Capital, Vol. 1: Ch. 7-9

Class five in this series covers chapters 7 through 9 in “Part III: The Production of Absolute-Surplus Value.”  The chapters are titled (in order), “The Labor Process and the Valorization Process,” “Constant Capital and Variable Capital,” and “The Rate of Surplus Value.”

Harvey starts off his lecture by reviewing Marx’s arguments over Part I and II of Capital and I think it is good to go over them briefly here.

As I’ve written about before Marx started off with the commodity and stated there was a differentiation within the unity of the commodity.  A commodity has use value and exchange value (see previous posts or watch the lectures on these concepts).

Within labor value there is socially neccessary labor time (which is the only thing that creates any real labor value as unnecessary labor time is wasted).  Within this concept there is concrete labor and abstract labor.  These two elements come together and create a form of value which arrises from it.

Marx then goes on to explain that there are equivalent and relative forms of value which produce the money form (the universal commodity); but the money form only represents a representation of what came before there was a monoey form (that is, use value and relative value and equivalent forms of value, etc.).

Because money only represents what came before and since it is hard to see this in everyday life (the true value of money and nature of money is hidden buy the market) this leads to a fetishism which creates material relations between peoples.  Now relationships are dictated by interactions through the market.

(Almost done with this “short” review)

On the market there are buyers and sellers who relate to each other through money.  Money has a dual relationship to it.  Money is a measure of value and a means of circulation.  And while nations each have there own form of money in the end there ends up being only one kind of money, world money, for a international market.  The universal form of money contains a relationship between debtors and creditors.

Through the circulation of capital (i.e., constant and moving money) there has to be someone who, at the end of the day, will get more money than there started out at the beginning of the day.  This poses a contradiction between the equivalents of exchange and the non-equivalents of profit, or, surplus value (how does one get more money out of money if all things are sold on the market at an equivalent price?).

This contradiction is resolved by finding a commodity in the market which can bridge this problem; there needs to be a commodity which can be exploited in order for the capitalist to get her or his profit.  This commodity is labor power (which is sold by the worker to the capitalist for money).

With that being said let us review one of the more interesting things I got from reading chapters 7 through 9 and from the lecture.

Capital, Vol. 1: Ch. 4-6

Class 4 covers chapters four through six of Capital, Vol. 1.  Chapters four through six make up Part II of the book entitled “The Transformation of Money Into Capital” and each chapter is titled (respectively) “The General Formula for Capital,” “Contradictions in the General Formula,” and “The Sale and Purchase of Labour-Power.”

One of the interesting points from Dr. Harvey’s lecture was explaining what freedom meant to Marx under a capitalist system and how this relates to the sale and purchase of labor power by the capitalist and the worker (it is important to note that Marx looks not at individuals but at roles, for the sake of argument, as he realizes that individuals can be both a capitalist and a laborer as a person can both be a pedestrian and a driver).

In chapters four and five Marx explains that under a free-market system (a true free-market system with equal value and equal price equivalents not manipulated by individuals and under the guise of the vision of Adam Smith) there can be no creation fo surplus value.  All things being equal there can be no creation of value as the capitalist buys products at their face value and sells them at their face value.  Because of this, Marx goes on to show us that under a true free-market system the true profit, the actual creation of surplus value, is gotten off the backs of the workers as they must be underpaid to a point for the capitalist to make an actual profit instead of coming up even in his balance sheets (a simplification of course, more on this in the next blog post).

In the beginning of chapter six Marx states:

In order to be able to extract value from the consumption of a commodity, our friend, Moneybags, must be so lucky as to find, within the sphere of circulation, in the market, a commodity, whose use-value possesses the peculiar property of being a source of value, whose actual consumption, therefore, is itself an embodiment of labour, and, consequently, a creation of value. The possessor of money does find on the market such a special commodity in capacity for labour or labour-power.

This is a key argument in Marx’s Capital.  The argument that Marx is making is not an argument on the present day (and flawed) free-market system in England and Europe he is making an argument against the classical economists about the actual free-market itself.  Some people confuse Capital on the fact that Marx was talking about capitalism in his time (which, indeed, he was and does in certain points in the book) and thus dismiss the book as being outdated when in fact Marx was actually making an argument against the Smithian and Ricardian view of a perfect free-market, free from human and government manipulations.  He takes Smith and Ricardo at their word, for the sake of argument, agreeing with their premise of the invisible hand of the market; self-correcting measures, sale, labor, etc. and that if left up to a truly free-market (away from outside manipulation) the market and society would actually behave in the way the classical economists said it would.

