6 LeniD, V. I. : Marx, Engels and Marxism (Foreign Languages Publishing House, Moscow, 1947 (Eng. ed.)
the production of commodities that dominates, and Marx's analysis, therefore, begins with an analysis of the commodity.
Capital, Vol. I, p. 45.—Ed.
Ibid., p. 6.—Ed.
A commodity is, to define it, a thing that satisfies a human want. It is also a thing that can be exchanged for another thing. The utility of a thing determines its use-value. In daily life, a certain number of use-values of one sort are exchanged for a certain number of use-values of another sort. What is common to them is that they are products of labour. In exchanging products, people equate to one another the most diverse kinds of labour. The production of commodities is a system of social relations in which the single producers create diverse products, and in which all these products are equated to one another in exchange. Consequently, what is common to all commodities is, according to Marx, not the concrete labour of a definite branch of production, not labour of one particular .kind, but abstract human labour—human labour in general. The magnitude of value is, therefore, determined by the amount of socially necessary labour, or by the labour time that is socially necessary for the production of a given commodity, of the given use-value. ". . . .Whenever, by an exchange, we equate as values our different products, by that very act, we also equate, as human labour, the different kinds of labour expended upon them. We are not aware of this, nevertheless we do it."7 We can understand, Marx explains, what value is only when we consider it from the standpoint of the system of social relations of production of one particular historical formulation of society, relations, moreover, which manifest themselves in the mass phenomenon of exchange, a phenomenon which repeats itself millions upon millions of times. "As values, all commodities are only definite masses of congealed labour time."8 Having made a detailed analysis of the twofold character of the labour incorporated in commodities, Marx goes on to analyse the forms of value and money. His main task in Capital is to study the origin of the money form of value, to study the historical process of development of exchange, from isolated and casual acts of exchange to the universal form of value, in which a number of different commodities are exchanged for one and the same particular commodity, and to the money form of value, when gold becomes this particular commodity, the universal equivalent. Being the highest product of development of exchange and commodity production, money masks and conceals the social character of private labour, the social tie between the individual producers who are united by the market. Marx analyses in great detail the various functions of money ; and it is quite essential to note here in particular tha* the abstract and seemingly at times purely deductive mode of exposition in reality reproduces a gigantic collection of factual material on the history of the development of exchange and commodity production.
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". . . .If we consider money, its existence implies a definite stage in the exchange of commodities. The particular functions of money which it performs, either as the mere equivalent of commodities, or as a means of circulation, or means of payment, as hoard or as universal money, point, according to the extent and relative preponderance of the one function or the other, to very different stages in the process of social production."8
The fact of growth of money in capitalist circulation is quite wt ll-known. It is this growth which transforms money into capital, as a special, historically defined, social relation of production. Surplus value cannot arise out of commodity circulation, for the latter knows only the exchange of equivalents ; it cannot arise out of an addition to price, for the natural losses and gains of buyers and sellers would equalize one another , whereas what we have here is not an individual phenomenon but a mass, average, social phenomenon. In order to derive surplus value, the owner of money "must. . . .find. . . .in the market a commodity whose use-value possesses the peculiar property of being a source of value"10—a commodity whose process of consumption is at the same time a process of creation of value. And, according to Marx, such a commodity exists. It is human labour power. Its consumption is labour and labour creates value. The owner of money buys labour power at its value, which, like the value of every other commodity, is determined by the socially necessary labour time requisite for its production. Having purchased labour power, the owner of money is entitled to use it, that is, to set it to work, "for the twelve hours—the whole day, let us suppose." The labourer produces product sufficient to cover the cost of his own maintenance in the course of first six hours, and he produces 'surplus ' product, or surplus value, in the course of next six hours, for which the capitalist does not pay.
There are two principal methods by which surplus value can be increased : by lengthening the working-day ("absolute surplus value"), and by shortening the necessary working-day ("relative surplus value"). Analysing the first method, Marx gives a most impressive picture of the struggle of the working-class to shorten the working-day and of governmental interference to lengthen the working-day and to shorten the working-day. Since the appearance of Capital, the history of the working-class movement in all civilized countries of the world has provided a wealth of new facts amplifying this picture.
10 ibid., p. 145.—Ed.
To continue new and important in the highest degree is Marx's analysis of the accumulation of capital, i.e., the transformation of a part of surplus value into capital, its use, not for satisfying the personal needs or whims of the capitalist, but for new production. Marx
revealed the mistake of all the earlier, classical political economists (from Adam Smith on), who assumed that the entire surplus value which is transformed into capital goes to form variable capital. In actual fact, it is divided into means of production and variable capital. Of tremendous importance to the process of development of capitalism and its transformation into socialism is the mere rapid growth of the constant capital share as compared with the variable capital share.
