Metamorphoses of Capital

Capital Volume 2, Part 1

Metamorphoses of Capital

We have now completed the course Volume 1 of “Capital” here on “CU Africa”. Today we begin Part 2. We will proceed through ten parts to the end of Part 3 before the end of 2010.

“The Metamorphoses of Capital and their Circuits” is the title of Part 1 of Karl Marx’s “Capital, Volume 2. A “metamorphosis” (plural “metamorphoses”) in science is a profound change in form, such as from a tadpole to a frog or from a caterpillar to a butterfly. [The illustration refers to the Book “Metamorphosis”, by Franz Kafka, wherein a man turns into a beetle].

Skimming through the first chapters of Volume 2, even though they contain some rather obscure formulas, it quickly becomes clear that what Marx is describing are the changes and movements that take place during the repeated acting-out of the capitalistic relationship, and which are somewhat  invisible to the actors, or else only visible to them in an illusory form.

From Chapter 2:

“So long as the product is sold, everything is taking its regular course from the standpoint of the capitalist producer. The circuit of capital-value he is identified with is not interrupted. And if this process is expanded — which includes increased productive consumption of the means of production — this reproduction of capital may be accompanied by increased individual consumption (hence demand) on the part of the labourers, since this process is initiated and effected by productive consumption. Thus the production of surplus-value, and with it the individual consumption of the capitalist, may increase, the entire process of reproduction may be in a flourishing condition, and yet a large part of the commodities may have entered into consumption only apparently, while in reality they may still remain unsold in the hands of dealers, may in fact still be lying in the market. Now one stream of commodities follows another, and finally it is discovered that the previous streams had been absorbed only apparently by consumption. The commodity-capitals compete with one another for a place in the market. Late-comers, to sell at all, sell at lower prices. The former streams have not yet been disposed of when payment for them falls due. Their owners must declare their insolvency or sell at any price to meet their obligations. This sale has nothing whatever to do with the actual state of the demand. It only concerns the demand for payment, the pressing necessity of transforming commodities into money. Then a crisis breaks out. It becomes visible not in the direct decrease of consumer demand, the demand for individual consumption, but in the decrease of exchanges of capital for capital, of the reproductive process of capital.”

Different capitals compete with one another, says Marx. The fundamental type of capital has been described in Volume 1. Here we see “capitals”, plural, interacting with each other to produce a secondary phenomenon – a crisis.

Later in the same Chapter (under Part 3), Marx is very clear about the difference between “accumulation” and “hoarding”. This is a crucial point in terms of current (2010) SACP theory, which leans heavily on the term “accumulation”, or alternatively “accumulation path”. Marx says:

“Hence the accumulation of money, hoarding, appears here as a process by which real accumulation, the extension of the scale on which industrial capital operates, is temporarily accompanied. Temporarily, for so long as the hoard remains in the condition of a hoard, it does not function as capital, does not take part in the process of creating surplus-value, remains a sum of money which grows only because money, come by without its doing anything, is thrown in the same coffer.”

“Accumulation” for Marx is always the assembly of the prerequisites for the relationship “Capital” to appear, or reappear. Anything else, whether transitional or permanent, is “hoarding”.

For a reading of part of the original text, we offer Chapter 6, the last chapter in Part 1 of Volume 2 of Capital (see below for a link to download this chapter). It is clear from this chapter that in this Part 1, called “Metamorphoses of Capital and their Circuits”, Marx is dealing with the Reproduction and Accumulation of capital, where “reproduction” is accomplished by the reassembly (accumulation) of the elements of production so that the cycle of extraction of surplus value can be re-enacted.

The following quotation can suffice to show that there is no question of Marx backsliding on the question of surplus-value being the source of “the self-increase of capital”, as expounded repeatedly in Volume 1:

“To the capitalist who has others working for him, buying and selling becomes a primary function. Since he appropriates the product of many on a large social scale, he must sell it on the same scale and then reconvert it from money into elements of production. Now as before neither the time of purchase nor of sale creates any value. The function of merchant’s capital give rise to an illusion.”

