On the So-Called “Capitalist Mode of Production”


In an earlier entry in Sublation Magazine, the first part of this argument, we discussed the contradictory identity of the commodity-form, which manifests in everyday forms like money. This is but an expression of a contradictory mode of reproduction. Marx had a phrase for this: the “capitalist mode of production.”

When Ludwig Von Mises criticized the socialist commonwealth as impossible because “[e]very step that takes us away from private ownership of the means of production and from the use of money also takes us away from rational economics[,]” he was (unconsciously) reflecting a truth about the present society. On the one hand, it is “not money that renders commodities commensurable” but rather the first property in bourgeois society, labor. On the other hand, as discussed in part 1, the estrangement of this form of social mediation appears as an alien power emanating from an independent object [i]. Money necessarily appears to be the cause of commensurability. This need for commodities to hold their general social character against their particular being holds true for a world where the forms of mediation have become estranged. This is not mere illusion: “the contradiction in reality corresponds entirely to the contradictory essence.

This means that all the forms of politics, philosophy and economics, are themselves an expression of a contradiction. To understand this, we must return to the more basic question of society.

The Ought of Value

One only truly becomes a human in society [ii]. In society, one does not simply gain protection, but receives powers that are “alien to him, and incapable of being made use of without the help of other men.” These powers allow each to transform (“negate”) the slavery of the “mere impulse of appetite” into a conscious act and become “truly master of [oneself].” For social power, formed from the joint activity of Society’s members, could only pull one out of nature if it was a sum greater than the will of those parts that played a role in producing it. Animals certainly congregate in groups, but only the joint activity of homo sapiens transforms them into humans.

For many millennia, this freedom did not manifest in all beings who lived in civilization. “The Eastern nations knew only that one is free,” writes Hegel, “the Greek and Roman world only that some are free; whilst we [Moderns] know that all men absolutely (man as man) are free[.]” The seemingly geographic specification here represents a qualitative change over time. For it was not a mere opinion that only one or a few were free in the ancient world, but rather it was the only form possible at the time.

In the modern political sphere, we frequently speak of the “People” – but this too has changed its meaning. The category requires dialectic to grasp its truth. It is plural, made up of persons, and yet these latter identify themselves as parts of the larger whole. For the particularity of each is taken beyond itself to form the “People” with other “persons”, and yet, it is only through the “People” that one becomes recognized as a “person.” This modern political form, of which “the ancients knew nothing,” followed from the revolution that “opposed to the property of the nobility which consisted in land… a new form of property which depended on labor.” Thus, Felicite Robert De Lamennais could write in 1839:

Among the ancients the People was not. What we call the people were slaves. They were laborers: tillers of the ground, household servants, mechanics; sometimes even professors of the liberal arts – grammarians, poets, and physicians. Citizen, and in virtue of this title invested with public functions, the freeman governed, administered and judged; or exempt from all save domestic cares, lived idly on their own revenues or on the revenues of the State – the State providing for all citizens unable to support themselves. [iii]

Note that De Lamennais’s 19th century mind emphasizes that the “Citizen” or one with political power “lived idly on their own revenues or on the revenues of the State” while those who “we call the [P]eople” were those who worked. Adam Smith was not exaggerating when he wrote that a “revolution of the greatest importance to the public happiness” was accomplished by “merchants and artificers,” supported by “a parcel of emancipated slaves[.]” They would eventually call themselves burghers or bourgeoisie.

From thenceforth, labor was no longer the curse man inflicted upon for eating from the Tree of Knowledge but became the most noble of social activity; there was nothing more honorable than being a “self-made man.” In this new society, Bourgeois Society, it was only right that one’s political rights (droit du citoyen) no longer followed from primogeniture, but rather from labor (droit du homme). The justification of all politics, henceforth, rested on the preservation of that “unalienable right” of labor.

The modern relation of labor did not simply mean work, but the relation of work as labor [iv]. It requires the quantitative comparison of heterogenous activity, not limited to the productivity of the output but instead its relationship to the whole of society. Thus, the modern social relation of value is measured “not by the time needed to produce [something] by itself, but in relation to the quota of each and every other product which can be created in the same time.” It is a claim on society. A crisis of this very measure of human beings must necessarily reverberate into the political sphere. After all, it is the “internecine conflict within the political state [which] enables us to infer the social truth.”  In reaction to the crisis, the working class was led to return to political economy in order to justify their political claims.

Critique of Political Economy

Political economy, according to Rosa Luxemburg, originated “as one of the most important ideological weapons of the bourgeoisie as it [struggled] with the medieval state and for a modern capitalist class state[.]” It was neither possible nor necessary in pre-bourgeois society, such as with the writings of Xenophon. It only became necessary as “a precondition and a spurt to revolutionary action. Even in its remotest offshoots, the bourgeois task of remodelling the world was fed by the ideas of classical political economy” [v]. We can see then that the “economic categories…bear the stamp of history,” because they were forged during the revolt of the Third Estate. Indeed, the “weapons with which the bourgeoisie felled feudalism to the ground [were] turned against the bourgeoisie [themselves].”

Marx wrote Das Kapital because the proletarian socialist movement had politicized political economy in response to the crisis of society. This is apparent when we consider the laws that Marx described. The lawful character of value is not value neutral. For one, the very self-consciousness of that law, by a subject that could transform society, would supersede its very lawful character (the category would become “for-itself”) [vi]. But second, and perhaps more importantly, lawfulness is an expression of the unfulfilled desiderata of bourgeois society. Returning to the “relative value” form discussed in Part I,  we can hear the cry of the proletariat demanding to count in society [vii]. Any betrayal of the promise of bourgeois society – and this is most apparent when superfluous labor sits alongside superfluous money [viii]- deserves condemnation. To be part of the production of society but not partake in its progress [ix], recalls memories of enslaved ancestors. “[H]istory hitherto is the history of class struggle,” not because the previously oppressed groups were actually classes, but because the “final enslaved and avenging class” finds its present suffering in images of the past [x].

