Capital & Class. - 1977. - Issue 3

EDITORIAL In this issue we publish a long article by Jairus Banaji which should reorient the Marxist discussion of the theory of modes of production . While his arguments are directly aimed at the debates on the transition from feudalism and on colonial history, they offer also an analysis of the relation between the laws of motion of capital and the history of capitalism in Marx's thought which is of more general interest and relevance . We complete the article by Crossmann begun in our previous issue and publish the first part of Robin Murray's article, which begins with a forthright attack on neo-Ricardian theories of rent and attempts to lay the basis for a general theory of modern landed property . We should perhaps emphasise that the publication of these two articles in two parts does not mean that we are becoming a serial publication, but merely results from the judgment of the editorial committee that these two long articles happen to fall naturally into two parts and are better published as such than be allowed to dominate an issue . In future we hope that the planned CSE books and pamphlets series will provide a wider choice of appropriate format . The shorter article by Veronica Beechey explores, with a notable clarity, ways in which the subordination of women in capitalist society can be related to the analyses of forms of labour and of the labour-process and divisions in the working class, both in Marx and in recent discussions . This issue completes the first year of publication of Capital & Class . The transition from the old Bulletin has formed part of the continuing transformation of the CSE as a whole. There has been a rapid increase in new membership (which has caused distributional problems for which we apologise and which we hope will by now have been resolved) . More importantly, there has been an intensification of work within the CSE . The intensified activity in the working groups and local groups and the increasingly frequent dayschools and weekend meetings culminated in the annual conference in July, which was attended by well over 400 people. More than 80 papers were presented, but despite the crowded programme and the crammed meeting-rooms the conference was characterised by a notable sense of collective self-discipline and good humour, which produced many productive discussions and certainly a highly enjoyable social occasion. We hope that this level of activity and involvement will ensure that Capital & Class will never be merely passively consumed by its readers . We also hope that this work will have an increasingly political impact .

MODES OF PRODUCTION I N A MATERIALIST CONCEPTION OF HISTORY Jairus Banaji ..

the extremely dubious speculative juggling, with the concepts and terms of the materialist method, which has under the pens of some of our Marxists transplanted the methods of formalism into the domain of the materialist dialectic ; which has led to reducing the task to rendering definitions and classifications more precise and to splitting empty abstractions into four equally empty parts ; in short, has adulterated Marxism by means of the indecently elegant mannerisms of Kantian epigones . It is a silly thing indeed endlessly to sharpen or resharpen an instrument, to chip away Marxist steel when the task is to apply the instrument in working over the raw material!" (Leon Trotsky)

I THE RETREAT INTO HISTORICAL FORMALISM* In his polemic with Duhring, Engels described the theory of surplus-value and the materialistic conception of history as the "two great discoveries" of Marx, through which were established the scientific foundations of Socialism . Modern materialism, wrote Engels, characterized history as a "process of evolution" and set itself the task of discovering its "laws of motion" . (Engels, Anti-Duhring, p . 39, 43) . In one of the best reviews of Capital to appear at that time, a bourgeois economist Kaufmann repeated the point to Marx's approval : Marx treats the social movement *Some of the positions proposed in this essay will be argued more extensively in a forthcoming book on Modes of Production and the Peasantry . Parts of the section on Feudal Production have appeared in an article in the Journal of Peasant Studies, April, 1976 . It was written before Anderson's two recent volumes appeared, and therefore contains no reference to them . Although Laclau's article on Frank is criticized at various points in the essay, my own train of thought derived much of its impetus from the directions of that critique . Finally, I should like to thank Lajpat Jagga, Rohini Banaji and Dave Rosenberg for shaping the essay in various ways .



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"as a process of natural history governed by laws (Marx, Capital, Vol . I, Afterword to Second German Edition) . I n a famous resume of his conception of history, written closer to our time, Braudel describes Marx as the originator of "historical models" . (Braudel, 1972) . In their own way these writers implied, in a language borrowed from the sciences of their time, that social phenomena like the phenomena of nature are scientifically penetrable, and that we owe the recognition of this fact to the work of Marx . Between the period from which this discovery dates and our own period, roughly in the last hundred years, the foundations of the older traditional conceptions of history collapsed as rapidly as the inherited conceptions of matter . But there the analogy ends . On the ruins of substantialism, a new physics evolved at rapid speed, whereas the "programme of a fully scientific history . . . remains not merely to be realized, but even to be drafted" . (Vilar, 1973, p . 67) . In short, the materialist conception of history did not actually produce a specifically materialist history . In a sense this abortion is not difficult to understand . Later in his life Engels repeatedly noted in his correspondence [1] that the younger elements attracted to Marxism saw in its theory, "historical materialism", the summary of established results or points of arrival . In their conception, between historical materialism and materialist history there was a relation of immediate identity or implicit spontaneous derivation . Liberal bourgeois historiography of that time and later proceeded as if theory could be derived from "facts" ; in this positivist conception "facts" were objects outside theory, constituted, like Matter, independently of consciousness . For vulgar Marxism, infected by the illusion which Engels noted, history, already endowed with its theory ("historical materialism"), consisted in the application of this theory to "facts" . By its vulgar conception of historical materialism this tendency implicitly threatened to submerge the scientific possibilities contained in Marx's conception of history in a quasi-positivism for which theory was latent in an objective succession of immutable facts . If such a premise were accepted, only minor differences remained : for positivism, the collection of those facts would lead spontaneously to the framing of general "laws" ; for the vulgar tendencies in Marxism these "laws" were already known, and the task of history lay in their verification by "facts" . [2] In fact, as we know,[3] it was this convergence which became central to the Marxism of that period . For Marx himself the task of scientific history consisted in the determination of the laws regulating the movement of different epochs of history, their "laws of motion" as they were called after the example of the natural sciences . Vulgar Marxism abdicated this task for a less ambitious programme of verifying "laws" already implicit, as it supposed, in the materialist conception of history . Whereas Marx had noted, as one of the points "not to be forgotten", that is, to be investigated in future by him or others : the "dialectic of the concepts productive force and relation of production, a dialectic whose boundaries are to be determined" (Marx, Grundrisse, p . 109), a whole tradition from Plekhanov to Stalin argued with more assurance . Reverting to a naturalistic conception of history that Engels himself had explicitly rejected in the Dialectics of Nature (see the note on "causality"), Plekhanov wrote : "We now know that the development of the productive forces, which in the final analysis determines the development of all social relations, is determined by the properties of the geographical environment" . (Plekhanov, 1969) Reared in a Plekhanovist tradition, as so many of the



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other Bolsheviks were, but with a singular capacity for vulgarisation, Stalin would tell the party cadre many years later, "first the productive forces of society change and develop, and then, depending on these changes and in conformity with them, men's relations of production, their economic relations change" (Stalin) . Marx had been emphatic that abstract laws do not exist in history, that the laws of motion which operate in history are historically determinate laws . He indicated thereby that the scientific conception of history could be concretized only through the process of establishing these laws, specific to each epoch, and their corresponding categories . In other terms, through a process of producing concepts on the same level of historical "concreteness" as the concepts of "Value", "Capital" and "Commodity Fetishism" . The "laws" which Plekhanov and Stalin proposed were laws of the historical process in general . The tradition of Vulgar Marxism which drew its earliest sources of energy from the marxism of the Second International, crystallised only under the domination of Stalin . Stalinism uprooted not only the proletarian orientations of Marxism, but its scientific foundations as well . For the dialectic as the principle of rigorous scientific investigation of historical processes - it was, after all, this rational dialectic that was "a scandal and abomination to bourgeoisdom and its doctrinaire professors" (Marx, Capital, Vol . I, Afterword to Second German Edition) Stalinism substituted the "dialectic" as a cosmological principle prior to, and independent of, science . For the materialist conception of history it substituted a theory of history "in general", "converting historical epochs into a logical succession of inflexible social categories" (Trotsky, 1932, Appendix I) . Finally, this rubber-stamp conception of history it represented as a history deja constituee, open therefore only to the procedures of verification . This lifeless bureaucratic conception, steeped in the methods of formalism, produced a history emptied of any specifically historical content, reduced by the forced march of simple formal abstractions to the meagre ration of a few volatile categories . Within five decades of Marx's death, the history written by the Stalinists became as opaque and dreamlike, and hardly as exciting, as the fantasies of surrealism . Superficially these conceptions seemed to conflict, to clash sharply : the cosmological dialectic asserted a principle of continuous flux in the vast ambit of the Universe ; "historical materialism", by contrast, proposed a principle of external recurrence, of the endless repetition of essentially identical mechanisms . Yet beneath this apparent conflict, idealism provided the deeper connection between these conceptions, in the idea, found both in the Academy's conception of history (see Toulmin and Goodfield, 1967) and, much later, in abstract, systematising rationalism (Lukacs, 1968), that reason abolishes the chaotic flux of the empirical order when it grasps those abstract principles of necessity which are its deeper rational foundations . The Academy sought these principles in the geometric layout of the heavens and in the mathematical forms associated with the different material elements . At a certain stage in its evolution Greek thought deprived history of any intrinsic significance . "It became interested only to the extent that history offered clues to the nature of the enduring realities" (Toulmin and Goodfield, 1967) . To its cosmological conception of the dialectic Stalinism thus welded a cosmological conception of history, the ancestry of which lay not in Marx but in the whole tradition of Metaphysics beginning with the Academy . In their Stalinist determination the basic categories of the materialist



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conception functioned as abstractions akin to Platonic Ideas, (Sartre, 1960, p . 36) . The full impact of this paradox is driven home when we compare this formalist construction of history, entirely metaphysical in character, to the real, if limited, progress of the politically domesticated currents of "academic" history . The pioneers who explored, colonized and subjugated the "continent" of History discovered by Marx were not Marxists, by and large : Rostovtzeff, Mickwitz, Ostrogorsky, Pirenne, Kato Shigeshi, Hamilton, Goitein[4] . Moreover, the "most successful revolutionary group of modern historians" (Stedman Jones, 1972, p . 115) around Annales bore only a marginal and indirect relation to Marxism . On this current Marxism exerted its influence only at a distance, through the sociology of Weber and the writings of Sombart and Henri See (5] . In fact, the reverse was true : the few consciously Marxist historians who grew up in this period were largely formed, to one degree or another, in connection with Annales : notably, Labrousse, Lefebvre, Vilar, Pach, Kula[6] . This strictly professional history, not known for purely scholastic disquisitions on "modes of production" and "social formations" came far closer to the conceptions of Marx than the whole tradition of abstract historical formalism which passed for "Marxism" and which, in the period of its confident domination, decisively shaped all later discussions of the "mode of production" .

II PRODUKTIONSWEISE AS "LABOUR-PROCESS" AND "EPOCH OF PRODUCTION" A summary glance at the Grundrisse or Capital would show that Marx ascribed two distinct meanings to Produktionsweise (mode of production) . According to one of these, it was indistinguishable from the "labour process" (Arbeitsprozess), or what Lenin would sometimes call the "technical process of production" . For example, in a brief reference to the domestic system Marx writes : "The manufacturer in the French silk industry and in the English hosiery and lace industries was mostly but nominally a manufacturer until the middle of the nineteenth century . In point of fact, he was merely a merchant, who let the weavers carry on in their old unorganized way and exerted only a merchant's control, for that was for whom they really worked . This system presents everywhere an obstacle to the real capitalist mode of production and goes under with its development . Without revolutionizing the mode of production, it only worsens the condition of the direct producers, turns them into mere wage-workers and proletarians under conditions worse than those under the immediate control of capital, and appropriates their surplus-labour on the basis of the old mode of production" (Capital, Vol . III, p . 329 ; emphasis in this, and following quotations, added) . When capital concentrates these scattered producers into one manufactory, it "no longer leaves them in the mode of production found already in existence, establishing its power on that basis, but rather creates a mode of production corresponding to itself, as its basis . It posits the concentration of the workers in production . . ." (Grundrisse, p . 587) . When Lenin describes this process of the subordination of the simple commodity producer by capital, his vocabulary is more precise : "The subordination begins with merchant's and usury capital, then grows into industrial capitalism, which in its turn is at first technically quite primitive, and does not differ in any way from the old systems of



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production - which is still based on hand labour and on the dominant handicraft industries . . ." (Lenin, Collected Works, Vol . I, p . 438) . For Lenin this incipient "industrial capitalism" which evolves out of the merchant's domination over the small producer is quite compatible with the "system of production" inherited from small-scale handicraft industries . In this form of incipient capitalism capital operates on an inherited labour-process . When he describes this phenomenon, Marx writes : "Here then the mode of production is not yet determined by capital, but rather found on hand by it" (Grundrisse, p . 586) ; whereas Lenin prefers to say, "Capital always takes the technical process of production as it finds it, and only subsequently subjects it to technical transformation" (Collected Works, Vol . I, p . 466) . Again, in the sections dealing with relative surplus-value in Capital, Volume One, we find Marx writing : "With regard to the mode of production itself, manufacture in its strict meaning is hardly to be distinguished in its earliest stages from the handicraft trades of the guilds, otherwise than by the greater number of workmen simultaneously employed by one and the same individual capital" (Capital, Vol . I, p . 322) . "When surplus-value has to be produced by the conversion of necessary labour into surplus-labour, it by no means suffices for capital to take over the labour-process in the form under which it has been historically handed down . . . The technical and social conditions of the process, and consequently the very mode of production must be revolutionized before the productiveness of labour can be increased" (Capital Vol . I, p . 315) . Elsewhere in these sections he writes that an increase in the productivity of labour posits as its condition a revolution in the "mode of production and the labour-process itself" . When he says in the Grundrisse that "agriculture forms a mode of production sui generis ." (Grundrisse, p . 726) he means that it is defined by technical conditions peculiar to itself . In various other passages where Marx made more general statements about the various stages of social development, Produktionsweise figured in a broader and more specifically historical meaning . Modes of production are variously called : "forms of production" (Theories of Surplus Value, part 3, p . 55, p . 430) ; "forms of the social process of production" ; "epochs in the economic development of society" (Preface to Contribution to the Critique of Political Economy, p . 21) ; "epochs of production" (Grundrisse, p . 85) ; "periods of production" (Grundrisse, p . 98) or, finally, "historical organizations of production", (Grundrisse, p . 105) . Here the "mode of production" figures as a "social form of production"[7) (Capital, Vol . II, p . 36, 113) .

III LEVELS OF ABSTRACTION IN HISTORICAL MATERIALISM 1 Wage-Labour as Abstract Determination and Determinate Abstraction All the various tendencies of that abstract scholastic formalism which dominated Marxist theory much later accepted the implicit premise that a scientific history could be derived spontaneously from the materialist conception . In other words, the unity of these various currents lay essentially in a Ricardian methodology of "forced abstractions", (Marx, Theories of Surplus Value, part I) . The definition of the different epochs of production distinguished by Marx required only a closer examination of their specific "relations of production",

CAPITAL & CLASS

which were nothing else than the various forms which the subjugation of labour assumed historically . "Our definition will characterize feudalism primarily as a 'mode of production"', wrote Dobb in his major work of historical interpretation . "As such it will be virtually identical with what we generally mean by serfdom . . ." (Dobb, 1946, p . 35) . As he would explain later in his debate with Sweezy, by "serfdom" was meant "exploitation of the producer by virtue of direct politico-legal compulsion", or "coercive extraction of surplus-labour'[8] (Dobb, "A reply", in Sweezy, et . al, 1954) . According to this formal abstractionism, modes of production were deducible, by a relation of "virtual identity", from the given forms of exploitation of labour . These forms of exploitation, the so-called "relations of production", were the independent variables of the materialist conception of history . This conception, quite unexceptionable as it appears, became one of the most widespread and persistent illusions of Vulgar Marxism . Although neither Marx nor Engels ever consciously reflected on the nature of their categories - the fact that Marx distinguished implicitly between "simply formal abstractions" and "true abstractions", that he saw in his failure to carry abstraction "far enough" the secret of Ricardo's confusions on "value", that he himself subjected "wage-labour" to a careful and painstaking analysis - all go to indicate that in the materialist conception the process of investigating and defining the "relations of production" in any given epoch was far more complicated that Dobb seemed to imagine . To begin with "wage-labour" ; in the dominant inherited notion, a wagelabourer is one who, divorced from any means of subsistence, is forced to sell his labour-power to others . "Wage-labour" in this vulgar definition is dispossessed labour, labour divorced from the means of production, with labour-power as a commodity . When Dobb defined capitalism on a model symmetrical to his definition of feudalism, he called it "a system under which labour-power has itself become a commodity, bought and sold on the market like any other object of exchange" (Dobb, 1946, p . 7) . In this definition of capitalist production, "wagelabour" figures as the commodity labour-power, that is, as a simple category . Marx defined "simple categories" as those which were common to several epochs of production . In this simple determination, "wage-labour", i .e., the commodity labour-power, was known under various forms of social production before the capitalist epoch . Duby tells us that "from the very earliest years of the thirteenth century, the administrators of the estates of the bishop of Winchester spent hundreds of pounds every year on wages" . Moreover, "on the lands of Worcester Abbey the growth of the demesne economy was entirely achieved by taking on wage-labour . . . The accounts of Henry de Bray, a knight of no great wealth, show that men subject to labour-service played hardly any part in the cultivation of the demesne, which was wholly worked by hired labour" . (Duby, 1968 ; p . 262) . In accordance with the requirements of capitalist production, "wage-labour" in this simple determination as the commodity labour-power was the necessary basis of capitalism as the generalized form of social production . Within certain limits, the mobility of labour-power became as essential to the laws of motion of capital as the ability of capital itself to operate on a world scale . But the historical specificity of wage-labour, its character as a specifically bourgeois relation of production, its position as a historically determinate abstraction equivalent to the abstractions "capital" and "commodity fetishism" - derived from quite other



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7

mechanisms than this mere generalization of the labour-power commodity . At this deeper level of abstraction, where it now figured, in the process of Marx's analysis, as a "concrete" category (Grundrisse, p . 100), wage-labour was, for Marx, capital-positing, capital-creating labour . "Wage-labour, here, in the strict economic sense," Marx wrote, "is capital-positing, capital-producing labour", (Grundrisse, p . 463, emphasis added) . In a methodology of forced abstractions which identified relations of production with particular forms of exploitation, the concept of "historical specificity" was radically impoverished . Sweezy, for example, found Dobb's position unacceptable ; he argued that there was nothing specifically feudal in the "exploitation of producers by virtue of direct politico-legal compulsion" (Sweezy, et . al, 1954) . To this Dobb replied that the elements of such compulsion do occur in a subordinate and incidental role in various other forms of economy : "if these elements are merely incidental and subordinate, their presence no more suffices to constitute the form of economy in question as feudal than does the incidental existence of hired wage-labour suffice to constitute a particular society capitalist" (Dobb, "A reply" in Sweezy, et . al, 1954) . In other terms, if we follow out the logic of this argument, what makes an economy "capitalist" is the statistical preponderance of the simple abstraction "labour-power as a commodity" . A simple category becomes a historically determinate category when it becomes historically preponderant. This failure to understand "wage labour" at the same level of abstraction as Marx, in the "strict economic sense" which Marx gave it, that is, as abstract, value-producing labour, hence as labour which already posits the elements of capitalist production, would lead Dobb to quite absurd positions . He would be compelled to argue, for example, that when some of the most deeply entrenched feudal estates of thirteenth century England often based their production mainly or entirely on paid labour ("wage-labour" in Dobb's sense), specifically capitalist relations of production were established .[9] He would have to hold that the Russian feudal estates which utilised slave labour in the sixteenth and seventeenth centuries[10] operated within the framework of a "slave mode of production" . He would have to hold that wherever in history the extraction of surplus-labour was based on "coercion", feudal relations of production predominated, or "coexisted" according to the currently fashionable conceptions . 2 Serf-Owning Capital In fact, Dobb himself might have found several clear indications in the revolutionary Marxist tradition refuting his law of the "virtual identity" of forms of exploitation and relations of production . Analysing the pottery industry of Moscow Gubernia, characterized by the Narodniks as a "purely domestic" industry, Lenin wrote : "The relations in this industry too are bourgeois . . . We see how a minority, owning larger and more profitable establishments, accumulate 'savings', while the majority are ruined . . . It is obvious and inevitable that the latter should be enslaved to the former - inevitable precisely because of the capitalist character of the given production relations . . . Do not think that this exploitation, this oppression is any less marked because relations of this kind are still poorly developed, because the accumulation of capital, accompanying the ruination of the producers, is negligible . Quite the contrary . This only leads to cruder, serf



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forms of exploitation, to a situation where capital, not yet able to subjugate the worker directly, by the mere purchase of his labour-power at its value, enmeshes him in a veritable net of usurious extortion, binds him to itself by kulak methods, and as a result robs him not only of the surplus-value, but of an enormous part of his wages too . . ." (Collected Works, Vol . I, p . 216) . In this industry, then, specifically capitalist relations of production were expressed and mediated through "serf forms of exploitation" . Against Struve, Lenin wrote elsewhere : "The argument is based on extremely strange methods that are not Marxist at all . A comparison is made between "bondage" and "differentiation" as between two independent special "systems" . . . This bondage which he has now demolished as retrogressive is nothing but the initial manifestation of capitalism in agriculture . . . It is purely capitalist in essence, and the entire peculiarity consists in the fact that this initial, embryonic form of capitalist relations is totally enmeshed in the feudal relations of former times : here there is no free contract, but a forced deal . . ." (Collected Works, Vol . I, p . 484, emphasis added) . In these passages Lenin argued, in other words, that as simple commodity producers are subordinated to the power of capital, in town or village, and specifically bourgeois relations of production develop, far from transforming bondage and serf forms of exploitation into specifically capitalist forms of exploitation, i .e., those forms which correspond to the "classical, adequate mode of production of capital", these new relations of production, founded on capital, intensify the existing backward forms of exploitation : these forms remain "feudal" or "semi-feudal" in character, while the relations of production acquire a bourgeois character[11] . Because Lenin understood this mechanism, he could refer elsewhere to "semi-feudal forms of appropriation of surplus-value" (Collected Works, Vol . I, p . 414), just as Kautsky refers, in theAgrarfrage, to the fact that in the early growth of capitalism in European silviculture, "surplus-value" was produced by exploiting a feudally-subjugated labourforce (travail force de nature feodale) ( Kautsky, 1970, p . 25) . Earlier than either Lenin or Kautsky, Marx himself spoke of the production of "surplus-value" in the cotton plantations of the American South, (Capital, Vol . I, p . 234-6) . Although the translation of Moore and Aveling distorted the sense of this passage when it used "surplus labour" for Mehrwert, the meaning was abundantly clear to both Rosa Luxemburg and Preobrazhensky . Luxemburg, with this passage in mind, spoke of "capitalist accumulation with forms of slavery and serfdom" persisting up until the 1860's in the American South, and as late as her own day in Rumania "and various overseas colonies" (Luxemburg, 1972) . In his own commentary, Preobrazhensky wrote, "the important thing is that there are present all the pre-requisites of surplus-value, except the last, which is characteristic of the development of capitalism - the transformation of labour-power into a commodity" ; he proposed "transitional forms of surplus-value" as a more precise characterization, (Preobrazhensky, 1965) . Again, in Capital Volume 3, Marx referred to the evolution of merchant capital in the ancient world transforming "a patriarchal slave system devoted to the production of immediate means of subsistence into one devoted to the production of surplus value" . (Capital, Vol . 3, p . 326f .) . According to an edict of 1721, Peter the Great had allowed the Russian factoryowners to utilise serf-labour . "But if the factory-owner could now carry on his business with the labour of serfs", wrote Pokrovsky, "who prevented the serfholder from establishing a factory?" To Pokrovsky the edict was one of the



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forerunners of "bondage or landlord capitalism", (Pokrovsky, 1932) . Analysing the land question in Peru, Mariategui wrote about the technically advanced capitalist latifundia on the coast, owned by US and British business, in which "exploitation still rests on feudal practices and principles", (Mariategui, 1971, p . 55) . In its theses on the Eastern Question proposed at the Fourth Congress, the colonial commission of the Comintern spoke of capitalism arising in the colonies "on feudal foundations" and developing "in distorted and incomplete transitional forms which give commercial capital predominance" (Comintern, 1922) . Finally, outside the Marxist tradition, Hobson could refer to industrial profits which "represented the surplus-value of slave or forced labour" (Hobson, 1917), and Barrington-Moore to "labour-repressive forms of capitalist agriculture" (Barrington-Moore, 1966) . In all these varied instances - the subordination of the potters of Moscow province to merchant capital, the production of cotton in the slave South, the expansion of landlord capitalism in Rumanian agriculture or Petrine industry, the sugar latifundia of coastal Peru - there was no question of identifying the "mode of production" according to the character of the given forms or relations of exploitation . Nor did any of these instances involve a "coexistence" of modes of production . 3

The

Defining Role

of the Laws of

Motion

"To identify the different kinds of motion is to identify the bodies themselves" . (Engels to Marx 1873) Engels defined the dialectic as the "science of the general laws of motion of the external world" (Engels, Ludwig Feuerbach and the End of Classical German Philosophy) . gut the abstractness of the dialectic in this definition deprived it of its specifically revolutionary fun . ion in Marx . For Marx, as his approval of Kaufmann's review indicates, the dialectic was, more specifically, a science of the laws of motion of the "social process", profoundly historical by its very nature, not only in that it guided only the investigation of social (or historical) phenomena, but insofar as it denied that such phenomena could be understood according to abstract or historically indeterminate (social or historical) laws : "in Marx's opinion", Kaufmann wrote, "every historical period has laws of its own" (Capital, Vol . I, Afterword to Second German Edition) .[12] The dialectic in Capital was thus nothing else than the rigorous, systematic investigation of the laws of motion of capitalist production, in the course of which a series of simple abstractions ("wage-labour", money, etc .) were historically concretized as bourgeois relations of production, or abstractions determinate to capitalism as a mode of production ; that is, reconstituted as "concrete categories", as historically determinate social forms . It follows that modes of production are impenetrable at the level of simple abstractions . The process of "true abstraction" is simultaneously a process of "concretization", of the definition of specific historical laws of motion . Isolating the enterprise of production under capitalism, Marx analyzed these laws at two levels : at the level of each enterprise (or "economic unit" : Lenin) and at the level of the social totality of enterprises. If we generalize from this analysis, at its first level, the enterprise, an isolated entity, figures as a unit of production



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governed by specific laws which impose on it a determinate mode of economic behaviour, converting the given inherited forms of the labour-process into the form posited by their own motion . It follows that the different types of enterprise which form the basic cell of production in a given social form of economy are determined, in the first instance, as units of production, and only crystallize (that is, acquire their classical developed structure) in the determinate form of historically specific modes of organization of the labour-process which posit a particular level of technique and specific historical forms of the appropriation of the objective conditions of labour . At the level of the economy of enterprises, the process of investigation traces those tendencies which derive from the behaviour of each enterprise at the level of all enterprises . In Marx, Capital Volume I comprises the analysis of the enterprise (of capitalist production) as an isolated entity, as individual capital - of the production and accumulation of surplus-value and of the labour-process as a value-producing process, which Marx characterizes as the "direct process of the production of capital" or the "immediate productive process" . The laws of the rising organic composition of capital and of the concentration and centralization of capital are already implied in the motion of individual capital (of capital as an isolated enterprise) . Volumes II and III derive the laws of motion of capital at higher levels of integration (social capital, many capitals) from the laws of motion of capital as an isolated entity, arriving finally at the transformation of surplus-value into profit and the law of the falling rate of profit . The first three parts of Volume III complete the definition of capitalism as a mode of production . Taken as a whole, across its various stages, the substance of Marx's analysis lies in its definition of the laws of motion of capitalist production : the production and accumulation of surplus-value, the revolutionization of the labour-process, the production of relative surplus-value on the basis of a capitalistically-constituted labour-process, the compulsion to increase the productivity of labour, etc . The "relations of capitalist production" are the relations which express and realize these laws of motion at different levels of the social process of production . They are, as Marx calls them in a polemic against Proudhon, "all the economic relations which are merely the necessary relations of the particular mode of production . As modes of production are only a definite totality of historical laws of motion, relations of production thus become a function of the given mode of production . The character of any definite type of production relations, is, in short, impossible to determine until these laws of motion are themselves determined . Finally, apart from deriving the nature of production relations of a given type from the mode of production as such, the defining role of the laws of motion implies that the specific economic rhythms through which these laws become at once historically effective and verifiable are themselves purely derivative economic phenomena . Although phenomena of this order (trends, cycles, intercycles) are in some sense perceptible and open to statistical determination independently of any conception of those laws, of which they are simply the expression, their historical content remains indeterminate without a prior conceptualization in economic theory .[13] Lacking any determination in theory, they retain their character as empirical (quantitative) facts : on certain epistemological premises observation as the origin of theory - they become therefore the basis for positing "laws" of a purely fictitious nature, e .g ., the "acceleration principle" of neoclassical economic theory .

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11

4 The Failure of Abstraction in Vulgar Marxism Even when the later Marxism broke with Stalinism politically, its theoretical conceptions were to a large extent still imprisoned in the deeper framework of a metaphysical-scholastic formalism which deduced its "modes of production" by forced abstraction from the simple categories present in various epochs of production . The classification of "modes of production" which came to prevail on this basis resembled nothing so much as the Periodic Table of Mendeleev, when the discovery of the structure of the atom had yet to explain the physical basis of that Table . The simple abstractions of Stalinist history, its "inflexible social categories", functioned in the historical process as social substances, and this Newtonian conception of history was absorbed into the later Marxism even when it modified or rejected the established sequence of those elements . (In this sense, the "linear notion of historical time" had always been a purely subsidiary characteristic of vulgar historical materialism .) In short, the naive conception of "relations of production" as forms of exploitation of labour, and the classification of "modes of production" according to the simple formal identities which this equation yielded, remained essential links of continuity between the ossified pseudo-Marxism of the Stalinists and the "critical" tendencies of modern Marxism . The persistent underlying confusion between "relations of production" and therefore, in this conception, "modes of production", with the different mechanisms of surplus-labour extraction became the most characteristic symptom of this continuity of problematics in the more recent debates on the "transition" and on the nature of imperialist world economy . Despite their critical character, these debates produced no breakthroughs by way of a specifically Marxist analysis either of the decline of feudalism or of colonial history . It was precisely in the backward countries subjugated to world economy as "colonies" that the process of the mediation of capitalist (value-producing) relations of production by archaic ("pre-capitalist") forms of subjection of labour assumed historically unprecedented dimensions, while feudal relations of production figured predominantly in their pure form of commodity feudalism . Insofar as these relationships were perceived by them, a number of Marxists conceptualized them, completely wrongly, as the structure of the "social formations" themselves . The chaos of simple abstractions was overcome by them through the simple notion, today commonplace to the point of banality, that the colonial "social formations" typically "combined" a number of "modes of production" (which was true, of course, but not at this level of abstraction) . The colonial countries were mainly dominated by two distinct forms of enterprise, radically different in their specific laws of motion and characteristic preoccupations, but converging in their external forms : on one side, in most of Latin America and parts of South East Asia, feudal estates integrated into the network of world commodity exchanges, estates which in their external attributes resembled capitalist enterprises insofar as the major share of their output was produced for national and international markets ; on the other, in the West Indies, most of Africa and large sectors of Asia, capitalist firms operating mainly through archaic ("pre-capitalist") modes of labour-organization at low and generally stagnant levels of technique . Isolated from their specific laws of motion, these enterprises disintegrate analytically into a single type, "capitalist" or "pre-capitalist" according to the specific formal appearances collapsing them together (for Frank



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commodity production, for Laclau the prevalence of servitude of various forms), (Frank, 1971 ; Laclau, 1971) . This collapsing together, from which followed the false conception of the colonial world as a "sector", or unified totality of production relations of one type, became one of the common premises in the debate started by the publication of Frank's book . The whole challenge which the "colonial question" poses for historical materialism lies in establishing these distinct economic rhythms and movements, in tracing their specific origins according to the conjuncture of world economy, and finally in grasping their deeper connections . If the feudal enterprises of the colonial world functioned as commodity producers, the explanation lies basically not in their historical position as colonial enterprises (that is, not in their determinate form and function as elements in a specific type of social formation), but in their specifically feudal character ; and if the capitalist enterprises which dominated most of colonial Africa and large parts of Asia utilised coercive forms of exploitation, we must ask whether the laws of motion of capital are not, within certain limits, compatible with "barbarous forms of labour" . Thus neither the phenomena of colonial history nor the disintegration of feudalism could be subjected to a specifically Marxist analysis as long as relations of production were conceived in their abstract, one-sided determination as "forms of exploitation" . For on this premise, Marxists consciously or unconsciously denied the intrinsic connection between feudalism and commodity production, or between bondage and capitalism, which was established in given historical conditions . Once currency began to circulate on an expanding scale, the whole tendency of feudal production lay in the direction of its integration into circuits of commodity exchange . Moreover, the whole history of colonialism in Africa was basically a history of capitalist enterprises subjugating peasant labour on specifically non-capitalist foundations . Both these phenomena, characterized by Marx as "intermediate, hybrid forms" (Mittelgattungen, Zwittergattungen) (Grundrisse, p . 512) were historically never of purely limited scope or passing significance. The "second serfdom" engulfed most of eastern Europe and large areas of Latin America, where it persisted for well over four centuries, longer than capitalism has existed in its classical form of large-scale socialized production ; and the archaic barbarous forms of capitalist production itself appeared sporadically over a similar historical span - from the early origins of the "domestic system" in medieval Europe, through the sugar plantations of Barbados in the seventeenth century, to the gold mines of South Africa in the nineteenth, the agrarian colonate of Algeria, the Junker estates of Prussia, the tea plantations of Assam and sugar centrales of Cuba, or, finally, in our own century, the processing factories of coastal Peru, cottonn fields of northern Mozambique or white settler farms of Kenya, (see for example, Trapido, 1971 ; Van Zwanenberg, 1971) . Constricted by their problematic of characterization (of simple formal abstraction), the debates among Marxists perceived these facts in a purely onesided, distorted way : that is, the facts were "formulated" incorrectly even when they were perceived . Sweezy perceived a certain connection between the decay of feudalism and expanding commodity relationships, but formulated the connection as a collapse of feudal economy . Dobb, and later, in Dobb's tradition, Laclau perceived the link between commodity production and the intensification of servitude, but concluded, from their famous "virtual identity", that the market

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"consolidated" feudal economy, (Dobb, "A reply" in Sweezy, etal ; 1954 : Laclau, 1971) . Frank perceived the intrinsic bond which tied the feudal haciendas to the market, only to dissolve it immediately by defining them as "capitalist", (Frank, 1971) . Bettelheim argued, correctly, that the exploitation of colonial peasants by capitalist firms had to be "rooted at the level of production", only to reconstitute the relation at the level of exchange in saying that these peasants sold not their labour-power but their products, (Bettelheim, 1972, p . 300) . The new currents of "political economy" influenced by Arrighi and Amin correctly defined the role of the "labour reserves" in Africa in relation to the needs of capital accumulation, only to characterize them as distinct "modes of production" perpetuated by capital, (Arrighi, 1970 ; Amin, 1974 ; Amin 1976) . Marx himself had proposed the view that "commerce has a more or less dissolving influence everywhere on the producing organization, which it finds at hand and whose different forms are mainly carried on with a view to use-value" . (Capital, Vol . II, p . 36 ; Vol . III, p . 326) . When the world market crystallized after the revolution of the sixteenth century, these "producing organizations" or enterprises, as we have called them, consisted mainly of two types : feudal estates and independent peasant family-labour farms . The progressive integration of these types of enterprise into commodity circuits convulsed both, but only on the longer historical scale of several centuries . Both the feudal estates and the peasant farms entered a process of dissolution, but neither "collapsed" or disappeared immediately . Moreover, this process of dissolution acquired, in the case of feudalism, a "combined" character . Feudal production (the feudal mode of production) both crystallized and decayed within the framework of expanding market relations : the feudal estate both acquired its "classical", fully developed, structure and reached its inherent limits as a commodity-producing enterprise . By contrast to both forms, the slave plantations, normally regarded as "pre-capitalist", disintegrated by an entirely different process, not immediately connected with the expanding volume of exchanges in whose vortex they were, in fact, born as "centres of commercial speculation" .

IV READING HISTORY BACKWARDS When the revolutionary Marxist tradition took up the analysis of world economy early in the present century, the context was set by an international division of labour centred on the requirements of capital-reproduction on the basis of largescale industrial enterprises . The classical conception which now evolved in the writings of Lenin, Luxemburg and Bukharin saw in the major tendencies of evolution of world economy the separate phases of the reproduction-process of capital : the conversion of value into money and of money, as the pure form of value, into capital . The debate which began closer to our own period about the early phases of evolution of world economy inherited this classical conception and converted its points of arrival into points of departure . If to the Marxists of the Second and Third Internationals the contemporary world market was an entirely capitalist phenomenon, it seemed evident to Frank that world economy had been capitalist from its inception . So deeply entrenched was this notion, that even when he disputed Frank's position that capitalism prevailed in Peru or Chile from the



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earliest stages of the Spanish colonization, Laclau accepted his premise that metropolitan-industrial capital provided the major impulse behind this process of colonization . For Frank, colonization converted the countries of Latin America into "sources for metropolitan capital accumulation and development" ; for Laclau, too, world economy was from its inception an expression of the accumulation process : "the growth of the system depends on the accumulation of capital, the rhythm of this accumulation depends on the average rate of profit, and the level of this rate depends in its turn on the consolidation and expansion of precapitalist relationships in the peripheral areas" (Laclau, 1971, p . 37) . Behind their formal dispute about "characterization" the two arguments shared this single premise : whether one characterized the forms of economy in Latin America as "feudal" or as "capitalist" - that is, whether one "deduced" their character from one or other of the two simple abstractions specified earlier - the point was that world economy evolved in this period as a response to the expansion of industrial capitalism . If this was so evident both to Frank and Laclau, the only "problem" which remained was the formal problem of characterization : "the problem is to define in each case the specificity of the exploitative relationship in question" which was no different from saying that there was in fact no problem at all, or that the problem was purely formal, because this so-called "specificity" was already self-evident at the level of the simple abstraction . For example, for the plantations it required literally only a single sentence to establish this "specificity" : "in the plantations of the West Indies", Laclau wrote, "the economy was based on a mode of production constituted by slave labour" (Laclau, 1971, p . 30) . It was as simple as that . Inherent in this form of argument - not peculiar to Laclau or Frank, but deeply entrenched in the whole tradition of "Marxism" inherited from the twenties - is the following underlying premise, which is inseparably bound up with the formal problematic of "characterization" : in all phases of its evolution, the structure of world economy posits only one element of explanation, namely, the demands of capital-reproduction . From this it follows that modes of production other than capital which coexist within the structure of that economy figure only as "specific" forms of subjugation of labour perpetuated over time by the requirements of industrial accumulation . These are "modes of production" entirely deprived of their own laws of motion, vegetating on the periphery of an industrializing Europe like a vast reserve of labour-power periodically called into action by the spasmodic expansions of metropolitan capital . For purposes of propaganda it would be entirely adequate to relate the existence of slavery in the cotton plantations to the requirements of the English textile industry, or the intensified exploitation of serf-labour in the grain-exporting nations of eastern Europe to the fact that capital requires a large volume of grain at low prices . But Marx was aware that a scientific enquiry was an entirely different sort of exercise to a propagandistic tract, and it was this awareness that initially distinguished Marxism from Ricardian and petit-bourgeois socialism .

