Readings: Capital II, ch. 4-6
Chapters 4-6 do not entirely hold together and there are key points made in each, so I will separate this out into a few sections.
First, chapter 4 contains an important theoretical formulation that fills out some of the scattered theoretical references made in Volume I.
What is Marx’s theory of dialectical materialism and how does it apply to capital circulation?
He writes, “Capital, as self-valorizing value, does not just comprise class relations, a definite social character that depends on the existence of labour as wage-labour. It is a movement, a circulatory process through different stages, which itself in turn includes three different forms of the circulatory process. Hence it can only be grasped as a movement, and not as a static thing. Those who consider the autonomization of value as a mere abstraction forget that the movement of industrial capital is this abstraction in action.” (185; my emphasis)
In characterizing those who describe capital’s autonomy as “mere abstraction” he is referring to vulgar materialists who dismissed the role of human consciousness in the unfolding of reality. When Marx describes the circulation of capital, he means that capital is a very real thing that shapes our social reality, an abstraction in action. The abstraction of capital—the consciousness we all have that there is value and that it increases, decreases, circulates, etc.—has as much of an effect on the world as physical processes like the fabrication of a new machine.
He continues: “The movements of capital appear as actions of the individual capitalist in so far as he functions as buyer of commodities and labour, seller of commodities and productive capitalist [sic—I think he meant “capital”], and thus mediates the circuit by his own activity. If the social capital value suffers a revolution in value, it can come about that his individual capital succumbs to this and is destroyed, because it cannot meet the conditions of this movement of value. The more acute and frequent these revolutions in value become, the more the movement of the independent value, acting with the force of an elemental natural process, prevails over the foresight and calculation of the individual capitalist, the more the course of normal production is subject to abnormal speculation, and the greater becomes the danger to the existence of the individual capitals. These periodic revolutions in value thus confirm what they ostensibly refute: the independence which value acquires as capital, and which is maintained and intensified through its movement.” (185; my emphasis)
Marx is referring here to technological innovation and the search for relative surplus value (see Volume I). Capitalists consciously search for ways to increase their relative surplus value in order to gain super profits over their competitors, but the process takes on a life of its own in capitalist production because technological innovation lowers the value of products. So a given capitalist may at one point appear to be in control of this process and generate super profits by applying new technology, but as soon as other capitalists inevitably beat him to the punch, the initial capitalist falls victim to the process he appeared to have initially mastered. Marx’s goal here is to generalize this chaotic process in a scientific manner to understand the underlying logic: humans are governed by the independent movement of value. We are subjected to the “abstraction in action” that is capital in the same way we are subjected to natural forces like weather patterns, earthquakes, climate change, etc.
So, Marx’s personification of capital in these three volumes is not simply a literary device; it is a scientific characterization of an abstraction—capital—that governs society, much in the same way Freud used literary tropes to characterize the very real psychic energy of the human mind.
Chapters 5 and 6 deal more with the mechanics of circulation than does chapter 4, whose analysis is fundamental Marxist theory. In general, Marx’s argument is that circulation entails constant movement and metamorphosis by capital between its three forms. This movement is punctuated by sources of friction and interruptions. From Volume I, we know that the production process involves the creation of new value, but what happens to value in the circulation process?
There are two forms of circulation: pure circulation, which is simply the change of state between commodity, money and productive capital; and storage and transportation, which have ramifications for the value of the product. In characterizing pure circulation, he writes, “The change of state costs time and labour-power, not to create value, but rather to bring about the conversion of the value from one form into the other…” (208) So pure circulation does not create value, but merely converts that value to a different form. Comparing this to thermodynamics, the application of energy is necessary to change the state of matter; likewise the application of labor is necessary to change the state of capital.
Discussing stock formation, an aspect of storage, he states, “…the value of the commodities is conserved, or increased, only because the use-value, the product itself, is transferred under certain objective conditions that cost an outlay of capital, and subjected to operations in which additional labour works on the use-values.” (216) Here, use-value comes back into the picture. He defines productive labor as that which creates or preserves value, and the key question is to what degree the labor acts on the use-value of the commodity. For example, given that vegetables naturally decay over time, refrigerated transportation preserves the use-value of vegetables. Without this labor—active and embodied—vegetables would decay and be useless.
But what is the role of money in the circulation of capital? For this analysis, we will adopt another one of Marx’s assumptions—this time unstated—and posit that money is commodity money—not fiat money. In other words, we are referring solely to money that has real embodied value as a result of labor. This is actually consistent with Marx’s statement on the first page of Volume II that makes the assumption that all commodities are sold at their value. On money, he writes, “The commodities that function as money go neither into individual nor into productive consumption. They represent social labour fixed in a form in which it serves merely as a machine for circulation… This is a part of the social wealth which has to be sacrificed to the circulation process.” (213-4) By this definition, precious metals are fixed pieces of labor that are extracted and abstracted from consumption as a cost to the process.
But he quotes the Economist in the footnote: “A certain amount of wealth is, therefore, as necessary in order to adopt gold as a circulating medium, as it is to make a machine, in order to facilitate any other production.” (214) To extend this analysis further, we could say that both machines and precious metals have embodied labor and therefore have value. Machines are necessary to facilitate the production process. Precious metals are necessary to facilitate the circulation process. The difference is that, in production, part of the machine’s value is passed to the end product. In circulation, none of the value of money is passed to the commodity. But what if we talk about the wear and tear of precious metals over time? Maybe the value that is extracted from consumption through money production is then finally consumed during the circulation process through the wear and tear of circulation on those precious metals. How does digital currency fit here? We can compare the degrading of precious metals over time to the wear and tear of the computer networks on which transactions take place.
By this logic, it seems that Marx may have fallen victim to the commodity fetish he spent so much time critiquing in Volume I. Money is not some pristine abstraction that is invulnerable to the friction of capitalist circulation; in fact it is consumed over time like any other commodity, but specifically in the circulation process. That said, I am sure Marx will have more to say about money, so this comment is speculative for now.
World of Lenidzky 