3. The Theory of Capitalism

Marx takes capitalist society as a specific historical category. It is a society working on a machine technique of which the economic structure possesses peculiar distinguishing marks. It is a society producing for the market (commodity production); it is a society in which the means of production belong to a special class purchasing labour power (the capitalist bourgeoisie) and which is in opposition to its antipodes, deprived of the means of production and selling its labour power (the proletariat). Only in the combination of these conditions do the means of production become capital, the decisive mass of products and labour power, value, labour, the producer of surplus value. In such conditions social production is capitalist production, the process of the self increase of capital. A special "law of motion" of this specific society is discovered and is the task of theoretical economy in "the narrow sense" (in distinction from political economy in "the broad sense", which also embraces other historical-economic formations).¹⁾ The very statement of the problem is a complete revolution in science, for before Marx (and after Marx insofar as it is a question of bourgeois science) the categories of political economy were taken as the "eternal" and "natural" categories of any productive process. In this lies "all the wisdom of modern economists who are trying to prove the eternal nature and harmony of existing social conditions".²⁾ Thus "Capital is not a thing. It is a definite interrelation in social production belonging to a definite historical formation of society. This interrelation expresses itself through a certain thing and gives to this thing a specific social character".³⁾ Only when the means of production (things) are means of exploitation, and even then on the basis of commodity production, of hired labour power, do they become capital.⁴⁾ Marxism rejects any general, unhistorical, eternal statement of the problem, either a vulgarly naturalistic one derived directly from the thing, or a "psychological" one derived from the relation of man to the thing. The laws of economic theory are social-historical laws. But Marxism also inevitably rejects attempts to separate social relations from things and thus to spiritualise these relations. Capital is not a thing but a relationship appearing in things, that is, not a bare relationship between people outside of any material relatedness to things. A thing would not be capital if there were not a definite social relationship. But, on the other hand, if it were not for "things" (means of production) there would not be capital. In relation to the process of labour as such, the social-historical structure is the form. In relation to the historical structure labour is the content. But this content is always given in its concretely historical form. Outside of it, it becomes simply meaningless, an empty and contentless abstraction. Hence it follows that the object of the economic theory of capitalism is the process of production and reproduction in its historical form. For the Marxist theory of capitalism does not work on idealist sociology but on the materialist conception of history. As we have seen, the materialist conception of history embraces theoretically the "general laws" (Engels) of social development, including at the same time the "laws of movement" of different historical structures as a whole, the reproduction of the whole of social life, from its materialist basis to its ideological sublimations. Economic theory analyses the reproduction only of these materialist foundations. The economic theory of capitalism (political economy in "the narrow sense") analyses the specific "laws of movement" only of one historically limited structure, the laws of movement of capitalist economy, i.e. the reproduction (understood in its arising, development and inevitable end) of the material basis of capitalist society. Thus the materialist conception of history is logically the premise of the theory of capitalism. Here too is shown the great compactness of the theoretical building which Marx constructed. Consequently the attempts to separate Marx's economic theory from his sociological theory are absolutely stupid, just as it is stupid to separate his sociological doctrine (the theory of historical materialism) from his philosophical doctrine (the theory of dialectical materialism). If the labour process has such an immense importance from the point of view of the theory of historical materialism, then it is perfectly clear that it must also have a decisive importance in the theory of political economy. If the conception of the mode of production is one of the main conceptions of the theory of historical materialism, then it is perfectly clear what importance this category must have for economic science. It is of course not accidental that Marx gave his classical exposition of the historical-materialist conception as the preface to The Critique of Political Economy. It is not here just a matter of external form. The profoundest inner meaning is present here. The materialist conception of history is the premise (the "preface" in the broad meaning of the word) of economic theory in general and the economic theory of capitalism in particular. Consequently all kinds of theoretical economic idealism, of subjectivism, of non-historical views, are absolutely alien and deeply hostile to Marxism. "The relations between people" are here taken not as forms of a psychological connection, but as being objectively the historical presentation of the labour process. The separation of this historical form from its content leads inevitably to its separation both from materialism and dialectic. For the chief contradiction lies in the sphere of the conflict between this content and its form. The analysis of this objective, real contradiction is the core of the whole theory. The categories of political economy must therefore reflect the material process of production in its specifically historical social form. ⁵⁾