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V SLAVERY AND THE WORLD MARKET 1 "Slavery" To start with this "mode of production constituted by slave labour", it is a striking fact, impossible to ignore, that within the Marxist tradition, as outside it, the slave plantations of the American south were never always as simply characterized as Laclau imagines . For example : Marx wrote that in the English colonies which produced tobacco, cotton, sugar, the colonists acted "like people, who, driven by motives of bourgeois production, wanted to produce commodities . . ." (Theories of Surplus Value, part 2, p . 239) . He described these plantations as enterprises of "commercial speculation" in which "a capitalist mode of production exists, if only in a formal sense . . . The business in which slaves are used is conducted by capitalists" (Theories of Surplus Value, part 2, pp . 302-3) . He described the exploitation of slave labour as a "factor in a calculated and calculating system", driven by compulsion to produce "surplus-value" (Capital, Vol . I, p . 236) . Commenting on this passage, Preobrazhensky spoke of "undeveloped, transitional forms of surplusvalue, which are not completely characteristic of a developed capitalist mode of production" (Preobrazhensky, 1965, p . 185) . On the other hand, for Kautsky the slave plantations of America were a form of "largescale production of a precapitalist type" (Kautsky, 1970, p . 205) . Lenin, who accepted this characterization directly under Kautsky's influence, later argued, in a polemic on American agriculture, that there was really "no foundation for the common practice (sic) of classifying the (slave) latifundia as capitalist enterprises", that these latifundia were "frequently (sic) survivals of pre-capitalist relationships - slave-owning, feudal or patriarchal" which typically manifested the lowest percentages of "improved acreage" (Lenin, Collected Works, Vol . XXII, "New Data on the laws governing the development of capitalism in agriculture" .) . Much more recently, in one of his books Genovese argues that the "slave regime in the British Caribbean bore the clear stamp of capitalist enterprise", and that sugar was grown on "large plantations of a decidedly bourgeois type" run by "capitalist slaveholders", (Genovese, 1970, p . 69) . But earlier, in his major work of interpretation, Genovese had also written, this time with reference to the American plantations, "the planters were not mere capitalists (sic), they were pre-capitalist, quasi-aristocratic landowners who had to adjust their economy and ways of thinking to a capitalist world market " (Genovese, 1966, p . 23) .[14] In a review of the Frank-Laclau debate, J . Mandel thought the plantations were "intensely profit-oriented commercial enterprises" and the plantation owners "profit-maximizing entrepreneurs", i .e . capitalists as we normally understand them, but added, to be on the safe side, that their exploitation of slave-labour made it "impossible by Dobb's definition to classify them as capitalist" (Mandel, 1972) . In fact, as we know, with the single exception of Lenin, the major argument proposed by all other writers against classifying the slave plantations as a form of capitalist enterprise was precisely that "by Dobb's definition", by virtue of his "virtual identity", they could not be so because they exploited slave labour[15] . Lenin himself proposed a quite different argument, and one which, as we shall see in a moment, contained a substantial insight, namely, that the level of technique and the extensive character of such an enterprise were sufficient to preclude their characterization as "capitalist" in the strict sense in which the various other types



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of agricultural enterprise in other zones of America were "capitalist" . It would have made practically no sense for Lenin to have argued that the prevalence of slave-labour as such made the plantations "pre-capitalist", because, quite apart from his early descriptions of the various "medieval" forms of capitalism prevalent in the Russian countryside, he also wrote, in that period : "our literature frequently contains too stereotyped an understanding of the theoretical proposition that capitalism requires the free, landless worker . . ." ; this was true, Lenin argued, as "indicating the main trend" (cf, Section 111 .1 . above where we referred to wagelabour in its simple determination, i .e ., free labour, as the necessary basis for capitalism as the generalized form of social production), but agrarian capitalism was compatible with unfree labour at specific stages in its evolution . (Lenin, Collected Works, Vol . III, p . 179) . To indicate only briefly, and entirely by way of hypothesis, the framework for a more rigorous Marxist understanding of the slave plantations : we argued earlier that the analysis of a given historical form of production treats its constituent enterprise basically as a unit of production, an entity governed by specific economic laws, and regards the emergence of its specific form of organization of the labour-process, the process which corresponds to its laws of motion, only as a moment of its "crystallization" . The slave plantations were commodity-producing enterprises characterized by speculative investments ("centres of commercial speculation") in the production of absolute surplus-value on the basis of landed property . Production was carried on in such enterprises at low, "capital-specific" techniques which posited enlarged simple cooperation subject to economies of scale .[16] Accumulation in this form of speculative capitalist enterprise asserted itself only in the long run, as a relatively slow and mainly sporadic tendency dominated by feudal modes of consumption . The progress of such an enterprise would thus present the external aspect of a series of simple reproduction cycles expanding slowly to higher levels according to a discontinuous and bunched rhythm of investments . At the level of all enterprises, this purely quantitative character of accumulation[17] and its "natural" basis in the ownership of land (here the capitalist and landlord being one and same person, as Marx indicated) would progressively convert the excess of commodity-values over prices of production inherent in the low technical composition of capital[18] into "surplusprofits" appropriated by the slaveowners themselves as "absolute rent"[191 . For we know that historically plantation land of a specific fertility would become progressively a monopoly of only the most substantial or at least earlier-established slaveowners, and thus present a "barrier" to the free investment of capital, as much as land incorporated as feudal property constituted such a barrier and thus generated "absolute rent" . It follows that even when cost-prices rose as the natural fertility of the soil declined through intensive exploitation at stagnant levels of technique, a crisis of profitability could be postponed indefinitely for a certain range of market-prices . This specific form of enterprise therefore differs from the classical form of capitalist enterprise mainly in its lower intensity of accumulation and in the fact that accumulation is here compatible with a constant composition of capital, and therefore with stagnant or declining levels of labour-productivity . Increases in the rate of exploitation depend not on the conversion of necessary labour into surpluslabour, i .e . the production of relative surplus-value, but on an intensification of

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labour or on a lengthening of the working-day to the limits of physical endurance . The self-expansion of value no longer figures as an entirely autonomous and dominating force compelling each enterprise to reduce cost-prices to a minimum, but acquires a purely relative and sporadic existence as a function of feudallydominated habits of consumption and display . Plantation profits, we know, financed not only the (quantitative) expansion of the enterprise itself, but, probably to an even greater extent, peerages, marriage alliances, seats in parliament and the purchase of feudal properties (Pares, 1960; Sheridan, 1%5) . In short, the slave plantations were capitalist enterprises of a patriarchal and feudal character producing absolute surplus-value on the basis of slave-labour and a monopoly in land . This heterogeneous and, as it appears, disarticulated nature of the slave plantation generated a series of contradictory images when the early Marxist tradition not equipped with the same abundance of material available to-day, attempted its first characterizations . 2 The Nascent World Market The sugar produced by enterprises of this nature in the Caribbean and exported by them mainly to England, France and Holland, became the leading item of a major re-export trade within Europe itself in the course mainly of the seventeenth century . (cf . Davies, 1954) . Given the circumscribed and localized distribution of a specifically bourgeois class in Europe at that time, the growth of this re-export trade suggests that the demand for sugar and other types of plantation produce was not confined exclusively to the established mercantile, or to the older incipient industrial-capitalist classes of England or Holland . Moreover, we know also that the period when English sugar displaced Brazilian sugar from the markets of northern Europe was itself a period of rapid English commercial expansion in the Baltic . The deeper meaning of this connection becomes evident when we note that throughout this period and in fact much earlier, Europe had been divided into three more or less distinct price-zones whose centres of gravity tended to fluctuate while preserving a certain basic uniformity . On the eve of the seventeenth century, according to the price-series constructed by Braudel and Spooner, the price of grain in England, France or Holland was 200-300% higher than the price of Polish grain . (Brandel and Spooner, 1%7) . The growing volume of grain exports from the port of Danzig had become a crucial mechanism in stabilizing grain prices in those countries in the period of rapid demographic reconstruction and currency depreciation which began around 1570 . So intense was this integration of Polish grain into the economy of western Europe that Pokrovsky wrote in the History of Russia : "the price of rye in Danzig determined the cost of living in Madrid or Lisbon" (Pokrovsky, 1932), and Marian Malowist tells us that "every disturbance in the delivery of grain from the coasts of the Baltic, especially from Poland, produced a rise in the cost of living in Holland and other provinces of the Low Countries . . ." (Malowist, 1959) . But how were the English, Dutch or Portuguese to pay for these imports? Before the export of English textiles to Portugal helped to balance England's trade with the Baltic by sucking bullion out of Portugal, (Fisher, 1971), this role of payments-mechanism in the expanding grain trade devolved partly on the export wool trade, which required a massive drive to expropriate the domestic peasantry, and partly on the re-export of colonial produce to the feudal classes of eastern Europe . From this we can draw



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two conclusions . Firstly, the demand which sustained production in the capitalist slave enterprises of the West Indies depended to some degree on the expansion of feudal incomes in the grain-exporting zones of eastern Europe . Secondly, these enterprises were compelled to operate within a framework of mercantilist control because colonial produce, as an element of feudal consumption, became one important means of financing grain imports from the feudal estates . In the seventeenth century, at any rate, world economy presented a vastly different picture from the industrially-dominated world market of the nineteenth which formed the basis for the early Marxist theories of imperialism . For at that stage the structure of world exchanges linked the capitalist slave plantations of the Atlantic to feudal estates in Poland through a complicated network of basically mercantile and financial interests centred in Amsterdam and London . Each of these enterprises fitted into this structure of world economy as specific autonomous units of production driven by their own laws of motion . If this is evident for the slaveowners, "driven by motives of bourgeois production", it now has to be established for the Polish estates .

VI FEUDAL PRODUCTION 1 The Estate The feudal economy was an economy of consumption based on a level of technique that was so rudimentary that a single aristocratic household required for its support a vast arable area . In the earliest period for which estate inventories become available the ratio of output to seed barely exceeded 2 :1 . In Europe on the eve of the fourteenth century, after a long swing of slow agricultural progress connected with improvements in ploughing technique and a gradually expanding triennial rotation, maximum grain yields oscillated around 4 :1 . Finally, as late as the eighteenth century, both in the fertile Po Valley of northern Italy and in the black earth region of Russia, the major cereals gave a yield of 3-5 :1 .[20] For this low productivity of labour, the estate, the basic enterprise of feudal production, compensated by practising an extensive economy . As the level of technique progressed only slowly, over several centuries, as our figures indicate, the estate's output was a function of the surface in production, and the surface which the lord could bring into production in any given period was a function of the disposable mass of labourpower (Kula, 1970) . The limits to the mobilization of this mass of labour-power, when not determined technically by the available quantity of draught-animals, were imposed socially by the relation of forces, the possibility of flight and the relative degree of "overpopulation" . The average volume of output was thus determined ultimately by the socially disposable mass of labourtime .[21] As a form of enterprise, the feudal estate normally consisted of separate manorial units related metabolically as parts of a single economic organism centred on the lord's household . The structure of these units varied from those in which demesne arable was of no significance and feudal incomes consisted mainly of monetary payments based on tithes and seigneurial rights (seigneurie banale), to others in which demesne economy based on slave or serf labour predominated . In the feudal epoch as a whole, the estate's economy generated two relatively

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distinct modes of organization of the labour-process . The first of these, defined by the insignificance of demesne, posited a higher elasticity of surplus in the peasant sector and a distribution of arable between peasant holdings and demesne, which conferred on the former the character of a sector of small peasant production, with the peasants disposing of the whole of their labour-time ; here the rate of feudal exploitation was not immediately evident in the ratio of the two arables . I n the second mode of organization of the labour-process the peasant holding was a "subsistence plot" or "wage in kind" (Lenin, Collected Works, Vol . I, pp . 189, 450, 493), and the totality of these holdings a sector of simple reproduction (Kula, 1970) ; here the distribution of the peasants' necessary and surplus labour-time would tend to coincide directly with the distribution of arable between peasant holdings and lord's demesne . Taking the feudal epoch as a whole, the peasant holdings thus figured in two determinate forms and functions : as small peasant farms capable of generating a more or less substantial surplus over the peasants' immediate requirements of consumption, and as subsistence plots adapted to the reproduction of labour-power . As the organization of the labour-process became effective within the framework of the manor, and as most estates comprised several manors, the ratio of demesne arable to present arable would tend to fluctuate quite sharply between the different manors, estates and regions, and the size of peasant holdings (manses) to vary even more sharply at any given time . In general, a casual survey suggests that the area occupied by demesne varied between 13% and 45% of the total area of a given estate or manor, with a tendency to vary inversely with the size of these units ; while peasant holdings ranged from miniscule plots of 10 acres or less to substantial farms of 100 acres . If we now ask, which of these forms constituted the classical or fully developed structure of the feudal enterprise, the answer should not be difficult : the enterprise only "crystallized", that is, acquired its classical structure, when the ratio of the peasant's necessary to surplus labour-time was directly reflected in the distribution of arable between demesne and peasant holding . In other words, the form of organization of the labour-process specific to the feudal mode of production in its developed form would be one which permitted the lord to assert complete control over the labour-process itself - in which the peasant holdings assumed the form of, and functioned as, a sector of simple reproduction . Within the framework of this type of economy, and regardless of the structure of the labour-process, the production of wealth was subordinated to habits of generosity, display and consumption . Pirenne maintained that in the "patriarchal" organization of the big estates the notion of "profits" in the sense of value which expands itself, was utterly alien (Pirenne, 1969, p . 56) ; as we know, the only "investments" which such an enterprise ever undertook were those which were strictly necessary for the requirements of simple reproduction (and mainly, the periodic reconstitution of manorial livestock) . In this sense, the lord's consumption constituted the only "motor-force" of expansion in the feudal economy . (Duby, 1973, p . 200) Yet Pirenne's conception of the estate as a "patriarchal" organization is misleading (and did, in fact, mislead Sweezy) . The determining role of consumption did not imply an ideal of isolationism, or any basic economic irrationality . We know that as the twelfth century progressed, a large number of agricultural treatises appeared which regarded agriculture as a "mechanical art" worthy of



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scientific interest and capable of systematic improvement . We know that in gradually going over to a triennial rotation, the estates spread the risks of a bad harvest more widely, for in years when excessive moisture destroyed the winter crops, spring grain would come to the rescue. Above all, of course, we know that when the demand for agricultural produce expanded, demesne cultivation accounted for a major share of the marketed output . The fact that in phases of rapid inflation estates would tend to convert from fixed monetary payments to "direct management" implies that some mechanism of "opportunity cost" calculation operated . But the spread of these "Business-like" attitudes, as they were characterized by Sweezy, (Sweezy, "A critique" in Sweezy et al, 1954) was not only compatible with the character of the feudal economy as an economy of consumption, but inseparably tied to it . In a sense, this compatibility and basic link between feudal consumption and business-like attitudes is the central point . The consumption requirements of the nobility and the perpetual need to adjust the level of income to rates of consumption were the most powerful determinants in drawing both lord and peasant into production for the market : the lord directly through the consolidation of a demesne economy, the peasant indirectly through the expanding weight of monetary payments . In phases of ascending production for the market (England c .1250, Poland and Hungary c .1600) it is quite probable that most commodity-producing estates rarely sold less than half their net output . For example, on the 32 dependent manors of the Bishop of Winchester, for which detailed time-series are available, in average years close to 80% of net output was sold ; on 6 of the Duchy of Lancaster's manors in Wiltshire, 90% (Duby, 1968, p . 136) . Even outside periods of high grain prices, the proportion of marketed output was fairly high : c .1150 one of the manors of the abbey of Cluny was selling the whole of its wheat output and 33% of its output of rye (Duby, 1968, p . 211) ; two hundred years later, when demesne production was in partial decline in the West, but the full impact of the incipient recession had still to come, a small estate in Essex for which figures are available, reserved 21% of its total wheat receipts for seed, paid 19% in wages to workers on the demesne, sent 23% to the lord's household for direct consumption, and sold the remaining 30%, which comes to 37% of net output (deducting seed), (Britnell, 1966) . If these preliminary examples do not suffice, a different order of evidence might be used . The "maximization of sales" became a major slogan of the various treatises addressed to the Russian nobility of the eighteenth century . According to Confino, "the basic idea underlying the economic treatises of this period was the realization of profits and expansion of feudal incomes : these became the major goal of the estate's economic activity, the main obsession of the pomescik and the chief duty of the bailiffs . . . Ryckov's book of instructions to estate-managers began, 'Our main interest in this book is how the income and profits of the lord may be expanded"' (Confino, 1%3) . In another treatise, Bolotov described the most competent estate-managers as those who could maximize the volume of sales at the best price, while ensuring the immediate consumption needs of the household (Confino, 1963) . Far from facing the "alternatives" of producing for the market or producing for "use",[22] most estates were organized according to a certain internal specialization, with some manorial units producing mainly or entirely for the market and others for household consumption . In both aspects, the organization of the estate

MODES OF PRODUCTION IN A MATERIALIST CONCEPTION OF HISTORY

21

was a function of the socially determined consumption needs of the lords . In their consciousness, commercial production and feudal "subsistence" were not separate, conflicting aspects of their social practice as a class, for, as one of the Russian treatises indicated, the production of feudal profits was geared to the goal of feudal consumption (A .L . Komarov, cited by Confino, 1963, p . 141) . This preliminary outline of the basic characteristics of the estate is sufficient to imply two conclusions. (i) Production for the market did not entail competition between the different enterprises . What was mainly important to this type of enterprise was the preservation of a certain proportionality between income and consumption, not the rapid expansion of incomes from one year to the next on the example of a capitalist firm . In a capitalist economy the market exerts its domination over each individual enterprise by compelling it to produce within the limits of a socially average level of productivity . The existence of this social average posits a mechanism of cost-calculation which was absent in conditions of feudal production . To be more precise, for a bourgeois enterprise the "absolute limit of exploitation" is constituted by the average profit of capital ; for the small commodity producer who sells the whole of his output, the limit is set by the costs of simple reproduction, comprising mainly his "wage" . In the medieval world, as feudal consumption became bound up with the expanding currents of circulation and implied progressively higher levels of monetary expenditure, a specifically feudal structure of accounting tended to crystallize : "costs" were defined mainly as those items of expenditure which required an outlay of cash, and "profits" as all items of monetary receipt . As items of expenditure, the elements of consumption and production were merged into a common category, something like the "sum of all expenses", which was then deducted from receipts to obtain an apparently spurious "net balance" (Levett, 1927) . This ratio of receipts to expenditure was calculated as the ratio of two consolidated sums ; even when, on the side of income, the proceeds from the sale of various crops figured as separate items of receipt, costs of production were distributed under various agricultural operations, so that no attempt was made to determine individual monetary costs of production, or even the monetary costs of crop production as a whole . As all items of cash income were regarded as "profits" independently of any mechanism of costcalculation, crops were more or less "profitable", not according to their monetary rate of profit but according to the volume of cash which they brought in .[23] Any increment in crop production which increased the total volume of these receipts, however marginal its contribution, was therefore "profitable" . That is to say, for a given distribution of productive forces, even if it made sense to sell a given output at the highest price, sales would nonetheless continue over a wide range of prices below this bound . In short, in an economy which dissociated production from the "rational" calculation of costs and which regarded "profits" not as a ratio but as a simple magnitude, the "limit of exploitation" could onl' be a vague and elastic concept, and one which could assert itself only in the longer run in a sort of feudal "scissor's crisis", as the hiatus between income and consumption widened over a number of years . (ii) Once the estates established a certain connection with the market, the lord's income became a function of three variables : (a) the volume of gross output, which would tend to fluctuate sharply from one year to the next ; (b) the coefficient of the marketable surplus, whose elasticity would vary more or less



22

CAPITAL & CLASS

directly in proportion to gross output: (c) the current price of grain (Kula, 1970) . As no estate had any control over prices, an expansion of manorial incomes depended mainly on expanding the marketable surplus . As the level of internal consumption was more or less constant, the volume of this surplus, sold on the market, would vary proportionately to the volume of the harvest . At the existing level of technique, the average productivity over time was a function of the surface in production and therefore of the disposable mass of labour-time . It follows that in these conditions the "maximization" of feudal profits necessarily implied incursions into the sector of small peasant production, from which the estates drew their sources of labour . 2 Peculiarities of the "Second Serfdom" The feudal mode of production prevailed in England, for example, in its period of "high farming" c .1230, as well as in Poland c .1600, when most of western Europe was becoming heavily dependent on Polish grain exports . In England in that period, as in Poland, the larger and better organized estates were extensively involved in the production of grain for the market, selling up to 80% of net output. But a deeper comparison would reveal differences of some interest . Of England, we are told by Duby, "to associate the tenants with the labour of the demesne in the thirteenth century was an anachronism . . . The revival of forced labour seems, therefore, to have been very limited : it was only temporary, since it declined definitely on the monastic estates after 1275, and was restricted in scope, since labour-services were only used to reinforce those of manorial employees" (Duby, 1968, p. 262-3) . Seventeenth century Poland, on the other hand, was experiencing a substantial feudal offensive, with the nobility beginning to "limit the area of their peasant's cultivation, and, in this way, enlarge their own land" (Malowist, 1959) . If we take these cases as proto-types of the first and second serfdoms respectively, it is clear that the tendency of demesne consolidation at the cost of peasant production, which they both reveal, prevailed with varying degrees of intensity in these conjunctures . The extent to which it prevailed, and the intensity of its effects were a function of broader economic factors . The possibility of expanding manorial incomes or safeguarding feudal consumption by means other than direct management depended mainly on the elasticity of the surplus in small peasant production, while demesne farming could itself be organized mainly on the basis of paid labour . At any rate, whether estates converted to monetary payments or retained demesne cultivation with the use of paid labour, both processes posited a certain level of currency circulation . At a deeper level of analysis, therefore, the first significant contrast between the epoch of "high farming" and the "second serfdom", between the two extremities of Europe, is located here . In the West the enormously expanding weight of the seigneurie banale on which Duby lays so much stress in his most recent work (Duby, 1973), and the growing volume of monetary payments by the peasantry, implied proportionate increases both in the stock of money and in the velocity of its circulation . The leasing of demesne lands, the imposition of jurisdictional taxes, entry fines and "permanent rents", the movement of commutation and the growing volume of peasant indebtedness - all cash transactions or transactions based mainly on cash - make no sense on any other assumption . In relative terms, the level of currency circulation was quite different in the East : in Poland it actually diminished

MODES OF PRODUCTION IN A MATERIALIST CONCEPTION OF HISTORY

23

in the early part of the seventeenth century, compelling the nobility to adapt to this situation by intensifying the economic isolation of the estate and establishing in this way, as Kula remarks, a "mechanism of closed monetary operations" (Kula, 1970, p . 109) . In the second place, conversion to monetary payments required a peasantry capable of producing for the market ; and these surpluses would tend to derive mainly from the more substantial households . Although in the west the expanding weight of population after the early phases of arable colonization led into a spontaneous fragmentation of most peasant manses, both the gradual improvements in productivity and the relaxation of feudal pressures on the peasant's surplus had enabled this sort of peasantry to establish itself . Once the structure of feudal exploitation itself became more diversified and fluid, this sector of the peasantry, the real base of peasant commodity production in the feudal social formations, could consolidate its position to an even greater extent . In the East, the whole process of differentiation was more or less repressed up until the nineteenth century . The peasants' share of the total volume of grain sales was therefore never very significant - in late Czarist Russia landlords accounted for 90% of the marketed output of grain, and the eventual conversion to monetary payments (obrok in the Russian countryside) required migrations of the peasantry in search of employment (otchod) . Finally, the momentary vigour of demesne farming in England was supported by an extensive use of hired labour and consequently closely linked to the overpopulation of the English countryside . Earlier conditions connected with clearance operations and the expansion of arable, viz improvements in agricultural techniques ; gradual increases in productivity ; the shift to a grain-centred system of husbandry and the connected shifts in the peasant's diet ; the conversion of slave gangs into serf households - all favoured a rapid growth of the serf population . By the middle of the thirteenth century, as this movement of grain expansion came to a halt, a new phase of "over-population" was becoming evident (Duby, 1%8, p . 286) . In England the proportion of serf households which at that time was living at, or even substantially below, subsistence was close to 80% . The emergence in these conditions of a village proletariat expanded the supply of labour at a subsistence wage, promoted the use of such labour on the medium and small estates insufficiently provided with villeins, and attracted even the bigger estates by its greater seasonal flexibility . About a third of the English peasant population worked for "wages" in this period .[25] This increasing use of paid labour was closely linked with the expansion of monetary payments and with expanding levels of currency circulation . By contrast, in Poland, Ukraine, Lithuania, the low level of currency circulation and the high level of wages made an extensive use of such labour practically impossible . Unlike the lower layers of the nobility in England, who depended largely on reserves of free labour, the smaller Russian landowners, the svoezemtsi, who were their counterparts, were compelled to work their own lands, aided by slaves (Blum, 1%8, p . 206) . "The Russian landowners", wrote Marx, "complain about two things : first, about the lack of money-capital . . . The second complaint is more characteristic . It is to the effect that even if one has money, not enough labourers are to be had at any time" (Capital, Vol . II) . In short, a dearth of cash, a more backward differentiation of the peasantry, and a scarcity of free labour were the basic conditions distinguishing the "second serfdom" from the so-called "classical" feudalism of the medieval West .



24

CAPITAL & CLASS

3 Commodity Feudalism as the Pure Form The greater intensity and more primitive character of the "second serfdom" were thus closely conditioned by the real rhythms of economic activity implicit in the movement of population and currency . But this greater primitiveness should not be confused with a more backward development of feudal production . In this primitiveness of the "second serfdom" we find, in fact, an important clue to the real logic of the feudal enterprise . In the West, which is generally characterized as the locus of a "classical" feudalism, the estate attained its really classical structure, as defined earlier (Section VI, 1), only sporadically and then mainly in the period of "high farming" ; that is, as a temporary and even abrupt prelude to the long process of diversification which followed towards the close of the thirteenth century . Surveying the development of feudal economy across the whole of this early epoch, it is undeniable that as feudal enterprises, the estates in the medieval West possessed a far more fluid and diversified structure than those which sustained the second serfdom . There labour-services were for at least two centuries (centuries central to the epoch of "classical" feudalism), a less powerful pressure on the peasant's labour-time than the seigneurie banale, as Duby argues . Even in the brief outburst of high farming, when the estates turned to commodity production and attempted to compress the sector of small peasant production into totally subordinate reserves of serf labour, the largest and best organized estates, such as those of the Bishop of Winchester, continued to derive a major share of their income from more archaic monetary payments and from marriage and entry fines . Thus the form of organization of labour based on the partial autonomy of small peasant production persisted even in this phase of intensified labour-services . By contrast, in the central period of East European feudalism, this distinction of forms was of practically no significance : the large mass of the peasantry were reduced to the position of "serfs", i .e . bound by labour-services ; and the character of feudal enterprise in these countries was typically far less fluid, far more bound up with the exploitation of "serfs" than in the West some centuries earlier . In other words, the feudal enterprise in the early epoch of so-called "classical" feudalism crystallized, or acquired its truly classical form, (with the labourprocess reducing the sector of peasant production to a reserve of simple reproduction), only sporadically ; and then only rarely in its pure form . In the grainexporting countries of the "second serfdom", the predominant form of feudal enterprise was the developed form . The primitiveness and barbarity of their social relations were an expression of the maturity of feudal relations of production, of their relative purity . The clue to this contrast lies in the origins of the "second serfdom" . When the countries of Eastern Europe plunged into this epoch a world market was already in the process of formation . Merchant capital had already established an important and expanding grain trade, which in the course of the fourteenth century was progressively integrating the Baltic into a European division of labour . Marx himself, and most later Marxists, assumed as a matter of course that "feudalism" evolved by a simple progression from labour-services to monetary payments through an intermediate form of "rent in kind" . But if, in order to explain the peculiar connection between the purity of the "second serfdom" and its location in an emerging world market, we return to the early patriarchal Europe

MODES OF PRODUCTION IN A MATERIALIST CONCEPTION OF HISTORY

25

of the Carolingian period, we find that labour-services were of practically no importance on the manors of Gaul, Germany, Flanders and Lombardy : in this vast

region of early feudal Europe the demesne utilised slave labour, and the peasantry were exploited through payments in kind (Duby, 1968, p . 53-4 ; Duby, 1973, p . 51-2 ; p . 105) . In a famous article, Kosminsky set out to show that the monetary payments which predominated in England much later were only partly the result of commutation, and that a certain proportion of these payments derived from a more archaic structure of money rents (Kosminsky,

1935) .

In the debate on the

"transition", to make the point that market relations did not accelerate the decay of forced labour in England, Dobb cited this article by Kosminsky ; he argued that serfdom (labour-services) disappeared "earliest" in the backward and commercially remote regions of the north and west . But Kosminsky's thesis was different : in these backward regions labour-services had probably never prevailed . Thus both in England and on the Continent there were substantial zones where labourservices had been of little importance originally, and where payments assumed the form of produce or money . In Kosminsky's terms, the structure of the manor evolved independently of any formative influence of payments in labour. Eastern Europe in its own phase of backward patriarchal isolation provides even clearer evidence . In Hungary in the fifteenth century the peasantry was exploited predominantly in the form of money rents and produce rents ; Pach notes that a demesne economy as such had barely developed at this stage (Pach,

1966) .

Around this period, in Mecklenburg, Prussia, Bohemia, Poland and Russia feudal incomes derived, as in Hungary, mainly in the form of cash and kind payments (Blum, 1957) . The significance of this fact is enormous . It suggests that not only did the crystallization of feudal relations of production find its only true and widespread expression in the "second serfdom", (i .e . the more backward eastern periphery of Europe) ; but the feudal estate only crystallized, (i .e ., acquired its developed, "adequate" form) not in the relative isolation of a Europe cut off from markets and forced to depend on local production, but precisely when the estate itself assumed the character of a commodity-producing enterprise . Labour-services, Kosminsky had argued, were more strongly represented in the most populated and industrialized areas with the biggest markets (Kosminsky, 1935) . That is to say, insofar as the feudal enterprise tended to crystallize in its pure form in the earlier epoch of

feudalism, the context was an expanding market . The history of the "second serfdom" substantiates this point, if only because the process of crystallization here was neither held back nor obscured by the survival of a specifically small peasant production, and by the correspondingly more fluid nature of the enterprise . As the countries of Eastern Europe were drawn into production for the emerging world market or for an expanding domestic market (which was the case in Hungary), labour-services advanced rapidly against both earlier forms of payment . This type of exploitation was thus a later development, and it reached its maximum intensity in agricultural regions close to urban centres, (for example, the zones surrounding Moscow and St. Petersburg), or in the hinterland of the port cities and major trade routes (Confino,

1963) .

The chronological distribution of labour-services shows

the same pattern . In the second half of the sixteenth century - to cite only one example - as cereal prices in the port of Danzig increased on average by some 200% over

50

years under the pressure of expanding exports, the volume of



26

CAPITAL & CLASS

labour-time mobilized from a full-sized peasant holding on the estates increased by over 400% . Every favourable price conjuncture intensified the drive to expand the demesne at the cost of small peasant production and to increase the volume of disposable serf labour time both directly by imposing heavier work obligations and indirectly by a policy of cutting the size of the peasant plot . The process of evolution of the classical manor, which the countries of the West, in particular England, had experienced in a relatively mild and impure form, was destined to be repeated at higher levels of intensity, without the same impurities, in Prussia, Denmark, Poland and Hungary (Kula, 1970 ; Pach, 1972) ; and finally Russia, in the period inaugurated by the "revolution of the world market" in the sixteenth century. Under the impact of successive commercial booms, the European dimensions of which were already evident as early as the fourteenth century (Bautier, 1971, p . 192), the estates, formally relying on produce in kind or, to a limited extent, rents in cash, converted small peasant production into a reserve of simple reproduction : a process described by Pokrovsky as the serfowner's leap into "new and more compldicated forms of production" (Pokrovsky, 1932) . But this process was not peculiar to the countries of Eastern Europe : it had been known much earlier, not only, on a limited scale, in the West, but also in China; and was found at that time and later in the major countries of colonial Latin America . We know that in the major countries of Latin America the form which the feudal estate assumed was the hacienda . The hacienda was an enterprise "always dependent on a fairly large market for its products" (Keith, 1971, p . 435) . [26] Both major phases of expansion of the hacienda in Chile, for example, coincided and were closely tied up with the expansion of demand for Chilean grain . The hacendado could expand his volume of sales in such periods only by transforming peasant production into feudally-subjugated simple reproduction . In the course of successive booms, the older arrendatario gradually disappeared from the countryside of central Chile, replaced by a new serf population of inquilinos concentrated in the areas which produced for the wheat market . Peasant livestock rapidly disintegrated in this process, peasant holdings degenerated into subsistence plots, and the earlier more deeply differentiated structure of the peasant population, separating more prosperous tenant households from the remainder, collapsed into a more or less uniformly impoverished mass (Bauer, 1971 ; 1972) . In China the same tendencies are evident some ten centuries earlier . Here, already in the T'ang epoch, the big estate had become a common feature of rural economy ; but in that period, before the commercial boom of the eleventh century, the tenants (tien-hu) who worked these estates under the control of bailiffs were generally bound by payments in kind, equivalent to half the crop . On the Sung estates, especially those of the prosperous coastal provinces of the south where "wheat was grown purely as a cash crop for sale in the cities of the lower Yangtze area" (Twitchett, 1962), the same tenants were progressively bound by labourservices and their mobility restricted in law . A substantial number of Sung estates worked by these serf households "produced either regularly or intermittently for the market" (Elvin, 1973) . The parallel between the condition of such Sung peasants and the serf populations of Europe was sufficiently striking to make the Japanese Marxist historians who pioneered Sung economic history, date the transition to feudalism in China precisely at this conjuncture, when the whole southern economy was transformed by the rapid growth of cities, expanding levels of

MODES OF PRODUCTION IN A MATERIALIST CONCEPTION OF HISTORY

27

monetary circulation, a vast boom in the grain trade and the establishment of commercial links with Europe through the intermediary of Arab traders . To summarise : we defined the classical or developed form of the feudal enterprise as one which necessarily implies the lord's complete control over the labourprocess ; that is, where small peasant production no longer retains its former autonomy but now functions in the form of a sector of simple reproduction, sustaining surplus-production on the demesne . We argued that both in Europe, and elsewhere through the vast epoch of feudal production, the estate acquired this developed structure only as a commodity-producing enterprise . When Frank witnessed the signs of this specific evolution in the colonial history of Latin America, where it was repeated in a definite series of cycles, he could understand it only by reconstructing the hacienda in the image of capital ; thus entirely ignoring the specific laws of motion according to which such enterprises operated ; laws deriving not from the compulsion to accumulate, but from the compulsion to defend and improve social consumption levels which rapidly lost their patriarchal (non-monetary) character, if they had had such a character to begin with . But when Frank's critics quickly demolished this illusion, the formal-abstract premises from which they started led them to the conclusion that "on the contrary' the market was a factor of feudal "consolidation" . This poses a final question, namely, the "long duration" of this type of economy, or the problem of its decline . 4 Modes of Production as Objects of Long Duration The "long duration" is the least perceptible, and in a sense, the slowest of all forms of historical time . Its effectivity is staggered across centuries, and its reality only measurable on that scale . Insofar as Marx conceived of modes of production in a broader, more truly historical sense as "epochs of production" or "epochs in the economic development of society", he implied that they were objects of this order of magnitude . Pirenne had argued that as commerce and the stock of money expanded, the old economy of subsistence and custom could no longer adjust to the new and more sophisticated levels of consumption ; the nobles were forced to borrow and their regime disintegrated . Even earlier than Pirenne, Weber had posed the question in similar terms ; for him the "immediate cause" of the breakdown of the "manorial system" had been the development of market operations and market interests on the part of both lords and peasants, although the major impetus derived, in his view, from the nascent commercial bourgeoisie of the towns who promoted the dissolution of the manor because "it limited their own market opportunities" (Weber, 1%1, p . 82) . As a collapse theory, the Pirenne-Weber thesis was obviously wrong : over short conjunctures most estates were clearly capable of adapting to the market and expanding incomes (cf Painter, 1943) . Expanding levels of demand and the growing weight of monetized consumption could be sustained over a cycle of short conjunctures by stepping up the rate of jurisdictional income ; intensifying demesne exploitation ; substituting short-term leases or exacting entry fines to siphon off the cash holdings of more substantial peasants or to profit directly from inflation . Impressed by these short conjunctures in which the best estates in particular demonstrated their ability to prosper, Dobb concluded that the market was a factor of consolidation, and that the decline of feudalism lay "within" the "sphere" of production, in the static levels of



28

CAPITAL & CLASS

labour-productivity which would eventually compel the lords to overexploit their serfs and reduce their rates of reproduction (Dobb, 1946, p . 42) . Neither Dobb nor Sweezy saw that, to make any sense at all, their respective "theories" of feudal decline posited each other; and neither posed the question of the durational scale over which each position could hold true when integrated with the other . The "market", and the "overexploitation of serf labour" were not relatively independent phenomena, or factors which simply "interacted", as both Dobb and Sweezy conceded in their moments of generosity . They were indissolubly linked aspects of a single process, the "long duration" of feudal production . In large areas of Europe, and outside Europe, the feudal estate acquired its classical or developed form only as a commodity-producing enterprise . In countries like Hungary, Poland, Russia, and later in certain parts of the colonial world, the expansion of a demesne economy and labour-services which had formerly been of little or no significance, began directly with and under the pressure of an expanding demand for agricultural produce in local and international markets . This adjustment to the market suited both the serfowners and the importers of grain . It suited the latter because in the feudal economies there was no specific limit of exploitation which posited a certain level of prices . The fact that any sale brought a "profit" and the perpetual thirst for such "profits", ensured an abundant supply of grain at low prices . The adjustment suited the serfowners because the expansion of the market itself implied higher levels of monetized feudal consumption . As feudal consumption inevitably lost its patriarchal character ; as the lure of old models of consumption ceased or the civilizing influences of an established nobility exerted a pressure of sophistication on the consumption needs of cruder barbarian aristocracies ; and as the monetary share of feudal consumption progressively expanded to a point where "internal consumption" was of scarcely any importance - the thirst for cash became the dominant motive force of feudal production . This "thirst for cash" in fact operated in all but the patriarchal periods of medieval history ; those exceptional conjunctures where trade declined, towns reverted to villages, and consumption was predominantly of a natural character . Once a network of world commodity exchanges was established, it became an even more pervasive, more powerful factor . Driven by this thirst for cash, which each fall in the value of currency intensified enormously, the nobility reacted to the market in two distinct phases . Initially, the slowly rising levels of grain prices would have automatically adjusted the rate of exploitation in the peasant's favour, if, as was normally the case, the level of monetary payments which prevailed earlier tended to remain static . In this phase of slow inflation, the lord's first response would be a progressive readjustment of the level of payments to the level of prices . This was, for example, the initial reaction of most Russian landlords during the sixteenth century, when the Polish nobility not far away was already constructing the foundations of a demesne economy . In Russia "the increase in cash obrok during this century just about kept pace with the fall in the purchasing power of the currency" (Blum, 1968, p . 221) . But even in these phases of a gradual upward movement of prices, there were more far-sighted serfowners who, to preserve the level of their income, turned to production for the market . Feudal commodity production might originate then as a purely defensive manouevre, as in England, where "in the face of the tendency for prices to rise, a more or less static

MODES OF PRODUCTION IN A MATERIALIST CONCEPTION OF HISTORY

29

income encouraged borrowing in order to sustain a customary level of consumption . . . The abandonment of leasing might be a step towards solvency and a means of safeguarding consumption standards" (Miller, 1971, p. 11) . Then, as the inflation periodically accelerated, more and more estates would be drawn into production for the market ; and this compulsion would be so much stronger where feudal rates of consumption, now expanding more quickly in money terms, pushed against the limits of a low elasticity of surplus in peasant production and a low velocity of circulation in local markets . Under the pressure of successive inflationary conjunctures of this type, a new and distinct phase of feudal production would begin, a phase of crystallization, with demesne arable expanding by incursions into fallow, forests, pasture and grazing land . At low and generally static levels of productivity, output was limited mainly by the extent of arable in cultivation ; and the expansion of arable required a proportionate expansion of the disposable mass of labour-time . The construction of demesne economy, the process through which the feudal enterprise acquired its adequate form, implied a series of sharp and brutal inroads into peasant land and a vast project of mobilizing labour-power from the surrounding villages . This unwritten history of the "primitive accumulation" of feudal economy evokes its most striking expression in the "second serfdom", only because in the countries of Eastern Europe and the Baltic the relatively sudden nature of their integration into the emerging world economy compacted the process into a matter of decades . Where labour-services had existed formerly, their specifically low weight, at most one day per week, implied a basic compatibility with small-scale production . In the phase of crystallization, with the weight of these services rising by several hundred percent over a few decades, small peasant production would be more or less rapidly converted into pockets of simple reproduction . The division between the peasant's necessary and surplus labour-time would now be directly encapsulated in the distribution of arable, with the peasant's holding fluctuating around the limits of subsistence . Within the framework of this classical feudal economy, with its specifically feudal organization of the labour-process, the basic obsession of estate management remained as before the adjustment of rates of income to rates of consumption, but now magnified on the larger scale of a more labile monetary consumption . Where consumption had retained its patriarchal character, the rate of feudal income would have fluctuated sharply from one year to the next because the level of technique was never sufficiently high to dominate and control the stochastic cycle of production . To overcome potentially vast disproportions, the productive capacity of the undeveloped patriarchal estate would have been organized to ensure outputs above the level of current (internal) consumption . Once the circulation of money impinged on the organization of this patriarchal economy, the curve of the new monetized feudal consumption would show a slow upward trend punctuated by short spasms of expansion with every fall in currency values . But with income dependent on commercial surpluses and computed as the product of price and output, the inverse movements of these variables such as characterized feudal conditions would tend to average out the rate of revenue from year to year (Kula, 1973, p . 76) . As the rate of productivity tended to constancy, prices were given exogenously and rates of consumption were inflexible downwards, the estate could respond to this growing crisis of profitability by heavy borrowings, by



30

CAPITAL & CLASS

the liquidation of assets, or by increasing the volume of output, hence the surface in production and the mass of available labour-time . Yet each of these responses expressed tendencies of feudal disintegration, and the later they supervened in the long cycle of feudal-commodity economy, the more sharply were these tendencies revealed. When the consumption of the serfs already oscillated around a level of simple reproduction, that is, when the classical form of the feudal enterprise had already crystallized, every new drive to "maximize sales" - i .e . to push the level of serf consumption below the existing limits of simple reproduction would in the longer run radically shorten the periodicity of the old crises of subsistence and aggravate their intensity ; it would thus depress the rate of reproduction of the serf population to one degree or another .[27] The progressive indebtedness and bankruptcy of the lords, the liquidation and ever increasing mobility of feudal property (comprising as one of its elements the serf population itself), the compulsion to expand the volume of output or to expand the field of feudal colonization and the ever greater frequency of . short-term subsistence crises were basic long run tendencies of feudal production, the necessary expression of its specific laws of motion, present to one degree or another in all sectors of the feudal world .[28] In this sketch of the long duration, it is impossible to produce an abstract separation between the "market" and the "process of production" as if these were "factors" of decline . The inherent limits of the "process of production" on which Dobb focussed in the debate were only revealed, i .e . only became effective as limits, in the context of expanding commodity production or its underlying thirst for cash . Moreover, if, as Sweezy argued, the market was a factor of feudal disintegration, it could become so on the basis of the specific laws of motion of feudal economy, and only in the long run . In this sense, the debate argued from false premises, because the question which it posed posited a "process of production" divorced from the specific character of feudal consumption, and a process of exchange devoid of any compulsion to exchange .

5 Two Brief Conclusions To relate this short discussion more closely to the themes mentioned earlier : (i) Although it is in some sense quite self-evident and banal, the distinction between "modes of production" and "social formations" that is generally drawn in most recent Marxist literature may actually obscure and mystify the mechanisms of modes of production . For it is a fact that even in its crystallized form the feudal enterprise was sustained by a variety of forms of labour ; comprising domestic servants who were legally slaves and who often undertook the principal tasks, especially ploughing ; day labourers who were housed separately on the estate ; part-time hired workers recruited from the impoverished peasantry ; free tenants who performed seasonal or supplementary services ; and the serf population as normally understood, i .e . villeins bound by labour-services . The slaves and hired labourers who intervened in this type of economy were as much part of specifically feudal relations of production as the serf population itself . Their intervention did not signify the persistence or emergence of other relations of production ("slavery" ; capitalism), and did not therefore imply an "articulation" of several distinct "modes of production" . Consistent with the logic of his definitions, Dobb was, however, forced to

MODES OF PRODUCTION IN A MATERIALIST CONCEPTION OF HISTORY

31

argue on these lines ; the fact, that on the thirteenth century English estates which turned to commodity production, the lords made increasing use of hired labour, signified for him the emergence of a "new" i .e . capitalist, mode of production . If Dobb had really believed this, the debate on the transition would have had to deal with a second problem : not only the decline of feudal economy, but the decline, in fact collapse, of the barely established capitalist one . For as we know, this phase of commodity production with hired labour was rapidly superceded in the history of Western Europe ; and, as Dobb himself argued, the feudal enterprise preserved its dominance, in progressively modified forms, for at least another two centuries . Relations of exploitation based on the dispossession of labour, on the commodity labour-power, become capitalist relations of production only when we can posit the capitalist enterprise in one of its varied forms. Marx makes the point indirectly when he writes : "if a nobleman brings the free worker together with his serfs, even if he re-sells a part of the worker's product, and the free worker thus creates value for him, then this exchange takes place only . . . for the sake of superfluity, for luxury consumption" (Grundrisse) . In other terms : hired labour functions in this economy as an expression of specifically feudal relations of production, the motive-force of which lies in the social consumption needs of the owners of the feudal enterprise ; it functions in an economy in which the production of commodities is itself only a mediation of consumption . (ii) The idea of world economy as already dominated from its inception by the requirements of capital-reproduction is a false abstraction . To put our argument in its crudest form : the initial impulse which sustained the vast network of world commodity exchanges before the eighteenth century derived from the expanding consumption requirements of the lords . Moreover, at its inception the colonization of Latin America was a feudal colonization, a response to the crisis of feudal profitability which all the landowning classes of Europe were facing down to the latter part of the sixteenth century . In the Baltic and Eastern Europe this crisis was partly overcome by territorial expansion into contiguous areas, and then displaced by the production of grain for export ; but in the maritime periphery of Europe, in Spain and Portugal where this feudal crisis recurred with periodic sharpness, it expressed itself in a movement of overseas colonization . The Spain which launched this movement of expansion was a Spain dominated by feudalism, but a feudalism in crisis . The thesis is not, of course, new : it was proposed by Vilar many years ago, when he described Spanish imperialism as the highest stage of feudalism, (Vilar, 1971) ; and intimated some years later by Marian Malowist, when he asked whether the Spanish colonization was not, to a certain extent, "the result of a depression in rural economy and a sudden drop in the revenues of the nobility (Malowist, 1972) . The forms which this widespread feudal crisis took in different sectors of Europe, its specific local intensity, and the means used to overcome it is a matter for investigation by historians . Suffice it to say that the crisis of feudal profitability not only unleashed movements of internal colonization in Europe itself, in the land-locked territories ; but the first major "imperialist" conquest ; and, if we examine the question more closely, those bastardized forms of capitalist production which prevailed in the colonial plantations, the profits from which enabled many bankrupt noble families to re-establish their economic position .



