Doug Lain’s fantastic Diet Soap podcast features an interview with yours truly this week:
http://dietsoap.podomatic.com/entry/2012-04-17T12_49_35-07_00
We discuss all sorts of things from Fetishism to real abstraction to reading Kapital.
I also recommend Doug’s interview with Alan Freeman from March:
http://dietsoap.podomatic.com/entry/2012-03-13T12_35_40-07_00
There is this great panel featuring 4 different critiques of David Harvey:
and this roundtable on Andrew Kliman’s new book:
After Law of Value 9: Abstract Labor I will conclude the trio of videos dealing with Marx’s method (not that I’ve conclusively said all there is to say on the topic, but all that I have to say for this series). The next 2 or 3 videos deal with the price-value relationship. I suspect that this will be of interest to many viewers as this is a topic full of confusion and varying interpretations. My plan is to stick as closely as possible to what I understand to be Marx’s take on the subject. For this reason I will draw somewhat on the Temporal Single System Interpretation’s literature on the topic, especially some essays by Alan Freeman and the book Frontiers of Political Economy by Guglielmo Carchedi, as this is the school of thought that I think most coherently establishes the logical consistency and relevance of Marx’s value theory (though I don’t claim to have an exhaustive knowledge of the all of the different takes on this topic and their surrounding debates.) Of course Marx’s writing on the subject, especially vol. 3 of Capital will be in the forefront of my considerations as well.
But in preparation for the task of preparing the scripts for these videos I thought some preparatory explorations might be in order. Perhaps the first place to start would be to explore the rationale behind and relevance of Marx’s observation that value cannot be created in exchange.
In his Vol. 3 transformation procedure Marx holds that total value equals total price. (Despite the fact that prices and values diverge, the coherence and relevance of value theory is maintained by the equality of total value and total price, and total surplus value and total profit.) Bohm Bawerk, Marx’s famous Austrian detractor, argued that this assertion proved nothing. “… it is perfectly true that the total price paid for the entire national produce coincides exactly with with the total amount of value or labor incorporated in it. But this tautological declaration denotes no increase or true knowledge, neither does it serve as a special test of the correctness of the alleged law that commodities exchange in proportion to the labor embodied in them. For in this manner one might as well, or rather as unjustly, verify any other law one pleased- the law, for instance, that commodities exchange according to the measure of their specific gravity.” (Bohm Bawerk, “Karl Marx and the Close of His System” p 36 of the 1975 Sweezy edition) He goes on to give an example where individual commodities do not exchange at their specific weights but total weight equals total price, thereby apparently showing the tautological uselessness of Marx’s first equality.
Gravity
Like much of Bohm-Bawerk’s critique, his reading of Marx here is inaccurate and simplistic. Yet his critique is a good jumping off point for clarifying what Marx is actually arguing. Marx’s theory of value does not require that goods trade in exact proportion to the labor time embodied in them. Neither does his theory require that prices fluctuate around a ‘center of gravity’ that is embodied labor times. Rather Marx argues that prices and values systematically deviate and that this poses no problem for any aspect of his theory of capitalism.
Marx’s claim that total price equals total value is not supposed to “serve as a special test of the correctness” of his value theory. Rather it is a logical conclusion of his observation in Volume 1 of Capital that value cannot be created in exchange. This observation flies in the face of everything that is sacred to the Austrian school. As Bohm-Bawerk writes, “Where equality and exact equilibrium obtain, no change is likely to occur to the disturb the balance. When, therefore, in the case of exchange, the matter terminates with a change of ownership of the commodities, it points rather to the existence of some inequality or preponderance which produces the alteration.” (ibid p. 68) In other words, people exchange things because of a subjective difference in their estimation of the value of goods. Exchange happens because of an inequality in subjective estimations in value. This leads to the bizarre notion of “subjective profit” which, more than anything else, makes it obvious that the entire idea of marginal utility comes from an attempt to impose the objective rational of the capitalist investor upon the the subjectivity of individual consumers.
Two points should be made in response to Bohm-Bawerk. First, despite the impressions that could be had from a naive reading of the first chapter of Vol. 1 of Capital, Marx does not believe that every exchange involves an equality of labor times. The very concept of socially necessary labor time (SNLT) implies inequalities in exchange between the social value of a commodity and the individual value (between the labor time considered socially necessary for its production and the labor time actually spent on its production.) The gap between social and private labor is the mechanism whereby value regulates private labor for social purposes. (2) Rather, Marx is claiming that value cannot be created in exchange. While there can always be inequalities in exchange, these cannot be the source of profit because no aggregate addition to the total value of society can be created just by moving commodities from one person’s hands to another’s.
Now Marx does often ask his readers to assume, for sake of argument, that value and price are identical for individual commodities. Why?…because this makes it easier for him to show that profit must come from the exploitation of wage labor, rather than from an inequality in exchange. If value can’t be created in exchange we must look to production and the exploitation of wage labor to explain profit. But this type of profit is different than the super-profit that comes from selling below the SNLT. Thus it makes sense to assume the sale of commodities at their SNLT in order to look at the source of profit proper, rather than super-profit. Sometimes people, like Bohm-Bawerk, claim that Marx holds price and value equal for the first two volumes of Capital, later dropping it for the 3rd volume. But the concept of SNLT, which entails sale above and below SNLT, occurs at the beginning of Vol. 1!
Equivocation is the misleading use of a term with more than one meaning.
Secondly, the Austrian school’s concept of inequality being the prerequisite to exchange is highly problematic. It rests on a conflation of two different definitions of the term “value”: on one hand the subjective estimations made by individuals, on the other the real, concrete prices which commodities sell for in the market. Just because we make subjective judgements about our preferences for commodities doesn’t mean that these judgements are the same as or have any bearing on the market prices of commodities.
I question whether the concept of “subjective profit” so popular to Austrian thought has any usefulness. It seems like a bad analogy to the real, concrete profit of capitalists. Whereas capitalist profit can be easily measured, there is no measure of this so-called subjective profit that individuals supposedly get in exchange. Yes people buy things by their own free will. But on what basis can we say that this is a result of their preferring a commodity more than they prefer money? Money only has value because it can buy things. To say buying deodorant demonstrates that I prefer a $5 stick of deodorant more than I prefer $5 in cash seems to overlook the obvious fact that a commodity worth $5 has just exchanged for $5. I have exchanged one use-value for another yet the amount of economic value I have has not changed. While there has been a transfer of use values there has been no transfer or value. While the Austrian instinct is to follow the movement of these use-values, to conflate their circulation with the motor force of capitalism, Marx is more interested in the movement of value. Since value can’t be created in exchange, the motor of capitalism is the exploitation of wage-labor. This allows Marx’s gaze to focus on production, class, the movement of value… all of the things that the bourgeois economists try to abstract out of their theory.
We need look no further for an illustration of the problematic conflation of subjective value and real market prices than Ludwig Von Mises’ “Human Action”. P. 329: “Valuation is a value judgement expressive of a difference in value. Appraisement is the anticipation of an expected fact. It aims at establishing what prices will be paid on the open market for a particular commodity or what amount of money will be required for the purchase of a definite commodity.” and later:” “The valuations of a man buying and selling on the market must not disregard the structure of market prices; they depend on appraisement. In order to know the meaning of pr ice one must know the purchasing power of the amount of money concerned.” (Human Action, p.329, The Scholars Edition).
Here Mises clearly states that our subjective valuations are not the same as market prices and that market prices effect our subjective valuations. It is a logical conclusion from here to the fact that an exchange of $5 for a stick of deodorant with a $5 price tag is an exchange of equivalent values (value defined in this objective sense) regardless of what the personal valuations of individuals are regarding deodorant. Mises goes on to assert that these market prices are just the result of personal value judgement. But just because market prices are formed in the process of people making judgements does not mean that these judgments determine the exchange ratios between commodities. Regardless, once one acknowledges the fact that prices are an objective quantity one has to admit that value cannot be increased merely by trading two commodities with the same price. Whether or not there is a “subjective profit” (and I don’t think this can be proven or that it has any relevance [1]) has no bearing on the fact that value can’t be created in exchange.
On with the story…
If value can’t be created in exchange then this puts us quite far along in our path to understand the value price relation. The exchange process is one of measuring the value of commodities against each other. If a commodity is exchanged above or below its value then value is transfered from one person to another. This can be a source of profit for one person but it cannot increase the total amount of profit in society. Though Marx doesn’t use the term, sometimes one hears the words “super profit” used to describe this profit arising from unequal exchanges.
If profit can’t come from exchange then we must look to production for it. There is one commodity that can produce more value than it costs to buy. This is labor power. Labor power is the only commodity whose cost of production (the cost of the means of subsistence) differs from the value it transfers to the final product. The amount of value created by the worker in production cannot be determined by looking at the wage. It can only be determined by looking at the total amount of work that has been done. This is the source of profit proper.
Marx’s theory of SNLT contains both types of profit, profit proper and super-profit. All capitalists in an industry exploit labor and thus make profit. But they also compete to outsell each other in the market by introducing new production techniques which allow them to produce under the SNLT. This allows them to appropriate value through exchange, hence making an additional super-profit on top of the profit proper.
The source of this super-profit is the surplus value created by workers in other firms. It works like this. All capitalists in an industry must at least cover their costs of production or else they will go out of business. So let’s assume all firms are at least making enough to cover costs. Now if the SNLT corresponds to the modal (not average) level of productivity in an industry this means there will probably be firms operating above, at, and below the SNLT. Firms operating above the SNLT will lose business and make less profit. Firms operating below the SNLT will get more business and realize more profit. The more efficient firms carve out a larger space for themselves in the market, squeezing out less efficient firms. They cut into the profits of competitors. Less efficient firms are not able to realize all of the surplus value they have created while more efficient firms realize more profit than just the surplus value their workers created.
If value can be transferred in exchange, and if this transfer of value comes through redistributing surplus value created in production, then we already have the tools needed to understand Marx’s theory of Prices of Production. Sometimes we are told the notion of prices of production involves some modification of Marx’s value theory. I do not believe this to be the case. All of the tools we need to understand prices of production are already present in the notion of SNLT, and all of these points flow logically from the observation that value can’t be created in exchange. (I will leave the topic of prices of production for a future post.)
The Fraternity of Capital
The fact that surplus-value is transferred in exchange allows Marx to theorize the interrelations between different factions of the capitalist class. The theory of prices of production demonstrates that the specific profit a capitalist accrues are not just the result of surplus value originating in their own workforce. Their profits also consists of surplus value transfered in exchange. Thus the capitalists class, as a whole, exploits the working class as a whole.
