more precisely, to the quantity of labour-time
required to produce those goods, even if the latter quantity varies between different parts of the
world (p.276); for the capitalist the use-value of the labour-power of others lies in its
consumption, that is, in extracting work out of the worker (p.279);
M. then draws a distinction between the labour-process and the valorization process, retaining
the duality between value and use-value that has run through his entire analysis to this point; a
capitalist labour-process is one where “the worker works under the control of the capitalist” and
where the final product belongs to the capitalist (p.291-2); but the capitalist’s aim is to produce
not just value but surplus-value (p.293); Marx goes on to define “valorization” specifically as the
production of surplus-value, that is, the process of creating value “beyond the point where the
value paid by the capitalist for the labour-power is replaced by an exact equivalent” (p.302), in
other words, employers must produce more value than the amount paid out to and consumed by
their workers by way of wages; the capitalist process of production thus combines a labour-
process with a process of valorization, it is, Marx says, their “unity” (p.304);
Constant capital/variable capital; in strictly value terms, the factors of the labour-process
divide into (1) means of production that simply transfer their value to the final product, and (2)
living labour which creates new value in the shape of the final product; surplus-value is now
defined more expansively as “the difference between the value of the product and the value of
the elements consumed in the formation of the product, in other words the means of production
and the labour-power” (p.317);
The rate of surplus-value is the value expression of the degree of exploitation of labour-power
by capital, that is, the ratio between surplus-value (s) and the capital invested in wages or
invested as variable capital (v); it is s/v;
The next important distinction Marx works with is between the rate and the mass of surplus-
value; “the mass of the surplus-value produced is equal to the amount of the variable capital
advanced multiplied by the rate of surplus-value” (p.418); expressed differently, it is the degree
of exploitation of each individual worker times the number of workers exploited by the same
capitalist; of course, the rate and the mass of surplus-value need not move in the same direction,
so that “a decrease in one factor may be compensated for by an increase in the other” (p.418);
One of the major contradictions of capitalism lies, according to Marx, in the conflict between the

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tendency of capital “to reduce as much as possible the number of workers employed” ( it does
this through technological changes) and its “tendency to produce the greatest possible mass of
surplus-value” (p.420); for a given rate of surplus-value and a given value of labour-power, “the
masses of surplus-value produced vary directly as the amounts of the variable capital advanced”
(p.420); later Marx writes that the mass of surplus-value will depend both on the length of the
working day and the number of workers or “size of the working population” (p.422); (as an
aside, the mass of surplus-value plays a crucial role when we come to Marx’s notion of capitalist
crisis as an overaccumulation of capital; in other words, a crisis of overaccumulation “represents
a situation in which the exsiting capital is simultaneously too small and too large; it is too large
in relation to the existing surplus-value (that is, in relation to the mass of surplus-value, JB) and
it is not large enough to overcome the dearth of surplus-value” (Mattick, Marx and Keynes,
p.68); but reaching this level of analysis presupposes that we know what “profit” means and
how profit is calculated and what causes the crisis of profitability; Marx only comes to all of this
in volume three of Capital ; meanwhile, here in volume one he still has to explain that the
essential tendency of capital is its drive to revolutionize the means of production and through this
to raise what he calls the “organic composition of capital”, which roughly is the ratio of the
means of production to labour-power expressed in value terms, say, the amount of machinery
operated by a single worker expressed as values of constant and variable capital respectively; to
get to these levels of the analysis, he spends a very substantial portion of Capital dealing with the
organization of large-scale industry, that is, with machinery and its impact on the labour-process.
Thus Chapter 10 on the working day and Chapter 15 on machinery are among the longest in
volume one.
A further distinction that is crucial to understanding how capitalism works is that between
absolute and relative surplus-value; the surplus-value which is produced by the lengthening of
the working day Marx calls “absolute surplus-value”; in contrast, “I call that surplus-value which
arises from the curtailment of the necessary labour-time” relative surplus-value (p.432); the
curtailment or reduction of necessary labour-time comes about by the cheapening of the
necessary means of subsistence and thus of the value of labour-power; this means that that part
of the working day which the worker spends reproducing the value of her labour-power is
shortened so that more is left for capital to appropriate as surplus-value (p.438); it also means
that there has been a rise in the productivity of labour in those sectors (branches of industry)
which produce wage goods; today much of this drive for productivity in the wage goods sector
takes the form of contract farming , with large firms like Unilever ensuring that consumer goods
that will feed into mass consumption are produced as efficiently as possible;
By accumulation of capital Marx means the constant coversion of surplus-value into capital
which is used to produce more surplus-value and thus more capital, and so on endlessly (p.725);
thus the accumulated capital can also be called “capitalized surplus-value” (p.734); to Marx the
actual workings of capitalism is explained not by the actions or will of individuals (individual
capitalists) but by a system that is driven by and revolves around the accumulation of capital (by
the “laws of motion” of capital, to use an exprssion from classical physics); this is why Marx can
say, “the capitalist is merely a machine for the transformation of surplus-value into surplus
capital” (p.742); moreover, the productivity of social labour is the key factor driving capital
accumulation to new levels; “science and technology give capital a power of expansion which is
independent of the given magnitude of the capital actually functioning” (p.754);
Chapter 25 is in many ways a summing up; it condenses Marx’s vision of an advanced capitalism
characterized by the growing concentration and centralization of capital; this is where he first

