Marx’s analysis of capitalism – II
Rashed Rahman

If Marx’s Capital Volume I took years to complete, Volumes II and III remained incomplete and were published by Frederick Engels after Marx passed away. Ever new and deeper studies, lingering illness and finally death prevented Marx from completing the whole work. Volumes II and III represent the results of tremendous intellectual labour extending, with considerable interruptions, from 1861 to 1878. Given these circumstances, we must not look to the last two volumes of Capital to provide a final and completed solution of all economic problems. In some cases these problems are merely formulated, together with an indication here and there as to the direction in which one must work to arrive at a solution. In accordance with Marx’s whole attitude, his Capital is not a holy book containing final and unalterable truths, but rather an inexhaustible source of stimulation for further study, further scientific investigation and further struggles for truth.The contents of the second and third volumes represent an essential supplement to and development of the first volume. They are indispensable therefore for an understanding of the Marxian system as a whole.
In the first volume Marx deals with the cardinal question of political economy: what is the origin of wealth? What is the source of profit? The real source of capitalist wealth was revealed for the first time in the first volume of Capital. Marx showed how profit originated and how it flowed into the pockets of the capitalist. He did so on the basis of two decisive economic facts. First, that the mass of the workers consist of proletarians who are compelled to sell their labour-power as a commodity in order to exist and survive. Second, this commodity labour-power possesses a high degree of productivity, such that it is able to produce in a certain time a much greater product than is necessary for its own maintenance in that time. These two economic facts, representing the result of objective historical development, cause the fruit of the labour-power of the proletarian to fall automatically into the lap of the capitalist and to accumulate, with the continuance of the wage system, into ever growing masses of capital.
Thus capitalist wealth is explained as an exchange between capitalist and worker, as a transaction proceeding exactly according to those laws that govern the sale and purchase of all other commodities. In order to explain thoroughly this transaction that gives the capitalist the golden fruits of labour, Marx had to develop the law of value discovered by Adam Smith and David Ricardo at the end of the 18th and beginning of the 19th centuries, i.e., the explanation of the inner laws of commodity exchange, to its logical conclusion and apply it to the commodity labour-power. The first volume deals chiefly with the law of value and, resulting from it, wages and surplus-value, i.e., the explanation of how the product of wage-labour divides itself into a pittance for the wage-worker and wealth for the capitalist. The great historical significance of the first volume of Capital lies in the fact that it demonstrated that exploitation can be abolished only by abolishing the sale of labour-power, i.e., by abolishing the wage system.
The root of capitalist exploitation is laid bare, but at this stage, the capitalist’s fruit of exploitation is present, but still in a form unsuitable for appropriation. So long as the fruit of exploitation takes the form of piled up commodities, the capitalist can derive little pleasure from the process. In order to maintain himself and his family in a manner befitting his social standing, the capitalist must have his riches in hard cash. This is also necessary if he is to increase his capital ceaselessly. Therefore he must sell the commodities produced by the wage-workers together with the surplus-value contained in them. The commodities must leave the factory and the warehouse and be thrown onto the market. The capitalist follows his commodities from his warehouse and office into the shops, outlets, and thereby into the stock exchange. The second volume of Capital takes us on this journey.
The second stage in the life of the capitalist is spent in the sphere of commodity exchange. Here he meets with a number of difficulties. In his own factory the capitalist is undisputed master, and strict organisation and discipline prevail there. But on the commodity market complete anarchy prevails in the name of free competition. On the commodity market no one bothers about his neighbour or the whole. But it is precisely here that the capitalist feels his dependence on the others and on society as a whole.
The capitalist must keep abreast of his competitors. Should he take more time than absolutely necessary in selling his commodities, should he fail to provide himself with sufficient money to purchase raw materials and all the other things he needs in timely fashion in order to prevent his factory coming to a standstill for lack of supplies, should he fail to invest promptly and profitably the money he receives for the sale of his commodities, he is bound to fall behind in one way or another. The individual capitalist who fails to ensure that his business is managed as effectively in the constant exchange between the factory and the commodity market as it is in the factory itself will not succeed in obtaining the normal rate of profit no matter how zealously he exploits his workers. A part of his profit will be lost somewhere on the way and will not find its way into his pocket.