The accumulation of capital, by accelerating the replacement of workers by machinery and creating wealth at one pole and poverty at the other, also gives rise to what is called the "reserve army of labour", to the "relative surplus" of workers, or "capitalist overpopulation" which assumes the most diverse forms and enables capital to expand production at an extremely fast rate. This, in conjunction with credit facilities and the accumulation of capital in the means of production, incidentally furnishes the clue to the crises of overproduction that occur periodically in capitalist countries—at first at an average of every ten years and later at more lengthy and less definite intervals. From the accumulation of capital under capitalism must be distinguished what is known as primitive accumulation : the forcible divorcement of the worker from the means of production, the driving of the peasants from the land, the stealing of the commons, the system of colonies and national debts, protective tariffs, and the like. "Primitive accumulation" creates the "free" proletarian at one pole, and the owner of money, the capitalist, at the other.
New and important in the highest degree, further, is the analysis Marx gives in the second volume of Capital of the reproduction of the aggregate social capital. Here, too, Marx deals not with an individual phenomenon but with a mass phenomenon ; not with a fractional part of the economy of society but with the economy as a whole. Correcting the mistake of the classical econcmists mentioned above, Marx divides the entire social production into two big sections r (1) production of means of production, and (2) production of articles of consumption ; and examines in detail, with arithmetical examples, the circulation of the aggregate social capital—both in the case of reproduction in its former dimensions and in the case of accumulation. The third volume of Capital solves the problem of the formation of the average rate of profit on the basis of the law of value. The immense advance in economic science made by Marx consists in the fact that he conducts his analysis from the standpoint of mass economic phenomena, of the social economy as a whole, and not from the standpoint of individual cases or of the external, superficial aspects of competition, t>■> which vulgar political economy and the modern "theory of marginal utility" are frequently limited. Marx first analyses the origin of surplus value, and then goes on to consider its division into profit, interest, and ground rent. Profit is the ratio between the surplus value and the total capital invested in an undertaking. Capital with a "high organic composition" yields a
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lower than average rate of profit: capital with a "low organic composition" yields a higher than average rate of profit. The competition of capitals and the freedom with which they transfer from one branch of production to another reduce the rate of profit to the average in both cases. The sum total of the values of all the commodities of a given society coincides with the sum total of prices of the commodities ; but, owing to competition, in individual undertakings and branches of production, commodities are sold not at their values, but at the prices of production (or, production prices), which are equal to the expended capital plus the average profit.
Marx's theory of Surplus Value is merely the introduction to something that interested him far more, an examination not of capitalism as it is but of capitalism as it was becoming. Using nature in the Aristotelian sense of what a thing will become when fully developed, we may say that it is with the nature of capitalism that Marx is primarily dealing, and that his main concern is to show that its nature is self-destruction. Capitalism, according to him, is doubly doomed—doomed by the general law of capital accumulation and centralization which begins to operate automatically as soon as capitalists appropriate surplus values ; doomed also by its own internal contradictions. "To accumulate," Marx says, "is to conquer the world of social wealth, to increase the mass of human beings exploited by him, and thus to extend both the direct and the indirect sway of the capitalist." Competition, the growth of credit, the development of a joint-stock system, technical improvements involving high initial capital cost, all speed up the accumulation and the centralization of capital. The development of capitalism simplifies the class-struggle, since it leaves only two classes, the property owners and the wage-earners, embattled against each other. Thus by increasing the poverty of the great majority and by simplifying the class struggle, the law of capitalist accumulation leads capitalism to the final and inevitable clash with the proletariat that can have no other ending than the triumph of the oppressed.
Internal Contradictions of Capitalism
Marx prophesied that capitalism would destroy itself by its own internal contradictions. According to him, it is too wasteful of men. Under the pressure of competition it becomes "a squanderer not only of flesh and blood, but also of nerve and brain." This waste must ultimately cause a breakdown of the mechanism of capitalism, which cannot work without men. Of even greater importance, it creates abundance, and faiis to cope with it. Capitalism can never solve the fundamental contradiction that competition both makes inevitable the greatest increase in the production of goods and by rationalization of production methods and consequent lowering of wages reduces the market of these goods, thus destroying the possibility of existence for the overdeveloped enterprises it has itself called
into being. It completely fails to deal with the crises it thus itself brings on. Truly speaking, the monopoly of capitalism becomes a fetter on the mode of production which has sprung up and flourished along with it and under it. Centralization of the means of production and socialization of labour at last reach a point where they become incompatible with their capitalist husk. This bursts asunder. "The knell of capitalist private property sounds. The expropriators are expropriated."