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VII SIMPLE COMMODITY PRODUCTION : A "DETERMINATION OF FORM" 1 The Peasant Mode of Production The historical roots of all varied forms of simple commodity production lie in the patriarchal-subsistence mode of production based on small scale parcellised property and the exploitation of family labour .[29) This connection is important because when simple commodity production arises, the economic logic of the more archaic patriarchal enterprise continues to dominate this form of production . The chief expression of this fact is that products are sold without regard to price of production . According to Marx, "(The small peasant operating in this mode) regards the expenditure of labour as the indispensable prerequisite for the labour-product, which is the thing that interests him above all . But, as regards his surplus-labour, after deducting the necessary labour, it is evidently realized in the surplus product ; and as soon as he can sell the latter or use it for himself, he looks upon it as something that cost him nothing, because it cost him no materialized labour . . . Even a sale below value and the capitalist price of production still appears to him as profit" (Capital, Vol . III) . It follows that "for the peasant owning a parcel, the limit of exploitation is not set by the average profit of capital . . . The absolute limit for him . . . is no more than the wages he pays to himself, after deducting his actual costs . So long as the price of the product covers these wages, he will cultivate his land, and often at wages down to a physical minimum", (Capital, Vol . III, pp . 805-806) . "It is not necessary, therefore, that the market price rise either up to the value or the price of production of his product . This is one of the reasons why grain prices are lower in countries with predominant small peasant landownership than in countries with a capitalist mode of production", (Capital, Vol . III, p . 806) . In Kautsky's conceptions, based on these passages of Marx, this "incomplete remuneration for the labour-power expended" was, as Lenin notes, "the distinguishing feature of small production" . "As long as the peasant remains a simple commodity producer, he can be satisfied with the standard of living of the wage-worker ; he needs neither profit nor rent ; he can pay a higher price for land than the capitalist entrepreneur" (Lenin, Collected Works Vol . IV, p . 124; Kautsky, 1970, p . 365) . In short, simple commodity production internalizes the patriarchal logic of the subsistence mode of production, much as feudalism does in its own way . Outputs are sold as a function of subsistence, and dissociated from any mechanism of "rational" cost-calculation . In this devalorization of labour-time lies the specific advantage of all smallscale forms of production threatened with extinction by the capitalistically produced commodity . In the epoch of capitalism, as Kautsky argued in the Agrarfrage, "overwork" and "underconsumption" become the twin slogans of peasant economy . 2 The Simple Commodity Producer as Wage-Slave As a pure form, simple commodity production is a form of economy of a purely subordinate and transitional character, in which : (i) The labour-process preserves its patriarchal character, with the predominance of the self-sufficient peasant family-labour farm as the basic enterprise of production . (ii) The producing households preserve not only their self-sufficiency, transforming only their surplus into commodities (Theories of Surplus Value, part 2,

MODES OF PRODUCTION IN A MATERIALIST CONCEPTION OF HISTORY

33

p . 302), but their independence as the basic agents of the productive process, chiefly expressed in their freedom to allocate labour-time between commercial production and immediate consumption, and between the different types of commercial production . (iii) The system of accounting retains a specifically patriarchal, subsistencebased interpretation of "costs" and "profits", as noted above ; here the "limit of exploitation" is equal, in principle, to the costs of simple reproduction . (iv) Subsistence remains the goal of production, even in those limiting cases where the whole of household labour-time is absorbed in commercial production . (v) As the co-efficient of marketed output rises and the monetary components of the labour income expand, the volume of sales will tend to vary inversely with the movement of prices (the "backward sloping supply curve" thus typically characterizes households in this position) . (vi) Fluctuations of the market introduce a process of differentiation among simple commodity producers, which in the first instance remains a differentiation of wealth, i .e . preserving its historical content as a differentiation of simple commodity producers (Lenin, Collected Works, Vol . I, p . 482-3) . As Marx and Lenin were aware, the subordination of the simple commodity mode of production to the power of capital converts this mode into the embryonic basis of specifically capitalist production, but a capitalist production which retains the determinate organization of labour specific to the "pre-capitalist" enterprise . Marx describes this process perhaps more rigorously in the following passage than anywhere else : "(The) exchange of equivalents proceeds ; it is only the surface layer of a production which rests on the appropriation of alien labour without exchange, but with the semblance of exchange . This system of exchange rests on capital as its foundation, and, when it is regarded in isolation from capital, as it appears on the surface, as an independent system, then it is a mere illusion, but a necessary illusion" (Grundrisse, p . 510) . Let us examine this process more closely . The subjugation of the simple commodity form of production to capital proceeds inevitably within the limits imposed by the prevailing organization of production . Capital's struggle to dominate the enterprise of simple commodity producers - to determine the type, quality and volume of its commercial output - posits as its basis the limitations imposed on its own elasticity by a labourprocess not determined by itself ; in which, therefore the enterprise of small producers retains its independence, if only as a formal determination ("quasiindependence" (Lenin, Collected Works, Vol . III, p. 473) . Domination over the labour-process becomes impossible on this basis, within these limits of quasiindependence, without those mechanisms which uproot the patriarchal sufficiency of the small enterprise . The compulsory enforced destruction of the small producer's self-sufficiency figures here as the necessary foundations for the dominance of capital .[30] It follows that in this articulation, except at the limit where the enterprise effectively ceases to exist, where its formal independence is converted into the complete dependence of free labour on capital, the capitalist's control over the labour-process retains a partial and sporadic character . Frequent adulterations of the crop, as with the cotton produced in Maharashtra in the 1860's ; smuggling on the open market, as with poppy grown in Bengal much earlier ; restrictions in the



34

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volume of output, such as the colonial bureaucracies persistently feared ; and the switching to more "profitable" cash crops, reflect this partial and unstable character of the capitalist's control . Yet within the limits of such control, continually re-established on the basis of various coercive forms of exploitation, the relations of production which tie the enterprise of small commodity producers to capital are already relations of capitalist production . Between the market and the small producer, capital intervenes with the determinate forms and specific functions of both merchant and industrial capital (as in the slave plantations two radically distinct "determinate forms" merge) . In this process two enterprises are thus present, a quasi-mercantile capitalist enterprise,(31) which figures solely as a unit of production (as defined earlier) without the labour-process specific to its mode of production ; and an enterprise of formally independent small producers functioning according to its own labour-process, inherited from the conditions of a patriarchal economy, and according to its own economic conceptions, also patriarchal in their determination, but no longer as a totally independent unit of production . The social process of production incorporating the immediate labour-process of the small peasant enterprise is governed by the aims of capitalist production ; namely, by the compulsion to produce surplus-value . Within this social process of production dominated by the capitalist enterprise, the economic conceptions of the small households, and their formal possession of a portion of the means of subsistence, enter as regulating elements only as a function of the law of surplus-value production . The patriarchal notions of accounting, which dissociate the range of acceptable market-prices from the price of production and the autonomous internally subsidized reproduction of labour-power which from the perspective of the process as a whole, ensures a sale of labour-power below its value, enable capital to depress wages "in a fashion unequalled elsewhere", as Engels noted (Engels to Bebel, Dec . 11, 1884) . When we regard the simple commodity enterprise articulated to capital, no longer as an independent unit of production imposing its own laws of motion on the process of production, but as a quasi-enterprise with the specific social function of wage-labour (in the strict sense, value-producing labour) ; in other words, when following Marx's method, we have correctly "determined its form"(32], some conclusions are immediately evident . In the first place, the "price" which the producer receives is no longer a pure category of exchange, but a category, that is, a relation, of production, a concealed wage . Behind the superficial "surface" sale of products, peasants under this form of domination sell their labourpower . Secondly, the monopsonistic determination of "prices" under this system, or the fact that the contracts which fix this price may often also stipulate the volume of output required and its specific quality, are necessary expressions of the capitalist's "command over labour power" (Chowdhury, 1964, pp . 129-134) . The more perceptive colonial administrators regarded such contracts "as of the same kind as one between a capitalist and a worker" (Chowdhury, 1964, p . 162) . Finally, subsistence production now figures, under this system, as the specific form of reproduction of labour-power within a capitalist process of production . It becomes misleading, therefore, to regard it as a specific, separate mode of production (e.g. a "domestic mode of production") in a system of modes of production dominated by capitalism . This was, after all, the illusion which Lenin

MODES OF PRODUCTION IN A MATERIALIST CONCEPTION OF HISTORY

35

polemicized against so vigorously in his earlier writings against Narodnism, repeatedly making the point that capitalism always takes the "technical process of production" as it finds it . Yet this illusion is today widespread in the neo-populist currents of "third world political economy" which paradoxically end up by reconstituting the thesis of "dual economy" at the very centre of their analyses, now in a Marxist terminology and with slight modifications of the original premises .[33] In the colonial period capitalistically-subjugated simple commodity production, or, more precisely, capitalist production which is mediated through an internalized "simple commodity producing" enterprise, accounted for a major share of colonial output, when the latter did not derive from commodity-feudal estates or capitalist slave plantations . The entire economy of certain sectors of the colonial world - West Africa, Uganda, Mozambique, Bengal, Burma, Cambodia - was dominated by this backward form of capitalist production at its various stages of crystallization . [34] In one of his very last references to colonial questions, Marx wrote that with their integration into world economy the earlier forms of production which had prevailed in India, China, Egypt disintegrated but that this process of disintegration was not initially "apparent" (Capital, Vol . II, p . 36) . The colonial peasants integrated into commodity production by a process called "forced commercialization" entered capitalist relations of production behind the backs of their existing forms of production : here capitalist production thus retained a "surface layer", an "appearance" of superceded forms of economy, the peasants "retained the external attributes of independent producers" (Preobrazhensky, 1965, p . 186), and the forms of reproduction of labour-power retained the appearance of distinct, even if "dependent", forms of production . Thus late nineteenth century colonialism acquired a paradoxical character . I n the midst of societies of apparently "ageless stagnation", those that Marx called "peasant nations", a form of capitalistic production had already begun to establish a fairly deep local penetration . The capitalism that evolved on the foundations of small commodity production differed from the classical or adequate form of capitalist production in several fundamental ways . In the industrializing sectors of world economy the rule of capital depended crucially on the dispossession of labour from all means of subsistence, or on the constitution of a labour-market . Wakefield, conscious of this, would advocate an identical programme for the white colonies . Even in the "peasant nations" such as Egypt or India, there were sections of the bureaucracy that saw the proletarianization of the peasantry as a certain and inevitable fate, as a process that had begun under its own rule and one that would proceed with the force of a natural law . This was one way of imparting a historical function to the famines that began to hit the peasantry more and more frequently towards the closing decades of that century . But in these "peasant nations" capital followed a less obvious or more deceptive trajectory . As it happens, it was in a note to one of Wakefield's comments on the depressed condition of the Irish peasantry that Marx summed up this fundamental fact . He wrote, "In this case profit is called rent, just as it is called interest when, for example, as in India, the worker (although nominally independent) works with advances he receives from the capitalist and has to hand over all the surplus produce to the capitalist" (Theories of Surplus Value, pt . 3, p . 188) . By "worker" Marx meant, of course, the peasant himself, and by "capitalist", the monied bourgeoisie of moneylenders and merchants through whom the small



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producer was brought into relation with the market . In 1859, Marx already implied that this relation was basically a capitalist one, but then with some uncertainty . Referring to the "advance system", he wrote "In these cases, however, money function only in the familiar form of means of purchase and therefore requires no new definition" . But he added, "Of course, capital too is advanced in the form of money and it is possible that the money advanced is capital advanced . . ." ( Theories of Surplus Value, pt . 3, p . 487) . It makes a lot of difference which of these conceptions we accept, for, as Marx himself says, the latter "does not lie within the scope of simple circulation" . That is to say, the "advance" which a moneylender makes to the peasant is an advance of capital in the form of an advance of a certain sum of money or of the material elements of circulating capital (e .g . seed) and thus bearing the deceptive or illusory appearance of a pure "loan" . Within a few years it was this conception that Marx came around to accepting . Under this system he wrote, later, "the producer pays the capitalist his surplus labour in the form of interest", or the capitalist receives his profit in the form of interest, so that "We have here the whole of capitalist production without its advantages . . ." (Theories of Surplus Value, pt . 3, p . 165) . That is, the labour-process, still being a process specific to the form of smallscale parcellized peasant production, allowed no scope for a production of relative surplusvalue or for the technical renovations presupposed therein . It follows also that domination by capital in this specific form (i .e . by a monied bourgeoisie) would force capital outwards in its drive to self-expand, force capital to extend the sphere of its domination laterally, to draw into its network an ever-growing mass of peasant households . This would explain why so many of the peasant struggles of this period (e .g . the Deccan Riots of 1875) were directed against the monied bourgeoisie and not against the colonial State, in which sections of the peasantry would in fact see a potential benefactor . But again, because this was likewise a form of capitalist production that depended not on the constitution and automatic functioning of a labour-market, but on the coercive subjugation of the small commodity producer, the later historical empiricism of the Marxist tradition would simply isolate and concentrate on these relatively superficial elements of coercion and entirely ignore the inner content of the relationships they sustained . The widespread myth of "semi-feudalism" is one of the legacies of this illusion .[35]

NOTES Eg, to Schmidt, August 5, 1890 (Marx-Engels Correspondence, p . 496-7) . That this conception underlay most Marxist historiography after the twenties is evident from Pecirka, 1967 . Practically every essay in this collection, for example, or in the CERM collection (1969) proceeds from the premise of verification . Yet these essays were characterized recently as "important articles" (by Samir Amin) . Only one of the essays in fact showed a definitely critical and scholarly tendency : Antoniades-Bibicou, (1969) . 3 Cf . Colletti, 1972 . 1 2

MODES OF PRODUCTION IN A MATERIALIST CONCEPTION OF HISTORY 4 5 6

7

8

9

10 11

37

Some of their key works are listed in the bibliography. In 1927 Henri See published a work entitled Materialisme Historique et Interpretations Economiques de !'Histoire . There were, of course, exceptions to this generalization, eg, E .A . Kosminsky, R . Hilton . No detailed studies exist of the evolution of Annales and its relationship to Marxism . The fact that Marx tended to use Produktionsweise and Arbeitsprozess more or less interchangeably would partly explain why the "naturalist" conception of production which became widespread in the Second International and which passed, through Plekhanov, into Bukharin, for example, was hardly ever directly challenged by those Marxists who assaulted its underlying philosophical premises, eg, Gramsci . Lukacs provides a partial exception in his critique of Bukharin, "Technology and social relations", New Left Review 39 . As some of Sweezy's comments indicate, a certain confusion prevailed in the debate about the content of the term "serfdom" . (i) Marx himself tended to identify "serfdom" specifically with the performance of labour-services, eg, Theories of Surplus Value, pt . 3, p . 401 . (ii) Historically, servage and villeinage were not organically linked to labour-services and only became so when the estates turned to commodity production (cf . R . Hilton, 1969, p . 30) . (iii) Dobb made the term sufficiently elastic to mean by it not only labourservices as such but "the appropriation of tribute either in kind or in money" ("A reply") . This confusing and historically illegitimate conception of "serfdom" directly contradicted Marx's conception, eg, in the following statement from Theories of Surplus Value : "Serf-labour has this in common with wagelabour, in respect of rent, that the latter (rent) is paid in labour, not in products, still less in money" (our emphasis) . In the Studies he does characterize the increasing use of hired labour by such estates as the emergence of a "new mode of production", ie, capitalism (Dobb, 1946, p . 55) . Cf . J . Blum, 1968, pp . 271-2 . According to M . Bloch, 1963, p . 214, slaves were a "normal element of nearly every seigneurie" in the early feudal period . C . Palloix, 1971, pp . 74-5 simply fails to understand this process when he argues that as long as the peasant remains tied to the means of production, capital appropriates his surplus-labour on the basis of the old feudal relations of production : "Ie processus de quasi-integration de ('atelier agricole par le marchand drapier laisse subsister des anciens rapports feodaux tant que ce proces n'aboutit pas A Ia proletarisation du paysan" . On the contrary, Marx spoke of the artisans being "turned into mere wage-workers and proletarians", and referred, elsewhere, to the means of production which were left to the small producer by capital as "sham property' . Palloix cites Capital, Vol . III, p . 329 to substantiate his view, thus ignoring the fact that in this passage, as in so many others, Marx meant by "mode of production" only the labourprocess of the small producer . (See section VII below for a fuller analysis .) Samir Amin, 1976, is correct to point out that peasants who produced under these conditions were wage-workers, but he abolishes this insight in Amin, 1974, when, in the short chapter on "modes of production" he writes that the internal disintegration of simple commodity production into capitalism was



38

12 13

14

15

16

17 18

19

CAPITAL & CLASS an "absolute law" of this form of economy . This principle of "historical specificity" was central to Korsch's interpretation of Marx. cf . Korsch, 1936 . Thus Marx wrote of Sismondi that he "forcefully criticizes the contradictions of bourgeois production, but does not understand them . . ." (Theories of Surplus Value, pt . 3, p . 56) . This ambiguity or confusion is found outside Marxist writings as well : with reference to Mexico, Francois Chevalier described the coastal sugar plantations of New Spain as "the first great feudal estates" which, as early as the sixteenth century, "anticipated the classical Mexican hacienda", (Chevalier, 1963, p . 81ff) . On the other hand, to Lewis Gray, in a major work on the economics of American slavery, the plantation was a "capitalistic type of industrial organization" based on a mass of unfree labourers (Gray, 1933) . Dunn states in his sensitive social history that when the English planters of Barbados turned to sugar production, "their prime goal was to make money, not to become seigneurs . . ." (Dunn, 1973) . To the "new economic historians" of the USA, the econometric study of Conrad and Meyer, was a decisive blow against "the attempt to portray slaveowners as a "precapitalist" or "acommercial" class which failed to respond to modern business incentives" . (Cf . R .W . Fogel and S .L . Engerman, 1971, p. 326) . Finally, Samir Amin refers to the plantations as a "slave owning mode of production" but adds that it should not be confused with the "true" one (Amin, 1974, Vol . 2, p . 361) . In other words, it is taken for granted, as we said earlier, that no form of forced labour can mediate capitalist relations of production . Cf . M .V . Freyhold, "The rise and fall of colonial modes of production", (The Institute of Finance Management, Dar-es-Salaam) : "When the representatives of early capitalism started looking around the world for chances of appropriating the surplus-labour of other peoples, they soon realized that "free labour" was not available outside Europe . Any exploitation elsewhere would have to be based on forced labour of some kind . Capitalist production was out of the question" . The characterization of the mode of production as "colonial" (which I myself accepted earlier, much too hastily) suspends the problem even more than either of the traditional characterizations . "Economies of scale" : in Barbados c .1646 an average sugar plantation probably required an investment close to £2,500 (computed from data in Dunn, 1973), which should be compared with Dobb's data on the scale of investment in seventeenth century British industry (Dobb, 1946, Ch . 4) . In Jamaica by the eighteenth century the average value of such a plantation was £20,000 according to Sheridan (1%5) . Cf. Genovese, 1966, p . 16, "the greater part of slavery's profits find their way back into production (but) economic progress is quantitative . . ." . In Marx's chapter on "Absolute Groundrent", Capital, Vol . I11, Ch . XLV, it is the technical proportion of living labour to the conditions of labour that determines the relation of the price of production to value . Thus the problem of how the "organic composition of capital" could be determined for a capitalist slave economy does not affect the hypothesis proposed . This is implied by Marx when he writes that as long as "the elemental profusion of land . . . offers no resistance to capital investment", "nothing will stand

MODES OF PRODUCTION IN A MATERIALIST CONCEPTION OF HISTORY

39

in the way of cost-price regulating market-value" : Theories of Surplus Value, pt . 2, p . 303 . We know that this condition would apply only in the early stages of settlement . 20 Data on productivity collected from : Duby, 1968, p . 101-102 ; S .) . Woolf, 1964-65, p . 268 ff ; Blum, 1%8, p . 329 . 21 This point, emphasized by Kula, is already to be found in Richard Jones (1831) who, precluding the possibility of rapid technical advances under feudalism, argued that rent could only be increased "by an increase in the total quantity of labour exacted, and in this case while the lands of the proprietor will be better tilled those of the serfs, from which labour has been withdrawn, all the worse" (Marx, Theories of Surplus Value, pt. 3, p . 400) . 22 As Sweezy tended to imply they were, after correctly stating that his conception of feudalism as a "system of production for use" did not preclude the possibility of estates producing for the market . 23 The point is stressed by Confino, 1%3, who sees in this a transposition to the feudal estates of the economic logic of small peasant production . 24 The connection between obrok and otchod is drawn out by Confino, 1%3 . 25 The proportion 80% is calculated by combining Postan's data on the sizedistribution of holdings, (Postan, 1972, p . 130) with Titow's calculation of the size of a "subsistence plot", (Titow, 1969) . Conditions in the thirteenth century English countryside would thus have been comparable to the condition of India's peasantry today, except that the possibilities of employment may have been greater. 26 Keith, however, sees the connection with the market as sufficient for calling the hacienda "a capitalist institution" . 27 Duby suggests that such a decline was already evident in Europe some four decades before the Plague . For further evidence of declining population well before the Plague, see Herlihy, 1%5 . 28 If we take the rural economy of Russia, for example, on the eve of the emancipation, it was characterized by (i) a predominance of landlords on the grain market, (ii) a serf population of which 70% had been mortgaged to government credit bureaux, (iii) an absolute decline in the serf population, (iv) a buoyant market in serf labour . . . cf . Blum, 1968, ch. 20-21 . It should be emphasized that the "model" proposed abstracts from all supplementary and contingent factors in order to reveal the process in its essential form : notably, it abstracts from (a) the intervention of the State, which could radically modify or restrain this whole process, as in China or Byzantium, (b) the crises specific to the old biological time, eg, the Black Death which inaugurated the decay of feudal economy in the West, (c) the territorial expansion of capitalist powers . 29 The form was variously called the "rural-patriarchal system of production" by Marx, A Contribution to the Critique of Political Economy, p . 33 ; "die Keinproduktion in der Landwirtschaft" by Engels (to Danielson March 15, 1892) Marx-Engels Werke, Berlin 1968, p . 304 ; and the "peasant mode of production" by Kautsky, 1970, p . 317 . 30 Lenin derived the small producer's dependence from the inherently monopsonistic position of merchant capital in conditions of largescale marketing . Collected Works, III, p . 387 . He spoke of "a necessary causal connection



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CAPITAL & CLASS

between small production for the market and the domination of merchant capital", ibid ., p . 389 . 31 The now classic examples of this form of enterprise are : the Societe Commerciale de L'Ouest Africain ; the Compagnie Francaise d'Afrique Occidentale; the United Africa Company ; The British East Africa Corporation ; Ralli Brothers ; the Assam Company ; Binny & Co. ; Boustead & Co . . . . 32 Cf . Rubin, 1972, p . 37f f, for this principle of formbestimmtheit in Marx . Translating the central thesis of our essay into these terms, we could say : forms of exploitation derive their specific historical "social forms" and "functions" from the relations of production which they mediate or which are embodied in them . When simple abstractions are confused for concrete categories, when they are not yet subjected to a process of further abstraction which is a process of their concretization, the specific forms and functions which compose their historical content in any given situation are left "indeterminate" . We can see, therefore, that there is a close and essential connection between Marx's pages on the "method of political economy" in the Grundrisse (where the notions of "simple" and "concrete" categories figure) and the principle of "form determination", which figures in a practical way in the analysis of money . 33 There is no obvious reason why the "dual economy" thesis could not be modified to incorporate the image of a "traditional sector" not simply coexisting with the "modernizing" one, but actually relating to it through various forms of dependence and domination . In this sense, Laclau's critique of Frank (Laclau, 1971) and Arrighi's critique of Barber (Arrighi, 1970) do not actually transcend the thesis, but only render it more sophisticated . 34 For historically concrete analyses of this form, see Chowdhury, 1964, and Mamdani, '975 . 35 I shall argue this in detail elsewhere, on the basis of the superbly informative British sources that cover this period for India .

BIBLIOGRAPHY Amin, S . Accumulation on a World Scale, Monthly Review Press, 1974 . Amin, S . Unequal Development, London & New York, 1976 . Anderson, P . Lineages of the Absolutist State, New Left Books, 1974 . Anderson, P . Passages from Antiquity to Feudalism, New Left Books, 1974 . Antoniades-Bibicou, H . "Byzance et le Mode de Production Asiatique", Centre d'Etude de Researches Marxistes, Sur le Mode de Production Asiatique, Paris, 1969 . Arrighi, G . "Labour Supplies in Historical Perspective : A Study of the Proletarianisation of the African Peasantry in Rhodesia", journal of Development Studies, vol . 6, 1970 . Bauer, A .J . "The Hacienda El Huique in the agrarian structure of 19th . century Chile", Agricultural History, vol . XLVI, 1972 .

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Bauer, A .J . "Chilean Rural Labour in the 19th . Century", American Historical Review, vol . 76, 1971 . Bautier, R . H . The Economic Development of Medieval Europe, London, 1971 . Bettelheim, C . "Theoretical Comments", in A . Emmanuel Unequal Exchange, New Left Books, 1972 . Bloch, M . Melanges Historiques, vol . 1 ., Paris, 1963 . Blum, J . "Lord and Peasant in Russia from the 9th to the 19th Century" American Historical Review, 1957 . Braudel, F . "History and the Social Sciences", in P . Burke (Ed .) Economy and Society in Early Modern Europe : Essayes from the Annales, London, 1972 . Braudel, F . and Spponer, F . "Prices in Europe from 1450-1750", in E . Rich and C .H . Wilson (Eds .), The Cambridge Economic History of Europe, vol . IV, The Economy of Expanding Europe in the Sixteenth and Seventeenth Centuries, Cambridge 1967 . Britnell, R .H . "Production for the market on a small Fourteenth Century Estate", Economic History Review, vol . 19, 1966 . CERM . Sur le 'Mode de Production Asiatique', Paris, 1969 . Chevalier, F . Land and Society in Colonial Mexico : The Great Hacienda, California, 1963 . Chowdhury, B .R . The growth of Commercial Agriculture in Bengal 1757-1900, vol . 1, Calcutta, 1964 . Colet`ti, L . "Bernstein and the Marxism of the Second International', Rousseau to Lenin, New Left Books, 1972 . Confino, M. Domaines et Seigneurs en Russie vers la fin du XXVIIIe siecle, Paris 1963 . Conrad, A .H . and Meyer, J .R . "The Economics of Slavery in the Ante-Bellum South", in R .* . .Fogel & S . L . E~ erman The Reinterpretation of American Economic History, New York, 4 1 . Comintern, Colonial Commission . Theses on the Eastern Question, , November, 1922 . Davis, R . "English Foreign Trade, 16(IP-1700", Economic History Review, vol . 7, 1954 . Dobb, M . Studies in the development of Capitalism, London, 1946 . Duby, G . Rural Economy and Country Life in the Medieval West, London, 1968 . Duby, G . "Guerriers et Paysans Vile - Xlle siecles", Premiere Essor de l'Economie Europeenne, Paris, 1973 . Dunn, R .S . Sugar and Slaves : The Rise of the Planter Class in the English West Indies 1624-1713, London, 1973 . Elvin, M . "The Pattern of the Chinese Past", London, 1973 . Engels, F . Anti-Duhring, Moscow, 1959 . Engels, F . "Ludwig Feuerbach and the end of the Classical German Philosophy", in Marx-Engels Selected Works, London, 1968 . Fisher, H .E .S . The Portugal Trade, A Study of Anglo-Portuguese Commerce, London, 1971 . Frank, A . C . Capitalism and Underdevelopment in Latin America, London, 1971 . Freyhold, M.V . "The Rise and Fall of Colonial Modes of Production" The Institute of Finance Management, Dar-es-Salaam .



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Genovese, E .D . The Political Economy of Slavery . Studies in the Economy and Society of the Slave South, London, 1966 . Genovese, E .D . the World the Slave Holders Made : Two Essays in Interpretation, London, 1970 . Goitein, S .D . Studies in Islamic History and Institutions, Leiden, 1966 . Gray, L . History of Agriculture in the Southern United States to 1860, vol . 1, 1933 . Hamilton, E . American Treasure and the Price Revolution in Spain 1501-1650, Cambridge S .S .A ., 1934 . Herlihy, D . "Population, Plague and Social Change in Rural Pistoia", Economic History Review, vol . 18, 1965 . Hilton, R . The Decline of Serfdom in Medieval England, London, 1969 . Hobson, J .A . Evolution of Modern Capitalism' London, 1917 . Jones Stedman, G .A . "History : The Poverty of Empiricism" in R . Blackburn (Ed .) Ideology in Social Science, London, 1972 . La Question Agraire, Paris, 1970 . Kautsky, K . Keith, R .C . "Encomienda, Hacienda and Corregimiento in Spanish America", Hispanic American Historical Review, vol . LI, 1971 . Korsch, K . Karl Marx , New York, 1936 . Kominsky, E .A . "Services and money-rents in the 13th Century", Economic History Review, vol . 5, 1935 . Kula, W . Theorie Economique du Systeme Feodale . Pour un Modele de I'Economie Polonaise 16e-18e siecles, Paris, 1970 . Laclau, E . "Feudalism and Capitalism in Latin America", New Left Review, May-June, 1971 . Lenin, V .I . Collected Works, vol . 1, Moscow, 1963 . Lenin, V .I . "The Development of Capitalism in Russia" Collected Works, vol . III, Moscow, 1956 . Lenin, V .I . Collected Works, vol . IV, Moscow, 1964 . Lenin, V .1 . Collected Works, vol . XXII, Moscow, 1964 . Levett, A .E . "The Financial Organisation of the Manor", Economic History Review, vol . 1, 1927 . Lukacs, G . "Technology and Social Relations", New Left Review, 39 . Lukacs, C . Geschichte and Klassebewustsein, Berlin, 1968 . Luxemburg, R . "The Accumulation of Capital : an Anti-Critique', Imperialism and the Accumulation of Capital, London, 1972 . Malowist, M . "Movements of Expansion in Europe in 16th-17th Centuries" in P . Burke (Ed .), Economy and Society in Early Modern Europe : Essayes from the Annales, London, 1972 . Malowist, M . "The Economic and Social Development of the Baltic Countries from the 15th to the 17th Centuries", Economic History Review, vol . 12, 1959 . Mamdani, M . "Politics and Class Formation in Uganda", Monthly Review Press, 1975 . Mandel, J . "The Plantation Economy", Science & Society, 1972 . Mariatequi, J .C . Seven Interpretive Essays on Peruvian Reality, Texas, 1971 . Marx, K . Capital, Moscow, 1961 . Marx, K . Grundrisse, London, 1973 . Marx, K . Theories of Surplus Value, Moscow, 1971 .

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Marx, K . Preface to a Contribution to a Critique of Political Economy, Moscow, 1970 . Marx-Engels, Werke, Berlin, 1968 . Marx-Engels, Correspondence, London, 1934 . Mickwitz, G . Geld and Wirtschaft in Romische Reich des IV jahrhunderts, Helsinki, 1932 . Miller, E . "England in the 12th and 13th Centuries : An Economic Contrast", Economic History Review, vol . 24, 1971 . Moore, B . Social Origins of Dictatorship and Democracy, London, 1966 . Ostrogorsky, C . Pour I'Histoire de la Feodalite Byzantine, Brussels, 1954 . Ostrogorsky, C . Quelques Problemes de l'Histoire de la Paysanne Bysantine, Brussels, 1956 . Ostrogorsky, C . Gesichte des Byzantinischen Staves, Munich, 1963 . Pach, Z .P . "The Development of Feudal Rent in Hungary in the 15th Century", Economic History Review, vol . 19, 1966 . Pach, Z .P . "Sixteenth Century Hungary : Commercial Activity and Market Production by the Nobility", in P . Burke (Ed .) Economy and Society in Early Modern Europe : Essays from the Annales, London, 1972 . Painter, S . Studies on the History of the English Feudal Barony, Baltimore, 1943 . Palloix, C . "L'Economie Mondiale Capitalist", Le Stade Concurrentiel, Tome I, Paris, 1971 . Pares, R . Merchants & Planters, Cambridge, 1960 . Pecirka, J . "Discussions Sovietiques; Premieres Societes de Classes et Mode de Production Asiatique", Recherches Internationales a la Lumiere du Marxisme, )an-Avril, 1967 . Pirenne, H . Mahomet and Charlemagne, London, 1939 . Pirenne, H . Histoire Economique et Sociale du Moyen Age, Paris, 1969 . Pleckanov, G . Fundamental Problems of Marxism, London, 1969 . Pokrovsky, M . N . History of Russia, London, 1932 . Preobrazhensky, E . The New Economics, Oxford, 1965 . Rostovtzeff, M . The Social and Economic History of the Hellenistic World, Oxford, 1959 . Rostovtzeff, M . The Social and Economic History of the Roman Empire, Oxford, 1971 . Rubin, I . I . Essays on Marx's Theory of Value, Detroit, 1972 . Sartre, J .P . Question de Methode, Paris, 1960 . See, H . Materialisme Historique et Interpretations Economique de I'Histoire, Paris, 1927 . Sheridan, R .B . "The Wealth of Jamaica in the 18th Century", Economic History Review, vol . 18, 1965 . Shigeshi, K . Studies in the Chinese Economic History, Tokyo, 1952 . Stalin, J . Dialectical and Historical Materialism . Sweezy, P . et al . The Transition from Feudalism to Capitalism, New York, 1954 . Titov, J .Z . English Rural Society . 1200-1350, London, 1969 . Toulmin, S . & Goodfield, J .' The Discovery of Time, London, 1967 . Trapido, S . "South Africa in a Comparative Study of Industrialisation", journal of Development STudies, vol . 7, 1971 .



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Trotsky, L . History of the Russian Revolution, London, 1932 . Twitchett, D .C . Land Tenure and the Social Order in Tang and Sung China, Oxford, 1%2 . Vilar, P . "The Age of Don Quixote", New Left Review, July-August, 1971 . Vilar, P . "Marxist History : a History in the Making", New Left Review, July-August, 1973 . Weber, M . General Economic History, New York, 1%1 . Zwanenberg, R . van Primitive Colonial Accumulation : Kenya 1919-1939, D . Phil Thesis, University of Sussex, 1971 . Grossmann

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SOME NOTES ON FEMALE WAGE LABOUR IN CAPITALIST PRODUCTION Veronica Beechey

The object of this brief paper is to raise some of the problems which are involved in analysing the position of female wage labour in the capitalist mode of production .[1] This is essentially an introductory and exploratory paper which is intended to contribute both to the Marxist Feminist discussion of the subordination of women in capitalist society, [2] and to the growing Marxist discussions on the labour process and the foundations of divisions within the working class .[3] My main concern is with the form of female wage labour which is known in popular discourse as 'women's work', i .e ., low paid, unskilled and semi-skilled work which is concentrated in particular centres of modern industry and is usually performed by married women .[4]

ENGELS : THE ORIGIN OF THE FAMILY, PRIVATE PROPERTY AND THE STATE Most Marxist writings on the subordination of women comprise a debate with Engels who, in The Origin of the Family, Private Property and the State, laid the foundations for the analysis of the position of women in class society . For Engels the determining factors in history are two-fold : the production of the means of subsistence, on the one hand, and the reproduction of human beings, on the other hand .[5] Engels argues that the social institutions under which people live are conditioned by both the stage of development of labour (which produces the means of subsistence) and the stage of development of the family (which reproduces human beings) . Thus, the material conditions of production are related to the family form, and the development of the mode of production and the form of family are constituted as a problem of history . Engels analyses a number of stages in the development of the mode of production and the family form in pre-capitalist and capitalist societies . Although the major focus of his analysis is upon social formations which could be described as 'primitive communist', it is Engels' brief account of the transition to modern industry which is relevant to this paper. Engels follows Marx in presuming that the development of modern industry makes possible the entry of women into social production . The position of the



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woman in social production is, however, in contradiction with her position in the family, since : "when she fulfils her duties in the private service of her family, she remains excluded from public production and cannot earn anything ; and when she wishes to take part in public industry and earn her living independently, she is not in a position to fulfil her family duties ." (Engels, pp .509-510) The pre-conditions for the resolution of this contradiction between the position of the woman in production and her position in the family arise, according to Engels, with the development of modern industry, since this gives rise to a new form of family within the working class : "the first premise for the emancipation of women is the reintroduction of the entire female sex into public industry . . . (which) demands that the quality possessed by the individual family of being the economic unit of society be abolished ." (Engels, p .510) The embryo of this new form of family can be found, in Engels' characterisation, in the proletarian family as modern industry draws women into social production . "since large-scale industry has transferred the woman from the house to the labour market and the factory, and makes her, often enough, the breadwinner of the family, the last remnants of male domination in the proletarian home have lost all foundation - except, perhaps, for some of that brutality towards women which became firmly rooted with the establishment of monogamy ." (Engels, p .508) Engels offers three reasons for the disappearance of male domination in the epoch of modern industry : [6] first, the proletarian family lacks private property which is the foundation of the monogamous family ; second, the woman, herself a

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SOME NOTES ON FEMALE WAGE LABOUR IN CAPITALIST PRODUCTION

47

wage-labourer, is no longer the property of her husband and has economic independence from him ; third, the proletarian family lacks the means for securing male domination in bourgeois law . Thus, as Rosalind Delmar points out, Engels defines women's oppression in terms of the role ascribed to women in production, and their emancipation in terms of the absence of private property : "Engels . . . locates women's oppression at the level of participation in production, links the conflict between the sexes to the appearance of private ownership of wealth, and posits the reconciliation of the sexes as possible only when private property has been abolished . The fortunes of women and of oppressed classes are intimately connected : neither can be free until economic foundations based on private property have been abolished ." (Delmar, p .275) Engels is correct in postulating the centrality of production and the family in determining the position of women and in constituting the form of family as an historical question . His analysis is, however, deficient in a number of respects, as contemporary Marxist Feminist critics have emphasised .[7] Among the criticisms which can be levelled against Engels' analysis are the following[8] : (i) That he fails to recognise the role of the woman's domestic labour in reproducing labour power within the family ; (ii) That he does not regard the sexual division of labour as problematic, and therefore requiring explanation ; (iii) That he does not analyse the role of the State in reproducing the position of women within the family, and in circumscribing the forms of employment available to women ; (iv) That he fails to analyse the ideology of domesticity which is involved in reproducing a particular form of family and the relations of male domination and female subordination ; (v) That he uncritically presumes that the monogamous family would disappear among the working class as women were drawn into social production . Furthermore, a number of changes which have occurred in the epoch of monopoly capitalism require modification of Engels' analysis to take account of : a) The extension of forms of property to the working class family (e.g ., home ownership, ownership of consumer durables, etc .) which, while different from the forms of property in the means of production which Engels discusses, nevertheless involve female dependency upon the male head of household ; b) The extension of the law as a mechanism regulating the working class family ; c) The involvement of the welfare state in the reproduction of labour power, and maintenance of a particular form of family and role for the woman within it . These criticisms and modifications can be summarised by the argument that Engels fails to recognise what Feminists have consistently argued, that the patriarchal family has remained within capitalist society, and that its persistence is not merely a 'hangover' from a pre-industrial stage of capitalism or from precapitalist society,[9] nor even of sexist attitudes and prejudices which can be purged through argument and education,[10] but is of fundamental economic, political, and ideological importance to the capitalist mode of production . In this



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paper I shall indirectly consider the implications of Engels' arguments from another perspective, that of the organisation of wage labour within capitalist society, and shall suggest that the inadequacies of Engels' account of the implications of the development of modern industry for the position of women stem not only from his failure to analyse the patriarchal family, but also from his failure to analyse the ways in which the changing capitalist labour process structures the organisation of wage labour, creating divisions within the working class .[11] My starting point in analysing the specificity of the position of female wage labour is Marx's analysis of the labour process in Capital . I shall argue that Marx's analysis of the general tendencies within capitalism must provide the foundation of the analysis of female wage labour, but that his specific, and extremely fragmentary, allusions to the position of women are unsatisfactory because he, like Engels, does not adequately analyse the relationship between the family and the organisation of capitalist production .

THE FAMILY AND THE CAPITALIST MODE OF PRODUCTION The background against which the position of women in capitalist production must be understood is the separation of the family from the means of production, which occurs in the course of capital accumulation . Historically this occurred through the 'putting out' system, in which capital engages the entire family in wage labour, usually under the domination of the male head of the household, and work takes place within the household . As capitalist production develops, however, (through the stages of co-operation, manufacture and modern industry) the production of commodities for exchange takes place within the workshop or factory, while the woman as a domestic labourer in the family continues to produce use values for family consumption, whether or not she is also engaged in wage labour in the factory, workshop or home .[12] Although with the development of the capitalist labour process (in particular the emergence of modern industry, when capitalist domination of the labour process becomes direct) the family appears to have become separated from the capitalist mode of production, it is in reality divorced only from the labour process (the site of production), and continues to play a vitally important role in the system of capitalist production as a whole .[13] This suggests that it is essential to penetrate beneath the apparent separation of the family from production, and to analyse the relationship between the family and the organisation of production as capital accumulation develops .[14] It is important, however, to transcend the mechanistic form of explanation provided by Engels, whereby the family form is presumed to change as a mechanical result of changes in the organisation of production, and to make the family-production relationship the object of analysis . In this paper I attempt to analyse one aspect of this relationship, and specifically to argue that the existence of the family must be presupposed if Marx's implicit arguments about the advantage of female wage labour are to constitute a satisfactory explanation .

SOME NOTES ON FEMALE WAGE LABOUR IN CAPITALIST PRODUCTION 49 FEMALE WAGE LABOUR AND THE CAPITALIST LABOUR PROCESS Marx's analysis of the capitalist labour process must be located in his theory of capital accumulation and the contradictions to which the process of accumulation gives rise . According to Marx the object of capitalist production is the extraction of surplus value by capital through the employment of labour power in the capitalist labour process . In the surplus-value producing process, the wage labourer sells her/his labour power to the capitalist in exchange for a wage . The wage, however, does not represent payment for the entire time worked, but rather corresponds to what Marx calls the value of labour power . This is equivalent to the costs involved in the production and reproduction of labour power as a commodity which, in Marx's view, corresponds to the costs of reproducing the worker . A number of writers on domestic labour have pointed out[15] that Marx had little concern for the ways in which the reproduction of labour power was transformed by the advent of capitalism, or of how it takes place in the epoch of modern industry, merely stating that : "The maintenance and reproduction of the working-class is, and must ever be, a necessary condition to the reproduction of capital . But the capitalist may safely leave its fulfilment to the labourer's instincts of self-preservation and of propagation . All the capitalist cares for, is to reduce the labourer's individual consumption as far as possible to what is strictly necessary ." (Marx, Capital, 1, p .572) The analysis of domestic labour has shown how the woman, labouring in the home without remuneration, and outside the direct domination of capital, produces use values for the reproduction and maintenance of the male labourer and his family . The recognition of the role of domestic labour in the reproduction and maintenance of labour power has required a modification of Marx's definition of the value of labour power, as the following argument suggests : "The value of labour power is therefore defined as the value of commodities necessary for the reproduction and maintenance of the worker and his family . This implies that the value of labour power is not synonymous with the labour-time embodied in the reproduction and maintenance of labour power once one takes account of domestic labour (and the state)", (C .S .E . Pamphlet No 2, pp.10-11) because domestic labour is itself involved in the reproduction of labour power as a commodity . Marx discusses two main forms of extraction of surplus value . These are : 1 . Absolute surplus-value which takes the main form of the extension of the working day; and 2 . The production of Relative Surplus value, which consists in increasing the intensity of labour. Essential to Marx's theory is the analysis of contradictions . Each of these methods of extracting Surplus Value gives rise to contradictory tendencies :



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1 . The attempt to increase Absolute Surplus Value founders on the physical conditions of the population (high sickness and mortality rates, high infant mortality and morbidity rates) and on state restrictions on the length of the working day which the working class has won in the process of class struggle . 2 . The attempt to increase Relative Surplus Value founders on the tendency for the rate of profit to fall through the changing organic composition of capital . Historically, the development of modern industry made possible an increase in both Absolute and Relative Surplus Value, although as limits were placed upon the hours which could be worked in any given day capital has concentrated in the metropolitan countries upon the production of Relative Surplus Value . In a situation of declining profitability a major offensive of capital thus involves attempting to keep down, or lower, the value of labour power, in order to counteract the tendency for the rate of profit to fall as a result of the changing organic composition of capital . Modern industry, according to Marx, arises at a stage of capital accumulation at which machines are created which can make machinery . The instruments of labour, or workman's tools, are converted into machines, and there emerges a new form of division of labour in which the worker becomes an appendage of the machine : "Along with the tool, the skill of the workman in handling it passes over to the machine . The capabilities of the tool are emancipated from the restraints that are inseparable from human labour-power . Thereby the technical foundation on which is based the division of labour in Manufacture, is swept away . Hence, in the place of the hierarchy of specialised workmen that characterises manufacture, there steps, in the automatic factory, a tendency to equalise and reduce to one and the same level every kind of work that has to be done by the minders of the machines ; in the place of the artificially produced differentiations of the detail workmen, step the natural differences of age and sex ." (Marx, Capital, 1, p .420) This tendency for capital to equalise the forms of labour through deskilling forms the basis of Braverman's analysis of the labour process in the epoch of monopoly capitalism in Labor and Monopoly Capital . Marx suggests that there is a tendency in modern industry for unskilled labour to be substituted for skilled, female labour to be substituted for male labour, and mature labour to be replaced by young labour . He ascribes this tendency to the fact that machinery dispenses with the need for muscular strength, his argument relying upon the naturalistic assumption that the physical strength of women is less than that of men and that this determines the demand for sexually differentiated labour powers : "In so far as machinery dispenses with muscular power, it becomes a means of employing labourers of slight muscular strength, and those whose bodily development is incomplete, but whose limbs are all the more supple . The labour of women and children was, therefore, the first thing sought for by capitalists who used machinery . That mighty substitute for labour and labourers was forthwith changed into a means for increasing the number of



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wage-labourers by enrolling, under the direct sway of capital, every member of the workman's family, without distinction of age or sex ." (Marx, Capital, 1, p.394) The resort by Marx to a naturalistic form of explanation is, I suggest, clearly inadequate, especially in view of the historical fact that women have been involved in heavily physical work both in precapitalist society and in the early stages of capitalism (e .g . in mining) . Marx's analysis can, however, be reconstituted on a more properly materialist basis, as I hope to demonstrate in the following section .