Capitalism is a historic impasse, or a sort of repetition of the revolt of the Third Estate under changed conditions. For the “Ricardian theory that the entire social product belongs to the workers as their product, because they are the sole real producers, leads directly to communism” – and yet, “the Ricardian definition of value, in spite of its ominous characteristics, has a feature which makes it dear to the heart of the honest bourgeois.”  The proletarian critique of society was a self-contradiction, demanding both the fulfillment and overthrow of bourgeois society. The “systematic” character that seems to unfold in Das Kapital is driven by the demand of thought trying to rationalize industrial society with bourgeois means. Its truth is that it is false [xi]. Marx felt that if he was to be truly scientific in his expose of political economy – truly immanent to his object of critique, the proletarian socialist movement – then “it may appear as if [in Das Kapital] we had before us a mere a priori construction.” And yet the same “law[s] of capitalism [are] ‘implemented only by not being implemented[.]’” It is exactly this non-identity that made the critique of political economy both possible and necessary.

The “Capitalist” production of commodities

Marx begins Kapital by writing that wealth in a capitalist society appears like an “immense accumulation of commodities.” We learn in the course of time that capital sometimes manifests sometimes as commodities, sometimes as labor, and sometimes as money. Wages, which have always existed [xii], are no longer simply renumeration for work but rather appear to the worker “in the form of capital.” Likewise, the capitalist’s own consumption of profit is “[debited] to his capital’s expense account, and what is squandered on his pleasure must therefore amount to no more than will be replaced with profit through the reproduction of capital.”

The common conflation of bourgeois society with capitalism bears the mark of reification. Bourgeois society is the character-mask that capital wears. Capital presupposes the “circulation of commodities or money.” It takes “the creation in the 16th century of a world-embracing commerce and a world-embracing market” as its “starting-point[.]” From this, it modifies Bourgeois society so that it becomes a “means of production” for capital. Indeed, Lenin criticized his teacher, the Marxist Georgi Plekhanov, for failing to distinguish between the “most general features of commodity production in general…  [with] the modifications of commodity production on the basis of capitalist production relations” (my emphasis) [xiii]. This is why it is the capitalist mode (modification) of commodity production.

Commodity production necessitates free individuals and capital makes use of their freedom. Slaves produced wealth but not value. This follows simply from the fact that they were not free laborers; they were not property owners. There was not a reason to represent their claim on the social product [xiv]. But how can capitalism require free individuals and yet still be unfree? In presupposing bourgeois practice, capital makes use of bourgeois categories. Pre-capitalist, bourgeois forms of political economy, such as value, “take on a specifically different, historical, character on the basis of the capitalist mode of production.” Hence, the phrase, bourgeois ideology. What was at first the presentation of simple forms of bourgeois society become, in the course of Marx’s dialectic, concretely revealed to be necessary forms of misrecognition that play a part in reproducing capital.

If capital takes as its point of departure the circulation of commodities, then it must reproduce itself through this same means- in other words, it must be able to repeat the purchase and sale. If this was not the case, the very need for a category of capital would be lacking. That an exchange happens at all implies that both sides must have something that the other party wants.

Proletarian Labor

Marx had noted in 1844 that while the relationship between property and propertylessness appeared “indifferent” in ancient societies, there was an “active connection” in modern society. This meant that there is something about modern production that destroys property. This may seem odd, considering that capitalism is associated with great inequality in property, but the answer is implied in the very apotheosis of commodity production.

The greatest strength that the workers have against their employers is their cooperation. “The collective laborer, formed by the combination of a number of detail laborers, [was] the machinery specially characteristic of the manufacturing period.” For Adam Smith, “the political economist par excellence of the period of Manufacture,” the division of labor, whether in society or in the detailed form of “those great manufactures,” was an infinite self-differentiating and self-unifying form of social cooperation. While the workers held each other to a strenuous measure of time, the measure itself was constituted by the comparison of labor-activity. Labor, as a social relation, was not estranged from society – or to put it more familiarly, the workers owned the means of production.

Hence, in pre-capitalist production, “one man’s hour [was] worth another man’s hour[.]” It is only after the industrial revolution that “one man during an hour is [now] worth just as much as another man during an hour.” Not just individual skill but cooperative forms, such as the division of labor, were divested from the working-class as it politicized the living time of the present against the dead time of the past. In this fight over the working-day, locomotives were not so fortunate to gain their right to property. They are the property of people and thus, continue to count as past labor-time in bourgeois society. However, while “[t]he possibilities of labor are limited; those of capital are unlimited.” The forms unleashed by the industrial revolution allowed the machine to be “settled entirely in accordance with mechanical principles, and emancipated from the traditional form of the tool that gave rise to it.” Machine cooperation “burst[s] asunder” the integument of bourgeois society, but this spectacle is set behind the backs of the producers. The cooperation of the workers in Adam Smith’s pin-factory gives way to the unconscious regulation .  Workers, in separate factories, have “the process of nature, transformed into an industrial process, [step in] between himself and inorganic nature.” This appears as the mere “technical composition” of different producers (the butcher, the baker and the candlestick maker), but it rather reflects a “delicate and complicated mechanism” that is liable to breakdown. Production has become socialized.

