David Harvey is probably the best-known living Marxist. He has written very important works of his own, but his online lectures on Marx’s Capital, against the backdrop of the Global Financial Crisis of 2007-8, reached a global audience.
He followed these up with two volumes of commentary on Capital. Now Harvey has shifted focus to the Grundrisse, Foundations of the Critique of Political Economy. This is the massive economic manuscript Marx wrote in the white heat of the first global financial crisis, in 1857-8.
Marx never published it, but his attempts to revise it led eventually to the appearance of Capital, Volume I, in 1867.
The Grundrisse is a very rich text, and develops themes that Marx was unable to pursue in depth in Capital. But, inevitably, he changed his mind and developed his analysis in the decade between starting it and finishing Capital, Volume I.
Harvey has long dismissed the falling rate of profit theory, and accuses its supporters of ignoring the mass of surplus value. I think he’s wrong about this but there’s a bigger problem
This makes it hazardous to treat the Grundrisse as where we can find the real Marx. But it looks as if this is where Harvey is going in his forthcoming book on the Grundrisse. We get a preview in an article, “Rate and Mass”, in the latest issue of New Left Review.
This is devoted to an apparently obscure issue. Harvey argues that economists, including many Marxists, don’t pay enough attention to absolute quantities and focus too much on the rate at which these quantities change.
So, for example, it’s more important that China is now the second biggest economy in the world than that its rate of growth has slowed significantly.
Harvey argues, more specifically, that Marxists are too interested in the rate of profit and too little in the mass of profit. These concepts are in fact closely related. The rate of profit measures the mass of surplus value extracted from workers relative to the total amount of capital invested to obtain this surplus value.
The mass of surplus value is simply the absolute amount of surplus value on its own.
Marx explains capitalist crises by the economic law that, as competition drives firms to make labour-saving investments, the rate of profit tends to fall.
But he also argues that, as the rate of profit starts to fall, the mass of surplus value initially continues to rise. This can mitigate the damaging impact of the falling rate of profit.
Harvey has long dismissed the falling rate of profit theory, and accuses its supporters of ignoring the mass of surplus value.
I think he’s wrong about this but there’s a bigger problem.
Harvey emphasises Marx’s conception of capital as “value in motion”. Capitalism is a process in which capital takes many forms. As well as productive capital where workers are employed to produce goods and services and create surplus value, there is also finance, retail, and so on.
Harvey restates long-standing themes of his writing—for example the growing importance of fixed capital—as ways of absorbing surplus value.
He concludes, “Marx litters the conceptual landscape of capital with multiple contradictions. But some are more important than others.
The “contradiction between alien capital and alien labour” is another way of referring to the class struggle between bosses and workers
“If capital is defined as value in motion, then the foundational contradiction that propels and orients that motion surely takes pride of place in any theory of capital. The contradiction between alien capital and alien labour does not fit the bill.
“But for ‘value in motion’, the contradiction of the falling rate and the rising mass is foundational.”
This is baffling. The rate and the mass are different ways of looking at the relationship between capital and surplus value. But where does this surplus value and indeed all the “value in motion” come from?
For Marx, only labour creates new value. As Harvey shows very well in his Commentary on Capital, Volume I, profits come from the exploitation of wage labour by capital. If this isn’t “foundational”, how does Harvey now explain value?
Worse still, the “contradiction between alien capital and alien labour” is another way of referring to the class struggle between bosses and workers.
Sideline this, and Marx’s conception of socialism as working class self-emancipation vanishes.
Crises are on the horizon