This however only covers the relation between different productive capitalists. There are also merchants, bankers and the state to consider. Merchants don’t create value but they siphon off value created in production by taking a cut of the Industrial capitalist’s profit in exchange for bringing the product to market. Bankers charge interest for loans to industrial capital. The state siphons off tax revenue. These interactions bind the different factions of the capitalist class in their united interest in the daily exploitation of wage labor. We see the cohesion of the class most strikingly in a crisis where the state must act as the arm of the collective capitalist class to preserve the institutions of wage labor at all costs.
Obviously individual capitalists compete against one another to get more of this super-profit then their competitors. Obviously there are times when some factions of the capitalist class have power over others. For instance, WalMart seems to have the ability to dictate profit margins and production techniques to producers. Or, to take another example, the banking class seems to have a dominant voice in the state’s attempt to mediate the current crisis. But, despite this competition, the one thing that is always constant, the one feature that makes the rest of this system possible, is the exploitation of wage labor.
This should be the cover of the next Penguin edition of Capital...
Footnotes:
1. For one, the use of the word “profit” is problematic because it too closely conflates capitalist investment activity with consumer behaviour. Capitalist investment is an objective, measurable process. Consumer behavior is not. Austrians argue that utility is ordinal. But capitalist profit is not ordinal. It is clearly delineated in objective quantities of money. Capitalist profit cannot emerge merely from exchange, as discussed above. Use of the word profit for both phenomenon is clearly an ideological device for obscuring the nature of capitalist profit.
Consumers don’t take their subjective profit and use it to reinvest in the creation of more profit. They don’t hire accountants to keep track of their subjective profits. The state can’t tax their profits. There is really no way that this concept of subjective profit has any relation to the real profit of capitalists.
2. Now SNLT is an average, a center, which pulls less efficient producers towards it, punishing less efficient producers, disciplining labor to achieve a social average. But this center point which labors are drawn to is also constantly in motion as the same process also rewards those who produce under the SNLT. This is why we can’t think of Marx’s theory of value as an equilibrium theory. The theory does not contain any final resting point at which supply and demand meet, and labor stops undergoing revolutions in productivity.
WordPress tells me that since I posted the sloppy draft of my David Harvey critique two days ago my hits have more than doubled. I didn’t get too many responses but I assume people are reading. So, in case another a thousand people visit the sight in the next day or so I thought I’d post a much more developed draft. I usually shy away from adding to the clutter of unfinished thoughts on the internet, but in this case I could really use any constructive comments. There are not many good critiques of Harvey out there that I have found and I am somewhat nervous about launching into a public critique of such a heavy thinker.
The aim of this brief talk is to provide the beginning of a critique of David Harvey’s theory of crisis. But I have to start by saying how humbly I approach this task. Like many people, I am greatly indebted to David Harvey. In many ways Harvey was my first access into the world of Marx. His clear, articulate language, his passion for his subject material, and his patient dedication to pedagogy were a big influence on me, compelling me to dig deeper and deeper into the world of Marx and Marxism. The criticism I offer here is made with the deepest and most sincere respect for his work.
My critique is of 3 intertwined aspects of Harvey’s work: his rejection of Marx’s theory of the Tendency of the Rate of Profit to Fall (TRPF), his theory of ‘overaccumulation’, and his use of this ‘overaccumulation’ as a framework for his geographical analysis.
Much of 20th century Marxism is defined by its defeats, both theoretical and political. As much as we have to learn from our elders, we also must remember that they have their origin in a certain time and place and that their approach to Marx is informed by this origin. For Harvey the time is the 1970′s and the place is the western academy. It is a time and place where Marxists were facing certain theoretical challenges that they were unable to respond to, forcing them to revise or reject key aspects of Marx’s value theory. They were also faced with the need to distance themselves politically from the horrors of Soviet Marxism and Maoism. This led to several distinctive characteristics of what I call here ‘the 70′s Marxist’.
Aspect 1: Anti-orthodoxy
Disillusionment with the USSR, Maoism, and the like provided space for a critique of so-called “orthodox Marxism” allowing for a reappraisal of Marx himself, not filtered through the politics of the Soviet state. This combined with a trend of academic Marxism, tracing itself back to figures like Paul Sweezy, who worked to establish more space for Marxian ideas in the academy by developing a non-sectarian Marxist tradition which often borrowed language and tools of neo-classical economics. On the positive side, this has led to some great scholarship and debates on many topics from dialectics to value theory to the labor process, revealing the great depth and richness of Marx’s analysis, and freeing Marx from the stodgy determinism of the Iron Curtain. On the other hand there has been too great, and often too superficial, a rush to distance oneself from this so-called “orthodoxy”, often confusing this “orthodoxy” with Marx himself (throwing out the marx-baby with the orthodox bath water). Most problematic was the attempt by some to continue the Marxist project without Marx’s value theory, dismissing value as an unnecessary category useful only for “orthodox dogmatists”. (Indeed the charge of “orthodoxy” is too often used as a substitute for a real argument.) For Harvey this takes an unusual form. In his 1981 Limits to Capital and his online course on Capital he seems comfortable with Marx’s value theory. But in his writings on crisis and geography from Condition of Postmodernity to Enigma of Capital he makes no use of value as a category. The word value doesn’t even occur in the index of many of these books. This gives the impression that he is advancing a crisis theory that is not based in a theory of value. This is reinforced by his frequent use of the same language as the Monopoly school of thought (“price-fixing markets”, “surplus capital absorption”, “overaccumulation”, etc.), a school which advances a surplus-capital theory of crisis that does not require value as a category.
Aspect 2: theoretical retreat
As 70′s Marxists wrestled with their identity in the post-Stalin era they also had to fend off the theoretical assault of the Sraffian’s, the transformation problem, and the Okishio Theorem, critiques which they could not find answers to. Those who didn’t abandon Marx altogether often resorted to vague reformulations of the Marxist project which attempted to skirt criticism by taking focus away from the specifics of the critique and focussing on more general Marx-ishness. For the purpose of this essay what is most important is the Okishio Theorem which argued that Marx’s theory of the Tendency of the Rate of Profit to Fall (TRPF) was invalid. Okishio argued that it was impossible for labor-saving innovations to make the rate of profit fall as Marx had argued it would. The inability of Marxists to find a way to refute the Okishio Theorem led many to abandon Marx’s theory of crisis, and to try to find some way to prove the inevitability of crisis using other aspects of Marx’s analysis of Capital. It was a time for vague work-arounds and soft answers. For Harvey it meant taking focus away from the rate of profit and instead focussing on the growth of capital itself, searching for a multitude of different barriers that could check this growth.
But since these 70′s debates, since Harvey’s Limits to Capital, there has been a rising tide of theorists who have come to question the theoretical assumptions behind the Okishio Theorem and the transformation problem, arguing that Marx’s value theory is consistent and complete, not in need of full-scale revisions. The presence of these new challenges, these new defenses of value theory, demand that we reinvestigate the theories of the past, theories that were forged in an era of theoretical defeat.
Aspect 3: do it my own way
It seems almost every book on Marx written in the last 40 years must have as a subtitle “a reinterpretation”, “a reformulation”, or “a critical appraisal”. Academic careers were made based on the uniqueness of one’s reinterpretation. Putting a distance between oneself and Marx certainly makes one more palatable to the academy. But I suspect that the larger factor in this is the nature of academic careers in general which tend to foster individualism and originality in theories. Harvey puts a lot of effort into tying his theoretical contributions into Marx’s framework. He also sees his work, especially in Limits, as completing aspects of Marx’s project: integrating different models of accumulation that Marx left separate, extending the theory of primitive accumulation, etc. But sometimes one can lose track of where Marx leaves off and where Harvey picks up. if indeed Harvey’s crisis theory was formed in part as a retreat from the Okishio Theorem then this demands that we pay extra close attention to this sometimes fuzzy line between Marx and Harvey and ask whether or not Harvey’s extensions and reformulations of Marx are always warranted.
Let’s get into it…..
The Geography
Thinking back to my first encounters with Harvey’s writing, reading the Condition of Postmodernity as an undergrad, I remember the excitement that his geographical project had on me. In a college environment of identity politics and postmodernism, where culture was used to explain politics, where ‘meta-narratives’ were akin to totalitarianism, David Harvey’s ability to provide a fresh materialist analysis to culture was a breath of fresh air. By focussing on the way capitalist accumulation constructs its own version of space and time his writing was able to pierce through the fragmentation and nihilism of the dominant postmodern narrative, and provide a materialist framework with which to understand the lived experience of capitalism in all of its diversity and complexity.
Often as an undergrad I had been told that Marxist analysis was reductive, that it predicted a uniform lived experience, that it proscribed a politics that ignored differences between people, rejecting many forms of struggle to focus narrowly on workplace struggles. Harvey showed that it was possible to theorize a great diversity of experiences of capitalism as well as a great diversity of struggles against capitalism, within a marxist framework.
This is the real strength of his project. It represents some of the best aspects of the 70′s Marxist, showing that Marxism is an open, developing body of theory, capable of theorizing the continuing evolution of capitalism in all of its complexity and diversity.
But the 70′s Marxist too often threw out the Marx-baby with the orthodox-bath-water. Often times this was the best that could be done at the time as theoretical defenses of key aspects of Marx’s value theory had not been developed yet. MORE ON THIS BELOW. The best thing that could be done was to side-step these criticism of Marx, developing alternative approaches. Harvey’s work-around is this theory of over-accumulation.
What is missing in his theory?
For Harvey, capitalists are in a constant state of anxiety because they must turn their money into more money. They must constantly find new avenues for profitable investment. But the amount of value that needs to be valorized keeps increasing and so their task gets harder and harder. Eventually this growth reaches limits. It begins not just to accumulate, but to overaccumulate. The attempts of capitalists to overcome these limits is what particularly interests Harvey. Investments in fixed capital, public works, infrastructure, etc… The entire construction of physical space, and the organization of time are bound up in this attempt to deal with the overaccumulation of capital.
“The Marxist argument is, then, that the tendency toward overaccumulation can never be eliminated under capitalism. It is a never-ending and eternal problem for any capitalist mode of production. The only question, therefore is how the overaccumulation tendency can be expressed, contained, absorbed or managed in ways that do not threaten the capitalist social order.” (The Condition of Postmodernity p.181)
Too Much Explained:
This becomes a very powerful tool for Harvey as it allows him to explain all of space and time, more or less, through the problem of overaccumulation, or as he says in Enigma, the problem of surplus. But the problem is that his theory explains too much. Like his theory of Accumulation by Dispossession, the categories are extended too wide; too much is explained; it’s too easy.