The wage relation transforms as a result. With socialized labor, “the pendulum of the clock [became] as accurate a measure of the relative activity of two workers as it is of the speed of two locomotives.” Consequently, what capital exchanges for is not skill but rather “a definite quantity of human muscle, nerve, [and] brain.” This is simply a means of capital preserving itself as a social being, as a value. Labor is simply the “yeast thrown into it, which starts it fermenting.” To get to the point where mere nerve and muscle could be of any use, it must be the case that humans have their inalienable right to the fruits of their labor recognized (bourgeois right) and yet, the very skill that this same social relation is supposed to measure must be divorced from labor’s control. One’s right to property absurdly confronts them as their property that they cannot even dispose of without first selling their property. The crisis of commodification manifests itself as the commodification of labor-power. Hence, the contradictory phrase – Estranged Labor.

This is an expression of the fullest socialization of individuals. Indeed, value has “a historical and moral element,” reflecting how much even the basic actualization of nerve and muscle are historically and socially constituted. Thesocialization of production is coterminous with separation of the means of production from the producer. This is not a “juridical relation, but purely an economic relation.”  Capital is “most extreme form of this rupture [between production and property], and the one in which the productive forces of social labour are also most powerfully developed[.]” And yet, this contradiction manifests in rather anodyne form as the purchase of different commodities – as if nothing ever changed from Adam Smith’s time [xv]. Consequently, it is difficult to distinguish from pre-capitalist epochs, despite the enormous transformation that has happened between periods [xvi]. In fact, we only know of the contradiction through the absurdity of bourgeois forms e.g., “too much civilization.” Indeed, as Marx himself says, it is “self-evident” how absurd it is to say that one commodity is the “universal incarnation of abstract human labor.” This anachronism was long recognized by people before Marx was even ten years old [xvii]. And yet, when one buys groceries or pays bills, they relate by “the same absurd form.”

Adam Smith had already shown that profit could be validly derived on the basis of the exchange of equivalents or commodity exchange [xviii], and Marx simply followed Smith when he wrote the “the capitalist—as soon as he pays the worker the real value of his labour-power—[has] every right… to [the] surplus-value.” For Smith, surplus labor was the Wealth of Nations, the production of potentiality. Now, however, the “realization of labor appears as loss of realization for the workers[.]” But in neither case was it actually theft. Rather, labor had become proletarianized since Smith’s time– it is property destroying labor. Means and ends had become inverted.

The very production of capital presupposes the destruction of bourgeois society. “[T]he capitalist mode of production and accumulation, and therefore capitalist private property,” writes Marx, “have for their fundamental condition the annihilation of self-earned private property; in other words, the expropriation of the laborer.” Monopolies are the consequence of this but are regularly treated as the cause. And yet through the destruction of bourgeois social relations, capital reconstitutes itself, producing the very beings who desperately seek to restore bourgeois society. This is why capital always seems to find a “commodity [on the market], whose use-value possesses the peculiar property of being a source of value [.]

Thus, capital posits bourgeois society, only to undermine it and reproduce itself through the destruction of the same society. When Rosa Luxemburg retorted to Eduard Bernstein that “[crises are] instruments of rekindling the fire of capitalist development,” she was not talking about the periodic need to liquidate assets to restore profitability. Such devaluation could be simply “higgling” of cooperation, but the production of capital is a form of destruction.

Is Capitalism a form of cancer?

Recently, in the pages of Sublation Magazine, Jag Bhalla has described the present as suffering from a swarm of “economic cancers,” or the “private tyranny” (as Sohrab Ahmari has called it) of corporate, rent-seeking monopolies. The analogy to cancer is raised to characterize the anti-social behavior. In the same way that “cancer formally corresponds to the de novo evolution of a selfish phenotype within an organism that…spreads for its own benefit but at a cost at the level of the organism,” [xix] the tyranny of modern monopolies represents a kind of unregulated hyper-individualism that is threatening to doom society altogether.

However, this characterization of hyper-individualism is a hyper-misrecognition of the issue. For one, it doesn’t matter if the capitalist is greedy. What was emancipatory about bourgeois society was the ability of individuals to cooperate without requiring friendship or ethical agreement. Indeed, bourgeois society is a higher form of cooperation than the direct, personable form that is usually the image glorified by the Left. The social power of labornot to be confused with work not only allows one to cooperate with people on the other side of the earth at all moments [xx].

This is where the analogy to a cancerous tumor collapses. One can only subordinate modern society to just another form of evolutionary strategy by abstracting from the essential difference. Capitalist production is not the selfish shirking of cooperation but is a self-contradictory form of cooperation based on a definite set of developed social relations – bourgeois society. For that reason, it is “merely historical necessity… but in no way an absolute necessity.” One can abstract anything into another but only at the cost of science.

The inflated concentration of wealth is but the appearance of that “social power” (capital) that can only be set in motion by “the united action of all members of society.” The concentration and centralization of capital is the estranged development of social cooperation: but as discussed above, it manifests in a dead manner because the bourgeois form that facilitated this has grown anachronistic as a means of measuring this industrial potential. If this simply classified alongside the concentration of wealth present under the Pharaohs of Egypt or the Duke of Saxony, as is common in the current discussions about techno-feudalism, then the whole content of what is being concentrated is evaporated.

Thus, rather than being a tyranny of private princes, reality is more like the opposite: industrial production is toointerdependent for the bourgeois form it is refracted through.  

