This year’s Historical Materialism conference in London focused on the Russian revolution as well as the 150th anniversary of the publication of Marx’s Volume One of Capital. Naturally, I concentrated on presentations that flowed from the latter rather than the former.
By Michael Roberts.
Indeed, the main plenary at HM was on Marx’s theory of value and class – and the annual winner of the Isaac Deutscher book prize announced at the HM was William Clare Roberts’ Marx’s Inferno, which seemed to be a ‘political theory’ of capital seen through the prism of Dante’s famous poem. Maybe, more on that later.
The plenary speakers were Moishe Postone, Michael Heinrich and David Harvey – an impressive line-up of heavyweight Marxist academics. Postone is co-director of the Chicago Center for Contemporary Theory and faculty member of the Chicago Center for Jewish Studies. His 30-min speech was difficult to understand, being couched in polysyllabic academic jargon. But I think the gist of it was that we cannot consider the class struggle under capitalism as just between exploited workers and capitalists any longer, as it now involves race, creed and gender and a new populism of the right. So we need to rethink Marx’s theory of class.
For this reason, “orthodox Marxism” is a hindrance. The old meaning of class struggle is not essential. As for Marx’s theory of value, it is specific to capitalism, but it has changed and exploitation is now over the amount of time we all have rather than over the production of surplus value. Now I think that is the gist of what he said, but frankly, I cannot be sure because Postone’s exposition was so incomprehensible.
The next speaker was Michael Heinrich, the well-known German expert of Marx’s Capital and close researcher of Marx’s original writings in the so-called MEGA project. Now readers of this blog will know that Heinrich and I have debated before on whether Marx’s law of the tendency of the rate of profit is logical and whether Marx himself dropped it; and we published on this issue.
In his presentation, Heinrich agreed with Postone that value is a category specific to capitalism, but he reckons that Marx changed his conception of both class and value over his lifetime. So it is not possible to pull quotes from Marx like random rocks in a stone quarry. Each quote must be placed in its context and time. For example, Marx’s definition of class struggle as found in the Communist Manifesto in 1848 differs with his later definitions of class at the end of Capital Volume 3.
Similarly, Marx’s concept of value changed over time. Early on, value is seen to come from the production process and the exploitation of labour power by capital. Later on, Marx revised this view to argue that value was only created at the point of exchange into money. Similarly, Marx thought that a rising organic composition of capital would lead to a fall in the rate of profit, but later he recognised that more machines could raise the rate of surplus value and so the rate of profit may not fall.
Heinrich has the advantage over us in reading Marx’s original words in German, but they remind his interpretations of Marx’s meaning. Heinrich, in effect, argues that value is not a material substance, namely the expenditure of human energy in labour that can be measured in labour time, but only exists in the form of money. In my view and in the view of many other Marxists, this denies the role of exploitation of labour in production, which comes first. Yes, you can only see value in the form of money, but then you cannot see electricity until the light comes on, but that does not mean it does not exist before the light glows. For an excellent critique of Heinrich’s interpretation of Marx’s value theory, see G Carchedi’s book, Behind the Crisis, chapter 2).
Does any of this matter, you might say? Are we not just discussing how many angels are there on the head of a needle, as medieval Catholic theologians did? Well, yes. But I think there are some consequences from deciding that value is only created in exchange and also that class struggle is not really centred (any longer) on workers and capitalists in the production process. For me, such theories lead to the idea that crises under capitalism are caused by faults in the ‘circulation of money and credit’ and not in the contradictions of capitalism between productivity and profitability in the production of surplus value, as I think Marx argued. And the revisions of the nature of class struggle could lead to the removal of the working class as the agent for socialist change.
There is a similar problem with David Harvey’s presentation. Again, Harvey has made a massive contribution to expounding and defending Marx’s ideas as expressed in Capital to explain the workings of the capitalist mode of production. I have presented my critique of Harvey’s more novel propositions on this blog before and he has also criticised my ‘orthodox’ view.
In his presentation, Harvey again looked to be ‘innovatory’ in an attempt to raise new categories in Capital. Yes, value is ‘phantom-like’ (can’t be seen), but objective (i.e. real) and only appears as money. But Harvey wants us to consider new terms like ‘anti-value’. What does Harvey mean by this? Apparently, money and credit can be created without the backing of value. Marx called this ‘fictitious capital’ because it was not real capital based on the production of value and surplus value by the exploitation of labour, but merely the title to assets that may or may not be supported by new value. In that sense, investment in financial assets produces fictitious profits.
Now Harvey wants to change the name of this category to ‘anti-value’ because he thinks that in doing so it can show that there are obstacles to the flow of capital (value) in the realisation of value. Thus crises can originate or be caused from breaks in the circuit of capital outside the production process itself. Similarly, Harvey came up with what he called ‘value regimes’. ‘World money’ as represented by gold no longer controls the value of fiat money (money ‘printed’ and backed by governments), particularly after the US dollar came off the gold standard in 1971. So now we have ‘value regimes’ like the dollar area, the euro and more recently, the Chinese yuan. Again, I think all this was saying was that various economic national state powers are trying gain the biggest shares of global value and in so far as they are successful, their currencies will be stronger relative to others over time. I failed to see why we needed new terms or concepts to ‘explain’ this. But there we are.
