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Marx's "Grundrisse": Vision of Capitalism's Creative Destruction
Author(s): John E. Elliott

Source: Journal of Post Keynesian Economics, Vol. 1, No. 2 (Winter, 1978-1979), pp. 148-169
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JOHN E. ELLIOTT
Marx's Grundrisse: Vision of
capitalism's creative destruction
It is well understood that, in the analysis of Karl Marx, the pro-
spective demise of capitalism emanates from a confluence of eco-
nomic contradictions and class conflicts. What is not so well un-
derstood is that Marx's vision of the impending transformation of
capitalism into socialism also incorporates a process of creative de-
struction and supersession. Socialism is conceived and nurtured in
the womb of capitalism and is its product, not merely its heir ap-
parent. Its emergence is based on capitalism's development and
creativity as well as spawned by the latter's conflicts and contra-
dictions. Capitalism's very success stimulates changes that both
portend and facilitate the process of movement toward socialism.
Socialism is capitalism's supersession as well as successor, fulfilling
possibilities that are immanent in capitalist development, but ap-
pear under capitalism "as through a glass, darkly," in distorted and
alienated form.
Marx's Grundrisse' provides the clearest statement of Marx's
The author is Professor of Economics at the University of Southern California.
1 The Grundrisse, the massive series of notebooks Marx wrote in 1857-58 as
preparatory studies for Capital, was unpublished during his lifetime and fully
translated into English only recently (1973).
Aside from its vision of creative destruction-our focus here-the Grund-
risse is especially important for two major reasons. First, more than any
other single work, it synthesizes the various elements-economic, sociologi-
cal, historical-of Marx's thought (Elliott, 1978b). Second, the Grundrisse
serves as the "missing link" between the analysis of alienation in Marx's
early writings, notably the Economic and Philosophical Manuscripts of 1844
(Marx, 1964), and Marx's mature studies on exploitation and surplus value of
the 1860s (Nicolaus, in Marx, 1973, p. 60; Elliott, 1979). These two qualities
of the Grundrisse overpower its numerous deficiencies of form, even of con-
tent, growing out of the fact that it is (1) literally a rough draft, with major
defects in presentation; and (2) a "transitional and incomplete work..."
148 Journal of Post Keynesian Economics/Winter 1978-79, Vol. I, No. 2
CAPITALISM'S CREATIVE DESTRUCTION
analysis of capitalism's creative destruction2 and supersession. This
work is an invaluable addition to the contemporary understanding
of Marx's analysis of these issues.3 The present article draws heav-
ily on the Grundrisse in identifying three major facets of Marx's
vision: (1) capitalism's creative properties; (2) capitalism's trans-
formation and creative destruction, and intimation of the socialist
future based on capitalism's creative success; (3) socialism's pro-
spective supersession of capitalism and fulfillment of capitalism's
developmental promise.
The Creative Properties of Capitalism
Capitalism's industrializing, revolutionizing, and
universalizing propensities
The theme of capitalism's creative propensities runs like a leitmotif
through the pages of the Grundrisse. Again and again, Marx under-
scores the "boundless" creative force of the capitalist system and
its drive to overcome any barriers to its development. The fre-
quency, intensity, and clarity with which Marx returns to and
dwells upon these creative properties of capitalism strongly affirm
that they were not grudgingly given, nor mere rhetorical gloss, but
were instead a strategic component of his analytic program.
(Tribe, 1974, p. 181), with important topics occasionally presented as asser-
tive sketches rather than as carefully formulated and tightly reasoned argu-
ment.
2 The phrase "creative destruction" is taken from Schumpeter (1950). In
Schumpeter's "perennial gale of creative destruction," the new product or
method of production displaces the old in a dynamic process. This is also part
of Marx's argument (viz., capitalism's "revolutionizing properties" in the first
section of this paper), as Schumpeter recognized in his centennial review of
the Communist Manifesto (1949, p. 355). But Schumpeter describes a broader
process for which the expression also seems appropriate: namely, one in which
capitalism, through its "creative" success, leads on to its own "destruction"
as an economic system and prepares the way-technologically, institution-
ally, and psychologically-for a socialist economic system to succeed and
supersede it. It is in this broader sense that the phase "creative destruction"
is used here. Although this paper concentrates on Marx, it is clear that the
Grundrisse invites reexamination and possible revision of widely received
comparisons of Marx's and Schumpeter's respective visions of capitalism's
future.
3 The Grundrisse, with its vision of creative destruction and transition to so-
cialism at an advanced stage of development, is also clearly a work with im-
portant-and controversial-implications for revolutionary strategy.
149
JOURNAL OF POST KEYNESIAN ECONOMICS
Capitalism's creative role in history is dramatically exemplified
by its industrializing, revolutionizing, and universalizing propen-
sities. The great "historic quality" of capital is to create surplus
labor (labor in excess of that necessary for subsistence) and thereby
surplus value, investment, and growth. Capitalism's "ceaseless
striving" for wealth "drives labor beyond the limits of its natural
paltriness," and thus creates the material basis for the future so-
cialist society (p. 325).4 Capitalist production presupposes a dis-
solution and, indeed, a "total revolution" in landed property (p.
277). It is destructive of the old precapitalist way of life and "con-
stantly revolutionizes it, tearing down all the barriers which hem
in the development of the forces of production, the expansion of
needs, the all-sided development of production, and the exploita-
tion and exchange of natural and mental forces" (p. 410). Under
capitalism, nature "ceases to be recognized as a power for itself'
and "becomes purely an object for humankind." Scientific explor-
ations of the earth "in all directions" stimulate the discovery and
universal exchange of new products and materials, and bring the
natural sciences to "their highest point." Accompanying scientific
advance is the discovery, creation, and cultivation of new, rich,
and varied needs and human qualities. Thus, just as capitalist pro-
duction creates "universal industriousness," this "universalizing
tendency" of capitalism, its constant striving toward the "univer-
sal development of the forces of production" including the
world market-distinguishes it from all previous stages and "be-
comes the presupposition of a new mode of production" (pp. 409-
10, 540).
The creativity of capitalism and its institutions
For Marx, capitalism's creativity springs directly from its underly-
ing institutions (notably, the capital-labor relation, money, and
market exchange). Investment, science, natural resources, the
labor force, even social attitudes and needs, are endogenous devel-
opmental forces, created by capitalist institutions and directed by
capitalists-not merely exogenous factors which obey their own
independent laws of development and show an impact on the eco-
nomic system. In brief, "capital creates the bourgeois society, and
the universal appropriation of nature as well as of the social bond
4 Unless otherwise designated, page references in parentheses refer to the
Grundrisse (Marx, 1973).
150
CAPITALISM'S CREA TIVE DESTR UCTION
itself by the members of society. Hence the great civilizing influ-