This is why the problem seems like one of “market malignancies.”The contradictions inherent in the movement of capitalist society,” wrote Marx, “impress themselves upon the practical bourgeois most strikingly in the changes of the periodic cycle, through which modern industry runs, and whose crowning point is the universal crisis.” But they are not identical with the problem itself. Elaborating on this point, Marx writes:

No crisis can exist unless sale and purchase are separated from one another and come into conflict, or the contradictions contained in money as a means of payment actually come into play; crisis, therefore, cannot exist without manifesting itself at the same time in its simple form, as the contradiction between sale and purchase and the contradiction of money as a means-of payment.  But these are merely forms, general possibilities of crisis, and hence also forms, abstract forms, of actual crisis.  In them, the nature of crisis appears in its simplest forms, and, in so far as this form is itself the simplest content of crisis, in its simplest content.  But the content is not yet substantiated.  Simple circulation of money and even the circulation of money as a means of payment—and both come into being long before capitalist production, while there are no crises—are possible and actually take place without crises.  These forms alone, therefore, do not explain why their crucial aspect becomes prominent and why the potential contradiction contained in them becomes a real contradiction [my emphasis].

These “simple forms” that Marx speaks of are bourgeois forms – they gain their definite necessity only in bourgeois society, only altogether in its totality. As Marx notes, the “general possibilities of crisis” were always possible with commodity production but what needed to be explained was how the crises became “prominent” and what “real contradiction” lay beneath them. The “simple forms,” furthermore, existed “long before capitalist production” – but only in capitalism can the overproduction of one good (say houses in 2007) shutdown the entire world through a generalized financial crisis. The world is truly socialized [xxi]. It will do one no good to speak of “American society” and “Chinese Society” as different forms of state capitalism – the skewed trade balance simply signals different parts of the socialized production process being sent downstream.

One should avoid choosing between “[the] middle-class prophets who laud [free competition] to the skies or to the socialists who damn it to hell.” For what is at play in things like overproduction of commodities, is the overproduction of bourgeois society. This was famously depicted as the “industrial reserve army” – the overproduction of labor. But this is naturalized so thoroughly today by abstracting from bourgeois society – it becomes merely the labor market.

The so-called “profiteering” of the capitalists, for example, obscures the destination of that surplus. A capitalist can pay wages to the workers and rent to the landlord, but what do they pay to the machines, buildings and materials that they own? The socialization of production, in other words, manifests itself in the fragmentation of private property. But the capitalist’s profit is not just for his income but also the preservation and accumulation of the value of capital. Indeed, that which the capitalist takes for “pleasure…he debits…to his capital’s expense account[.]” Hence, “[i]t will never do, therefore, to represent capitalist production as something which it is not, namely as production whose immediate purpose is enjoyment or the manufacture of the means of enjoyment for the capitalist.

But on the market, this appears like the cancerous overgrowth of a specific firm. Capitalist production is identified with bourgeois society – capitalism gets identified with the market.  

What’s important to note is that the capitalist production of commodities seems to both fulfill bourgeois society and violate it. “Capitalist production is the first to make the commodity the universal form of all products” – but only by making labor the “most wretched of commodities”; capitalist production creates the conditions for “the fully developed individual, fit for a variety of labours, ready to face any change of production, and to whom the different social functions he performs, are but so many modes of giving free scope to his own natural and acquired powers[,]” but only by making all replaceable; the will of the people is perfected, but only to confront them as the “special bodies of armed men”; capital overthrows bourgeois society only to reconstitute it. Bourgeois discontents are kept alive through the regular posing and violation of bourgeois society. Revolution is the norm in capitalism, and anti-capitalism its greatest resource.

Returning to part 1, we see that the seemingly anodyne and trivial categories of “relative value” and “equivalent form” are necessitated by the very crisis of production. There is even a sense of desperation and anxiety now coloring these the forms. The forms are no longer simply characterizing the speculative side of the commodity-form, but also the inability to commodify at all. The proletariat demands for the social dialectic to be true to itself, while pushing this same dialectic, negatively, beyond itself. Capital “is the moving contradiction” for this very reason.

What kind of society produces Democracy?

This is why value is not just an alien thing oppressing the workers. It is democratically demanded, too. The same class striving to overthrow society is the same class that holds it together. Why? The relation of labor is the standard by which we judge right and wrong. The crisis of bourgeois society, then, is understood as an injustice, a violation of humanity [xxii]. The workers appeal to the State for it to carry out its one job – protect the rights of its citizens [xxiii].

Democracy is the contradictory attempt to implement the ends of bourgeois society. Political economy is no longer the politicization of the economy as civil society or the realm of peaceful and voluntary cooperation (civil!), but rather, the political fight to maintain that same society caught “in insoluble self-contradiction.” Liberal society must violate liberal society to save liberal society. The State is but the “admission” that this is so. When so-called “Marxist Economists” seek to separate “economic” laws from the political sphere – usually to give some kind of structural critique – they merely regurgitate the old bourgeois desiderata for this to be true. The laws of political economy can no longer subsist merely on the basis of the higgling of buyer and seller but require that “force decides” where to tip the scales.

The struggle, for Marx, was not of stratum within Democracy – that would be the liberal conception -but rather was the self-contradiction of Democracy. This manifested itself as seemingly two general wills, two claims to the will of the People. This is more clear now that we have considered the problem as a crisis of time and indeed, even a younger Marx was “reproached for neglecting to portray the economic conditions which form the material basis of the present struggles between classes and nations.” Hence, Marx’s emphasis on Capital and Wage-Labor – on the will of Capitaland the will of Wage-Labor. This has misled many to think the battle is for Democracy. “[C]lass struggle is a political struggle” because the Executive, which is supposed to enact the will of the people, finds itself torn between seemingly two wills who it is supposed to obey. 

