A paraphrase of Capital and the “Communist Manifesto” by former members of the Bordigist group, Communisme ou Civilisation (1976-1998), with chapters on the historical stages of capitalist development, the basic categories of the critique of political economy (labor power, value, surplus value, etc.)—with special emphasis on the increasing productivity of labor—the modern “middle classes”, accumulation and crisis, concluding with a chapter on “the classless society” that calls for the “constitution of the proletariat into a political party” (Engels) and the dictatorship of the proletariat in the form of a transitional proletarian state based on territorial soviets and labor coupons.

A Condensed Guide to Marxism: From the Critique of Capitalism to the Classless Society – Robin Goodfellow

1. Introduction

After the defeat of the great proletarian struggles of the 1920s, the longest counterrevolution in history has helped to obscure the basics of revolutionary theory, even for militants. In its Stalinist, social democratic and leftist versions, or in the attempts made by the representatives of the bourgeoisie to explain it, Marxism has been distorted. It no longer has anything to do with the powerful critique of bourgeois society, with the scientific theory that, starting in the mid-1840s, explained the genesis, development and death of this society and foresaw the end of class society.

On the occasion of the crisis that convulsed the capitalist economy in 2008-2010, one part of the international bourgeois press thought that the time had come to offer a tip of the hat to Marx. But it did so by saluting the “visionary” of the difficulties of capitalism rather than the revolutionary who demonstrated the intimate link between crises and the need to abolish them. Thanks to the fact that we situate ourselves at the point of view of the proletariat, that we defend its historic program, that we call upon it to constitute itself as a distinct political party opposed to the other parties and to conquer political power for the purpose of establishing a society free of social classes and the State, wage labor, money and the categories of the commodity, we defend the revolutionary content of that theory, far removed from, and contrary to, all official or academic recognition.

This little book, which summarizes the essential points of the communist critique of political economy, seeks to provide all those who are looking for a radical critique of today’s society with a condensed version of the coherence and power of revolutionary theory. Its purpose is above all to show that the communist future is not an ideal, nor is it a mere desire or a utopia, but is necessarily inscribed in the very development of the bourgeois society that rests upon the exploitation of the productive class: the proletariat.

Socialism has become a science and must be studied as such. The only school in which it can be understood, transmitted and further developed is the proletarian party, in the historic meaning of the term. The authors of this work fully lay claim to this tradition, and do not concede any validity to the critiques of Marxism, like those “modernization” efforts undertaken by bourgeois or reformist wise men, economists and university professors.

This text is for a class in struggle, a class that instinctively knows what exploitation represents and is seeking to provide itself with solid theoretical tools to face the battles of the future.

We have ventured upon the difficult project of “vulgarizing” a corpus of complex scientific thought. Revolutionary socialism is scientific in the sense that it gives an explanation of reality, and it is militant in the sense that it passionately defends the need for revolution. In certain cases, the vocabulary of the past can be an obstacle to understanding the phenomena that are described: for example, in the expression “labor power”, the word, “power”, is a relic of the physics of the 19th century, when it was used to describe what goes by another name today. While we have continued to use this concept, we have, however, attempted to explain it in today’s language, in which it might be translated as labor’s potential “capacity for work” (a term already used by Marx). At the same time, the risk of “vulgarization” lies in the reduction of complex proofs by an exaggerated simplification of certain concepts or phenomena.

The reader who wants to obtain a deeper understanding of certain topics addressed in this book may refer to our more theoretical texts, which are available in many languages at our website, www.robingoodfellow.info, and, obviously, by reading the original texts. At the present time, they may be consulted at numerous websites (although not always in the best translations).

To make this text more readable, we decided to limit the number of quotations from Marx and Engels to a few exceptional cases where the clarity of the original formulation cannot be surpassed.

Marxism is a science and therefore a living theory, whose concepts have held up remarkably well when confronted by the complexity of our contemporary world (whereas bourgeois political economy, on the other hand, not to speak of its philosophy or its sociology, is increasingly more stupid); this does not make it any less necessary to engage in a considerable effort to make this theory more accurate, to refine its concepts, to apply them precisely to the phenomena of today’s capitalist mode of production, and to do so within the general programmatic framework defined by this theory. Without revolutionary theory there is no revolutionary activity, Lenin said; this is more true today than ever before.

Sao Paulo – Paris

July 2013

2. The Historical Development of the Capitalist Mode of Production

The unprecedented development of the capitalist economy and the attenuation of the crises that followed the end of the Second World War in the West for thirty years, the collapse of the false “communisms” of the East, the rise and development of new capitalist countries on every continent, and last but not least, the never-ending counterrevolution that, since the 1920s, has reduced the influence of revolutionary communism to almost nothing, have helped spread the belief that the capitalist system had won its eternal life on earth.

For the rulers, economists, journalists and other representatives of the bourgeoisie, there is no doubt about it: nothing can escape capitalism. The economy (always understood as capitalist) seems to have become as natural as the air that we breathe; it even seems impossible to imagine that a society could work, live, reproduce and develop without those categories known as money, market, exchange, and wage labor; that life would be possible by using the products of labor without their being commodities.

None of these categories, however, whose scientific definitions as set forth by Marxism we shall recapitulate in the next chapter, are eternal; they have not always existed and Marxism proves that they have become obstacles to the development of society. To further its development, capital was forced to fundamentally transform the relations of production (rapports de production) among humans, the modalities of production (mode de production), and create the preconditions for its own development. This process was far from peaceful and idyllic.

2.1 The Preconditions for the Capitalist Mode of Production

Marx ridiculed those bourgeois economists who offered a virtuous fable to explain the origins of the great fortunes that constituted the first foundations of merchant capitalism. According to this fable, they were the fruits of patiently accumulated savings by generations of sober and industrious entrepreneurs, while incompetents and those who gave themselves up to a life of pleasure were without resources and obliged to sell their labor. Obviously, that is not how history produced the two principal preconditions for capitalist exploitation: the existence of a mass of laborers “with neither hearth nor home”, the proletariat, on the one side, and a class of capitalists who monopolize the money, and the means of production and subsistence, that create a situation where the latter can hire the former for a wage. It was through expropriation, State intervention and cruel legislation whose purpose was to discipline and contain the nascent proletariat, through looting, robbery, pillage, murder and other forms of violence, the slave trade, forced labor, the public debt, taxes, trade wars, and protectionism, that these preconditions were imposed and further developed.

2.1.1 The Development of the Proletariat

The capitalist economic structure emerged from the dissolution of feudal society. What was needed was a free laborer who has disposal over his own person, and therefore one who is liberated from serfdom and from the power of the guilds.

The creation of the proletariat is therefore the concentration, at the other pole of society, of a mass of free men. At this point we must make it clear that they are “free” … to sell their capacity for labor to the possessors of capital. There must also be a class that possesses something else besides “its labor in a potential state”, a class that has before it the necessary means for the performance of their labor: the tools, the raw materials, the workplace. Unlike the artisan, who is simultaneously the owner of his tools and the person who does the work, the proletariat can do nothing because it is in a manner of speaking “naked” before the capitalist. What this entails is a radical separation of the means of production, a separation that would only become more pronounced over the course of the existence of the capitalist mode of production.

In England, for example, under feudalism, one part of the land was known as the commons; this land did not belong to the lords, but remained the common property of the residents of each town or village. On the commons, the village residents could freely pasture their animals or they could cultivate parcels without thereby appropriating to their exclusive ownership the lands they used (and therefore this form of land use was not a form of private property). In the 17th century, the so-called Enclosures movement was accelerated by State intervention, by means of legislation voted by Parliament. It was by way of this deliberate act that part of the peasantry was expropriated and made available for sale to capital.

In Chapter 23 of Volume I of Capital, devoted to colonization, Marx uses this particular mode of capitalist expansion to prove that what makes capital is not the means of production as such, but the fact that these means of production confront a mass of dispossessed proletarians. In other words, to produce surplus value, what is necessary is not just capital, but this capital must be confronted by a mass of proletarians who have been dispossessed of everything. While the bourgeois economists reconstructed the past in an idyllic form to explain how modern society was born, Marx turned to the places where the constitution of capitalist relations can be directly observed: the colonies, where the producer still possesses the means of production and the land, a state of affairs that had not prevailed in England for several centuries. In the colonies, he said, one may behold “the secret of political economy”, in which, without the expropriation of the worker, the capitalist relation cannot function.