ence of capital; its production of a stage of society in comparison
to which all earlier ones appear as mere local developments of hu-
manity and as nature idolatry" (pp. 409-10). The strategic role of
capitalist institutions in generating capitalism's creativity is dra-
matically illustrated by reference to the two central organizing
concepts of the Grundrisse, which is gathered into two major
"chapters" money and capital.
As for money, the generalized pursuit of exchange values and
the acquisition of wealth in money form profoundly affects the
development process. In ancient societies, the expansion of money
exchange subverted and destroyed the bonds of community. Un-
der capitalism's system of wage labor, however, money becomes
"rather a condition for its development and a driving wheel for the
development of all forces of production, material and mental."
Money itself becomes the "real community" in capitalist society;
and the "general mania for money" becomes the "wellspring of
general, self-reproducing wealth." When money becomes the aim
of production, industriousness "knows no bounds" and is "inge-
nious in the creation of new objects for a social need, etc." (pp.
223-25). Under capitalism, "growing wealthy is an end in itself.
The goal-determining activity of capital can only be that of grow-
ing wealthier, i.e., of magnification, of increasing itself" (p. 270).
In Marx's writings, including the Grundrisse, capital is a social
relation, not a thing. Thus, "capital" includes labor, wages, profits
-in short, the entire constellation of relations between capitalist
owners and workers, not merely tools or instruments of produc-
tion. "[C] apital is necessarily at the same time the capitalist, and
the idea held by some socialists that we need capital but not the
capitalists is altogether wrong" (p. 5 12). Discussion of the produc-
tivity of capital or of labor separately from one another is "ab-
surd." Separated from capital, labor is unproductive. It becomes
"productive only if absorbed into capital, where capital forms the
basis of production, and where the capitalist [i.e., capitalist-em-
ployer] is therefore in command of production" (p. 308).
Because capitalists are in positions of dominance over workers
in capitalist society, benefits from rising productivity-notably
those resulting from "science, inventions, division and combina-
tion of labor, improved means of communication, creation of the
world market, machinery, etc." (p. 308)-flow, at least initially,
to them. Consequently, the capitalist mode of production contains
151
a singularly powerful incentive force, propelling capitalists on in
the development of capital and more productive employment of
labor. "This is why capital is productive; i.e., [is] an essential rela-
tion for the development of the social productive forces" (p. 325).
Barriers in capitalism's behavior as stimuli to development
Capitalism's industrializing, revolutionizing, and universalizing
properties are not invalidated by such systemic features as aliena-
tion, exploitation, crises, and falling profit rates. Indeed, these as-
pects of capitalist behavior function as cause as well as effect in
the dialectic of development. As contradiction, they serve to stim-
ulate capitalism's further creative thrust.
Marx carried over into the Grundrisse much of the analysis of
alienation presented in his earlier studies, notably the 1844 Manu-
scripts (Marx, 1964; Elliott, 1978b, 1979). The separation or alien-
ation of the worker from his product, the division and combina-
tion of labor, as well as the worker's "own labor as an expression
of his life" (p. 470), like the "worker's propertylessness" or the
"appropriation of alien labor by capital," are "fundamental condi-
tions" of capitalist economy, "in no way accidents irrelevant to
it" (p. 832). Alienation, by reinforcing the capitalists' dominion
over labor and production, gives them the freedom, power, and
incentives to pursue-and achieve-the expansion of their wealth,
which generates the "universal development" of society's produc-
tive forces. The barrier to capitalism is that its entire development
proceeds in a contradictory manner, so that "the working individ-
ual alienates himself; relates to the conditions brought out of him
by his labour as those not of his own but of an alien wealth and of
his own poverty." Still, the alienated society provides the disci-
pline and control for the "tendentially and potentially general de-
velopment of the forces of production" and a universal world mar-
ket (pp. 541-42).
The same basic point holds for exploitation. The Grundrisse
definitely exhibits the mature talents of Marx the economist in his
lengthy examination of surplus value. However, exploitation,
though clearly "theft" and a "miserable foundation" for wealth
(p. 705), is not merely a defect systemic to capitalism. Nor is it
sufficient to recognize that capitalism's "boundless" striving for
wealth helps to bring exploitation to a peak. Exploitation is a
cause as well as an effect of the development process of capitalism
and certainly does not repudiate its creative success. It is capital-
152
ism's means of creating an economic surplus, distributing the sur-
plus to a politico-economic elite, and investing the surplus to gen-
erate economic growth, which reinforces tendencies towards capi-
talism's self-destruction (as discussed below). Surplus value, Marx
observes, constitutes "liberated exchange value"-that is, value
over and above that given as equivalent for existing exchange val-
ues or labor time-and is available to be put "in motion." Surplus
value as abstract wealth
. .can realize itself only in new living labour (whether labour which had
been dormant is set into motion, or new workers are created (population
[growth] is accelerated), a new branch of production [opens up, or]
the sphere of circulation in a new country [is enlarged] by an expansion
of trade" (p. 348).
As with alienation and exploitation, crises clearly emanate from
basic aspects of the capitalist structure and growth process. In a
sense, they are dysfunctional elements, evidencing "contradic-
tions" and constituting "barriers" to further development. For
Marx, however, the basic law of motion in capitalist development
is dialectical. Expansion creates barriers to growth; barriers, in
turn, serve as stimuli to further expansion. A barrier does not
necessarily constitute a fundamental boundary condition or an
ultimate, intrinsic limit to expansion;indeed, it is a goad to further
development (see Lebowitz, 1976).
Thus, capitalism's contradictory mode of development leads to
"explosions, cataclysms, crises...." But succeeding depressions,
while they constitute "hard times," prepare the way for the re-
newal of expansion on an enlarged scale. Momentary "suspension"
of labor and "annihilation" of a large part of the existing capital
stock "violently" lead capitalism back to the point where it can go
on "fully employing its productive powers without committing
suicide" (p. 750). Falling profit rates caused by problems in cre-
ating sufficient surplus values stimulate capitalists' efforts to in-
crease productivity and to cheapen the elements of constant capi-
tal. Barriers to the realization of surplus value in exchange due to
the limited consuming power of the working class stimulate each
capitalist to expand his sales efforts and to spur workers on to
greater consumption, "to give his wares new charms, to inspire
them [consumers] with new needs by constant chatter, etc."
(p. 287). Through this process, needs are "created by production
itself" (p. 527), and what formerly were regarded as luxuries are
now perceived as necessities. "It is precisely this side of the rela-
153
tion of capital and labour which is an essential civilizing moment,
and on which the historic justification, but also the contemporary
power of capital rests" (p. 287).