So, with this in mind, Marx shows us that there indeed would be freedom within a society, but only freedom for the bourgeoisie as the bourgeoisie could freely trade, buy, sell, and hire as they pleased.  And the worker could also be free to sell his labor as he or she pleased.  The worker alienates her or his labor power and avoids renouncing of ownership to it.  But the problem with this (which will be discussed more in the next blog post) is that the worker is always being exploited by the capitalist for all capitalists must exploit their labor force in order to make a net gain in their account book.  So while the worker can sell her or his labor power to any capitalist as she or he chooses the workers will never fully gain full ownership of the products they make and will never be able to control the means of production in order to fully receive the actual full benefits of their labor power.

Marx points out that bourgeois constitutionality is entirely concerned with market relations and that definitions of freedoms and rights are to pertain to the political realm and the realm of the free-market.  Freedom for the bourgeois never means economic freedom for the worker.  Bourgeois constitutionality has nothing to say what goes on inside production and inside a factory and when states start to interfere with the factory life, with the passing of moderate bills such as OSHA, capitalists get outraged “This is our property rights!”  They scream.

Marx says you can’t see the secrete of what capitalists have produced just by looking at the market, as do classical and neo-classical economists; in order to crack the secrete of profit making and the production of capital you have to go inside the production process, inside the labor process.  Which he leaves for Part III titled “The Production of Absolute-Surplus Value.”

Photo by Sebastião Salgado and From:
Leading Design

Capital, Vol. 1: Ch. 3

Chapter three, titled “Money, or the Circulation of Commodities” is the last chapter in the Part 1 called “Commodities and Money.” David Harvey went over the entire chapter for his lecture as he said it was the most difficult chapter to comprehend and that most people who quite, or almost quite, reading Capital, Vol. 1 almost always do it at or around reading chapter three.

However, despite its reputation for being hard (which it is, let me tell you) one can actually easily work through it be going at it step by step and by keeping in mind Marx’s main argument for a particular section you are reading.  With that, one realizes Marx’s argument in chapter three is quite simple.  The make-up of the chapter essentially goes like this, in the first part Marx goes over the value of money, in the second part he goes over it as a means of circulation, and then he ends by describing it as a universal equivalent on the world market.

The main structure of chapter three is similar to the previous two chapters in Capital.

One of the interesting points from the lecture and from chapter three is Marx’s explanation of money on the world market and how money is essentially based on imaginary forms, not based on actual gold.  This is kinda complicated to explain out right but he leads up to it by first explaining the measure of value of money in the market (sec. 1), then by explaining the means of circulation of commodities and money in the market (sec. 2), them by explaining money (sec. 3) and how money (the universal equivalent of all commodities) went from physical gold to essentially paper money (partly due to the convenience of paper money in everyday transactions); which leads to one of the interesting things about Harvey’s lecture on section three part B in chapter three on world money.

The nation-state itself plays an important role in the management and regulation of the money system.  At first by regulating gold to regulate inflation and deflation, then by backing up paper money and metallic tokens (creation of the state) with gold, and then by removing the gold back up and allowing the speculation of money.  But, once on the world market the state essentially losses all control of the regulation of its own money.

In 1973 the world market de-metalized its money.  Because of this speculators and economists still wanted to associated currencies around the world with certain commodities (like it had done with gold).  At first, Harvey says, there was talk of the Petro-dollar being the new standard, money in relation to oil.  But soon the oil crisis of the 1970s destroyed this thought.

Now, to find out the worth of money (which is essentially worthless peices of paper and metal) currency speculators and economists look at the productivity of a whole national economy (i.e., unemployment rates, stock market, accumulation of capital, national debt, trade balances, etc., etc.) and compares this outlook with other national economies across the global market.  While there is some type of control the state can exert over its currency there is a fiction of a national economy.  There is no national economy as the national economy is also based on the performance of other national economies that are connected to that economy.  If China is in a slump trade to the U.S. will fall which in turn would cause a rise in prices and other adverse affects in the U.S., etc.  So while there is a “national” economy it is also dependent on the international market.