FEMALE WAGE LABOUR AND THE VALUE OF LABOUR POWER How, then, would one explain the demand for female labour in modern industry? I want to suggest in the first place, the theoretical possibility that the employment of married woman who are dependent upon the family for part of the costs of producing and reproducing their labour power can be advantageous to capital in three ways : (i) in reducing the value of labour power overall . The tendency of capital to reduce or force down the value of labour power arises as a countertendency to the tendency for the rate of profit to fall . (ii) because female labour power has a lower value than male labour power . (iii) because women can be paid wages at a price which is beneath the value of labour power. While (ii) and (iii) do not refer to a general tendency, individual capitals will always seek to employ forms of labour power which have lower average values, and to pay wages which are below the value of labour power, in order to increase their share of surplus value . I shall now examine each of these possibilities in turn . (i) Marx assumes that the value of labour power is a societal average value, which is culturally and historically determined . He suggests that the value of labour power is determined by the labour-time which is necessary to maintain the individual male labourer, and by that which is necessary to reproduce his family . Marx is not clear how this cultural and historical determination of the costs of reproducing the male labourer and his family is reached . This presumably is a question of the historically determined definitions of subsistence and minimum wage, and the historical assumption that the male wage constitutes a family wage - determinations which are, in the last analysis, an outgrowth of class struggle . Marx suggests that there is a tendency, in the epoch of modern industry, for the value of labour power to be lowered when all the members of the workman's family enter into employment : "The value of labour-power was determined, not only by the labour-time necessary to maintain the individual adult labourer, but also by that necessary to maintain his family . Machinery, by throwing every member of that family on to the labour-market, spreads the value of the man's labourpower over his whole family . It thus depreciates his labour-power . To



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purchase the labour-power of a family of four workers may, perhaps, cost more than it formerly did to purchase the labour-power of the head of the family, but, in return, four days' labour takes the place of one, and their price falls in proportion to the excess of the surplus-labour of four over the surplus-labour of one . In order that the family may live, four people must now, not only labour, but expend surplus-labour for the capitalist . Thus we see, that machinery, while augmenting the human material that forms the principal object of capital's exploiting power, at the same time raises the degree of exploitation ." (Marx, Capital, 1, p .395) The value of labour power is lowered when all the members of the workman's family enter into employment, since the costs of the production and reproduction of labour power are spread over all the working population . Thus the portion of the working day in which the labourer works for himself is lowered, and more surplus value can be extracted . This is a general tendency which Marx generalises from the historical experience of the textiles industry in which men, women and children were extensively employed in the early stages of modern industry . (ii) Marx also states at various points in Capital that while the value of labour power is theoretically assumed to be averaged for a given society, in practice labour powers may have different values . He cites as determinants of these concrete differences in the value of labour power a number of factors, including the expenses involved in training, natural diversity and the part played by the labour of women and children . Marxists have argued that the uneven development which characterises imperialism can be expressed through different average values of labour power, and also that different regions within one society may have labour powers of differing average values, as a result of regional development and underdevelopment . [16) Marx's general argument, as well as the specific analyses of Marxists who have studied imperialism and regional development and underdevelopment, makes it possible to raise the question of whether female labour power can have a lower value than male labour power . I am not clear whether it would be correct to argue that the sexual division of labour within a given society could give rise to labour powers with different average values, but this is a theoretical possibility . These different values could exist for two reasons . First, that women have less training, and therefore the costs of reproducing their labour power are lower ; and second that, by virtue of the existence of the family, and their dependence on their husbands for part of the costs of production and reproduction of labour power, married women do not bear the total costs of reproducing their labour power themselves, and their labour power has a lower value than male labour power . (iii) Although the value of labour power is assumed theoretically to be averaged for a given society, in practice individual capitals will attempt to purchase labour powers at prices which are below the average social value . Marx states that the "Forcible reduction of wages below this value plays . . . in practice too important a part, for us not to pause upon it for a moment . It, in fact, transforms,



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within certain limits, the labourer's necessary consumption-fund into a fund for the accumulation of capital ." (Marx, Capital, 1, p .599) Marxists have usually discussed the practice of individual capitals of paying wages below the value of labour power with reference to semi-proletarianised workers on the agricultural periphery of capitalist production .[17] In this case, capital pays wages which are lower than the costs of production and reproduction, since part of the costs of reproduction are met within the subsistence economy . Thus, in the typical case of the male semi-proletarianised worker who becomes part of the industrial reserve army, capital can pay wages below the value of labour power when his wife is engaged in subsistence production through which she can contribute to the reproduction of herself, her children and her husband when he is unemployed . This occurs in many underdeveloped countries, the male semiproletarianised worker being drawn either into wage labour in the metropolitan society as a migrant worker, or into the capitalist sector of the dependent society . A similar argument has been advanced with respect to black workers on the South African Bantustans, the worker's family remaining on the Bantustan where the costs of reproduction of his wife and children are also met through the subsistence economy, in which the costs of his day-to-day reproduction can be met when he is unemployed .[18] In each of these cases it is important to note that the sexual division of labour, in which the woman remains in subsistence agricultural production while the male worker moves away to become part of the industrial reserve army, lies at the foundation of capital's ability to pay the man low wages[19] (or, rather, to the ability of the man and his family to survive physically on wages which are below the value of labour power) . [20] One consequence of this form of organisation of labour is that the State does not have to pay unemployment benefits and poor relief (in societies in which these exist) to the male wage labourer since the costs of his day-to-day reproduction can then be met in the subsistence economy on the periphery . I want to argue that married women workers are like semi-proletarianised workers so far as capital is concerned, since they too can be paid wages at a price which is below the value of labour power . In the case of married women, it is their dependence upon male wages within the family for part of the costs of production and reproduction of labour power which accounts for the possibility of individual capitals paying wages which are below the value of labour power . The married woman does not, therefore, have to pay for the entire costs of reproducing her labour power, nor for that of her children who will become the next generation of wage labourers and domestic labourers . This argument, if correct, can explain why women's wages are significantly lower than men's . The foregoing arguments suggest the theoretical possibility that the employment of women who are dependent upon the family for part of the costs of producing and reproducing labour power can be advantageous to capital in three ways : (i) in reducing the value of labour power overall ; (ii) because female labour power has a lower average value than male labour power; (iii) because married woman can be paid wages at a price which is below the value of labour power .



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If correct, these arguments suggest that it is married women's labour which is particularly advantageous to capital, since it is married women who do not, by virtue of the existence of the family, have to bear the total costs of production and reproduction out of their own wages . What, then, becomes of the position of single women? Does the employment of single women require a distinctive form of analysis? Tentatively I would suggest that the position of single women wage labourers might be analysed along the following lines : a. In the case of young single working class women their family of origin bears some of the costs of day-to-day reproduction (provision of housing, cleaning and feeding, for example - Mum's domestic labour) and generational reproduction is not a problem . Here the economic position of young single women is similar to that of young single male workers (for whom Mum no doubt performs even more domestic labour) . b . Since the wages of single women are paid on the assumption that they do not have to bear the costs of reproduction, those categories of women who do not have husbands whose wages can contribute to the costs of reproduction, and who do not have families of origin to meet at least part of the costs of reproduction, are depressed into poverty . If they also have children, and thus have to meet the costs of reproducing the next generation of labour power and domestic labourers from their wages, then single and widowed mothers are frequently depressed into severe poverty .[21]

DESKILLING AND THE INTRODUCTION OF FEMALE WAGE LABOUR I have suggested (p .50) that modern industry tends, in Marx's words, "to equalise and reduce to one and the same level every kind of work that has to be done by the minders of the machines" (Marx, Capital, 1, p .420), that is, it gives rise to the tendency of deskilling . Discussing this tendency, Marx suggests that while the hierarchy of concrete labours is no longer inherent in the labour process in the epoch of modern industry as it was in manufacture, because of the tendency of deskilling, the division of labour nevertheless hangs on through what he calls traditional habit, and becomes in modern industry a way of intensifying exploitation through fostering competition . There thus emerges a contradiction between the possibilities which are unleashed by the development of modern industry and the social character which is inherent in its capitalist form - a fact which Engels loses sight of in his optimistic assertion that the entry of women into modern industry is a precondition for their emancipation . This social character is formed and transformed in the process of class struggle. Marx points, in his discussion, to a very important characteristic of modern industry - to the fact that, although there exists a tendency towards deskilling, in practice the extent to which this occurs may be limited . The limitations on the possibilities for capital to transform the labour process through deskilling which are imposed by working class resistance are crucial in determining the concrete development of the labour process - a fact which Braverman fails to appreciate in his analysis of the degradation of work in the epoch of monopoly capitalism, in which the development of the labour process is portrayed as an outgrowth of



SOME NOTES ON FEMALE WAGE LABOUR IN CAPITALIST PRODUCTION

55

capitalist strategies, rather than of class struggle . The analysis of the tendency towards deskilling on the one hand, and of the organised working class resistance to it on the other hand can also be important in determining the conditions of entry of female labourers into industry, as well as the position which they occupy within the labour process . I suggest, therefore, that Marx points to an important characteristic of modern industry, but that his analysis in terms of traditional habit is unsatisfactory . It is not habit, but the organised power of the working class which has struggled to resist deskilling, and this organised power has, historically, been overwhelmingly representative of male, white, skilled workers . While capital can in principle introduce any .workers as agencies of deskilling, Marx suggests that in concrete situations it has introduced women and children in order to break down the resistance to changes in the organisation of the labour process which skilled workers have shown, e .g . in the manufacturing period : "By the excessive addition of women and children to the ranks of the workers, machinery at last beaks down the resistance which the male operatives in the manufacturing period continued to oppose to the despotism of capital ." (Marx, Capital, 1, p .402) One implication of this is that while the introduction of women and children may be advantageous to capital, both because they can be paid lower wages and because their introduction may be used to foster competition, the employment of women is frequently opposed by male workers who are attempting to resist deskilling . One consequence of the coincidence of the struggle against the process of deskilling with the struggle against the introduction of female wage labour is that, so far as women are concerned, they have been denied the opportunity to enter into skilled jobs, and the hierarchy of concrete labours within the labour process has come increasingly to coincide with the sexual division of labour . A good example of capital's using female labour in this way can be seen in employment practices in the munitions and engineering industries during the first world war .[22] This was a period in which large numbers of women, both single and married, entered into paid employment in the centres of modern industry, since female labour as part of the industrial reserve army of labour was pressed into service during the wartime labour shortage . Female labour was also used as a means of deskilling . The employment of women was strongly resisted by the engineers (organised in the A .S .E .) who eventually reached a series of agreements with the employers and the Government that women should only be allowed to enter industry as unskilled and semi-skilled workers, and stated that where women had to be employed on skilled jobs because there were no available men, they should leave these at the end of the war, since these were men's jobs . The organised engineers' resistance to deskilling became displaced on to the women workers who were separately unionised (in the National Federation of Women Workers), de facto denied equal pay, and forced to leave employment in the engineering industry at the end of the war . The restructuring of the labour process which occurred in the war economy is an excellent example of the ways in which the introduction of female labour can be utilised by capital as an agency of deskilling, thereby fostering competition among the workforce, with the



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consequence that the hierarchical divisions within the labour process come to resemble the sexual division of labour. It would be incorrect to generalise from the experience of women in munitions and engineering in the first world war, or to use this example as a prototype . Clearly the extent to which female labour has been utilised as an agency of deskilling and as a condition of competition can only be discerned through the concrete investigation of particular industries and trades . In such an investigation it would be important to consider : (i) To what extent there has been struggle around the substitution of female wage labour for male wage labourers, and how this struggle has been resolved ; (ii) to what extent the introduction of female labourers has functioned to depress wage levels .

A NOTE ON WOMEN, THE FAMILY AND THE INDUSTRIAL RESERVE ARMY The introduction of female wage labour into the capitalist labour process cannot be separated from the question of which categories of labour comprise the industrial reserve army .[23] Marx argues that capital needs an industrial reserve army as a lever of capital accumulation . This is : (i) a population which acts as a reserve of labour which can be brought into particular branches of production as the market expands or new branches of production are established, and dispensed with as changes in the organisation of the labour process require a different kind of labour force, or smaller labour force . Marx's discussion suggests that the industrial reserve army must be a flexible population which can easily be introduced into production, and disposed of again when the conditions of production change . (ii) a population which acts as a competitive force, through a) depressing wage levels, or b) forcing workers to submit to increases in the rate of exploitation, thus increasing the level of surplus value extraction . In this way the industrial reserve army functions to increase surplus value, and as a counter-tendency to the tendency for the rate of profit to fall . It is difficult to say how one could precisely define who is and who is not in any given situation a part of the industrial reserve army - this is an important question which requires further analysis. Clearly such an analysis would have to examine the role of the State in constituting and reconstituting the industrial reserve army (through immigration legislation, race relations legislation, and the provision of work permits, so far as immigrant and migrant workers are concerned, [24] and through regulations governing women's work - e .g . on shiftwork - as well as Equal Pay, Sex Discrimination and Employment Protection legislation, so far as women workers are concerned) .[25] It would also have to examine the practices of particular capitals in labour recruitment, and organised labour's resistance to the employment of particular categories of labour . I want to suggest, somewhat tentatively, that a possible criterion of the preferred sources of the industrial reserve army, from the viewpoint of capital, is those categories of labour which are partially dependent upon sources of income other than the wage to meet some of the costs of the reproduction of labour power . The advantages of such labour are :



SOME NOTES ON FEMALE WAGE LABOUR IN CAPITALIST PRODUCTION a.

57

they can be paid wages which are below the value of labour power, for reasons which I have already suggested; b . they provide a flexible working population which can be brought into production and dispensed with as the conditions of production change . Clearly, since the State has assumed responsibility for some of the costs of reproduction (through education, council housing, the health service, unemployment benefits and poor relief, family allowances, etc .) no section of the working class is entirely dependent for the costs of reproduction upon the wage .[26] Nevertheless it is possible to make two sets of distinctions which may prove fruitful in differentiating sections of the working class from one another : 1. Between those sections of the working population which are predominantly dependent upon the wage to meet the costs of reproduction of labour power and those which are not ; 2 . Between those sections of the working population which are dependent upon sources other than the State for some of the costs of reproduction (eg. married women's dependence upon the family, semi-proletarianised workers' dependence upon the subsistence economy) and those which are primarily dependent upon the State (e .g . to provide unemployment benefits when unemployed, and poor relief when underemployed or low paid) . The position of married women could then be defined, in terms of these distinctions, as follows : (i) married women comprise a section of the working class which is not predominantly dependent upon its own wage for the costs of production and reproduction of labour power; (ii) married women are a section of the working class which is not heavily dependent upon the welfare state, which refuses to recognise married women as individuals in their own right (e .g . denying them social security benefits if married or cohabiting) . I have in this section pointed to some similarities between the position of married women and semi-proletarianised workers from the point of view of capital . It is important, however, in suggesting such similarities, not to underestimate the differences between different categories of labour . One important difference is that married women have a world of their very own, the family, into which they can disappear when discarded from production, without being eligible for State benefits, and without appearing in unemployment statistics (unless they sign on) . The existence of the family, and of the fact that the married woman also performs domestic labour within it, differentiates the position of the married woman within the metropolitan society from that of the semi-proletarianised worker who enters into the metropolitan society on a temporary basis . A further point of difference between the married woman and the semiproletarianised worker becomes apparent if one analyses the role of the wage labourer, and the family, in the circulation process . Marx argues that capital attempts to penetrate all areas of the world with capitalist relations of exchange in order to create an expanding market for its commodities . Furthermore, since in order to be a consumer of commodities which are capitalistically produced the worker must be in receipt of a wage which s/he can exchange for commodities, capital attempts to create a large class of wage labourers . Marx points out that this is the site of a contradiction within capitalism, between the interests of an



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individual capital which attempts to force down the wages of its own workers in order to increase its share of surplus value, and the interests of all other capitals producing consumable commodities (what Marx calls Department II) which attempt to create a class of wage labourers in receipt of high wages which can become elements of the circulation process .[27] These contradictory tendencies operate both on a world scale and nationally . One reason why one might expect capital in general to tend towards employing married women in preference to semi-proletarianised workers is that when the married woman enters into wage labour the family is entirely dependent upon the wage - indeed, upon two wages in the case of the typical nuclear household . It is therefore dependent almost entirely upon the consumption of capitalistically produced commodities for its survival . The family of the semi-proletarianised worker, in contrast, is still located partly within the subsistence economy . It is therefore less dependent upon capitalistically produced commodities . Thus capital in general will tend to penetrate all areas of the world with capitalist relations of exchange . It will also tend to bring married women under the direct domination of capital, both within the metropolitan working class, and also within the subsistence economy . The question of who constitutes the preferred sources of the industrial reserve army in any given historical situation must be concretely investigated . It cannot be derived from the logic of capitalism, but is determined by class struggle - by the strategies employed by individual capitals, by trade union practices, and by state policies which are themselves a product of class struggle . I have advanced various reasons why in theory married women might have become a preferred source of the industrial reserve army - reasons which could account for the empirical evidence on the growth of female employment which Braverman produces in analysing the structure of the working class in the United States in the epoch of monopoly capitalism . In Britain, which has not employed migrant workers (other than the Irish) on a large scale (unlike West Germany, for example), it is possible that married women have become a preferred source of the industrial reserve army in the period since the second world war . Since Commonwealth immigrants and Irish and European migrant workers are also important groups which comprise the industrial reserve army in the same period, it is important to examine the historical demand for different kinds of labour in different branches of production .

A CONCLUDING NOTE ON CONTRADICTIONS Coulson, Magas and Wainwright have argued that : "the central feature of women's position under capitalism is not their role simply as domestic workers, but rather the fact that they are both domestic and wage labourers . It is this dual and contradictory role that imparts a specific dynamic to their situation ." (Coulson, Magas and Wainwright, p .60) In conclusion I want to emphasise that it is essential to analyse the contradictory tendencies within capitalism to which women are subject, and to avoid falling into functionalist forms of explanation as some analyses of domestic labour and wage



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labour have done .[28] I have emphasised in this paper the tendencies within capitalism towards bringing married women under the direct domination of capital as wage labourers and as consumers .[29] These tendencies have been accompanied by some moves on the part of the State to assume more of the functions of reproduction, which stem from the fact that : "since individual capitalists are concerned with production only for their own profit, they are not individually concerned with the processes through which the system as a whole is made to continue ; they are not concerned with reproduction . This is where the State must step in to represent the interests of the capitalist class as a whole ." (Mackintosh, Himmelweit and Taylor, p .3) However, as the writers of this paper point out, the State, while providing certain services, has never come close to removing the burden of the woman's work in the home . This is particularly true inn the field of childcare, as the recent R .C .G . paper Women's Oppression under Capitalism points out . The tendency to draw married women into wage labour under the direct domination of capital has also given rise to the tendency for capital to produce more labour-saving devices for use in the home, and to produce some of the use values which were previously produced in the home within the system of capitalist commodity production (e .g. take out meals, launderettes) . Mandel points out in Late Capitalism that it is frequently small capitals which move into these areas of production . These frequently utilise women as wage labourers to produce those use values capitalistically which they had previously produced in the home as domestic labourers (and, indeed, often continue to produce for their families in their role as domestic labourers) . The movement of women into wage labour under the direct domination of capital therefore creates the possibility for some use values to be produced caitalistically, and to a lesser extent to the tendency for the State to assume some of the functions of reproduction . [30] These tendencies coexist with another tendency, however, emphasised by all the writers on domestic labour, towards the maintenance of the family as a unit for the reproduction of labour power, and of the woman's role as domestic labourer within it . The woman's domestic labour within the family functions to lower the value of male labour power by producing use values which are necessary for the production and reproduction of labour power as a commodity, both on a day-to-day and a generational basis, without remuneration . The interest of capital in keeping down the value of labour power by maintaining the woman's domestic labour within the home thus creates a tendency towards the maintenance of the nuclear family, which is reflected in and reproduced through a host of social welfare policies . Since the second world war these contradictory tendencies have been embodied in a number of ways of organising the labour process - the creation of flexible shifts, part time work, etc . - which have enabled women to perform both forms of labour, domestic labour and wage labour . Whether she labours as domestic labour outside the direct domination of capital, or as wage labourer under the direct domination of capital, the woman is vitally involved in capital's attempts to extract a high rate of surplus value, and to generate countertendencies to the tendency for the rate of profit to fall . This situation is bound to



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give rise to new contradictions, however, which Marxist Feminists must begin to analyse . One new form of contradiction which is arising from this situation is, I suggest, the phenomenon which is known in popular discourse as the dissolution of the family, which can perhaps be more adequately described as the transformation of the family[31] (reflected in soaring divorce rates, rapid decline in the manual working class birth rate, increased incidence of physical and mental illness among women, etc .) . Could it be that, just as the attempts to increase Absolute Surplus Value in the nineteenth century by inordinately extending the working day foundered upon the physical condition of the working class, so the tendencies both to bring women under the direct domination of capital as wage labourers and also to maintain them in the family as domestic labourers in order to extract a high rate of surplus value is beginning to founder on the impossibility of maintaining the family in its present form, and of combining within the woman two vital forms of labour for the capitalist mode of production? Right-wing critics and anti-feminists argue that the so-called decline of the family results from the woman working and the independence to which this gives rise, and claim, as did the opponents of women working in the mills in the nineteenth century, that a woman's place is and should be in the home. They thus attempt to resolve the contradiction between the two forms of women's labour by preserving domesticity for women . Engels, in contrast, presumed that when women entered into social production, the monogamous family would disappear, and with it the oppression of women . He thus argued for resolving the contradiction between the two forms of female labour by advocating the entry of women into social production, without adequately analysing the contradiction between the two forms of female labour, in production and the family . The Women's Liberation Movement, with its demands for nurseries and for free abortion and contraception to relieve women from unwanted pregnancies, has demanded that the State should assume more of the functions of the reproduction of labour power, thus calling upon the State to resolve the contradiction between the woman's domestic and wage labour . Since the resolution of the contradiction between the two forms of female labour is ultimately determined by the processes of feminist and class struggle within the limits of capital accumulation, it is important that Marxist Feminist theory demonstrate the ways in which the subordination of women in each of its aspects is rooted in the contradictions which capitalism generates in the process of accumulation, and develop a socialist feminist strategy which is based upon this analysis .

NOTES 1

this paper is restricted to an analysis at the level of political economy, which is broadened to include the family - production relationship. It is not directly concerned with the important questions of the role of the State in reproducing a particular form of family and role for women, and the ideology of domesticity .



SOME NOTES ON FEMALE WAGE LABOUR IN CAPITALIST PRODUCTION 2

3

4

5

6 7

8 9

10

11

61

I am utilising the term Marxist Feminist, which is now common parlance within the Women's Liberation Movement, since in my view a correct analysis of the subordination of women cannot be provided by Marxists unless Marxism is itself transformed . The term Marxist Feminist implies a commitment to, and attempt to move toward, such a transformation . It is unfortunate that many Marxist discussions of the labour process and divisions within the working class (including recent contributions) fail to consider the sexual division of labour as significant . See, e .g. the paper written by the Brighton Labour Process Group, 'The Capitalist Labour Process' ; Christian Palloix, 'The Labour Process ; From Fordism to Neo-Fordism' ; and A . Sivanandan, Race, Class and the State . A notable exception to this is Harry Braverman, Labor and Monopoly Capital . This paper is only concerned with the applicability of Marx's analysis to female wage labour . Further work is required to consider how far this framework can be utilised to analyse the position of women in service industries and occupations, and to develop a Marxist Feminist analysis of the position of women who are employed by the State (e.g. in the health service, education system, social services) . Engels succinctly outlines his theory in his "Preface to the First Edition" of "The Origin of the Family, Private Property and the State", written in 1884 . See Engels, pp . 454-456 . cf . Rosalind Delmar, "Looking Again at Engels"Origin of the Family, Private Property and the State"', which develops these arguments . There is a considerable critical literature on Engels'"Origins". While some of it, e .g . Kathleen Cough, The Origin of the Family, is concerned with Engels' analysis of primitive communist societies, others discuss the relevance of Engels' analysis more generally . See e.g. Kate Young and Olivia Harris, "The Subordination of Women in Cross Cultural Perspective" ; Karen Sacks, "Engels Revisited ; Women, the Organisation of Production and Private Property" ; Irene Brennan, Engels' Origin of the Family, Private Property and the State ; Chris Middleton, "Sexual Inequality and Stratification Theory" ; and Rosalind Delmar, op . cit ., who provides an extremely useful critique which my discussion draws from . cf. Rosalind Delmar, op . cit . Juliet Mitchell, among others, appears to suggest this in the following quotation : "Part of the function of the ideology of the family under capitalism is to preserve . . . (the) unity (of the family) in the face of its essential breakup", Woman's Estate, p .157 . Clearly the ideological subjection of women, which is reproduced at the individual level through sexist attitudes and prejudices, is an important component of women's subordination . I am arguing, however, that the tendency to regard the family as primarily an agency of ideological reproduction is to provide a one-sided picture . An example of this tendency is Judith and Alan Hunt's statement that : "The economic and material base for women's oppression need no longer exist in society ; its continued re-creation is a measure of the strength of traditional ideas and prejudice", "Marxism and the Family" . cf . the statement in "Women, the Family and Industrialisation in Britain" that "Engels obviously does not view the sexual differentiation of the labour



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process in factory production as itself forming a new barrier to female emancipation . But this is not surprising, since Engels does not see male domination functioning through the sexual division of labour, but through property relations and specifically women as transmitters of property", p .4 . 12 Sally Alexander points out, in "Women's Work in Nineteenth Century London : a Study of the Years 1820-1850", that much women's work tended to be concentrated in manufacturing workshops or took place in the home, and that the entry of women into modern industry was therefore limited in London in this period . This excellent essay emphasises the point which Marx makes in Capital, vol .1 ., chapter XV, that modern industry gives rise to new forms of domestic industry, and that these are an important source of employment for women and children . 13 One implication of this paper is that in order to comprehend the subordination of particular groups (e .g . women, immigrant and migrant workers) within the capitalist mode of production, this must be analysed in its totality . This suggests that the attempt to abstract the analysis of the labour process from the organisation of production as a whole provides a limited analysis . 14 To postulate the centrality of the family - production relationship and that this changes historically, differentiates Marxist Feminism from structural functionalist sociology, from Radical Feminism, and from the ahistorical structuralist approach of some of the recent contributions to the theory of patriarchy. One problem with my analysis in this paper is that it does not provide a satisfactory analysis of this changing relationship . In particular, it suggests that the family must be presupposed if the specificity of the position of female wage labour is to be comprehended, instead of seeing that the family is itself constituted in a particular form and transformed in the process of producing and reproducing labour power . 15 See e .g . Jean Gardiner, "Women's Domestic Labour" ; the paper written by the Political Economy of Women Group, "Women's Domestic Labour", and the R .C .G . paper, "Women's Oppression under Capitalism" . 16 cf. Ernest Mandel, Late Capitalism, chapter 3 . 17 cf. Ibid, chapter 5 . 18 For specific arguments concerning black workers in the South African Economy see Harold Wolpe, "Capitalism and Cheap Labour Power : from Segregation to Apartheid" ; and Martin Legassick, "The Analysis of Racism : the Case of the Mining Economy" . 19 Carmen Deere points out in "Rural Women's Subsistence Production in the Capitalist Periphery" that it is "women's contribution toward the maintenance and reproduction of labor power within the rural labor reserve (which) permits the non-capitalist mode of production to absorb the costs of production and reproduction of labor power (and that it is) . . . the division of labor by sex, based on the articulation between modes of production (which) serves to lower the value of labor power for capital, enhancing the relative rate of surplus value for peripheral capital accumulation", p .9 . The fact that the sexual division of labour lies at the foundation of the position of the male semi-proletarianised worker within the capitalist economy is overlooked, so far as I can see, in most of the literature on semi-proletarianised and marginalised workers .



SOME NOTES ON FEMALE WAGE LABOUR IN CAPITALIST PRODUCTION 20

21 22

23

63

It could be argued that capital is not concerned with the conditions for the reproduction of labour power, and that whether or not the male semiproletarianised worker or the married woman worker has means of subsistence other than the wage is of no interest to capital . While this is true at an abstract level, an historical analysis of the development of modern industry in Britain reveals that the individual capitals have been concerned about the conditions of reproduction of labour power, and that capital in general has, through the State, introduced legislation (through e .g. the Factory Acts) to restrict women's work, and to constitute a particular form of family . For evidence on this see the Finer Report on One Parent Families, Vol .1, para 4 .86 and fig . 5 .1 . This example comes directly out of the work on women in the first world war which the Women and Labour Process Group has undertaken . The most useful introductory references on the position of women in the labour process in this period are : G .D .H . Cole, Trade Unionism and Munitions ; Barbara Drake, Women in the Engineering Trades ; Irene Andrews and Margaret Hobbs, Economic Effects of the War upon Women and Children in Great Britain . Arthur Marwick's most recent book, Women at War, while containing some beautiful photographs, fails to analyse the ways in which the subordination of women was structured within the labour process as they entered into employment and projects a simple-minded view of the war as a march towards progress in female emancipation . Unfortunately James Hinton's book on The First Shop Stewards Movement is insufficiently aware of the relationship between the process of dilution and the subordinate position of women, and of the ways in which trade union organisation, as well as capital's strategies in this period, reinforced the subordination of women . There is a growing literature on the question of the industrial reserve army . Other than Capital, vol .1, chap . 25, the most useful works which utilise this concept are those by Harry Braverman (1974) and Ernest Mandel (1975) . Braverman's analysis is subject to a number of criticisms, however, e .g . (i) that it does not consider the attempt to constitute and reconstitute the industrial reserve army in relation to the operation of the law of value ; (ii) that it tends towards technological determinism ; (iii) that although in chapter 13 Braverman discusses the ways in which capital seizes upon the family, bringing women under its direct domination, he does not link this to the analysis of the industrial reserve army, as I have tried to do in this paper . In Late Capitalism, chapter 5, Mandel argues that the attempt to reconstitute the industrial reserve army has been a major tendency of capital since the end of the nineteenth century, in its attempt to counteract the falling rate of profit . Unlike Braverman, however, Mandel has scant regard for the role of women workers within the industrial reserve army . This criticism could also be extended to the Brighton Labour Process Group's paper, "The Capitalist Labour Process" (second part, unpublished), and to A . Sivanandan, 1976 . Ruth Milkman, in "Women's Work and the Economic Crisis : Some Lessons of the Great Depression" ; and Jean Gardiner, "Women and Unemployment", argue that the concept of the industrial reserve army is inapplicable to women's work, because the sexual segregation of occupations creates an inflexibility in the



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labour market which prevents the expulsion of women from unemployment in times of crisis (jean Gardiner argues that the expulsion of women from manufacturing employment has been absorbed by the services sector) . In arguing this, both Milkman and Gardiner point to an important aspect of women's work, that it is sexually segregated . Their analyses in my view involve a partial interpretation of Marx's conception however . It is not inherent in Marx's use of the concept of the industrial reserve army that labour should be expelled from production altogether . Marx utilises the concept of the industrial reserve army both as an abstract law of accumulation and as a description of particular sources of labour (in his discussion of the floating, latent and stagnant forms) . The problem is to analyse the mediations between the abstract law and the concrete instances, and to specify what these forms are at particular levels of capital accumulation . Martin Legassick and Harold Wolpe, in "The Bantustans and Capital Accumulation in South Africa" attempt to do this in their critique of Anibal Quijano Obregon, "The Marginal Pole of the Economy and the Marginalised Labour Force", centring their analysis on the distinctions between the absolute and relative surplus populations, and the latent and floating forms . I am not aware of any satisfactory attempts to utilise the concept with regard to female wage labour, and to analyse the specific form which this takes as a relative surplus population . This is in my view an important task . 24 A . Sivanandan, 1976, has begun to do this so far as immigrant and migrant workers are concerned . 25 I am not aware of any work which analyses the ways in which the recent State legislation, the Equal Pay Act, the Sex Discrimination Act, and the Employment Protection Act have functioned to constitute women as a particular form of industrial reserve army . This is an extremely important question . 26 Norman Ginsburg, in "Poor Relief : the Development of State Policy in the Context of Class Struggle and the Struggle for Accumulation" begins to analyse the role of the State in constituting particular forms of the industrial reserve army through the provision of poor relief . 27 cf . Marx, The Grundrisse, pp .419-420. 28 The R .C .G . paper, "Women's Oppression under Capitalism" has a particularly functionalist approach to the position of women within the capitalist mode of production . It fails to analyse the contradictory tendencies which capitalism generates, toward both maintaining the woman's role as domestic labourer and bringing women under the direct domination of capital as wage labourers . It is thus unable to provide any strategy for transforming the position of women which is rooted in the contradictions which capitalism generates, other than the assertion that women must join with the working class in revolutionary transformation . 29 I am aware that I have probably overemphasised the ways in which capitalism generates tendencies towards bringing women as wage labourers under the direct domination of capital, and have underemphasised the continuing role of domestic labour which is maintained within the family within capitalism . This stems in part from an attempt to provide a counter to the emphasis among Marxist Feminists upon domestic labour, and in part from the fact that I have not adequately managed to build the analysis of contradictions into



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my own account . This therefore tends towards the functionalist form of explanation for which I have criticised others . However, this tendency does not necessarily entail the breakdown of the family, since the increasing capitalistic production of domestic use-values could equally reinforce the family by making it possible for women to continue to perform a domestic role when they have been drawn into wage labour . In the same way, the tendency towards maintaining the woman's domestic labour in the family does not necessarily entail her removal from wage labour . These tendencies must therefore not be seen simply as determining tendencies, each with its own necessary outcome, but as tendencies which structure the boundaries within which struggle takes place . I am aware that this phenomenon is usually seized upon by conservatives and anti-feminists, and that statistics referring to changes in the family are frequently invoked as arguments against the employment of women . I am also uncertain of the correctness of the argument which I am proposing here - 1 am certain, however, that it is essential to move towards analysing new contradictions, in order to avoid providing a functionalist explanation which renders the position of women impervious to change, and which renders useless the attempt to develop a Socialist Feminist strategy within capitalism .

BIBLIOGRAPHY Alexander, Sally, "Women's Work in Nineteenth Century London : a Study of the Years 1820-1850", in Juliet Mitchell and Ann Oakley, ed ., The Rights and Wrongs of Women (Penguin, 1976) . Andrews, Irene Osgood and Hobbs, Margaret A ., Economic Effects of the War upon Women and Children in Great Britain (O .U .P. 1921) . Braverman, Harry, Labor and Monopoly Capital (Monthly Review, 1974) . Brennan, Irene, Engels' Origin of the Family Private Property and the State; Discussion Series on the Women's Movement no .1 (Polytechnic of Central London, Cultural and Community Studies Unit, n .d .) . Brighton Labour Process Group, "The Capitalist Labour Process", Capital and Class, No .1, 1977, and second part of this paper (unpublished, CSE 1976 Conference paper) . Cole, G .D .H ., Trade Unionism and Munitions (Clarendon Press, 1923) . Coulson, Margaret, Magas, Branca and Wainwright, Hilary, "The Housewife and her Labour under Capitalism : a Critique", New Left Review, 89, Jan-Feb 1975 . Deere, Carmen Diana, "Rural Women's Subsistence Production in the Capitalist Periphery", Review of Radical Political Economics, vol .8, no .1, 1976 . Delmar, Rosalind, "Looking Again at Engels's "Origins of the Family, Private Property and the State"', in Juliet Mitchell and Ann Oakley, ed ., The Rights and Wrongs of Women (Penguin, 1976) . Drake, Barbara, Women in the Engineering Trades (Labour Research Dept . and Allen and Unwin, 1918) . Engels, Frederick, "The Origin of the Family, Private Property and the State", in



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Marx and Engels, Selected Works (1 vol, Lawrence and Wishart, 1968) . Finer Report on One Parent Families, Cmnd . 5629, HMSO, 1974 . Gardiner, Jean, "Women's Domestic Labour", New Left Review, 89, Jan-Feb 1975 . Gardiner, Jean, "Women and Unemployment", Red Rag no .10, Winter 1975-1976 . Ginsburg, Norman, "Poor Relief : The Development of State Policy in the Context of Class Struggle and the Struggle for Accumulation" (unpublished, CSE Conference paper, 1977) . Gough, Kathleen, The Origin of the Family (New Hogtown Press pamphlet 1973) . Hinton, James The First Shop Stewards Movement (Allen and Unwin 1973) . Hunt, Judith and Alan, "Marxism and the Family", Marxism Today, Feb 1974 . Legassick, Martin, "The Analysis of Racism : the Case of the Mining Economy' (unpublished) . 1976 . Legassick, Martin and Wolpe, Harold, "The Bantustans and Capital Accumulation in South Africa", Review of African Political Economy, no .7 1977 . Mackintosh, Maureen, Himmelweit, Sue and Taylor, Barbara, "Women and Unemployment, a discussion Paper for London Women's Liberation and Social iism Conference', March 1977 . Mandel, Ernest, Late Capitalism (New Left Books, 1975) . Marwick, Arthur, Women at War, 1914-1918 (Croom Helm, 1977) . Marx, Karl, Capital, vol .1 . (International Publishers, 1970) . Marx, Karl, The Grundrisse (Penguin, 1973) . Middleton, Chris, "Sexual Inequality and Stratification Theory, in Frank Parkin, ed . The Social Analysis of Class Structure (Tavistock, 1974) . Milkman, Ruth, "Women's Work and Economic Crisis : Some Lessons of the Great Depression", Review of Radical Political Economics, vol .8, no .1, Spring, 1976 . Mitchell, Juliet, Woman's Estate (Penguin, 1971) . Obregon, Anibal Quijano, "The Marginal Pole of the Economy and the Marginalised Labour Force", Economy and Society, 3, 1974 . Palloix, Christian, "The Labour Process : From Fordism to Neo-Fordism", in The Labour Process and Class Strategies (CSE pamphlet no .1, Stage 1, 1976) . Political Economy of Women Group, "Women's Domestic Labour" in On the Political Economy of Women (CSE Pamphlet no . 2, Stage 1, 1976) . Revolutionary Communist Group, "Women's Oppression under Capitalism", in Revolutionary Communist no .5, November 1976 . Sacks, Karen, "Engels Revisited : the Organisation of Production and Private Property" in Michelle Rosaldo and Louise Lamphere, eds, Woman, Culture and Society (Stanford, 1974) . Sivanandan, A ., Race, Class and the State : the Black Experience in Britain (Race and Class Pamphlet no .1, 1976) . Wolpe, Harold, "Capitalism and Cheap Labour Power: from Segregation to Apartheid", Economy and Society, 14, November, 1972 . Women and Labour Process Group, "Women, the Family and Industrialisation in Britain" (unpublished) n .d . Young, Kate and Harris, Olivia, "The Subordination of Women in Cross-Cultural Perspective" in Papers on the Patriarchy Conference (Women's Publishing Collective, Dec . 1976) .

ARCHIVE : MARX, CLASSICAL POLITICAL ECONOMY AND THE PROBLEM OF DYNAMICS PART II Henryk Grossmann Translated by Pete Burgess

V The second characteristic feature of the dominant theories since Classical economics (the first was their one-sided view of the valorisation process) is their static character . No one disputes the static nature of the theory of the Physiocrats, the discoverers of the 'economic circuit' (the "Tableau Economique'l . The theories of Smith and Ricardo are both similarly static . All of their categories are based on the concept of an equilibrium, in which 'natural price (value) asserts itself as an ideal resting point of economic activity, around which market prices oscillate . As a result, there is no room for crises in Ricardo's theory :[1] such things figure as eventualities introduced from the outside (wars, bad harvests, state intervention etc .) . In itself the economic circuit always moves in equilibrium, and always follows the same paths . The eventual deceleration and cessation of capital accumulation which Ricardo forecast for the distant future must be characterised as mere pseudo-dynamics, as the dynamic factor is not inherent in the economic process itself, but is rather a natural force which influences the economic process from the outside, (falling rate of profit as a consequence of a growing population, and hence increased ground rents) . Ricardo's own followers left matters at this stage . In France, Say's theory of markets, that is the doctrine that any supply is simultaneously a demand and consequently that all production, in producing a supply, creates its own demand, led to the conclusion that an equilibrium between supply and demand is possible at any time, and at any level of production . But this implies the possibility of the unlimited accumulation of capital and expansion of production, as no obstacles exist to the full employment of all the factors of production . Part I of this article was published in Capital and Class, number 2 .