In Europe, expropriation, the subjection of the masses to the discipline of factory labor, the Poor Laws of the 17th and 18th centuries, the persecution of vagabonds, and other coercive measures were utilized to create and subdue a mass of proletarians whose existence is necessary for the development of the capitalist mode of production. The history of their expropriation and their domestication in order to imprison them in the factories was written in letters of fire and blood. But only with the advent of more highly developed capitalist production, which followed in the wake of the industrial revolution, did the expropriation of the immense majority of the rural population become radicalized, and the separation between agriculture and domestic production (weaving, spinning) was finally consummated.

2.1.2 Genesis of the Capitalist Class

In order for the capitalist mode of production to develop, money and commodities must be susceptible to being turned into capital. To put it another way, on the one hand there must be money, means of production and subsistence; and on the other hand there must be a class of free workers. The mere existence of such a class of free workers does not create a class of capitalists. The latter has multiple origins. The capitalist farmer is its oldest form; he emerges gradually. Later, as a counter-stroke against the agrarian revolution of the late 15th and early 16th centuries, a domestic market was opened up for industrial products and a capitalist class was encouraged to develop within this sector. This class came in part from the masters of the guilds, in part from the artisans, that is, from wage workers who had become capitalist entrepreneurs, but above all from the existence of a kind of capital, a legacy of the Middle Ages, which possessed the scope of capital before the capitalist era: merchant and banking capital. In the hands of these merchants and bankers there was a sufficient mass of accumulated money that could be transformed into industrial capital, that is, it could buy means of production and hire free labor power for a wage.

It was on the basis of these “antediluvian forms” of capital that the expressions of modern capitalism developed. Before the emergence of these forms, merchant capital for the most part played a role in the development of exchange, insofar as its specialty was the social function of exchange. That is, instead of the apple farmer going to the market to sell his apples and then buying shoes from the shoemaker (we are no longer dealing with barter, but with monetary exchange), the possessor of merchant capital acts as an intermediary between the different agents of production. One of the paths that the subsequent development of the capitalist mode of production would follow was that of the centralization, on the part of merchant capital, of the means of production in central locations, which would favor the increase in the productivity of labor. Thus, capital begins by socializing exchange rather than labor.

Thus, from the beginning, the functioning of the capitalist economy is neither possible nor explicable without taking into account this relation between the two antagonistic classes, where one of them (the capitalist class) can only cement its rule over the other (the proletariat) by exploiting it.

We shall now take a brief look at how, on the basis of this first impulse, the historical movement of the capitalist mode of production develops.

2.2 Stages of Capitalist Development

Capital has unfolded throughout its history by ceaselessly accentuating the factor that determined its emergence, that is, by valorizing capital by buying labor power that is capable of producing more value than it costs. We shall see in more detail, in the second chapter, how the scientific work of Marx has provided the keys to explain the extortion of surplus value.

Over the course of its development, the nature of capital has not changed, and capital has in fact fulfilled its purpose all the more effectively: to produce a maximum of surplus value. By doing so, the bourgeoisie unites and expands the means of production, and develops the productive power of labor. One of the consequences of this is the socialization of the means of production and of the products of labor. Furthermore, the modern capitalist mode of production clears the way to an unlimited development of the productivity of labor. This latter development contradicts the limited goals of capital, the quest for a maximum of surplus value, and calls for another society, a society for which capitalism has produced the foundations. A society that will no longer be based on the exploitation of wage labor.

In this process, Marx distinguishes three stages that have followed one another since the middle of the 14th century: simple cooperation, manufacture, and machine industry. Capitalist production presupposes, from its origin, the exploitation of a significant mass of workers, under the command of a single capital which, in order to pay wages on such a scale as well as to acquire means of production, must have attained a certain size.

This organization guarantees that the collective labor power that cooperates in production will have a productivity that is consistent with that of the social average productivity and, by virtue of economies of scale, expenditures on means of production (for buildings and maintenance, for example) will decrease. The cooperation of these bearers of labor power, the creation of a collective worker, also allows for the extension of the range of jobs that can be performed under the aegis of capital (large scale construction projects, for example) and improve social productivity. This simple cooperation that implies large scale production is re-encountered throughout capitalist production, and is a characteristic of a certain stage of infancy of capitalist production in craft-based manufacture and large scale agriculture.

With the beginning of the manufacturing period properly speaking, which extends from around the middle of the 16th century to the last third of the 18th century, a kind of cooperation was established that was based on a new division of labor. We have seen that the agrarian revolution of the end of the 15th and beginning of the 16th centuries favored this craft-based manufacturing system and this system was the dominant form of the capitalist mode of production when the capitalist era really began. Without going into details concerning the various types of manufacture, we shall emphasize the specificity of the division of labor that was characteristic of the manufacturing period: the collective worker is constituted by concentrating in one place a large number of workers performing particular tasks. At the same time, one observes a differentiation and specialization of the instruments of labor. Even though there was a tendency to subdivide tasks, to create a hierarchy between skilled and unskilled workers, to reduce the expenses of training and to mutilate the worker by extreme specialization, the craft or trade was still the basis of manufacture and the springboard of proletarian resistance. With the development of manufacturing production, this narrow technical basis entered into contradiction with the needs of production; machines were invented to overcome this contradiction.

2.3 Machine Industry, the Industrial Revolution and the Growth of Productivity

In the section of Volume I of Capital that deals with modern industry, Marx devotes a chapter to “Machinery and Modern Industry”. He begins by recalling a fundamental point of revolutionary communism: all progress of the productive powers of labor is progress in the exploitation of proletarian labor power and in the refinement of this exploitation. Thus, “the immediate result of machinery is to augment surplus-value”.

The apologists for technical progress should reacquaint themselves with this lesson, since technical progress has been turned directly against the proletariat. It is synonymous with the development of relative surplus value, of the increase in the exploitation of labor power, it is synonymous with the accentuated valorization of capital due to the increase of surplus value.

Socialism has made use of the concept of the industrial revolution to define that moment (which corresponds, in Europe, with the beginnings of big industry in the 18th century, after the transitional stage of manufacture) when “mechanical production” took over from manual production, in which the hand-tool was crucial. The tool, manipulated in the past by the hand of man, is now transformed into a component of the tool-machine. Before, the worker used the tool; now, he serves the machine. As long as production was still based on the manual use of the tool, even when production was reorganized as in the case of manufacture, there were limits to the growth of the productivity of labor. With the machine, the perspective of an unlimited development of the productivity of labor was revealed.

The industrial revolution did not take the form of the creation of machines that are the extensions of machines, but that of the elimination of man from the productive process. This phenomenon opens up vast perspectives for the development of the productivity of labor. On the one hand, the number of tools working simultaneously can be multiplied, and on the other hand their speed can be increased. Machinery seizes upon all aspects of production, which are “connected together by being separate phases of a process”. Progress in one branch also brings progress to other branches; large scale weaving and spinning, for example, bring advances in chemical industries for dyes, and so on. The capitalist mode of production thus contributes to the unification of all human activities and to the constitution of an “interdependent process of social metabolism” (Marx). By unifying the industrial fabric, by associating all the branches of production, by considerably developing the productivity of labor, capital creates the preconditions for a society where collective and social production will allow for free individual development.

However, this logic pertaining to technical development must not be viewed only from the perspective of the machine, nor should it be viewed as a process that is separate from the social form in which it is inscribed. Driven forward by the movement of capital valorization, the movement of integration of technologies produces social effects that are fundamental for the evolution of humanity, starting with the unification of the productive class, the proletariat.

This is especially important because socialism speaks of an industrial revolution with respect to the phenomenon of machine industry. This is not just a technological development, a new invention in the history of humanity. Its advent establishes the material foundations of communism and allows for a unlimited development of productivity and a permanent reduction of necessary labor time, creating the bases for a society of abundance. That is not all, however! Machine industry leads to a labor process that is specific to the capitalist mode of production and creates an enduring form of associated social labor. It creates the class of associated producers who must free themselves from the dictatorship of capital in order to be able to fulfill the potential of machine industry, in order to raise to another level, a higher level, the magnitude of the productive power of labor.

Potentially, by virtue of its own concept, the industrial revolution leads to the perspective of a classless society, communist society. With the industrial revolution, the bourgeoisie set in motion productive forces that enter into conflict with the exclusive and limited goal of capitalist production: the quest for the maximum surplus value. This conflict between the tendency towards the unlimited development of the productive forces and the relations of production characteristic of the capitalist mode of production is manifested in general crises of overproduction (catastrophic crises in the sense that society, for social reasons, is devastated as if by natural catastrophes) which periodically remind us that the time has come for a new society. The tendency of these crises is that they are becoming more extensive and are leading towards a violent collapse of capital.