How can the boom in construction at the start of an economic boom (say the 50′s in the US) and the boom in construction that accompanies a credit bubble right before a crisis (say the 2000′s) both be a result of overaccumulation? Here the same geographical phenomenon, the rapid construction of spaces, exists at two very different places in the accumulation cycle. The dominant forces of a boom can’t be the same as those of a bust. We need a theory capable of explaining cyclical movement.
Cycles:
But a theory of overaccumulation is a mono-directional theory. It suggests a chronic state of overaccumulation. In contrast, for Marx overaccumulation is a specific symptom of the falling rate of profit. It exists at a specific point in the accumulation cycle, before a crisis. Marx’s theory of the TRPF, like all of his economic laws, contains tendencies and counter-tendencies which make for cyclical patterns. Because overaccumulation suggests a chronic state of stagnation Harvey must turn to politics to explain change and movement.
[this needs to contain some reference to the accumulation cycle as described by Harvey in Limits]
Politics:
Motion for Harvey is a political, contingent phenomenon. Again: “The only question, therefore is how the overaccumulation tendency can be expressed, contained, absorbed or managed in ways that do not threaten the capitalist social order.” (The Condition of Postmodernity p.181) So the only question is how actors, mostly states and combinations of capitalists, contain, absorb and manage this overaccumulation. This leads to a theory of crisis that leans heavily on the politics of the ruling class. This is especially strong in “A Brief History of Neoliberalism” in which Harvey considers neo-liberalism to be a “class project” of “wage repression” and robbery. Talking about class in this way certainly sounds Marxist at first. But would Marx really ascribe 30 years of economic history to a political theory of the ruling class? How much agency can we allow for politics before we lose track of the whole point of value theory?
Value is what organizes our productive activity so that politics doesn’t have to. Value is what we don’t think about. Politics describes the messy business of people trying to exert control over the law of value and failing. What is most interesting about politics is not the successes of certain political ideologies but the failures of people to escape the logic of capital.
Andrew Kliman’s recent book on the crisis, The Failure of Capitalist Production, makes an interesting point about the use of neoliberal ideology as an explanation for the economic phenomena of the period: Most of the key institutional and economic features of neoliberalism predate the ascendancy of neoliberals into political office. This suggests that perhaps neoliberalism was a class project to justify what capitalism was already doing!
Little Limits
Big vs. Little
[Harvey talks a lot about the creation of difference through the uneven development of capital in space. These differences are often due the contingent aspects of the flow of capital through spaces, local advantages and barriers, the irregularities of fixed capital, etc. ]
So I don’t think overaccumulation or politics can explain the cyclical motion of crisis. But I also don’t think overaccumulation can explain overaccumulation.
If capital is overaccumulating due to a shortage of profitable investment we need some theory of the growth of capital relative to investment opportunities- or, I should say, relative to profitable investment opportunities.
Historically theories of overaccumulation are associated with the underconsumption school of thought which argues that low wages create a situation of not enough consumer demand which means product can’t be sold, capital overaccumulates, etc. Harvey seems to endorse this thesis in Enigma, even though he critiques the theory earlier on in Enigma, and many of his earlier works. (This, I must confess, I find confusing.) His critique I agree with: capital has the ability to generate its own demand through the expansion of capital goods. (see Kliman’s new book.)
If Harvey rejects the underconsumption argument then what is the cause of overaccumulation? At his worst, Harvey sometimes seems to suggest that overaccumulation is its own cause and effect. The mere fact that capitalism must constantly grow is used to suggest that this growth will hit a limit at some point. This aspect of his theory seems to have become more blatant since the current crisis. It emerges quite strongly at times in Enigma and in recent speaking engagements. I think it is mostly a result of trying to communicate his ideas with lay audiences. But it has the danger of evoking an “anti-growth” aesthetic similar to the ‘small is beautiful’ politics of primitivists, anarcho-libertarians, apolitical environmentalists and hippies. It borders on vulgar populism. And it has no theoretical meat: he must provide a reason why capitalism can’t expand forever.
Now, Harvey does have a better answer to the question. He often argues that there are multiple Limits to capitalist production. This, for him, means that the specific limit operating at any particular place and time is contingent. Many of the limits Harvey talks about have to do with the temporal barriers to production generated by the complex overlapping of different turnover times, transportation, and the use of the credit system to overcome these limits, which generates its own speculative impulses.
This idea of a plurality of limits can seem attractive at first. It definitely gets anti-orthodoxy points due its ability to embrace many different interpretations of crisis. But I worry that it ignores the mechanism by which capital overcomes its limits: profit. Profit reapportions investment to areas with high return, and takes investment out of unprofitable areas. Now, of course this is not always successful for every individual capitalist. Of course there is a lot of unevenness due to all of the factors that Harvey discusses. But it is no good to just stress the limits and ignore the elephant in the room: the profit rate.
It turns out that capitalism is remarkably good at overcoming barriers. The ‘little-limits’ Harvey discusses are good for describing much of the unevenness and violence of capitalist production. But these litte-limits are not adequate to describing a real crisis of the system.
Perhaps it would be useful to be more specific about some of these limits. Harvey lists several in Enigma, devoting pages to elaborating them. What does not emerge from this discussion is any reason why these limits would lead to a large-scale crisis of capitalism.
Most of the limits in Enigma are limits to the circulation of capital, not the production of value. This immediately differentiates Harvey from Marx who argued that the falling rate of profit was a phenomenon of capitalist production, though its manifestations could be seen in circulation.
$ capital scarcities – which call forth credit (state-finance nexus)
The need for money to lubricate exchange calls for credit and state-finance nexus to regulate this credit system. Credit can have is own logic which can lead to speculative bubbles. But this is surface froth compared to the speculative bubbles that attach themselves to capitalism in the lead up to a crisis. (There is an attempt in Enigma to embed the concept of speculation deeper into the logic of capitalism. Harvey wants to call all investment speculative, conflating risk and speculation. This is another problematic extension of categories. No time to develop this here.) The fact remains that if a credit bubble is not a bubble unless there isn’t enough money to pay back those loans. If money is flowing into speculation rather than production then this implies there is a problem with the profit rate. If Harvey wants to develop his explanation for the particular character of the state-finance nexus his argument would be strengthened by an analysis of the profit rate.
labor problems- profit squeeze
Harvey does throw some support behind the profit-squeeze theory of crisis to explain the crisis of the 70′s. This is a problematic move on his part and I was surprised to read it. It seems strange to embrace a profit-squeeze theory for the 70′s and an underconsumption theory for the current crisis. Are high wages good or bad for capitalism? It seems that both only matter when the profit rate is falling.
disproportionalities- again a reference to Morishima and some math nobody understands…
In Enigma and Limits Harvey makes reference to disproportionality theories of crisis, mostly to refer to some complex algebra of Michio Morishima that claims to prove that it is impossible for capitalism to achieve balanced investment between wage-goods and capital-goods. I have no way of responding to this as it involves math which is over my head. Harvey doesn’t take the time to explain either. I don’t know if his math is that savvy either.
natural limits… which he doesn’t actually see as limits
Harvey goes into a long discussion of ecological limits to capital and seems to conclude that ecology is so much a product of human labor that we can’t really see nature as having any limit to capitalist growth. I would go further and suggest that the environmental crisis and their ensuing destruction are good for capital because they destroy capital.
unbalanced technological and organizational changes/ viable technology
In Enigma he calls it unbalanced technological and organizational changes which probably sounds really vague to most readers. In Limits he calls it the inability of capitalist competition to achieve “viable technology.” This concept is a direct descendant of the TRPF. It comes from Harvey trying to put Marx’s argument about profit rates into an equilibrium framework. Marx argued that labor saving technology causes prices to fall and with them long term profit rates. Harvey argues that we should theorize a mix of technologies that achieves a stable profit rate, a viable technology. He then argue that capitalist competition drives the economy away from a viable technology. My response is that if it walks like a duck and talks like a duck it must be the TRPF.
lack of effective demand
In many of Harvey’s works he devotes a little time to explaining why lack of effective demand is not an adequate explanation for crisis. His reason is the same reason I would give: that the growth of the demand for capital-goods can sop up any shortage of demand for wage-goods. What he leaves out is this: this growth of demand for capital-goods only solves the problem when there is a healthy profit rate. When the profit rate is low there is a demand problem for all sorts of goods. Curiously, despite his previous arguments Harvey embraces the underconsumption argument in Enigma.
turn-over time
The complexity of fixed capital formations is a recurring fascination for Harvey. Some of his best geographical insights come from this. The relation to crisis is this: the growth of investment in fixed capital and the built environment ties up capital for a long period of time. Capital loses its mobility. This makes fixed capital likely to be devalued by newer, more efficient investments in other places. Hmmmmmmmm…… Interesting that this is one of the key arguments made for why savings in constant capital are not adequate to forestall the fall in the rate of profit!
Why Harvey rejects the TRPF
In Enigma Harvey rejects TRPF because it has counter-vailing influences. Echoing Sweezy he says that savings in constant capital and rising rates of exploitation make the rate of profit indeterminate. We might find a counter argument to this in Harvey’s own words: “The parallel incentive for individual capitalists to seek economies in employment of constant capital is, by contrast, much weaker. The actual processes regulating technological change under capitalism are indeed systematically biased towards variable-capital as opposed to constant-capital saving. The anarchic nature of inter-capitalit competition prevents and rational application of technological change-’rational’ that is, from the standpoint of sustaining accumulation through a stabilization of the value composition of capital.” (Limits p183)
I think there is more to the argument than this, but for now it’s probably adequate to dismiss Harvey’s undeveloped Enigma critique with this more developed Limits argument. In Limits it is not counter-tendencies that are Harvey’s beef. His beef is obscured by a rather confusing tangle of arguments that seem designed to avoid the Okishio Theorem.