Democracy’s self-contradiction means that Democracy can be constituted either by the proletariat or capitalist class. All of Marx’s critique of political economy was aimed at this problem. Lenin summed up the relationship of Das Kapitalto Democracy:

The issue is this—which of the main forces, the proletariat or the bourgeoisie, these intermediate sections will join. There cannot be any third way; he who has not understood this from reading Marx’s Capital has understood nothing in Marx, understood nothing in socialism, but is in fact a philistine and a petty bourgeois who blindly follows in the wake of the bourgeoisie.

This is why the end goal of Marx’s account of the commodity-form in Capital was supposed to be “the class struggle, as the conclusion in which the movement and disintegration of the whole shit resolves itself” [xxiv]. Those who could not realize themselves in civil society turned to the political sphere. Democracy is no virtue but rather symptomatic of the problem. A society that necessarily produces democracy – that would need democracy – follows from the crisis of this same society. Hence, the critique of political economy arrives necessarily at the necessity of the dictatorship of the proletariat.

Socialism, for Marx, revealed the telos of bourgeois society, but only because Socialism is the form of bourgeois society in contradiction with itself [xxv]. This image of socialism/communism was not just a misrecognition but rather, was the means to grasp the problem. Marx’s critique of the Proudhonist and Ricardian Socialists schemes to solve the problem of money – the so-called labor chits schemas– is more concerned with their historical than logical aporia. Taught by Adam Smith that the real value of money is labor, the socialists were confronted with the absurdity of capital. However, we can see in the schemes the desiderata of bourgeois society. They were trying to solve the violation of bourgeois society by demanding the universal exchangeability of all labor; by demanding society remain true to its ideal.

This implies that the fulfillment of these ends of bourgeois society also point beyond bourgeois society altogether. Consequently, it follows that “[the] victory of the modern working class and the realization of socialism will be the end of economics as a science.”

If the character of abstraction is conditioned by concrete circumstances, then it follows that the relationship between concrete and abstract must itself become conditioned by the same situation. In Part 3, we will take an interlude through the relationship of abstract and concrete, until returning to Marx’s theory of surplus value in Part 4.

 [i] Compare to Ludwig Von Mises, who, after writing about the necessity for money as a means of rational economic calculation, seems to turn it into a matter of pragmatism: “Monetary calculation has its limits. Money is no yardstick of value, nor yet of price. Value is not indeed measured in money, nor is price. They merely consist in money. Money as an economic good is not of stable value as has been naively, but wrongly, assumed in using it as a “standard of deferred payments.” The exchange-relationship which obtains between money and goods is subjected to constant, if (as a rule) not too violent, fluctuations originating not only from the side of other economic goods, but also from the side of money. However, these fluctuations disturb value calculations only in the slightest degree, since usually, in view of the ceaseless alternations in other economic data—these calculations will refer only to comparatively short periods of time—periods in which “good” money, at least normally, undergoes comparatively trivial fluctuations in regard to its exchange relations. The inadequacy of the monetary calculation of value does not have its mainspring in the fact that value is then calculated in terms of a universal medium of exchange, namely money, but rather in the fact that in this system it is exchange value and not subjective use value on which the calculation is based. It can never obtain as a measure for the calculation of those value determining elements which stand outside the domain of exchange transactions. If, for example, a man were to calculate the profitability of erecting a waterworks, he would not be able to include in his calculation the beauty of the waterfall which the scheme might impair, except that he may pay attention to the diminution of tourist traffic or similar changes, which may be valued in terms of money. Yet these considerations might well prove one of the factors in deciding whether or not the building is to go up at all.” Ludwig Von Mises, 1920, Economics in the Socialist Commonwealth, available at https://mises.org/es/library/economic-calculation-socialist-commonwealth/html.

[ii]: “Man becomes man only amongst men; and since he can only be man, and would not be at all unless he were man, it follows, that if man is to be at all, there must be men. This is not an arbitrary assumption, not an opinion based on past experience or on other probability-reasons; but it is a truth to be strictly deduced from the conception of man. As soon as you proceed to determine this conception fully, you are driven from the thinking of a single man to the assumption of another one, by means of which to explain the first. Hence, the conception of man is not at all the conception of a single one, for such a one is unthinkable, but of a race.” By J. G. Fichte, The Science of Rights, translator A. E. Kboeger. London: Trubner & Co., (1889): 60.

[iii]:  Felicite Robert De Lamennais, 1839. Modern Slavery.

[iv] For Engels, the value of the English language was that it “has two different expressions for these two different aspects of labour: in the Simple Labour-process, the process of producing Use-Values, it is Work; in the process of creation of Value, it is Labour, taking the term in its strictly economic sense.”

[v] The passages hitherto in this paragraph are taken from Rosa Luxemburg’s “Introduction to Political Economy.”

[vi]: Hence, Lukacs emphasizes that the conformism to these social laws is “is fully justified from the point of view of the individual consciousness. As far as class is concerned…this subjugation is the product of a lengthy struggle which enters upon a new stage with the organisation of the proletariat into a class. but on a higher plane and with different weapons.”

[vii]: Marx writes that “…relative value, measured by labor time, is inevitably the formula of the present enslavement of the worker, instead of being, as M. Proudhon would have it, the “revolutionary theory” of the emancipation of the proletariat.”

[viii]: “But the more productiveness develops, the more it finds itself at variance with the narrow basis on which the conditions of consumption rest. It is no contradiction at all on this self-contradictory basis that there should be an excess of capital simultaneously with a growing surplus of population.” Karl Marx, Capital, Volume 3, Chapter 15: Exposition of the Internal Contradictions of the Law.