Inevitability of Transformation of Capitalist Society into Socialist Society
From the foregoing it is evident that Marx deduces the inevitability of the transformation of capitalist society into socialist society wholly and exclusively from the economic Jaw of motion of contemporary society. The socialization of labour, which is advancing eve-niore rapidly, in thousands of forms, and which has manifested itself very strikingly during the half-century that has elapsed since the death of Marx in the growth of large-scale production, capi.alist cartels, syndicates and trusts, as well as in the gigantic increase in the dimensions and power of finance capital, forms the chief material foundation for the inevitable coming of socialism. The intellectual and moral driving force and the physical executant of this transformation is the proletariat, which is trained by capitalism itself. The struggle of the proletariat against the bourgeoisie, which manifests itself in various and, as to its content, increasingly richer forms, inevitably becomes a political struggle aiming at the conquest of political power by the proletariat ("the dictatorship of the proletariat"). The socialization of production is bound to lead to the convert jn of the means of production into the property of society, to the "expropriation of the expropriators". This conversion will directly result in an immense increase in productivity of labour, a reduction of working hours, and the replacement of the remnants, the ruins of small-scale, primitive, disunited production by collective and improved labour. Dictatorship of the Proletariat and Withering Away of the State
Marxian Socialism puts the question of the state on the same historical footing, not only in the sense of explaining the past but also in the sense of a fearless forecast, of the future and of bold practical action for its achievement. The state, which is an organized violence, inevitably came into being at a definite stage in the development of society, when society had split into irreconcilable classes, and when it could not exist without an 'authority' ostensibly standing above society and to a certain degree separate from society. Arising out of class contradictions, the state becomes "the state of the most powerful class, the class which rules in economics and with its aid becomes also the class which rules in politics, and thus acquires new means of holding down and exploiting the oppressed class. Thus, the state of antiquity was primarily the state of the slave-owners for
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the purpose of holding down the slaves, as the feudal state was the organ of the nobility for holding down the peasant serfs and bondsmen, and the modern representative state is a tool for the exploitation of wage-labour by capital."11 EveL the freest and most progressive form of the bourgeois state, the democratic republic, in no way removes this fact, but merely changes its form. Socialism, by leading to the abolition of classes, will thereby lead to the abolition of the state. The interference of the state power in social relation becomes superfluous in one sphere after another, and then ceases of itself. The government of persons is replaced by the administration of things and the direction of the process of production. The state is not "abolished", "it withers away."12"The society that will reorganize production on the basis of the free and equal association of the producers will put the machinery of state where it'will then belong : into the museum of antiquities by the side of the spinning wheel and the bronze axe." (Engels : The Origin of the Family, Private Property and the State.)13
During the period of dictatorship of the proletariat the state continues to be the repressive organ of the class controlling the means of production, but instead of the minority oppressing the majority, the majority will oppress the small group of former exploiters. The workers' state will thus be far more democratic than the bourgeois parliamentary government. They were, indeed, a sham and a contradiction in terms since democracy cannot exist in any society which is divided, as it is under capitalism, into two irreconcilably antagonistic groups.
Under the loving care of the dictatorship of the proletariat, socialism will blossom into communism. Two things we can be sure of this golden age—society will be organized and then goods distributed c -u the principle "from each according to his ability, to each according to his need." And, of course, there will no longer be a state. That instrument of class oppression will have come to an end of its long march through history, for there will be no more classes.
Marx's Incorrect Evaluation of Growing Capitalism
As such, Marx's theory of Historical Materialism is not a sovereign formula to be mechanically applied, but a working hypothesis, a method of investigation which will help us to understand the pattern of the past and to predict the path of the future.
EngUs: The Origin of the Family, Private Property and the State (Moscow.. 1940), p. 141.—Ed.
Engels : Anti-Duhring, p. 315.—Ed.
Here, it is to be admitted that Marx failed in his evaluations of growing capitalism. He believed that the development of capitalism would leave facing each other in irreconcilable opposition two and only two classes. That has not been so. He could not think of the emergence of a new class of managers and skilled technical advisers. And for this he is not to be blamed as he depended for his conclusion on the past experience. But he claimed to be able to foretell the future of capitalism and it seems evident that he has failed to do so. The forecasts based on his economic analysis of Surplus Value have similarly proved wide of the mark. He declared that working-men must become ever poorer until the day of final reckoning. But real wages today are considerably higher than they were a century ago, not lower as they should now be according to Marx. He also said that capital would be concentrated in fewer and fewer hands and the small capitalists and businessmen would be crushed out of existence. This has not happened. In fact, the ownership of capital is being more evenly spread throughout the community than at any previous period. Marx was convinced that the classless society was coming because he believed that the next phase of history would witness the revolutionary clash of two completely opposed classes. As these have not emerged, the classless society "would still appear to be shimmering dejectedly on far-away horizons."14 And the Marxian belief that the state would ultimately "wither away" seems to be almost fantastic. Prophet of a Revolutionary Creed
Marx was a prophet of a revolutionary creed. He had no liking for democracy. A democratic system was totally alien to his temperament in spite of his plea for democratization of social forces. He was essentially a prophet who had to dominate every movement he entered and who had no patience with difference. Laski remarks in his book Karl Marx (1922): "He was contemptuous. . . .of all who did not think exactly in his fashion, he never learned the essential art of colleagueship."'6 Marx dismissed liberty as a purely bourgeois ideal and was openly scornful of democracy as a bourgeois invention designed to deceive the people ; for him, history was the story of clashes between determined minorities contending for power. As a prophet of force and revolution, he failed to analyse human nature correctly. The admission that he had no knowledge of human nature is a proof that great man as he was he yet did not know all things.
U Wayper, C. L. : Political Thought (London, 1958), p. 215.