In short, capitalism "is the endless and limitless drive to go be-
yond its limiting barrier.... Every limit appears as a barrier to be
overcome" (pp. 334, 408). Of course, the fact that capitalism
overcomes a particular barrier to growth in the process of its de-
velopment does not thereby demonstrate that it has overcome all
barriers once and for all. Each barrier "contradicts its [capitalism's]
character; its production moves in contradictions which are con-
stantly overcome but just as constantly posited" (p. 410). Putting
these two ideas together, Marx concludes that because capitalism
"both posits a barrier specific to itself, and on the other side
equally drives over and beyond every barrier, it is the living contra-
diction" (p. 421).
Capitalism's Transformation and Creative Destruction
"All previous forms of society," Marx observed, "foundered on
the development of wealth." Feudalism, for example, fell to the
blows of trade, modern agriculture, urban industry, and such in-
ventions as gunpowder and the printing press. With the expansion
of wealth, "the economic conditions on which the community
rested were dissolved," along with associated political relations
(p. 540). But the development of social wealth is capitalism's "his-
torical task and privilege" (Marx, 1909, p. 304). If capitalism has a
"boundless" proclivity to drive "over and beyond every barrier" in
its pursuit of wealth and consequent development of society's pro-
ductive forces, why does Marx not conclude that capitalism's ten-
ure is indefinite?
Economic contradictions and creative destruction
Let us begin with Marx's analysis of economic contradictions, but
from the perspective of creative destruction. Marx certainly be-
lieved, apparently more on the basis of his general theory of his-
tory than of his economic analysis, that there are growing conflicts
between progressive productive forces and lagging social relations,
especially property relations. At a "certain stage," social relations
become "fetters" to further development. Even here, however, the
theme of creative destruction is central, for the "stage" or "point"
of shift to an era of system decline is predicated on an earlier period
154
of creative flowering or peaking of the system's developmental po-
tentials. (Marx's example is the flower, which wilts "after the
flowering and as a consequence of the flowering" [p. 541].) The
highest development of an economic system, Marx wrote, is always
the point at which it is itself worked out, developed, into the form in
which it is compatible with the highest development of the forces of pro-
duction, hence also the richest development of the individuals. As soon
as this point is reached, the further development appears as decay, and
the new development begins from a new basis (p. 541).
When capitalism has reached the stage of system decay, it enters
into "the same relation" toward the development of society's
wealth and productive forces "as the guild system, serfdom, [and]
slavery, and is necessarily stripped off as a fetter." The casting off
of this last form of "human servitude" is the result of the capital-
ist mode of production; that is, "the material and mental condi-
tions of the negation of wage labour and of capital, themselves al-
ready the negation of earlier forms of unfree social production, are
themselves results of its productive process" (p. 749; italics added).
The alienating and "antithetical form" through which economic
development proceeds under capitalist auspices "is itself fleeting,
and produces the real conditions of its own suspension" (pp. 541-
42). Capitalism serves as a "condition" for economic development
only as long as development requires an "external spur" and disci-
pline. At a "certain level" of development, it becomes "superfluous
and burdensome," like the guilds in an earlier era.
This basic theme is then applied to capitalism's future. When
capitalist development "reaches a certain point," it "suspends the
self-realization of capital instead of positing it" (p. 749); that is, it
"suspends capital itself' (p. 543). The expansion-barrier-ex-
pansion sequence becomes barrier-expansion-barrier, with suc-
ceeding barriers mounting in magnitude and intensity. "Capitalist
production is continually engaged in the attempt to overcome
these immanent barriers, but it overcomes them only by means
which again place the same barriers in its way in a more formidable
size." Thus, "the real barrier to capitalist production is capital it-
self' (Marx, 1909, p. 293). Capitalism is "a limited form of pro-
duction" whose expanding barriers contradict its creative tenden-
cies and eventually drive it "towards dissolution" (p. 540).
Concretely, capitalism's "fundamental contradiction" is "over-
production." Its tendency to restrict production to levels profitable
within a limited capitalist framework "contradicts its general
155
tendency to drive beyond every barrier to production. . ." (p. 415).
But "contradiction" is not logical impossibility or impassable
boundary conditions. What are the special features of the later
stages of capitalism that explain its shift to a less creative role in
economic development? Marx identifies two. First, cycles are ex-
pected to increase in severity, with higher output, growing eco-
nomic interdependence, increased monetization of economic life,
and a greater role for credit. Because crises and succeeding depres-
sions are repeated on a larger scale, new expansions must be
launched from higher levels of development, "with each time
greater collapse as capital" (p. 416). Second, the Grundrisse antici-
pated a secular, not merely a cyclical, tendency for the general
rate of profit to fall-based on difficulties in expanding surplus
labor and surplus value as rapidly as productivity increases (because
of the ultimate limit of the length of the working day) in conjunc-
tion with increases in the organic composition of capital (pp.
335-41, 763); this conception was carried over virtually intact for
later exposition in Capital (Marx, 1906, pp. 444-45). The more
advanced capitalism becomes, on the basis of past creations of
surplus value, the more "terribly" it must expand productivity to
add new surpluses, Marx declared. "Its barrier always remains the
relation between the fractional part of the day which expresses
necessary labour, and the entire working day. It can move only
within these boundaries" (p. 340). Thus, there is a tendency for
the general rate of profit to fall "with the development of capital
..." (p. 763). Further, as Marx was to argue later, the effects of
the falling tendency in the rate of profits become "clearly marked"
only "in the course of long periods" when, presumably, the
various "counteracting causes" weaken (1909, p. 280).
The cyclical and secular dimensions of Marx's argument are
interwoven. Because capital accumulation occurs irregularly, in
bursts (Marx, 1906, pp. 672, 693-94), the decline in the rate of
profit is also irregular. In addition, the credit system both contin-
ually oversteps the "immanent fetter and barrier" of capitalist pro-
duction, thus accelerating development, and hastens the "violent
eruptions" of capitalist crises, thereby speeding "disintegration of
the old mode of production" (Marx, 1909, p. 522). Further, the
greater the secular development, the more incongruous the cyclical
crises and ensuing depressions appear. The higher the development
of capital, "the more it appears as barrier to production-hence
also to consumption-besides the other contradictions which
156
CAPITALISM'S CREATIVE DESTR UCTION
make it appear as burdensome barrier to production and inter-
course" (p. 416).
It would be misleading though, to interpret Marx's views on
capitalism's growing economic contradictions as merely another
radical diagnosis of failure in capitalism's "economic engine," to
use Schumpeter's (1950) phrase. Increasingly severe cycles and de-