[ix]: “And that is precisely what we are after; the worker would reap the joys of the rising productivity of his labour, instead of creating proportionately more alien wealth and devaluing himself as at present. Thus the socialists.” Karl Marx, 1857-1858. Grundrisse, Notebook I: October 1857.

[x]: “According to theory, history is the history of class struggles. But the concept of class is bound up with the emergence of the proletariat… By exposing the historical necessity that had brought capitalism into being, political economy became the critique of history as a whole, whose immutable nature was the source of the privileged status of capitalism as well as its forebears. To recognize the catastrophic violence in the latest form of injustice, that is to say, the latent injustice contained in fair exchange, means simply to identify it with the prehistory that it destroyed. If all the oppression that man has ever inflicted on man culminates in the modern age in the cold inhumanity of free wage labor, then the past is revealed inn conditions and things, the romantic contrast to industrial reason, as the trace of former suffering. The archaic silence of the pyramids and ruins become conscious of itself in materialist thought: it is the echo of factory noise in the immutable.” Theodor Adorno, 1942, “Reflections on Class Theory.”

[xi]: “In this respect, superficial readers imprisoned in the modes of thought created by capitalism, experienced the gravest difficulties in comprehending the structure of thought in Capital. For on the one hand, Marx’s account pushes the capitalist nature of all economic forms to their furthest limits, he creates an intellectual milieu where they can exist in their purest form by positing a society ‘corresponding to the theory’, i.e. capitalist through and through, consisting of none but capitalists and proletarians. But conversely, no sooner does this strategy produce results, no sooner does this world of phenomena seem to be on the point of crystallising out into theory than it dissolves into a mere illusion, a distorted situation appears as in a distorting mirror which is, however, ‘only the conscious expression of an imaginary movement.’” Georg Lukacs, 1923, “What is Orthodox Marxism?” (1919), in History and Class Consciousness, (Translated by Rodney Livingstone, Merlin Press, 1967).

[xii] “It is not, then, simply the exchange of objectified labour for living labour – which appear, from this standpoint, as two different aspects, as use values in different forms, the one objective, the other subjective – which constitutes capital and hence wage labour, but rather, the exchange of objectified labour as value, as self-sufficient value, for living labour as its use value, a use value not for a specific, particular use or consumption, but as use value for value.

In the exchange of money for labour or service, with the aim of direct consumption, a real exchange always takes place; the fact that amounts of labour are exchanged on both sides is of merely formal interest for measuring the particular forms of the utility of labour by comparing them with each other. This concerns only the form of the exchange; but does not form its content. In the exchange of capital for labour, value is not a measure of the exchange of two use values, but is rather the content of the exchange itself.” Karl Marx, 1857-1858. Grundrisse, Notebook IV-V: The Chapter on Capital.

[xiii]: Engels’ parting addendum to Volume 3 in 1895: “the Marxian law of value holds generally… for the whole period of simple commodity production… up to the time when the latter suffers a modification through the appearance of the capitalist form of production” Engels continues, “[u]p to that time, prices gravitate towards the values fixed according to the Marxian law and oscillate around those values, so that the more fully simple commodity production develops, the more the average prices over long periods uninterrupted by external violent disturbances coincide with values within a negligible margin. Thus, the Marxian law of value has general economic validity for a period lasting from the beginning of exchange, which transforms products into commodities, down to the 15th century of the present era.”  While Marx’s materialist conception of history finds determinations of capitalist production earlier in history to capitalism proper, we should remember that these forms, as will be discussed in part 3, find their meaning only in the capitalist totality. This totality is regularly called the class struggle and it is this modification that we are concerned with. Given that the proletariat only “originated in the industrial revolution, which took place in England in the last half of the last (18th) century,” and that only in the 1830’s does the “first working-class rising [take] place in Lyons[,]” then it follows that the law of value must be understood as modified by capitalism.

[xiv]: Aristotle’s inability to get to the bottom of the commodity-form follows from what would have been the absurdity, for him, of recognizing slave labor as an enslaved free person: “There was, however, an important fact which prevented Aristotle from seeing that, to attribute value to commodities, is merely a mode of expressing all labour as equal human labour, and consequently as labour of equal quality. Greek society was founded upon slavery, and had, therefore, for its natural basis, the inequality of men and of their labour powers. The secret of the expression of value, namely, that all kinds of labour are equal and equivalent, because, and so far as they are human labour in general, cannot be deciphered, until the notion of human equality has already acquired the fixity of a popular prejudice. This, however, is possible only in a society in which the great mass of the produce of labour takes the form of commodities, in which, consequently, the dominant relation between man and man, is that of owners of commodities.” Karl Marx, 1867. Capital, Volume 1:Chapter 1.

[xv]: For the below, M is Money, L is Labor-Power and MP is Means of Production.

“The class relation between capitalist and wage-laborer therefore exists, is presupposed from the moment the two face each other in the act M — L (L — M on the part of the laborer). It is a purchase and sale, a money-relation, but a purchase and sale in which the buyer is assumed to be a capitalist and the seller a wage-laborer. And this relation arises out of the fact that the conditions required for the realisation of labour-power, viz., means of subsistence and means of production, are separated from the owner of labour-power, being the property of another.

We are not concerned here with the origin of this separation. It exists as soon as M — L goes on.