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Although John Stuart Mill was the first to attempt to give consideration to the dynamic character of the economy, through differentiating between statics and dynamics, this division of the object of science, which he derived from mechanics, proved fatal in the later development of political economy . Mill's analysis was utterly static in nature . After first having analysed the economic mechanism in a static state (with constant population, production, amount of capital and technology), and investigating its laws, he subsequently sought "to add a theory of motion onto the theory of equilibrium - to add the dynamics of the economy to its statics" . [2] A certain number of corrections were made to the static picture : population growth, growth in capital etc ., as if such subsequent retouching could serve to remove the essentially statically conceived character of the essence of the economic system ; as if in fact there were two capitalisms - a static one and a dynamic one . But if capitalism is dynamic, what is the point of investigating the laws of an imaginary static economy, if one does not at the same time show how the transition from statics to dynamics is to take place?[3] As theories of equilibrium, the dominant theories cannot, on their own principles, derive generalised crisis from the system, as in their view prices represent an automatic mechanism for the restoration of equilibrium and for overcoming disturbances . Any attempt by these theories to include one of the empirically proven moments of disturbance in their system would necessarily come to grief on this fundamental contradiction : a consistent application of the arguments of equilibrium theory (which they use) can only explain such disruptions of the equilibrium as being externally produced, i .e . by changes in what is economically given . As far as the theories of equilibrium are concerned the economy will always tend in one direction following changes in these givens : by adjustment - i .e . a tendency towards the creation of a new equilibrium . How crisis can arise in such a system is difficult to see .[4] The theory of Alfred Marshall (1880), who tried to link Classical theory to marginal utility theory, is also decidedly static in construction . Although he investigates the movements of a developing society, these merely constitute an external framework of analysis . His sole concern is with the adjustment of the economy to changing external variables, such as population, capital, etc ., but not with those developments which arise from the economy itself . Marshall's economy is totally lacking in development . At the centre of his system lies the concept of a general equilibrium which asserts itself throughout the economic mechanism ;[5] the attainment of equilibrium signals the fact that no further changes will take place . This basic idea is then applied to individual problems . Equilibrium is not a heuristic device in the construction of theory, but a tendency which seeks to assert itself in reality . [6] The whole system is governed by the idea of a general state of equilibrium (maximum of satisfaction), which the economy, under perfect competition, strives to achieve . Marshall only arrived at this static picture thanks to his inadequate method, for, despite his "General Theory of Equilibrium", he does not provide any theory of the system as a whole, where all the sub-markets and the process of production are dealt with simultaneously, i .e . where all the interrelationships in the system as a whole are grasped . What Marshall in fact offers is a theory of particular (partial) equilibria in sub-markets, where the issue at hand is



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that of the relations between already existing economic givens : for example, in the determination of the level of price given the curves for supply and demand, or the determination of the supply curve, given quantities and prices . In the light of this H .L . Moore, quite correctly, characterised Marshall's method of study as "static and limited to functions of one variable" . [7] ) .B . Clark, the influential American theorist of a generation ago, did, in Schumpeter's view, "take one basic step further than Mill's standpoint, which carefully defined the static state . . . He also energetically put forward the postulate of a specific theory of 'dynamics' . [8] But this remained as a "postulate" . In resignation Clark says of dynamics : "But the task of developing this branch of science is so large that the execution of it will occupy generations of workers .'[9] In reality what Clark offers is a picture of an imaginary static economy : year after year the mass of workers employed and the number of capitals remain unchanged, along with the tools and techniques of production . No shifts of capital or labour take place from one branch of production to others, and consumer demand also remains constant . The principle of distribution is then investigated under these assumptions; this shows how prices, wages and interest on capital are formed in a static situation : commodities are sold at their "natural" i .e. cost price, so that manufacturers do not obtain a profit .[10] Clark admits : "This picture is completely imaginary . A static society is an impossible one" .[11] "Actual society is always dynamic . . . industrial society is constantly assuming new forms and discharging new functions ."[12] But he draws no conclusions from this observation . Clark considers that static forces, isolated in this way, do nevertheless possess real meaning : they are constantly at work in the dynamic world as a fundamental component force, and indicate real tendencies .[13] But there is still more to come . Despite the fact that he stressed the "hypothetical" character of the "static state", and despite all his references to the dynamic essence of reality, Clark almost totally abandoned dynamics in his later principal work, Essentials of Economic Theory (1915), where he adopts a static picture of the economy and society . The static model asserts itself in a competitive economy - although not in an ideally pure form . As long as there is free competition, "the most active societies conform most closely to their static model' . [14] The situation is much the same in contemporary society (with imperfect competition) .[15] It is in fact precisely the capacity for movement which the elements of the real economy possess, which enables a static state to be attained so much more quickly than if these elements were less responsive . The "normal" (static) form asserts itself more effectively in the highly industrialised society of North America than in the rigid societies of Asia. [16] "The static shape itself, though it is never completely copied in the actual shape of society, is for scientific purposes a reality" .[17] In short, "static influences that draw society forever toward its natural form are always fundamental and progress has no tendency to suppress them" .[18] Exactly what the "dynamic" character of the economy consists in, and how disturbances can arise, has not been revealed by Clark . He presents "dynamic" development, with its rapid changes in the economic organism, as a temporal succession of different static states .[19] This static character becomes even more pronounced in the pure theory of marginal utility . Dynamic change in the structure can hardly be reconciled with a construct which presupposes that production is directed by consumers (demand),



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and that the economy can be reduced to subjective choices between different subjective uses . Structural changes are merely external facts, which the theory takes as presuppositions : but it does not study them or explain how and why they arise . Schumpeter could therefore note that "the great reform of theory through the subjective doctrine of value left the static nature of its system untouched . . . In fact, the static character of theory gained substantially in rigour and clarity as a result of the new analysis" .[20) As Roche-Agussol confirmed, the main object of analysis of marginal utility theory was an "essentially static problem" - namely the valuation and distribution of goods "at a given stage of the means for satisfying needs, and of needs themselves" .[21] The introduction of movement through time had to lead to the breakdown of this theory, even from its own standpoint, as it offered no way of predicting future needs and means for satisfying these needs . Fully conscious of this fact, Menger declares : "The conception of theoretical political economy as a science of the developmental laws of the economy is utterly monstrous . . . It is tangible proof of the aberrations of judgement' .[22] The theory expounded by W .S . Jevons, the other founder of the theory of marginal utility, is also decidedly static : Jevons operates with concepts borrowed from the science of mechanics (such as "infinitely small quantities") which he uses as a basis on which to erect his theory. "The laws of exchange resemble the laws governing the equilibrium of a lever, as they are both determined by the principle of virtual velocities' . [23) Although Jevons knows full well that all economic phenomena are in motion, and must, therefore, be dealt with in units of time, in Chapter III of his book he manages completely to exclude the time factor from his analysis by recourse to a methodological dodge . Right from the outset he dispenses with the idea "of a complete solution to the problem in its entire natural complexity" (that would be "a problem of movement or dynamics") and confines his analysis to "the purely static problem" of establishing the conditions under which exchange ceases and equilibrium is achieved .[24] The marginal utility school has retained this character up until the present day : for reasons of space we have to restrict ourselves to a few typical examples . F .H . Knight, for example, although acknowledging that history never ceases and that "the evolution to other forms of organisation as the dominant type" is inherent in capitalism, [25] thinks that "such a social development falls outside the scope of the economic theorist", as the notion of equilibrium cannot be applied to such changes .[26] He refers the study of these changes to the science of history and comes to the conclusion, "that economic dynamics, in the sense which this expression should have in order to be applicable (in economic theory), does not exist . What is specified as being dynamics in it should be named revolutionary or historical economic theory .[27] Ewald Schams' view does not differ substantially from this . He considers that economics is a theory of "economic quantities", and that an understanding of the relations between variables and dependent variables necessarily requires the functional formation of appropriate concepts, and the construction of equations .[28] However, since the functional theory of relations, as is now admitted,[29] is necessarily static, since it investigates merely the relations between given quantities, Schams arrives at the conclusion (despite recognising the dynamic nature of the capitalist economy), that, since we do not



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possess a specifically dynamic conceptual apparatus, which could capture dynamic changes, we must work with a static conceptual apparatus . Mathematical economic theory, as a theory of relations, has no more possibility of development than geometry . Quite independently of whether "there is a stationary reality or simply an economy in complete motion", "logically defined statics will remain a presupposition" . [30) Schams therefore directs his criticism at the two-fold division of theory into statics and dynamics . "Any quantitative economic theory is completely static ." Economic movement can only be understood as the succession and comparison of various static states of equilibrium, as "comparative statics", "the comparison of the two states of dependent variables over a certain interval of time' .'[31] There can be no specific dynamic problems within mathematical economic theory, but, at most, theoretical problems which are no longer questions of mathematics ; that is, theories relating to the development of economic realities . But these lie outside the scope of economic theory .[32] The knowledge that the grasping of a number of interdependent movements and non-equivalent relations cannot be accomplished mathematically, has clearly led one part of the dominant theory to indulge in an intensified struggle against attempts to make theory more dynamic, and to a renaissance of static theories of equilibrium .[33] In Conrad's view, an economy which does not possess a central management is a "self-regulating mechanism, which seeks a state of rest, i .e . seeks to assume a uniform movement" . The essence of "self-regulation" consists in the "mechanism being steered towards a stationary positon" - "something which is never achieved, but which is the sole reason why an economy which lacks a unifying central management does not fall into chaos" .[34] Conrad knows full well that there are crises and disturbances which cannot be regarded as movement towards a state of rest . The presupposition of the tendency towards equilibrium is therefore "that the regulative apparatus functions correctly (sic! H .G .)" . If this is not the case, "then it is possible that the approach to the state of rest may be constantly impeded" .[35] Conrad believes that movement is a succession of states of rest : he does not try to conceptualise the states of non-rest between each of these states .[36] Alexander Bilimovic concedes that up to now theory has merely succeeded in determining the equilibrium equations for a stationary economy, but not for a dynamic one . This explains why "the schemes which have predominated up to now do not correspond to economic equilibrium in the real world" . Despite this, these schemes are held to be capable of improvement, and Bilimovic hopes that it may be possible to construct a mathematical "model" which does not only apply to a stationary economy, as in his view the lack of success of previous attempts to make the stationary schemes dynamic cannot be attributed to any inherent fundamental defect .[37] Is this two-fold division of theory not reminiscent of a similar plan expounded by Mill? And is it not also destined to remain just as barren as Mill's, in view of the fact that no bridge can lead from "statics" to "dynamics", especially not if this "dynamics" is conceived of as a succession of stationary states . For these are successive static states - states which were otherwise singled out for their persistence . The static mode of thought is unable to explain the development of new successive states precisely for the reason "that the equilibrium of static



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analysis does not allow for growth, that this analysis can only describe an expanding system in terms of successive states of equilibrium with the intervening stages of transition left, and left with danger to the validity of the argument, unanalysed" .[38] These difficulties only really begin to arise when statics are no longer regarded as a real tendency but as a heuristic device, as there is even less of a bridge from this hypothetical situation which can lead to a reality moving through states of disequilibria . "If the economic cycle's entire course is one of disequilibrium - neither cumulative downwards nor upwards - what is the point in regarding particular states of equilibrium as the point of departure or point of intersection of this movement?"[39] If one proceeds from the assumption of a static equilibrium, then the entire problem of dynamics is reducible to that of the factors which "disturb" this supposed state . This can be seen in the work of Haberler, for example, who considers that there is an inherent tendency towards equilibrium in the economic system . As far as he is concerned, the only fact which requires explanation in the course of the economic cycle is recession, "the long swing in the negative direction", but not the upswing, "since the upward movement, the approach to full employment, might be explained as a natural consequence of the inherent tendency of the economic system towards equilibrium" . [40] More recently still, the number of critics of the concept of "the stationary state" as a superfluous, because economically unreal concept, has multiplied among certain sections of bourgeois theory . As Hicks says, this group is forced to admit that, "the actual state of any real economy is never in fact stationary ; nevertheless, stationary-state theorists naturally regarded reality as 'tending' towards stationariness ; though the existence of such a tendency is more than questionable" . "The stationary theory itself gives no indication that reality does tend to move in any such direction ."[41] Still more, Hicks holds the concept of a stationary economy directly responsible for holding back the development of economics, because it neglected problems of dynamics .[42] We can deal with the mathematical tendency quite briefly, as our concern is not to present an exhaustive critique of this school, but rather to bring out its static character .[43] "No presentation is more static than that of Leon Walras ."[44] As a memorial tablet in the Laussanne Academy reads, Leon Walras was famed as the theorist "who first determined the general conditions of economic equilibrium" . According to Walras, the economy can be compared with a lake whose waves may well be occasionally whipped up by a storm, but which subsequently subsides to form a new equilibrium on its surface . Although the economic disturbances to general equilibrium spread throughout the entire economic system, Walras simply regarded them as oscillations, whose amplitude falls over time until equilibrium is restored . [45] He does not ask whether perhaps such a static case is impossible to realise . On the contrary, Walras is convinced of the possibility of obtaining permanent equilibrium . "In order to be able to quell or prevent crises it is necessary to know the ideal conditions of equilibrium ." The same can be said of Pareto . Hicks calls Pareto's "Manual"; "the most complete static theory of value which economic science has hitherto been able to produce" .[46] Pareto distinguishes three areas of research : the theory of statics, which represents the most developed part of economic theory : the theory of



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successive equilibria - "there are only very few ideas on the theory of successive equilibria" : and finally the theory of dynamics, which is concerned with the investigation of the movement of economic phenomena - "except for the specific theory of economic crises nothing is known of dynamic theory" .[47] Pareto himself contributed nothing to the investigation of dynamics, and in fact retarded it through his assumption that the above three-fold division of research actually corresponded to reality ;[48] his sole concern was with statics . His central, in fact his only, concern was that of equilibrium[49] to which he devoted Chapters III-VI of his book ; he never once indicates the bridge which leads from statics to dynamics .[50] Pareto underscores the significance of Walras's equations for economic equilibrium, and allots them an analogous role to that of Lagrange's equations in mechanics, in that he saw reality as a system of "continual oscillations around a central point of equilibrium", and considered this centre of equilibrium to be a moving one . [51 ] Pareto never posed the question as to whether the concept of economic movement is compatible with that of equilibrium, and in fact excluded it by the insupportable assumption that all economic phenomena share a simultaneous and uniform rhythm .[52] This static tendency in Pareto's theory can be understood if one considers that his sole concern was with the relations between already existing values in the market - or in Pareto's later formulation with choices between existing combinations of indifference . In his view equilibrium is achieved if two persons possessing a certain number of goods exchange them with each other on the market until the point where, with the approval of each of the parties, no further exchange is possible . The state of equilibrium which is thus attained can therefore be defined as "a state which will maintain itself indefinitely", if no changes in the conditions take place or if these changes are so slight that the system "tends to reestablish itself and return to its original state" . Pareto employs the concepts of "statics" and "tendency to equilibrium", which are borrowed from mechanics, without looking to see whether they make sense in economics . The static character of his theory lies in his much-vaunted method of the general interdependence of all economic variables, the essence of any functional method of study, which was regarded as a modern miracle for a long time, and which dispenses with genetic explanation ; it shows simply the relations between already given economic variables (be they utilities or indifference possibilities), but not the capacity of the system for movement, the development of these variables, and hence the direction in which the system is moving . If one wants to do this, it is necessary to look at the process of production as the source of all changes in "economic variables" : but this was excluded from Pareto's analysis from the outset .[53] Although Hicks thinks that Pareto's exchange equations could be extended to production processes, given certain corrections, he makes the reservation that they would only be valid for a stationary economy in which there was no accumulation of capital, and no other changes in the given world (Hicks says no net savings) . But this makes Pareto's equations, as Hicks admits, "remote from reality' . "They are not a depiction of reality' .[54] As early as 1846, in his polemic against Proudhon, Marx wrote, "The relations of production of any societyconstitute a whole" . The same authors who stress the "general interdependence" of all economic variables and reject methods which seek to isolate and explain individual groups of phenomena from the process of



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economic life, themselves break this totality down into individual sectors, into market phenomena separate from the sphere of the labour process, and make this artificially separated sphere of exchange the main object of their analysis . Pareto arrived at "equations for equilibrium" by dealing with the functional connection between given market variables[55] and excluding the dynamic factor of the production process or, in other words, by accomplishing the "complete dedynamising of the system" .[56] The above example also shows how matters stand as far as the precision of the mathematical method is concerned, the method used to construct the system of equilibrium equations . This precision has no relation to the content of the findings of economic science, but is rather a feature of the techniques of mathematical calculation . Despite the precision of these operations, the mathematical method can be a source of very great error, precisely because of the assumptions which underlie the equations, and which in turn determine the value of the knowledge which this method yields .[57] In its youthful enthusiasm, the mathematical school (Walras, Marshall, Edgeworth, Pareto and Boehm-Bawerk) believed it could measure everything and constructed a set of equations for equilibrium, behind which lay the assumption that utility is - in principle - measurable, or would be measurable if we had enough knowledge at our disposal . After one generation a more sober assessment was made . It was generally acknowledged, a fact only objected to by a few at the very beginning, that utility, as a psychological variable, cannot be measured and subjected to mathematical operations . [58] But if marginal utility is immeasurable, then so is aggregate social utility, and hence all the"equilibrium equations" which are constructed on this unreal basis are irrelevant . The critique of the marginal utility theory, which was originally made only by opponents of the mathematical school, was now practised by its supporters and led to the dissolution of the school .[59] However, the breakdown of marginal utility theory did not lead to the abandonment of equations for equilibrium, but rather to efforts to construct them on another basis . In his 'Manual' Pareto took recourse in the concept of "ordinal" indifference curves : he intended to use this as a basis, supposedly taken from experience, on which to construct a theory of preference and its "equations for equilibrium" . (60] Criticism proved the untenability of this theory by showing up the arbitrary nature of the assumptions behind the equations . The procedure employed by the mathematical school presupposed the infinite divisibility of goods, and the unlimited substitutability of the various goods (e .g . nuts instead of apples), in the satisfaction of needs ; this created a gulf between the premises on which the indifference curve were based and those of reality . [61] The assumption of the infinite substitutability of goods leads to the most absurd conclusions when elevated to the status of a universal principle . For example, in the everyday consumption combination of bread and wine, a very little, or even a minimum, amount of bread can be "substituted" for by a lot of wine, or increasingly smaller amounts of meat by more and more salt .[62] These absurd results, and the indifference curves derived from them, along with the demand curves, price relations and positions of equilibrium, are not an approximate mirror of reality, but "in fact a grossly distorted picture of reality" .[63] If one considers the fact that for the solitary individual and the few commodities attheirdisposal, there are an infinite number of possible combinations



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of indifference, one can see that if there were 40 million people and several thousand different types of commodities, "the time and energy of a whole generation would not suffice" to collect the incalculable amount of information needed to construct the hundreds of billions of indifference combinations. And the time and energy of further generations would never suffice to solve the equations which were constructed on this basis .[64] The post-1918 monetary theories of crisis which spread in the 1920s are also static in nature: these were predominantly the Wicksellian, and neo-Wicksellian, efforts to overcome the business cycle and stabilise the economy, the value of money, and world prices, in a purely monetary way by means of the regulation of interest rates by the central banks .[65] Although Wicksell conceded that "in principle" the real causes of crisis stem from the commodity, this in fact plays no role in his thought as, in his view, the connection of the economy with credit had produced a shifting of the centre of gravity of the economic system towards the monetary side . An appropriate regulation of interest rates would cause "the real moment which produces crisis" to cease working and become reduced to "a gentle swell" .[66] This is meant to apply not only to individual countries, but in fact predominantly to the world economy as a whole . It would then be simply a matter of the central credit organisations regulating their interest rates up and down in such a way "so that the international balance of payments remains in equilibrium, along with the general level of world prices, which should remain constant" . It is precisely this static conception of the economy which is hailed by Hayek as "the most important basis of any future monetary theory of the economic cycle".[67] And in fact this concept does indeed underlie all the monetary theories of crisis (Irving Fisher[68] and R .G . Hawtrey) . For the latter economic fluctuations are not of necessity bound up with the essence of the capitalist mechanism, "but rather arise because of the world-wide restriction of credit" .[69] The cycle of crises is consequently "a purely monetary phenomenon", and changes in economic activity,"the alternation of prosperity and depression", have as their sole cause "the changes in the flow of money" . "If the flow of money could be stabilised, the fluctuations in economic activity would disappear", [70] and prosperity could continue indefinitely, and without limit . It was the pressure of the great crisis of 1900-01, and then the economic disturbances of the post-1918 period which began to produce doubts within the dominant theory as to the correctness of the static conception . More attention was paid to the problem of crises, and empirical material began to be collected on past crises . The research institutes which were founded for the purpose of investigating these problems attempted, using this material, to establish the laws of behaviour of the economic cycle . This was the first time that attention was given to the material elements of the production process in addition to the value-aspect, and that the distinction between the production of means of production and the production of means of consumption was introduced into economic analysis, stressing their varying roles in the course of the cycle : the specific role of so-called durable "fixed" capital[71] was stressed as a cause of crisis - for example by Spiethoff and Cassel -, emphasis was given to the role of progressive technical improvements, the disproportion between the structure of the various branches of production[72] and the influence of the length of the period of construction on the course of the cycle (Aftalion) .



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These attempts turned out to be unsatisfactory as each of the authors simply took one, individual, isolated material aspect of the entire process as the basis of their theory of crisis, which gave these theories an accidental, eclectic character, resting on partial observations . The same can be said of J .W . Clark,[73] R .F . Harrod,[74] and L . Ayres[75] whose most recent attempts use the durability of the means of production as a possible basis for explaining the periodicity itself, and the pronounced fluctuations in the "capital goods" industries, (the accelerator principle) . An attempt is made to explain the special problem of crises by means of individual observable correlations : this in fact leads to a severing of the connection with the theoretical basis of political economy, since these theorists feel that the older static theories of crises are less applicable for explaining a dynamic process . However, since, on the other hand, no conclusive dynamic theory in which the material elements are given a proper theoretical treatment has yet been constructed, these more recent investigations of crisis remain as specific theories of a particular branch of economics, lacking a broader theoretical basis .[76] Only a very small circle within the dominant theory has perceived the lack of a general theory of dynamics . As H . Mayer stated "the unsatisfactory and inappropriate nature of previous theories was felt more and more" . Because of their fundamental errors and conceptual apparatus these theories "could not take up and deal with certain problems thrown up by the actual course of economic events", "The evidently dynamic problem of the economic cycle and crises" could not be grasped by the "previous essentially static systems of price theory" because of its "purely static method of study" of the relations of exchange between given economic variables which "merely described already-attained price relations in a state of equilibrium" . The problem of the "analysis of movements of economic reality required an insight into the process of the formation of prices" . [77] As we showed previously, all these systems dispensed with the search for the overall course of the economic system in a particular direction, i .e . its developmental tendencies, and, in addition, were incapable of doing this as as they confined themselves solely to an understanding of the exchange relations between given variables . But these exchange equations show that all the quantities of goods or prices, which the economic subject disposes of are received as additions by others ; hence all these increments (plus or minus) add up to zero in the total sum . There is no calculable remainder which could act as an indicator for a particular direction to the course of the system as a whole .[78] Similarly, the relations of exchange of the "economic variables" are not real movements, or processes in time : they are transcriptions of a timeless "movement" - a circular motion . However, if one wants to discover the particular direction of the overall course of the economy, one must investigate not only the relations of exchange of given variables, but also their development, growth and passing away or (as Mayer says) the process of "price formation" . It is insufficient to look at relations of exchange ; one must also study the production process as well as the process of circulation, i .e . the process as a whole . It then becomes clear that the positive and negative changes do not balance out to yield a zero, but that they assume definite values (e.g. the falling rate of profit) . That is, they reveal the direction of movement of the system as a whole, its developmental tendencies . We can now see how the main task of theory, as Marx characterised it in Capital, namely the investigation of the "economic laws of motion" which was banished from the realm of theory by



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the marginal utility school, finally appeals in the foreground in the dominant theory too . This was the first time that a small group of theoreticians within the dominant school - Streller, Amoroso, Rosenstein-Rodan, Ricci, Morgenstern, Bode and others - turned, in principle, against the central argumentation behind the equilibrium theories, with its fictitious assumption of a simultaneous rhythm to economic events, criticism of which was meant to be preparation for the basis of a dynamic theory of the economy ; this group observes that on the more realistic assumption of a variable rhythm of economic events "it would be a matter of coincidence if an equilibrium was established" . [79] The reason for this is that the tendency toward equilibrium is merely a possibility ; an alternative is that due to the unsimultaneous rhythm of economic movements, the change of one operation "could bring about other changes : there would be a perpetual series of changes, the time coefficients would never be the same and there would be no equilibrium" . Theories of equilibrium would have to prove that this second constellation of time coefficients cannot take place . They have not been able to provide such a proof, and because of their assumption of a simultaneous rhythm in all economic processes, they have blocked the way to an understanding of problems of dynamics . The "equilibrium system" of the mathematical school only exists by virtue of the fact that it represents "economics without time" . "The equilibrium system of the mathematical school, which embraces neither indices nor coefficients relating to time, can in no way capture the real state of equilibrium ."[80] The critique of the mathematical school does not single out one particular aspect of the theory or a particular axiom, but rather the theory itself, "as it offers the most precise formulation of one train of thought common to all economic schools, so that its proven defects affect all other formulations all the more acutely" .[81] The basic error of theories of equilibrium is not that "they have regarded moving, changing variables as invariable", for if these movements were to share the same duration, if they were equi-temporal, the real course of the economic process could indeed be understood as a series of "successive equilibria", of which each individual state could be defined by a system of equilibrium .[82] However, states Schams, at the moment when the theory proceeds to deal with non-equitemporal movements, i .e . to express explicitly the time factor "t", "one encounters the static system at its weakest point, the assumption of a pseudo- constancy of economic periods" .[83] This is because any ranking of the time elements, i .e . varying periods of movement, shatters the equivalence of the relations which constitute the basis of the mathematical system behind the equations, and renders them no longer amenable to a mathematical solution .[84] It is easy to see why there was talk of the failure of economic theory, as it progressively lost all relation to reality . A theory which sees capitalism as a mechanism tending, through "self-regulation", towards equilibrium, is incapable of understanding the economic developments of the last few decades - namely the attempts to establish such an equilibrium through the conscious monopolistic intervention which characterised this period . The dominant theory is therefore faced with a dilemma . Mathematical economics could celebrate its "triumph" as long as it was governed by the idea of equilibrium . However, this failed to explain the dynamic movement of the economy . It regarded these movements as mere "oscillations" around a state of equilibrium or as temporary "disturbances" prior to the attainment of a new



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equilibrium, [85] whereas reality exhibited long term movements away from equilibrium, in fact towards disequilibrium . The reason why all tendencies within the dominant theory stressed the static character of the economy and its capacity for adjusting to the changing needs of society, for over 100 years - from Ricardo to the present day - has clearly been the need to justify the existing social order as a "reasonable", "self-regulating" mechanism, in the context of which the concept of "self-regulation" was intended to divert attention away from the actually prevailing chaos of the destruction of capital, the bankruptcy of firms and factories, mass unemployment, insufficient capital investment, currency crises, and the arbitrary distribution of wealth .[86] It is only by appreciating this that we can understand why the concepts of "statics" and "dynamics", which originate in theoretical physics, were introduced into economic theory without any discussion as to whether such a two-fold division of theory was justified .[87] The untenability of such a separation becomes clear when one considers that there are no "non-moving" processes in the economy: that the so-called "stationary" economy "moves", and is a circular process . Hence the characteristic distinguishing feature of statics and dynamics cannot lie in the fact that one of them investigates non-moving, and the other moving and variable phenomena . Rather, we characterise as "static" a kinetic economic process which has reached the complete equilibrium of its movements, and as a result of the persistence of all the subjective and objective conditions repeats itself endlessly, in unchanged form, from one period to the next (a circuit) .[88] Consequently, a dynamic economy should be understood to mean not a "moving economy" (since the "static" economy also moves), but rather an economic process which has not reached equilibrium, i .e . one which moves into disequilibrium in the course of time, which simply means that the conditions of the economic process change from one period to another, resulting in the eventual outcome of the economic process - the economic structure - also undergoing change . Ever since Mill theory has been forced into this two-fold division : but only one aspect has been developed and worked on, - the static, the tendency towards equilibrium . The question of dynamics, and the necessity of "dynamising" theory has remained at the level of discussion without anyone actually being capable of constructing a conclusive theory of dynamics . Success in breaking away from the traditional dictatorship of these concepts has come only very slowly, and late . As Bode states, it has finally been realised that there is no sense in clinging to the concept of equilibrium, if in reality "there is nothing which seeks, passes through or leaves equilibrium" . However, the discovery of the untenability of the equilibrium thesis has not made the position of the dominant theory any easier . On one hand, it now states that a dynamic theory is needed to explain reality : on the other hand, it is forced to admit that the construction of such a theory implies fundamental difficulties of principle.[89]

VI The discovery which was only made by the most advanced minority faction of the currently dominant theory - and only then after the violent disturbances of the



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World War - namely that a dynamic reality cannot be explained by arguments based on ideas of equilibrium, had already been stated by Marx in 1867 in the theory of the "dual character of labour" . This theory was argued through to its conclusion in Volume II of Capital, in the theories dealing with the various circuits of capital, and with the turnover time of capital . Marx was obliged to set foot here on a terrain that had never been entered before, and create all the categories and concepts which were connected with the time element (circuit, turnover, turnover time, turnover cycles) ; and he was completely justified in reproaching the Classical economists for having neglected the analysis of the time element - the form of the circuits and of turnover .[90] Such a disregard was understandable given the purely value-oriented mode of observation which they employed . In contrast to this, Marx's conception of the dual character of all economic phenomena compelled him to look at the economy in its specific movement, not statically . The reason for this is that the capital which is advanced in the form of money can only maintain itself and grow by changing its natural form in the circuit, transforming itself from the money form into the form of the elements of production, and from these into the form of finished products, commodities . Capital must spend a given minimum period of time in each of these three stages before passing on to the next phase - a period which is objectively determined by the techniques of the processes of production and circulation . Capital "is a movement, a circuit-describing process going through various stages . . . Therefore it can be understood only as motion, not as a thing at rest" .[91] The "production time" which was presented in Volume I of Capital is now followed, in Volume II, by an analysis of "circulation time" ;[92] this not only has effects on the size of profit, but also gives Marx the opportunity to deal with the actual form of motion as such[93] - the question of the duration of the circuits, be this either in their coincidence or in their sequence, i .e . the conditions for the undisturbed transition from one stage to the next . "The circuit of capital can only proceed if the various phases can succeed each other without interruption" . [94] Marx demonstrates the theoretical conditions for such a normal circuit, conditions which in reality are only achieved by way of exception : the undisturbed course of the process requires the co-existence of capital in all its three natural forms . The normal "succession" of each part is conditioned by the "co-existence" of capital, i .e. by its constant presence in all the three forms : as money-capital, productive-capital, and commodity capital, and by the proportional division into each of these forms .[95] This simple formulation serves to hide the problem of dynamics . The "coexistence" of the three forms of capital is identical with their synchronisation, and hence presupposes given, and unchanged values - because they all fall into the same unit of time . This is the only instance when one can really speak of the "unity of the three circuits" .[96] In contrast to this, "succession" is a process in time, and consequently embraces the possibility of revolutions in value of the individual parts of capital, which must hinder the smooth transition of capital from one phase to another .[97] Hence, according to Marx, equilibrium would only be possible under the unrealistic assumption of the constancy of both values and techniques .[98] Since in reality this condition cannot be realised, the circuit of capital must move "abnormally", i .e . in disequilibrium . The entire presentation is crowned by the analysis of the "turnover of



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capital", where the circuit of capital through all three stages is to be understood "not as an isolated process, but as a periodic process" . The duration of this turnover, given by the sum of production time and circulation time, is called "turnover time", and measures "the interval of time between one circuit period of the entire capital-value and the next, the periodicity in the process of the life of capital or, if you like, the time of the renewal, the repetition, valorisation or production of one and the same capital-value" .[99] Finally, following the presentation of the turnover of individual capitals, Marx arrives at the presentation of "Aggregate Turnover of Advanced Capital . Cycles of Turnover", [100] which he uses within the overall argument, to stress those elements which work in the direction of disequilibrium . In his schemes of reproduction Marx proceeds on the assumption of an identical turnover time of one year for all capitals in all branches of production . But whereas for the dominant theory the synchronisation of all movements represents a definitive methodological observation, for Marx it merely represents a preliminary, simplifying assumption, a first step in the process of getting closer to reality . He later acknowledges the fact that in reality "the turnover times of the capitals vary according to the sphere of investment", with the variation in turnover time being dependent on the natural and technical conditions of production of each species of commodity (natural produce, leather etc .) .[101] In addition to these circumstances which are the product of the process of production and "which distinguish the turnover of different capitals invested in different branches of industry" we have to add those which are the product of conditions in the sphere of circulation (for example, improved means of transport and communication, which serve to reduce the travelling time of commodities) . [102] It is clear that all these variations in total turnover times must produce a disequilibrium in the system, when one recalls that the original equilibrium in the equations for the schemes of reproduction only held under the assumption of an equal turnover time for all capitals . And on top of these sources of disequilibrium, which flow from variations in the total turnover time of the capitals in the various branches of production, come additional differentiating factors within each branch of production, due to the different turnover times for the fixed and circulating parts of capital . As regards circulating capital, Marx analyses the temporal relation between the working period and the period of turnover, since the size of the circulating capital which functions through each of these periods is determined by their respective durations . Out of the three possible variants - that the working period is the same as, longer than or shorter than the period of circulation[103] - only one allows the undisturbed transition of the capital functioning in the working period into the circulation-phase, namely the first, "where the working period and the circulation time each constitute equal halves of the period of turnover" . [104] The same applies in the case wheree each of the periods may not in fact be equal, but where the period "is an exact multiple" of the working period : for example, where the working period is three weeks, and the period of circulation six, nine or twelve weeks .[105] The process of turnover only proceeds "normally" under these "exceptional circumstances", which in reality only occur by chance . In all the other cases, i .e . for the majority of the social circulating capital, a



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modification to the "normal course" occurs during the one year, or more than one year, cycle of turnover . This takes the form of the "release" or "tying up" of the advanced circulating capital,[106] and creates the objective basis and subjective impulse towards the expansion, or contraction, of the given scale of production itself, in place of the originally assumed "normal" transition from the working period to the period of circulation, at an unchanged scale of production . These impulses do not come from outside, but are endogenous, "through the sheer mechanism of the movement of turnover", i .e. from the temporal differences between the working period and the period of circulation . [107] Far from being a primary cause of changes in the scale of production (as is supposed by the monetary theorists) credit expansion and contraction are dependent variables, governed by the mechanism of the turnover of capital .[108] In similar fashion, the time factor (the durability of the means of production) constitutes the basis for the distinction between fixed and circulating capital . The means of labour employed in the production process only constitute fixed capital "to the extent that the period of their use exceeds that of the turnover period of circulating capital",[109] i .e . to the extent that the "turnover of the fixed portion of capital also therefore comprises the turnover time of a number of turnovers of the circulating portion of capital" .[110] This difference in the length of life of each type of capital produces a variation in the replacement of each type of the means of labour, to the extent that we do not look merely at the value aspect (as replacement of money), but at the same time at the process as replacement in kind . Whereas labour power and those means of production which represent fluid capital (raw materials) are used up in a short period of time, and must therefore be constantly renewed, the replacement of fixed capital in kind does not occur continuously, but rather periodically . [111] Marx uses this difference in the time periods necessary for the replacement of both types of capital in the form of money and in kind, as one of the elements ("the material basis") for his explanation of the periodicity of crises . [112] As long as the process of reproduction, and the problem of equilibrium are regarded exclusively in terms of value, the problem under consideration here will simply not arise, as the distinction in the lifetime of fixed and fluid capital applies to their natural form, not their value . If one looks at Marx's scheme for simple reproduction purely from the point of view of value, and assumes an annual renewal of all the parts of capital, the resultant synchronisation of the movements in the scheme would obliterate the specific difference between fixed and circulating capital,(113] and hence and whole problematic connected with the varying replacement times . This is because in the scheme, both fixed as well as circulating capital, as values, are renewed annually . The problem first arises when one looks at the scheme from the aspect of use-value : at this point the difference in the life of each kind of capital becomes apparent, and hence too the problem of different dates for their replacement . (The originally assumed synchronisation of replacement dates was only a preliminary approximation, which does not correspond with reality) . Whereas raw materials have to be renewed annually, fixed capital (for example the 2,000 units in Department II of the scheme (which manufactures consumer goods) "is not renewed during its whole time of function-



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ing" because its life adds up to several years . [114] Consequently, there can be no sales from Department I, which manufactures fixed capital, to Department II, for several years . However, since the annual productive capacity of Department I remains at 2,000 units, overproduction must take place there . "There would be a crisis - a crisis of overproduction - in spite of reproduction on an unchanging scale" .[115] So, "normal" production could only take place in Department I if (despite the assumption of simple reproduction in Department I) Department II was to be expanded over a number of years,[116] thus creating a new, additional market for Department I each year, (accelerator principle) . [117] However, this is impossible, as the more rapid growth of Department II, on the basis of a given technology, presupposes an impossible increase in the working population . Department II would have to be doubled in the second year, and increased three-fold in the third ; the growth in the working population employed there would therefore have to go up by 100% in the second year of reproduction, 50% in the third, and 35% in the fourth! In addition to the reasons for the absence of an equilibrium which we have already mentioned, there exists a much more fundamental and general one, which is a product of the structure of the capitalist mode of production and the tensions which are founded in the dual character of this mode of production . Both pre- and post-Marxist theory confine the conditions for "equilibrium" to sub-markets,[118] and then express them solely in terms of value . The relation between quantities and values is only analysed from the perspective of how variations in quantity affect marginal values . An "equilibrium" can always be obtained given such assumptions . [119] In contrast to this Marx showed that the issue is not that of equilibria in sub-markets (money-market, labour-market, commodity market for the means of production or consumption), or equilibrium in the "production process" or the "circulation process" . Rather, because Marx understood the capitalist process of production as a "process-in-circuit" of capital through all its various stages, he stressed the idea that equilibrium has to be seen and understood as an equilibrium within the overall framework of all these stages . Starting from this perspective, he first carefully defined the state of equilibrium for the "process as a whole", and analysed the conditions which allowed it to arise ; but at the same time he showed that these conditions cannot be realised within the capitalist mode of production . This signifies however, that in Marx the "normal course" of the "state of equilibrium" does not mean an "average", "typical" or "most frequently occurring" process, but rather an imaginary, undisturbed course of reproduction (under fictitious conditions), which never comes about in reality and merely services as a methodological tool of analysis . As a total social process the problem of reproduction has to be dealt with in its dual character : that is, "this process of reproduction must be studied from the point of view of the replacement of the value as well as the substance of the individual component parts of C' .[120] Consequently, equilibrium would only be realisable when both sets of conditions - those relating to value, and those relating to use are simultaneously fulfilled . A comparison of these two sets - "the component parts of the value of the social product with its material constituents"[121] - yields Marx's specific formulation of crisis, and its solution . In the circuit C . . .C"the conditions of social



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reproduction are discernible precisely from the fact that it must be shown what becomes of every portion of value of this total product, C"' .[122] This means that not only must all the commodities produced be sold on the market, without a remainder, in terms of value, but what subsequently happens with the use-values, the material mass of things, which has been purchased must also be investigated : to see whether they can in fact be completely used up in the production process (equilibrium in production), [123] including individual consumption . The question is therefore one of the "reconversion of one portion of the value of the product into capital and the passing of another into individual consumption ; . . . and this movement is not only a replacement of value, but also a replacement in material and is therefore as much bound up with the relative proportions of the valuecomponents of the total social product as with their use-value, their material shape" .[124] What has been said is already sufficient to show that the position often asserted in economic literature to the effect that Marx held use-values to lie "outside the sphere of investigation of political economy" is based on a misunderstanding . Marx states in fact that "use-value as use-value" is outside the scope of political economy, i .e . use-value as subjective utility .[125] He counterposes to this use-value "as material shape", which is not a subjective utility, but an objective thing with a definite, economically significant form,[126] with a natural form, which is either exchanged on the market or functions in the labour-process as a means of production . Consequently Marx speaks of "use-value or object of use", of use-value or "material form", of use-values "and the physical body of the commodity", of the "sensuous objectivity of the bodily form of the commodity", and of the "quantity of the means of production" - as distinct from values themselves . (127) Use-values defined in this way are of crucial importance in Marx's system .[128] The influence of the dominant theory has meant that Marxist literature has also dealt with the problem of equilibrium - insofar as its conditions are specified in Marx's "Tableau Economique" - exclusively in terms of value . (Kautsky, Hilferding, Bauer, Luxemburg and Bukharin) . There have to be certain quantitative proportions of value in each of the Departments of Marx's schemes of reproduction if all the amounts of value supplied and demanded are to be exchanged without a remainder . The analysis of the material aspect, of the labour-process, was reduced to the single thesis that in the process of reproduction Department I must produce means of production, and Department II means of consumption . However, Marx's conception is fundamentally different from the above . He shows that definite technical proportions must exist between the mass of labour and the mass of the means of production (machines, raw materials, buildings), in all the Departments and Sub-Departments of the schemes of reproduction, in addition to the value proportions ; this depending on the particular character of the sphere of production under consideration . In control of the technical labourprocess, the amount of value represented in the use-values is quite immaterial . [129] The technical proportionality of the factors of production is arranged directly in the factory by the technical management . However, as far as the mutual relation of the various branches of production within society is concerned, this proportionality is the basic condition for the undisturbed course of the

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production process, as the social division of labour makes the various preceding and subsequent stages of the labour process vertically dependent on one another, as "limbs of the total labour" . Despite any apparent personal independence, the producers soon discover that "the independence of the individuals from each other has as its counterpart and supplement a system of all-round material dependence" . [130] The full employment of all productive factors in the technical labour-process, with neither unused capacity nor shortages of raw materials, machines or labour, is only possible given such a technical articulation and complementary quantitative harmonisation of the various branches of industry . In short, the condition for the equilibrium of the system of capitalist production as a whole involves a dual proportioning of its basic elements . Whereas all that is required for the complete disposal (of the product) on the market is a value proportion within the realm of each individual branch of production, the technical labour-process requires a quantitative proportioning both between branches of production and of the factors of production within each branch, which is determined by the state of technology. These technical proportions are no more given from the outset in the capitalist mode of production than the value proportions, since the "quantitative articulation of society's productive organism is haphazard and spontaneous" .[131] But is there any chance at all of this dual proportioning being realised? This question is at the heart of Marx's understanding of the problem of equilibrium in the "process as a whole', which is the unity of the technical labour-process and the value-based process of circulation . Where this approach differs from the dominant view can be seen most clearly in the example of simple reproduction . "The assumption is that a social capital of a given magnitude produces the same quantity of commodity-value this year as last, and supplies the same quantum of wants" (i .e . supplies the same mass of use-values) . Does an equilibrium in reproduction exist in the case of, for example, a bad harvest reducing the amount of cotton by a half, although it represents the same value as twice as much cotton did previously? In short, "if the value remains the same although the mass of use-values may decrease"?[132] Seen in terms of value there would still be "an equilibrium of exchange" in the scheme for simple reproduction ; in contrast to this, the scheme would necessarily exhibit large disturbances when looked at from the standpoint of the technical labour-process : half of the spindles and looms would have to be shut down because of a shortage of cotton, i .e . the technical scale would be halved . Reproduction cannot proceed on the same scale .[133] This example shows what is unsatisfactory about purely looking at value, as the dominant theory does . The latter assumes that the conditions for equilibrium which are expressed in the value equations can always be realised . Although they know that capitals which are immobilised within a branch of industry can only be shifted with difficulty to other branches, they nevertheless treat such instances as "frictions" which merely impede the realisation of valueequilibrium for short periods . In contrast, the theory regards "adjustment" for longer periods as eminently possible, as the question here is not so much that of the transfer of already immobilised old capitals, as of the investment of new capital ; i .e . "processes of adjustment" within production, which allow the subsequent reestablishment of the correct value proportions on both sides of the exchange equations. Against this, Marx shows that the value-equilibrium, which is