clining profit rates do not in themselves constitute "a doctrine of
the specifically economic breakdown of capitalist production"
(Sweezy, 1956, p. 192). In Socialism. Utopian and Scientific,
Engels describes both how capitalism "breaks down" during crises
and how, because of trends toward monopoly and the large-scale
corporation, exploitation becomes "so palpable that it must break
down. No nation will put up with production conducted by trusts,
with so barefaced an exploitation of the community by a small
band of dividend-mongers" (in Tucker, 1978, p. 632). Neither of
these comments pertains to the question of a final capitalist eco-
nomic breakdown. The first is a cyclical, the second a political,
phenomenon. Elsewhere, Engels stated that the cyclical pattern of
1825 to 1867 had been replaced by a "permanent and chronic de-
pression" (Marx, 1906, p. 31) or at least "a more chronic alterna-
tion between a relatively short and slight business improvement
and a relatively long, undecided depression. . ." (Marx, 1909, p.
574 n). It is not clear that Marx would have agreed with this inter-
pretation. "There are no permanent crises," he observed pointedly
(1952, p. 373 n).
Closer to Marx's position would be a shift to a lower rate of
growth in output, combined with increased cyclical amplitude,
shown by greater departures from full employment output during
contractions (Higgins, 1968, pp. 130, 132). This would give ample
evidence of economic contradictions, but, by itself, would fall
considerably short of capitalism's demise. Indeed, unless the cap-
italist economy were to settle down into a stationary state, it
would continue to grow and to demonstrate its various creative
properties, though presumably in subdued form. In short, the vision
of capitalism's future that emerges from Marx's more strictly eco-
nomic analysis of crises and falling profit rates is that of a formerly
progressive system in decay, a less creative and presumably more
unpleasant society to live in, but not one in danger of imminent
collapse on grounds of economic failure per se.
It should also be emphasized that, for Marx, capitalism is the
penultimately and comprehensively creative economic system.
157
Capitalist economic decay follows, both chronologically and con-
sequentially, the creative development of strategic preconditions
for the prospective new society. These preconditions, which render
capitalism not only "burdensome" but "superfluous," are nothing
less than the revolutionary transformation of man himself and his
relations to nature as a basis for the creation of a radically new
mode of socioeconomic organization. This requires the develop-
ment of productive capacities and of a richer level and variety of
needs, both created by capitalist development (pp. 409, 325).
In short, capitalism creates the material bases for the emergence
of a "rich individuality," as "all-sided" in production as in con-
sumption, whose labor no longer appears as labor but as "the full
development of activity itself," in which the "natural necessity"
of external discipline (provided by the alienating and exploitative
capital-labor relation under capitalism) has been superseded by a
"historically created need. . ." (p. 325). Capitalism's universal de-
velopment of society's productive forces becomes the "presuppo-
sition" of a new mode of production, which permits the "universal
development of the individual" and further growth on this founda-
tion; thus there is a "constant suspension of its barrier, which is
recognized as a barrier [and is] not taken as a sacred limit." In
contrast to capitalism's contradictory development, characterized
by the control of production "for the purpose of reproducing or
at most expanding a given condition," the new mode of produc-
tion, based on the "universalist tendency of capitalism," is one
where the "free, unobstructed, progressive and universal develop-
ment of the forces of production is itself the presupposition of so-
ciety and hence of its reproduction; where advance beyond the
point of departure is the only presupposition" (pp. 540-42). When
the "limited bourgeois form is stripped away," Marx declared,
what is wealth other than the unversality of individual needs, capacities,
pleasures, productive forces, etc., created through universal exchange?
The full development of human mastery over the forces of nature, those
of so-called nature as well as of humanity's own nature? The absolute
working-out of [man's] creative potentialities.... Where he does not re-
produce himself in one specificity, but produces his totality? Strives not
to remain something he has become, but is in the absolute movement of
becoming? (p. 488).
Creative destruction and the working class
Neither creativity nor decay, superfluity nor burdensomeness, con-
158
stitute radical reconstruction of society and fulfillment of the
promises bequeathed by capitalism's creative universalist tenden-
cies. Whether the path of decay or of reconstruction is followed
"depends primarily on whether the old order has, within its life-
time, produced a class that is both ready and able to cut loose
from its existing ties and build a new society" (Sweezy, 1956,
p. 215).
If, for Marx, the historical mission of the capitalist class is the
creation of the preconditions for a new, communist mode of
production, that of the working class (notably, industrial workers
and the intelligentsia) is construction of the new society. The
connecting link is that the working class, as well as its capacity and
resolve to make the transition to and build the new society, is
itself a product of the capitalist development process.
Marx's analysis of the working class, and capitalism's role in its
creation, has two central dimensions corresponding to his concep-
tion of two major aspects of class relations: namely, the objective
relation to the mode of production (a class "in itself") and a group's
subjective awareness of itself as a class, with associated economic
and political organization in pursuit of its class interest (a class
"for itself"). The Grundrisse comments briefly but pointedly on
the second of these two aspects of class relations and provides
Marx's fullest analysis of the first aspect prior to Capital.
Marx examined the first of these two dimensions of class rela-
tions in terms of both the origins and the functioning of capitalism.
The capital-labor relation, he insisted, is the result of a "historic
process"; it is not an "eternal" or "natural" form of production.
On the labor side, emphasized here, it emerged from two key "his-
toric presuppositions": (1) the exchange of free labor power for
money; and (2) the separation of free labor from its means and in-
struments of production. These two propositions are intimately
connected, for the workers' propertylessness, based on the often
forcible eviction of peasantry and cottagers from the soil and the
dissolution of the artisan's relations to his tools during the early
days of mercantile and manufacturing capitalism, forms the basis
of the need to exchange labor power. As soon as the capital-labor
relation is established, it creates and extends its own presupposi-
tions through the production and development processes. The
emergence of capitalists and wage laborers is thus "a chief product
of capital's realization process" (p. 512).
But capitalism does not merely create modern industrial work-
159
ers. It stimulates a "consciousness" of their identity and position,
contributes to their association and organization, and encourages
political action on their collective behalf. The universality towards
which capitalism "irresistibly strives" will, at a "certain stage of its
development, allow itself to be recognized as being itself the great-
est barrier to this tendency, and hence will drive towards its own
suspension" (p. 410; italics added). Increasing recognition by the