Likewise, the socialization of production (or the separation of the means of production from the producers) manifests as the exchange between independent producers:

This mode of production, once it is assumed to be general, carries in its wake an ever increasing division of social labour, that is to say an ever growing differentiation of the articles which are produced in the form of commodities by a definite capitalist, ever greater division of complementary processes of production into independent processes. M — MP therefore develops to the same extent as M — L does, that is to say the production of means of production is divorced to that extent from the production of commodities whose means of production they are. And the latter then stand opposed to every producer of commodities which he does not produce but buys for his particular process of production. They come from branches of production which, operated independently, are entirely divorced from his own, enter into his own branch as commodities, and must therefore be bought. The material conditions of commodity production face him more and more as products of other commodity producers, as commodities. “  Karl Marx, 1885. Capital, Volume 2: Chapter 1: The Circuit of Money Capital.

[xvi]: The separation of the means of production from the producers is still not accomplished in Adam Smith’s Manufacturing era: “The knowledge, the judgement, and the will, which, though in ever so small a degree, are practised by the independent peasant or handicraftsman, in the same way as the savage makes the whole art of war consist in the exercise of his personal cunning these faculties are now required only for the workshop as a whole. Intelligence in production expands in one direction, because it vanishes in many others. What is lost by the detail laborers, is concentrated in the capital that employs them. It is a result of the division of labour in manufactures, that the laborer is brought face to face with the intellectual potencies of the material process of production, as the property of another, and as a ruling power. This separation begins in simple co-operation, where the capitalist represents to the single workman, the oneness and the will of the associated labour. It is developed in manufacture which cuts down the laborer into a detail laborer. It is completed in modern industry, which makes science a productive force distinct from labour and presses it into the service of capital.” Karl Marx, 1867. Capital, Volume 1: Chapter 14 (my emphasis).

[xvii]: “When Adam Smith wrote his celebrated Essays on the Wealth of Nations, men were struggling against a deficiency of the powers of production in society to supply all their reasonable wants; and the principle of division of labor, which he so ably advocated, was well calculated by its practice to lessen the difficulty. But he could not then imagine that in less than half a century the improvements effected by the combined sciences of mechanism and chemistry should set aside the necessity for the division of human labor to create the requisite wealth for happiness. It is now, however, obvious, that as long as the necessity for a minute division of labor existed, the happiness of the human race could not be attained.

Since that time that Adam Smith wrote, the extension of mechanical contrivances, and the discoveries in chemistry, combined with the progress and diffusion of general knowledge, have rendered a minute division of human labor, for the creation of wealth, as unnecessary as experience has proved it to be deteriorating to the physical and mental faculties of man, and, therefore, always opposed to happiness. Mechanism and chemistry have been directed to multiply the number of scientific hands, far exceeding the conception of ordinary minds. By these means, the powers of production have been increased in Great Britain alone, since the days of Adam Smith, more than one hundred times; or, in other words, these artificial powers have been so directed, as to produce the same effect as would arise from adding one hundred additional pair of hands to each producer, and these artificial hands have been better formed for their peculiar object of production, than the hands formed by nature.” Robert Owen, 1827, An Address to the Agriculturalists, Mechanics, and Manufacturers of Great Britain and Ireland.


[xviii]: “As soon as stock has accumulated in the hands of particular persons, some of them will naturally employ it in setting to work industrious people, whom they will supply with materials and subsistence, in order to make a profit by the sale of their work, or by what their labour adds to the value of the materials. In exchanging the complete manufacture either for money, for labour, or for other goods, over and above what may be sufficient to pay the price of the materials, and the wages of the workmen, something must be given for the profits of the undertaker of the work who hazards his stock in this adventure. The value which the workmen add to the materials, therefore, resolves itself in this ease into two parts, of which the one pays their wages, the other the profits of their employer upon the whole stock of materials and wages which he advanced. He could have no interest to employ them, unless he expected from the sale of their work something more than what was sufficient to replace his stock to him; and he could have no interest to employ a great stock rather than a small one, unless his profits were to bear some proportion to the extent of his stock.” Adam Smith, 1776, Wealth of Nations, Book 1: Chapter 6, On the Component Parts of the Price of Commodities.

[xix] See supplement, Model 3, in Ågren, J. Arvid, Nicholas G. Davies, and Kevin R. Foster. “Enforcement is central to the evolution of cooperation.” Nature Ecology & Evolution 3, no. 7 (2019): 1018-1029.

[xx]: “When an animal wants to obtain something either of a man or of another animal, it has no other means of persuasion but to gain the favour of those whose service it requires. A puppy fawns upon its dam, and a spaniel endeavours by a thousand attractions to engage the attention of its master who is at dinner, when it wants to be fed by him. Man sometimes uses the same arts with his brethren, and when he has no other means of engaging them to act according to his inclinations, endeavours by every servile and fawning attention to obtain their good will. He has not time, however, to do this upon every occasion. In civilised society he stands at all times in need of the cooperation and assistance of great multitudes, while his whole life is scarce sufficient to gain the friendship of a few persons. In almost every other race of animals each individual, when it is grown up to maturity, is entirely independent, and in its natural state has occasion for the assistance of no other living creature. But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and show them that it is for their own advantage to do for him what he requires of them. Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. Nobody but a beggar chooses to depend chiefly upon the benevolence of his fellow-citizens. Even a beggar does not depend upon it entirely. The charity of well-disposed people, indeed, supplies him with the whole fund of his subsistence. But though this principle ultimately provides him with all the necessaries of life which he has occasion for, it neither does nor can provide him with them as he has occasion for them. The greater part of his occasional wants are supplied in the same manner as those of other people, by treaty, by barter, and by purchase. With the money which one man gives him he purchases food. The old clothes which another bestows upon him he exchanges for other old clothes which suit him better, or for lodging, or for food, or for money, with which he can buy either food, clothes, or lodging, as he has occasion.” Adam Smith, 1776, Wealth of Nations, Book I, Chapter 2: On the Principle which gives occasion to the Division of Labour.