I have a rather detailed critique I have made of Harvey’s take on the TRPF in Limits, but here I will summarize:
Harvey’s chapter (it’s actually a sub-chapter) on the TRPF could be the poster child for the 70′s Marxist. It starts with a hint that there is something wrong with Marx’s theory, though it is very hard from the chapter to find out what this is. It begins with a very thorough, detailed description of all of the different possible criticisms of the theory, all of the counter-tendencies that might raise the profit rate, etc. One by one Harvey dismisses these critiques, arguing that they are not adequate to forestall a fall in the profit rate. Then comes this very interesting sentence:
“Van Parijs (1980), for his part, uses a proof of Okishio’s (1961) to show that capitalists, under competition, will choose techniques which necessarily reduce the unit values of all commodities (including labor power), and increase the transitional rate of profit to themselves as well as the social rate of profit, no matter what happens to the value composition, provided only that the physical standard of living labor remains constant.” (p. 185)
Now, nowhere does Harvey actually explain what this means or how this argument is proven. We are, I guess, just supposed to take the word of Van Parijs that we should take the word of Okishio. For a reader new to Marx, as I was when I first read Limits, this paragraph produces a deal of head-scratching. We have just read pages of elaborate details about the TRPF that turn out to be dead ends (failed critiques, counter-tendencies, etc.). Now we are finally given a definitive statement that the TRPF is wrong and David Harvey, the Marxist pedagogue, does not offer to give his readers any explanation.
This spectral appearance of Okishio becomes a turning point in the text. Okishio seems to be haunting the text like some sort of repressed idea. Harvey doesn’t want to directly confront Okishio. Instead he develops a very complicated and obtuse sidetrack about turnover time, credit and constant capital that attempts to rescue what it can of Marx’s crisis theory. In the end Harvey concludes:
“individual capitalists, acting in their own self-interest under the social relations of capitalist production and exchange, generate a technological mix that threatens further accumulation, destroys the potentiality for balanced growth and puts the reproduction of the capitalist class as a whole in jeopardy.” (p.188
This appears to be nothing more than a vague restatement of the TRPF. The only difference is that Harvey puts the question in the language of equilibrium states. It is hard to see how recasting the same theory in vaguer language really rescues it from Okishio. If Harvey had just left things here his work would probably not have been that note-worthy. But, Harvey doesn’t just leave things here. He uses this vague defense of Marx as a springboard for his own theoretical riffing: In the next chapter the camera has panned away from the discussed of the limits to profitability and zoomed in on the issue of the rising surplus. Here the language of overaccumulation begins.
The confusing thing, and it is still confusing to me, is how exactly Harvey’s theory of overaccumulation is supposed to relate to his vague conclusion about capitalist competition creating destabilizing technological mixes. Though Harvey talks a great deal about multiple limits, this is the only real limit in the text which seems like it could be the basis for a theory of overaccumulation. Yet nowhere else in subsequent writings of his on crisis in their any discussion of this destabilizing technological mix….
Conclusion:
This strange, ghostly encounter with the repressed spectre of Okishio provides us with a template for the 70′s Marxist.
1. Sraffian critiques of Marx are side-stepped in an attempt to save Marx by being vague.
2. This vagueness becomes a platform for erecting original reformulations.
3. The reformulation takes on a life of its own, and the relation to the original debate is forgotten.
4. The reformulation is conflated or confused with Marx’s crisis theory.
In order to question these theories we have to interrogate each of these:
4. We must separate Marx’s own theory from those of the “Marxits”, “Marxian”, “Marxoid”, etc.
3. We must acknowledge and understand the original debates that gave rise to these reformulations.
2. We must interrogate reformulations and challenge them to be clear, not evasive.
1. We must challenge Marxists to deal directly with the charges of inconsistency that have been leveled against Marx in the academy.
see the more recent, and far superior, draft here.
The Left Forum is next weekend at Pace University in NYC. I’m speaking on two panels on Sunday: David Harvey and Capitalist Accumulation; and a roundtable on Andrew Kliman’s new book The Failure of Capitalist Production.
Below is a rough draft of paper for the former panel. In case you were wondering, no David Harvey is not going to be at the panel. My paper is an attempt to summarize a longer paper of mine which critiques many of his positions on crisis theory, focusing primarily on his 1981 book Limits to Capital. There is certainly much editing in front of me in the coming week getting this ready for the Left Forum, but the draft below at least has the structure of the argument worked out. I am always glad to hear responses, feedback, criticism, etc.
The aim of this brief talk is to provide the beginning of a critique of David Harvey’s theory of crisis. But I have to start by saying how humbly I approach this task. Like many people, I am greatly indebted to David Harvey. In many ways Harvey was my first access into the world of Marx. His clear, articulate language, his passion for his subject material, and his patient dedication to pedagogy were a big influence on me, compelling me to dig deeper and deeper into the world of Marx and Marxism. The criticism I offer here is made with the deepest and most sincere respect for his work.
My critique is of 3 intertwined aspects of Harvey’s work: his rejection of Marx’s theory of the Tendency of the Rate of Profit to Fall (TRPF), his theory of ‘overaccumulation’, and his use of this ‘overaccumulation’ as a framework for his geographical analysis.
Much of 20th century Marxism is defined by its defeats, both theoretical and political. As much as we have to learn from our elders, we also must remember that they have their origin in a certain time and place and that their approach to Marx is informed by this origin. For Harvey the time is the 1970′s and the place is the western academy. It is a time and place where Marxists were facing certain theoretical challenges that they were unable to respond to, forcing them to revise or reject key aspects of Marx’s value theory. They were also faced with the need to distance themselves politically from the horrors of Soviet Marxism and Maoism. This led to several distinctive characteristics of what I call here ‘the 70′s Marxist’.
Aspect 1: Anti-orthodoxy
The 1970′s was a time of challenge and defeat for Marxists but these experiences also opened up space for new approaches to Marx and to reappraisals. The bitter end of the Stalin-era (marked by Khrushchev’s secret speech in 1956) provided a space for a critique of so-called “orthodox Marxism”, allowing for a reappraisal of Marx himself, not filtered through the politics of the Soviet era. This combined with a trend of academic Marxism, tracing itself back to figures like Paul Sweezy, who worked to establish more space for Marxian ideas in the academy by developing a non-sectarian Marxist tradition which often borrowed language and tools of neo-classical economics. On the positive side, this has led to some great scholarship and debates on many topics from dialectics to value theory to the labor process, revealing the great depth and richness of Marx’s analysis, and freeing Marx from the stodgy determinism of the Iron Curtain. On the other hand there has been too great, and often too superficial, a rush to distance oneself from this so-called “orthodoxy”, often confusing this “orthodoxy” with Marx himself (throwing out the marx-baby with the orthodox bath water). Public speak events require a ritualistic, undeveloped castigation of some aspect of Marx in order to prove to the audience that one is not a Stalinist. The charge of “orthodox marxism”, has too often been used as a rhetorical weapon to silence critics. Thinkers who have sought to defend key aspects of Marx from revision have been accused of dogmatism, inflexibility and sectarianism. A false-dichotomy between “open-minded reinterpretations” and “deterministic orthodoxy” is too-often erected as a substitute for a real argument. While I admire much of Harvey’s work as a Marxist pedagogue I also think that he sometimes suffers from this 70′s vibe of anti-orthodoxy. Limits to Capital, for instance, is riddled with dead ends and pointless asides spent critiquing Marx where there is no critique to make (for instance, the pages and pages spent pontificating about the transfer of value from fixed capital, none of which accomplishes anything, see my critique elsewhere). More relevant, Harvey seems to brush aside contemporary debates around the TRPF, dismissing these ideas as the work of orthodox dogmatists rather than actually engaging with them.
Aspect 2: theoretical retreat
As 70′s Marxists wrestled with their identity in the post-Stalin era they also had to fend off the theoretical assault of the Sraffian’s, the transformation problem, and the Okishio Theorem. The inability of Marxists of this era to defend Marx’s transformation procedure or the theory of the Tendency of the Rate of Profit to Fall (TRPF) (discussed later) produced a myriad of theoretical approaches, all attempting to rescue some aspect of Marx from the burning wreckage of Marxism, while erecting work-arounds, synthesis with other traditions, etc. The end result of most of these efforts was often pathetic, forcing many to abandon Marx altogether. Those who tried to remain within the tradition often were only able to do so by drastically reducing the radical scope of the Marxist project, adopting an entirely un-Marxist framework, focusing on the non-economic aspects of Marx, or creating vague reformulations which side-stepped these problems in a dialectical sleight-of-hand. “Marxian” replaced “Marxist”. I consider Harvey’s crisis theory to be such a vague reformulation.
But the vague reformulation, the work-around, is not the result of some reformist politics. Rather, it shows the fidelity of many thinkers to the Marxist project despite the theoretical obstacles in their path. But when we maintain fidelity to the ‘essence’ of Marx, while abandoning his logic we get ‘Marxiness’.
Aspect 3: do it my own way
It seems almost every book on Marx written in the last 40 years must have as a subtitle “a reinterpretation”, “a reformulation”, or “a critical appraisal”. Academic careers were made based on the uniqueness of one’s reinterpretation. Putting a distance between oneself and Marx certainly makes one more palatable to the academy. But I suspect that the larger factor in this is the nature of academic careers in general which tend to foster individualism and originality in theories. Harvey’s crisis theory is one of these original contributions. Much of his career is based on the reformulation of Marx’s crisis theory that he develops in his 1981 Limits to Capital. (But it is not wholly original. It begins by trying to vaguely reformulate Marx’s TRPF in order to side-step the Okishio Theorem. But it also attempts to use the language and tools of the Monopoly school though without the underconsumptionism usually associated with this school.)What emerges is a highly original, yet sometimes confusing, distinctly “Harveyian” crisis theory.
I don’t think it works for the following reasons: The language of ‘overaccumulation’ that he borrows from the Monopoly school cannot effectively explain the cyclical nature of capitalist crisis. The lack of a mechanism within the theory that creates this cyclical motion forces Harvey to ascribe too much explanatory power to the agency of political actors. Without the TRPF there is theory that can explain why capital would ever overaccumulate in the first place, that is, why there would ever be a shortage of profitable investment opportunities. I think that these problems rob his geographical project of its potential power.
Let’s get into it…..
The Geography
Thinking back to my first encounters with Harvey’s writing, reading the Condition of Postmodernity as an undergrad, I remember the excitement that his geographical project had on me. In a college environment of identity politics and postmodernism, where culture was used to explain politics, where ‘meta-narratives’ were akin to totalitarianism, David Harvey’s ability to provide a fresh materialist analysis to culture was a breath of fresh air. By focussing on the way capitalist accumulation constructs its own version of space and time his writing was able to pierce through the fragmentation and nihilism of the dominant postmodern narrative, and provide a materialist framework with which to understand the lived experience of capitalism in all of its diversity and complexity.
Often as an undergrad I had been told that Marxist analysis was reductive, that it predicted a uniform lived experience, that it proscribed a politics that ignored differences between people, rejecting many forms of struggle to focus narrowly on workplace struggles. Harvey showed that it was possible to theorize a great diversity of experiences of capitalism as well as a great diversity of struggles against capitalism, within a marxist framework.