working class that the product of capitalist industry is its own and
"that its separation from the conditions of its realization is im-
proper forcibly imposed-is an enormous [advance in] aware-
ness, and . . . the knell to its doom," just as the slave's growing
consciousness of himself as a person and his growing awareness
that a person "cannot be the property of another" contributed
to the earlier supersession of slavery (p. 463).
Although crises and depressions do not constitute a final capi-
talist "breakdown," they are the "most striking form in which ad-
vice is given it to be gone and to give room to a higher state of so-
cial production." The combination of economic performance and
higher potential performance, and a working class hit by economic
crisis, on the one hand, and increasingly conscious of its position
and interest, on the other, can be a powerful revolutionary force.
These "regularly recurring catastrophes" are repeated on a higher
scale and lead finally to capitalism's "violent overthrow" (p. 750).
Thus, Marx clearly felt that oppression and straitened circum-
stances may well intensify revolutionary ardor and bring it to a
head. But it is equally clear that oppression and hard times are an
insufficient basis for setting aside an existing social order and
building a new one. Capacity is equally important; and capacity,
Marx held, is derived from the position of the working class in the
production process and varies directly with the course of capitalist
development. "Marx and Engels assigned the proletariat the key
role in the coming of socialism," Ernest Mandel observes, "not so
much because of the misery it suffers as because of the place it oc-
cupies in the production process and the capacity it thereby pos-
sesses to acquire a talent for organization and cohesion in action
which is incommensurable with that of any oppressed class in the
past" (1971, p. 23). Solidarity and organization of the working
class are essential requisites for both proletarian revolution and the
achievement of Marx's vision of the future worker-controlled so-
cialist society. Capitalist development contributes directly to
160
working class solidarity and organization and therefore also, in
Marx's view, to the movement toward socialism.5
For example, industrial capitalism creates the factory system; it
thus concentrates workers and brings them into closer contact.
Monopoly increases the concentration and centralization of labor
as well as capital. As capitalism becomes national and international
in scope, aided by the railroad and the telegraph, these same im-
provements in transportation and communication centralize the
class struggle, making it national and international in scope and
political in character. Capitalist crises and labor-saving inventions
stimulate the establishment of labor unions as protective means in
the economic struggle to keep wage rates up. Another function of
labor unions, at least implied by the Grundrisse, is to help workers
translate the greater needs stimulated by an expanding capitalist
economy and its growing necessity to bolster consumption into a
higher value of labor power. Periods of prosperity-especially
rapid bursts into new areas or markets reduce unemployment,
raise wages as well as profits, and at least to a modest degree make
possible "the worker's participation in the higher, even cultural
satisfaction, the agitation for his own interests, newspaper subscrip-
tions, attending lectures, educating his children, developing his
taste etc., his only share of civilization which distinguishes him
from the slave. . ." (p. 287). In the long run, capitalism's very sus-
pension is itself a direct result of its development: "At a certain
point, a development of the forces of material production-which
is at the same time a development of the forces of the working
class-suspends capital itself' (p. 543).
Technology, automation, and supersession
of the labor process
The timing of capitalism's "suspension" is perceived differently in
Marx's various writings. In the Communist Manifesto, written on
5 Conversely, as Marx elaborated more fully elsewhere, the class struggle-it-
self the product of the capitalist development process-stimulates further de-
velopment. For example, one factor contributing to the establishment of fac-
tory legislation in England to limit the length of the working day was the po-
litical struggles of the working class. The capitalist response was to turn to
other strategies to extract surplus value-speeding up machinery, introducing
new machinery, and increasing the scale of enterprise-which thereby served
as further stimuli to the development process (Marx, 1906, pp. 514 ff.;
Smelser, 1973, Introduction).
161
the eve of the 1848 revolutions, Marx and Engels suggested that
capitalism's final hour had already arrived (and that proletarian
revolution was imminent). If this assessment is the correct one,
then the impending revolution will occur at a relatively low level
of economic development and will presumably incorporate a rela-
tively smaller role for creative destruction and a correspondingly
larger role for other causative forces in capitalism's demise.
In the Grundrisse, by contrast, "the impression is given that
capitalism has a very long way to go before it exhausts its capaci-
ties to exploit the enormous possibilities of automated machinery"
and science and technology in general (McLellan, 1971, p. 200).
The implication of the Grundrisse is that, despite growing contra-
dictions, conflicts, and crises, capitalism's creative proclivities-
with their profound implications for creative destruction, transfor-
mation, and preparation of further "presuppositions" of the future
socialist society-are still very much in evidence and in progress.
"As the system of bourgeois economy has developed for us only
by degrees, so too its negation, which is its ultimate result" (p.
712).
This section emphasizes Marx's views on the creatively destruc-
tive effects that science and technology have on the production
and labor processes and thus on capitalism itself. In the early stages
of industrial capitalism, Marx noted, production was still essentially
a labor process. Although under capitalist control, it was still char-
acterized by the direct application of labor and skill. Running a
successful business involved essentially the profitable deployment
of labor power and thereby the extraction of absolute and relative
surplus values.
With large-scale industry and expanded fixed capital, Marx held,
a radical transformation occurs in the qualitative character as well
as the quantitative productiveness of production and labor process-
es. First, science, itself a result of the development of production,
is "pressed into the service of capital." There, its chemical and
mechanical laws not only increase productivity, but enable ma-
chines to perform work formerly done by workers. Second, with
the incorporation of science into the capitalist development pro-
cess and expansion of the capabilities of machinery, invention
"then becomes a business, and the application of science to direct
production becomes a prospect which determines and solicits it."
Third, through extension of the division of labor, work operations
are gradually transformed into mechanical ones so that, "at a cer-
162
tain point," a mechanism can be substituted for workers (p. 704).
Thus, "once adapted into the production process of capital the
means of labour passes through different metamorphoses, whose
culmination is... an automatic system of machinery ... set in
motion by an automaton," comprising numerous mechanical and
intellectual parts (p. 692).
These radical changes have three major consequences. One is
that output and wealth come to depend less on the amount of
labor employed and more on the powerful forces affecting labor
productivity: science and technology. Labor productivity grows