Throughout history, the development of humanity takes place in a contradictory fashion, by way of class societies, conflicts and various contradictions. And at every step of the way, the question of social productivity is central. As long as the human species devotes the greater part of its time to assuring its necessary subsistence, the question of socialism cannot be posed, even if, in the form of millenarian and utopian religious movements, the idea of an egalitarian society has left its imprint in the depths of history. The capitalist mode of production is the first mode of production in history in which productivity develops on a social basis that allows for the perspective of a satisfaction of social needs that goes beyond the simple reproduction of the species.

3. Some Basic Concepts of Marxist Theory

3.1 Definition of the Commodity

A commodity is any material object or service produced for the purpose of being exchanged. The commodity has not always existed: the Indian tribes of North America, for example, were unfamiliar with it until the arrival of the European colonists. Products were made, and consumed, collectively. Among the first appearances of the commodity, as far as we know today, societies developed that were only partially based on commodity exchange, that is, such exchange involved only certain activities (as in the Middle Ages, when the villagers were still able to live on their own produce). Only with the capitalist mode of production was the realm of the commodity generalized.

Today, the objects that we use on a daily basis are commodities, whether they are tangible things, like our food, clothing, and furniture, or services like mass transit or various leisure activities. It must not be forgotten that the commodity is not just a matter of individual consumption. Machinery, raw materials, factories and office buildings, the instruments of labor and, especially, the labor power of the wage workers themselves, are also commodities. It is their mode of consumption that differentiates them. Marx speaks of productive consumption in connection with the commodities that are consumed in the production process.

3.2 Use Value and Exchange Value

All of these commodities have a use for those who buy them (the social utility of certain objects or gadgets may be debatable, but this is not the place to address this issue). This is called their value of utility, or more precisely their use value. The use value of an object, of a commodity, is its usefulness to me and the reason why I want to possess it. Up to this point, this idea is perfectly understandable for everyone. It remains to be asked why objects as different with respect to their uses as a kilo of apples, a DVD, a liter of gasoline, a wrench, a calculator, a ton of copper, a computer monitor, an hour on the internet at a café, a shirt, are all called commodities…. It also remains to be explained why, with 50 euros, I can buy a microwave, ten dozen oysters, fifty kilos of nails, two hammers, ten reams of paper, a pair of shoes, six seats at the movie theater, three hours of housecleaning, etc.

The answer lies in the fact that these objects (or services) possess another dimension besides their use value, which is called exchange value. Every commodity therefore has a dual character: a use value and an exchange value at the same time. The latter is linked exclusively to the fact that the objects are not produced from the very start to satisfy social needs, but to be sold on the market. In communist society, as in the first human societies, the objects that will be produced will always have a social usefulness, but they will no longer have any exchange value. It is a society that no longer knows the commodity.

But why is it that quantities of different objects possess the same value and can be exchanged?

The response is as follows: two commodities have the same value because they contain the same quantity of an invisible substance in its concrete form: the human labor that is necessary to produce them.

It is therefore not a matter of the concrete labor of the tailor who made the suit, or the farmer who tended the apple trees or the worker who manufactured the paper, but of human labor as a general activity. The labor time expended to produce a commodity is what determines the magnitude of value, of exchange value. Commodities are exchanged for each other because they represent an equal amount of the same general labor, an abstraction from the concrete forms of labor. We shall therefore differentiate between concrete labor, which produces use values, and general, abstract labor, which produces exchange value.

This labor contained in commodities, however, must be performed under average social conditions, which obviously vary historically and geographically based on the degree of social development. When we say that labor time is the measure of the value contained in commodities, we are speaking of socially necessary labor time. It is not just because an aficionado of home-made furniture thinks that his own products can be sold on the market for a value corresponding to the labor time he expended in producing them. The value of a table is calculated on the basis of the social average labor time necessary to produce a new copy of it. Our handyman has spent a lot of his personal time to fabricate his product. For example, if a table of comparable quality is sold in the store for 200 euros, which corresponds to three hours of social labor, and it took our handyman nine hours to make his table (including his purchases of raw materials), there is no way he can expect to sell it for more than 200 euros (and certainly not for 600 euros, which might represent the social value of his expenditure of labor).

The dual character of the commodity is something that is not obvious at first sight. The commodity does not allow one to see right from the start that its value is in proportion to the quantity of socially necessary human labor required for its production. Furthermore, its dual character seems like something natural. The exchange value that is associated with it and which dissimulates particular social relations presents itself as a natural property. We shall see below the importance of the mystifying character of the commodity.

3.3 Labor Power

Why do we speak of labor power rather than of labor?

When a worker makes something, he might have many raw materials or objects, but he does not have at his side a box or a basket labeled “labor” that contains a substance that would be “labor” and that he would inject into the production process. Labor is not a material, it does not exist outside of the power that is capable of producing it, which is the human capacity, muscular and intellectual power, that is mobilized to perform a task, whether this task involves picking apples, assembling auto bodies or designing the structural components of a bridge.

There is one commodity in bourgeois society that possesses a particular use value, the capacity to produce more value than is needed to reproduce it. This commodity is labor power, that is, a human’s inherent capacity to mobilize his intellectual and physical potential to perform the most varied productive tasks and, finally, to transform nature.

Thus, what the capitalist buys from the proletarian is not his labor, but this particular commodity, his labor power, his capacity for labor, for the purpose of consuming it, insofar as its use value consists precisely in producing a supplementary value, an extra value, a surplus value. No other commodity consumed during the production process transmits more than its own value to the product, neither raw materials nor machines.

In order for the exchange relation to exist, there must be a historical relation in which we have on one side the capitalists, who have a monopoly on money and the means of production and subsistence, and on the other side the proletarians who have been dispossessed of all means of production and whose only wealth consists of their labor power, which they are obliged to exchange for a wage. This has not always been the case (e.g., among the Indians of the ancient tribes, the Welsh) and it is not the case even now among direct producers (peasants, artisans, etc.).

How do we define labor power?

The same way we define any other commodity: by the average socially necessary labor time required to reproduce it. Before an individual is capable of performing productive labor, he must be reared, educated and trained. Furthermore, he must eat, have a place to live, have clothing, consume electricity, travel…. The sum of all these needs constitutes the global total of what must be spent to maintain this labor power. Naturally, these needs vary depending on time and place. The share of leisure activities or a more pleasant level of consumption can vary, and may be very high or very low.

There are numerous cases in history where the dietary habits of the masses were changed in order to reduce the cost of their maintenance, such as the campaign in favor of the potato, or getting the English workers to drink tea instead of milk.

The crucial point to grasp here is that labor power is a commodity. Like any other commodity it has a use value (the capacity to produce commodities, to be the source of value and surplus value) and an exchange value, which is determined by the average socially necessary labor time required to reproduce it.

3.4 Surplus Value

Why do we say that labor power, the capacity for labor, is a commodity that is capable of producing more value than it costs to its owner, the capitalist?

Because the average socially necessary labor time required to reproduce labor power is less than the labor time during which that labor power is exploited by the capitalist. And because the value of a commodity is nothing but the labor time necessary for its production, the value of labor power is effectively lower than the value created over the course of a day or a month of work. The capitalist pays the former and appropriates the latter. The difference between the two is what we call surplus value. It corresponds to the unpaid labor supplied by the worker, or the surplus labor.

For example, a capitalist who buys a day of work from a proletarian for 100 monetary units, has the right to make the worker toil for seven, eight or ten hours, or as many as are allowed by the prevailing laws.

Let us suppose that the elements we enumerated above, which are necessary for the reproduction of labor power, represent the equivalent of two hours of production, or, in other words, that two hours of labor are enough for the capitalist to be reimbursed for his advance—so, what happens after the second hour? Does the capitalist say to the proletarian, “Thanks, you’ve done good work, now you can go home and get some rest”? Of course not! He will take advantage of the contract they signed to employ him for another six hours, in the context of a normal, legal working day, such as, for example, the 44 hour working week in Brazil (in fact, 40 hours in numerous enterprises), or the 35 hour week in France (but longer hours in England and the United States).

And what are these six hours to our capitalist? Pure bonus, labor that he did not pay for, free labor, which we have defined as surplus labor, the working time during which surplus value is produced.

Here one can see that the struggles for the reduction of the working day constitute an important component of the relation of forces between the capitalist class and the proletariat, insofar as they seek to reduce the time that can be devoted to the production of surplus value.

An important consequence follows from these facts: even a decent capitalist, one who treats his workers “well”, who complies with the labor laws, who remunerates labor power at the correct rate, and associates on a personal level with his wage workers, even this capitalist, as virtuous as he may be, is an exploiter, because his workers produce gratuitous labor, labor which has not been paid for.