However, this too alone is not enough. The capitalist can accumulate riches only if he produces commodities, i.e., articles for use. Further, he must produce precisely those kinds and sorts of commodities that society needs, and he must produce them in just the quantities required, otherwise his commodities will remain unsold and the surplus-value contained in them will be lost. How can the individual capitalist control all these factors? There is no one to tell him what commodities society needs and how many it needs for the simple reason that no one knows. It is a planless, anarchic society and each individual capitalist is in the same position. Nevertheless, out of this chaos, out of this confusion, a whole must result that will permit the individual business of the capitalist to prosper and at the same time satisfy the needs of society and permit its continued existence as a social organism.
Out of the anarchic confusion of the commodity market must develop the possibility of the ceaseless circulation of individual capital, the possibility of producing, selling, purchasing raw materials, etc., and producing again, whereby capital constantly changes from its money form into its commodity form and back again. These stages must dovetail accurately: money must be in reserve to utilise every favourable market opportunity for the purchase of raw materials, etc., and to meet the current expenses of production, and the money that comes flowing back as the commodities are sold must be given an opportunity of immediate utilisation again. The individual capitalists, who are apparently quite independent of each other, now join together in fact and form a great brotherhood, and thanks to the credit system and the banks they continually advance each other the money they need and take up the available money so that the uninterrupted progress of production and the sale of commodities is ensured both for the individual capitalist and for society as a whole. In the second volume of Capital, Marx demonstrates that the credit system is a necessary part of capitalist life, the connecting link between two phases of capital, in production and on the commodity market, and between the apparently arbitrary movements of individual capital.
Then the permanent circulation of production and consumption in society as a whole must be kept in movement in the confusion of individual capitals, and this must be done in such a fashion that the necessary conditions of capitalist production are assured: the production of the means of production, the maintenance of the working class and the progressive enrichment of the capitalist class, i.e. the increasing accumulation and activity of all the capital of society. The second volume of Capital investigates how a whole is developed from the innumerable deviating movements of individual capital, how this movement of the whole vacillates between the surplus of the boom years and the collapse of the crisis years, but is wrenched back again and again into correct proportions only to swing out of them again immediately, and how out of all this there develops in ever more powerful dimensions that which is only a means for society, its own maintenance and economic progress, and that which is its end, the progressive accumulation of capital.
But even with this the capitalist has not completely traversed the thorny path before him, for although profit has been turned and is being turned in increasing measure into money, the great problem now arises of how to distribute the booty. Many different groups of capitalists put forward their demands. Apart from the employer there is the merchant, the loan capitalist and the landowner. Each of these has done his share to make possible the exploitation of the wage-worker and the sale of the commodities produced by the latter, and each now demands his share of the profit. This distribution of profit is a much more complicated affair than it might appear on the surface, for even amongst the employers themselves big differences exist, according to the type of undertaking, in the profits obtained, so to speak, fresh from the factory.
In one branch of production commodities are produced and sold quickly, and capital plus the normal addition returns to the undertaking in a short space of time. Under such circumstances business and profits are made rapidly. In other branches of production capital is held fast in production for years and yields profit only after a long time. In some branches of production the employer must invest the greater part of his capital in lifeless means of production, buildings, expensive machinery, etc., i.e. in things that yield no profit on their own account no matter how necessary they may be for profit-making. In other branches of production the employer need invest very little of his capital in such things and can use the greater part of it for the employment of workers, each of whom represents the industrious goose that lays the golden egg for the capitalist.