Capitalist production is the generalised form of commodity production, when labour power also becomes a commodity which gives an absolutely original appearance to the whole economic structure. Commodity production in general has an extremely important peculiarity, unknown in any form of natural economy. This peculiarity lies in the fact that the social connection between the different commodity producers is formed through exchange. The social character of labour in this divided social whole, of which the agents are formally independent of one another, is not recognised by the subjects participating in economy. Here we have a spontaneous character in development, its "blind" course. Here the spontaneous and irrational social law is in direct opposition to the separate commodity producer. So here we have a special connection between the causal and teleological range of phenomena. Commodity and commodity-capitalist society is not the aim-proposing subject, it is not a "teleological unity", as, for example, under the socialist mode of production. It is split up, though relatively united. It is not a mechanical sum of parts, the various commodity producers and enterprises are not membra disjecta: society nevertheless exists as such. But the type of inter-economic connection by means of exchange is an absolutely special type. The character of social unity is here extremely original. This is not the unity of a purposive organisation, but the spontaneous, anarchic, exceedingly contradictory and relative unity of formally independent agents of commodity production nevertheless objectively connected with one another. Society, as a whole, cannot here, by its very nature, give itself any kind of aims, for it is not a unified subject, but only the artificially functioning and anarchical combination (not sum !) of "members" connected with one another. They, the separate commodity-producers, set themselves aims, for each of them is a "purposive subject" subordinating his actions to the principle of economic rationalism sub-specie profit. But the social product of their intersecting wills and corresponding actions is far from coinciding with these aims, but partially directly contradicts them (ruin in the competitive struggle, bankruptcy in time of crisis, lowering of the average rate of profit, etc.). This is the so-called law of heterogeneity of aims, which is extremely typical for capitalist society. Therefore the causal laws of development have no directly teleological expression, which might conceal them and be their teleological hypostasis. There is here no such state of things as would allow us to examine one and the same phenomenon both theoretically (scientifically, causally) and according to a standard (teleologically, practically). We can talk of the causes of crises, but it is impossible to talk of their expediency from the point of view of the active agents of capitalist production and the conscious rationality of action (crises are not brought about, nor made, crises make themselves, i.e. arise spontaneously). Here there is no freedom for society as a whole, as a recognised necessity, but there is necessity and nothing else, confronting the agents of this society, as external in relation to them, independent of their will, an objective law, "blind", "iron", against which there is no remedy within the framework of the given society, for it is immanent in it. The social structure itself is the embodiment of this spontaneity. Society is here "Gesellschaft" and not "Gemeinschaft", if we use the same terms as Tönnies.⁶⁾ To discover the "laws of movement" of this society in its developed form, i.e. in that of capitalist society, is the task of Capital. Any society, whatever its historical form, must distribute (or there must be distributed within it) its joint labour - either well or ill - among the different spheres of production.

The masses of products corresponding to the different needs require different and quantitatively determined masses of the total social labour. That this necessity of distributing social labour in definite proportions cannot be done away with by the particular form of social production, but can only change the form it assumes, is selfevident. No natural laws can be done away with.... And the form in which this proportional division of labour operates, in a state of society where the interconnection of social labour is manifested in the private exchange of the individual products of labour, is precisely the exchange value of these products?⁷⁾

