Marx's Capital: A Social-Aggregates-Grounded Guide

ABSTRACT:

I aim to make Marx’s ‘project’ in the three volumes Capital - and in the crucial but regrettably ignored Theories of Surplus Value, sometimes justly called ‘Capital Volume IV’ - accessible to non-’Marxists’ (a name Marx deplored nearly as much as he did the name’s bearers). To do this I adopt what should not, but nonetheless seems to be, an uncommon focus: I use as touchstone, throughout, what I call the Social Surplus in excess of Subsistence that Capitalist Production generates at accelerating rates until reaching exogenous outer limits imposed by technology-rooted economies of scale. The mentioned exogenous scale economies function as limits by ultimately rendering Capitalism’s two endogenously defining characteristics - its separation of Labor from Capital and its reliance on sales competition between Capitalists as principal motive force in the community’s technological development - self-undermining. For the exogenous and endogenous factors in combination, by depressing aggregate consumption income relative to aggregate output, lead capitalist economies’ Productive Capacities to outstrip their Absorptive Capacities. This in turn culminates, often after Mercantilist and Colonialist escape attempts, in the breakdown of Surplus-generation itself. But because the Surplus is the material substrate of all human progress, anarchic Capitalism’s scale-wrought breakdown is catastrophic - not just for working people, but for human progress and civilization itself. It thus necessitates our taking collective control of its continued generation and dissemination after the breakdown of Capitalism. This is the message of Marx, and the sense in which his work is ‘science’ and ‘prophecy’ both.

A forthcoming Glossary will gloss all terms of art capitalized (pun intended) here.

Introduction

Thanks to his project’s vast scope and his own erudition, Marx and his life’s work go misunderstood. A brief Synopsis of Marx’s ‘project’ might accordingly be of help to those who don’t know, and to those who erroneously think that they know, what Marx and ‘Marxism’ (a word Marx detested) are at bottom about.

The following paragraphs, I hope, might fit the bill. They aim to distill Marx’s project down to its essentials - his two principal questions and answers, along with his purpose in asking and answering. In so doing they foreground a critical quantum that tends to be backgrounded by too many self-stuled ‘Marxists’ - what I’ll call the social production of Surplus and how we now do, how we could, and how we soon must, organize this production.

Here is the lynchpin, I claim, of all that Marx did in the three volumes of Capital - as its ancillary ‘fourth’ volume, the more exegetical Theories of Surplus Value, makes plain. All else in Marx’s life’s work - his writing on politics and ideology, his party organizing and agitation, his lecture series’ to workers in union halls and his housing of refugee revolutionaries - is understandable only against this backdrop.

I’ll also say something of what I think

Marx takes my ‘we’ here to be - the nature of ‘us’ who do all this producing. For it bears both on why and on how we should do it. It’s also crucial to knowing what Marx, as distinguished from ‘cultural Marxists,’ ‘analytical Marxists,’ ‘”transformation problem” or “price theory” Marxists,’ and other Marx caricatures, is about.

Preliminary Note on Marx’s Methodology: From (Structured) Aggregates to (Interacting) Components

As I turn now to sketching Marx’s project, bear in mind one methodological preliminary. This will help expedite ‘taking-in’ what I say about Marx and his aims and his claims ...

It is regrettably common, in many theoretic accounts of some complex and consequential phenomena, to build up to wholes from their parts - to ‘make a start / of particulars,’ as William Carlos Williams might say. A species of ‘methodological atomism,’ as distinguished from ‘holism,’ morphology or ‘organicism,’ is still the order of the day in much of the Anglophone world - perhaps a legacy of crude ‘British Empiricism.’

This leaves us vulnerable to incomplete understandings at best, and to rank fallacies of composition (confusions of wholes with the sums of their parts as though wholes had no structure) at worst. A salient case in point is that category error which is many orthodox economists' bizarre attempt to provide 'microfoundations' to 'macro'-economics.

Building up understandings from particulars can admittedly prove wise in our day-to-day lives. Our loved ones, after all, are unique individuals, and a lover who treated his love as but part of some ‘social whole’ - as a mere role or exemplar or specimen - would show either the wrong kind of love or no love at all.

But in seeking a full, comprehensive theoretical grasp of ‘big systems’ such as economies or societies, it often proves more intuitively useful to work in the opposite direction - to move from the internally structured, composite whole to the constituent parts, from ‘Gestalts‘ to components and the relations subsisting among them. For both parts and their interrelations, not parts alone, are what give wholes their specific characters.