Please download and read this text:

Chapter 6, The Costs of Circulation, from Capital, Volume 2, Karl Marx

Colonialism

Course on Marx's Capital: Part 23

Mogadishu, 1993

Colonialism

Here we are, nearly at the end of Capital, Volume 1, the famous and huge book that so many people talk about and so few people read. We have read it. We are more fit to be cadres. We are more fit to be the vanguard. What remain are only the three last chapters, which are not difficult to read, although as always they challenge us to be brave and to act, and action will never be easy.

In Chapter 31 Marx states that the origin of the industrial (not farming) capitalist is in colonialism.

“The discovery of gold and silver in America, the extirpation, enslavement and entombment in mines of the aboriginal population, the beginning of the conquest and looting of the East Indies, the turning of Africa into a warren for the commercial hunting of black-skins, signalised the rosy dawn of the era of capitalist production. These idyllic proceedings are the chief momenta of primitive accumulation. On their heels treads the commercial war of the European nations, with the globe for a theatre.”

“To-day industrial supremacy implies commercial supremacy. In the period of manufacture properly so called, it is, on the other hand, the commercial supremacy that gives industrial predominance. Hence the preponderant rôle that the colonial system plays at that time. It was "the strange God" who perched himself on the altar cheek by jowl with the old Gods of Europe, and one fine day with a shove and a kick chucked them all of a heap. It proclaimed surplus-value making as the sole end and aim of humanity.”

This last describes in a single sentence, the state of affairs that Marx's book was written to expose; and Marx did succeed in exposing “capital” as “surplus-value making”.

Yet it appears that Marx did not deal with Primitive Accumulation in the sense that the phrase would nowadays be understood. Marx does not establish that capitalism required a ready pile of money or its equivalent. What he establishes is how the requisite class forces were brought into being, in Western Europe, in the revolutions that overthrew feudalism.

It is a mistake to think that a capitalist business requires “capital” in advance, if by “capital” is meant money in the bank, or land, buildings, equipment et cetera. It does require such things, but they do not make it a capitalist business as opposed to any other kind of project. What makes a business work as capitalism is a dual relationship. The first part of it is the relationship between the worker and the capitalist. The second part is the relationship of the capitalist with his market. If these two relationships do not exist, or are faulty, then a capitalist business will not survive. But if they do exist, then the other means will probably be found without too much difficulty.

Marx shows clearly how the proletariat arose historically in Europe in the 16th century. He shows how the bourgeois class arrives on the scene. He shows how all the social building blocks including proletariat and market, are assembled, but not the money. In any case, capital is not money, it is a relation. Marx says so, directly, in Chapter 33. So the accumulation necessary for capitalism is not treasure, but is an accumulation of relationships; this is what we learn from the chapters in “Capital” on Primitive Accumulation.

Marx does not, in Capital, make a strong distinction between slavery and capitalism. He describes slavery candidly and without flinching from the horror of it. But he never discusses slavery in a comparative way, as distinct from surplus-value-extracting bourgeois-and-proletarian capitalism. Yet (bourgeois) slavery also started in the 16th century, or slightly before, and it ran on as a transcontinental Atlantic system for the next three hundred years, in parallel with the early development of capitalism proper, until Marx’s time, such that the last end of bourgeois slavery was the cataclysm of the American Civil War, that was happening while Marx was writing Capital.

Chapter 32 of Capital, Volume 1 contains about 1000 words in only four paragraphs. It is a full historical sweep from the past of slaves and serfs through present capitalism to the future, when the expropriators will be expropriated. It resembles the Communist Manifesto.