"out of all proportion" to the direct labor employed in produc-
tion. Material wealth manifests "monstrous disproportion between
labor time and output produced" (p. 705). The "full development
of capital" occurs when direct labor virtually disappears as the ba-
sic element in production and is reduced to an "indispensable but
subordinate" position compared to science, technology, and au-
tomated systems of machinery.
A second result is the extension of the alienation of labor. Pro-
duction ceases to be a process "dominated by labour as its govern-
ing unity." Production becomes no longer "subsumed under the
direct skillfulness of the worker. .. ." The worker becomes an "au-
tomaton," a "link," "limb," or "cog" in a system dominated by
machines. Science and technology, not labor skills, become the
strategic resource; the exercise of direct labor skill becomes subsid-
iary to the "objective unity of the machinery, of fixed capital,
which, as animated monster,... is in fact the coordinator [and]
does not in any way relate to the individual worker as his instru-
ment" (pp. 470, 693, 699).
A final consequence is a radical change in the composition of
labor and the character of work. Manual labor becomes increasingly
obsolete. Labor functions more and more as "watchman and regu-
lator" instead of "chief actor," and becomes essentially a supervi-
sory and regulatory activity. The fundamental basis of production
becomes the worker's "appropriation of his own general produc-
tive power, his understanding of nature and his mastery over it by
virtue of his presence as a social body," that is, as a "social indi-
vidual" (p. 705).
Ultimately, the accumulation of scientific knowledge, techno-
logical skill, and the general productive forces of the "social brain"
destroy capitalism's foundations and serve as preconditions for a
socialist future. First, capital lives by controlling and exploiting
163
labor. But through the labor and production processes, it trans-
forms the economic system into a scientific and technological en-
terprise that makes the old capital-labor process subordinate and
redundant, thereby destroying its own institutional basis and ra-
tionale. "Capital thus works towards its own dissolution as the
form dominating production" (p. 700).
Second, the "theft of alien labour time," the basis of present
wealth, appears as a "miserable foundation" compared to science
and technology, "created by large-scale industry itself." As soon as
direct labor ceases to be the major foundation of wealth, labor
time "ceases and must cease to be its measure, and hence exchange
value [must cease to be the measure] of use value." Surplus labor is
no longer the necessary requisite for the creation of wealth. Conse-
quently, production based on exchange value "breaks down, and
the direct, material production process is stripped of the form of
penury and antithesis" (pp. 705-6). In short, "capital itself is the
moving contradiction." It "presses to reduce labour time to a min-
imum, while it posits labour time [as the] sole measure and source
of wealth" and tries to confine the "giant social forces" it has cre-
ated
within the limits required to maintain the already created value as value.
Forces of production and social relations. . . appear to capital as mere
means, and are merely means for it to produce on its limited foundation.
In fact, however, they are the material conditions to blow this founda-
tion sky-high (p. 706).
Third, capitalists manipulate necessary labor time to generate
larger surplus labor time. Under capitalism, where most individuals
are degraded to the position of "mere worker," even highly devel-
oped systems of machinery force the worker "to work longer than
the savage does or than he himself did with the simplest, crudest
tools" (pp. 708-9). As in previous class societies, the capitalist ex-
traction of surplus labor from the masses appears as free time for
the few. The capitalist "usurps the free time created by the work-
ers for society, i.e. civilization. . ." (p. 634). Capitalism adds to
this process a creative mania to increase surplus labor time "by all
the means of art and science," because exchange value, not use val-
ue, is its direct purpose and because its wealth consists in the direct
appropriation of surplus labor time (p. 708).
But the phenomenal increase in productivity generated by the
expansion in science, technology, and investment "quite uninten-
tionally . . . reduces human labour" to a minimum. Capitalism "is
164
thus, despite itself, instrumental in creating the means of social
disposable time, in order to reduce labour time for the whole so-
ciety to a diminishing minimum, and thus to free everyone's time
for their own development" (p. 708). Although these benefits are
largely withheld from workers under capitalism, they will ulti-
mately "redound to the benefit of emancipated labour, and are
the condition of its emancipation" (p. 701). Once capitalism is
superseded, the minimization of necessary labor time so as to max-
imize surplus labor and surplus value can also be set aside in favor
of a general reduction in working time and accompanying expan-
sion in social disposable time, "which then corresponds to the ar-
tistic, scientific etc. development of the individuals in the time set
free, and with the means created, for all of them," that is, a genu-
ine "free development of individualities . ." (p. 706).
"Real economy" will then come to be seen as the saving of la-
bor time, which is identical to the development of productivity
and hence is in no way an abstinence from consumption. The in-
crease in free time, emanating from the saving of labor time, will
provide the basis for the "full development" of individuals and
their productive powers and scientific knowledge. This-not ex-
ploitation of labor and restriction of consumption-will provide a
new system of "discipline" for industry and will react "back upon
the productive power of labor as itself the greatest power" (pp.
711, 712).
Fourth, work itself potentially can become more genuinely hu-
man. The individual, Marx contended, "needs a normal portion of
work, and of the suspension of tranquility"; the "overcoming of
obstacles" in the pursuit of aims "is in itself a liberating activity,"
a means of "self-realization" and "hence real freedom," when the
aims become posited by individuals themselves. Under conditions
of slave, serf, and wage labor, "labour always appears as repulsive,
always as external forced labour; and not-labour, by contrast, as
'freedom and happiness.'" But work can become a means of self-
realization in two major forms: first, as "free working, e.g., com-
posing," during leisure or disposable time (which, Marx added, is
"precisely the most damned seriousness, the most intense exer-
tion"); second, in material production itself, "(1) when its social
character is posited, [and] (2) when it is of a scientific and at the
same time general character not merely human exertion as specifi-
cally harnessed natural force,. . . but as an activity regulating all
the forces of nature" (pp. 611-12). But the regulatory, social, and
165
scientific character of labor are the emerging results of capitalist
development. With the development of large-scale industry, not
only is the "conquest of the forces of nature by the social intellect"
the precondition for vast increases in productivity through auto-
mation; so too is individual, direct labor "posited as suspended in-
dividual, i.e., as social, labour. Thus the other basis of this [capital-
ist] mode of production falls away" (p. 709).
Some of this broad and remarkably prescient vision of the Grund-
risse-fixed capital, alienation of labor by the machine under cap-
italism, socialization of labor and production, and potential reduc-
tion in the length of the working day-is carried over into Capital