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asserted by all static theories, and which the economy is supposed to tend towards, can only be established by chance or exception . This is because the technical labour-process gives rise to resistances and blockages of an objective and enduring kind which, in principle, exclude the establishment of such an equilibrium . Even if, when seen from a purely physical point of view, complete freedom and free mobility of capital were to exist, and the requisite transfers needed for the establishment of equilibrium as set out in the value equations were to take place, the equilibrium of the system as a whole would not be attainable, due to the incongruence, in principle, of the value proportions and technical, quantitative proportions . It may well be possible for a temporary, particular, equilibrium to occur, e .g . a value equilibrium on the market (for products) ; but it would then turn out that an equilibrium in production did not exist, and that the various elements of production cannot find a use or, conversely, that although an equilibrium in production might exist, there would be no equilibrium of value on the market . What follows from this is that given a particular quantitative technical proportion, which is the necessary product of the scale of production and depends on the size of fixed capital, [134] there is a value proportion which is the result of this technical proportion ; it cannot be changed according to the free will of the capitalist in order to fulfil the theoretically postulated conditions for valueequilibrium . In short, the value proportion is less elastic because it is bound up with the technical proportion . Given these circumstances, the incongruence of both sets of proportions, and hence the tendency towards the disequilibrium of the system as a whole is unavoidable . On the basis of capitalist production, equilibrium - the "normal course" - is simply our own abstraction, a conceptual fiction, a derivation of a "true understanding", which is the opposite of our abstraction, namely constant disequilibrium . "In political economy law is determined by its opposite : the absence of laws . The real law of political economy is chance ."[135] Marx does not only deny the regulatory function of the price mechanism, which brings about a tendency for supply and demand to balance out, but also shows that once this mechanism has got into a state of disequilibrium,[136] it continually produces forces which magnify it . Because of the fact that too much has been produced, there is a drive to produce still more! Ever since Adam Smith, the dominant school has only been able to propound the theory of the adjustment of the volume of production to demand by using competition, because they presupposed competition as something given, as a kind of "occult quality", without analysing its origins . Competition takes on the role of explaining the entire lack of concepts of the economists, whereas, conversely, the economists should have explained competition . [137] In contrast to the dominant view, Marx showed that no mechanism of equalisation exists, in the sense of an adjustment of production to demand . For Marx an orientation to consumption, i .e . adjustment of production to demand, was a characteristic of capitalism's youth, the period before the arrival of modern large-scale industry, when there was as yet no large fixed capital .[138] There can be no talk of such an "adjustment" of production to demand in the present-day, where fixed capital constitutes a predominant, and growing, share of total capital : the industrialist ignores the "command of the market" to curtail production, which is supposedly expressed in falling prices . In fact, the characteristic of the highly



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developed capitalist economy is that it is directed towards production rather than consumption, i .e. production precedes demand, which results in an inherent tendency, for reasons dealt with previously, to the periodic over-production of durable "fixed" capital, for which no profitable use can be found .[139] But because there is a tendency to overproduction in the sphere producing fixed capital, a form of competition necessarily arises which does not operate to equalise supply and demand . Where overproduction means there is no livingspace (market) for all firms, the individual firm finds it necessary to save itself from collapse at the expense of all the others . Far from curtailing output when prices and profits are falling, every firm with access to the necessary means seeks to produce more cheaply than its competitors, and at a profit, by introducing improved and cheaper techniques and by an expansion in the scale of production . Hence, the constant overproduction of fixed capital constitutes a permanent force for the continuous revolutionising of the techniques of production, and through this for constant revolutions in value, which are a characteristic feature of the capitalist mode of production . [140) And although the constant improvements in techniques and the expansion of the scale of production aggravate the general overproduction, the individual capitalist has, nevertheless, secured the profitability and markets for his own progressive plant .[141] Thus, the pressure of the initial overproduction serves to propagate the transformation of the entire structure of the capitalist mechanism over the whole breadth of society : at one pole, the victory of the new, higher, technology and, at the same time, the enlarged scale of the individual plant ; the extra profits which are thus attained attract new entrants, the movement becomes more generalised and an "upswing" occurs . But this does not prevent that at the other pole of society, an increased threat is simultaneously posed to all those plants with backward techniques, because of falling prices and overproduction, along with pressure to withdraw altogether from competition, precisely as a result of the spreading of improved techniques and associated revolutions of value (reduction in "socially necessary labour time") . However, since the scale of those few new large plants exceeds the productive capacity of the many small plants which fail, the end result of this movement is a growth in the overall scale of production in society . This movement takes place repeatedly, as the new plants with the most modern techniques soon lose their privileged position because of the generalised application of technical innovations, which means the whole game must continuously restart . Under the pressure of periodically occurring overproduction, the drive towards the constant revolutionising of techniques, and hence "periodic revolutions in value" is strengthened . The capitalist who yesterday was able to make a surplus profit by the introduction of new processes, is today threatened by newcomers with even better techniques, and has to be content with the average level of profit : tomorrow he may not even cover his costs or may even register a loss, and will have to pull out of the market .[142] It is a permanent hunt for extra profit, a continual attempt to secure a privileged island, if only temporary, of surplus profit for the individual capitalist's own plant by the revolutionising of techniques . The "real movement" which we have described shows that one cannot speak of an "adjustment" of production to demand ; rather, production constantly races ahead of demand, and the "regulative" function of the price mechanism



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does not in fact operate . Far from leading to cutbacks in production, periods of falling prices were in the past, and still are today, periods of exceptional technical progress and expansion in production . In the face of this now evident failure in the construction of the prevailing economic mechanism, even the ruling theory begins to discover that instead of the alleged tendency towards equilibrium, there exists a 'perpetuum mobile' of change, a tendency towards disequilibrium ;[143] that instead of the regulatory function of the price mechanism, equalising supply and demand, situations can arise where "once destroyed, equilibrium is lost forever" . [144] A theory of dynamic movement must not only point out individual dynamic "factors", but also illuminate the disequilibrating movement of the system as a whole, and its causes ; and beyond that has to show the consequences of the dynamic movement for the system as a whole. In one self-contained theory Marx tried to capture not only the course of the economic cycle, but also the structural changes in the overall system which were its product . Only by doing this could he show the direction the system was taking as a whole, its "developmental tendencies" . This is not contradicted by the fact that at a particular level of development the direction of the process, which has been described, encounters a barrier, and is brought to a close . The validity of the theory is not put in question if it is shown that this barrier to the capitalist dynamic is caused by and derived from the basic conditions of the system - the "dual character of labour" .[145] We have seen how the development of the capitalist mode of production is accompanied by a tendency towards the growth in the minimum size of plants and hence also a growth in the capitals which are required to run a business under "normal" conditions . [146] It follows from this that, at a given scale of production, the size of plant does not depend on the free will of the businessman . "The actual degree of development of the productive forces compels him to produce on such and such a scale ."[147] This is therefore something which is technically given . It is evident that this makes the consonance between the technical proportions and the requisite value proportions all the harder to achieve . In the course of capitalist development the tendency towards the growth in the organic composition of capital makes itself felt . A continually larger portion of a given capital is transformed into means of production (MP), and an ever smaller portion into labour-power (LP) .[148] Looked at from the aspect of value, the relation c :v does indeed grow ; nevertheless, because of technical progress (cheapening, in value terms, of the means of production) this relation grows more slowly than the quantitative increase of the relation MP to LP . It is clear that the difference between the value and the quantitative rates of growth of capital renders the congruence of the value and the physical proportions all the more difficult . In addition, the analysis of the technical labour-process yields the law of the uneven development of the individual branches of prodiction .[149] In'fact, the example of the disproportionality in development best serves to illustrate the distinction between Marx's view and that of the dominant theory . The latter conceives of uneven development in the form of capital accumulation in different branches of industry having different values, e .g . 20% in one, 35% in another etc ., from which the value disproportions give rise to disturbances . According to Marx this can happen, but does not have to ; and it does not get to the real essence of the problem . Even if accumulation were to have taken place evenly, in value



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terms, in all spheres, e .g. by 1%, disturbances must necessarily arise if the expansion in terms of material is not the same in all branches of production ; this is because with the same percentage growth in capital (e .g . 1%) in all branches, the material expansion in the various branches can vary in size, and can amount, for example, to 5% in one sphere and 20% in another . This is determined by the specific technical characteristics of each sphere, and in Marx's view, it is these characteristics which underlie the strides in technical development . [150] Related to the above law, but not identical with it, is the contradiction between an - abstractly - possible, steady accumulation of value, and the actual fact of a discontinuous, uneven material expansion . Vulgar Marxist literature is very fond of looking at accumulation in purely value terms and assuming that any desired amount of value can be accumulated (see, for . example, Laurat) ; that 50% of the surplus-value is consumed by the capitalist, and the other 50% steadily accumulated each year . Whether the half of the surplus-value which has been accumulated is sufficiently large to purchase the amounts of means of production required for the expansion of production was not asked . Behind this view lies the assumption that any small increase in profit can correspond to an equally small growth in the technical apparatus of production - i .e . the assumption of the infinite divisibility of goods . In contrast to this, Marx stresses that such a parallel relation between value accumulation and material accumulation does not exist because not every dollar earned can be accumulated, i .e . converted into the material elements of production . In order to expand the scale of production a certain minimum amount of capital is usually required which represents a whole set of technically linked machines, making up a unity (e .g . in the textile industry) .[151] Expansion can only take place, therefore, with this unity, or multiples of it .[152] Such material relations - and hence also the value relations which they imply - consequently determine the minimum size of the money capital required for expansion, and vary from industry to industry .[153] In short, in Marx's view, "the proportions which the expansion of the productive process may assume are not arbitrary, but prescribed by technology" . For example, whereas the entire suprius-value (or part of it) may be sufficient for the expansion of production in one branch, and will be thus employed, in another the surplus-value may have to be saved up for several years until it reaches the minimum size needed for "real accumulation" . [154] Consequently, whereas one branch of production may be able to grow every year, expansion in others can only take place at intervals of several years . The incongruence of the value aspect and the material aspect of the process of reproduction which we have looked at from the side of production is increased still more by forces coming from the demand side . A uniform proportional expansion of all the spheres of production rests on the hidden assumption that demand (consumption) can also be expanded in an even and proportional manner . In opposition to this Marx emphasises that the individual productive use of certain commodities is tied and inelastic, which must likewise result in an uneven material expansion of production in the various spheres . No one who finds two tractors sufficient for the cultivation of their land will buy four simply because their price has fallen by a half, as the demand for tractors - all things being equal - is not a function of their price, but of the acreage of land, i .e. it is determined quantitatively . "However, use-value - competition - depends not on value, but



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on the quantity . It is quite unintelligible why I should buy six knives because I can now get them for the same price that I previously paid for one" .[155] All these moments serve to make a uniformity of motion of the technical and value aspects impossible to achieve, and to hinder the dual proportioning of the development of the productive apparatus, in both value and quantitative terms, which is postulated by economic theory as the condition for "equilibrium" . This equilibrium is incapable of realisation as a permanent "rule" . With the constant impulses to the revolutionising of techniques and values, the coordination of the value and material aspects of the productive apparatus must become continually more difficult, and their incongruence continually grow . Each of the aspects of the productive apparatus moves in opposite directions in the wake of technical change and the development of the productive forces : the values of individual commodities have a tendency to fall, whilst the mass of the material goods increases . Under such circumstances equilibrium, the "rule" which is presupposed by political economy, can, as it were, only occur by chance within the general irregularity, as a momentary transitory point in the midst of constant disequilibrium .[156]

NOTES 1 Theories of Surplus Value, 11, p .497 . 2 Mill, Principles of Political Economy, Chap-1 . 3 "The main problem now is to proceed from static to dynamic economics" . (John M . Clark, The Relation Between Statics and Dynamics op . cit . p .46) . 4 Cf . H . Grossmann, Das Akkumulations- and Zusammenbruchsgesetz des kapitalistischen Systems, Leipzig, 1929, p .284 . 5 "The general theory of equilibrium of demand and supply is a fundamental idea running through the frames of all the various parts of the central problem of distribution and exchange ." (Alfred Marshall, Principles of Economics, 1st Ed . London, 1890, Preface p .IX .) . 6 "When demand and supply are in stable equilibrium, if any accident should move the scale of production from its equilibrium position, there will be instantly brought into play forces tending to bring it back to that position ." (op . cit . Book V, Chapter III, Sect . 5, p .404) . 7 Marshall was conscious of the weaknesses of his construct, namely its unrealistic character . "He recognised the impossibility of solving real problems by his method unless his hypothetical, static constructions could be replaced by concrete, dynamic functions", which he hoped would follow the improvement of the mathematical "scientific machinery" . (See Moore, Synthetic Economics, New York, 1929, p.93) . Hicks also emphasised this static character of Marshall's construction, stating, "how reluctant Marshall is to abandon static conceptions even in this dynamic analysis . . . His dynamics are not made easier by running in terms of a very static equilibrium and by the fact that their central passage leads up to the introduction of the 'famous fiction', the stationary state" . Also, the Marshallian distinction between "short" and "long periods", with the further supposition that a "full adaptation" between



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supply and demand will occur in the latter, "is not a concept that fits very well into a general dynamic theory" . (J .R . Hicks, Value and Capital, Oxford, 1939, p .120-121) . 8 Joseph Schumpeter, Theorie der wirtschaftlichen Entwicklung, op . cit . p .86 . 9 J . B . Clark, The Distribution of Wealth, New York, 1899 . Quoted from the 2nd Ed . 1931, p .442 . 10 ibid . p .400 and pp .Vl-VII . 11 ibid . p .400 . 12 ibid . p .Vl and p .30 . 13 "The static state which has here been pictured is the one towards which society is at every instant tending ." ibid . p .402 . 14 J .B . Clark, Essentials of Economic Theory, New York, 1915, p .195 . 15 "The actual form of a highly dynamic society hovers relatively near to its static model though it never conforms to it ." op . cit . 16 ibid . p .197 . 17 ibid . 18 ibid . p.198 . 19 ibid . p .196 . A more recent critic of Clark says, quite correctly, that as a result of all his abstract assumptions the picture of reality which he projects is totally alien to reality . "Such an isolation of static forces, it is admitted, gives to the study an unlifelike appearance and makes it 'heroically theoretical' ." (Paul T . Homan, Contemporary Economic Thought, New York, 1928 . p .38) . 20 Joseph Schumpeter, op . cit . p .86 . 21 Roche-Agussol, "Die Werttheorie" in Wirtschaftstheorie der Gegenwart, Vienna, 1932, Vol .11, p .36. 22 Carl Menger, Untersuchungen Ober die Methode der Sozialwissenschaften and der politischen Okonomie (1883) in Series of Reprints of Scarce Tracts in Economic and Political Science, London, 1933 p .29 . 23 W .S . Jevons, The Theory of Political Economy, London 1879, Preface . 24 ibid . p .89-90. 25 F .H . Knight, "Statik and Dynamik" in Zeitschrift for Nationalbkonomie, Bd .ll (1931) . p . 25 . 26 ibid . p .26 . 27 ibid . p .7 . 28 Ewald Schams, "Komparative Statik" in Zeitschrift for Nationalokonomie, Bd . I I (1931) p .46-8 . 29 Cf . H . Mayer, "Der Erkenntniswert der funktionellen Preistheorien" in Wirtschaftswissenschaft der Gegenwart, Bd .11 (1932) . 30 Schams, op. cit . p .49 . 31 ibid . p .49-50 . 32 ibid . 33 One interesting additional reason why - despite the acknowledgement of the dynamic nature of reality - there is a passionate struggle waged against attempts to "dynamise theory" and directly introduce the time factor into analysis is cited by Schams . If one sees economics as "economic mathematics", then the mathematical method will prove indispensable in the "exact" treatment of complex mathematical relations, which cannot be mastered by means of the "conventional logic" . The most important methodological



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principle in the construction of such mathematical systems is the "equivalence of relations, i .e . the construction of equations in which the numerical variables can be expressed" (op . cit . p .48) . However, this method places one right in the centre of statics, as the functional method can only represent relations between given values and quantities, but not their formation . If one now introduces movement, i .e . change through time, what will happen is that "the law-like nature of the disporportional movement will destroy the equivalence of the relations" as Schams freely admits . "The simultaneity of more than two independent movements cannot be dealt with mathematically" (op . cit . p .49) . "The use of differential and integral equations is scarcely possible with non-equivalent relations ." However, if one does not proceed from given prices and quantities, and introduces change through time, one is faced with the task of dealing with future changes, and instead of establishing the exact relations between given variables one has to be content with "the calculation of correlations and price-expectations" . In doing this, however, one turns one's back on exact theory and "enters the company of the dice-throwing probability theorists" (op .cit .) . The "exact" mathematical method, originally designated as being indispensable, as it was supposed to be the best means for the exact investigation of reality, is now raised to the level of an end in itself . Reality is dynamic, but since it is impossible to capture dynamic movement, one restricts oneself to statics, so that one can avoid having to dispense with the "exact" method of mathematics . 34 Cf . Otto Conrad, "Die Grundannahme der Gleichgewichtstheorie" in Zeitschrift fur Nationalokonomie, Bd .VII (1936), p.243 . 35 ibid . p .236 . 36 ibid . p .239 . 37 M . Lachmann similarly sees "a dynamic theory of equilibrium" as being one which is concerned "with changes in equilibrium through time and describes the process of the transition from one equilibrium to the next" . The difficulties surrounding the theory of dynamics are difficulties of either its principles or content, and are more to be attributed "to the deficiencies of our analytical tools" (M . Lachmann, "Preiserwartungen and intertemporales Gleichgewicht" in Zeitschrift fur Nationalokonomie, Bd .VIII (1937), p .33-4 . 38 Cf . Harrod . op. cit . p .496 . 39 Alexander Bilimovic, "Zur Verteidigung der Gleichgewichtsidee" in Zeitschrift fur Nationalokonomie, 1937, pp .220-224 . 40 G . von Haberler, Prosperity and Depression . Geneva, 1937 . p .167 . 41 J .R . Hicks, Value and Capital, op . cit . p .119 . 42 ibid . 43 Hicks considers that Knut Wicksell should be included in the Lausanne school, alongside Walras and Pareto, because he thinks just as statically as the other two . Wicksell's "capital theory is limited to considering the artificial abstraction of a stationary state" (op . cit . p .3 .) . 44 J . Schumpeter, Theorie der wirtschaftlichen Entwicklung, op. cit . p .86 . 45 L . Walras, Elements d'6conomie politique pure, 4th Edn . Paris, 1926 . p .26174 . 46 J .R . Hicks, "A Reconsideration of Value" in Economica (1934), p .52 . 47 V . Pareto, Manuel deconomie politique, Paris, 1909, p .148 .



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"This division corresponds to concrete reality" (op . cit . p .147) . As if we had two different objects of perception, a static and a dynamic economy, alongside one another! 49 "The principal object of our study is economic equilibrium ." 50 ibid . 51 Rosenstein-Rodan consequently says correctly, "No doubt, mathematical, as any static theory, only wishes to explain tendencies to equilibrium, and understand the real course of the economy as deviations from the state of equilibrium" . "In this it is supposed that a state of equilibrium will develop after numerous oscillations, which will then continue to exist unchanged ." (Rosenstein-Rodan, "Das Zeitmoment in der mathematischen Theorie des wirtschaftlichen Gleichgewichtes" in Zeitschrift fur Nationalokonomie Bd .l 1929 .

48

p .136) . The supposition that economic phenomena share a simultaneous rhythm was explicitly emphasised in Pareto's'Manuel'(Ill Chap .10) ; the same applies to a successor of Pareto, De Pietri Tonelli . 53 As Amoroso points out "two factors underlay Pareto's economic statics : supply and demand . No substantial distinctions exist in production" . Amoroso asks ; what about the former division of economics into production, exchange, consumption and distribution? He answers this question, saying that according to Pareto, there is no division of things which corresponds to a difference in language . . . all problems of economics are contained in the conditions for general equilibrium, limited by the forces and connections of the initial state! Luigi Amoroso, "La Meccanica Economica" in Giornali degli Economisti, Roma, 1924 . p .46-47 . 54 ) .R . Hicks, "Gleichgewicht and Konjunktur" in Zeitschrift fur Nationalokonomie Bd .IV (1933) p .442 . 55 ibid . p .444 . 56 "The circulation of the commodity is naturally only concerned with already existing values ." 57 Hans Mayer "Der Erkenntniswert der funktionellen Preistheorien" op .cit . p .239 . Of course, Mayer is not consistent enough . As a marginalist he regards consumer demand as the "locomotive force of the entire system" (op . cit . p .239) . Demand, however, as the most recent work of the Keynesian school admits, is not a determining force, but is much more only a product, a result which depends on the volume of investment ; and, in turn, investments are conditioned by the profitability which can be obtained in the process of production . 58 "Utility is, and will remain, only a comparable but not a measurable magnitude . . . Attempts to treat utility like an extensive magnitude, in our opinion . . .

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are bound to fail . . . One cannot subject utility to the ordinary arithmethic and algebraic operations" (Cf . Irving Fisher, Mathematical Investigations in the Theory of Value and Prices, New Haven, 1892 . p .88) . "It is a curious process of a self-decomposition of a theory - a supreme example of Hegelian dialectics - which not so long ago had been hailed as the essential steps in putting economics on a scientific basis" (H . Bernadelli,

"The End of the Marginal Utility Theory?" in Economica, May 1938) . 60 Schumpeter states : "Pareto discarded the Walrasian theory of value and



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based his own on the indifference-curve apparatus invented by Edgeworth . . ." . (History of Economic Analysis p .860) . 61 Can someone who possesses 100 apples and 100 nuts ask, for example : How many nuts would compensate them for giving up 10 or 20 apples? Would, for example, a combination of 80 apples and 140 nuts come about? 62 Hans Mayer, "Der Erkenntniswert der funktionellen Preistheorien" op . cit . p .214 . 63 op . cit . p .211-2, p .212 . Cf . p .216 . Cf. too Umberto Ricci, "Pareto e l'economia pura" in Giornali degli Economisti 1924 p .43 . Cf . in addition, Henry Schultz, "The Italian School of Mathematical Economics" in Journal of Political Economy, Vol .39, (1931) p .77f f . and H . Hayer, op . cit . p .207-8, who stresses that the indifference combination only takes the form of a curve with two goods ; a combination of three goods produces a three-dimensional diagram ; under real conditions, i .e . with thousands of goods one would obtain an "unimaginable" creation, of thousands of dimensions (!) "a kind of hyperspace", which would be purely imaginary and have no relation to reality . 64 In addition, the method of the general interdependence of all economic variables, expounded by the Lausanne School, and so admired in its time, is today held responsible for the fact that the School never went beyond worthless generalities . It led to "a theoretical waste of effort" on the part of the Lausanne School (0 . Lange, "Die allgemeine Interdependenz der Wirtschaftgrossen and die Isoliermethode," in Zeitschrift fur Nationalokonomie Bd .IV (1933), p .56) . Hicks points to the "apparent sterility of the Walrasian system", owing to its great distance from reality, (Hicks, Value and Capital, op . cit . p .60) . As Husserl correctly says, the danger of such failures is inherent to the essence of mathematics itself. "The same researchers who operate the marvellous methods of mathematics with such incomparable mastery, and in doing so enrich them, often reveal themselves to be utterly incapable of giving sufficient consideration to the limits of its justifiable application" (Husserl, Logische Untersuchungen, 1913, p .10) . The result in the field of economic theory : the dazzling application of mathematical techniques, and the poverty of its results . 65 Knut Wicksell, Vorlesungen uber Nationalokonomie auf Grundlage des Marginalprinzips Jena, 1920 Vol .11, p .253-4 . 66 ibid . p .241-2 . 67 Fr . von Hayek, Geldtheorie and Konjunkturtheorie, Vienna, 1929 . Wicksell's neo-Malthusianism also originates in an undynamic conception of the productive forces, according to which a country can only feed a certain optimum population : exceeding this optimum will necessarily lead to the impoverishment of the country - a view which represents an unambiguous relapse to the level of observation of the first half of the eighteenth century (Cf . J .P . Siissmilch, Die Gottliche Ordnung in den Veranderungen des menschlichen Geschlechts, Berlin 1761, Bd .1, p.142) . 68 Cf . Irving Fisher, Stabilising the Dollar, New York, 1920 . 69 R .G . Hawtrey, Currency and Credit, London, 1950 . 70 Cf . C . von Haberler, Prosperity and Depression, p .16 and R .C . Hawtrey, Trade and Credit, London, 1928, p .98 .



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71 Cf . Haberler, op . cit . p .72 . 72 ibid . p .28 . Quite correctly, Haberler says of the non-monetary, overinvestment theories, whose representatives he names as A . Spiethoff and G . Cassel : "In the writings of these two authors, we find the culmination of a very important line of thought which can be traced back to Marx" . On the now general usual distinction between the production of means of production and the production of means of consumption, see for example, in Marx :" "The Two Departments of Social Production" (Capital, II, p .399) : on the specific role of durable (fixed) capital "Replacement of the Fixed Capital" (Capital, 11, p .453) ; on the influence of the length of the period of construction on the course of the cycle, see Capital II p .462 . This distinction between the material elements was first introduced into the recent literature by Tugan-Baranovsky's book on crises in England (1901), and subsequently by Spiethoff and others, all of whom were influenced by Marx as can be seen from Tugan's schemes of reproduction which were copied from Marx . However, Tugan was celebrated by Sombart as the "father of modern theories of crises" and Tugan's book was praised by Spiethoff as the "first scientific monograph on crises" (Cf . W . Sombart, "Schriften des Vereins fiir Sozialpolitik" Bd .113, p .130 and A . Spiethoff, "Die Krisentheorien von Tugan-Baranovsky and L . Pohle", in Schmollers jahrbuch Bd . 27 (1903) p .70 . 73 J .M . Clark, "Business Acceleration and the Law of Demand" in journal of Political Economy, Vol .25 (1917) . 74 R .F . Harrod, "Relations between Capital Goods and Finished Products in the Business Cycle" in Economic Essays in Honour of W.C . Mitchell, New York, 1935) . 75 L .P . Ayres, Turning Points in Business Cycles, New York, 1939 . 76 Thus P .T . Homan writes in an essay entitled "The Present Impasse" : "It is probably no exaggeration to say that recent investigations into the causes of cycles have done as much to destroy adherence to older types of theory as any other single cause . And it has led to the casting of their problems by many economists into terms of a changing process, rather than into terms of a static situation" (Contemporary Economic Thought op .cit. p .453) . 77 H . Mayer, "Der Erkenntniswert der funktionellen Preistheorien" op . cit . p .148 . 78 Cf . H . Schams, "Komparative Statik" op . cit . p .30 . 79 P .W . Rosenstein-Rodan, "Das Zeitmoment in der mathematischen Theorie des wirtschaftlichen Gleichgewichtes" in Zeitschrift fur Nationaldkonomie, Bd .I (1929) p.131, 134 . 80 ibid . p.129 . 81 ibid, p.135 . 82 Consequently the concept of "moving equilibrium" is a contradiction, as the real movements of the elements of the economy are in constant disequilibrium . Nevertheless H .L . Moore tried, in his book Synthetic Economics, Chap .V . "Moving Equilibria", to prove the parity of movement of exchange, production, distribution and accumulation, "as a moving general equilibrium", using empirical material from American potato production over a long period . However, he did not succeed . As Umberto Ricci showed in his critique, Moore did not describe a moving equilibrium, but in fact a moving



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disequilibrium . Cf . H .L . Moore, Umberto Ricci "Die synthetische Okonomie" in Zeitschrift fur NationalOkonomie Vol .l (1929) p.654 . 83 E . Schams, op . cit . p .42 . 84 ibid . p .55 . Or, as Streller formulated this idea : The formulas for equilibrium would only have been possible at a higher abstraction from reality : however, it turns out that "an introduction of the time factor "t" in the equation clearly makes them immediately incapable of a solution" (R . Streller, Die Dynamik der theoretischen Nationalokonomie 1928, p .12) . 85 Thus, Carver wrote recently : "In fact every dynamic movement is either a disturbance of a static condition, or a series of movements by which the static condition is reasserting itself, or rather by which a new static condition is being established after the disturbance" (Thomas Nixon Carver, "The Static State" in Economic Essays in Honour of John B . Clark op . cit. p .29) . 86 Ricardo stressed that despite changing conditions in the economy, the mechanism of self-regulation will distribute capital exactly according to the needs of the respective branches of industry, "without often producing either the effects of a glut from a too abundant supply, or an enormously high price from the supply being unequal to the demand" (Ricardo, Principles op . cit . Chap .IV) . Conrad likewise assures us that it is only the striving for equilibrium which prevents an economy lacking central direction from slipping into chaos . Hayek's language is very characteristic : he sees merely the "adjustments" of the economy, but regards the intervals of disruptions and catastrophes between these "adjustments" as unproblematic (F .A . Hayek, Preise and Produktion, Vienna, 1931 . p .23) . 87 This is only a vague indication of the concept of "dynamics" : within the static line of thought it is only statics which have to be defined : dynamics is the other, the "counterpart" which does not have to be defined and which is somehow supposed to "complement" statics (R . Streller) . 88 Alexander Bilimovic, "Zins and Unternehmergewissen im Cleichungssystem der stationaren Wirtschaft" in Zeitschrift fur Nationalokonomie Bd . VII (1937) p .218 . 89 "Only static theory can be regarded as being known : dynamic theory is almost totally uninvestigated and formulated ; up until now only the necessity for such a theory has probably been shown" (R . Streller op . cit . p.26) . John M . Clark assures us that "We possess a substantially complete static economics, while dynamics is in its infancy . . . and very possibly is destined always to remain in that stage" ("The Relation between Statics and Dynamics" op . cit . p .46, 48) . And similarly Hicks states : "a dynamic theory - the theory which many writers had demanded, but which none, at that time, had produced" (Value and Capital, op . cit . p.4 .) . Cf . Harrod, (in Zeitschrift fur Nationalbkonomie Bd .VIII (1937) p .498) and many others . 90 Cf. Marx, Capital, II, p .157-8 . 91 ibid . p .108 . 92 ibid . p .124 . 93 ibid . p .108-8 . 94 ibid . p .50, Cf . p.106 . 95 ibid . p.106 . % ibid . p .107 .



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97 "Further : since the circulation process of capital is not completed in one day but extends over a fairly long period until the capital returns to its original form, since this period coincides with the period within which market-prices equalise with cost-prices, and great upheavals and changes take place in the market in the course of this period, since great changes take place in the productivity of labour and therefore also in the real value of commodities, it is quite clear that between the starting point, the prerequisite capital, and the time of its return at the end of one of these periods, great catastrophes must occur and elements of crisis must have gathered and developed, and these cannot in any way be dismissed by the pitiful proposition that products exchange for products' (Theories of Surplus Value, Part II p.495) . 98 "In order that the circuit may be completed normally . . . C-M-C (must take place) not merely (as) replacement of one commodity by another, but . . . with value relations remaining the same . We assume that this takes place here . . . that the commodities do not undergo any change of value during the circular movement . Otherwise this process cannot run normally ." (Capital I I p .74-5) . 99 ibid . p.158-9 . 100 ibid . p.186 . 101 ibid . p.243 . 102 ibid . p.252, 255 . 103 ibid . p.270-4 . 104 ibid . p.266 . 105 ibid . p.277, 281 . 106 ibid . p.112 . 107 ibid, p.282-3 . 108 Curiously, a misjudgement of the importance of Marx's analysis for the understanding of the dynamic course of the capitalist economy can be found even in Engels, who advocated the view that Marx had "attached unwarranted importance to a circumstance . . . of little significance", namely what Marx called the "release" of money-capital and "what are the uncertain results of his painstaking calculations" ( See Engels's note on p .288 of Capital, Vol .11) . 109 ibid, p .282 . 110 ibid . p .171 . 111 ibid . p .462 . 112 ibid . p .189 . 113 In the scheme of simple reproduction "total value 6,000, exclusive of the fixed capital persisting in its natural form, according to our assumption" (Capital II p .401) . 114 ibid . p.507 . 115 ibid . p .472 . 116 "If things are to proceed normally, accumulation in II must take place more rapidly than in I" (ibid . p .516) . 117 As can be seen Marx's accelerator principle is the direct opposite of that normally expounded in the literature of the dominant theory . 118 "By its essence, statics only studies one single market" (R . Streller, op . cit . p .39) . 119 "Equilibrium must be considered as an equilibrium of prices ." "There is always a solution of such a system admitting full employment of every factor



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120 121 122 123

124 125 126 127 128

97

of production", given only that the condition "that prices must be high enough to equalise supply and demand" is kept to (G . Cassel, "Keynes" 'General Theory" in International Labour Review, October 1937, p .438, 444) . Capital, II p .497 . ibid . p .434 . ibid . p .397 . In Capital Volume III Marx consequently speaks of the "social equilibrium of production" . Since the immediate consumption of all factors of production is assumed, the existence of reserves lying unused in warehouses is disregarded . Capital II p .398 . Contribution to the Critique of Political Economy, p .28 . Theories of Surplus Value, 11, p .507-8 . Capital I p.143, 159, 164-5 : 11 p .398 : III p .46 . One can only abstract from use-value when the matter at hand is that of the process of valorisation, the formation of surplus-value : "In considering surplus-value as such, the original form of the product, hence of the surplusproduct, is of no consequence . It becomes important when considering the actual process of reproduction . . . Here is another example of how use-value as such acquires economic significance (Theories of Surplus Value, III p .251-

2) . 129 ibid . "All these things serve in the real labour process because of the relation-

130

131 132 133 134 135 136

137 138

139

ship which exists between . them as use-values, not as exchange-values, and still less as capital ." Capital 1 p .168, 203 . Marx therefore speaks of the "interdependent branches of the collective production of a whole society", and of the "bond" which holds it together . Not only are the branches of cattle-breeding, tanning and shoemaking quantitatively dependent on one another, but also those branches which supply the means of production (Capital I p .472, 474) . What results from this, and what is important for understanding the dynamics of capitalism, is that revolutions in the mode of production in one individual sphere, e .g . machine-spinning, will necessitate similar revolutions in other spheres, such as weaving and dyeing, or else incongruities could arise in the technical proportions between these branches of industry (ibid . p.505) . ibid . p .202 . Capital II p .399 . ibid . Capital II p .174 . Marx, Aus den Exzerptheften Op . cit. Section I, Vol .3, pp .530-1 . "In reality, supply and demand never coincide, or, if they do, it is by mere accident, hence scientifically = 0, and to be regarded as not having occurred ." (Capital III p .189) . ibid . p .208, 225 . Cf . Poverty of Philosophy, p .68 . On the absence of expansionary phases, cyclical booms with subsequent collapses in early capitalism, see W . Sombart ; Der Moderne Kapitalismus, Leipzig, 1921, Bd .ll p .214ff . Poverty of Philosophy, p .68 . "What Ricardo cannot answer, and neither Mr Say for that matter, is where competition, and the resultant bankruptcies, trade crises etc . come from, if every capital finds its proper employ?" "If



98

CAPITAL & CLASS

capitals were not so numerous in relation to the uses of capital, competition would be inexplicable ." (Marx, Aus den Exzerptheften zu Ricardo op . cit . Section I, Vol .111, p .510-1) . The only one of the recent writers to have seen this problem is Willard L . Thorp, who writes : "Under competition it is certain that some degree of overcapacity will exist" (W .L . Thorp, "The Problem of Overcapacity" in Economic Essays in Honour of W .C . Mitchell, 1935, p .491) . 140 Capital II p .108 . 141 Cf . Capital III p.186-189, 256-7 . 142 Cf . Capital II p .108 . 143 Cf . P . W . Rosenstein-Rodan, op . cit . p .131 . 144 Umberto Ricci, op . cit . 145 As a condition of the future higher form of society, Marx did not only consider the objective factor, the economy, but also the subjective factor, humanity itself . World history, "is nothing but the creation of humankind through human labour, nothing but the emergence of a nature for humanity" (Economic and Philosophical Manuscripts, p .145) . The "conquering" of the world of objects, is at the same time, the first emergence of this world for humanity . In Marx, its mastery, its "possession" does not only occur through theoretical observation, but rather through labour, through human praxis ; this view serves to distinguish Marx from Feuerbach, for example (Cf . Marcuse, "Neue Quellen zur Crundlegung des historischen Materialismus" in Die Gesellschaft, Berlin, 1932 No .8 p .152) . However, the labour, whose result is the subjection of nature and the becoming of humanity, is not "valuecreating" labour, but "real", i .e . "concrete" - labour which creates articles of use ; in short, the development of human productive power . But since concrete labour is always bound together with value-creating labour in the present economic order, the degree of the progressing maturity of concrete labour can only be expressed in its value, in the fall of the rate of profit, which is the capitalist expression of the wealth of society, the degree of the productive power of labour, and hence also a symptom of the approaching annulment of the rule of capital itself . "The decrease in the interest rate is therefore a symptom of the annulment of capital inasmuch as it is a symptom of the rule of capital in the process of perfecting itself - of the estrangement in this process of becoming fully developed and therefore of hastening to its annulment" (Economic and Philosophical Manuscripts, p .158) . Having shown elsewhere (Das Akkumulationsgesetz) the consequences which arise for the problem of equilibrium with the value-observation of the process of accumulation, I confine myself here to emphasising those moments which hinder the attainment of a state of equilibrium from the material side of the technical labour process, and increase the incongruence between the material and value-proportions . 146 Capital I p.773-4 . 147 Poverty of Philosophy p .41 . The significance of this observation first becomes clear if we compare it with Bohm-Bawerk's view, according to which the scale of production can be determined arbitrarily, and is not technically given . In Bohm's view "any desired large or small amount of capital goods is sufficient to buy and pay the total supply of wage-labour in the economy . One simply needs to extend or compress the period of production accordingly ." (Kapital



99

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and Kapitalzins) . One is simply left wondering why unemployment continues to exist, when it appears to be so easy to abolish . 148 Capital I p .774 . 149 "The specific development of the social productivity of labour in each particular sphere of production varies in degree . . ." (Capital III p .163) . 150 "If all . . . capitals have accumulated at the same rate it does not follow at all that their production has increased at the same rate . . . The same value is produced in both cases, but the quantity of commodities in which it is represented is very different . It is quite incomprehensible, therefore, why industry A, because the value of its output has increased by 1% while the mass of its products has grown by 20%, must find a market in B where the value has likewise increased by 1%, but the quantity of its output only by 5% . Here, the author has failed to take into consideration the difference between use-value and exchange-value" (Theories of Surplus Value I11, p .118119) . Cf . Capital II p .80 . Capital I p .465-6 . Capital II p .80 . Capital II p .492-3 . Theories of Surplus Value III p .119 . The fact of the inelastic demand - along with the role of money - constitutes the main argument of Marx's critique of Mill's and Say's theory of the identity of supply and demand, which denies the possibility of generalised crisis . 156 " . . . a mode of production whose laws can only assert themselves as blindly operating averages between constant irregularities' (Capital I p .169) . 151 152 153 154 155

Revolutionary Communist Papers Number One contains a full critique of the politics of the Revolutionary Communist Group - from which the comrades who formed the RCT were expelled in November 1976 - and outlines the central tasks facing the revolutionary movement today . Published by the Revolutionary Communist Tendency Articles on internationalism & party-building ; Stalinism & the British Communist Party Subscription for four issues UK £2 .00 UK Library £3 .75 Overseas £3.00 Overseas Library £6 .00 Issue Number One UK £0.50 (plus 13p postage) Overseas £0.75 (plus lOp postage) Make cheques, postal orders and international money orders payable to RCT Association, and send to : BM RCT, London, WC1 V 6XX

VALUE AND THEORY OF RENT : PART ONE Robin Murray Of the immediate political issues now before us, there is one group that involves branches of production unified by a common dependence on land and natural resources . I am thinking of the international oil price rise, of the exploitation of the North Sea, of the housing crisis and urban property speculation, of the rise in food prices in this country, co-existing with agricultural surpluses, and famine in underdeveloped countries . The productive sectors concerned are agriculture, urban property, and mineral production . In each of them capital has faced the crisis general to international capital, the pressure on profits, the strengthening of labour at the point of production, the crisis of restructuring. The existence of land, however, has meant that these sectors have had a relationship to the more general crisis quite distinct from other sectors that have no such dependence on the soil . It is striking indeed that these sectors often appear at the centre of the crisis . Some liberal theorists even locate the crisis in the control of these sectors by landlords : the property speculators in the British crisis, the Arab sheiks in the general rate of inflation and the declining rate of profit, the latifundistas in the crises of inflation and poverty in Latin America . Other liberals - piarticularly social democrats - see the control of landed property as a way out of crisis . The British Labour Party aims to match the success of the Norwegian government in using rents from the North Sea to cancel out the financial crisis in this country . Internationally, social democrats have held out similar hopes for land reform solving the problems of underdevelopment . In each case capital's theorists offer a particular interpretation of the issues, and capital's agents their own policy solutions to the specified crises . These "solutions" have been contested by the labour movement in many immediate ways : in tenants' struggles, in campaigns for price freezes, in demands for the nationalisation of urban land (in the advanced capitalist countries) and of rural land (in the underdeveloped world .) Unfortunately our general theory of the relation of landed property to capitalist development has not been developed in tandem . What is required is not merely the analysis of the capital-labour relation in these sectors, but the capital-land relation . We need a general theory of modern landed property, and its concomitant, a theory of rent . In the nineteenth century the question of rent and landed property was at the centre of theoretical and political debate . Ricardo devoted the second chapter of

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101

his Principles to rent, and much of his later life to the campaign against the power of landed interests . Marx devoted nearly 600 pages of Capital and Theories of Surplus Value to the critique of classical rent theory. Later, the Fabians schooled by the marginalist Wicksteed in their attack on Marx - made rent the pivot of their entire economic theory .[1] In the twentieth century, however, the debate has been consigned to the margins, in Anglo-Saxon countries at least . The Henry George Society still exists in Britain, but its demands have lost their political purchase . No major capitalist country has nationalised the land - as seemed possible a hundred years ago . Ricardian diminishing returns and unearned surpluses have been generalised to all branches of economic life. Opportunity cost and general equilibrium analysis have allowed land and its returns to be treated in the same way as other fields of price determination . [2] Even in Marxist theory, there have until recently been few contributions since the works of Kautsky, von Bortkiewicz and Lenin at the turn of the century. In the past few years Marxists have begun to revive the earlier classical debates . They have been principally concerned to confront Marx's theory of rent with problems raised in the analysis of particular branches . But none of them to my mind have successfully overcome the apparent disjunction between Marx's theoretical categories and the demands of concrete analysis . Some writers have preserved Marx's concepts, but without explanation, and with a resulting arbitrariness that has offended those less wedded to the words of Marx . More common has been a rejection of Marls concepts, particularly that of absolute rent, in favour of the more general monopoly rent, or in some cases of the neo-classical theories of producer and consumer surplus, of bilateral monopoly and monopolistic competition . It has not been made clear what significance this abandonment of Marx has had for the concrete analyses and the conclusions which arise from them . I want to suggest that there is a significance, and that it can only be understood if we recognise that what underlies the recent debates on rent within Marxism is nothing less than the controversy on value between neo-Ricardians and vulgar economy on the one hand, and the orthodox value school on the other . Neo-Ricardians have argued more generally that a) Marx's transformation from values to prices is incorrect, and b) that most of Marx's major propositions can be made without recourse to his theory of labour value . These are the very issues at the centre of the rent debate, and it is striking that the major theoretical contributions on rent after Marx have been made by von Bortkiewicz and Arghiri Emmanuel - both of them critics of Marls value theory and his method of transforming values to prices . Each has attacked Marx's rent theory at an abstract theoretical level, and neither has been effectively answered . Their emphasis on Ricardian value theory - individual labour times - and on distribution rather than production, has carried over into much of the current literature on rent . Defined in this way, neo-Ricardianism holds the field . In this essay I want to re-assert the importance of Marls value theory for rent analysis, and in doing so, to relate the issue of rent to the more general debate on value .