That is especially true of matters socio-economic - a realm of complexity, mutual interactivity, and dynamic change and development in which parts are not even so much as determinately individuated, let alone intelligible, in isolation from from their roles within (structured) wholes.

This is precisely, even if largely implicitly, what Marx does. He proceeds via an ‘organic,’ morphologically ‘holist’ method that he developed from modes championed by Goethe, Hegel, and other epoch-defining German thinkers who generated the extraordinary milieu - anything but ‘British Empiricist’ - in which Marx was educated. (Further encouragement, no doubt, came from Quesnay’s visionary Tableau Economique, precursor to latterday Keynesian National Income Accounts.)

Hence, even though Marx begins Capital with what he calls a ‘social atom’ in the form of what he dubs ‘the Commodity’ - the useful good or service produced or offered specifically for Exchange - he is no ‘atomist.’ For his interest in the Commodity is its bearing within its internal structure the whole of, indeed the essence of (Marx is quite comfortable with that word), both Production and Distribution as these occur under what he calls Capitalist conditions.

In a more contemporary idiom, we might say that in ‘the Commodity Form’ Marx finds the ‘DNA,’ so to speak, the ‘genetic structure’ of the Capitalist Mode of Production and Distribution itself. He sees and discusses commodities precisely as seed-bearing ‘fruits,’ as it were, of the capitalist society’s ‘tree.’

Marx’s Questions: The Relevant Social Aggregate and Its Generation-cum-Composition

We can now turn to Marx’s main questions - the twin puzzles that prompted and drove his life’s work - in light of the methodological preface just given. For what Marx seeks to know are the deep-structurally connected present and future (the latter intelligibly flowing from the former) of that social whole he calls ‘the Capitalist Mode of Production.’ And he sees this whole, in turn, above all in terms of certain aggregates that it produces.

I can’t overemphasize this. Methodologically speaking, Marx is not first about ‘exploitation,’ ‘class struggle,’ ‘revolution,’ or ‘communism.’ He is about something far larger that is both transgeographical and transhistorical, something only in terms of which those narrower and more geographically and historically limited phenomena are intelligible.

This something, this relevant aggregate, is Social Surplus - the quantum of aggregate Production over and above aggregate Subsistence.

Marx’s fullest elaboration and analysis of Capitalist Conditions of Production, the aggregates that these produce, and those aggregates’ circulation and dissemination - the ‘tree’ and its ‘fruits’ and its organic process of growth - is of course found in Capital, though as noted before it is helpful to read Capital here as if Theories of Surplus Value were its Volume IV.

Both in its two principal questions and in its modes of addressing those questions, Capital has both a ‘scientific’ and a ‘prophetic’ purpose. (Marx is no mere ‘economist.’ He is that and much more.)

Implicitly, Capital‘s point of departure is the empirically observable fact that under Capitalist Conditions of Production over time the community as a whole generates two critical social aggregates: (a) its and its members’ own means of subsistence and continuation (Marx calls this ‘Social Reproduction’); and (b) a steadily growing aggregate surplus over and above what’s required for mere subsistence (Marx calls this ‘Expanded Reproduction,’ or ‘Accumulation’).

The latter - what I will keep calling the Surplus - is effectively the Archimedean point of Marx’s life’s work. It is the fulcrum of all human history and all future human development. It is our species potential. For it is the material substrate of all human progress. All that we do, all we become and we strive for, is contingent on this Surplus and what we do with it.

(Why, once we see it, would we leave both its use and its management to chance?)

Now what I called Marx’s ‘scientific’ purpose in the face of this all-important fact, the fact of our generating Subsistence and Surplus alike, is to understand the technical means and the structured human - i.e. the ‘Social’ and ‘Productive’ - relations through which we knowingly, unknowingly, or ‘half-knowingly’ collaborate in both (a) generating this aggregate Subsistence and Surplus on the one hand, and (b) disseminating this Subsistence and Surplus among ourselves, for both Consumption and expansive Reinvestment, on the other hand.

What I called Marx’s ‘prophetic’ purpose, in turn, is to understand where the structured dynamics through which we do this producing, distributing, and reinvesting under Capitalism are presently taking us on the one hand, and how if at all we might optimize both that future and our movement toward it on the other hand.