essentially intact, though in more subdued and less philosophical
language. And Capital adds its own repertoire of creatively des-
tructive or transitional forces: notably, concentration and central-
ization of capital, monopolization, the separation of ownership
and management in the large-scale corporation, worker coopera-
tives, factory legislation, and modifications in the division of labor
(see Elliott, 1976). Capital's description of the joint stock com-
pany as engendering a progressive "abolition of the capitalist mode
of production within capitalist production itself' illustrates
pointedly Marx's continuation and extension of the creative destruc-
tion theme in his writings of the 1860s (Marx, 1909, p. 519).
In one respect, however, Marx's imaginative discussion of auto-
mation and labor in the Grundrisse differs from that in Capital-or
at least fails to make a clear connection (see Bottomore, 1973, pp.
18-19). In Capital, Marx stated that along "with the constantly di-
minishing number of magnates of capital" and the growth of mis-
ery and exploitation in latter-day capitalism, there also "grows the
revolt of the working-class, a class always increasing in numbers,
and disciplined, united, organized by the very mechanism of the
process of capitalist production itself" (Marx, 1906, pp. 836-37).
As we saw earlier, the Grundrisse emphasizes both economic con-
tradictions and the potential revolutionary significance of an in-
creasingly class-conscious proletariat. What is missing is a clear
connection between these passages and those pertaining to the
growth of regulatory, technical, and scientific labor under advanced
automation. Who is to be the principal agent of social reconstruc-
tion under advanced capitalism? The growing reserve army of un-
employed, as suggested by Engels after Marx's death, now height-
ened by automation? (Marx, 1906, pp. 31-32). The technicians,
in a Veblenesque takeover? An alliance between increasingly
166
sophisticated workers and a growing technostructure?6 Marx did
not say, leaving a bit of a puzzle for contemporary Marx-kritik.
One thing is clear, however. To take the long view, it is capitalism's
creative success as much as, if not more than, its economic failures
per se that is perceived as ultimately destroying its foundations
and hence abolishing the "capitalist mode of production within
capitalist production itself."
Socialism as Capitalism's Supersession and Fulfillment
In the interest of brevity, and at the risk of some overschematiza-
tion, we may distinguish among several variants of Marxian social-
ism (or communism, as Marx more or less freely transposed the
terms), perceived in terms of different levels of economic develop-
ment (see Elliott, 1978a). In the Manuscripts, Marx speculated as
to the possible emergence of a variant of socialism at a very low
level of development. Such a variant-Marx called it "crude com-
munism" to distinguish it from his own vision of genuine commu-
nism would share many characteristics with capitalism, indeed,
would be virtually indistinguishable from it. In the Manifesto,
Marx expressed hope that Germany would lead Europe in the tran-
sition to socialism (shortly after the expected bourgeois revolu-
tion), making up in proletarian political activism what it lacked at
that time in economic development. In Capital and the 1875 Cri-
tique of the Gotha Program (in Tucker, 1978), Marx presented
what is commonly regarded as his "mature" view. Here, socialism
is born at a relatively high level of development, as capitalism's
successor. Thus communism emerges out of capitalism's womb
and carries with it, in its "lower phase," residual capitalist vestiges
shucked off as it moves on to its "higher" stage. In the Grundrisse,
communism emerges at a very advanced stage of development.
Consequently, capitalism's creatively destructive role in establish-
6 Another possibility is that the tendency toward automation, with its accom-
panying long-run effects on the character and composition of the labor force,
is tempered by "counter-tendencies which prevent mechanization and auto-
mation from advancing beyond a certain limited point under capitalism," for
example, the countertendency of falling profit rates associated with the in-
creased organic composition of capital (Nicolaus, in Marx, 1973, p. 52). In
that event manual, industrial labor would continue to be a major component
of the total labor force, and the more revolutionary changes in technology de-
scribed in the Grundrisse (pp. 692-712 and passim) would remain as potenti-
alities to be more fully realized under socialism.
167
ing preconditions for and incorporating hints of the socialist future
to come is much stronger.
A brief checklist of the major elements of the postcapitalist so-
ciety found in the Grundrisse runs as follows:
1) the universal development of society's productive forces on the
basis of science, technology, and automation;
2) the rich and all-sided cultivation of needs, including the need for in-
dustriousness, on the basis of science and education;
3) the termination of the market exchange process as the means for
measuring use values and coordinating production (and, by implication,
the substitution of some system of social planning);
4) the termination of the capital-labor relation and the substitution of
property ownership by the "associated workers" (p. 833);
5) the radical reduction of working time and the promotion of social
disposable time;
6) the human transformation of work through science and social con-
trol, and substitution of the discipline of productivity gains through the
free cultivation of disposable time, for the restriction of consumption
and the extraction of surplus labor time.
This is scarcely an operational model for the conduct of a social-
ist economy. But that obviously was not Marx's purpose. What is
clear is that each item on the list is an extension of a trend from
the capitalist developmental process. For Marx, socialism does not
merely succeed capitalism; it supersedes it. Although socialism
goes beyond capitalism, it contains within it trends and tendencies
initiated and cultivated by capitalism. In effect, for Marx, socialism
is (the extension of) capitalism without capitalism's alienation and
exploitative and contradictory institutions and behavior. As such,
it fulfills the potentialities and promises of capitalism and is the re-
alization of capitalism's "historic destiny."
REFERENCES
Bottomore, Tom (ed.). Karl Marx. Englewood Cliffs, N.J.. Prentice-Hall, 1973.
Elliott, John E. "Marx Resurrected: The Transformation and Socialization of Capitalism."
Bulletin (Association for Comparative Economic Studies), Summer 1976, 18, 53-69.
. "Marx's Socialism in the Context of His Typology of Economic Systems."
Journal of Comparative Economics, March 1978, 2, 25-41. (a)
. "The Grundrisse as Social Theory: Link Between Young Marx and Mature
Marx." Social Science Quarterly, September 1978, 58, 239-56. (b)
."Continuity and Change in the Evolution of Marx's Concept of Alienation:
From the Manuscripts through the Grundrisse to Capital." History of Political Economy,
1979 (forthcoming).
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Higgins, Benjamin. Economic Development. New York: Norton, 1968.
Lebowitz, Michael. "Marx's Falling Rate of Profits: A Dialectical View." Canadian Jour-
nal of Economics, May 1976, 9, 232-54.
Mandel, Ernest. The Formation of the Economic Thought of Karl Marx. New York:
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Marx, Karl. Capital. Vol. I. New York: Modern Library, n.d. (Original publication,
Chicago: Charles H. Kerr, 1906.)
Capital. Vol. III. Chicago: Charles H. Kerr, 1909.
. Theories of Surplus Value. New York: International Publishers, 1952.
. Economic and Philosophical Manuscripts. In Karl Marx: Early Writings, trans.
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169