[xxi]: “The socialisation of labour by capitalist production does not at all consist in people working under one roof (that is only a small part of the process), but in the concentration of capital being accompanied by the specialisation of social labour, by a decrease in the number of capitalists in each given branch of industry and an increase in the number of separate branches of industry—in many separate production processes being merged into one social production process. When, in the days of handicraft weaving, for example, the small producers themselves spun the yarn and made it into cloth, we had a few branches of industry (spinning and weaving were merged). But when production becomes socialised by capitalism, the number of separate branches of industry increases: cotton spinning is done separately and so is weaving; this very division and the concentration of production give rise to new branches—machine building, coal mining, and so forth. In each branch of industry, which has now become more specialised, the number of capitalists steadily decreases. This means that the social tie between the producers becomes increasingly stronger, the producers become welded into a single whole. The isolated small producers each performed several operations simultaneously, and were therefore relatively independent of each other: when, for instance, the handicraftsman himself sowed flax, and himself spun and wove, he was almost independent of others. It was this (and only this) regime of small, dispersed commodity producers that justified the saying: “Every man for himself, and God for all,” that is, an anarchy of market fluctuations. The case is entirely different under the socialisation of labour that has been achieved due to capitalism. The manufacturer who produces fabrics depends on the cotton-yarn manufacturer; the latter depends on the capitalist planter who grows the cotton, on the owner of the engineering works, the coal mine, and so on and so forth. The result is that no capitalist can get along without others. It is clear that the saying “every man for himself” is quite inapplicable to such a regime: here each works for all and all for each (and no room is left for God—either as a super-mundane fantasy or as a mundane “golden calf”). The character of the regime changes completely. When, during the regime of small, isolated enterprises, work came to a standstill in any one of them, this affected only a few members of society, it did not cause any general confusion, and therefore did not attract general attention and did not provoke public interference. But when work comes to a standstill in a large enterprise, one engaged in a highly specialised branch of industry and therefore working almost for the whole of   society and, in its turn, dependent on the whole of society (for the sake of simplicity I take a case where socialisation has reached the culminating point), work is bound to come to a standstill in all the other enterprises of society, because they can only obtain the products they need from this enterprise, they can only dispose of all their own commodities if its commodities are available. All production processes thus merge into a single social production process; yet each branch is conducted by a separate capitalist, it depends on him and the social products are his private property. Is it not clear that the form of production comes into irreconcilable contradiction with the form of appropriation? Is it not evident that the latter must adapt itself to the former and must become social, that is, socialist? But the smart philistine of Otechestvenniye Zapiski reduces the whole thing to work under one roof. Could anything be wider of the mark! (I have described only the material process, only the change in production relations, without touching on the social aspect of the process, the fact that the workers become united, welded together and organised, since that is a derivative and secondary phenomenon.)” V.I. Lenin, 1894, What the “Friends of the People” Are and How They Fight the Social-Democrats (A Reply to Articles in Russkoye Bogatstvo Opposing the Marxists): Part 1. I have broken what is one paragraph in the original into multiple paragraphs.


[xxii]: What makes “scientific socialism” possible is because the crisis of the standard reveals the conditioned character of the unconditional moment in morality. This is the thrust behind Engels’ famous dictum that “what in economic terms may be formally incorrect, may all the same be correct from the point of view of world history.”

Plekhanov expands on this in detail: “If the growing perception that existing social institutions are unreasonable and unjust is itself a consequence of socio-economic development it is clear that a certain conformity to law may also be found in the conscious activity of men, which is conditioned by their conceptions of reason and justice. Since this activity is determined, in the last analysis, by the development of economic relations, now, having ascertained the trend of the economic development of society, we thereby acquire the possibility to foresee in which direction the conscious activity of its members must proceed. Thus, here as with Schelling, freedom flows from necessity and necessity is transformed into freedom. But whereas Schelling, because of the idealist nature of his philosophy, could not get beyond general – though extremely profound – considerations in this respect, the materialist conception of history allows us to use these general considerations for the investigation of ‘living’ life, for the scientific explanation of all the activity of social man. In providing the possibility to observe the conscious activity of social man from the point of view of its necessity, the materialist conception of history thus paves the way for socialism on a scientific basis.” Georgi Plekhanov, 1902, “Preface to the Third Edition of Engels’ Socialism: Utopian and Scientific,” in Selected Philosophical Works, Volume 3, Progress Publishers (Moscow, 1976): 31-55.


[xxiii]: “In order to control the statist tendencies rising from below, the bourgeoisie had to hastily call upon Bonapartism from above.” Max Horkheimer, 1942, The Authoritarian State.


[xxiv]: Unfortunately, the residual we are left with is the unsatisfying “[h]ere the manuscript breaks off.”


[xxv]: Cf. Engels: “Modern Socialism is, in its essence, the direct product of the recognition, on the one hand, of the class antagonisms existing in the society of today between proprietors and non-proprietors, between capitalists and wage-workers; on the other hand, of the anarchy existing in production. But, in its theoretical form, modern Socialism originally appears ostensibly as a more logical extension of the principles laid down by the great French philosophers of the 18th century. Like every new theory, modern Socialism had, at first, to connect itself with the intellectual stock-in-trade ready to its hand, however deeply its roots lay in material economic facts.” Thus, Socialism first appears as consistent and carrying forward the Enlightenment of bourgeois society, but in the course of the development of Socialism, it revealed itself to be a “reflex, in thought, of this conflict [between forces and relations of production] in fact[.]”