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CAPITAL & CLASS

MARX'S THEORY OF RENT Much of the confusion over Marx's theory of rent has resulted from a misunderstanding of the questions to which it is addressed . Its first concern is not with quantitative, moral or strategic questions . It is not concerned with indicating the level of rent in any particular sector; nor to show that recipients of rent are unproductive agents and as such worthy of attack ; nor to indicate the contours of class conflict and possibilities of class alliance. Rather Marx was concerned to develop a theoretical understanding of the form of rent, of how the ownership of one specific factor of production, land, gave rise to an apparently independent category of distribution, in spite of the fact that a material use value could not itself be productive of value . And in analysing the form, he also wanted to provide a critique of other theories of this form . Form analysis and critique : these two inseparable objectives informed his work on rent . It is from this perspective that I want to discuss four of the main points in Marx's treatment of rent . 1 Vulgar economy and rent as a return to land as a factor of production First, rent for Marx is a deduction from value produced by labour. Landlords, because of their control of a material element of the labour process, extract surplus profit which in other circumstances would accrue to capital . These profits may derive from the labour of agricultural workers which would otherwise be appropriated by capitalist farmers (differential rent) or by industrial capital (absolute rent) . Or they may be profits produced by industrial workers and normally enjoyed by industrial capital (monopoly rent) . In all cases rent is a deduction from total social value, and is limited by the total value produced by labour . What it was not was a return to land as a factor of production . Land and rent were an irrational couple . Land was a use value, a material element in the labour process . Rent was a price . To see rent as the price of land implies that land has a value . But how can a use value which is not the product of human labour have a value? It cannot . It may have a price without having value, but in this case the price cannot signify the contribution which the use value makes to the value of social production . The price rather represents a deduction from value produced elsewhere. "Land and price are incommensurable magnitudes", says Marx . (TSV,

Vol. III, p. 520) .

To get round this some "vulgarians" posit that rent must be seen as interest on capital advanced . This capital advanced may be the initial price of land . But, says Marx, since the initial price is merely the capitalisation of future rents, and since rents predate such a price of land, this argument is clearly insufficient . Others, like Carey, suggest that the capital in question is that previously invested on the land . How then would Carey explain that land without capital investment still yields rent, and that equal amounts of capital invested in land of differing fertility yield different amounts of rent? Pent seen as a return to land as a factor of production was not then consistent with the labour theory of value . In this Manx agreed with Ricardo, and regarded it as one of Ricardo's great achievements to have penetrated beneath this irrational form, in search of the relation between value and rent.

VALUE AND THEORY OF RENT

10 3

2 Differential rent, social fertility and the falling rate of profit Ricardo's argument against the vulgarians was that agricultural prices were determined by the labour time embodied in the commodities produced on the least fertile cultivated land . On these plots there was no rent . Rent only arose on soils with higher fertilities . It was a differential rent - a surplus accruing to landlords because of different fertilities . As such it did not contribute to price formation . "Corn is not high because a rent is paid, but a rent is paid because corn is high ." Rent did not arise because of land's contribution to value . Labour was the only source of value . Landlords appropriated a portion of value because of the particular character of price formation in agriculture, and their monopoly of the more fertile soils . Ricardo's main concern then was the debate on value, and the defense of the labour theory of value against cost of production theories . But he also developed his argument on rent to explain the phenomenon of the falling rate of profit . If rent represented a deduction from value produced elsewhere in the economy, and if wages were constant, then an increase in rent would imply a decrease in profits . How could a rent increase be consistent with the labour theory of value? By the fact that increased food output for a growing population would require cultivation to move to worse and worse soils, lowering labour productivity, raising prices, and therefore rent . An identification of value with labour time allowed Ricardo to theorise distribution within the capitalist economy, and explain the falling rate of profit . Here, according to Marx, Ricardo's value theory began to mislead him . Ricardo's failure to distinguish constant and variable capital meant that he could not understand the actual cause of the falling rate of profit as elaborated in Vol III of Capital . Instead he was forced to appeal to the natural laws of fertility, and build a general theory on a special case . Marx made the following points against this part of Ricardo's theory : a) rents may rise at the expense of wages rather than profits, even where real wages (in use value terms) are held constant . "For the average wage is not determined by the relative but by the absolute value of the products which enter into it." (TSV, Vol . II, p .19) Thus while industry may develop faster than agriculture, raising the relative price of agricultural products and the level of rent, any absolute increase in agricultural productivity will lower the exchange value of wages, leaving profits the same or greater . Increased profits would then be compatible with increased rent . b) rent can increase without affecting either profits or wages, because of an increase in the relative differences between plots rather than a fall in the absolute productivity on the worst land . The resultant increase in rent was not a deduction from value produced in other spheres . Rather it derived from an increase in the difference between the value of production on the individual plots and the value on the marginal plot which governed the commensuration of agricultural labour to labour in the rest of the economy . The increase in rent therefore represented the appropriation of increased surplus value produced by agricultural labour, rather than a deduction from a given quantum of surplus value in the economy as a whole . The distinction in part rests on the difference between Marx's concept of value as embodying socially necessary labour time established by the commensuration of labour between branches, and Ricardo's concept of individual labour time embodied in the isolated commodity .

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The point also reflected a different approach to fertility . Marx saw fertility as social rather than merely natural . "Fertility, although an objective property of the soil, always implies an economic relation, a relation to the existing chemical and mechanical level of development in agriculture, and therefore changes with this level of development ." (Capital, Vol . III, p. 636) . Once this is admitted, differential rent can equally develop as the result of movements to more and more fertile land as to less and less. "Whether by chemical means (such as the use of certain liquid fertilisers on stiff clay soil and calcination of heavy clayey soils) or mechanical means (such as special ploughs for heavy soils) the obstacles which made soil of equal fertility actually less fertile can be eliminated (drainage also belongs under this head) . Or even the sequence in types of soil taken under cultivation may be changed thereby, as was the case, for instance, with light sandy soil and heavy clayey soil at a certain period of development in English agriculture. This shows once again that historically, in the sequence of soils taken under cultivation, one may pass over from more fertile to less fertile soils as well as vice versa ." (Capital, Vol . III, p . 636) . On the basis of this, Marx distinguishes two types of differential rent, one extensive resulting from the development of new lands with equal quantities of capital (differential rent I), the other intensive by the application of equal amounts of capital successively to the same plot, (differential rent II) . In each case he wanted to break the tight relationship Ricardo had established between increases in output, declining fertility, and rising rent . Such a relationship might exist, but it was certainly not historically necessary, and could even be considered a special case . Marx investigates a number of alternative movements for both types of differential rent . For DRI his discussion is summarised in Table 1 . Ricardo's case is that where the productivity on the already cultivated land is held constant, and where increased output requires increased prices so that new worse land can be brought into cultivation . Once productivity on the old land is allowed to vary, or new land provides increased yields and replaces the former worst land, then the plus signs in the table show that differential rent can increase without a move to worse land and with the same or falling prices. Thus where new land with improved productivity replaces old marginal land, prices fall . With unchanged productivity in the more fertile old lands, rents would decrease, but if they also improved their productivity then differential rent could rise . While in the early nineteenth century, increased outputs, prices and rents followed Ricardo's case (until 1815), in the first half of the 18th century the increase in rents on cultivated land, in output and population went together with falling grain prices . (Capital, Vol . III, p . 644) . Ricardo was thus basing his general assumption on a particular and not inherently representative historical period . The limitations of Ricardo are even clearer when we take account of differential rent II . Marx now holds the amount of land and the plot productivities

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VALUE AND THEORY OF RENT

Table 1 Movements of differential rent l. productivity on old land

same

up

price movements

worse

+ (R)

+

rise

same

=

+

same

new land as average old land .

+/=/-

better

no new land

I

=

Source : Capital Vol III, Chapter XXXIX .

+

same (if old marginal land still in cultivation) or fall . same or fall

Table 2 Movements of Differential Rent ll. regulating prices production Productivity of new capital investment . Same

Lower

Higher General

1st case Constant

+ (increase in rent proportional tb increase in capital investment on rent-bearing soils). +/= (can increase as long as positive super profits from new investments)

+ (increase in mass and rate of rent) Rent cannot fall, likely to rise, may stay constant.

Source : Capital Vol 111 . Chapters XLI-XLI11 .

2nd case Falling

3rd case Rising

inapplicable unless DRI changes +/=/- (though more difficult for rent to rise in this case since has to offset loss of rent through falling price of production)

while rent more likely to fall, can also rise.

+/=/- (the increase of rent possibility is the normal and prevalent tendency of DRII for Ricardo) . not applicable unless DRI changes

10 6

CAPITAL & CLASS

constant (first column, second row in Table 1) and alters the quantities of capital invested on the plots of land . He then works through the results of differing productivities of the new capital investments on rent, and relates them also to changes in the regulating prices of production . The possible movements of rent in these cases are summarised in Table 2 : The third column, where the costs of production on the marginal land increase, can only relate to changes in DRII where the productivity of new capital investment is falling . Where productivity of the new investment is the same or rising it would be impossible to have a rise in prices of production without some shift as considered under the heading of DRI . But where it is falling, then costs will rise and prices of agricultural output will also rise . This case is the one which Ricardo considers the general tendency as far as intensive capital investment is concerned. In Chapter II of his Principles he does discuss other alternatives, particularly those of column 2 above . Capital investment could increase productivity, extrude the worst land from cultivation and lower prices and rent . But this he thinks would be a temporary phenomenon . A fall in rent would mean an increase in profits, accumulation would rise, and with it population, the demand for food, and finally rent . The cases of the second column would therefore be only an interruption to the general upward tendency of rents, and the downward tendency of profits . (Principles, pp .102-6) . Marx rejected the line of this argument . Diminishing returns on the worst land (row 2 of column 3) he thought of as exceptional . New investments tended to be made on the most fertile land . Secondly, even with diminishing returns on new investments (row 2) there could still be an increase in rent without an increase in agricultural prices . Further investment on intra-marginal land might lower the rate of return to capital employed but it would still increase the mass of rent and the rent per acre as long as the new prices of production lay below those of the worst land . Thirdly, there was no necessary relation between changes in rent and changes in profit . If the regulating prices of production rose, then prices would rise, the costs of labour would rise and profits (in the short term at least) would fall . But in all cases considered in columns 1 and 2 prices would remain the same, or fall, profits would therefore remain the same or rise, while rent could rise, remain the same or fall . Where prices fell and profits rose, together with accumulation and the demand for corn, there was no necessary increase in the price of corn since increased output could be provided by new intra-marginal investments (or new intra-marginal lands) . (This part of the argument can be found in Capital, Vol . III, Chapters XXXIX-XLIII, pp . 634-720) . The important point is not that Marx disagreed with Ricardo that rents might tend to rise with the development of capitalism . Rather it was the way they rose and therefore the connection with the rate of profit that was at issue . Whereas Ricardo concentrated on one possibility of extensive expansion (a rise in DRI), Marx considered increases in DRII more significant . "The more the capitalist mode of production develops the more does the concentration of capital upon the same area of land develop, and therefore, the more does the rent, calculated per acre increase ." (Capital, Vol . III, p . 675) . In the long run both the rate of rent and the overall amount of rent are likely to

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107

increase, but the nature of the increase will tend to leave agricultural prices and therefore general profits constant .[3] Any tendency of the rate of profit to fall cannot therefore be inferred from the relationship of agriculture to landed property . 3 Ricardian value and absolute rent In Capital, the bulk of the theoretical discussion of rent concerns differential rent . There is one brief chapter on absolute rent, where Marx switches the focus of his attack from the relation of rent and the rate of profit, to Ricardo's whole notion of value . It is this section which has been so heavily criticised . Some writers have suggested that Marx might have omitted this chapter altogether had he had the chance to revise Volume III . The pages of Theories of Surplus Value Volume II argue strongly against any such suggestion . It is clear that absolute rent is an unambiguous theoretical consequence of Marx's argument on value, and particularly of his method of transforming values into prices . As he put it in one of his plans for Capital Vol . III : "Rent - illustration of the difference between value and price of production" (TSV, Vol . I, p . 415) Marx's concept of absolute rent was the culmination of an attack on Ricardo's failure to distinguish between constant and variable capital, and therefore between values and prices of production . As such it was as much a part of Marls value argument as was the transformation problem . In defending the consistency of the labour theory of value and rent, Ricardo was forced to put forward the proposition that the marginal land earned no rent . This was unnecessarily restrictive, said Marx, and contravened common sense . No landlord was likely to let out his land for no rent, however marginal the land . The answer to Ricardo's problem was simple, once one understood the way in which values are transformed into prices. As Ricardo argues, commodities will tend to exchange at their values . But with different organic compositions of capital, the rates of profit will differ . There follows a flow of capital between sectors which equalises the rate of profit, and ensures that the right mix of use values is reproduced for the next time period . Low organic composition sectors with high profits yield up their excess profit to a common pool for high organic composition sectors to draw on . The main instrument of equalisation is the competition of capitals, and their free flow between sectors . With free circulation agriculture with its low organic composition would be expected to give up excess profits for the common pool . But capital cannot move freely into land . Landed property presents a barrier to prospective capital, by demanding a rent even on marginal land . The result is that agriculture is insulated from the general process of profit equalisation, and that its prices will continue to reflect their value rather than the post-equalisation prices of production . The difference between prices of production and value is excess profit . It is this excess profit which is taken by the landlord, even on the marginal land, in the form of rent . The process is shown in Figure 1 . In Chart A there are three branches, with equal rates of exploitation, equal quantities of capital advanced but unequal organic compositions . Thus branch I with a high ratio of living to dead labour (V :C) produced more surplus value than the other two. With a free flow of capital between sectors, an average rate of profit would be

Figure 1

P

I

P

II

P

III

r

Dv ar

N V J A J

I

II

III

I

II

III

2

II

III

ra

VALUEAND THEORY Of RENT

10 9

established equal for all sectors . This is shown in Chart B . Surplus value has been redistributed from I to III, with II - which has an organic composition of capital ; equal to the social average - remaining the same . If, however, there is a barrier to capital entering I (agriculture), then a new and lower rate of profit is established through a flow of profit from II to III : This is shown in Chart C, with the excess profit in branch I being drawn off in the form of rent . We can see then how Ricardo's problem is solved . Prices relfect values . Rent is earned on the worst soil as well as the best. In addition to Ricardo's differential rent, there is consequently a second, distinct form of which does not depend on differences between plots . Marx calls it absolute rent . Absolute rent depends on three things : i) the tendency of commodities to exchange at their value, and the modification of this tendency towards exchange at prices of production as a result of the free flow of capital between branches . ii) the presence of low organic compositions of capital in those branches yielding absolute rent . iii) the reproduction of comparative monopoly power of landed property against capital in those branches . The main objections to Marx's concept of absolute rent have centred on these three conditions . The commonest criticism has been directed at the first of these - Marx's method of posing the question in terms of value and price . Value, the critics suggest, does not come into it . If landlords have the power to withhold profits from the common pool, why should that power have any link to value? Why not treat it as a simple monopoly power, and the rent ensuing as a monopoly rent . The power of landlords against capital would vary according to circumstances, sometimes extracting less, sometimes more than the differences between value and prices of production . The most'serious contemporary critic, Arghiri Emmanuel, goes further and argues that Marx's attempt to insert value into the question suffers from internal inconsistencies . First, if capital is restricted from flowing into agriculture, why should products sell at their value, since the equalisation of value in exchange implies the competition of capitals . Second, Manx acknowledges that supply and demand determine the level of absolute rent . Why then should the upper bound be set by value? One answer that Emmanuel draws from Marx is that foreign competition establishes the limit at value . But why, says Emmanuel, should international trade take place at values? Another answer might be that the products from existing marginal plots would be bound by competition from the most favourable soils not yet in production . But this would leave us with a theory distinguished in no essential respects from Ricardo's theory of differential rent . Like Bortkiewicz, Emmanuel concludes that the problem should be treated in terms of monopoly power rather than value . Significantly he equates the required analysis with that applicable to monopoly power in any sector, resting on points common to the empiricist critique of marginalism (lack of information about potential productivity, stubbornness and other psychological traits in landlords, discontinuous fertilities between plots etc .) . Two points about these criticisms need to be made at this stage . First, Marx did discuss monopoly rent arising from natural or artificial monopolies which would

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allow commodities to be sold above both their prices of production and their value. But he saw this form of rent as only of peripheral importance, depending as it did solely on the buyer's needs and ability to pay . He criticised those like Buchanan and Hopkins who suggested that all rent is monopoly rent because no reason is given why supply should not rise to meet demand and thus abolish all rent. Rent in these theories becomes accidental, because the movement of demand and supply is accidental . The analysis of monopoly rent belongs therefore at a lower level of abstraction "under the theory of competition, where the actual movement of market prices is considered ." (Capital, Vol . III, p . 746) . What was required was an understanding of the "inner organisation of the capitalist mode of production, its ideal average, as it were, "abstracted from the conjunctures of the market ." The question was whether rent could exist on the marginal plot under such an "ideal average", in conditions where demand equalled supply, where there was no general market power allowing corn to be sold above its value . It is this question which the "monopoly/" critics of Marx have repeatedly failed to address . Secondly, in answer to the question, why value, Marx would answer, because agricultural commodities originally exchanged at their values, and landed property has always barred capital's inflow . According to Marx, his general theoretical procedure for transforming values into prices also reflected the process of historical development . "Apart from the domination of prices and price movement by the law of value, it is quite appropriate to regard the value of commodities as not only theoretically but also historically prius to the prices of production ." (Capital, Vol . 111, p .174) . There was therefore a historical basis for the creation of absolute rent. For landed property preceded capital . It was a condition for the development of capitalism since it was required to divorce the worker from the means of subsistence . Hence it existed as a barrier before the transformation, or put another way, before the equalisation of profit between branches took place . "The conversion of values into cost prices is only the consequence and result of the development of capitalist production . Originally commodities are (on average) sold at their values . Deviation from this is in agriculture prevented by landed property ." (TSV, Vol . II, p .333, and see also p .243) . Emmanuel's objections now become relevant to the subject matter . How is it, without free movement of capital, that goods exchange at their value? To this we can add the more general objections of opponents of the "historical transforma tion problem" - is the exchange of commodities at their values compatible with capitalism? Marx's answer is clear . The immobility of capital - that particular limitation on competition - is a condition rather than a hindrance for commodities to exchange at their values . Otherwise capital would flow between sectors, equalising the rate of profit and forming prices of production . Prices proportional to values rule as the result of the establishment of sustained (rather than accidental) trading relations, the production by both trading partners of commodities in the required proportions, and the absence of accidental monopolies .

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11 1

Demand will determine the quantities produced, socially necessary labour time the price at which they are sold . These conditions characterised trade between nations, between pre-capitalist commodity producers, and also the early stages of capitalism . First a single market value and a single market price were established within spheres of production for capital and labour could be presumed to be more mobile within spheres, with weak producers being driven out by the strong . Secondly, prices of production would be established by capital mobility between spheres . "The latter process requires a higher development of capitalist production than the previous one ." (Capital, Vol. III, p .177)[4] The important point is that capital mobility between branches is not a prerequisite for the exchange of commodities at their values nor for the existence of capitalist relations of production . Marx's theory of absolute rent cannot then be held to be internally inconsistent on this score . Why not above value? Marx certainly mentions international trade as a competitive regulator and would argue that international trade tended to be at values if there was no international mobility of capital . The line of the argument would follow that outlined above . The conditions would be the existence of competition within the branches and between consumers . This is certainly not arbitrary as Emmanuel suggests . Even leaving this aside, Marx still argues that there is a tendency for goods to exchange at their values in developed capitalism, and that the equalisation of profits must be constantly reproduced through the mobility of capitals . For agricultural commodities to sell at more than their value, there would have to be an artificial restriction of output from the land, and this is ruled out by the assumption of a non-collusive landlord class, and an abstraction from conjunctural disturbances to the supply/demand equilibrium . Why not below value? This Marx said was a possibility. It would depend "wholly on the relation between supply and demand and on the area of land newly taken under cultivation ." (Capital, Vol . III, p.744). Again these are conjunctural factors . They are qualitatively different from the forces that lead price to gravitate to value . Hence the discussion of these contingencies cannot be taken as an argument against the determination of agricultural price by value - as Emmanuel does - but rather as an acknwoledgement of the inevitability of conjunctural divergencies from the long run trend . Marx's answer then to the first general objection is that value is always the centre of gravity to which all prices tend . The mobility of capital may modify the prices in the process of equalising profits, but if it is obstructed in agriculture, then absolute rent is the necessary outcome . The second set of objections relate to the dependence of absolute rent on the low organic composition of capital . The issue has arisen in the discussion of rent and minerals . Many minerals are produced with high organic compositions . Does this mean that marginal land does not earn a rent? Self-evidently not - if we are to follow Marx's objection to Ricardo . But if marginal mineral land is paid a rent, should that rent not be seen as absolute rent, and if so, would not absolute rent be no longer tied to the organic composition of capital? We have outlined why Marx insisted on the connection between absolute rent and organic composition . It was not accidental, but at the core of his theory . The concept of absolute rent is redundant once the notion of the low organic

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composition is removed . How then do we explain the self-evident point raised in the mineral discussion? Simply by recognising that the "absolute rent" charged by the owner of the marginal plot in mineral production is the absolute rent of the agricultural and not the mineral sector . Agriculture sets the limits for other land uses . The marginal mine will only be open to production if the rent paid compensates for the rent lost from the use of the land as a marginal field . A similar argument applies to urban land . What if the organic composition of capital in agriculture rises to the social average or above? Samir Amin suggests that it has, with the domination of agriculture by capital in the 20th century . If such is the case, would we not still expect the proprietor of marginal land to demand a rent? Marx certainly foresaw the possibility of agriculture's organic composition rising in this way, and thus liquidating absolute rent . But he did not deal with the resulting objection that marginal land would not be given gratis . The conundrum is easily answered once we understand the material basis for rent of any kind . The existence of differential and absolute rent is dependent on capital's inability to reproduce the conditions of production . A rising organic composition reflects, as Amin acknowledges, capital's subordination of the soil . Output increasingly varies with the inputs of capital rather than the inputs of land . The material basis for rent of all kinds is thus dissolved . The marginal plot will tend to disappear along with absolute rent, and the conundrum . The third set of objections centre on the reduction of the monopoly power of landed property against capital . They can be read as an alternative version of the points about rising organic compositions . The argument is as follows . Absolute rent depends on landed property restricting the inflow of capital into agriculture . With the increase of differential rent from intensive capital investment (DRII), landlords will compete for the most efficient farmers, (von Bortkiewicz) . Capital will then flow with increasing freedom into land as rents are reduced, profit rates will be equalised and absolute rent eroded . If capital does flow freely into agriculture then of course absolute rent disappears . Whether it does or not is an empirical question which I will take up later. At this stage we need only note that such a possibility does not constitute an objection to the theoretical category of absolute rent . Von Bortkiewicz, however, wishes to have the argument both ways . He wants the technical productive conditions for rent to exist (the non-subordination of land by capital) but the social distributional conditions to be surpassed (increasing bargaining power of capital vis A vis landowners) . Land can still be a fetter in production but not in distribution . Landlords lose their monopoly power through competition among themselves . Two things only need be said . First, Marx never assumed a landlords' monopoly which could be broken up through competition among themselves . Absolute rent assumes competition amongst landlords and the capitalist tenant farmers . In the long run, increases in productivity through intensive capital investment would be as likely to raise rents as profits, since capital could be reproduced but land could not . Secondly, Marx's whole argument was that the significance of land in production would be reflected in the sphere of distribution . Distribution was not autonomous . The landlords would only weaken in production when land became less significant as a material input, and/or when the institutional conditions of landholding were changed .

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4 Modern landed property All rent is the economic realisation of landed property, of the legal fiction "by grace of which certain individuals have an exclusive right to certain parts of our planet" (Capital, Vol . III , p .619) . This applies to rent in feudalism, in slave society, in Asiatic society or in capitalism . The theoretical task, says Marx, is not to emphasise the common element in all forms of rent, but to show why rent takes the specific form it does in each moje of production . i n capitalism rent takes the form of surplus over average profits on capital . This was quite distinct, and implied entirely different social relations from previous forms of rent, even from the money rent of late feudalism . In the same way, the forms of property holding must be distinguished according to different modes of production . In capitalism the form assumed was called by Marx modern landed property . The principal features of modern landed property were four : a) property rights could be bought and sold, b) the landlord was transformed from an active agent in production to an unproductive one in distribution . c) the landlord's payment in rent was no longer directly appropriated from agricultural labour, but received as a residual payment in cash from a capitalist farmer . d) landholding was stripped of its former political and social power derived from its direct role in production . These were the result of capital's transformation of traditional relations in agriculture to serve its requirements . The main requirements were two . First to secure a supply of wage labour . Property rights on land, of a kind that would separate workers from their means of subsistence, had to be established . Under feudalism the lord's drive had been the direct accumulation of men through the extensive development of force . His aim had been to include men on his land to work and fight . The modern proprietor, restricted to the accumulation of money, now became the main instrument for extruding labour from the land . It is the landlord himself who clears "the land of its excess mouths, tears the children of the earth from the breast on which they were raised" . (Grundrisse, p .276) . "The cottiers, serfs, bondsmen, tenants for life, cottagers etc . become day labourers, wage labourers ." (Grundrisse, p .276) . It is in this sense that Manx says that wage labour in its classic form is "initially created only by modern landed property ." (Grundrisse, pp .276-7) . Secondly, capital needed to ensure a supply of food to feed the wage labour in the towns . This it did by introducing capitalist relations on the land, transforming agriculture into industrial agronomy, and totally separating land as an instrument of production from landed property . "The rationalisation of agriculture, on the one hand, which makes it for the first time capable of operating on a social scale, and the reductio ad absurdum of property of land on the other, are the great achievements of the capitalist mode of production" (Capital, Vol . III, p .604) . The intimate connection between wage labour, capital and modern landed property was most clearly seen during the colonial expansion when capital expanded to new territory where no such landed institutions existed . Marx cites

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Wakefield's story of one Peel who brought with him to a new settlement in Australia means of subsistence and production worth £50,000 plus 3,000 working men, women and children . But because land was freely available, Mr Peel was left without a servant to make his bed . "Unhappy Mr Peel who provided for everything except the export of English modes of production to Swan River" (Capital, Vol . I, p .766) . Wakefield argued in his Theory of Colonialisation that the British government should create modern landed property which would put an artificially high price on the colonial land, put a stop to proletarian settlement and provide a fund from the sale of land to finance further migration of workers to the new areas of accumulation . Yet as an institution modern landed property had a contradictory relation to capital . For the monopoly necessary to exclude wage workers from the land was also a monopoly against capital . They cannot be separated . Landed property, developed as an ally, becomes a charge on capital . With an industrial proletariat established, it is the aspect of the negative charge which becomes dominant . (Grundrisse, p .279) . I n the Grundrisse, the negative nature of landed property is given two closely related characteristics . First it has no direct bearing on production . It is unnecessary, an excrescence, and in this sense the "negation" of capital . Second, it represents a deduction from capital, a limitation on profit . This is the distributional perspective which Ricardo emphasised, and which the Fabians took up in their generalised theory of rent . It is interesting that in spite of the fact that Marx's landlord deducted absolute as well as differential rent in contrast to Ricardo's more modest deductions, Marx pays little attention to this issue . For as we have noted he did not regard the distributional feature of rent as a major limitation to continued industrial accumulation . Rather it is the limitation to the application of capital in agriculture which Marx emphasises as the major fetter presented by landed property . Thus the fact that no landlord will lease out his land, whatever its quality, without the payment of rent constitutes a limitation to capital and its free expansion on the land . The exceptions prove the rule . In new areas where there is unlimited land - as in the colonies - capital can be applied without hindrance, but there landed property does not exist . Nor does it exist in effect where the landlord is also the farmer and where he would invest on the worst land even if the investment yielded only normal profit . A tenant would not make such an investment since he would also have to pay rent, but the cultivating landlord avoids this . Marx regarded both cases as exceptions and outside the terms of the discussion . What may be less exceptional is owner occupation, but we find here a different fetter . For while the owner is notionally free to invest on his own land without rent, he may lack the capital to do so since he has to spend so much in servicing the payment for the original cost price of the land . Because the cost price of the land is nothing other than the capitalised value of the rent, the tenant's yearly interest payment are effectively his rent payments in another form . Finally in the case of the tenant farmer, the limitation placed by landed property on the investment of capital will be suspended for the period of the lease (or of the period of the set rent) . At the end of the lease period the landlord is able to take over surplus profits by raising the level of rent, and to appropriate long term investments into the value of the land . The shorter the lease period, the more

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flexible the rent-charging conditions, and the weaker the terms of compensation for tenant's investments, the greater is the disincentive for the tenant to invest capital in his farm .[5] It is these factors to do with the development of productivity in the agricultural sector itself, rather than the effects on overall accumulation, which Marx thought would lead to general demands by capital for the dissolution of landed property and its transfer to the state . In his discussion of modern landed property Marx wanted to insist that a) rent and this social form of ownership were inseparable, and that rent could not be discussed as deriving from nature, as Ricardo at times did ; b) that the modern form of land ownership was not an eternal form, but a form specific to capitalism, whose characteristics could be derived from capital's requirements . VALUE AND FORM One of the things I have tried to bring out in this discussion is Marx's overriding concern with rent and landed property as forms taken by social relations under capitalism . The questions he asked of these forms were whether their origin and significance were self-evident and whether their appearance immediately revealed their essence . These are, of course, the questions which run right through Capital, and inform Marx's approach to Political Economy . The pages on rent are one part of his general project to uncover the mystery behind the forms taken by capitalist social relations in the spheres of exchange, production, the circulation of capital, and distribution . Vulgar economy tries to explain these forms at the level of appearance . But in doing so it only compounds the mystery, interpreting social relations as relations between things . Rather we must pass beyond appearances, first by understanding the basic form taken by social relations under capitalism - value - and then by tracing through the connection between value and its many ossified forms . This is how Marx can say that the theoretical task is not proving the concept of value. "It is a question of working out how the law of value operates" (Letters to Kugelman, p .74) . The categories of political economy which the vulgarians introduce without explanation and without history - money, capital, wage labour, profits, rent can in this way be explained ontologically . We can understand how these forms appear, what conditions are necessary for their reproduction, what laws govern their development and limit their movement . We can also understand the theoretical limits and inconsistencies of those theorists who have either failed to go beyond appearances, or who have, like Ricardo, failed fully to grasp the value form . This is why form analysis simultaneously supplies the basis for a critique of political economy . It is such an approach which lies behind Marx's theory of rent, his insistence on value, his derivation of the concept of absolute rent, and his emphasis on the social foundations of differential rent and the form of landownership . We can see how very different is the focus and method of Marx from almost all modern theorists of rent . If we take Emmanuel again - a writer who is acutely aware of the issue of value - we see that his main work, Unequal Exchange - is

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centred on the static distribution of surplus value in a system . To analyse this he posits a two-department abstract value scheme - based on Ricardian labour values rather than Marxian socially necessary labour time - and then equalises the profit rates in the system . His concern with rent is how it affects this comparative static distribution of value . For this purpose a concept of monopoly rent is sufficient . Any notion of absolute rent is not only unnecessary but stands quite at variance with the whole method of analysis, since value is posited not as the law of gravity in the system around which prices move, but as an arbitrary starting off point for the static transformation . Now what is wrong with this? Why shouldn't we be interested in distribution as a separate question, and cannot we use any analytical tools which appear to throw light on it? What is so important about value? The answer is to be found in the way we relate distribution and production relations . For Marx distribution was a moment in the process of expanded reproduction . It was subordinated to production . "The structure of distribution is completely determined by the structure of production . Distribution is itself a product or production, not only in its object, in that only the products of production can be distributed, but also in its form, in that the specific kinds of participation in production determine the specific forms of distribution ." (Crundrisse, Introduction, p .95 ; see also Capital, Vol . III, Chapter LI) . What happens if we lose the link between production and distribution by adopting an isolated "distributionalist" analysis? I will make five points which seem to me characteristic of distributionalism : 1 . Limits . Without the bounds set and reset by production analysis there is no adequate way in which the limits of distribution and redistribution can be determined . First we must posit a given value to be distributed . This is itself derived from production, and cannot be reposited until a new round of production has been considered . This is the importance of the first point we outlined in Marx's theory, that rent was a deduction from social value . Ricardo, too, unlike the vulgar economists, was able to show total value as a limit to rent in the short run since he posited value as labour expended in production . But he was unable to analyse the development of this limit in the long run . Further, distributionalism cannot set endogenous limits to the movement of the various categories of distribution . It cannot answer the question why all revenues cannot go to wages, for example, or why all revenue cannot be consumed . The fact that distribution is part of reproduction means, however, that this expansionary process itself sets limits on the distribution of revenue . Wages have to be paid if wage labour is to be available to capital . Capitalists have to set aside at least part of their profit for reserve funds, insurance and competitive investment, and this limits capital's ability to consume its revenue . Rent will be determined residually, by the deviations of individual rates of profit from the rate on marginal land, and by the deviation of prices of production from value . These various values, moreover, are themselves determined by movements in production - the change in the value of labour power, in the value of replacement

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machines, or in the value of agricultural commodities . A distributional theory must assume these values and these limits, or refer to exogenous forces, such as subjective choice or class struggle . It cannot analyse the laws governing their development . Finally, distributional theory has no endogenous theory of power, which could give some indication as to the limits of class power in distribution, and as to which way the material basis of the relative class powers might develop . In contemporary Marxist rent theory, where movements in rent are so often theorised by reference to class struggle, the class struggle itself tends to remain descriptive in the past and unbounded in the future . With so small an area submitted to the pessimism of the intellect, too large a zone is left to the optimism of the will . 2 . The terrain of class struggle . Moreover, where class struggle is discussed it tends to be interpreted as a struggle over distributional shares, rather than a struggle over relations in production . This is, of course, clearest in Fabian theory, which explicitly limits the field of struggle to distribution, supposing that production relations themselves are either outside history, or may even be subordinate to distribution relations . Marx's comment that "the view which regards only distribution relations as historical but not production relations . . . rests on the confusion and identification of the process of social production with the simple labour process," (Capital, Vol . I 11, p .861) is is most apposite to the Fabians . 3 . Static . Without a theory of the long run rooted in production, distributionalism tends to be static, with, at the most, mechanistic connections between one period of distribution and the next . 4 . Rent and accumulation . One consequence of the tendency of distributionalism to the short run is that the relation between changes in distribution, accumulation and crisis are either ignored or treated in the most rudimentary fashion . Even Ricardo, who started with a clear position on value in production, was limited by having an inadequate theory of the movement of value in production in the long run . An increase in rent was therefore seen as necessarily a decrease in profit given the wage - as it would have been in the short "distributional" run . Marx's sections on differential rent are intended to show precisely why such an approach is mistaken, and how an analysis of the movement of value in the long run can yield results quite contrary to those derived from Ricardo's value theory . Even with the value of labour power constant, a rise in rent can also accompany a rise in profit . Or real wages can remain constant or rise in use value terms, but fall in exchange value, giving further possibilities for rises in rent and profit . These results are derived from Marx's law of value . In the current period those theses which identify the cause of crisis with the increase in rents almost always fail to go beyond the simple redistribution of value from wages and profits to landed proprietors . The rise in oil prices, for example, lowered some industrial profit rates but raised others, and it was founded not merely on an increase of OPEC's bargaining power, but on the need for

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restructuring the metropolitan energy industries as interpreted by the major oil companies and the US government . The resulting increase in oil exporters' revenues may have served marginally to increase rentier consumption, but much of it has been recirculated through the international money market, or through the purchase of arms and capital goods . It is the effect of these sectoral shifts on international accumulation rather than a static discourse on the redistribution of revenues that should be the prime focus of attention . Similar arguments apply to the property sector in the UK, to the rise of agricultural prices (and rents) following British entry to the EEC, and to commodity prices in the world market more generally . 5 . Contradiction . Distributional theories are marked finally by their concern with conflict rather than contradiction . It is only when there exists an adequate theory of the development of production, that one can analyse a) how contradictions within production are manifested in the sphere of distribution ; and b) how the development of the forces and relations of production come into contradiction with the forms and relations of distribution . It is here that Marx's theory of landed property is important . He shows that it is simultaneously a monopoly against labour and a monopoly against capital, and that once wage labour has been constituted by the expulsion of labour from the soil, it is the negative relation to capital that assumes prime importance. Marx emphasised the restriction on capital investment as the major fetter. To this I would add something which is today perhaps of equal importance, the limits set by landed property to restructuring . In manufacturing sectors restructuring takes place through the downward pressure of price, the squeezing/ bankruptcy of the marginal producer and the reallocation to efficient producers of the bankrupt stock . In agriculture this process is much more difficult . First the efficient farmers do not lower price so much as increase differential rents . These rents are liable to be expropriated by the landlord rather than ploughed back in a restructuring of capital . Second, each farm has specific plots which it would be worthwhile to incorporate in restructuring. Even where the least efficient farmers do go bankrupt, it is rare for them to be in the optimum position for restructuring with the most efficient . Usually the optimum restructuring takes place on adjoining farms . Where the adjoining farm is efficiently run, or where the landowner has no desire to sell the farm, then the necessary restructuring does not take place . Third, landlords themselves are insulated from the law of value . Since the rents are gratis, enjoyed solely because of the rentiers property in land, he/she cannot in principle go bankrupt . While an efficient landlord can reap more rents (through amalgamations, improvements, extruding the inefficient tenants and attracting the best), the inefficient landlord cannot himself be restructured, cannot himself be forced to impose the law of value on his tenants . Lastly, even the owner occupier may be insulated against value more thoroughly than his confreres in industry . His purchase price will reflect the capitalised value of differential and absolute rent as it existed at the time of sale . If his plot, through his own investment or through the general diffusion of agricultural technique increases its productivity and differential rent, then he, too, will have a cushion against expropriation . The same applies to increases in

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absolute rent . Moreover even where his profits as an efficient producer remain normal, the structure of a farm commonly allows a further barrier to the bailiffs . His subsistence may be grown irrespective of the market prices of agricultural commodities. His family can be drafted to work, and can be folded into the cycles of the seasons . Or they can be sent to the town for supplementary income in the slack periods . And where petty producers are numerous, and have voices and votes in the chambers of the state, this extensive character of the agricultural labour process can generate political insulation against value, where the economic insulation has failed . The insulation against value is another side of the barrier thrown up by landed property against capital . It is in this sense that capital and the modern form of land ownership are in contradiction . What we have to analyse is the course of this contradiction : what capital does to try and surpass these fetters, whether the contradiction has tended to intensify, or whether, as some writers have suggested, it has already been liquidated . These are the questions I shall take up in the second part of this essay. I have outlined some of the consequences which follow from the disjunction of distribution and production, and which have concrete as well as theoretical implications . Now in Marxist theory the link between production and distribution is nothing other than value . For the way in which capitalism links these two moments of social reproduction is through the abstract forms of money and price, and both money and price are but forms of the value relation itself . Hence it is only through starting from value, and never losing its thread, that we can adequately understand the determination of distribution by production, and the contradictory development of their forms . It was for this reason that Marx was so virulent against analyses which lost this thread, and which started not from value but from prices of production . Such prices were, he said, "an utterly external and prima facie meaningless form of the value of commodities, a form as it appears in competition, therefore in the mind of the vulgar capitalist, and consequently in that of the vulgar economist ." (Capital,

Vol. III, p.194).

Unfortunately much of the recent Marxist work on rent has been marred by taking this starting point . This is true of all those who adopt monopoly rent in preference to absolute rent . In urban theory, for instance, the dominant approach is barely distinguishable, save in terminology, from traditional monopolistic competition and bilateral monopoly theory . Thus Harvey analyses cities as aggregations of sub-markets strategically separated by landed proprietors . He like,is these to man-made islands, and calls the rent earned from them absolute rent . This is an utter confusion . He is in no way seeking to connect rent to value, or to see how labour in these sub-sectors is commensurated with the rest of social labour . The barriers to the free flow of capital to which he refers are similar to the traditional "barriers to entry" which can apply to any temporary monopoly . The resulting rent is merely a version of monopoly rent . His confusion on value is equally clear when he attacks neo-classical theories of differential rent as being based on distance and

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neglecting utility . Distance, with its implicit differential labour times embodied in the costs of transport, is the one hard basis for an adequate theory of urban rent. [6] In agriculture similar remarks apply. If we take the two essays by Amin and Vergopoulos as examples, both reject Marls rent theory, and proceed to classify and periodise according to changing class balances . Amin in particular regards the state of class relations as central to an understanding of how rent moved . In Northern Europe capital's abandonment of the landlords meant some form of alliance with the working class, usually accomplished by social democratic parties . In Britain this alliance was made possible by the empire . In Sweden the feudal class was weak . In Germany it was the working class which was weak, and in America the alliance was carried through by the populist parties. In Southern Europe on the other hand both landlords and workers have been stronger . In some cases capital has sided with landlords against the working class, and rents remain high . In other cases capital has attempted to ally with workers under right wing or fascist governments and when this has failed it has turned to small speculators and the peasantry . Vergopoulos has a similar thesis, arguing that capitalism exhibits a tendency to replace large estates by peasant proprietors (a law of deconcentration) since in this way capital can reduce the power of landholders and erode rent through state taxes, low administered prices and/or high interest rates . Capitalism solves the problem of landed property by the creation of an owner occupying peasantry . The strength of these essays is their bold generalisations, their weakness that they are descriptive. They have no theory of capital/land relations . The issue could as well have gone one way as another. Like all empirical structuralism, their approach is high on intuitive and creative renderings of historical development, but low on the necessary limits and directions of this development . Harvey, Amin and Vergopoulos exemplify an approach which is dominant in Marxist analysis of urban and agricultural questions . It is an approach whose theoretical basis is not, I think, adequate to engage with bourgeois theory on the major issues of rent theory: rent and value, rent and crisis, and rent as specific to land rather than as generalised to all sectors with diminishing returns . Nor is it adequate to provice a theory of the long run . _I hope I have shown why this is so and why a theory adequate to these tasks must necessarily start from Marx's value theory and his analysis of forms . One final point needs to be made about value and rent . Marx did not confine himself to value, but to the contradiction between exchange value and use value . He asked how the forms of capitalist social organisation came into contradiction with the material processes which were the other irreducible element of commodity society . Thus the reason why landed property arose as a separate form in capitalism, both required by and contradictory to capital, was the material (use value) characteristic of land as an input for capitalist production . First land could yield an output without the application of capital - hence the need to divorce the working class from the land . Secondly, capital could not reproduce the conditions of production on the best land . It has tried to do so : by the application of fertilisers, but cutting down gestation times, by standardising outputs, by developing new seeds, and so on . But for most crops capital still exercises formal rather than real subordination over the land . This is the material basis for differential and

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12 1

absolute rent . It is the use value side of the analysis which we must not forget if we are to understand how the development of the productive forces serves to change the material basis for rent and landed property in the land-using industries .