This is the real strength of his project. It represents some of the best aspects of the 70′s Marxist. Marxism of the 70′s needed to escape from the determinism and narrowed politics of the so-called ‘orthodox marxism’ of the 2nd and 3rd Internationals. It needed to show that Marxism was an open, developing body of theory, capable of theorizing the continuing evolution of capitalism in all of its complexity and diversity.
But the 70′s Marxist too often threw out the Marx-baby with the orthodox-bath-water. Often times this was the best that could be done at the time as theoretical defenses of key aspects of Marx’s value theory had not been developed yet. MORE ON THIS BELOW. The best thing that could be done was to side-step these criticism of Marx, developing alternative approaches. Harvey’s work-around is this theory of over-accumulation.
What is missing in his theory?
For Harvey, capitalists are in a constant state of anxiety because they must turn their money into more money. They must constantly find new avenues for profitable investment. But the amount of value that needs to be valorized keeps increasing and so their task gets harder and harder. Eventually this growth reaches limits. It begins not just to accumulate, but to overaccumulate. The attempts of capitalists to overcome these limits is what particularly interests Harvey. Investments in fixed capital, public works, infrastructure, etc… The entire construction of physical space, and the organization of time are bound up in this attempt to deal with the overaccumulation of capital.
“The Marxist argument is, then, that the tendency toward overaccumulation can never be eliminated under capitalism. It is a never-ending and eternal problem for any capitalist mode of production. The only question, therefore is how the overaccumulation tendency can be expressed, contained, absorbed or managed in ways that do not threaten the capitalist social order.” (The Condition of Postmodernity p.181)
This becomes a very powerful tool for Harvey as it allows him to explain all of space and time, more or less, through the problem of overaccumulation, or surplus value absorption, or as he says in Enigma, the problem of surplus. But the problem is that his theory explains too much. Like his theory of Accumulation by Dispossession, the categories are extended too wide; too much is explained; it’s too easy.
How can the boom in construction at the start of an economic boom (say the 50′s in the US) and the boom in construction that accompanies a credit bubble right before a crisis (say the 2000′s) both be a result of overaccumulation? Here the same geographical phenomenon, the rapid construction of spaces, exists at two very different places in the accumulation cycle. The dominant forces of a boom can’t be the same as those of a bust. We need a theory capable of explaining cyclical movement.
Harvey talks a lot about the creation of difference through the uneven development of capital in space. These differences are often due the contingent aspects of the flow of capital through spaces, local advantages and barriers, the irregularities of fixed capital, etc. This is all great and usefull. But his theory of overaccumulation also has a monotone quality to it, one that can’t theorize other types of difference. Again, I refer to the long-term cyclical movements of profit rates, and the accompanying booms and busts which have occurred regularly throughout the history of capital. If overaccumulation is a chronic condition, this suggests a steady stagnation, not cyclical motion.
So I don’t think overaccumulation can explain the cyclical motion of crisis. But I also don’t think overaccumulation can explain overaccumulation.
If capital is overaccumulating due to a shortage of profitable investment we need some theory of the growth of capital relative to investment opportunities- or, I should say, relative to profitable investment opportunities.
Historically theories of overaccumulation are associated with the underconsumption school of thought which argues that low wages create a situation of not enough consumer demand which means product can’t be sold, capital overaccumulates, etc. Harvey seems to endorse this thesis in Enigma, even though he critiques the theory earlier on in Enigma, and many of his earlier works. (This, I must confess, I find confusing.) His critique I agree with: capital has the ability to generate its own demand through the expansion of capital goods. (see Kliman’s new book.)
If Harvey rejects the underconsumption argument then what is the cause of overaccumulation? At his worst, Harvey sometimes seems to suggest that overaccumulation is its own cause and effect. Just the very fact that capitalism must constantly grow is used to suggest that this growth will hit a limit at some point. This aspect of his theory seems to have become more blatant since the crisis. It emerges quite strongly at times in Enigma and in recent speaking engagements. I think it is mostly a result of trying to communicate his ideas with lay audiences. But it has the danger of evoking an “anti-growth” aesthetic similar to the ‘small is beautiful’ politics of primitivists, anarcho-libertarians, apolitical environmentalists and hippies. It borders on vulgar populism. And it has no theoretical meat: he must provide a reason why capitalism can’t expand forever.
Now, Harvey does have a better answer to the question. He often argues that there are multiple Limits to capitalist production. This, for him, means that the specific limit operating at any particular place and time is contingent. Many of the limits Harvey talks about have to do with the temporal barriers to production generated by the complex overlapping of different turnover times, transportation, and the use of the credit system to overcome these limits, which generates its own speculative impulses.
This idea of a plurality of limits can seem attractive at first. It definitely gets anti-orthodoxy points due its ability to embrace many different interpretations of crisis. But I worry that it ignores the mechanism by which capital overcomes its limits: profit. Profit reapportions investment to areas with high return, and takes investment out of unprofitable areas. Now, of course this is not always successful for every individual capitalist. Of course there is a lot of unevenness due to all of the factors that Harvey discusses. But it is no good to just stress the limits and ignore the elephant in the room: the profit rate.
It turns out that capitalism is remarkably good at overcoming barriers. It is an overcoming marked by all sorts of violence and unevenness, but it is an overcoming. Now when a crisis erupts this is qualitatively different than the sorts of minor fluctuations and unevenness that I think Harvey’s limits imply.
If profit is the mechanism for overcoming these ‘little-limits’, we need a theory about profit rates to explain the ‘big-limit’ that is a crisis. Of course, this is Marx’s theory of the Tendency of the Rate of Profit to Fall (TRPF): technological change eliminates human labor in proportion to total investment which causes a long-run fall in profit rates. As profits fall, there are less opportunities for profitable investments, capital bunches up… it ‘overaccumulates’, crisis erupts.
Harvey isn’t willing to take Marx’s approach to the problem, even though his theoretical framework seems to demand to be completed by a theory of profit rates.
Why he rejects the TRPF
I suspect that Harvey’s gravitation towards developing some version of an overaccumulation theory is in many ways a result from his inability to find a way to make Marx’s TRPF work. 70′s Marxists wrestled with the TRPF and often came out rejecting the theory. They were up against the logic of the Okishio Theorem, which claimed the exact opposite of what Marx claimed: rather than labor-saving technology causing a fall in the rate of profit, Okishio aruged that it must always raise the rate of profit.
The inability of Marxists from this period to save the TRPF from Okishio led many, including Harvey, to develop alternative crisis theories. Math is math and you can’t argue with it. But you can argue with the presuppositions behind the math. This is what the TSSI does to the Okishio theorem. It questions the assumptions behind the theorem and shows that Marx’s theory of the TRPF is totally consistent. Because there now exists a refutation of the Okishio Theorem, I no longer believe it is defensible to just write off the TRPF in a current book on crisis. It also demands that we return to the debates around crisis that happened in the 70′s and reevaluate the conclusions that people like Harvey drew from them.
I have a rather detailed critique I have made of Harvey’s take on the TRPF in Limits, but here I will summarize:
Harvey’s chapter (it’s actually a sub-chapter) on the TRPF could be the poster child for the 70′s Marxist. It starts with a hint that there is something wrong with Marx’s theory, though it is very hard from the chapter to find out what this is. It begins with a very thorough, detailed description of all of the different possible criticisms of the theory, all of the counter-tendencies that might raise the profit rate, etc. One by one Harvey dismisses these critiques, arguing that they are not adequate to forestall a fall in the profit rate. Then comes this very interesting sentence:
“Van Parijs (1980), for his part, uses a proof of Okishio’s (1961) to show that capitalists, under competition, will choose techniques which necessarily reduce the unit values of all commodities (including labor power), and increase the transitional rate of profit to themselves as well as the social rate of profit, no matter what happens to the value composition, provided only that the physical standard of living labor remains constant.” (p. 185)
Now, nowhere does Harvey actually explain what this means or how this argument is proven. We are, I guess, just supposed to take the word of Van Parijs that we should take the word of Okishio. For a reader new to Marx, as I was when I first read Limits, this paragraph produces a deal of head-scratching. We have just read pages of elaborate details about the TRPF that turn out to be dead ends (failed critiques, counter-tendencies, etc.). Now we are finally given a definitive statement that the TRPF is wrong and David Harvey, the Marxist pedagogue, does not offer to give his readers any explanation.
This spectral appearance of Okishio becomes a turning point in the text. Okishio seems to be haunting the text. Harvey doesn’t want to directly confront Okishio. Instead he develops a very complicated and obtuse sidetrack about turnover time, credit and constant capital that attempts to rescue what it can of Marx’s crisis theory. In the end Harvey concludes:
“individual capitalists, acting in their own self-interest under the social relations of capitalist production and exchange, generate a technological mix that threatens further accumulation, destroys the potentiality for balanced growth and puts the reproduction of the capitalist class as a whole in jeopardy.” (p.188
This appears to be nothing more than a vague restatement of the TRPF. The only difference is that Harvey puts the question in the language of equilibrium states. It is hard to see how recasting the same theory in vaguer language really rescues it from Okishio. If Harvey had just left things here his work would probably not have been that note-worthy. But, Harvey doesn’t just leave things here. He uses this vague defense of Marx a springboard for his own theoretical riffing: In the next chapter the camera has panned away from the discussed of the limits to profitability and zoomed in on the issue of the rising surplus. Here the language of overaccumulation begins.
Conclusion:
This strange, ghostly encounter with the repressed spectre of Okishio provides us with a template for the 70′s Marxist.
1. Sraffian critiques of Marx are side-stepped in an attempt to save Marx by being vague.
2. This vagueness becomes a platform for erecting original reformulations.
3. The reformulation takes on a life of its own, and the relation to the original debate is forgotten.
4. The reformulation is conflated or confused with Marx’s crisis theory.
In order to question these theories we have to interrogate each of these:
4. We must separate Marx’s own theory from those of the “Marxits”, “Marxian”, “Marxoid”, etc.
3. We must acknowledge and understand the original debates that gave rise to these reformulations.
2. We must interrogate reformulations and challenge them to be clear, not evasive.
1. We must challenge Marxists to deal directly with the charges of inconsistency that have been leveled against Marx in the academy.
In late January of 2012 I interviewed Andrew Kliman about his new book on the economic crisis, “The Failure of Capitalist Production.” I am still working on getting a good method of recording Skype interviews so the audio is a bit scratchy, but still useable.