Chapter 33 is very interesting but in spite of its title, it is not really about colonialism. Instead, Marx uses the example of part of one colony of the time, Australia, to make points about capitalism and to “discover in the Colonies the truth as to the conditions of capitalist production in the mother country”. Also note the very last paragraph of the chapter (and the book), which says:

“We are not concerned here with the conditions of the colonies. The only thing that interests us is the secret discovered in the new world by the Political Economy of the old world, and proclaimed on the housetops: that the capitalist mode of production and accumulation, and therefore capitalist private property, have for their fundamental condition the annihilation of self-earned private property; in other words, the expropriation of the laborer.”

“...capital is not a thing, but a social relation between persons, established by the instrumentality of things,” says Marx.

In the next part, we will commence a ten-week course Capital, Volumes 2 and 3.

Please download and read the following document:

Click here to download Capital V1, C31, 32, 33, Capitalist, Accumulation, Colonialism, in MS-Word file format

The Home Market

Course on Marx's Capital: Part 22

Poverty map of part of London, 1889; darker areas show slums or “rookeries”.

The Home Market

Marx's first concern in his description of Primitive Accumulation is to establish where the labour power came from, in the metropolitan countries where capitalism was established as a system for the first time, and where it eventually proved itself to be even more profitable than the slave trade that stole people from Africa and worked them to death on plantations in North and South America, and in the Caribbean islands.

The expectation that the reader brings, on seeing the phrase “primitive accumulation”, is therefore not necessarily fulfilled. It is not the case that a hoard of money was first created, whether by plunder or by any other means, so as to purchase the commencement of capitalism. Rather, it was a case of piecing together the component parts of the capitalist system, which were the bourgeois class that had arisen from the peasantry; the dispossessed “free labouring” proletariat, also originally dispossessed peasants; and the ready market for commodities constituted by both of these two new classes, together.

This new abundance of available labour power in the metropolis, personified in citizens without property, was the consequence of deliberate dispossession. It had the immediate consequence of producing what we now call “unemployment”, which was immediately criminalised as “vagrancy”. The unemployment was an essential precondition for capitalism to arise, yet the bourgeoisie in its eternal hypocrisy criminalised its own victims.

Our text today, downloadable via the link given below, is a compilation of Chapters 28, 29 and 30 from Marx’s “Capital”, Volume 1. It describes a time, long ago, when the slogan could have been “Capitalism is the future, build it now”. The elements of capitalism were being assembled then.

Chapter 28 is an easy read detailing the legal steps in the original case, that of England.

Having shown (in Chapter 27) where their supply of labour-power came from, Marx at the beginning of Chapter 29 asks “whence came the capitalists originally?” This very short chapter answers the question in the case of the capitalist farmers, who were the necessary original capitalists, and who were already a historically-existing class in England by the late 16^th century (from which class later came, for example, Oliver Cromwell).

In Chapter 30, Marx turns his attention to the question of just how yet another of the necessary pre-requisites of capitalism came into being, namely the “home market”. The very same peasants who had been thrown off the land into the towns to live in shacks had to eat, whether they were working or not, and the farms that they had left were still the only source of food. Thus was set in motion the relation of demand and supply, and also of concentration of industries into “manufactories” as opposed to the family-scale production of earlier times. These kinds of changes can still be observed as they happen, in South Africa today.

Good images of the slums of England, also once known as “rookeries” (the equivalent of South Africa’s present-day “informal settlements”, less politely called “squatter camps”) are hard to find. The illustration above is from the “Poverty Map” of part of the East End of London, prepared by or on the orders of Charles Booth, a “philanthropist”. The red areas are "middle class, well-to-do", light blue areas are “poor, 18s to 21s a week for a moderate family”, dark blue areas are “very poor, casual, chronic want”, and black areas are the "lowest class...occasional labourers, street sellers, loafers, criminals and semi-criminals".

Booth’s 1889 survey found that 35% of London’s huge population was living in poverty.

Please download and read the following document:

Capital V1, C28, 29, 30, Expropriated, Farmer, and Home Market, in MS-Word file format

Expropriation

Course on Marx's Capital: Week 21

Expropriation

In the first of these two vivid chapters on primitive accumulation (compiled together in onee document downloadable via the link below), Karl Marx describes what is required before the system of surplus value can start pumping and reproducing itself.