Here we can see the power of Marxism, which is not a kind of morality, in which case it would be restricted to denouncing the miserable conditions imposed on the proletariat, but a theory whose proof has the force of a scientific truth: exploitation is inherent to the capitalist social relation. This is why it does not matter whether or not the boss is a “crook”, he must be eliminated not as an individual, but as a representative of a social relation based on exploitation (and now that it has fulfilled its task, we will see that, with the rising productivity of labor, the bourgeoisie as a whole has become, for Marx and Engels, a useless characteristic).

3.5 Wages

We have seen that labor power, like any commodity, has a value, and that this value is determined by the average socially necessary labor time required for its reproduction. Like any commodity, labor power also has a price, which is the concrete monetary expression of value.

A commodity’s value is socially determined by the quantity of labor that it contains; its market price, however, is based on supply and demand. Commodities are sold at a price that is higher than their value if demand is strong, and below their value if demand is weak. What matters, however, are the variations around which a value is determined by the average socially necessary labor time required for the reproduction of the commodity in question. In fact—although we shall only briefly touch upon the topic—the question is more complicated than that. In the context of the capitalist mode of production, the market prices of commodities do not gravitate around their values but around their prices of production. The price of production is the price that results from the equalization of the rates of profit among the great masses of capital, but these prices of production are themselves ruled by fluctuations of value. During crises, when effective demand for all commodities falls, there is a tendency towards a generalized decline in prices; this is one of the forms of devaluation that capital undergoes in crises of overproduction.

The same thing happens to the commodity known as labor power. What the proletarian exchanges for his labor power is his wage, which is the price of his labor power. We have seen that the value of the latter is constituted by the time it takes to produce and maintain it. For example, time devoted to extensive training for a higher skill level, but also the rapid wear and tear inflicted on the workers due to a longer working day or a more intense pace of work, tend to increase the value of labor power. We also have to take supply and demand into consideration, however, as they cause the variation of prices around that average value. If there are few workers with the sought-after skills, and demand for those skills is strong, labor power will tend to be sold above its value, that is, at a higher price; if, to the contrary, there are many workers, as in a period of high unemployment, wages will tend to fall, and labor power will be sold at a price below its value.

Besides the unemployment caused by crises, Marx shows that capital maintains an “industrial reserve army”, a surplus population whose role is to maintain constant pressure to keep wages low.

In its perpetual search for the maximum of surplus value, the capitalist class attempts to drive the price of labor power below its value, and to reduce that value itself. For example, during the 19th century, the British capitalists praised the frugality of the French worker, who was malnourished and therefore cheaper. These same capitalists, with the introduction of cheaper products into British diet, sought to reduce the value of labor power. And Marx wrote: “In our day these aspirations have been left far behind, thanks to the cosmopolitan competition into which the development of capitalist production has thrown all the workers of the globe. It is no longer a case of simply reducing English wages to the level of those of continental Europe, but to reduce, in a future more or less close at hand, the European level to the Chinese level.”

3.6 The Constituent Elements of Capital

The concepts we introduced above—labor power, surplus value, wage—are fundamental in the critique of political economy, but one must also see the movement of capital as a whole, and the contradictions this movement manifests, in order to understand why and how it is historically condemned.

The capitalist only advances the wage. To be in a position to exploit labor power and to extort from it a maximum amount of surplus value, he must also possess means of production: machines, raw materials, energy, buildings and urban real estate, and rural land in the case of agriculture … these things are what Marx called constant capital. Such capital is called constant because it only transmits its value to the product during the course of the production process. Meanwhile, the part of capital that is advanced to pay wages is called variable capital, because it returns a variable value, beyond its initial value. This part of capital, however, can yield a greater value only because it is exchanged for labor power, which is the only commodity that is capable of producing more value than it costs.

Thus, commodity production that proceeds on an everyday basis in a factory will be composed of:

• one fraction of value takes the form of machines, more generally known as fixed capital (the fixed part of constant capital) (this value is not transmitted all at once, but gradually, and is what economists call amortization).

• the value of the raw materials, fluids, etc., that enter into the product; this is what is called the circulating part of the constant capital.

• the value of the wages paid to the proletarians, which corresponds to the variable capital. This is the paid portion of the working day. Marx calls it necessary labor.

• finally, the surplus value produced during the working day by these same proletarians. It corresponds to the part of the working day that is composed of surplus labor.

Therefore, the value of the commodity is reduced, finally, to the quantity of labor that it contains, that is, the quantity of labor time that was necessary to manufacture it, with all the above components mixed together. The raw materials that were transformed were also produced by labor and therefore acquired an exchange value in the capitalist mode of production. This value (just like the used-up fraction of the fixed capital) will merge with the value that is created in the production of the new commodity. Marx says that the value of this constant capital is transferred to the product.

Here we can clearly see one of the difficulties that capitalism must face, which we shall address in the next chapter when we explain the role of machinery. To make labor more productive, capitalism has a tendency to increase the share of constant capital in production; but this part does not create new value; it only transfers value that already exists.

The relation between constant capital (c) and variable capital (v), expressed in the formula c/v, represents what Marx calls the organic composition of capital. The fact that this organic composition rises (that is, the mass of constant capital undergoes a proportionally greater increase as opposed to the mass of wages mobilized to set it in motion), constitutes a factor of contradiction in capitalist production, as the only goal of the latter is surplus value, which is only produced by living labor. We shall see below the consequences that this has for the rate of profit and its development.

But what methods can capital employ to further extend its search for surplus value?

Historically, Marx distinguishes two methods: the production of absolute surplus value and the production of relative surplus value. These two types of surplus value are not necessarily mutually antagonistic. They can be combined, and they can also reinforce each other. In any case, absolute surplus value can only exist in conjunction with a certain level of development of the productive force of labor, and relative surplus value can only exist if the working day is long enough. Since each type of surplus value forms the basis for the other type, they are distinguished by the historical development of their relations.

3.7 Absolute Surplus Value and Relative Surplus Value

In its early days, when capital was beginning to take over production on the basis of the expropriation of the traditional producers (artisans, peasants, etc.—a process that we shall examine more thoroughly in the third chapter), it began by prolonging the working day. Labor in agrarian economies was certainly arduous, and years with bad harvests brought hard times, but if the peasants spent a lot of time in the fields, there was also a lot of leisure time: breaks, lunch, snacks, repair jobs in the winter…. It was, after all, a natural rhythm that dictated the organization of labor and its development over time.

In work as it was conducted in the early manufacturing firms, which emerged in Europe in the 16th century, this rhythm was often considerably transformed, and it would undergo even more changes with the transition to large scale industry at the end of the 18th century.

An initial augmentation of productivity is obtained due to the fact that numerous bearers of labor power are concentrated in a single location. This enhanced productivity makes the system of manufacture more competitive, even if it only utilizes the techniques employed by artisans, by concentrating them and rationalizing their use. On this basis, the only way to obtain any further increases in the employer’s share of unpaid labor is to prolong the length of the working day.

Marx calls the surplus value that results from this prolongation of the working day, absolute surplus value. For example, if the working day is 12 hours and 6 are necessary to reproduce the value of labor power (necessary labor), the working day must be extended from 12 to 14 hours if the employer wants to gain two more hours of surplus labor. We would then have 6 hours of necessary labor and 8 hours of surplus labor. Surplus labor time, i.e., the surplus value, would have been increased by one-third, without altering the necessary labor time, while the added expenditure of labor power is not remunerated.

During the period before the industrial revolution, capital had no other option than to privilege this form of surplus value. On the limited technical basis that prevailed at that time in the system of manufacture, however, labor time could not be extended at will. In addition to physical limitations, technical constraints (for example, the absence of enough illumination to allow for night work), cultural restrictions, social rhythms and customs that fostered resistance to this trend also played a role.

Capital had to wait for the introduction of machinery before it could generalize other methods for increasing the quantity of surplus value. By creating a technical base specific to capital with machinery, by eliminating human labor from the process of production, capital, on the basis of large scale industry, gave itself the means to increase the quantity of surplus value produced by reducing the value of labor power with the growth of productivity.

This surplus value that is obtained, no longer by extending the absolute length of the working day, but by diminishing the value of labor power or by modifying the relation between surplus labor and necessary labor, and therefore by modifying the relative magnitudes between the two parts of the working day, without prolonging the working day, Marx calls relative surplus value.

Necessary labor is, just as its name implies, necessary for labor power to reproduce its own value; beyond that, it produces surplus value. In order to allow for a relative increase of the part destined to become surplus labor without increasing the length of the working day, the time spent in the reproduction of the value of labor power must be diminished, or a situation must be created in which the value created during a working day of the same duration should increase while the value (or the price) of labor power does not rise to the same degree.