It’s a great interview, full of insights and challenging ideas.
The book can be found here.
This is an hour-long interview with dialectical scholar and Marxist philosopher Bertell Ollman. Ollman is a professor of politics at New York University and author of “Dance of the Dialectic: Steps in Marx’s Method” and “Alienation: Marx’s Conception of Man in Capitalist Society”. Both books are great reads (and available for free download at the above links), very accessible, and quite helpful in getting one’s head wrapped around the dialectical method. Fans of left trivia might also recognize Ollman as the creator of the board game “Class Struggle”.
The topic of Abstraction (also the topic of my next video in the Law of Value series) is an easy one for Ollman to talk about as he has devoted a lot of his intellectual activity to an understanding of what it means to make abstractions. I barely had to ask him any questions over the course of the interview in which he explains many of the key concepts in his book Dance of the Dialectic.
Watching Democracy Now on Friday Jan 6th I saw another sad exchange on the topic of “corporate personhood”, the strange legalistic side-track that seems to have galvanized so much of the passions of Occupiers. Two days earlier Mark Provost of Occupy NH confronted Mitt Romney regarding Romney’s now famous defense of the idea that corporations are people. Provost prefaces his question by pointing out the growing disparities between the rich and the poor in America, alluding to some connection between this and corporate personhood.
What fascinates me is Mitt Romney’s response, which recapitulates an old argument from Adam Smith, and Provost’s complete inability to articulate a response to this argument. Romney responds with a simple question, “Where do you think corporate profits go?” Provost responds by arguing that profits could be hoarded or they could go to the 1%.
Romney had apparently been waiting for this question for a long time. He responds with a well-scripted, tight argument: “Corporations are collections of people that are trying to have good jobs for themselves and promote the future.” Profits go to shareholders, “some of which may be the 1%” (notice that he is perfectly comfortable embracing the 1% lingo) but also to people with pensions. Profits also go into growing businesses which creates new jobs. All the money always goes to people. “The money goes to hire people or to shareholders, and so they’re made up of people. So somehow thinking that there’s something else out there that we can just grab money from and get taxes from that doesn’t involve people- well they’re still people!”
Adam Smith made this exact same argument a couple centuries earlier. The argument is that the prices of commodities, or the total value in society, all resolve themselves back to wages. If you trace the price of a commodity back to all of the costs that went into its production all of these eventually end up at wages paid to workers. Now, you may ask where profit comes from then, since profit is, by definition, money you made above your cost of production. Profit, says Smith, is going to be spent on future wages. The greater the profit, the more jobs we can create in the future. So, for Smith, profit and capitalism are good news for workers. All value eventually resolves itself to wages paid to workers.
I can’t help but point out here that Adam Smith didn’t need to live in an age of “corporate personhood” to make this argument. This is because the basic logic of capital remains the same regardless of the specific legalese within which capital may find itself enmeshed at various times in history.
But back to Mark Provost…. Provost doesn’t get a chance to respond to Romney until he appears on Democracy Now two days later. Provost says that he doesn’t understand how Romney’s argument really related to his question which was meant to be a question about the growing disparity of wealth in the country, which he somehow, vaguely, sees related to corporate personhood. On Democracy Now he merely manages to mumble something about corporations needing to pay more taxes but he fails to try to take on Romney’s argument that corporations are just collections of people and that all corporate profits eventually go to job creation. He just repeats that there is growing wealth disparity in this country.
Then the discussion on Democracy Now immediately turns to a discussion of tactics: Are mic-checks still a legitimate way of interrupting public speeches? What are Occupy’s plans for the NH primary? This discussion takes up the majority of the interview. This is to be expected for a movement that is focused primarily on protest tactics and not on theory.
Now, if we take Provost’s comments and try to formulate them into a coherent argument it seems that they would be this: Corporations aren’t people because not all of the profit made by them goes to the workers. He defends this position by pointing to empirical data about wealth disparity, not by providing a theoretical counter-argument to Romney. Where does this profit go? Apparently, for Provost, they go to the personal consumption of CEO’s and shareholders, and to “deferred investment”.
Now, if there was no deferred investment (say, we were in a boom phase of the economy and profits were being channeled into growing businesses) and this money was instead plowed into production, and if wages were higher and CEO salaries were lower (say, because of a resurgent labor movement), then it seems that Provost would be forced to agree with Romney that corporations are just collections of people. Provost hasn’t actually shown that capital contains “something outside” of people. By focusing on wealth distribution and deferred investment he makes it sound like the problem is just the distribution of wealth between people within the corporation.
But I think that the beef with corporate personhood goes deeper than this. I think that what people are really upset about is not the legalistic framework of corporations. It is that we are intuitively aware that there is a greater, dominant force in society, something that is beyond relations between people. There is an autonomous, cold, calculating, impersonal nature to capital that follows its own rules. We work to enrich it more than we work to enrich the CEO’s that serve it. When Romney claims that there is nothing to see here, when he makes his “pay no attention to the man behind the curtain” argument that there is nothing “outside” of people in the corporation, we have two choices: 1. We agree with him that capitalism resolves itself to workers producing value for themselves and thus give up a real anti-capitalist project; or 2. We can try to identify what exactly this “something outside” is.
Something Outside
I couldn’t help but beat my head against a copy of Vol. 2 of Kapital and moan disconsolately as I watched the broadcast of Democracy Now. Marx tackles this very argument of Smith’s in Vol. 2 of Kapital. He shows that there is a rather significant part of capitalist production that does not resolve itself to wages, that does not go to serve workers at all. It does not exist to enrich the capitalist. It is merely self-perpetuating accumulation of capital for its own sake. This is the real nightmare of capitalist production, a greater nightmare than wealth disparity or deferred investment. Marx’s argument is a long, complex argument which eventually exposes a very crucial insight about the nature of capitalist production, one that is quite relevant for contemporary debates over crisis theory. I attempt to summarize it here.
Building a model of the interrelated investments that make up a capitalist economy Marx divides production into two departments. Department 1 (D1) produces means of production. Department 2 (D2) produces consumer commodities.
Let’s take a look at D2 first. The capitalists of D2 spend their money on wages and non-labor inputs like machines and raw materials. Marx calls these non-labor inputs ‘constant capital’. From the perspective of D2 it looks like Romney and Smith are correct. The wages of D2 obviously go to workers and the money spent on constant capital seems like it should all go to the workers of D1. (Yes some of the money they pay to D1 also goes to the capitalists as profit. But if this profit is spent as revenue for the consumption goods of capitalists then it just goes to the workers of D2 who make these consumption goods. And if the money is used to plow back into production then it goes to hire more workers…. or so it seems thus far.)
But when we ask the same questions about D1 things look different. Obviously the money spent by D1 capitalists on wages goes to workers. But where does the money spent on constant capital go? It goes to other firms in D1. In other words, capitalists in D1 buy and sell constant capital from each other. This means that there is a portion of value in society that never actually ends up in the form of wages. It is constantly circulating within D1 in the form of constant capital (or money which has just been paid for constant capital and is about to be reinvested in constant capital.)
This is the “something out there” that Mitt Romney and Adam Smith don’t want you to know about. They are not hiding the 1% from you. They are hiding this. Why? Does this really destabilize Romney’s argument that what is good for corporations is good for people? Even if there is a small portion of value that never makes its way into wages isn’t it still true that growing corporations creates jobs and that most of this investment goes to into wages?
No.
Marx’s argument continues as he examines what is necessary for capitalism to grow, to expand the total amount of production each period. Through a series of complicated illustrations he shows that what must grow first, before anything else can grow, is this chunk of value that is not wages. By expanding the means of production capital can then expand the total size of production. But in order for this to happen money must be diverted away from consumption (away from consumer goods) and into the production of means of production. As capital grows the portion of the total value in society dedicated to the production of means of production grows at the expense of the portion dedicated to consumption goods.
Thus Romney is not correct that what is good for corporations is always good for people. What is good for capital is what is good for capital and this will always involve people getting the short end of the stick. When capital grows it may lead to some more employment (in certain conditions) but there will be a greater growth of capital value that never makes its way into wages.
Another way to put it is that as capital grows in the expansionary phase of an economic cycle it will need more workers. But the expansion of capital happens faster than the expansion of wages and worker’s consumption. This is because this expansion happens at the expense of workers. Oftentimes capitalists enrich themselves by siphoning off a lot of this expansion in the form of bonuses and dividends. But these bonuses and dividends are not the driving force of capital. The driving force of capital is expansion for the sake of expansion. Machines for the sake of machines. Money for the sake of money. The real entity that dominates the corporation is not a person. It a constantly growing chunk of value that takes the form of money and anonymous objects that have no purpose but to grow forever in a nihilistic quest to expand for the sake of expansion. I discuss this from a slightly different perspective in my latest video Subject/Object.
I am indebted to Andrew Kliman for helping me to understand the significance of Marx’s argument in the latter half of Vol. 2 of Kapital. Interested readers should keep in mind that Kliman is currently working on a study guide to all 3 volumes of Kapital that should be ready in the next year of so. Also of interest is a section of Kliman’s brand new book “The Failure of Capitalist Production” which discusses these reproduction schemas (the models of a capitalist economy broken up into D1 and D2). Kliman tracks the growth of D1 empirically over that last century showing that as capital grew D1 grew at the expense of D2. Kliman also draws some important conclusions from this, conclusions that I don’t have room for here but will summarize/bastardize in short: if D1 can grow on its own, creating its own demand for its product, then there is something wrong with theories of crisis that claim that capitalism goes into crisis because of a lack of consumer demand due to low wages. If D1 can create its own demand, and if it is the growth of D1 which causes capital to grow, then lowering wages should actually be good for the economy not bad for it. This means that politics of wealth distribution that claim we can have healthy capitalism if wages are higher are logically flawed. Low wages are good for capital. Capital is good for capital but it is bad for people. Capital is not people.
My girlfriend chides me that I am too quick to criticize and too slow to offer constructive advice. In the spirit of rectifying this character flaw, I offer the following advice for Mark Provost and all others who may care to debate Mitt Romney in the future on this topic. When Romney tells you that corporations are just made up of people you can respond by saying one of the following:
1. “Actually there is a huge and growing portion of the value of corporations that never ends up in the pockets of workers or the pockets of capitalists! It is money that stays in the form of factories, machines, etc. and just grows for its own sake. It grows at the expense of the worker. We work for it not the other way around.”
2. “Put down the Book of Mormon and read volume 2 of Marx’s Kapital.”