In other words, in anarchistic "blind" society, in which development is spontaneous, there must be a law of development which would spontaneously, while opposing a "blind law " to people, regulate in some way or other the distribution of labour in the various spheres of production. This "blind" "law of movement" which acts as spontaneous regulator, is the law of value, which acts through the market and the "barometric fluctuations of price". Value is the quantity of socially-necessary labour expended on the production of a unit of a commodity, in distinction from its use value, determined by the natural substance of the commodity. Price is the empirical market expression of value. That price has a definite connection with the productivity of social labour, and, consequently with the quantity of value (in its Marxist sense), is evident at the first glance. But the matter is even deeper if looked at from the point of view of social reproduction as a whole, that is the regular repetitions of the productive cycle. From this point of view exchange is a definite "factor" of reproduction inferring its further progress. The empirically superficial laws of exchange therefore draw into themselves the deeper laws which derive from the sphere of production and appear in exchange. The empirically superficial facts are facts of the market to which price categories correspond. But value stands behind the back of price. This is far from being a metaphysical reduplication of price, but is a deep and general law of the movement of commodity economy on which alone it is possible to understand the movement of prices. In simple commodity-economy price fluctuates around value as its centre. If too much of a given commodity is produced the price falls, a redistribution of labour power takes place in this production. If a small amount is produced the opposite takes place. Prices rise, labour power pours in and thus another redistribution of joint labour time takes place. In capitalist society the mechanism of fluctuation is more complex. Here prices fluctuate around the "cost of production", and not directly around value. The social interdependence of the different fractional parts of the socially divided labour, the objective connection between the subjectively independent commodity producers is fixed behind their back. Whether much or little of the commodities a, b, c has been produced is only fixed indirectly, from the signs given by prices. Proportions in the distribution of labour change continually in accordance with the change in the productivity of labour. So the "blind" objective law of special connections and relations between people which regulates the process of material production, assumes the form of a quality of the thing (the value of the commodity piece). In a dismembered society in which even the spheres of production are not organically whole and in which the main principle is the extreme contradictoriness of the whole structure, the laws of the distribution and redistribution of productive forces (in the last resort the mass of labour, dead or alive) can appear in no other way than through their expression in commodity pieces, as values, which in their turn have their general money equivalent. If there is no organised production and organised distribution, if the process of exchange is formed from a number of separate and different exchange acts, in which separate commodity units appear, then it is only through the value of a commodity piece and, correlatively, its price, that the process of the redistribution of the masses of labour can take place in its social scale. "Social", in the sense of the distribution of quantities of labour over the social spheres of production, is here not given all at once, in unbroken front, it is not given as single acts of the distribution of labour which embrace whole spheres in their totality. The "social" is here formed from the "individual", which in its turn grows up on the basis of social determinants objectively given. The functioning of money as the general value equivalent is also connected with this. The rôle of the measure of value, of the price scale, etc., this is all "adapted" to serving this kind of reproduction which is inferred by the infinite quantity of exchange acts, and not by the organised distribution of quantities of labour all at once on a scale of whole spheres of social production. Therefore money is the "soul" of commodity economy. So the social law which regulates the distribution of quantities of labour among spheres of production and expresses the mutual work of human beings connected by the division of labour, assumes the form of a quality of the thing. On this foundation we get a universal aberration, characteristic for the commodity capitalist world. The relations of human beings are perceived as relations of things. This is the phenomenon which Marx called commodity fetishism and which appears in an extremely bloated form in the categories of bourgeois political economy, starting with the fetishism of the elementary commodity and passing through the fetishism of money to finish in the fetishism of capital.⁸⁾ The social relations of human beings, appearing in the substance money, are represented as a quality of things (gold, the power of gold, the golden calf). The social relations of people, which only appear in the substance capital, are represented as qualities of the means of production in general. These means of production are divided up of themselves by a supernatural force which engenders profit (the theory of the "productivity of capital") just as the earth is divided up of itself by an illusory force which engenders rent. It is from such categories that the conceptions of bourgeois theoretical economy are made up.

If Adam Smith investigated the "wealth of nations", Marx begins his Capital with an analysis of "the wealth of societies in which the capitalist mode of production reigns", wealth whose elementary form is the commodity. In the dual character of labour (abstract and concrete labour), in the contradiction between the value and use value of a commodity, are already found the further contradictions whose movement conditions the movement of capitalist society as a whole.

The development of exchange also draws labour power into its orbit (Marx describes the historical and violent premises of this with intense force). Labour power also becomes a commodity, but a commodity sui generis, a special and specific commodity, although "subordinated" to the general laws of commodity circulation.

