“Capital is dead labour, that, vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks. The time during which the labourer works, is the time during which the capitalist consumes the labour-power he has purchased of him.” – Karl Marx, “Das Kapital, Volume I”

In the vulgar economics department, the word capital is lightly thrown around as a synonym of the concept of the instruments of labor; that is, every factor utilized in a productive process that isn’t labor. According to this tale, capital and labor, by being so simplistically defined, have a transhistorical character; they have always existed and they will always exist, the only factor that can change is the way in which they relate in production. From here originates the definition of capitalism as the economy characterized by a free market and private ownership, and socialism as the economy characterized by state ownership. Perhaps, in the realm of academic economics, this is the most evident manifestation of commodity fetishism.

Probing into the theory of commodity fetishism is hence in order. The concept encapsulates the ways in which the social relationships between people in a society built on a social division of labor, national and international, take the form of relationships between things, making the exchangeability of commodities in a market appear as a natural phenomenon, and not an historically specific one.

In the capitalist mode of production, the allocation of human labor in the various sectors of the economy isn’t organized by means of direct relationships between people, but rather by the process of circulation of commodities, which indirectly disciplines production by forcing enterprises to change prices, quality, and quantity of goods produced. The Angolan oil rig workers, the Burkinabé cotton pickers, the Chinese textile workers, the American retail stores; all these realities are coordinated by the international law of value. When a worker buys a t-shirt, they can’t appraise the entire chain of concrete labors required to bring that commodity to their favorite store. We don’t see the work that creates commodities, we just see that commodity standing in relation of value to others. That t-shirt was worth the same as another one, or worth two baseball caps, or maybe a pair of sneakers. The exchange-value of the object we look at appears to be a property of the object itself, and not a result of a particular social relationships between workers all over the world mediated by monetary exchanges. However, since 1971, the dollar is nothing more than pieces of paper. What makes these pieces of paper so valuable, if not gold?

“Economic categories are only the theoretical expressions, the abstractions of the social relations of production, M. Proudhon, holding this upside down like a true philosopher, sees in actual relations nothing but the incarnation of the principles, of these categories, which were slumbering – so M. Proudhon the philosopher tells us – in the bosom of the “impersonal reason of humanity.” M. Proudhon the economist understands very well that men make cloth, linen, or silk materials in definite relations of production. But what he has not understood is that these definite social relations are just as much produced by men as linen, flax, etc. Social relations are closely bound up with productive forces. In acquiring new productive forces men change their mode of production; and in changing their mode of production, in changing the way of earning their living, they change all their social relations. The hand-mill gives you society with the feudal lord; the steam-mill society with the industrial capitalist. The same men who establish their social relations in conformity with the material productivity, produce also principles, ideas, and categories, in conformity with their social relations. Thus the ideas, these categories, are as little eternal as the relations they express. They are historical and transitory products.” – Karl Marx, “The Poverty of Philosophy

Our point of departure must be the relationships existing between people as they produce for each other. Extending this analysis to the means of production means analyzing the social relations that seize upon objects utilized in our workplaces. Any instrument of labor, for example a book printer, can enter into various types of social relations. When we use a printer to print a book, the printer is part of the process creating the book. This is where it’s important to remember the specific condition of capitalist production, i.e. a social division of labor: any single labor process in capitalist society can only be understood as part of a greater web of relations between independent producers. If we gifted the book we printed to a friend of ours, it would involve no monetary transaction and would only be for direct consumption. Using the same printer, we could be printing books in a capitalist printing factory; those books would in this context be sold in the market and become part of the capitalist division of labor, producing a profit for the factory owner. In this peculiar case, the most important characteristic of the book is not its use-value for our friend, but the customer’s pocket, the profit that can be realized by selling the book as a commodity. Here the useful properties of the book and the printer are reduced to their ability to realize profits for a capitalist. In two exactly identical labor processes we can observe two entirely different social effects resulting from the set of relationships in which they are inserted. For the capitalist, the purpose of the printer, and indeed, of the factory itself, the paper and ink needed as inputs, the money used to buy these inputs, and the labor of his workers, are all means to the end of profit and become incarnations of capital. To make the conclusion explicit, capital as a category of political economy can’t be understood as an object, but has to be understood as a particular social relationship between people that seizes upon an object; a printer is capital only when inserted in a labor process geared towards the production of surplus value in a context of social division of labor mediated by commodity exchange.

