There is not only economic capital but also fixed capital, human capital, social capital, environmental or natural capital, financial capital, and cultural, symbolic, intellectual, organisational, emotional and many other types of “capital”. The term is indiscriminately used to cover any resource deployed in any context.
It is the merit of Marx’s Capital, the three volumes of his most important work in political economy, that he both incorporates all of these uses of capital into his analysis and yet, equally fundamentally, breaks with them as well. For this reason alone, Capital stands head and shoulders above any other work of political economy more than a century after it was penned.
There are nine major sources for his originality and insight. First and foremost, capital is seen to be the result of historically constrained social relations of production – those attached to capital.
Second, this mode of production is based on specific class relations – those dividing capitalists from wage workers. Capital is not merely a resource, individual or collective, but is attached to social relations.
Third, capitalist production always takes the form of the production of commodities, for the market and for profit. Capital is not a resource available for individual or collective satisfaction in general.
Fourth, capitalist commodity production involves the production of value, again not as a thing or as a subjective measure of usefulness or consumer satisfaction. Rather it is a relationship between producers themselves in which their specific labours are brought into equivalence with, or measured against, one another through the medium of exchange in monetary form, as opposed to any old exchange or interaction of any old thing as it is with the plethora of “capitals”.
Fifth, capital involves not only the production of value but also of surplus value. The class relations attached to capital mean that labour is primarily free of feudal-type obligations but also free of independent access to means of production and livelihood. There is only freedom of exchange to a greater or lesser extent over who will be your employer. But it is not labour as a thing or resource that is sold, although this appearance is a form of capitalist alienation, but the capacity to labour, or labour power as Marx terms it. How much value is produced with that capacity is a matter of individual workplace and social conflict.
Capital’s capacity to extract more (surplus) value than that paid for the commodity of labour power is a precondition for both individual and total capital to prosper; it is the form taken by exploitation under capitalism and is the major source, directly and indirectly, of conflict between capital and labour, at the point of production as well as elsewhere.
The power and violence attached to capital are revealed in acute form once conflict against its fundamental relations and interests is raised or, see below, while those relations and interests are in the process of formation. Not surprisingly, then, Marx sees his distinction between labour and labour power as one of his two most important discoveries. The other, sixth, is his analysis of how surplus value is produced prior to addressing how it is distributed in monetary form to the recipients of profit, interest and rent.
Capital is a detailed theoretical and empirical account of how surplus value is produced in practice, highlighting its extreme dependence, individually and systemically, upon the accumulation of capital as a condition of survival, let alone precarious success. Production, not exchange, is the key to capital as a social and not just a technical relationship.
Seventh, then, capital is both highly dynamic in nature, reproducing and transforming both itself in the production process and the other economic and social relations to which it is attached but which cannot be reduced to it.
The plethora of “capitals” are both influenced by and influence the accumulation process, and need to be situated relative to it. But the perception of a plethora of capitals as resources, stripped of their historically specific social relations, breeds illusions about both the virtues of the “market” and of the potential for it to be corrected by non-market reform.
On this basis, Marx is able to address, however partially and relative to the conditions of his own time, fundamental features of the capitalist economy.
For instance he looks at the factory system, monopolisation, division between town and country, combined and uneven development, the emergence of a sophisticated financial system, the necessity of unemployment and poverty to the functioning of capitalism, the appropriation of nature, proletarianisation, and the formation of trade unions and political organisations in defence of the working class.
Eighth, he also argues that the monetary forms and economic and social implications assumed by capital are from time to time incompatible with its continued accumulation, giving rise to economic and social crises before accumulation can be resumed. These insights, together with an account of their implications for non-economic factors such as the state and society and the world economy and order, or “globalisation” more generally remain the enduring legacy of Marx’s Capital.
Last, to reiterate, capital as a social relation is historically bounded. How did it come about? Not through the selfless accrual of resources but through the forcible creation of wage labour from what were previously non-capitalist relations of production. This is the light in which to understand the current collapse of Soviet socialism and the Chinese market reforms, each an ill-disguised rush to capitalism involving violent appropriation.
At the other end of history, however, Marx admires capital for its unprecedented levels of productivity. These though are achieved through increasing socialisation of life, albeit on a distorted privatised basis.
Capital itself creates the material resources for socialism, the conscious and democratic planning of the economy in place of the anarchy of the market, and also the class of wage labourers that can bring socialism about through revolutionary appropriation of the means of production.
Ben Fine is co-author, with Alfredo Saad-Filho, of Marx’s Capital, published by Pluto Press
Next month – D is for Dictatorship
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