Marx’s Answer (1): How Social Surplus Is Generated, Disseminated, and Reinvested

The resultant picture of where we are on which Marx alights in addressing his questions (that is, his first answer) runs essentially as follows:

Capitalist arrangements legally authorize a minority of propertied individual owners of what I’ll call Productive Assets, who now become ‘Capitalists,’ to appropriate to themselves the proceeds of Production, including the aforementioned aggregate social Subsistence and Surplus.

These Capitalists initiate Capitalist Production, in hopes of Profiting, by (a) purchasing the resource inputs out of which their Productive Assets can help generate Outputs, and then (b) deploying those resources as productive Inputs - ‘investing’ them.

Now crucially under these Capitalist arrangements, those whom Marx calls ‘direct producers’ - that is, hired laborers who do not possess land or other productive assets of their own - are not themselves Capitalists, but are effectively ‘inputs.’ They, or rather their time and capacity to labor (their ‘Labor Time’ and ‘Labor Power’), are simply more resources under these arrangements.

This is the basis for Marx’s discussions of Capital’s Exploitation of Labor. For all Resources, including Labor Power, are exploited in Production. But this is in a certain sense ancillary to Marx’s principal object, at least in its ‘scientific’ guise, which again is to understand the generation and distribution of social Surplus.

That the Surplus turns out to be what Marx dubs Surplus Value, generated in its entirety by what he dubs Surplus Labor (labor expended beyond what’s required for mere labor subsistence) is of course urgently important as both a moral and a practical-political - indeed as a ‘prophetic’ - matter. But as a scientific matter its significance is simply its role in explaining how Social Surplus is generated under Capitalism.

So Capitalist owners of Productive Assets rent human beings much as feudal owners in earlier times owned human beings. Workers accordingly have no rights to the aggregate Social Product (Subsistence plus Surplus) apart from what owners of assets contractually agree to share with them in order to induce them to produce for them.

And, crucially, we learn in Capital, this us all we need know about how Social Surplus is generated, and how Social Surplus is disseminated (including as Reinvestment). This Marx demonstrates through Volume I on Surplus’s generation (by Labor), then Volume II on the Surplus’s circulation (among buyers, sellers, wholesalers, retailers, shippers, etc.), and then Volume III on the Surplus’s flow into beyond commerce to banking, finance, real estate and beyond. (’Volume IV,’ Theories, is effectively Marx’s homage to and critique of his more groping, less thorough predecessors in studying and tracing what I am here calling the Social Surplus.)

Now in Capitalism’s early stages, the commanding role it confers upon Capitalists proves in part socially useful, indeed crucial, ‘developmentally’ speaking. It is key to that aforementioned ‘Expanded Reproduction’ which is the generation of a growing Surplus. For it affords Asset-endowed, ‘entrepreneurial’ individuals both incentives and, for a time, dynamically self-augmenting capacities to concentrate and mobilize human and ‘other’ Resources in the cause of ever-growing material Production, technical Productivity, and hence ... Social Surplus.

Capitalism is accordingly how Social Surplus first comes to be ‘a thing’ - something systematically generated and grown almost as if by design. (Smith’s ‘Invisible Hand.’) Capitalism is also, as the Communist Manifesto well emphasizes, how the Surplus then grows. (Hence Marx’s Pindarian paean, with Engels in their Manifesto, to Capitalism’s transformative powers of human capacity-enhancement.) It’s ‘Reinvested’ to generate ever more surplus.

Indeed, because competition between capitalists drives constant technical improvement, the rate of this growth tends to rise exponentially - for a time ...

As Capitalism ‘matures,’ however, the same structural features that render it salutary to human development early on come to render it structurally dysfunctional and thus obsolete down the road. The very competition that drives its Investment and Reinvestment ultimately combines with scale production economies in manners that push industrial concentration and productivity to such a pitch that eventually too few people own and profit, while too many people become non-owners who can’t profit, to sustain the effective ‘Consumer Demand’ that profits and thus motivates decentralized individual Capitalist Production in the first place.

In contemporary language, a colossal Collective Action Problem emerges and spreads, whereby individually rational decisions by Capitalist firms to cut costs by shedding their Labor all aggregate into the wider economy’s inability to generate Effective Demand for what it produces. (’Effective Demand’ doesn’t originate with Keynes; it’s coined in Capital‘s Volume III, as is much else we now tend erroneously to credit not only to Keynes, but also to Walras, to Wicksell, and even to self-styled successors to Marx such as Hilferding, Bukharin, and Lenin.)