As Marx says, the myths around this origin are many, but the truth is written in blood and fire, the ruin of the feudal system, and the destruction of the semi-feudal, semi-bourgeois guilds in the towns of Western Europe.

These revolutions made possible the existence of “free labourers”, which is to say people with no means of production or subsistence, who must sell their only possession – their labour power – in order to survive from day to day. These are the working proletariat.

According to Marx, the capitalistic era began in the 16th century, but he does not say that capitalism was dominant or hegemonic at that time. Many of the bourgeois institutions that are nowadays taken as part of capitalism, such as double-entry book-keeping, banks, stock and bond markets, insurance, contract law and global freight navigation, were first developed under late feudalism, but especially in the 17^th century, in the service of the big, bourgeois, transcontinental business of slavery, which is very different from capitalism.

How the “free labourers” historically came into existence is exemplified in the second of the two chapters, where Marx takes the “classic form” of this process as being that of England, starting from the 16th Century (i.e. 1501 to 1600). Clearly, the creation of the proletariat was contemporary with the slave trade, while the latter was dominant. Capitalism only began to supersede and to actively suppress slavery after it had matured during the period 1500 to 1800, or in other words, after the “industrial revolution”.

The process of eviction of people from the land is popularly known in England as “the enclosures” and in Scotland as the “Highland clearances”. To South Africans, one can say that the book describes processes of dispossession that are familiar even up to the present time. In the case of the Highlands of Scotland, one can also read that game parks (called deer forests) were replacing settlements of people from two centuries ago. The same thing is happening today in South Africa under cover of “green ecology”, and not only with game parks, but also with golf estates and horse-riding establishments.

With Chapter 27, it is not necessary to understand every local term, or to remember every local event. What is applicable still is the class struggle that underlay it all, the victorious bourgeoisie that came out on top, and the great, dispossessed, working proletariat that was left as the principal basis for capitalist extraction of surplus labour from then onwards, but also as capitalism’s inevitable gravedigger.

Picture: Brutal force, as in Sharpeville, 1960, is what has enabled the expropriation of land.

Please download and read the following document:

Capital V1, C26, 27, Primitive Accumulation, Expropriation, Capital, in MS-Word file format

Unemployment

Course on Marx's Capital: Week 20

Unemployment

Chapter 25 of Marx’s Capital, Volume 1, called The General Law of Capitalist Accumulation, is about the effects of Capital on the workforce.

Section 3 of Chapter 25 is concerned with what we nowadays refer to as Unemployment. Marx argues very directly and very convincingly in this section that unemployment is a necessary, constant, conscious and deliberate part of the capitalist system. He writes:

“The over-work of the employed part of the working-class swells the ranks of the reserve, whilst conversely the greater pressure that the latter by its competition exerts on the former, forces these to submit to overwork and to subjugation under the dictates of capital. The condemnation of one part of the working-class to enforced idleness by the overwork of the other part, and the converse, becomes a means of enriching the individual capitalists”.

In the light of what Marx says here, it can be argued that all protestations from bourgeois democrats that they are intending to provide "jobs" for all of the unemployed are false.

This course is now being doubled up so that we can move on to Volumes 2 and 3 of Capital and complete the whole lot this year. This means that we will do another posting this week and two postings next week, thereby completing Volume 1.

Picture: A South African mine worker (AP).

Please download and read the following document:

Capital V1, C25, Section 3 on Unemployment (4423 words)

Reproduction and Accumulation of Capital

Course on Marx's Capital: Week 19

Reproduction and Accumulation of Capital

“The conversion of a sum of money into means of production and labour-power, is the first step taken by the quantum of value that is going to function as capital. This conversion takes place in the market, within the sphere of circulation. The second step, the process of production, is complete so soon as the means of production have been converted into commodities whose value exceeds that of their component parts, and, therefore, contains the capital originally advanced, plus a surplus-value.”