Etymologically, the vulgar economic description of capitalism as a society of voluntary exchange falls apart; according to the Collins English Dictionary – Complete & Unabridged 10th Edition, -ism is a suffix forming nouns indicating a doctrine, system, or body of principles and practices. Capitalism can hence only be understood as the system of capital. If capitalism is a system of capital, and capital is an element of this system, we can probe into the contradiction between the totality and the element: capital is a social relation, capitalism is a mode of production in which capital becomes the dominant social relation.

Capital is concerned with profit, it is value in motion; we can capture its movement with the circuit of industrial capital, the most important and foundational circuit for the reproduction of capitalist society: M-C…P…C’-M’.

On this model, money (M) is advanced, input commodities (which include labor power, machinery, and raw materials) are purchased (C),  direct (living) and indirect (dead) labor time is applied in production (P), creating commodities with higher value (C’) which are then sold in order to realize an amount of money higher than the sum invested (M’). This circuit, where money becomes a means of making more money (that is, where money becomes capital), is entirely different from what is termed simple commodity exchange, captured by the circuit C-M-C, where a commodity is exchanged for money which is then used to acquire another commodity of an equivalent value.

“The commodity is exchanged for money; money is exchanged for the commodity. In this way, commodity is exchanged for commodity, except that this exchange is a mediated one. The purchaser becomes a seller again and the seller becomes purchaser again. In this way, each is posited in the double and the antithetical aspect, and hence in the living unity of both aspects.” – Karl Marx, “Grundrisse”

Following from the M-C…P…C’-M’ circuit, we have two other circuits:

M-M’, the circuit of bank-capital; here a loan is advanced and interest is paid on the loan;
M-C-C-M’, the circuit of arbitrage; here money is advanced to buy a commodity and that same commodity is resold for a higher amount of money in a market where it has a higher price.

Only the M-C…P…C’-M’ circuit produces surplus value, i.e. unpaid labor performed by the working class which sells its labor power to the capitalist, who appropriates its products. While the laborer sells his labor power (ability to do work) to the capitalist, he also cedes his effective labor, which can’t be disembodied from him. M-M’ and M-C-C-M’, on the other hand, appropriate value in exchange. This is easily proven by the fact that any society that limited itself to buying cheap and selling dear and loaning wouldn’t survive for more than a week.

A society whose regulator of production is profit, i.e. unpaid labor, is bound to be a society of antagonism; there is no place on earth where this can’t be observed. There is an antagonism between worker and capitalist, between workers looking for jobs, between capitalists for sales, between oppressed nationalities and oppressor nationalities, between the patriarchal structure of society and women, between oppressed genders and heteronormativity, between imperialist and imperialized countries for markets and sovereignty, between transnational ruling classes for hegemony. This climate of antagonism is precisely what so-called general equilibrium, a fantasy of vulgar economics, tries to conceal.

If the capitalists’ interest is to exploit labor as much as possible, what is the working class’ direct interest? Their interest is to overthrow the bourgeois state and affirm themselves as a class by means of a dictatorship of the proletariat, a transitory period between capitalism and communism, a classless, stateless society of freely associated producers. The proletariat has to declare “the permanence of the revolution, the class dictatorship of the proletariat as the necessary transit point to the abolition of class distinctions generally, to the abolition of all the relations of production on which they rest, to the abolition of all the social relations that correspond to these relations of production, to the revolutionizing of all the ideas that result from these social relations”.

Join the conversation! 1 Comment

  1. What do you think of bitcoin as a transitional stage in escaping the tyranny of rewarding the capitalist(‘s with) interest?


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Imperialism, Lenin, Maoism, Marxism, Political Economy, Revolution, Theory


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