Thus in the process of profit-making big differences develop between the individual capitalists, and in the eyes of bourgeois society these differences represent a much more urgent ‘injustice’ than the peculiar ‘exchange’ that takes place between the capitalist and the worker. The problem is to come to some arrangement that will ensure a ‘just’ division of the spoils, whereby each capitalist gets ‘his share’, and what is more, it is a problem that has to be solved without any conscious and systematic plan, because distribution is as anarchic as production. There is in fact no ‘distribution’ at all in the sense of a social measure and what takes place is solely exchange, commodity circulation, buying and selling. How therefore does unregulated commodity exchange permit each individual exploiter and each category of exploiters to obtain that share of the wealth produced by the labour-power of the proletariat, which is his or its ‘right’ in the eyes of capitalist society?
Marx gives the answer to this question in the third volume of Capital. In the first volume he deals with the production of capital and lays bare the secret of profit-making. In the second volume he describes the movement of capital between the factory and the market, between the production and consumption of society. And in the third volume he deals with the distribution of profit amongst the capitalist class as a whole. All the time he proceeds from the basis of the three fundamental principles of capitalist society: first, that everything that happens in capitalist society is not the result of arbitrary forces, but the result of definite and regularly operating laws, although these laws are unknown to the capitalists themselves; second, that economic relations in capitalist society are not based on violence, robbery and cheating, and third, that no social reason is at work controlling the movements of society as a whole. He analyses and systematically lays bare one after the other all the phenomena and all the relations of the capitalist economic system exclusively on the basis of the exchange mechanism of capitalist society, i.e. the law of value and the surplus-value that results from it.
Taking his great work as a whole we can say the first volume, which develops the law of value, wages and surplus-value, lays bare the foundations of capitalist society, whilst the second and third volumes show us the structure that is based on these foundations.
The contents of the second and third volumes take us onto a different plane. In the first volume we are in the factory, in the deep social pit of labour where we can trace the source of capitalist wealth. In the second and third volumes we are on the surface, on the official stage of society. Department stores, banks, the stock exchanges, finance and the troubles of the ‘needy’ agriculturists take up the foreground. The worker has no role on this stage, and in fact he shows little interest in the things that happen behind his back after he has been skinned.
At first glance therefore it may not be clear why the workers should concern themselves with the private worries of the capitalists and with the squabbles that take place over the division of the spoils. However, both the second and third volumes are as necessary to a thorough understanding of the capitalist economic mechanism as is the first volume. They do not play the same decisive and fundamental historic role for the working-class movement as the first volume does, but they offer a wealth of insight into the workings of capitalism that is invaluable to the intellectual equipment of the proletariat in the practical struggle for its emancipation.
When dealing with the process by which the regular maintenance of society results from the chaotic movement of individual capitals, in the second volume Marx touches on the problem of the crises. He says: “It is sheer tautology to say that crises are produced by the lack of paying consumption or paying consumers. The capitalist system recognizes only paying consumers…That commodities are unsaleable means no more than that there are no purchasers, or consumers, for them. And if people are inclined to give this tautology an appearance of some deeper meaning by saying that the working class does not receive enough of its own product and that the evil would be dispelled immediately it received a greater share, i.e. if its wages were increased, all one can say is that crises are invariably preceded by periods in which wages in general rise and the working class receives a relatively greater share of the annual product intended for consumption…It would appear therefore that capitalist production includes conditions which are independent of good will or bad will and which permit such periods of relative prosperity for the working class only temporarily and always as the harbingers of the coming crises.”
The investigations that Marx pursues in the second and third volumes of Capital offer a thorough insight into the nature of crises, which are seen to be the inevitable result of the movement of capital, which in its impetuous and insatiable urge to accumulation and growth quickly plunges beyond the limits of consumption, no matter how wide these limits may be set as the result of increased purchasing power of one section of society or by the opening of new markets. Thus the idea of a harmony of interests between capital and labour, harmony that is prevented only by the shortsightedness of the capitalists, is refuted, and all hope of palliative measures to patch up the economic anarchy of capitalism must be abandoned.
(To be continued)