Thanks to a general increase in the productivity of labor, capital can reduce the value of the commodities that enter into the reproduction of the value of labor power; the latter’s value falls, and therefore so, too, does the length of time necessary to reproduce that same labor power. Let us continue with our previous illustration, where the working day is 12 hours, with 6 being necessary labor and 6 surplus labor. Let us assume that the general increase of the productivity of labor reduced the duration of necessary labor to 4 hours. The time spent producing surplus value would therefore be 8 hours instead of 6. Capital would have succeeded in increasing the mass of surplus value produced by 33%, without prolonging the working day.

Also, by increasing the intensity of labor, capital increases the value created in the same amount of time. In this case, as long as the value of labor power (or its price) is still the same, or does not rise in proportion to the increase in surplus value, surplus value will grow.

3.8 Productive and Unproductive Labor

Marx, like many of the classical economists who preceded him, such as Adam Smith, distinguished between productive labor and unproductive labor. The definition of productive labor within the framework of capitalist production is very clear: productive labor is labor that produces surplus value for capital. To put it another way: the expression “productive labor” does not mean “labor that produces something”—if this were so, then anyone who putters around their house or likes to cook at home would be “productive”—but rather, surplus value producing labor.

This question is crucial, because it profoundly encapsulates the entire problematic of exploitation, and the definition of classes and class struggle. The proletariat, the productive class, is also, in the capitalist mode of production, the only exploited class. It is a matter of contraries: if there is productive labor, then there must also be unproductive labor and unproductive workers. For example, when the capitalist owner of a custodial services company employs ten wage workers who clean offices, their labor is productive labor. But when this same capitalist uses his own revenue (which, when used this way, is no longer capital) to hire a woman to clean his house, he does not employ productive labor, for the reason that, in the course of its consumption, this labor produces no surplus value.

Thus, one of the first criteria that should guide us in determining whether a job (and therefore a worker or a group of workers, since the individualization of the question is of little interest in itself) is productive or unproductive, involves ascertaining whether it is exchanged against capital or against revenue (the latter being the case, for example, with the bureaucracy and the civil service as a whole).

Labor can, however, be exchanged against capital, and from this point of view it could yield a profit for the capitalist without consequently being productive. This is the case with all jobs in the sphere of circulation (banking, commercial middlemen, etc.) and those dedicated to the incidental overhead costs or faux frais of production (insurance, accounting). Consequently, the labor that produces surplus value and is therefore productive is the labor that is exchanged against capital in the sphere of material production.

This implies that:

1. While every productive worker is a wage worker, not every wage worker is a productive worker. Marxism shows that, while the wage labor force is growing, it is its unproductive sector that is growing more rapidly, creating a material basis for the emergence of the modern middle classes, the wage earning middle classes. The middle classes of the past did not come from the capitalist mode of production and tended to disappear. On the other hand, even if they do not produce surplus value, they can produce value (for example, peasants and artisans).

2. Productive labor is not identical with labor that produces a tangible good or a concrete object.

3. Productive labor is not the same thing as manual labor. The proletariat is not exclusively comprised by the socio-professional category, “blue-collar worker”, or, to put it another way, the concept of the working class in Marx is not restricted to manual workers. The same kind of confusion arises when industrial capital is wholly conflated with the industrial sector strictly speaking. In fact, agriculture as well as the service sector can depend on industrial capital and allow for the production of surplus value.

4. Productive labor is not the same thing as the production of socially useful objects. The proletarians who produce weapons or luxury goods produce surplus value and are therefore productive. For precisely the same reason, unproductive labor does not mean labor that is useless or socially harmful. For example, communist society will need to perform social accounting, the role of which will be all the more important as its cost will be much lower.

5. It is pointless to individualize the idea of productive labor. Marx shows that what characterizes capitalist production ever since its infancy, is the existence of a collective worker (see above, on “Cooperation”, “Manufacture” and “Machine Industry”) that engages in material production.

6. The wage earning middle class is not characterized by an intermediate wage level, as bourgeois sociology believes. The highest layers of the proletariat, or its most highly-skilled fractions, can earn more money than many representatives of the middle class. The difference between them lies in the productive or unproductive character of their labor, rather than how much they are paid.

3.9 Formal and Real Subordination of Labor to Capital

With regard to the development (and not just the development) of the capitalist mode of production, Marx employed the concepts of the formal subordination and the real subordination of labor to capital. In this context, labor means productive wage labor; he is therefore addressing the way the proletariat is subjected to the authority of capital.

What do these terms, which are somewhat complicated and whose significance is regularly falsified, really mean?

At first, capital could only be invested in what its owners found all around them, amidst the conditions of production of the society of their time. Labor was therefore performed for the most part with tools whose technical features were rooted in tradition, like the spinning wheel and the weaver’s frame, and the hand-tools that were used in traditional trades (carpentry, masonry, pottery, shoemaking…).

One of the essential roles of capital was, during its first stage, to concentrate in a single location (workshop, manufactory and, later, the factory) large numbers of bearers of labor power, thereby achieving an improvement in the general productivity of labor (see Chapter Thirteen of Vol. I of Capital, on “simple co-operation”), a trend that continues when the technical division of labor is widely implemented. This increase in the productivity of labor, which was made possible by simple cooperation and then by the division of labor in the era of the manufacturing system, allowed for the increase of relative surplus value. Once these organizational systems of labor were introduced, however, since the advance of the productivity of labor is limited, the growth of surplus value can only be obtained in the form of absolute surplus value.

Generally speaking, during this first period the prevailing technical methods are not radically modified. The labor process, and the various stages involved in producing goods, were still identical to or very much like those that were typical of the craftsmen of the pre-capitalist era. This is what Marx meant by the formal subordination of labor to capital. With regard to its form, the labor process remains the same, but it is subjected to the valorization process of capital. In other words, the spinner or the weaver who worked alongside other spinners or weavers in the capitalist’s workshop performed the same gestures with the same tools, but their social relation with these tools and with the product of their labor has changed. While the labor process was inherited from the forms of production that preceded capitalist production, it is now subjected to capital and to its exclusive goal: to produce the maximum of surplus value.

With the formal subordination of labor to capital, the scale of production grows. A large number of workers are gathered under the command of capital. This formal subordination of labor to capital therefore corresponds to the origins of the capitalist mode of production, and its existence is predicated on the fact that the labor of the wage workers is based on a pre-capitalist technology. Simple cooperation, like the era of the manufacturing system, is therefore typical of the formal subordination of labor to capital, for although its goal is always to produce the maximum of surplus value, the labor process has not been fundamentally transformed.

For this reason, in the framework of the formal subordination of labor to capital, once a certain level of development of the productive force of labor is stabilized, surplus value can only be produced under the form of absolute surplus value. On the basis of the techniques employed before capital entered the field of production, the extraction of surplus value could only be increased, once the new organization of labor that made labor more productive was established, by resort to such procedures as the prolongation of the working day. The formal subordination of labor to capital knows only this form of surplus value production.

Socially speaking, we now have before us the fully established capitalist mode of production, that is, we have a social relation that chains the proletarian to an instrument of labor that stands outside of him, and against him, as capital. From this perspective, the formal subordination of labor to capital is a general form of the capitalist process of production. Technically speaking, however, this form of capital has not yet modified the general forms of the labor process; its technology is not yet specific to, or strictly characteristic of, the capitalist mode of production.

With this first concentration of the means of labor, however (simultaneously uniting the constant capital, with its tools and raw materials, with the variable capital and its proletarians), and with the division of labor that soon followed this concentration, the foundation was laid for the development of a form of technical progress that was characteristic of the capitalist mode of production. In order to drive the extraction of surplus value to a higher level, it was not enough to make men work longer hours, they had to be made to work in a different way.

Marx therefore spoke of a moment when capital really dominated labor, that is, when it developed a technology that was really its own, dictated by the specific goal of capital: the production of a maximum of surplus value, a form of production that was no longer the legacy of the old forms of production.

Thus, the real subordination of labor to capital is an intrinsic form, truly characteristic of the capitalist mode of production, its most highly developed form. It includes the formal subordination of labor, because, in its general contours, which consists in the fact that it subjects a significant number of workers to capital, this characteristic endures throughout the entire lifespan of the capitalist mode of production. The formal subordination of labor to capital has a specific dimension which is, on the one hand, characteristic of an already-concluded historical epoch of the capitalist mode of production, but it also has a general dimension that endures throughout the entire history of this mode of production and which is inscribed within the framework of real subordination. In a way, the real subordination of labor to capital succeeds the formal subordination of labor to capital, yet it preserves it and establishes it at a higher level. With the real subordination of labor to capital, the production of relative surplus value can really begin to flourish and with it, the extraordinary growth of the exploitation of the proletariat.