Labour power has both value and use value. Its value is determined in exactly the same way as that of other commodities. In the general circuit of the vital process, from the point of view of reproduction as a whole, that is from the point of view of the repetition of the productive process, the reproduction of labour power is an essential factor. The reproduction of labour power is a process of consumption (the unity of production and consumption is manifested in this; a unity which does not exclude but presupposes contradictions). This process of consumption is in its turn a process of transferring values of the means of consumption into the new sphere of production of labour power. Thus the value of labour power is fixed by the value of the necessary means of existence (which vary in accordance with the different qualifications of this peculiar form of commodity). The use value of labour power (for which the capitalist buys it) is fixed by the fact that it possesses the quality of being able to develop a greater quantity of labour than it needs for its own reproduction. So that even if the capitalist pays for his labour power according to its full value, he still has a surplus value left. The general formula of capital is M (money)-C (commodity)-M' (money increased). So accumulation is created, not in the sphere of circulation, but in the sphere of production, and is only realised in circulation. Consequently the process of capitalist production is a process of the production of surplus value.⁹⁾

This discovery of the secret of surplus value is a discovery of the main levers of the capitalist mechanism, of the main inner springs of its self-movement. Neither Smith nor Ricardo drew any distinction between labour and labour power and so became confused in contradictions as soon as ever it was necessary on the basis of the theory of labour value, to explain the fact of surplus value.¹⁰⁾

Surplus value, in its turn, is divided into an accumulated section and a section consumed by the capitalists and their servants. The accumulated part, i.e. the one incorporated in functioning capital, of surplus value, is in its turn, like capital as a whole, divided into a constant part (the means of production) and a variable part (labour power). In the process of production constant capital (constantes Kapital, "c") merely transfers its value into the value of the product. Variable capital (variables Kapital, "v") not only reproduces its value, entering into the composition of the value of the product produced, but also creates surplus value (Mehrwert, "m"). The labour day is divided into two parts, the necessary labour time when the workers reproduce the value of their labour power, and the surplus time when surplus value is created. Correspondingly the mass of surplus value can be increased either (1) by dint of increasing the working day ("absolute surplus value"), or (2) by dint of curtailing the necessary labour time ("relative surplus value"). The first is connectted with direct attacks on the workers. The second is directly connected with raising the productivity of labour in the production of means of consumption.

Capitalism differs from other forms of exploiters' economy (slave-owning systems, feudalism) by the fact that the greed for surplus value is unlimited. If the natural exploiters' formations had limits in the needs of the ruling classes, then here we have a limitless "drive for profit", without any previously given limits to accumulation. At the same time the inner tendencies of development powerfully force on the whole process. Here the mechanism, in conditions of free competition, was as follows the value of the commodity is fixed by the quantity of socially necessary labour (i.e. necessary for the production of the given commodity with an average technique and other average quantities). The enterprise with a higher technique has a greater productivity of labour and consequently a much lower individual value of the commodity unit. But in the market it is a matter of socially necessary labour time. So the difference between these quantities is the basis for getting differential profit (surplus value is broken into different streams, whilst profit is part of the whole surplus value which flows to the industrial capitalist in opposition to other forms of capital and to landowning, which receives rent). The conditions of market competition force the rest to follow the general model and what was an exception becomes typical, the whole level is raised, all scales are changed and a new circle begins. Thus, if the application of machines is the technical basis of capitalism whilst the machine is itself an historical category, then the economic conditions of capitalism have a tendency towards the continual revolutionising of the methods of production and its technical basis. But, on the other hand, this growth of the productive forces of capitalist society comes into conflict with the limited conditions of capitalist appropriation. The analysis of this contradiction is one of the essential parts of Marx's economic theory.

Together with the process of accumulation the organic composition of capital (c / v) is raised, the relation of constant to variable capital, that is the mass of means of production is increased, the raw material and so on put into motion by a single worker, and simultaneously the productivity of social labour grows at an immense speed.

The process of the production of capital, examined as a regularly repetitive process, is a process of simple reproduction when there is no accumulation and of enlarged reproduction when there is accumulation. This process of reproduction represents in itself an immense theoretical problem, for the course of reproduction presupposes a unity of production and circulation and also technical correspondences and proportions fixed not only in value, quantitatively, economically, but also naturally and qualitatively. Schematically Marx's teaching on the reproduction of capital can be represented as follows:

Let the whole social product equal c + v + m
A (production of the means of production) = c₁ + v₁ + m₁
B (production of the objects of consumption) = c₂ + v₂ + m₂

In the case of simple reproduction we have the following as its necessary conditions.