Of course, things have changed over the last 150 years since Marx formulated his critique of capitalism and political economy and published Capital. Capitalism is now global, finance capital has expanded dramatically, imperialist power blocs have developed and capital has become ever more concentrated and centralised. But it seems to me that the laws of motion in the capitalist mode of production have not so fundamentally changed that we need new categories to explain them; or we need to drop Marx’s basic value theory or his main law of the contradiction between productivity and profitability to explain crises and instead search for other explanations in the money and credit circuit.
If we do that, then we also reduce the role of the proletariat as the main agency for revolutionary change. And in my view, it still is, if only by the absence of success in the last 150 years. Revolutions based on the peasantry (China) or isolated in one country (Russia) have not delivered socialism even if they have removed capitalism, for a while. Only the global proletariat in unity can do that.
The idea that Marx’s theory of value and crises is out of date and needed amending was the theme of my own paper at HM. I quoted John Maynard Keynes in commenting that Capital was “an obsolete textbook which I know to be not only scientifically erroneous but without interest or application for the modern world”. I wanted to defend Marx against this view of Keynes, which is still prevalent not only in bourgeois analysis, but also in recent biographies of Marx by former Marxist historians who claim that Marx was a man of 19th century with little to tell us about the 21st
My paper above all aimed to show that Keynesian ideas have nothing in common with Marx’s critique of capitalism and are thoroughly designed to restore capitalism in crisis and make it work better. HM London November 2017 This, I think, is important, because Keynesian theory and policies dominate the minds of the labour movement everywhere, as though they were a workable and radical alternative, while Marxist theory is ignored.
Of course, this is no accident because if you accept Marx’s critique of capitalism, you are compelled to require a revolutionary transformation of the capitalist mode of production – something that remains frightening, not just to the leaders of the labour movement, but also to many activists who fear the risks involved in revolutionary change.
My paper argued that, contrary to Keynes’ view, the labour theory of value provides a logical and empirically verifiable explanation of the capitalist mode of production, while, in contrast, the mainstream ‘marginalist’ theory is false, indeed unfalsifiable. Marx’s great discovery about capitalism is that it is a system of exploitation of labour power to appropriate value produced by workers as surplus value or profit through sale on the market for commodities. That is where profit comes from. Keynes, like all mainstream economics, denied profit is the result of unpaid labour. For him, profit is the marginal return on investment and justified to the capitalist.
Marx’s theory of crises means that rising productivity of labour through increased investment in means of production relative to labour will lead to the contradictory fall in profitability, engendering recurring crises. Keynes, instead, saw slumps or depressions as due to a collapse in the ‘animal spirits’ of entrepreneurs and/or to too high interest rates charged by financiers. Crises are a ‘technical problem’ that can be corrected by boosting the ‘confidence’ of capitalists and lowering interest rates, or in the extreme, getting governments to spend to prime the pump of private industry.
For Keynes, once such measures are used to deal with these occasional slumps, then capitalism will be set fair for a golden future where hours of toil will fall dramatically with the use of technology; scarcity and poverty would disappear; and the main problem would be how to use our leisure time. Well, now 80 years after Keynes argued this, more than 2bn people are in dire poverty, inequality has never been greater, technology is threatening to take away many jobs and the average working life has not fallen at all. Moreover, the Keynesian prescriptions of easy money (QE) and government spending have signally failed to revive capitalism in the major economies since the Great Recession. The Long Depression, as I have called it, remains.
Indeed, in my session, veteran French Marxist Francois Chesnais presented his thoughts from his book, Finance Capital Today, which was short listed for the Deutscher prize. Chesnais argued that the current depression would never end. The rate of profit globally is still falling and global debt is steadily rising. The Great Recession has not ‘cleansed’ the system. And now global warming threatens to destroy the planet.
Now I am not quite so ‘pessimistic’ (or is it optimistic?) that capitalism is in its last throes. But it is possible that capitalism could sink into ‘barbarism’ or the collapse of living standards, as the Roman slave empire did after 400AD, without being replaced by a new mode of production. As Carchedi put it in a recent paper at the Capital.150 symposium, ‘the old is dying but the new cannot be born’ (Gramsci). But capitalism could also stagger on with some revival in profitability after new slumps and the renewed opportunity to exploit new sources of labour in Africa and the periphery.. It will require the action of the global working class to achieve socialism. It won’t come just because capitalism flounders economically.
Marx’s Capital provides us with the clearest and most compelling analysis of the nature of the capitalist mode of production and also its irreconcilable contradictions that show why capitalism is transient and cannot last forever, contrary to what the apologists for capital claim.
I don’t think we need to invent new and often confusing terms or categories to explain modern capitalism 150 years since Capital was published; or deny the role of exploitation in the creation of value at the heart of capitalism; or reduce the role of the global proletariat in ending it.