The capitalist mode of production therefore underwent a historical transformation that led it to develop towards an increasingly more “pure” model, although this model is never completely realized. All branches of production fall under the rule of capital, which prevails in its battle against the independent producer. Marx says that capital is “value in process”, value that valorizes itself. This expression, which is of a philosophical nature, is abstract, but this motion is embodied quite concretely in the insatiable quest for surplus value, a quest for which the capitalist mode of production sets in motion the productive forces and attempts to take advantage of all the results of science and technical development in order to place them at the service of this valorization process, and of this quest for the maximum of surplus value.

It is by way of the development of machine industry, with the industrial revolution, that the formidable increases in productivity are made possible which the capitalist mode of production puts at the service of the production of surplus value and which communism will place at the service of the reduction of working time and its tedium in order to allow human beings to enjoy their free time without dreading the arrival of the next day.

3.10 Rate of Surplus Value, Rate of Profit and the Tendency of the Rate of Profit to Fall

We must now probe more deeply into the general process of capital and understand how the principles upon which it is based are the very same factors that lead to its downfall. In short: the more capital seeks surplus value, the more obstacles it encounters in the growth of that very same surplus value.

When he relates surplus labor to necessary labor, and surplus value to variable capital, Marx speaks of the rate of surplus value, which is defined by the ratio, s/v (the mass of surplus value produced divided by the variable capital advanced). This is a measure of the degree of exploitation of labor power by capital.

Let us suppose that the capitalist advances 100 euros of variable capital for a working day of 8 hours, and that 4 hours represent the necessary labor. At the end of the day, the value corresponding to realized living labor represents 200 euros, and the capitalist will be able to pocket a surplus value of 100 euros. We would say that the rate of surplus value is 100%.

But when it comes to the preconditions for the production process, living labor, labor power, is not enough. It produces only because it sets dead labor in motion, in the form of the means of production (machines, raw materials…) that we have referred to, following Marx, as constant capital (c).

If we relate our 100 euros of produced surplus value not only to the 100 euros of variable capital (v), but also to the total amount of advanced capital, that is, c + v, we do not get the same result. If the amount of constant capital advanced is 100 euros, it must be related to the produced surplus value, which is also 100 euros, so that 100c + 100v = 200.

The rate of surplus value is always 100%, but the rate of profit, which is represented by the ratio, s/c + v, that is, the surplus value divided by the total amount of advanced capital (c + v) is no more than 50% (100/200). We see here that, by definition, the rate of profit is lower than the rate of surplus value.

Among the preconditions for the development of the capitalist mode of production, however, we must include the development of machine industry and of the productivity of labor that accompanies it and results, as we have seen, in a rise in the organic composition of capital.

Let us suppose that our capitalist buys more expensive machines that allow him to increase the productivity of labor and which require fewer workers to operate them. At the same time, all other factors remaining unchanged, if productivity increases, the mass of raw materials and intermediate products used by the same labor power rises in tandem. We would therefore have the following situation (abstracting from the modifying effects of productivity):

200 c + 80 v + 80 s

The rate of surplus value (s/v) is still 100%, but the rate of profit has fallen to 28.5%.

Marx defines this phenomenon as the tendency of the rate of profit to fall. It is the most important law of political economy. It is a tendency because, like every law, its action is modified by particular circumstances. It is also affected by counter-tendencies. It is only manifested over the long term and in certain circumstances. If there were no counter-tendencies, capitalism would quickly collapse.

Among these counter-tendencies, Marx calls attention to:

• the increase in the exploitation of labor, by way of rising productivity and the constant intensification of the labor process itself.

• the depreciation of the elements of constant capital: what we said about the value of v also applies to c. Let us suppose that, in order to make a machine, it used to take 50 hours of labor, but now it only takes 25 hours. The value of the constant capital represented by this machine has fallen by 50%. Likewise, if rising productivity diminishes the labor time needed for the production of raw materials and intermediate products, their value falls. Capital has been able to raise its technical composition, by slowing down the increase of its value composition. This is why, in defining the organic composition of capital, what is being addressed is the value composition insofar as it reflects the technical composition.

• relative overpopulation. There is a fraction of the population in society that is unemployed or sporadically employed, which retards technical progress because capital would rather employ low-paid workers than invest in modernization. This is the case in luxury industries generally, and the tendency to the expansion of the luxury industries follows in the wake of the expansion of capital, mainly to satisfy the needs of the upper middle classes. Generally speaking, the growth of industries that employ more living labor than average contribute to slowing down the tendency of the rate of profit to fall.

3.11 The Cycle of Accumulation

Capitalist production takes the form of a circular movement, a cycle. This cycle is as follows:

Money (money capital advanced by the capitalist)—Commodity (purchase of the means of production and labor power)—Production (the production of commodities in the actual process of production)—Commodity (commodities generated by the production process, offered for sale. Their value is higher than the value of the commodities that entered the process at first since they include surplus value)—Money (the realization of the value of the commodities in money. At the end of the cycle, there is more money capital than was advanced at the beginning of the cycle. It has been augmented by surplus value).

The capitalist advances capital in the form of money, he converts it into means of production and labor power, in order to be able to produce commodities. These commodities, however, are no good to him if he cannot sell them. To put it another way, the movement of transformation of money capital into commodity capital is pointless without the continuation of the movement: the transformation, the realization, of the commodity capital in money capital, increased by the surplus value that was produced.

As the phrase, “cycle of accumulation”, implies “circulation”, it is a circular movement, in principle endless. We would be remiss, however, if we did not take a look at what happens in the different moments of the cycle. It can be compared with the cycle of water. It can undergo all the metamorphoses that are required for the completion of the cycle, but there is a big difference between its different states, which can profitably be studied separately. Water, water vapor produced by evaporation, clouds, rain and water again; it is always the same material (H2O), manifested in different forms.

In our inquiry, it is capital that is presented in diverse forms and passes from one to the other. From the money form to the form of productive capital (means of production and labor power), to the commodity form, and once again to the money form.

In this movement, capital realizes its goal, its “supreme end”: to produce the maximum of surplus value. That is, the capitalist is not trying to recover the sum he invested in production, but to obtain more than he invested.

We must not forget that everything that lies behind these objects (money, commodity) is capital. The capitalist invests his capital in production and that capital undergoes metamorphoses, it is constantly changing: at one time it has the form of money, another time it is means of production (machines, raw materials, labor power), then it takes the form of a commodity destined for the market, where it is restored to its money form, and so on. If the rhythm of this movement is steady and sustained, there is no problem, but if the time that elapses between two metamorphoses grows too long, there is a risk that the cycle will be broken. This is what happens in crises: if the commodities that have been produced cannot be reconverted into money, and therefore capital cannot follow its cycle to be reincarnated in money and to be re-invested, it is idled, and the threat of devaluation looms. This is why, for Marx, crises are crises of overproduction: there is too much capital, too many commodities have been produced that cannot be realized. On the one hand, if money capital does not obtain enough surplus value, it will not accumulate. The absence of realization as the absence of the conversion of money capital into the elements of productive capital (means of production and labor power) are two aspects of the same phenomenon that is characteristic of general crises of overproduction, that is, the economic crises that are typical of the highly developed capitalist mode of production (the first such crisis took place in 1825).

But what will the capitalist do with this surplus value if he does succeed in realizing it? If he were to spend all of it, there would be no accumulation. In order to pursue its objective, the production of a maximum of surplus value, this surplus value must be, at least in part, capitalized, that is, re-transformed into capital, in order to initiate a new cycle of production on an enlarged scale. If, at first, the capitalist does have enough money to invest it in production, we have seen that it was also necessary for him to have means of production and labor power at his disposal. Since he has an additional sum to inject in turn into production, he has to find additional means: other machines, raw materials and other labor power.

This forms the basis for the movement of capital, of the accumulation of capital. Marx calls it extended reproduction, and compares it, quoting the words of the bourgeois economist, Sismondi, to a spiral.

This is how the preconditions for the development of capitalist society were created. It is not enough to have money, this money must have someone who will employ it usefully, as capital.