1. Since the whole product A (i.e. the sum of c₁ + v₁ + m₁) consists entirely of means of production (conditionally, the iron, coal, machine, substantial husk), then it must all go on the compensation of the constant capital of both subdivisions, i.e. the necessary condition of reproduction is the premise expressed in the equation c₁ + v₁ + m₁ = c₁ + c₂.

2. Since the whole product B (i.e. c₂ + v₂ + m₂) entirely consists of objects of consumption (conditionally, a textile wheat natural form), then it must go entirely in the consumption of the capitalists and workers of both sub-sections in conditions of simple reproduction. This brings us to the equation: c₂ + v₂ + m₂ = v₁ + m₁ + v₂ + m₂.

3. Since A itself produces for itself its own constant capital c₁ and must give up the remainder for B (i.e. v₁ + m₁), then B itself produces for itself v₂ + m₂ and must give up c₂ for A, that is c₂ = v₁ + m₁.

On rearranging the first two equations they give a third equation. And this is the condition for simple reproduction. The sum of the incomes of the first subdivision must equal the constant capital of the second subdivision.

In the case of enlarged reproduction it is a much more complex matter. Here also it is possible to bring out a system of equations which will show the possibility of such a reproduction in the corresponding conditions of the whole process.

Let us suppose that:
m₁ = α₁ (goes to the consumption of the capitalists) + β, (which is capitalised);

m₂ = α₂ + β₂

Let us suppose further that:
β₁ = β_1c (which is subject to accumulation as a part of constant capital) + β_1v (which is accumulated as a part of variable capital).

β₂ = β_2c + β_2v

Then the general product of both subdivisions is expressed in the formula:

In the sphere A, c₁ + β_1c must remain by force of its natural form, the rest [(v₁ + α₁) + β₁] must be cancelled. In the sphere B, v₂ + α₂ + β₂ remains, (c₂ + β_2c) on the other hand, must be cancelled.

So we get the equation:

which is the condition for enlarged reproduction in its most general form. Of course, in reality the whole process, since it is contradictory, proceeds far from smoothly and the schemes themselves can only be looked upon as an expression of tendencies with a definite law, and as nothing more.

It is exceedingly important to note that the analysis of the conditions of enlarged reproduction given by Marx in his famous arithmetically formulated schemes in the second volume of Capital brings in both the value (economic) and the natural (technical) aspect of reproduction. The process of exchange between the two spheres presupposes not only a "logic" of value but also one of technique, which is derived from the law of technical interconnection of the different spheres of production. So here there clearly appears the whole impermissibility of separation from the "things" in which "social relations" manifest themselves.

The process of reproduction is the process of the reproduction of commodities, it is a process of reproduction of surplus value. It is the process of reproduction of the productive relations themselves and of their class agents. The structure of capitalist society, as a specifically historical category, is a special class structure. Therefore this class character of capitalism is expressed and reflected in the specific categories of political economy. If value expresses the objectively given fact of the social co-operation of people in any commodity economy (here, consequently, it is a question of the cluster of social connections horizontally, outside the vertical class hierarchy), then the category of surplus value already expresses the relation of class exploitation, whose object is the wage labourer. If money is the more abstract reflection of co-operation in commodity economy, then capital (including money capital) is the classical class relationship of exploitation. If the form of commodity is not yet eloquent of the class structure of society (commodities also exist in simple commodity economy), the commodity of labour power is, however, already a category of class capitalist society. Division into classes is founded directly on the relations of human groups to the means of production. From the polarised relations to the means of production there arise the different functions in the productive process, the different positions in the process of distribution (various kinds of "income"), and different (for the class poles of the polarised opposites) material interests which condition the class struggle. The class division of capitalist society runs therefore like a red thread through all the main categories of Marx's political economy, in an adequate expression of the contradictory movement of capitalist reality. The transformation of the historical transition form into a "natural" and "eternal" one is characteristic of bourgeois economic theory. So also are the illusory "destruction" of all the real contradictions of capitalism and the setting up in their place of social "harmony", the general concealing and damping down of the class struggle.¹¹⁾ Marx, on the other hand, gives an analysis of genius of all the contradictory factors in capitalism, while the class struggle is revealed at the heart of all the main categories. "Wages" contain an "historical and moral element", being the converted price (i.e. value) of labour power and at the same time expressing the relation between the contending class forces. Surplus value is correlative with the value of labour power. The length of the working day, the rate of exploitation (the relationship m : v), accumulation, the divided forms of surplus value (profit, rent, etc.), these categories all express the real class relations in capitalist society. With Marx "economic" and "social" are indivisible. The main class categories of economic theory, specific for capitalism, inevitably assume the form of value.