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defines what he means by the “organic composition of capital”, that is, the value ratios between
constant and variable capital (c/v) as those are determined by technological changes or by the
“technical composition of capital” (p.762); where he underscores that “a point is reached in the
course of accumulation at which the development of the productivity of social labour becomes
the most powerful lever of accumulation” (p.772), which implies that a rising organic
composition of capital is to him a law of accumulation; and where accumulation is said to entail
an increasing “concentration of the means of production and of the command over labour” (that
is, concentration of capital) in the hands of the most successful businesses as well as the
absorption of some capitals by others or what Marx calls the “centralization of capitals” , the
acquisition of one enterprise by another stronger one; Marx’s passing references to competition
and to the credit system make it plain that he intended to cover these aspects of “real” capital
later in his work; both the credit system (what today we would call the banking system or even
more widely the “financial markets”) and the centralization of capital (takeovers, mergers &
acquisitions) are thus seen by him as subjects more fit for a study of how capitals compete
(pp.777-8); in volume 1 Marx’s focus is on “capital in general” or “capital as such” and the lens
through which that is constructed is “individual capital” (the standpoint of a single business
enterprise) as opposed to “total social capital” (the interconnections and integration of individual
capitals) which is what he comes to in Volumes 2 and 3; thus the general contrast between the
volumes is in terms of the division between individual and total capital, but Marx often also uses
the term “many capitals” to refer to competition; this is, if you like, the fragmentation of the
total social capital into numerous competing individual capitals, but Marx never actually got
around to writing the projected section or book on the competition of capitals;
“In any given branch of industry centralization would reach its extreme limit if all the individual
capitals invested there were fused into a single capital” (p.779); this, of course, or something
very close to it has actually come about, brilliantly confirming Marx’s prognosis; in these pages,
a whole set of issues are rapidly sketched into the analysis—joint-stock companies, the increased
scale of industrial establishments, the integration of production processes into forms of business
organization that are “socially combined and scientifically arranged” (p.780), the increasing
velocity of accumulation thanks to centralization, and the consequences both of these have in
accelerating technical change and a rising organic composition of capital. These pages of
Capital show Marx to be thoroughly modernist in his conception of capitalism as he saw this
evolving in the third quarter of the 19th century. In fact, no one else in the 19th century, except his
colleague and collaborator Engels, had such an up-to-date vision of modern industry or laboured
so carefully and scientifically to understand its inner mechanism, and this in decades when the
vertically integrated large American enterprises were still twenty or thirty years in the future.

Volumes 2 and 3 of Capital were compiled by Engels from Marx’s copious notes. Volume 2
deals with the circulation, turnover and reproduction of the total social capital (in other words,
capital is no longer treated as an isolated “individual” capital, as it is in Volume 1), while the
most important part of Volume 3 is Part 3 where Marx lays out what he calls the “Law of the
tendential fall in the rate of profit”. The argument here is that as capital accumulates, the organic
composition of capital keeps rising over time and this in turn means that there is relatively less
and less living labour to act as a (living) source of surplus-value to sustain the rate of profit on
the total social capital. In the Grundrisse Marx called this “in every respect the most important
law of modern political economy”, “a law which, despite its simplicity, has never before been
grasped and, even less, consciously articulated” (p.748). In volume three much of the chapter

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that deals with the “law” of the falling rate of profit revolves around the distinction between rate
and mass, in this case of profit itself. Marx insists that the absolute mass of profit can actually
grow despite a decline in the rate of profit; indeed it will have to grow, since it is in the nature of
the accumulation process that the absolute mass of labor set in motion and exploited by the total
capital should grow, “hence also the absolute mass of surplus-labour it absorbs, the mass of
surplus-value it produces, and the absolute mass of profit it produces” (vol.3, p.322-4). It is a
beautiful example of Marx’s thoroughly dialectical method of argument that he says, in this
context, “The same laws produce both a growing absolute mass of profit for the social capital
and a falling rate of profit” (p.325) , and underlying both of these contradictory movements is, as
he says, the “same development in the social productivity of labour” (p.329).

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