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philosophy of marxism
PART TWO - Contradictions of Capitalist Production
Let's now take a look at how Karl Marx applied dialectics in his most important scientific work, "Capital: A Critical Analysis of Capitalist Production."We get some idea of Marx's combined respect for, and merciless criticism, of Hegel's idealist dialectics from this brief extract from his afterword to the second German edition of Capital. Marx writes:
The mystifying side of Hegelian dialectic I criticized nearly 30 years ago, at a time when it was still the fashion. But just as I was working at the first volume of "Das Kapital." ... [Hegel fell into disfavor in the eyes of arrogant and mediocre, "cultured Germans," who considered him and his ideas to be a "dead dog."]
I therefore openly avowed myself the pupil of that mighty thinker, and even here and there, in the chapter on the theory of value, coquetted with the modes of expression peculiar to him.
The mystification which dialectic suffers in Hegel's hands by no means prevents him from being the first to present its general form of working in a comprehensive and conscious manner. With him it is standing on its head. It must be turned right side up again, if you would discover the rational kernel within the mystical shell.
The chapter on the theory of value in which Marx says he pays homage to his teacher by "coquett[ing] with the modes of expression peculiar to him," is the first and most difficult chapter in his analysis of capitalist production. But it also one of the most instructive examples of dialectical materialist analysis.
Let's take a look at what that looks like when applied by the man who turned Hegel rightside up.
In the first chapter of "Capital," Marx attacks the false notion, widely circulated by the vast propaganda machine of the ruling capitalist class, that profit is value added to commodities by capitalists.
However, the contrary is true: Profits are, in fact, not an addition, but a deduction from the value added by the labor of workers. But, like everything, this also is a contradictory thing needing analysis.
Marx begins to unravel the mystery of the source of profit. He explains that on the one hand workers receive full value for their labor power in the form of wages and that it is an equal exchange of things of the same kind. But workers, he goes on to show, are shortchanged just the same.
Now I must note, parenthetically, that this assertion seems to be inconsistent and self-contradictory. But it's a real contradiction which seems inconsistent only because such real contradictions are not allowed by the rules of formal logic. On the contrary, real contradictions are in complete accord with the way the world is and the way it works. And that, of course, is precisely what dialectical materialism is all about.
The mystery disappears when we perceive that the value of wages is not the same thing as the value that workers add to the commodities they produce! The value of the latter is, with rare exception, higher than the former and that is the source of the surplus value expropriated by the capitalists from workers. And that boils down to profits.
Let's look a little closer:
In the case of wages-which is the price of a given quantity of labor power-its value is determined by how much it costs workers to buy enough of life's necessities for them and their dependents to live and reproduce. Obviously, without a wage high enough to support workers and their families they would be unable to raise the next generation of workers to supply the future needs of capitalists.
And that's not to mention that capitalists need workers to stay alive and healthy enough to come back to work as hard as they can the next day.
If they are paid too little, workers cannot survive, much less continue working for their employer for very long. And since capitalists, like any other buyer, will not pay more than what the market demands, they assiduously strive to keep wages down as close to subsistence levels as they can.
That's a law of the capitalist market and has little to do with the goodness or badness of individual capitalists. But has a lot to do with the capitalist class as a whole.
Now here's how it can appear to be an equal exchange but in the end proves to be an unequal one. And as we shall see, it also explains why labor power is the only source of surplus value-that is, the sole source of profits. Here's how the thing works:
Let's assume that workers reproduce the value of their wages in around four hours on average (it's no doubt much less today). But workers are fully able to work much longer than what Marx calls "the necessary labor time."
However, the capitalist-all other things being equal-is not compelled to pay a higher wage for a day's labor consisting of eight hours than he would have to pay for a day lasting four hours or 12 hours, since the amount needed for one day's subsistence doesn't substantially change.
So if workers on average are compelled to work eight hours for a day's pay, the boss gets the value produced in the extra four hours-for free! And if workers are compelled to work 12 hours, the boss gets twice as much free labor every day!
Marx, by the way, calls an unusually long work day and workweek, super-exploitation. And he calls the higher rate of expropriated surplus value, superprofits.
To be sure, in real life there is a never-ending struggle between labor and capital over how much a day's labor is worth. And that depends in great part, on what the given category of workers think their labor power is worth.
Thus, this irrepressible war over wages, hours, and working conditions is an expression of the fundamental thesis of scientific socialism-the class struggle is the driving force of historical development.
Falling average rate of profit
We come now to the contradiction between the two components of invested capital; what Marx calls constant and variable capital. The law of the tendency of the rate of profit to fall is the fundamental contradiction that will bring the entire structure of world capitalism tumbling down. This is how the contradiction is manifested:
Constant capital-that is, the portion of capital invested in factory buildings, machines and raw materials-is merely reproduced in commodities, creating no new added value.
On the other hand, variable capital, the portion spent on labor power, both reproduces itself and adds new value to the commodities produced.
In other words, even automatic machines can't produce anything unless there are humans to turn them on and off, maintain them, transport the commodities, and distribute them to wholesalers and retailers.
And much less can machines produce surplus value; that is, a profit. In fact, if completely automated production was achieved, there would be no workers, and thus zero surplus value and zero profit.
But as can be seen from this chart on the wall,2 long before the rate of profit falls to zero, a massive crisis of overproduction is inevitable. And the lesson of history is that the real value of commodities including the value of the means of production themselves will fall to their real values when a crisis of overproduction erupts, and goods pile up unsold, halting the cycle of production, sale, and more production.
And along with a sharp fall in prices, otherwise known as deflation, there tends to be a qualitative collapse in the rate of profit as well.
I hope that this brief excursion through the Marxist analysis of capitalist production will not scare anyone away from a more patient and thorough study of Marx's "Capital." My aim today could not be to teach you either Marxist philosophy or economics in one quick and easy lesson. But only to inspire as many of you as I can to seriously study at least the first chapter of "Capital."
And as Marx pointed out in his preface to the French edition: "There is no royal road to science, and only those who do not dread the fatiguing climb of its steep paths have a chance of gaining its luminous summits."
Now on to the matter of the role of the workers as the class created by history to lead the socialist revolution. As will be seen, the emphasis in this part of the report is on the historical side of dialectical materialism.