Thus the problem of "Machtgesetz-ökonomisches Gesetz", the problem of the relations between "economic law" and "class force", is solved by Marx in such a way that the relations of force between the classes are included in the movement of economic quantities. Not "pure economic" and "non-class", "a-social" categories which are only "distorted" by categories of another kind, categories of a "special", "class" character; not "economics on the one hand and classes on the other", but social-economic categories in which class. division is included as the characteristic feature of their specifically historic nature, this is what is characteristic for Marxist economic theory. In accordance with this, the capitalist mode of production is, says Marx, "on the one hand the process by which the material requirements of life are produced, and on the other hand a process which takes place under specific historical and economic conditions of production and which produces and reproduces these conditions of production themselves, and with them the human agents of this process...." ¹²⁾

Bourgeois political economy has seen three "purely economic", "non-historical", "factors of production": capital, land and labour, which "naturally" give birth to three kinds of income, interest, rent and wages. Whilst here there takes place in reality a division of the value produced by labour, with a disintegration of surplus value on the basis of the monopoly of specific means of production, these "factors" appear fetishistically to the agents of capital aid their ideologues as the independent sources of revenue and even as the very value substance of this revenue.¹³⁾ "Rent grows out of the earth", "gold gives birth to gold". All the recent and latest theories of "imputation", of "productivity", etc. ("Zurechnungstheorien"), are built upon this fetishistic illusion.

The process of the reproduction of capital as a whole, as a unity of production and accumulation, in order to be understood calls for an explanation of the divergence of price from value. In simple commodity economy value is a "law of movement" directly apparent in prices. In capitalist society fluctuations of prices occur around "production prices", and from this point of view the law of value is converted into the law of the prices of production, which appears as the historical development of the law of value and can only be understood on the basis of the latter.

To understand this transformation it is essential to remember that the capitalists are interested in a profit on the whole of their capital expended. If we put the landowners, etc., on one side and accept that the whole surplus value equals the sum of profit, while society consists only of workers and capitalists, then the quantity (m / c + v) will interest the latter. But in fact capitals of different organic composition exist, since surplus value is created only by living labour, i.e. variable capital, then (m / c + v) would inevitably vary everywhere where there is a difference in the organic composition of capital. However, it is perfectly clear that through the mingling of capitals and on the basis of competition a spontaneous irresistible tendency to an average rate of profit is formed, that is to say, such a rate of profit as corresponds to the composition of the whole total of social capital. Marx showed that, as a result of this, prices in those sections of industry with a high composition of capital diverge above, and those with a low composition, below the value, and that prices do not fluctuate directly around value but around so-called production prices (the costs of production plus the average profit). Thus the law is here much more complex than in simple commodity economy. The superficial and directly empirical fact of the market price is explained by the prices of production, the latter by the average profit and the average profit by the organic composition of capital, which, in its turn, is explained by the whole sum of surplus value and the whole sum of capital.¹⁴⁾

We cannot dwell here on the whole immense wealth of ideas given in the three volumes of his gigantic work (in particular on the great importance of the question of the converted forms of surplus value, the theory of ground rent, etc.) and we will pass to the explanation of those more fundamental tendencies in the development of capitalism which arise from his analysis and are formulated by him.