In other words, the capitalist must be able to transform money into means of production and labor power in the market. We have already mentioned, along with the commodity, the division of labor, the precondition sine qua non for effective exchange in accordance with a common pattern: its value can be reckoned in contrast with the labor that would have been required to reproduce it at a lower level of organization in the past. Now we once again cross paths with the division of labor, but this time on a social scale. There must be industries that complete the picture: some produce machine-tools, others produce raw materials, electronic components, etc. There must also be a class of free workers who can pass under the authority of capital, to supply productive labor. The process of production is therefore also a process of reproduction of the capitalist relations of production, a process of production and reproduction and of their expansion. And this expansion is becoming increasingly more unfavorable for the productive class.

The bourgeois economists who preceded Marx understand none of this, and this is all the more true of our contemporary economic professors. They think that the additional value that the capitalist recovers comes from the sphere of commerce, which is why a commodity can be sold for more than its value, by means of which one can pocket a surplus value, or they imagine that the means of production are inherently endowed with the ability to produce value, a faster machine will produce more value, as will land that is more fertile, new inventions, etc…. We have seen, however, that surplus value is created in the sphere of production, by the productive wage workers. This is not price gouging, but the product of the exploitation of the proletarian class.

Marx criticizes his adversaries with regard to another point: the economists. The latter, as good defenders of bourgeois law, always see the relation between the capitalist and the worker from the point of view of the contractual relation between two persons. This relation must not be viewed from an individual point of view, however, but rather in such a way as to discover how the relations between the two classes, that is, all the capitalists against all the proletarians, are held together.

The purpose of this movement of capital known as accumulation is the acquisition of the maximum of surplus value. It is an absolute necessity for capital to constantly expand production since it is the basis for capital’s valorization; this means that a value invested in production only has a reason to exist if it yields, once it leaves the productive process, a higher value (composed of the value advanced and the surplus value). Capital, as Marx says, is value in process, value that remorselessly seeks to increase its own magnitude; that is the only way it can be within the logic of capital accumulation.

3.12 Economic Relation and Relation of Exploitation

Bourgeois political economy, like the bourgeois labor laws, views the transaction that takes place between the worker and the capitalist as an equal relation of two possessors of commodities who exchange their goods: in this case, the ability to work for a certain amount of time (labor power) is exchanged for money (the wage).

Marxism, however, reveals that exploitation lies concealed behind the equality of this transaction, and that this relation of exploitation is reproduced and perpetuated. On the one side, the process of production never ceases to produce and reproduce capital; on the other side, the worker emerges from that same process the same man he was when he entered it: an individual source of social wealth, utterly lacking his own means of realization. His labor, which becomes the property of the capitalist, can only, obviously, be realized in the process, in products that slip through his hands.

Capitalist production, insofar as it is at the same time the consumption of labor power by the capitalist, endlessly transforms the product of labor, not only into commodities, but into capital, into value that channels the creative force of labor into means of production that dominate the producer, and into means of subsistence that the worker himself buys. The continuity alone, or the periodic repetition, of the capitalist process of production reproduces and perpetuates its basis, the worker in his quality as a wage worker.

3.13 Profits and Superprofits

At the level of society as a whole, the productive class engenders a growing mass of surplus value; this surplus value is shared out among the different fractions of the ruling class in various forms. In particular, in the individual enterprise it takes the form of profit.

Today, the term, “profit”, is often employed in a moral sense, as the equivalent of a parasitic “commercial” profit: thus, the fact that someone would sell a commodity for more than its price of production for gain, or profit, is condemned. In the scientific terminology of Marxism, however, profit, in its totality, is by no means to be equated with commercial dishonesty. Profit is a fraction of the surplus value. All commodities, taken as a whole, are sold at their value, and it is because they are sold at their value that, taken as a whole, the capitalists can appropriate surplus value.

This surplus value is basically divided into profit and rent, thus drawing a line between the class of capitalists and the class of landed property. Within the capitalist class, the profit will be shared out among the capitalists in proportion to the capital they advanced (equalization of the rates of profit). Capitalists in trade and commerce therefore obtain an average rate of profit that is equal to the general rate of profit, the same as the industrial capitalists, even if their effective contribution to the production of surplus value is less. The same profit will be divided between the enterprise profit and the interest that has to be paid to the capitalist financier. But that is not all. Taxes are the lifeblood of the State, and they lay claim to part of the surplus value (but also to part of the social wage). Nor should we forget that the wages of the tasks of supervision and management that are attributed to the capitalists and the wages (and means of production) of the unproductive classes, are just so many other forms of surplus value.

Surplus value is therefore shared out, on the scale of society as a whole, among the different dominant classes, and within the bourgeoisie itself among its different fractions, and it even reaches other layers. Marx stridently insists, however, on the single origin of this mass of surplus value, which is then shared out among the different protagonists. At first, it is the industrial capitalist (this term applies to capital employed in any sphere whatsoever and not just the capitalist of manufacturing industry) who guarantees the production of surplus value thanks to the exploitation of productive wage labor. Contrary to the assertions of the currents of the petit bourgeois critique of capitalism, it is not the banks or the world of finance that is the enemy, as opposed to the “virtuous” industrial capitalist. The capitalist mode of production is not based on finance, but on the production of surplus value and its accumulation thanks to the exploitation of the proletariat.

Theoretical considerations with respect to agrarian questions also provided Marx with an opportunity to address the issue of the various forms of superprofits. In view of the fact that they are derived from productivity differentials, social monopolies like landed property in the countryside, or from monopoly pricing strictly speaking, by the fact of a demand that is greater than the supply (because of a relative scarcity, as in the case of fine wines, or because such scarcity is deliberately created—by trademark and patent claims, for example), they are exemplified in the different forms of land rent. Far from constituting a theoretical novelty or a particular phase of the history of the capitalist mode of production, Marx shows how average profit and superprofits, and competition and monopoly, are articulated on the basis of the action of the law of value.

3.14 Fictitious Capital

Alongside the accumulation of real capital, another form of capital also developed, which Marx, following in the footsteps of other economists, calls fictitious capital. At first this term embraced legal claims to fractional ownership interests (stocks, IOUs, government debt, letters of exchange…) that corresponded to real capital that had been loaned (it does not matter to whom it was loaned). Since these claims can be alienated (for example, at the stock exchange, at a bank or at a brokerage firm), they are the objects of particular kinds of market, which are subject to specific laws. In such markets, a hurricane of speculation takes place that allows some of its participants to pocket some of the surplus value.

For petit bourgeois socialism, this sphere is the root of crises, and the acquisition of surplus value from speculative activities and interest payments (or from dividends in the case of stocks) in return for the loaned capital, are the consummate forms of exploitation. We have already seen, however, that these aspects of capitalism are only various forms of surplus value (at the same level as profit, rent, taxes, the wages of the unproductive classes…). Surplus value, once it has been extracted in the productive sphere, is the object of competition and the play of relations of force in order to determine how it will be distributed. The communist movement seeks to abolish wage labor and other commercial categories, rather than seeking to rein in the most blatant manifestations of social parasitism.

Another meaning (meaning II) of the term, “fictitious capital”, concerns the fraudulent use of borrowed capital. Once the money is loaned, it is dissipated by the borrower, who does not put it to work as capital. Besides professional thieves and con artists, we must not forget that the line between a business facing difficulties that is trying to get a loan in order to weather a bad stretch, hoping that business will pick up, and the business that is buried under hopeless debts, is a fine line indeed. In this respect, the State itself, the biggest creditor by far, which is in such a hurry to spend money as revenue, may very well be viewed with suspicion. History is riddled with its bankruptcies and debt restructuring plans; which situates it, in this sense, among the great providers of fictitious capital.

One last aspect of the idea of fictitious capital (meaning III) resides in the excessive creation of debt. In order to realize the additional surplus value, new means of payment must be created. When they exceed the capacities of accumulation (since there are other markets, they must necessarily exceed these necessities) and, on the other hand, it is in the interest of the banks to loan as much money as possible, since they consider that their risk exposure is limited (ignorance, greed, State guarantees, technical manipulations in both financial engineering as well as computerized decision making … would be factors that will reduce this risk, whereas at any given moment they might amplify it), the growth of credit is accompanied by the growth of excessive creation of debt. This phenomenon leads to the inflation of commodity prices, inflation of fictitious capital (in meaning I, claims and titles to ownership), inflation of land rent (the price of land and of real estate investment shares), inflation of fictitious capital (in meaning II), and, in short, to the inflation of social parasitism. When inflation is transformed into deflation, these phenomena, which are themselves vectors of crisis, only comprise one aspect, among the most visible features, of the crisis of overproduction whose origin lies at the heart of capitalist production.