There is an imaginary understanding of money now.  States collect massive amounts of data on money through statistics.  In order to understand the value of money statistics comes up with all sorts of mathematical equations and comparisons in order to give money value.  For example, statistics on GDP, GNP, collected on certain countries by the IMF or the World Bank.  Speculators step in and debate on what measures are right and what measures are wrong in the measurement of value of certain currencies, hence why George Soros was able to make a billion or so dollars within only a few days be speculating the British Sterling against that of the Euro.

Marx would essentially argue all of this is due to the masking of the true value of money over the decades by the market.  Marx states many times in Capital “We imagine it to be like this…” and “We imagine it to be like that…”  The reason why Marx talks so much about the imagined world of the capitalist market is because the capitalist market depends on imagination, the imaginary things are socially necessary, we can’t get rid of them within capitalism.

Image from:
celsias

Capital, Vol. I: Ch. 1 & 2

As I’ve stated in a previous post I’m re-reading Capital, Vol. 1 along with the lectures by David Harvey.  Every week I’ll post a blog on one or two things I found enlightening and/or interesting about my readings from that week and from the leasson.  I suggest to everyone that if anyone has been thinking about reading Das Kapital to actually start doing it now because these lectures are fucking dope and will help you understand (especially if your reading it you second or third time, etc.) some of the complex points wihtin the book and will also help you understand how to read and grasp the book for yourself.

One of the reasons why reading Marx’s Capital is so hard is because we are used to a modification of Hegelian logic which unflolds as thesis followed by antithesis, and then synthesis.  Harvey states that Marx does not follow this line of logic.  His points aren’t synthetic instead they internalize intention, then point out contradictions which need to be expanded and then looked at and then this is furthered by more examples and logical conclusions until he expands his concept so much as to bring us to the next logical point.  An example can be seen when we look at Marx expanding his arguments in chapter 1 about the commodity until he brings us to the commodities universal equivalent in the end of chapter 1, money.

Example of how Marx does this:

Comodity has use value and exchange value which are both turned into overall value value is then brought about through sociall necesary labor time which has two concepts itself, concrete labor and abstract labor which both equal a certain exchange on the free market which in turn has relative value and equivalent value which in turn brings us to the universal equivalent money.

Kinda complecated huh?  Essentialy, to make an overall point Marx starts with the basic, then builds on extra elements through his explanation which in turn creates a graduatl expansion of his argument from a narrow conception of the commodity on the market to broader and broader conception of the commodity on the market.

Another point I find worth mentioning was that Marx saw that there needed to be an alternate system of values in order to free men from the market.  The destruction of capitalism had to lead to an alternate social and economic system other than the one in place now which was only in place since the beginning of the 17th century (capitalism is a relatively new concept).  Marx saw that human beings were alienated from each other through the system of capitalism.

Harvey explains it as a religious person saying, “I care about having good face to face relations with my fellow man, with being a good person and living life to the fullest and respecting others.”

But when asked about what this fellow thinks of the market economy. “I couldn’t give a hoot about that.”

That in turn is the folly.  How could a person care about human beings he sees face to face but not about his fellow humans who cloth, feed, and shelter him? This is because the capitalist market hides this.  If we trully knew what went into our breakfast and cared about how it went into our breakfast then we would demand that those who put our breakfast on our tables be paid good wages since we would care enough about those who feed us.  That is: the workers at the supermarket, the truck drivers, those who make the trucks, those who pump the oil from rigs, those who pluck the eggs, slaughter the pigs, raise the pigs, work the farms, pick the strawberries, etc., etc.

Photograph by:
David Bacon

Reading Capital with David Harvey

Originally posted at The Blog and the Bullet.

There is a great online series of Dr. David Harvey’s lectures on his class at City University of New York which cover the entire book of Capital, Vol. I.

Bhupinder blogs:

Listening to David Harvey’s lectures on Capital Vol 1 not only gave me a feeling that I was re- reading Capital but also provided a refreshing enthusiasm that I had experienced when first reading the tome. Though the first three chapters are considered to be somewhat intimidating, these three chapters are also the most interesting ones. As Harvery points out, Marx follows different literary techniques in different parts of the book, and the first three are marked not only by philosophical flamboyance but also literary flourishes with copious references to Shakespeare , Schiller and Balzac (the latter, like Harvey, I read much after reading Capital).

I myself have seen the first video (which can also been downloaded in mp3 format to one’s iPod) and it’s excellent and I reccomend everyone see it.  I myself am re-reading Capital, Vol. I (I had forgotten how huge it was!!).

Image:
The Forge (A Modern Cyclops) painted in 1875 by Adolph von Menzel