1. The drive for profit, which is the specific regulating principle in capitalism, leads to the individual capitalist striving to get a surplus profit and to get it by the introduction of new technique. New technique, by raising the productivity of labour in the given enterprise, temporarily creates for it this surplus, differential profit. But the process of competition, and, as a result, the raising of the whole technical level, leads to an immense increase in the organic composition of capital in its social scale (c : v) and to a rapid increase in the productivity of social labour. But since the total surplus value is created by the total v, the growth of which lags behind c, then there inevitably follows from this a tendency for the rate of profit (m / c + v) to fall.

2. Accumulation, which has its expression in the growth of c / v creates specifically capitalist laws of the movement of population. Surplus "hands" are created, the so-called "reserve army of industry" which grows the more rapidly the "greater the social wealth, the amount of capital at work, the extent and energy of its growth".¹⁵⁾ The greater the reserve army in comparison with the active, working section of the proletariat, the greater is the mass chronic overpopulation and the stronger is officially recognised pauperism. "This is the absolute general law of capitalist accumulation." ¹⁶⁾

3. The drive for profit, as the motive force of accumulation, i.e. of the process of the growth of capital, makes production an aim in itself, cutting it off from consumption. The possibility of conflict is already to be found in embryo in the elementary form of the commodity, in the opposition of abstract and concrete labour, of value and use value. The movement of capital by systematically revolutionising technique and creating to an overgrowing extent mass production, tends towards its unlimited enlargement. If, on the one hand, the growth of c : v implies an immense growth of production, on the other hand it also implies the putting of definite limits to that growth, for it implies a tendency to a relative curtailment of the mass of effective demand, defined by the movement of quantity of the whole variable capital (v). So here we have a contradiction between the growth of the productive forces of capitalism and its economic structure ("the capitalist husk"), which determines the falling behind of v. The analysis of the conditions of reproduction shows that, speaking generally, enlarged capitalist reproduction is fully possible, even without the so-called "third persons" (i.e., for example, the peasants). But the contradictory tendencies of development, owing to its elemental march, the possibility of vast preliminary investments in the production of the means of production, investments which only afterwards almost unexpectedly appear in the mass of completed articles of consumption, periodically lead to collisions between production and the effective mass demand, collisions which take place in the form of periodical industrial crises.

4. The competitive struggle among capitalists leads to the inevitable victorious march of large-scale production. Pre-capitalist forms perish. Capital overwhelms them with its machines, and consequently with a high productivity of labour, and therefore with low prices. Large-scale production has all these advantages in the competitive struggle. Therefore simple accumulation (and the concentration of capital corresponding to it) goes hand in hand with the ruin of the conquered, with the doom of handicrafts, with the perishing of the small and medium capitalists, with the passing of their capitals into the hands of the conquerors, with the centralisation of capital. The concentration and centralisation of capital are thus the consequence of deep causes enrooted in the very structure of capitalist relations in general and of capitalist competition in particular.

5. The accumulation of wealth on the one hand is accompanied by the accumulation of poverty on the other. Class contradictions are not only not softened, but, on the contrary, are sharpened. Immense human masses are transformed into wage labourers, are utilised by the mechanism of capitalist production itself and are in opposition to capital as a subversive, revolutionary, mass force.

6. On the other hand, the concentration and centralisation of the powerful means of production and the socialisation of labour proceed apace. These material prerequisites of the new society, expressing the growth of the productive forces of capitalism, come into conflict with its productive relations. The social character of labour comes into contradiction with the individual character of appropriation, production conflicts with consumption, the productive forces revolt against the productive relations. This fundamental contradiction breaks out periodically and is periodically "solved" in crises only to be reproduced on a new and wider basis. In other words, the process of enlarged capitalist reproduction appears also as a process of the enlarged reproduction of all its contradictions, which is inevitably bound up with the final explosion of the relative unity of society, i.e. with the socialist revolution of the proletariat. So the constant technical revolution and growth of the productive forces of capitalism leads with iron necessity to a revolution which destroys capitalism. This is not an automatic process of the collapse of capitalism. But the objective development of its contradictions determines the class will in such manner that the proletariat comes forward openly as the grave-digger of bourgeois society.