3. “If I wrote Volume 2 of Kapital on a gold tablet and buried it in the hills of New York would you take the time to read it?”
4. “Fuck you, clown.”
This is draft of my script for Abstract Labor, the 9th video in my Law of Value series. I always appreciate the comments, suggestions and criticism on these drafts. They really help me focus the scripts. This video has a different format. It is broken into two short parallel videos. Video A discusses the concept of ‘abstract labor’. Video B discusses the method of abstraction in Video A. It deals with the concept of abstraction and explains the way Marx uses the concept to capture the totality of capitalist social relations and destabilize his bourgeois opponents.
[everything in brackets is a note about possible visual images for video production]
(everything in parenthesis is something I’m considering cutting out and relegating to footnotes)
Money can really fuck you up. It can make you lose your home. It can make you go to work. It can topple governments, cause wars, pave the jungles…
Of course it’s really nothing by itself: pieces of paper, digits in a computer… And of course money doesn’t literally take away homes, topple governments, cause wars or fuck you up. People do these things. Money then seems to have a strange power to compel people to do things. It has a certain social power.
What kind of social power does money have? It seems to have any social power we might want it to have. In a society in which social life is coordinated by market exchange money has the ability to buy any aspect of this social life, to compel any action, to coordinate any complex activity. The more money we have, the greater our ability to command this social power. This is a non-specific power. It is not tied to any particular activity, commodity or person. It is social power in the abstract. [word 'abstract' appears]
This abstract social power goes by another name: value. The subordination of society to the rule of value we call: The Law of Value.
[Title Sequence]
Value, then, is quite an abstract substance. It does not refer to any specific concrete thing. It is just value in the abstract, social power in the abstract. Our society is ruled by an abstraction. But it is certainly not true that all societies in all times were ruled by abstractions, by value. Only in a certain type of society is social life ruled by abstractions. This begs the question: “What sort of organization of society is necessary for the existence of value in the abstract?” [question appears on screen]
(We ask this question not for fun but because the answer will allow us to figure out how to create a society not ruled by the law of value. There are several possible answers to this question but not all of them are complete answers. We will move through several answers, several perspectives, the incompleteness of each vantage point driving us to probe further into the social fabric of a capitalist society.)
Free Market
The existence of value implies the free exchange of things between people. Perhaps this is the essential feature of a society ruled by the law of value, by abstractions. In bourgeois theory this free exchange is often deemed all that is necessary to characterize the fundamental elements of our society. We are told that we live in a “free market society” (or that we should live in one), or a “free enterprise system”. Since this narrow picture seems only to show consenting individuals freely engaging in mutual agreements it is often used by apologists of the status quo to defend the system. After all, what is wrong with freely making mutual agreements with others? The positive aspects of this vantage point have influenced some anarchists that seek to build mutualists societies of freely exchanging individuals, as well as market socialists who want to cooperatize the workplace yet leave market exchange in tact.
But we need more than just the phenomenon of free exchange to explain the existence of value in the abstract. It is one thing for two isolated individuals to make one exchange [this could be any image of two isolated people exchanging something... dudes in a desert, etc. I would change the text to fit the image]. But it is quite another thing in a society organized through exchange where we can observe regular, predictable exchange ratios between commodities.
A boat equals a thousand cigars. A book equals 4 pears. These are relations of value between things. In order for us to form predictable, reliable exchange ratios between things (in order for us to know how many boats to exchange for cigars) there must be some predictable knowledge of the supply of these things. And in order for exchange to continue everyday there must be a regularly recurring supply that we can predict to some degree. The force that constantly replenishes these supplies is, of course, human labor.
This brings us to a fuller picture of our society ruled by abstractions. Rather than just a society of free exchange, it is also a society in which this exchange is regulated by production. The production of commodities by people creates both the demand for and supply of these commodities. It determines (at one level of abstraction) the exchange ratios between these commodities.
At the same time the exchange of commodities is the means by which the division of labor is regulated. It is only the raising and lowering of prices that can apportion labor between different tasks. Thus we have a society in which exchange and production constantly regulate each other. Behind the movement of commodity values in the market lies a parallel process of the movement of labor from one task to another. The social power of money, of value, lies in its ability to move about this labor.
Abstract Labor
If the social power of labor comes from its ability to measure and command labor, what kind of labor is this labor? Knitting? Building? Singing? [any examples suffice, depending on good images] It is any kind of labor. Labor in general. Abstract Labor.
We began by asking what sort of society makes the rule of abstractions possible, makes the law of value possible. After penetrating the surface appearance of market exchanges we found that it is a society in which the value relations between commodities are directly related to the labor that produces these commodities. And now we have seen that the abstractness of these value relations is paralleled by an equally abstract aspect of human labor, abstract labor. Does this answer our question as to what sort of society makes such abstractions possible?
No.
Marx is sometimes taken to task for his concept of abstract labor. “How is it possible,” some ask, “for Marx to theoretically equate all of these different sorts of labors? Manual and intellectual labor? Skilled and unskilled labor? etc?” “Labor is never abstract,” they argue, “but is always a specific type labor.”
Marx’s reply is typical of Marx: We don’t have to theoretically equate all these different labors. Society does it for us. Society already treats all labor as an abstraction. For us as individuals our work seems very concrete and very important. But when we suddenly lose our job because of an economic crisis, when we see jobs move to other countries, when we see entire skill sets replaced by machines, we realize that our own livelihood means nothing to capitalism. For capitalism our work is just an abstract unit in a giant profit calculator. We are just another digit to be moved around. In this sense, though our work seems very specific and concrete to us, for capitalism it is completely abstract. All that matters is that it produces value.
If abstract labor is not a philosophical idea but a real phenomena, a real abstraction that is made by capitalism itself then that leads us to ask again: what sort of society makes this possible?
The answer is this:
People only become abstract units in the profit calculator of capitalism when they sell their work as a commodity in the market. A society ruled by the law of value requires wage labor.
[OWS sign that says "people are not commodities"] People are not commodities but their ability to work is. This is called “labor power”. How does the exchange of commodities apportion labor? This apportioning takes the form of the buying and selling of labor power. Wage-labor is the mechanism by which the “hidden hand of the market” moves labor inputs about.
We finally have an answer that seems adequate to our initial question: what sort of society makes possible the law of value, the subordination of society to the abstraction of value? We see that this abstraction of value is tied to the abstraction of labor. And this abstract labor relies on the existence of labor power as a commodity. When labor-power is a commodity then the specific uses of that labor become irrelevant to capital. All that is important is that profit can be produced by exploiting this labor. It doesn’t matter if this labor knits sweaters or makes guns. It doesn’t matter if we work 80 hour weeks or work dangerous jobs. It doesn’t matter when the mines collapse on us. It doesn’t matter when we are replaced by robots or when our jobs move somewhere else. It doesn’t matter when unemployment drives down our wages. Our work is just an input into the production of value, of social power. Capital is the expansion of this value, of this social power, for its own sake, not for any particular purpose.
Yet our answer to this question still points to other questions. What sort of society is necessary in order for wage-labor to be the dominant form of labor? We must have a society in which people don’t have access to their own means of production but instead must sell their labor power in the market in order to survive. This requires private property, a capitalist state to guard this property, and lots of drugs and smooth jazz to keep us passive.
So the institution of wage-labor which forms the foundation of the social power of the law of value require a whole host of political, institutional and social factors. In searching for an answer to our question we have encountered, rather than one simple answer, an assemblage of factors, like pieces in a complex puzzle.
Conclusion
We’ve heard demands to “end capitalism”, “end exploitation”, “end private property” and “abolish class”. That all sounds great. We don’t usually hear people talk about “abolishing Abstract Labor”. It certainly sounds like an obtuse philosophical demand. But, as we’ve seen, Abstract Labor is a very real thing, not just a philosophical idea.
When critiquing capitalism it can sometimes seem difficult to identify what it is we want to end- what exactly would be required to break with the capitalist mode of production. Different political positions on this issue come from different ways of seeing the way the complex array of pieces of capitalism fit together. (Here we’ve traced the abstract social power of money and value to wage-labor. But we’ve also seen that this wage-labor is dependent on a complex assemblage of social and political arrangements.)
For the market-socialist vision, it seems that all we need to do replace the class-relationships in the workplace with a cooperative workplace, leaving market exchange in tact. But such a cooperative society would still have wage labor, socially necessary labor time, value in the abstract, and abstract labor. Cooperatives would still be compelled by competition to produce surplus value in order to expand production and stay competitive. Production would still be for the sake of producing surplus value, and not for the sake of bettering society. It is probable that the most efficient and successful firms would be those with the least cooperative structure and the highest disciplining of labor.
For the 20th century communism of the USSR and China it was the seizure of state power by a vanguard of the working class, the nationalization of property, and the administration of production by a plan that was thought to be sufficient to break with the capitalist mode of production. Yet the plans of the planners resembled the most despotic plans of the capitalist workplace. In order to compete in the world market planners found that they needed to extract the highest amount of surplus value from workers as possible. There was still wage labor, socially necessary labor time, surplus value and abstract labor. The same year the conveyor belt was introduced to Soviet Russia they revised their textbooks to claim that the law of value applied to socialism.
This means that if we are to be serious about anti-capitalist politics we have to be series about our analysis of capitalism. What is it we are really trying to do-away with? And what forms of organization can replace capitalism effectively?
Jackson Pollock- Number 8
The word “abstract” can mean many different things. A painting is abstract if it doesn’t have any references to representational objects. An idea is abstract if it moves out of the realm of concrete examples and deals with general principles. When Marx talks about “abstract labor”, as we discussed in video 9, he is using the term in a unique way. For Marx the abstraction that is abstract labor is not one that happens in the minds of philosophers. It is one that happens in reality. It is a “real abstraction”.
This seems an interesting enough proposition to warrant this brief supplementary video on the topic of Abstraction.
To Abstract or Not to Abstract
What does it mean to abstract? We abstract all of the time. When we say “woman” we are not talking about any concrete specific woman. We are talking about women in general. Yet, there is no such thing as a woman in the abstract. We cannot meet her at a bar and buy her a drink. We can only experience concrete women, specific women.
To attempt to look at the complex totality that is a capitalist society only in its concreteness, only in the specific actions of trillions of individuals all happening at the same time, would be madness. We have to separate out the patterns, finding terms that can encompass a broad swath of concrete behaviors into general, abstract terms. Instead of talking about rice, tanks and DVD’s we have to talk about commodities. Instead of talking about carpentry, dentistry, and bicycle repair we must talk about labor.