NOTES 1

2 3

4

On the development of Fabian economic theory see: D .M . Ricci (1969) and Wicksteed (1933) . See also the Fabian Essays, 1889, reprinted in 1962, and Bernard Shaws review of Marx's Capital in National Reformer, October 7th, 14th, 21st 1887 in which the issue of rent is a major point of difference . This paper originated from discussions in the CSE Bulletin Board, and in the Brighton Commodity group . It was also discussed at a CSE day school on rent . I would very much like to thank all those who have contributed to the production of the current version, especially Barbara Bradby, Diane Elson and David Evans . A useful review of post classical rent theory is provided in C .R . Bye (1940) . See also Fetter (1901) . Engels in a note inserted to Capital Vol . III, writes : "The more capital is invested in the land, and the higher the development of agriculture and civilisation in general, in a given country, the more rents rise per acre as well as in total amount, and the more immense becomes the tribute paid by society to the big landowners in the form of surplus profits ." p.709 . Comments by Marx on these trends can be found on pp .609, and 622-3 . This comes from Chapter X of Vol . III, "Equalisation of the General Rate of Profit through Competition, Market Prices and Market Values . Surplus Profit ." Quite apart from the particular quotes, the whole of this chapter reads as an exposition of the historical and not simply theoretical transformation of values into prices . The recent attack by Michio Morishima and George Catephores (1975, 1976) on the idea that Marx regarded the transformation as historical as well as theoretical is therefore surprising . They deal with only one of the passages in which Marx treats the transformation as historical (that quoted in this text from Vol . III p .174) . This they dismiss and suggest that Marx might have omitted it had he had the chance to revise Volume III . The other sections - particularly in Chapter 10 - they do not relate to (in spite of their quotation by Meek) nor do they deal with the clearly historical interpretation of absolute rent . The reason for this is, I think, that both authors were concerned with denying that a value epoch either could or did exist . This is certainly a tenable position, though for reasons advanced in the text I do not agree with them . What I find less tenable is to argue that Marx shared their general view or their particular arguments . He certainly never argued that labour mobility between sectors was a condition for equivalent exchange. Nor would his wole principle of limiting the movement of profits by total surplus value have allowed him to follow the argument suggested by Michio Morishima and George Catephores (with supporting quotes from Engels) that industrial profits tended to merchant profits lying above value so that the

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the average rate of profit was higher than the rate of surplus value . This argument can in no way be taken as evidence against . Marx's explicit statement in Vol . III Chapter 10 that a single market value and a single market price were first established within spheres, and only later between them . For an argument that not only absolute rent but differential rent creates a barrier to capital investment on the land see M . Ball (1976) . Harvey (1973) . Clarke and Ginsburg (1975) share this disquiet with Harvey, but themselves adopt a different version of monopoly rent for housing that is determined by the 'buyer's needs and ability to pay' and represents "a premium which a consumer is compelled to pay for a house in a particular location" (p .8) . Their only comment on absolute rent is to question its restriction to sectors with low organic compositions of capital, (p .7) . Byrne and Beirne (1975) are also critical of Harvey, but again do not relate rent and value, and confuse one of Marx's types of monopoly rent with absolute rent (p .50) . Walker (1974) tries to maintain the distinction between monopoly and absolute rent, but by failing to relate absolute rent to the law of value, he is reduced to suggesting that the basis for the distinction is the contrast of active as against passive action on the part of the landlords . Edel (1976) likewise maintains it, but suggests that the distinctions between Marx's three categories of rent are based on differences in the class conflict involved . Only Breugel (1975) seems to me to preserve the necessary link between the categories of rent and the theory of value .

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REVIEWS

A HISTORY OF COLD AND MONEY, 1450-1920 By Pierre Vilar New Left Books (London, 1976) pp . 360, £7 .50 Reviewed by Barbara Bradby This book is a good holiday read - when you've got a bit of time to wallow in the detail of ducats and doubloons, piastres and maravedis, the early mints and the great annual fairs ; time to enjoy debates on the impact of piracy on the treasure of Portugal and Spain, on the relative importance of gold and silver through the 16th century, or the early theological treatises on money, usury and inflation . Vilar does a beautiful job of tracing the history of ideas about money through the political haze that is the history of monetary events . He is also good at proving his basic thesis - that things haven't changed as much as you think they have showing how the distinction between the "internal" money of common circulation, which always had a fiduciary aspect, and "external" money used for settling international balances, goes right back through history . He is also helpful in pointing out historically the difference between paper money and credit, and providing easy layperson's guides to debates such as that between Locke and Lowndes at the end of the 17th century . In fact it is such an excellent compilation of facts and quotations that it seems uncharitable to criticise the book for its theoretical assumptions and conclusions ; particularly as its theoretical aims are undeniably modest . Vilar sets out to prove that monetary events do have an impact on the rest of the economy, that gold is not irrelevant in the modern world, that the quantity theory was in some sense correct, and that discoveries of the precious metals were sparked off by falls in the general price level . Yet these theses are so general as to allow of considerable ambiguity, and the reader could understandably be left a little mystified as to what is Vilar's own position at the end of it all . For instance, he digs up innumerable quotations from early Spanish, French and Italian authors on money, showing how they really understood the quantity theory as well as Hume or Ricardo, yet can quote in the same breath from Marx's critique of the "quantitative" theory, al! with apparent approval . Vilar's analysis of the 16th century "price revolution" (which takes up geting on for half the book) is novel in that he does take the production of the money



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commodities into account . So much of the literature on this vexed question gets stuck into the vicious circle of whether the increase in the supply of bullion caused increased circulation, or whether increased "economic activity" called forth the increase of bullion . Completely opposed positions have been taken on the issue of whether rising prices cause incresed or decreased mining of the money metals . But Vilar goes behind all this by starting with production in the 15th century and showing how it was the falling general price-level in the century prior to the great voyages of discovery that made the money metals particularly valuable in terms of other commodities and therefore profitable to produce . It was this that produced the gold-fever of Columbus' diaries and the myth of El Dorado . Now this account does have an element of marxism in it, in that it takes production into consideration and is based on the belief that the long-term value of gold and silver is determined by their costs of production, like any other commodity. Yet Vilar does not seem to have the courage of his convictions to carry through the analysis of money as a commodity . In fact he states in the preface that one of the big questions to be answered is why money is not a commodity (page 11) . So that even his positive use of the evidence of a falling general price-level in the 15th century is vitiated by his slavish equation of rising prices with growth, falling prices with recession . Now it may or may not have been true that there was a general economic recession in the 15th century, though there is evidence that could be used to the contrary even in Vilar's book (e .g . the increase in population in France during the last quarter of the century), but the point is that falling prices do not on their own prove anything . This is in a sense just the old point about Fischer's equation - how do you know what is happening to Q and V (in the equation PQ = MV)? But in marxist terms (and introducing the vital distinction between prices and values that Vilar never makes) what we should ask is whether the fall in prices reflects a fall in values, i .e . a decreased socially necessary labour-time in production, and secondly, whether the fall in prices is accompanied by the production of a greater mass of use-values or a lesser one . To go back to the 15th century, it may be true that in order to say that gold production was becoming profitable in terms of other commodities, all we need is to know the movement of the general price-level, so that the argument about growth or recession in gratuitous . But the great stumbling-block both for Spain in the 16th century and for the ink spilt over the subject since, was that whatever else rising prices did, they did not stimulate much growth of production in Spain, which lagged behind other countries, eventually becoming swamped under the mass of bullion which rapidly transformed itself into a mass of foreign debt . Yet this paradox is left fairly muddled by Vilar, since he clings to the Keynesian belief that rising prices stimulate growth . Basically, he wants to stick to Marx's analysis of the long-term costs of production of the money commodity as determining its value (and thereby the exchange-values of all other commodities), but does not grasp the converse, that the general price-level is also affected by the long-term costs of production of non-money commodities, and that the exchange-value of the money commodity must be affected by this too . So Vilar has two half explanations which do not quite go together . On the one hand, it was falling prices and economic recession in the 15th century that made gold production more profitable and sparked off the searches for new sources of supply . In this case an increased supply should have been all that was needed to



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restore the price level and economic activity . On the other hand, we have that the rising price-level of the 16th century was caused by a decrease in the costs of production of the precious metals as a result of the more fertile deposits and the brutal exploitation of the indigenous population in the Americas . The real problem is, that if, as Keynes would have us believe, the scarcity of money was the cause of economic stagnation under feudalism, i .e . all that was needed to stimulate capitalist growth was bullion, and if falling prices in the 15th century really indicated economic recession, then there is nothing to show why production did not fall in line with the scarcity of money, or why money should be overvalued relative to other commodities . On the marxist analysis, money metal becomes a profitable line of production relative to other commodities because its value, i .e. the socially necessary labour-time involved in its production, has not fallen in line with the technological progress in the production of other commodities . As the production of precious metals is discontinuous in space to such an extent that it tends to be discontinuous in time as well, the great falls in value are likely to be consequent on discoveries of richer sources, which though economically motivated, are still essentially chance happenings in time . Similarly, the technological advances where only one production process is involved are likely to be highly discontinuous in time, whereas for a whole range of commodities, average value may fall fairly continuously in line with technological advance . When criticising Schumpeter for thinking that growth and recession can be explained solely in terms of the rate of technological innovation without reference to monetary factors, Vilar fails to draw out the conclusions of his own analysis - that monetary factors are themselves influenced by the rate of technological advance in money production, and that there is a reciprocal interaction between this production process, and that of all other commodities that are measured in terms of it . For instance, if we look at Vilar's date on prices in the 15th century (taken from Hamilton's work on Valencia and Aragon) we see that the striking discrepancy is not that between nominal prices and silver-prices, which is small and may be accounted for by debasement of the coinage, but that between the fall in the nominal price index and the fall in prices expressed in terms of gold, which was very much greater . And Vilar tells us in another chapter that the great breakthoughs in silver-mining technology were made in Germany in the 15th century . Yet he never relates this up to the fact that the discoveries of Africa and the Americas were primarily motivated by the search for gold, although later on it was silver that became important . This shows up the significance of the bimetallic ratio . If this was not adjusted to take account of the fall in the value of silver consequent on the technological improvement, then gold was liable to become over-valued in terms of silver . If we bear in mind Vilar's picturesque statistic, that in 1500, all the gold in Europe would have fitted in a 2 metre cube, it is easy to see how the vast influx of gold plundered from the Incas and the complete working to death of the indigenous Carribean population, could have upset the bimetallic ratio, and again made silver production very profitable . Again, as Vilar never quite abandons the belief that lots of money and rising prices stimulate growth and investment, he does not have anything very convincing to say about the economic decline of Spain . There is always the sneaking suspicion running through the book that producing lots of money should make a



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country rich, provided they don't do silly things like trying to stop it being traded outside the country . This suspicion remains despite lots of interesting quotes from little-known early theorists denouncing the accumulation of money for its own sake and pointing out that real wealth lies in the product of agriculture or industry (depending on school of thought) . What Vilar does not do is to follow through the analysis of the production of the money metal commodities as production processes, so that we never really get to understand what were the conditions that made first one and then the other of the precious metals profitable, how it was that surplus value would be appropriated in this area, and what it was that would bring these super-profits to an end, and then recreate them at a later date elsewhere . Failing such an analysis of production, we are left with our childhood equation of money with wealth . But Vilar covers three more centuries, following gold production through Brasil to California, Klondike and Johannesburg, as well as the development of the Banks, the south sea bubble, the assignats and the Law system in France and the establishment of the gold standard . The book is comprehensive and authoritative, yet its publication makes the development of a marxist framework for the analysis of money more urgent than ever .

UNEQUAL DEVELOPMENT By Samir Amin Harvester Press (Sussex, England, 1976), pp . 440, £10 hardback Reviewed by Diane Elson The chief interest of this book is that it exemplifies a view of the world capitalist system which is shared by a large number of "left" intellectuals, both in what Amin calls the periphery and what he calls the centre . Amin's presentation of this view is both discursive and eclectic, so that it is not easy to summarise, but the core of the argument goes something like this : the world economy consists of a set of autocentric economies ("the centre") which impose, for their own benefit, an unequal international specialisation, and an unequal exchange upon a set of extraverted economies ("the periphery") . The extraverted economies are "blocked" in the sense that it is not possible for them to achieve autocentric growth because of "the transfer from the periphery to the centre of the multiplier mechanisms which cause accumulation at the centre to be a cumulative process" . (p .288) . The impossibility of achieving autocentric growth in the periphery "has not only made possible the development of socialist trends at the periphery, but has also shifted the principal nucleus of the forces of socialism from the center to the periphery" . (p .197) By an autocentric economy, Amin means one where accumulation can continue without external expansion, one in which the essential relations of the system can be grasped without taking account of external relations . Such autocentric accumulation requires a continual increase in real wages to overcome what for Amin is the central contradiction of the capitalist mode of production, "the contradiction between the system's capacity to produce and its capacity to consume" . (p .74) In contrast, an extraverted economy is one in which capital

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accumulation is dependent on external markets, and where the essential relations of the system cannot be grasped without taking account of this . This happens when a continual increase in real wages is not possible . The 'periphery' is argued to be in this situation on the grounds that it has been forced into an unequal specialisation in which its function is to supply cheap labour to the centre, in the form of foodstuffs or raw materials . It is argued that the capital of the centre is not obliged to emigrate owing to shortage of markets, and is only interested in going to the periphery insofar as wages are lower . Cheap labour is thus a condition of the integration of the periphery into the international capitalist system, and the contradiction between the capacity to consume and the capacity to produce is overcome by increasing real wages only at the centre . This differential behaviour of real wages at centre and periphery is what constitutes the mechanism of unequal exchange . In common with other unequal exchange theorists, Amin argues that the rate of profit tends to be equalised internationally but for wages there is no such tendency . The crux of his argument (which largely derives from Emmanuel, 1972) rests on a comparison of two industries in two different countries, which employ the same quantities of constant capital, and produce the same amount of value, but which have to pay different wages . Amin assumes an equalisation of the rate of profit between the two industries, everything else remaining unchanged, and shows that the price of production of the industry in the low wage country is lower than the price of production of the industry in the high wage country . He then argues that a transfer of value takes place from the low wage country to the high wage country, equal to the difference between the prices of production : this is the unequal exchange . The periphery is unable to break free of unequal exchange and extraverted accumulation, argues Amin, because it can only compete with the centre insofar as it has low wages ; this means that although profits are high, they will not be reinvested for lack of outlet . This is compounded by the "disarticulation" of the economy, the low degree of internal linkages between different sectors . Attempts to get round this problem by large scale organised investment which would create its own market runs into a balance of payments or a public expenditure constraint . (These arguments are very similar to those deployed in the 1950's and 60's by a variety of UN based economists ; for instance, Singer, 1950; Prebish in United Nations, 1964) . Although in his analysis of unequal exchange Amin follows Emmanuel closely, he does not draw the same political conclusion . He rejects the idea that the world system should be analysed in terms of bourgeois nations exploiting proletarian nations on the grounds that this is based on a pre-Leninist view of the world system as simply the juxtaposition of national capitalist systems . "In reality", he declares, "the class struggle takes place not within the context of the nation but within that of the world system" (p .359) . However most of the bourgeoisie are in the centre, and most of the proletariat in the periphery . (Amin includes the peasants among the proletariat, on the grounds that they are integrated into the world trade system and "pay the price of unequal exchange" .) Moreover, the rise in real wages in the centre has lead to a "reformist consciousness" and incorporation of the proletariat there . This is not, however, possible in the periphery where "the proletariat is being more severely exploited than the proletariat at the centre" (p .361) . The proletariat in the periphery is thus the key to the transition to socialism . This summary does not convey adequately the texture of Amin's essay, which resembles a patchwork quilt into which bits of material from many different



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sources have been stitched : here an articulation of instances ; there a large piece of stylised history (why capitalism developed in Western Europe and not elsewhere, in twenty-five pages) ; now an insistence on the tendency of the rate of profit to fall ; then an introduction of "a new concept, that of 'surplus"' courtesy of Baran and Sweezy ; here a conjuncture, and over here a combination of multipliers and accelerators, the whole surrounded by a balance of payments constraint . Not surprisingly, there are a good many mis-matches and loose ends . But in spite of the short comings in coherence and rigour, there is one thread that runs all the way through : under-consumption as the cause of unequal development . This under-consumptionism rests on two foundations : an analysis of the categories of distribution (wages, prices, profits) which is not rooted in an analysis of the labour process ; and a failure to apply consistently the Leninist position which Amin claims to espouse . If it means anything to argue that class struggle takes place at the world and not merely the national level, then it is difficult to see how we can maintain that wage determination operates with complete independence in the "centre" and the "periphery" . Yet this is the basis of Amin's position . Moreover, he treats wages as if they could be varied in complete independence from the labour process . Prices of production with equal wages can be compared with prices of production with unequal wages to establish the degree of unequal exchange, because it is assumed that the wages can be changed without any change in the underlying use-values . In effect, the "moral and historical elements" in wage determination are implicitly assumed to operate in a complete vacuum, at some purely spiritual, not material level . This structure of assumptions conditions the way that Amin can reply to the problem raised by all unequal exchange theory : given that the difference in wages between centre and periphery is not outweighed by differences in intensity of labour,[1] why doesn't all accumulation take place at the periphery, where the rate of profit would be higher? Why is it that there is a net outflow rather than a net inflow of capital to the periphery? (Something which Amin spends several pages documenting, and which he cites as one of the main reasons for loss of linkages to the centre .) The complete dislocation that exists in his analysis between distributional categories and the labour process makes underconsumption an obvious way out : there is no demand at the periphery due to low wages . The questions that Amin tries to tackle are very important, particularly given the weakness of internationalism in the labour movement . His forthright rejection of notions of bourgeois nations exploiting proletarian nations is to be welcomed . But to make this more than an assertion of Leninist faith, and to get beyond a facile equation of revolutionary potential with low wages, it seems to me necessary to recognise that there is a tendency for the international equalisation of wages (within each category of labour) just as there is for the rate of profit ; a tendency which, however, is always being countered by an uneven process of accumulation . The analysis must take accumulation, not wages, as its starting point, and analyse it as a concrete process .

NOTES 1

Amin in fact assumes that the important point is that differences in wages between centre and periphery are not the result of differences in productivity .

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Here he shares in a general muddle in the theory of unequal exchange, which confuses the question of productivity with the question of intensity of labour . The value of labour power is of course related to productivity in the wage goods sector as a whole, and not the particular branch where labour is employed . The rate of exploitation does however depend upon the intensity of labour in the particular branch .

REFERENCES Emmanuel, A . Unequal Exchange, New Left Books, 1972 . Singer, W .H . "The Distribution of Gains between Investing and Borrowing Countries", American Economic Review, Papers and Proceedings, May 1950 . United Nations, Towards a New Trade Policy for Development, New York, 1964 .

CLASS STRUGGLE IN THE USSR . FIRST PERIOD : 1917-23 By Charles Bettelheim . Translated by Brian Pearce . Harvester Press (Sussex, England, 1977), pp . 567, £12 .50 hardback Reviewed by John Taylor . In his two texts, The Transition to Socialist Economy and Economic Calculation and Forms of Property, Charles Bettelheim developed a theoretical framework for analysing social formations in transition between capitalism and socialism . Basing his analysis on the artculation of modes of production characteristic of this period, he was able to demonstrate the political and ideological complexity of the transition, focusing in particular on the continuing reproduction of aspects of the capitalist mode of production (its technical division of labour, its forms of calculation, its planning categories, etc), a reproduction that establishes a constant basis for a return to the dominance of this mode of production . Despite a number of limitations in his analysis - most notably his unproven contention that, in the Soviet Union, the transition has been terminated through the dominance of a "state capitalist class" - it undoubtedly constituted the most rigorous attempt thus far within historical materialism to provide a basis for analysing this particular transitional period . In Economc Calculation . . ., Bettelheim promised a "concrete analysis of the Soviet social formation", utilising the conceptual framework he had developed . Class struggles in the USSR, the first part of a five volume text (two volums of which have already been published in French), is the end product . The overall result is somewhat disappointing . The theoretical sophistication of the framework for analysing the transition is not adequately brought to bear on the empirical raw material, and this material itself, with the exception of the "classics" (Lenin, Trotsky, Bukharin) is derived to a considerable extent from the words of historians such as Carr, Broue and Liebman . These two factors produce



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an analysis that often takes the rather "conventional" form of analysing the period 1917-23 in terms of "limits" being placed on its successive phases by the characteristics of the situation in which state power was seized in 1917 . For Bettelheim, two phenomena are of over-riding concern here . Firstly, that the revolution itself conjuncturally coalesced three movements - the socialist upsurge of the working class in the cities, the bourgeois-democratic movement of the peasantry against the landlord class, and the struggle for national independence by Russia's minority peoples . The fact that the revolutionary rupture took this specific form set definite limits on the possibilities for socialist transformation . Secondly, that the Bolshevik party itself was dominated by a particular economistic interpretation of marxism which it had inherited from the Second International . This interpretation, which confuses changes in property-ownership with changes in class relations, which gives primacy to the development of the productive forces over changes in the relations of production, and which denies the continuing existence of class struggle in the transition to socialism, is, for Bettelheim, the major reason why the Bolshevik party failed adequately to understand the changes that occurred after 1917, and explains the limitations of their interventions, particularly during the period of "war communism" . Where he does not explain events in terms of the limits of the external situation, Bettelheim constantly refers to these two "sources" in his argument ; their elements constantly re-appear in varying forms as the basic determinants of each phase of history . Given the wealth of empirical information provided in the text, it is impossible in a review of this length to give an adequate account of Bettelheim's analysis . Rather, I will focus very briefly on its major trends, indicating how the author's analysis of events has constant recourse to the tenets above - tenets whose application, in my opinion, considerably reduces the possibilities opened up for analysis of the transition based on Bettelheim's earlier theoretical texts . The major concerns of the analysis are the increasing political and economic centralisation characteristic of the period, the separation of the party from the state, the formation of a "state bourgeoisie", and the difficulties of transforming relations of production in the agricultural sector . Of secondary concern is the continuing reproduction of capitalist and "pre-capitalist" social relations in institutions such as the educational apparatus and the army . The twin processes of centralisation are seen very much as the effects of external constraints - the need to limit political opposition in a period of armed struggle and foreign intervention, the weakness of genuine soviets in the countryside, the centralised planning and requisition required for the running of the economy during war communism, the need to utilise trained administrators from the previous regime, the decimation of the Russian proletariat in the struggle against foreign aggression, and so on . The prevalent ideology of leading Bolshevik theorists then reinforces these processes to a certain extent . To give just one example, Bukharin s notion - that war communism, with its limitations on commodity exchange, its centralised state control over production and distribution, and its mobilisation of labour constituted the "disappearance of wage labour" - is analysed as a component part of the economistic problematic of the Second International . The analysis of centralisation is then compounded by the introduction into it of the "characteristics" of the revolution : since it combined



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socialist and bourgeois-democratic forms, it is "necessarily" the case that bourgeois and pre-bourgeois practices continue to be reproduced within the state apparatus . If we now examine a second "trend", namely the failure to transform relations of production in the countryside, we can again see that, despite the excellent account of capitalist differentiation within an ideological apparatus - the mir inherited from the Tsarist period, the same determinants are again at work in the analysis . "War communism" acts as a constraint in that it demands a requisitioning of the surplus-product for the towns, thereby postponing any transformation and intensifying the resistance of the peasantry to the latter . This resistance is solidified by the continuing reproduction of forms of rural organisation which played a crucial part in the bourgeois-democratic movement against the landlord class ; the underestimation of the continuing class struggle in the countryside by the Bolshevik party is, again, referred to the economistic problematic . Other examples could be chosen from the text, but they would, I think, only serve to reinforce the point - namely that, rather than adequately utilising the framework developed for analysing particular transitions, Bettelheim's text tends to be constantly displaced from this level to one where the most general conclusions from this framework are applied to the raw material . These conclusions then co-exist with characterisations of an ideology (the economistic problematic) and an event (the October seizure of state power) as determinants of a historical period . The tremendous possibilities opened up by Bettelheim's theoretical work for analysing what is an extremely complex period of Soviet history are, it seems to me, significantly reduced by this method of investigation . Two points in conclusion . Bettelheim's analysis of Lenin's changing conception of NEP at the end of the text is quite outstanding . Through a rigorous reading of Lenin's late texts such as Better Fewer, but Better, On Co-operation, etc, he shows how, far from conceiving NEP as an economic policy that had to be introduced in an unfavourable situation, to be repudiated as soon as feasible, Lenin analysed it as a means for creating a new political alliance between the proletariat and peasantry, an alliance that could establish a basis for struggling against the political and economic centralisation of the war communism period . This presents an entirely new interpretation of the strategy put forward by Lenin for the NEP period, and, hopefully, it will open up new discussions on a period that is absolutely crucial for the development of economic policy in the twenties and, in particular, for the Bolshevik party's conception of NEP after Lenin's death . Secondly, throughout his analysis, Bettelheim states that the Soviet Union is now dominated by a form of state capitalism . Yet, as in Economic Calculation . . ., he does not establish an adequate proof of this As opposed to an analysis of the dominance of specifically capitalist relations of production over the existing productive forces, or an investigation of the enlarged reproduction of a dominant capitalist mode of production, the conclusion simply rests upon the existence of a stratum which controls both the production and distribution of the surplus-product . As such, then, this answer is somewhat lacking . Hopefully, however, Bettelheim will have more to say on this subject in a later volume . Hopefully, also, the analysis in these volumes will reflect more fully the theoretical advances made in the earlier studies of the transition between capitalism and socialism . One final note : Bettelheim's



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work is often very difficult to translate into flowing English ; as usual, however, Brian Pearce has provided an excellent rendering of the text .

THE DIVISION OF LABOUR : THE LABOUR PROCESS AND CLASS STRUGGLE IN MODERN CAPITALISM Edited by A . Gorz Harvester Press (Sussex, England, 1976) pp . xiv + 189 £6 .95 hardback . Reviewed by John Kelly The central theme of this series of readings put together by Corz is stated quite explicitly in the Introduction, and it is therefore worth quoting : " . . .it is argued that the fragmentation and specialisation of jobs, the divorce between intellectual and manual labour, the monopolisation of science by elites, the gigantism of industrial plant and the centralisation of power that results - that none of this is a necessary prerequisite for efficient production . It is necessary only for the perpetuation of capitalist domination . (p .viii) After a number of extracts from the first volume of Capital on manufacture, the factory, and the division of labour, three articles complete the first section of the book, which is devoted to an analysis of contemporary developments in the division of labour, and in particular to job "enrichment" and "democratisation" of decision-making . Marglin's lengthy essay on the "origins and functions of capitalist hierarchy" seeks to demonstrate that the subdivision of manual labour, and the division between manual and mental labour, owed more to the capitalists' need to control the production process, than to the demands of efficiency per se . To support this argument, he examines the advantages of division of labour, proposed by Adam Smith, and rejects them . Secondly, he looks at a case (the British coalmining industry) where" . . . capitalist control was . . . beyond challenge . . ." and claims that specialisation of labour did not develop here to anywhere near the same extent as in other industries . Thirdly, he looks at the rise of the factory, and at the growth of water-powered mills in feudal times, again claiming, that in both cases, these technical developments reflected the need for political control rather than economic efficiency . The next article, by Gorz, espresses a rather more sophisticated view of job "enrichment" than that which appears in his second contribution to the book (see below) . His argument is that the significance of job "enrichment", or "recomposition of tasks" as he calls it, is determined essentially by the balance of class forces surrounding its introduction . Although in any case it " . . . frees workers from stupefaction, isolation, and the oppression of petty bosses, . . . " (p .60) it can, given a favourable balance of forces (and presumably a certain level of consciousness?) do significantly more than this . The thesis in other words is similar to the one argued by another French writer, Bosquet, with regard to the radical potentialities of job enrichment schemes .



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Pignon and Quezola complete the first section with a reanalysis of two wellknown cases in the job enrichment literature, namely those of AT&T and Donnelly Mirrors . The analysis attempts to show that what happened in both cases was not so much a transfer of authority from management to workforce, i .e . a measure of democratisation, as a relocation of authority in the market . Each group of workers in the experiments was assigned a specific group of customers, thus permitting management to trace faults and defects in the work to those responsible. With the exception of the article by Gorz, the second half of the book, on "the struggle against the capitalist division of labour", is generally of a lower standard than the first, and is far more polemical and assertive in character . The major issue under examination is the position of technicians in the class structure, and the conflict between the necessity, under socialism, for the working class to control production, and the fact that the knowledge required for this is embodied in a separate stratum of personnel . In the final chapter Gorz returns to his argument in the Introduction to the book concerning the political rather than the economic function of the twofold division of labour referred to there . He suggests, on the basis of an interview with one technician, that such workers do not in fact possess a greater stock of useful knowledge than shopfloor workers, although they do posses a larger amount of useless theoretical knowledge . Secondly, the results of job "enrichment" studies are used to argue that, . there is no technical need to turn workers into unskilled robots . Indeed the work process can be so organised that it is simultaneously a process of continuous apprenticeship . It is possible to integrate productive labour and the continuous acquisition of knowledge and skill . There is no reason why anyone should be restricted to unskilled, mindless and subordinate work ." (pp . 172-73) I think there are three points one can make about the general orientation of this work, the first of which relates to the general assessment of "task recomposition" . There is no suggestion anywhere in the book that the results of job enrichment are anything other than the literature would have us believe : supervisory control is virtually eliminated, workers control their activities, and the old, stultifying division of labour is on its way out . A more detailed examination of the literature shows that the reality is often somewhat different, and the changes in work content, although apparently radical, still often leave the worker performing a fairly repetitive task . This overassessment of the changes described as job enrichment provides the basis for a corresponding underassessment of the economic significance of the division of labour . The job enrichment studies do not show that these divisions are not now, and were not in the past, an economic necessity : their persistence is an eloquent testimoney to their continued economic effectiveness . Thirdly, given that (according to Corz et al .) job enrichment is not primarily about increasing efficiency and/or reducing costs, what is its meaning? The answer given is that it represents a capitalist response to the increasing discontent of workers (expressed in absenteeism etc .) which tries to harness the "mass initiative" of the workforce to capitalist objectives, and to secure continued capitalist authority . This assessment, it seems to me, conflates the objectives of



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two developments which I would prefer to regard as analytically separate : namely those of job enrichment, and of worker "participation"/industrial democracy . Whilst the latter could be seen as a political response to a predominantly political challenge, job enrichment exercises have, on the whole, been conducted in companies with relatively "non-militant" labour forces . They would not, therefore, seem to represent responses to political challenges, but attempts rather to intensify the labour process and to augment the production of surplus value . On the whole then the book seems overly concerned with the political and ideological aspects of job enrichment, as a result of which its contributors are inclined to underestimate its economic significance . Strangely enough their enthusiasm for job enrichment, and their tendency to focus on the most well-known coases mirrors almost exactly the predilections of job enrichments' politically more conservative supporters .

PROFITS AGAINST HOUSES, 1976, 50p . LIMITS OF THE LAW, 1977, 50p. THE COSTS OF INDUSTRIAL CHANGE, 1977, 80p . By CDP Information Unit . Available from : The Home Office (Urban Deprivation Unit), Horseferry House (Room 137), Dean Ryle Street, London, SW1P 2AW Reviewed by Peter Taylor Goodby

The original Community Development Project brief of 1969 claimed that the problems of areas of high social deprivation were due to the shortcomings of local communities and state institutions . After eight years of tokenism, the equivocation of research rather than action, and finally the closure of a number of local projects and of the central Information and Intelligence Unit, an account of deprivation in terms of structural factors beyond the control of their victims emerges . (For a full account of the British Poverty Programme, see the C .D .P . publication "Guilding the Ghetto" .) These three reports detail the process of industrial development that once vitalised and has now eviscerated local economies ; the way in which a housing system founded, articulated and perpetuated on, by and through profit reproduces the housing crisis ; and the inability of the legal system as it operates in practice to define and protect people's "rights" against the interest of capital and the collusion of the state . The Costs of Industrial Change presents an explanatory account of the "making and breaking of five industrial areas" . Local industries undergo a lifecycle of expansion, maturity and decline . In the first phase, industry locates on green-field sites, draws in a work-force, often from relatively declining areas of the country, and expands to fill all available opportunities . There follows a short era of stability . New growth slows, few firms leave the area and job-opportunities are still good . However, development continues elsewhere . Local industry tends to decline . Skilled labour migrates . Ultimately, a process of transformation into



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small-scale, low-wage, low-productivity industry takes place . This account is reinforced by a brief historical sketch and a detailed analysis of the structure of the local economy in five CDP areas . The response of the state to the shifting chiaroscuro of uneven development is examined . The blinkers of "urban" and "regional" policy compel an interpretation of structural problems as the marginal difficulties of particular areas circumstantial "pockets of poverty" . The role of state intervention in War Industries, the Docks, Textiles, Sugar, the Vehicle Industry, Shipbuilding, Ship Repair, and in nationalisation programmes is shown to have the object of rationalisation and restructing "where private capital founders" . "Until policies are implemented which seriously challenge the rights of industry and capital to move freely about the country (not to mention the world) . . . the problems and inequalities generated by uneven capitalist development persist" . Profits against Houses is concerned to demonstrate that "profits conflict with the need for homes" . The report analyses the regulation of land supply, the organisation of the house-building industry, the distribution and consumption of housing and the system of housing exchange . The nature and operation of the housing market is dictated by the extraction and reproduction of profit in land transactions, and property construction and exchange . Provision of shelter is incidental to this process . As long as the system continues "there will always be a housing crisis ." Limits of the Law presents "a general picture of the law's impact in working-class districts" . It describes not how the law is supposed to work, but instead what happens in practice ; "not just the legislation, but the combined effects of legislation, court procedures, court decisions and administrative practice ." The report falls into two main sections . The first examines the protection given to the "rights" and interests of workers against the normal operations of capital, particularly against the migration of industry; the second discusses the administrative machinery provided by the welfare state to defend people's "rights" against arbitrary official decisions . The conclusion is that the legal system operates in the interest of capital rather than the individual . Procedures laid down are rarely fully implemented, and the processes carried out in practice serve to mystify, confuse and disunite the human victims of the process of capital, be they underpaid, victimised, sacked or made redundant ; council tenants, black immigrants, homeless families or social welfare claimers . A general model of the relations of the state and capital underlies and informs all three reports . The housing system, the legal system, industrial policy serve the interests of capital . State intervention also operates to divert or contain the pressure of class-struggle . Thus the housing report argues that pressure for better conditions has made housing a less profitable investment ; "there is a basic problem for an economy which on the one hand is run for a profit, yet a : the same time depends for that profit on a work-force which must be housed . So the state steps in with subsidies . . . (to provide) a profitable return for those with capital" . In industry : "the state took on the jobs which private firms could no longer handle, but which were necessary to ensure the continuation of profitable production" . One problem with the vision of the merry progress of the two - the grasping hand of capital clasped in the velvet-gloved plastic fist of the state - lies in the implications for action . All three reports emphasize political struggle : "Now is the



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time to organise . . . to acquire the political thrust so that measures can be formulated and implemented which will begin to control investment in the social interest" ; "change . . . is won through political action by people organising together to challenge the decisions and structures which oppress them ." The problem is how to characterise the relation of state and capital so that on the one hand the role of the state as a buttress to capital is fully acknowledged and on the other adequate space for effective struggle remains - to transform the state's industrial and regional policy, to challenge the collusion of the state's legal structure and capital and to reverse the cuts in the welfare state and in the state's housing subsidies in the interest of the working class . If the state is seen simply as an industrial rescue, welfare and securicor service, it is hard to avoid the sterility of functionalism . Analysis of the present potential for change must include understanding of the myths which support capital . The ideological status of owner-occupation ; the respectability of the building society movement, of solicitors, of estate agents ; the mystifying misinterpretation of land-value speculation as house-building ; the diversion of the distinction between tenure groups; the mirage of equality before the law ; the lie of administrative "justice" which sets scrounger against worker, council tenant against the homeless family on the waiting list, immigrant against citizen, the deserving against the undeserving; the acceptable professional collusion of health inspector or harassment officer and landlord, local government officer and businessman ; the myths of a value-free town-planning, of community interest, of a social policy outside politics ; the fetishism which presents structural problems as local, regional and marginal, which interprets the deprivation of areas as the failure of their inhabitants, which reflects exploitation, as the partnership of labour and capital, job-creation as social advance; the original individualism of CDP which the problematic of these reports transcends ; all these distortions, to which the reports point, are factors in the hegemony of capital . Simply to confront them with more powerful accounts of social relations, is not to explain their origin in consciousness, their stability or their material power . No-one would expect reports of this length to solve these problems : their achievement is to force such issues on us through the detailed analysis of empirical data .

THE ASIATIC MODE OF PRODUCTION by L . Krader Van Gorcum (Assen, 1975) pp . XIII + 454, Fl . 98 . Reviewed by John Solomos This is not the kind of book one reads very often these days . It is not exactly based on thirty years work in the British Museum, but it is clearly based on a wide variety of source materials in various areas, both geographical and intellectual . Like his previous work on Marx's ethnological notebooks (cf . L . Krader, editor and translator, The Ethnological Notebooks of Karl Marx) the author brings with him a



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meticulous grasp for the detail and intricacy of the source material . Yet, surprisingly, this has not prevented him from presenting his argument in a very clear and lucid manner . This is a book which addresses itself to showing the way that Marx developed the concept of the Asiatic Mode of Production (AMP) at basically two levels : 1 . in terms of the sources of the concept and the specific interpretation that was given to it by Marx ; 2 . in terms of how this concept related to the overall course of Marx's theoretical development . In this sense the author is correct in claiming that this is a work that differs substantially from the other words on the subject, for this is a work of critical exposition . It is none the less important for this . It shows in a very detailed manner the various developments that can be delineated in Marx's work on the AMP, particularly relating his views to those of classical economists such as Richard Jones, and of ethnologists and anthropologists like Phear, Maine, and Kovalevsky . The crucial chapter of the book is in many ways Chapter VII, where Krader attempts to show the specific forms of ownership and possession that characterise the relation of the AMP to the capitalist mode of production (CMP), and other modes . We can perhaps provide a clear summary of the basic arguments of the book by pointing out two basic propositions that Krader develops . Firstly he takes Marx's argument for "A Critique of Political Economy" as applying not only to capitalism but to what he calls the "economy of political society" (pp .2-4) . This is an argument that runs throughout the book : "The Asiatic mode of production encompasses the distinction between the community and the state . State property in land is ager publieus, public property, and is distinct from private property and possession ; both are distinct from communal property . Private property, however, is not constant but variable . The owner of the property in land is the community : individual private property in land is but poorly developed ; the immediate cultivator of the soil is in possession of his share, he does not own it . This mode of production has the production of value, exchange of commodities between community producers of value, hence commodity exchange, hence exchange value ; the social producer is no longer the same as the social consumer of the product" . (p .140) This is a crucial formulation, yet many of the concepts Krader uses in it are hardly developed in the book . Elsewhere he shows that Marx distinguished the CMP from previous modes of production, such as the AMP, on the basis of two conditions : 1 . the formation of capital by capital (Verwertung) ; 2 . the separation of the immediate producer from the means of production . (pp .184-6) Yet by the type of argument that is presented in the above quotation Krader tends to collapse the conditions of existence of "political society" (a concept whose status is not very clear in this work) with those of the existence of such categories as "commodity exchange" and "exchange value" . At points he seems to reduce his argument to a rather superficial level by simply saying that because there is some "similarity" between the CMP and AMP in terms of relations of ownership and possession (in the AMP the direct producers are separate from the means of production, e .g . land), that one can somehow use the concepts Marx developed for a critical analysis of both modes of production .

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Secondly, and in view of the present concerns of the CSE, we can mention the sections of this work that bring out clearly some aspects of classical Marxist analyses of the state . In particular Chapters V and VI, provide at some crucial points an interesting presentation of some aspects of Marx's analyses of the state that have generally not been emphasised . Here Marx is shown, particularly in his "Ethnological Notebooks" written just before his death, to be concerned in particular with the origin of the state . But here the problem that is crucial for an analysis of the state as an "Asiatic State" "Feudal State", or "Capitalist State" is not really considered by Krader . Specifically because he does not go far beyond a narrow distinction between civil society and the state, he finds himself unable to present a critical analysis of the scattered writings of Marx and Engels on the state . Moreover the relation between "civil society" and the "state" is never made clear . (See pages 327-339) . The existence of the state in any specific mode of production needs more careful study than Krader gives us here . In a review of this size one cannot do justice to all the results of the vast scholarship embodied in this book . If I have emphasised certain gaps or incorrect formulations in this book, I do not claim to have covered all the questions the author attempts to answer . But this is a volume that must be studied, and one which compares not unfavourably with the recent works of Perry Anderson and the Hindess-Hirst volume . If these works point to a serious attempt to think through all the problems involved in looking at modes of production, then Marxism can only gain .

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NOTES FOR CONTRIBUTORS

Capital & Class welcomes all contributions within the general scope of the CSE, not only long articles of a theoretical nature but also short notes and polemics, correspondence, and pieces long or short which have a topical political relevance . The Editorial Committee is responsible for producing Capital & Class . The members of the EC are elected at the annual conference, half being replaced each year so that no-one serves for more than two years . The Editorial Board has now been replaced by an open delegate body which will discuss all general policy questions, which should include the relation of the journal to other CSE activities . The Editorial Committee hopes to develop a closer liaison with general CSE activities through working groups and local groups, who are invited to nominate members to act as points of contact and to attend periodical editorial meetings . Material submitted to Capital & Class is assigned by the reviewing editor to at least 4 people for comment, usually two members of the EC and two others . Frequently, papers submitted will have been discussed at a CSE group or dayschool, and might have been revised after discussion there . However, the Editorial Committee of Capital & Class likes to be involved at an early stage rather than simply being presented with a final version to accept or reject . Papers submitted to the EC may be referred for comment to a CSE group if they have not already been presented at such a group meeting . All submissions should go directly to a member of the EC or to John Harrison, Oxford Institute of Economics & Statistics, St Cross Building, Manor Rd ., Oxford . Material submitted in draft form should be typed single-spaced and if possible 5 copies should be provided . The final copy which goes for typesetting must be typed very clearly, double-spaced with very wide margins . Writers should try to avoid unnecessary jargon or other complexities of style ; for our basic format in using references and footnotes please refer to a current issue . NEW GERMAN CRITIQUE is the first American journal to develop a comprehensive discussion of German politics, social theory, literature and art on an international level .

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Roman Rosdolsky

THE MAKING OF MARX'S `CAPITAL' Translated by Pete Burgess The Conference of Socialist Economists, in association with Pluto Press, are making the English-language edition of this classic work available directly to readers before publication, at 2/3 of the bookshop price . Originally published in German in 1968, The Making of Marx's `Capital' is the only serious study to date of how Marx reworked and developed his understanding of the categories of political economy . Its systematic comparison of the drafts of Capital provides a comprehensive basis for the re-evaluation of a number of contentious issues in marxist theory . Rosdolsky himself draws out the implications for many themes in marxist `political economy', dealing in particular with the realisation problem, schemes of reproduction, skilled and unskilled labour, the role of use-value and the critique of Marx's concept of value . Rosdolsky's reconstruction of Marx's method and theoretical system has laid the foundation for much of the recent renaissance in marxist theory . Roman Rosdolsky remained a committed revolutionary, active in Eastern Europe from the first world war until his imprisonment by the Gestapo and his exile in the United States . He died in 1967 . In 1948 he discovered one of the then extremely rare copies of Marx's Grundrisse which inspired almost two decades of work embodied in The Making of Marx's `Capital'. Ernest Mandel's Late Capitalism is dedicated to Rosdolsky, his `friend and comrade' . 600 pages ISBN 0 904383 37 7 hardback only, £18 .00

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Pre-publication offer until 30 November 1977 Rosdolsky's The Making of Marx's `Capital' is available through the Conference of Socialist Economists at a special price of £12 .00 (including postage) . Cheques/ postal orders to be made out to CSE and sent to : CSE, c/o Department of Economics, Birkbeck College 7-15 Gresse Street, London W 1 P IPA Please indicate amount of cash enclosed and address to which the order is to be despatched .