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Marx's "Grundrisse": Vision of Capitalism's Creative Destruction

Author(s): John E. Elliott

Marx's Grundrisse: Vision of

capitalism's creative destruction

It is well understood that, in the analysis of Karl Marx, the pro-

spective demise of capitalism emanates from a confluence of eco-

nomic contradictions and class conflicts. What is not so well un-

derstood is that Marx's vision of the impending transformation of

capitalism into socialism also incorporates a process of creative de-

struction and supersession. Socialism is conceived and nurtured in

parent. Its emergence is based on capitalism's development and

creativity as well as spawned by the latter's conflicts and contra-

dictions. Capitalism's very success stimulates changes that both

portend and facilitate the process of movement toward socialism.

Socialism is capitalism's supersession as well as successor, fulfilling

possibilities that are immanent in capitalist development, but ap-

pear under capitalism "as through a glass, darkly," in distorted and

Marx's Grundrisse' provides the clearest statement of Marx's

The author is Professor of Economics at the University of Southern California.

1 The Grundrisse, the massive series of notebooks Marx wrote in 1857-58 as

translated into English only recently (1973).

Aside from its vision of creative destruction-our focus here-the Grund-

other single work, it synthesizes the various elements-economic, sociologi-

cal, historical-of Marx's thought (Elliott, 1978b). Second, the Grundrisse

serves as the "missing link" between the analysis of alienation in Marx's

early writings, notably the Economic and Philosophical Manuscripts of 1844

of the Grundrisse overpower its numerous deficiencies of form, even of con-

defects in presentation; and (2) a "transitional and incomplete work..."

148 Journal of Post Keynesian Economics/Winter 1978-79, Vol. I, No. 2

analysis of capitalism's creative destruction2 and supersession. This

work is an invaluable addition to the contemporary understanding

of Marx's analysis of these issues.3 The present article draws heav-

ily on the Grundrisse in identifying three major facets of Marx's

vision: (1) capitalism's creative properties; (2) capitalism's trans-

formation and creative destruction, and intimation of the socialist

future based on capitalism's creative success; (3) socialism's pro-

spective supersession of capitalism and fulfillment of capitalism's

The Creative Properties of Capitalism

Capitalism's industrializing, revolutionizing, and

The theme of capitalism's creative propensities runs like a leitmotif

scores the "boundless" creative force of the capitalist system and

its drive to overcome any barriers to its development. The fre-

quency, intensity, and clarity with which Marx returns to and

dwells upon these creative properties of capitalism strongly affirm

were instead a strategic component of his analytic program.

(Tribe, 1974, p. 181), with important topics occasionally presented as asser-

2 The phrase "creative destruction" is taken from Schumpeter (1950). In

Schumpeter's "perennial gale of creative destruction," the new product or

of Marx's argument (viz., capitalism's "revolutionizing properties" in the first

section of this paper), as Schumpeter recognized in his centennial review of

the Communist Manifesto (1949, p. 355). But Schumpeter describes a broader

capitalism, through its "creative" success, leads on to its own "destruction"

as an economic system and prepares the way-technologically, institution-

ally, and psychologically-for a socialist economic system to succeed and

Grundrisse invites reexamination and possible revision of widely received

comparisons of Marx's and Schumpeter's respective visions of capitalism's

cialism at an advanced stage of development, is also clearly a work with im-

portant-and controversial-implications for revolutionary strategy.

Capitalism's creative role in history is dramatically exemplified

by its industrializing, revolutionizing, and universalizing propen-

sities. The great "historic quality" of capital is to create surplus

labor (labor in excess of that necessary for subsistence) and thereby