When we use the word “abstract” we can mean the verb, the act of abstracting, or we can mean the noun, the concept which forms an abstraction.
There are many abstractions which we may choose to extract out of the complex totality of capitalism and label as the most important, fundamental defining abstractions. In forming our abstractions we have choices to make. The way we abstract and the way we piece together these abstractions determines what full picture of the totality we come up with.
An abstraction by itself will always be an incomplete picture of the totality. In the video on Abstract Labor we began with the abstract power of money. This did not seem adequate to explain capitalism. We were left wondering how there could exist this strange phenomenon of value in the abstract. There was something incomplete, lacking, in our abstraction. We looked to the sphere of exchange, where the exchange of commodities form value relations between commodities. We found that this perspective was still incomplete because it didn’t explain how we could have regularly recurring supplies of and demand for commodities. This led us to examine a labor process that was coordinated by exchange which gave us the idea of Abstract Labor. But this too was an incomplete picture until we introduced the notion of wage-labor which explains how it is that labor can be come an abstract accounting unit in the profit calculator of capital. But wage-labor then implies a certain class relation, private property and a capitalist state. It was only when these political and institutional factors all came together that our initial abstract was grounded enough to give us an adequate answer to our initial question.
Hegel (Schlesinger 1831)
This movement from the abstract to the concrete is a key feature of Hegel’s dialectical method. Yet there is something quite distinctive to the way Marx uses this method: the way Marx’s abstractions are grounded in the real material practices of capitalism.
When we talked about the abstract term “woman” we noted that we cannot ever meet “woman in general”, but only specific women. However we can meet “value in general”. In fact, we carry it around with us everyday in our pocket. It is money. So the abstraction that is value is not a mental or philosophical one. It is a real one. This is why Marx begins his analysis of capitalism with an analysis of the value-form.
This also differentiates Marx’s method from bourgeois methods of understanding capitalism. For Austrian economists like von Mises it is the abstraction of free human action that is the foundational abstraction that frames the theory of capitalism. But we cannot ever see “human action” in the abstract. It is merely a philosophical device and thus appears as an arbitrary starting point for a philosophical system, begging the charge of being an ideologically motivated starting point.
Because abstract labor is a real abstraction this means that the theoretical system that we build out of it is not just a question of logically extrapolating principles and ideas in our heads from a given a starting point, like we would do in bourgeois philosophy. Rather, since the abstraction is a real one, we must proceed by trying to ground this abstraction in real social practice. It becomes an anthropological investigation. This is why, in video 9, the question that always propelled us forward in our analysis was “what sort of society makes this abstraction possible?” We had to uncover a complex system of social practices that allowed such an abstraction to emerge. Such an approach of grounding our analysis in real social practices keeps us from falling into the trap of fetishism.
Fetishism
We have talked about the fetishism of commodities in several videos, uncovering different aspects of the fetish along the way. In one sense the fetish is a bad abstraction. A fetish attaches the social power of the whole to an isolated, abstracted part of the whole. For instance, when we say “money is power” we are taking the social power of labor, as commanded by the value form, and attributing it to little pieces of paper. To treat money like it has some inherent social power is a fetish.
On the other hand, the social power of money doesn’t go away just because we have exposed the fetish with our fancy theories. Money really does have power because value is a real abstraction. This makes Marx’s fetish argument quite mysterious and tricky. It is one thing to make a bad abstraction and attribute the powers of the whole to one piece of the whole. It is quite another when this abstraction is a really existing phenomenon that can’t be changed by theory.
Depending on our vantage point we can argue two different points. One the one hand money and commodities are just objects and do not have any inherent social powers. They derive their value and social power from a specific organization of labor. On the other hand the social power of money and commodities is not an illusion. In a capitalist society they really do have value and social power. The fetish is real.
This strange phenomenon of commodity fetishism leads to all sorts of confusion when we think about capitalism. It can lead people to the conclusion that money has some inherent value, that capital creates its own surplus value without labor, and that exchange value comes from the material properties of commodities. We often call these ideas fetishes but it would be more correct to call them ideas generated by the fetishism of commodities.
Marx does not just dismiss such ideas. Instead he subjects them to the same sort of analysis that we have just discussed: he seeks to ground these ideas in real social practices. All of video 9 could be seen as a Marxist critique of the idea that money has some inherent value. Rather than dismissing the idea we acknowledge the fact that money does have power. We then show that this power is not a result of the material properties of money but a result of a specific sort of social organization of labor. Thus we can show that such an idea, the idea that money is power, is the result of a specific type of social relation. In this way Marx destabilized bourgeois theory. He takes bourgeois ideas and shows why they are possible.
There is a new website in town. Now, perhaps you are already maxed-out on new websites, but I would urge regular readers to consider paying a bit of attention to this new site as it is a bit unique. The project is called “Network for the Circulation of Theoretical Struggles” (NCTS). You might remember that about a year ago I spoke at a panel at a conference in New York called “The Economic Crisis and the Left Response” that featured some heavy characters like Rick Wolff and Andrew Kliman. The conference was a great success, bringing together a lot of disparate thinkers all interested in exploring the relevance of Marx not just to the academic exercise of analyzing the crisis but to the concrete problem of politics. An idea came out of the conference: the formation of a platform for theoretical struggles that brought together many people interested in Marx for real discussion. Let’s face it, a great deal of discussion that happens on the left happens in echo chambers, where leftists preach to the choir. A great deal of “conversation” is often just people talking past each other, using discussions for platforms to advocate a party line rather than a real place for exchange of ideas.
This website, the Network for the Circulation of Theoretical Struggles, aims to provide a platform for real dialogue between disparate tendencies, not with the goal of coalescing around a party line, or deciding on one correct analysis, but instead of fostering the development of a theory-praxis relation that will be relevant to contemporary political struggles. There has been a large resurgence of interest in Marx in recent years, including Capital reading groups and the like, and we seem to be in a unique historical moment for the development of Marxist thought.
I was honored to be asked to compose an introductory essay to help start discussion on the site. My essay is a critique of David Harvey’s crisis theory, which I find to be problematic on many counts. But the essay is more than that. It is also a call to those of us looking for ways to develop Marxist thought in a new way to also be critical of our role-models and teachers. We have to remember that their ideas come from a specific place and time and that they don’t necessarily have to be the ideas of this time. It appears my essay was a bit long (14 pages) so it will appear on the site in 3 installments.
Here is the site: Network for the Circulation of Theoretical Struggles
(note this link changed since the first day I posted it… technical glitch!)
And here is the first installment of my essay: That 70′s Show, Starring David Harvey, Overaccumulation, and the Baggage of the 70′s
Commenting is restricted to members in order to foster the community of discussion mentioned above. Consider this your invitation to become a member of the Network. You read this blog. You care about this stuff. You have something to say. Join the site. It’s a brand new project and its direction will be shaped by the ideas of participants.
This is what you will feel like when engaged in theoretical struggle:
And here is the official invitation to join the website:
Dear Friends,
We are writing to invite you to become a participant in a new international initiative, the Network for the Circulation of Theoretical Struggles (NCTS). Capitalism’s most severe financial crisis since the 1930s and the Great Recession have left us with an especially uncertain future. “The new normal” may prove to be very difficult, economically and politically. In order for the Left to be prepared for what may happen and prepared to respond effectively, more and more activity and organization will not be enough. We also need the organization of thought. Wide-ranging dialogue is key, not only so that all views can be heard, but, above all, so that we can test different ideas in debate and work out answers to the questions we face.
We are encouraged by the relatively large number of reading groups (study groups) on Marx and Capital that have sprouted up in the U.S., the UK, Germany, and elsewhere, largely in response to the crisis and slump. Nothing like this has been seen since the economic crisis of the 1970s. We are also encouraged by the seriousness with which the causes and consequences of the recent crisis have begun to be discussed.
We have formed NCTS to help facilitate and bring together these and similar initiatives. Everyone throughout the world who is interested in this project is invited to participate in it. We hope to bring together individuals in reading groups and related projects, and all other interested people, so that we can engage in dialogue, provide mutual assistance, and share information. NCTS will supplement, not replace, the activity that is already taking place.
The term “theoretical struggles” combines two seeming opposites, theory and practice, that NCTS will try to help unify. It is for people who recognize that activity and organization, without theory, will not be sufficient, and who are deepening their grasp of theory not simply for the sake of knowledge, but so it can serve as a guide to action.
What is needed, in our view, is not a theory, but the doing of theory. The point is to work out answers to the questions we face on a rational basis, and this requires critical examination of all ideas, taking nothing for granted. So NCTS is not a project that will select some particular theory from among the existing alternatives, and certainly not an opportunity for adherents of different positions to fight to have their position adopted as the “correct” one. We want it to be an ongoing, collaborative process in which we engage with one another, explore and test ideas, and develop our thinking in order to respond in a rational and effective manner to the new challenges of our times.
The doing of theory does not mean adopting political positions, but rather digging deeply into the ideas that underlie differing views of the crisis. In order to contribute to the fight against capitalism, we need to examine the theories that are contending and what their ramifications may be. NCTS therefore does not have a political or theoretical “line.” It is open to all who share its goals, participate in it, and abide by the procedures and rules it sets for itself. All participants have equal voice and vote.
NCTS’ first project is the website we have established, www.nctswebsite.wordpress.com. It will provide a forum for dialogue as well as an archive of articles, readings, and links.The first topic for discussion is a critique of David Harvey’s crisis theory and “the theoretical baggage of the 1970′s” by Brendan Cooney. One of NCTS’ initiating participants, Brendan also operates the Kapitalism101 YouTube channel and associated blog, and he was active in a reading group on Marx in Philadelphia for several years.
Because we want NCTS to facilitate dialogue and mutual assistance, not just be a source of information, use of the website is limited to active participants in NCTS. Our working definition of “active participant” is someone who engages with what others say and write. (Those who just express their own views or publicize what they’ve written are not actively participating in the project we’ve outlined above.) In order to facilitate dialogue, the website’s moderator(s) will ensure that posts do not divert, engage in ad hominem critique, or contain remarks that are racist, sexist, heterosexist, or that demean members of any nation, nationality, or ethnic group.
Please consider becoming a participant in NCTS, and please forward this invitation to others who you think may be interested. For information on how to apply, and to view sample content from the NCTS website, please visit nctsinfo.wordpress.com.
David Adam
Brendan Cooney
Mike Dola
Alan Freeman
Mac Intosh
Anne Jaclard
Tom Jeannot
Andrew Kliman
Sander
Seth Weiss
Charlie Winstanley