Thus Marx describes the working of capitalism, and he goes on to describe this cycle as the origin of capital. As chapter 23 goes on, Marx describes the position of the working class in terms that are easy to understand today. This chapter of Capital speaks of what has in recent years been referred to as the “accumulation path”. Marx concludes Chapter 23 by saying:

“Capitalist production, therefore, under its aspect of a continuous connected process, of a process of reproduction, produces not only commodities, not only surplus-value, but it also produces and reproduces the capitalist relation; on the one side the capitalist, on the other the wage-labourer.”

And he begins Chapter 24 by saying:

“Hitherto we have investigated how surplus-value emanates from capital; we have now to see how capital arises from surplus-value. Employing surplus-value as capital, reconverting it into capital, is called accumulation of capital.”

Later on, Marx writes that the result of capitalistic production is threefold:

1)      “that the product belongs to the capitalist and not to the worker;

2)      “that the value of this product includes, besides the value of the capital advanced, a surplus-value which costs the worker labour but the capitalist nothing, and which none the less becomes the legitimate property of the capitalist;

3)      “that the worker has retained his labour-power and can sell it anew if he can find a buyer.”

This and the subsequent is material that is familiar and widely accepted today.

“Accumulate, accumulate! That is Moses and the prophets!” says Marx.

Image: Photograph of women workers (welders), USA, 1940s

Please download and read the following document:

Capital V1, C23, 24, Accumulation of Capital, in MS-Word file format

Wages

Course on Marx's Capital: Week 18

Memphis, Tennessee, 1968

Wages

Part VI of Karl Marx’s Capital, Volume 1 is devoted to wages. We will use the first three chapters,in this section, 19, 20 and 21 (download linked below). The short Chapter 22, on international differences in wages, is one of the very few chapters from Volume 1 that we will leave out of this course, but you can still read it on the Marxists Internet Archive, here.

On the first page of Chapter 19 Marx says, among other things, that the "value of labour… is an expression as imaginary as the value of the earth”.

The commodity that is exchanged by the worker for money is not Labour, but Labour-Power. After that, the entire product of the worker’s labour for the contracted time belongs to the boss. The product of the worker is greater than the payment given for the worker’s labour-power. The difference is surplus-value. The extraction of surplus-value from workers in this way is the defining characteristic of capitalism.

Through these three chapters on wages Marx continues to discuss this basic point in different ways. The minimum price of labour power is that which is sufficient to keep the worker going until the next day. Or, it may be calculated over a worker’s lifetime, as Marx demonstrates here, and divided out to give an average day-rate. In all cases, including piece-work, the capitalist pays only for labour-power, and at the minimum price that will ensure the return of the worker to the workplace, next day.

Marx finishes Chapter 21 by declaring that if, under piece-work, the workers think they can get more by producing more, the boss will remind them quickly of the true relationship, which is not payment for labour, or the product of labour, but only payment for maintenance and reproduction of labour power.

“The capitalist rightly knocks on the head such pretensions as gross errors as to the nature of wage-labour.  He cries out against this usurping attempt to lay taxes on the advance of industry, and declares roundly that the productiveness of labour does not concern the labourer at all.”

The image above is a photograph of one of the striking workers in the 1968 “Memphis Sanitation Strike”. Their union was AFSCME. Martin Luther King went to Memphis, Tennessee to show solidarity with the strikers, who were badly paid, badly treated, not recognised and racially discriminated against. King was shot dead by an assassin at the Lorraine Motel in Memphis, where he was staying while supporting the strike.

This week, and for the following two weeks, we will double up on the “Capital” posts so as to be able to complete the course, including Volumes 2 & 3, before the end of 2010. The next time the course on Capital, Volume 1 is done it will be reduced to a total of ten weeks, mainly by doubling up in this way.

Please download and read the following document:

Capital V 1, C19, 20 and 21, Wages, in MS-Word file format