While there is thus a progressive diminution in the number of the capitalist magnates (who usurp and monopolise all the advantages of this transformative process), there occurs a corresponding increase in the mass of poverty, oppression, enslavement, degeneration and exploitation; but all the same there is a steady intensification of the wrath of the working class-a class which grows ever more numerous, and is disciplined, unified, and organised by the very mechanism of the capitalist method of production. Capitalist monopoly becomes a fetter upon the method of production which has flourished with it and under it. The centralisation of the means of production and the socialisation of labour reach a point where they can prove incompatible with their capitalist husk. This bursts asunder. The knell of capitalist private property sounds. The expropriators are expropriated. ¹⁷

With such words of fire, which cover the deepest penetration of the secret of social dialectic, does Marx characterise "the historical tendency of capitalist accumulation". That which he formulated so monumentally in the Communist Manifesto, the heroic song of genius of revolutionary scientific creation, as the foundation of the practice of the proletarian revolution, here in Capital found its full force with all the connections and deductions of a proved scientific forecast.

Marx himself estimated his scientific work as follows at a quite early period, in 1852, even before the appearance of Capital.

And now as to myself, no credit is due to me for discovering the existence of classes in modern society nor yet the struggle between them. Long before me bourgeois historians had described the historical development of this class struggle and bourgeois economists the economic anatomy of the classes. What I did that was new was to prove: (1) that the existence of classes is only bound up with particular, historic phases in the development of production; (2) that the class struggle necessarily leads to the dictatorship of the proletariat; (3) that this dictatorship itself only constitutes the transition to the abolition of all classes and to a classless society.¹⁸⁾

So he saw the chief thing to be the doctrine of proletarian dictatorship and the transition to classless communist society. The scientific analysis of the movement of capitalism is only a means of foreseeing, and foresight itself is only a means for practical activity. Lenin remarks splendidly in one place that Marx gives examples "of materialism examining society in motion, and moreover not merely from that aspect of its motion which faces backward". He grasps the coming, in order the more energetically, fully, actively and successfully to "change the world". His analysis of capitalist society is great and incomparable. His forecasts are justified by the whole consequent course of historical development, just as the teaching on proletarian dictatorship and the transition to classless communist society founded on that analysis is also completely justified by the whole consequent course of historical development.

Notes

¹⁾ Engels makes such a limitation in Anti-Dühring.

²⁾ K. Marx, Introduction to a Critique of Political Economy.

³⁾ Marx, Capital, Vol. III, p. 948.

⁴⁾ See the recently published preparatory work for Chap. VI of Vol. I of Capital in which Marx makes fun of the unhistorical definitions of Capital. M.-E. Archiv., Vol. VII, Moscow, 1933.

⁵⁾ For a detailed analysis of the methodology of bourgeois economic theories and particularly the marginal utility school, see N. Bukharin, The Political Economy of the Rentier, London and New York, 1928.

⁶⁾ See Marx, Capital, Vol. I; Engels, L. Feuerbach.

⁷⁾ K. Marx, Letters to Kugelmann, London and New York, 1934.

⁸⁾ Marx, Capital, Vol. I.

⁹⁾ Antonio Graziadei, Preis und Mehrpreis in der kapitalistischen Wirtschaft, Berlin Prager, 1923.

¹⁰⁾ Marx gives a detailed analysis of surplus value in Theorien über den Mehrwert, hg. von K. Kautsky.

¹¹⁾ Cf. Albion W. Small, "The Sociology of Profits", The American Journal of Sociology, January, 1925 (Vol. XXX, No. 4), pp. 439 and 441.

¹²⁾ K. Marx, Capital, Vol. III, p. 952.

¹³⁾ K. Marx, loc. cit., Chap. 48, "The Trinitarian Formula".

¹⁴⁾ This is the so-called "contradiction" between Vols. I and III of Capital which so many critics of Marx have "discovered" - Masaryk, Böhm-Bawerk, Tugan-Baranowski, Bortkevich, etc.

¹⁵⁾ K. Marx, Capital, Vol. I, p. 712.

¹⁶⁾ Ibid.

¹⁷⁾ Ibid.,

¹⁸⁾ See Selected Letters of Marx and Engels, London and New York, 1934 p. 57.

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