Capital III. Chapter 14: Counteracting factors

Marx stresses that the phenomena he describes here are tendencies, rather than a general law – as per the previous chapter. Here exploitation of labour, reduction of wages below their value, cheapening of the elements of constant capital, the function of unemployment, foreign trade, and the increase in share capital are all presented as trends which act to attenuate the declining rate of profit.

The core question Marx returns to in this chapter is how is relative surplus-value produced?

More on this to come…

Capital III. Chapter 13: The law itself

This chapter explores the “inner and necessary connection between two apparently contradictory phenomena” (331)

—> the falling rate of profit, and

—> the accelerated accumulation of capital.

The essence of the argument is that a progressively rising organic composition of the social capital as a whole (its total material volume) occurs at the same time as a relative decline in the rate of profit. The engine of capital’s need to expand is hence located within the tendency for profit rates to decline.

An example of the transformation of values into prices.

Here is a working-up of Marx’s ideas from Chapters 9 & 10 of Capital III. It is the first half of a response to Steve Keen’s absurd criticisms of Marx (don’t get me started!). It might be helpful in working through Chapters 9 & 10. Or not.

Capital III. Chapter 9: Formation of a General Rate of Profit (Average Rate of Profit), and Transforamtion of Commodity Values into Prices of Production

Marx introduces the general rate of profit (p’), prices of production, cost-price plus the average profit (k + kp’), and average profit, the capital advanced indexed to the general rate of profit (Cp’), in this chapter.

The substantial move the he makes is the substitution of the inequality of surplus-value and profit for its equality: s = p —> s ≠ p. The substance of this chapter is the explanation and the consequences of this substitution

One of the historical consequences of this substitution has been the so called transformation problem, but it is interesting that Marx flags the désoeuvrement of his theory to the analysis of individual capitals, or to developing the analysis from the individual capitals (260), and that thinking about s and p only works from the level of the total social capital.

One direct consequence that Marx flags is that the determination of value is entirely displaced; and that this is the basis of the ideological representation of capital. Two other things of note. (1) he says that the determination of P’ goes on behind-their-backs (268) and (2) he introduces the notion of chance and accident to talk about the formation of P’, average profit, p, that refluxes to a capital is “in fact only accidentally determined” (272).

More on Capital III

One very interesting thing to note about Capital III, is that it is the oldest material presented in Capital. Capital I was finished in the early 1870s, when Marx edited the serialised French edition, (the edition we read to day was a composite of the German and French editions that Engels published in German in  1894); the first and third parts of Capital II were worked on up to 1878, five years before Marx’s death. The manuscripts that make up Capital III are drawn from the first full draft of Capital in 1864-5. What does this mean?

One very interesting point is that we find Marx still deploying in very strong terms the language of a much earlier period. For example, on pages 178-9 Marx enters openly into a discussion that could have been excerpted straight from the 1844 Manuscripts. He says that the conditions of labour’s realisation take on an external character for the worker. He says that the means of production are deprived of their social character, that the value of the means of production are to a worker as the ‘expense of bits and bridal are to a horse’ (178), that the social power of labour appears as a power of capital.

This conception is so much the less surprising since it appears to accord with fact, and since the relationship of capital actually conceals the inner connection behind the utter indifference, isolation, and alienation in which they place the labourer vis-à-vis the means incorporating his labour.

First, the means of production that make up the constant capital represent only the money belonging to the capitalist (just as the body of the Roman debtor represented the money of his creditor, according to Linguet) and are related to him alone, while the labourer, who comes in contact with them only in the direct process of production, deals with them as use-values of production only as means of labour and materials of production. Increase or decrease of their value, therefore, has as little bearing on his relations to the capitalist as the circumstance whether he may be working with copper or iron. For that matter, the capitalist likes to view this point differently, as we shall later indicate, whenever the means of production gain in value and thereby reduce his rate of profit.

Second, in so far as these means of production in the capitalist production process are at the same time means of exploiting labour, the labourer is no more concerned with their relative dearness or cheapness than a horse is concerned with the dearness or cheapness of its bit and bridle.

Finally, we have earlier seen that, in fact, the labourer looks at the social nature of his labour, at its combination with the labour of others for a common purpose, as he would at an alien power; the condition of realising this combination is alien property, whose dissipation would be totally indifferent to him if he were not compelled to economise with it. (178-9)

Besides the philological interest of this, it flies in the face of those readers who say that the shift between the early and late Marx is the disappearance of his normative discourse in Capital. Of course Marx does struggles against his early Hegelian remainders. But to say that material of the style of 1844 does not appear in Capital is plain wrong. Perhaps it simply shows that these readers have not read the book.

The reading of Capital III, then, might need to keep in mind that the material is much older – less worked-up — than the first two books.