In short, then, owing to its underlying mechanism and the longterm Collective Action Problem imminent in the mechanism once scale economies reach certain thresholds, what I call the Capitalist economy’s Productive Capacity ultimately outstrips what I call its Absorptive Capacity. The system begins to seize-up and break-down as its driver - that part of its Surplus recycled (Marx would say ‘Realized’) as Consumer Spending - dwindles. (Rapidly developing AI and robotics at present appear to be accelerating the pace at which we approach now this terminal point of the process.)

Marx’s Answer (2): How Social Surplus Will in Future Be Generated, Disseminated, and Reinvested

The picture of where we must go at which Marx arrives - that is, his second answer to his own questions - in this light follows straightforwardly from his picture of where we have been: It is a world in which ever smaller numbers of ‘big owners’ entitled to an aggregate Social Surplus too massive for them alone to Consume and profitably Invest no longer own everything and hence no longer are entitled to the Social Surplus that they can’t Absorb. The community itself now takes charge of its own Productive Activity and Produced Surplus.

Marx, who was the very contrary of the dogmatist some self-styled ‘Marxists’ now turn out to be, explicitly abjured any ‘blueprinting’ of precisely what form this communal ‘taking of charge’ might assume. He seems both (a) to have thought this partly a matter of ‘learning by doing’ and, relatedly, (b) to have anticipated that different societies would get to the endpoint in different regionally-, culturally-, and historically-specific ways.

Hence Marx suggested that ownership of large manufacturing concerns might next devolve on their workers in industrialized Western Europe, for example (’Cooperative Production’), while a spread of the then-still-encountered peasant commune (’Soviet’) might become the next dominant form in then-still-largely agrarian Russia.

The important point for Marx was that transformation toward direct or indirect worker ownership of the non-human determinants of Social Production, and hence of the Aggregate Social Product including the Surplus, was all but inevitable. The specific forms this would take across space and through time would emerge in the future - ideally in peaceful ways, but unavoidably either way.

There is of course much more to Capital than the foregoing, including as noted in passing above the many sectors and subsectors of the modern multisectoral economy into which the ultimately Labor-made aggregate Surplus flows - commodity capital, commercial capital, bank and finance capital, ... land rents, money rents, ... etc. These are the subjects of Parts 4 and 5 of Volume III much as the foregoing are the subjects of Volumes I, II, and Parts 1 through 3 of Volume III.

Marx’s sustained Surplus- ‘tracing exercise,’ and the mechanisms that this exercise uncovers in both Surplus Generation and Surplus Dissemination, are as fascinating as they are penetrating and revealing. But the important point for present, synoptic purposes is that it is all about Labor-generated Surplus that isn’t yet Labor-owned and -commanded Surplus, hence Surplus that flows in many directions now but will have to flow back to labor in future.

This is the future that Marx ‘prophetically’ sees through his ‘scientific’ analysis.

Postscript: Two Pretheoretical Premises to Remember Going Forward

A final ‘hot tip’ before closing: Two pervasively important but implicit substantive, indeed ‘metaphysical’ premises or pretheoretical ‘priors’ that Marx brings to his project, which must be borne in mind always in seeking both to understand and to appropriate the results of the project, are these ...

First, a conception of the human person or human essence as not only that of an irreducibly collaborative, social, or ‘political’ being in the Aristotelian or Confucian sense (’homo politicus‘), but also of an irrepressibly creative, inventive, and productive being in what can reasonably be called an artistic sense (’homo faber‘).

Hence Marx’s focus on Labor and Production throughout all his work.

And second, a conception of human and natural history as dynamically unfolding in keeping with an intelligible, indeed teleologically progressive (’dialectical’) structure, which renders it intelligible to both analytic and synthetic (both ‘penetrating’ and ‘creative’) human understanding and hence, ultimately, to intelligent human control.

Hence Marx’s optimism about our ultimately moving away from chaotic ‘anarchic’ to deliberatively rational, socially ‘agential’ production.

These are ‘priors’ that the present author shares, and that drew him to Marx in the first place in his youth. Those who don’t share them, I hope, will still find much value (sorry, pun foreseen but not intended) in Marx.

Summa: Social Management of Social Surplus By & For Our Creative Selves

In this light, we might summarize Marx’s life work as a massively ambitious and self-sacrificing effort to enable us to understand ourselves and our creative-productive conditions in a manner that enables us to wrest control over those conditions from mere fate, and thus henceforth to shape them in ways that do justice to our common creative essence.