4. The Dynamic of Capitalism and Social Classes

4.1 The Discovery of Capitalist Mystifications

Marx, in his time, performed a task that was both scientific and revolutionary. Scientific, because he revealed, beyond the phenomena recognized by the various protagonists of society, the deep foundations, and provided an explanation that broke with the interpretations of the bourgeois economists of his time; revolutionary, because he was able to discern, behind the functioning of the capitalist economy, what it was that created the material preconditions for the revolutionary break. Furthermore, his scientific work could only be situated on a revolutionary point of view, on the point of view of the proletariat and of the society of tomorrow: communism. This is why Marx’s fundamental works on economics bear the subtitle, “critique of political economy”.

More than a century and a half after its birth, the materialist conception of history is still facing an uphill battle for acceptance. On the defensive since the end of the 19th century, reinvigorated by the Russian Revolution, and then annihilated by the counterrevolution that followed the crushing defeat of the revolutionary wave of the 1920s (the defeat of the German, Hungarian, Chinese revolutions … and the Russian regression and counterrevolution with the victory of Stalinism), Marxism is not yet done learning the lessons of the defeats of the proletariat. The systematic re-contextualization of concepts, theoretical elements and conclusions that have been advanced for almost a century and a half, and the application of the results of this endeavor to the understanding of the developments and transformations of the contemporary capitalist mode of production, are imperatives for the cause of the emancipation of labor.

4.2 The Evolution of Social Classes

The evolution of social classes, and, among those classes, that of the productive class, constitutes one of the most important questions that Marxist theory now faces.

The 20th century was simultaneously the most vital and the most deadly century in history. The world’s population quadrupled and people lived much longer, while the century’s wars claimed 120,000,000 victims and malnutrition affects 800,000,000 people (at the other extreme, 300,000,000 are obese) with its entourage of tragic consequences (shorter lifespan, infant mortality—6,000,000 per year—physical and mental illnesses…).

The capitalist mode of production has grown even faster than the population. The proportion of wage workers in the world’s working population is constantly increasing and now accounts for the majority. In the countries where the capitalist mode of production is most highly developed, wage workers represent 80-90% of the working population. The proletariat has become the majority in society. The social classes of the past, independent peasants, artisans and small-scale entrepreneurs, are disappearing. Their alleged “independence” is often only formal, and their existence is restricted to the pores of bourgeois society. In the worst case, their activities are merely the effect of generalized precariousness and unemployment.

Take agriculture for instance: it is still the world’s number one employer, but its workforce no longer represents the absolute majority of the active population. A large proportion of this agrarian population, such as the small scale peasantry, certainly produces value, but not surplus value. It does not have a wage relation with the capitalist, but has a relation with the landowner when it is not itself the owner of the land it cultivates. In the most highly developed countries, it only accounts for a very small part of the active population, whereas it was the majority in Marx’s time. Within this sector, wage workers are playing an ever greater role. The capitalist mode of production is becoming more involved in agriculture, it submits it to its own laws, it ruins the peasantry, who then join the industrial reserve army, and swell the ranks of the urban population.

Besides the proletariat, the capitalist mode of production has two other basic classes: the capitalists and the landowners. The analysis of the formation of prices in agriculture and in the sphere of the production of raw materials shows that it is the least fertile, or most inaccessible land (for mines or surface extraction), that sets the prices of production, and that market prices oscillate around this price. In the capitalist mode of production, the relative prices of raw materials and resources that are indispensable for survival are therefore higher than the prices of any other commodities; industrial luxury is easier to produce than agricultural necessities. Also, the monopoly of ownership of the land further exacerbates this process, by serving as a brake on the development of productivity in these spheres of production. Beyond these phenomena, we also have to take into account the particular effects linked to monopoly pricing in the strict meaning of the term (for the finest wines, for example).

The examination of these different phenomena shows just how disastrous the capitalist mode of production is for the social metabolism.

The contradictions of the capitalist mode of production drive the antagonism between the city and the countryside, and the imbalances between the urban the rural worlds, to a fever pitch. This contradiction becomes so pronounced that the bourgeoisie, incapable of bringing about a harmonious distribution of the population over the territory, is forced to assume responsibility for, to feed and to control the movements of the populations that have been rejected by its system of production. Thus, the masses expelled from agrarian regions pile up in the suburbs of the megalopolises.

Urban rents, however, are skyrocketing; in France, for example, they have long ago surpassed by far the level of rural land rents. Although buildings (for housing or for productive activities) occupy a much smaller surface area than agricultural land, their general price is higher, and the relation between the price per square meter of the best residential or office space and that of the worst agricultural land is constantly rising. At this point in time, in France, the ratio of this relation is on the order of 1,000,000:1. In the better neighborhoods of Paris, the price per square meter easily reaches 10,000 euros, while the worst agricultural land can be bought for around 1,000 euros per meter. Taking the most extreme cases, one could easily multiply this figure by 10 to arrive at the actual discrepancy.

Bourgeois society will never be able to correctly feed humanity, nor can it provide it with decent housing, nor can it be a good caretaker, from the point of view of the general interests of the human species, of the land, the forests, the soil, and the health and the well being of the people, the metabolism between man and nature.

4.3 Middle Classes: Past and Present

What is true of agriculture is also true of industry and the services; the influence of wage labor is spreading and makes the rule of the capitalist mode of production increasingly more obvious with each passing day. Outside of the peasantry, the artisanal sector and retail commerce, which is still thriving, which represent the classical historical middle classes, a modern, wage-earning middle class has emerged. As we have seen, the capitalist mode of production, in its quest for surplus value, reduces the value of commodities by reducing the average social labor time that is necessary for their production. It must, however, find an outlet for this growing mass of commodities and capital must multiply the unproductive expenditures and activities in order to cause these commodities to circulate and to realize its commodity-capital in the form of money-capital (market surveys, advertising, salesmen, credit, insurance…). The time of circulation increases relative to the time of production. The multiplication of focal points of accumulation of capital with its entourage of small enterprises leads to the creation of a class of small-scale capitalists whose incomes and rents come from surplus value and therefore represent so many overhead costs proportional to their number. This is also accompanied by the emergence and further development, both in large and small enterprises, of intermediate categories which are responsible for business administration, accounting and organization.

Finally, modern capitalist societies have witnessed the considerable growth of the State and the bureaucracy. Insofar as they are paid from the State budget, that is, by way of taxes and public debt, civil servants are neither exploited (they do not produce surplus value, nor do they confront capital when they sell their labor power), nor are they proletarians. Their labor power is not exchanged against capital but against revenue. With the defeat of the proletariat in the 1920s and the rejuvenation of capital that followed in its wake (particularly after the Second World War), capital experienced decades of growth of the production of surplus value that went hand in hand with the increasing degree of skill disposed of by the labor force. This was only possible by imitating the communist program, by realizing a social democracy, in order to provide, within the limitations of the capitalist mode of production, advances with respect to the reduction of the working day, improved health care and sanitation, and educational opportunities, while simultaneously reinforcing the iron heel (police, army, etc.) and the State bureaucracy. All of these phenomena have engendered the creation of jobs for civil servants and caused the State to become a major employer of labor, and sometimes the leading employer.

All of these phenomena mean that the wage does not itself, strictu sensu, imply a relation of exploitation. When labor power is exchanged against revenue or when it is employed in the sphere of circulation, or even when it forms a part of the faux frais of capitalist production (accounting, billing, administration, etc.), it is unproductive; it produces neither value nor surplus value (even if it can yield a profit). Every proletarian is by definition a wage worker (because he has nothing to sell but his labor power), but not every wage worker is a proletarian.

The considerable expansion of the productivity of labor since the Second World War may be conceived in two ways:

In the first conception, it will be considered that this social wealth is produced by the population of wage workers as a whole. The latter receive, in the highly developed countries, a wage equivalent that varies from between one-half and two-thirds of GDP. It is then easy to conclude that the exploitation (both in absolute and relative terms) of the proletariat (in this case confused with the population of wage workers in general) is not getting worse and that the interests of capital and labor are therefore reconcilable.

In the second conception, the distinction is observed, which is crucial in Marx, between a productive fraction of the working population and an unproductive fraction; the latter may also be composed of wage workers. In this case, the production of surplus value must be attributed exclusively to the productive fraction. It is therefore considered that the production of value and surplus value is completely dependent on the proletariat, rather than on the wage earning workers as a whole. Consequently, its exploitation is, when viewed from this perspective, considerably more important than the way it is conceived in the first conception, and shows that the interests of labor and capital are irreconcilable.

The implications of this last point with respect to an evaluation of the possibility of communism are crucial; for the fact that the productive sphere is concentrated among the proletariat and is not spread among the entire wage earning labor force is testimony to an unprecedented level of productivity attained by the development of the capitalist mode of production, a productivity whose product must be wasted so that the boiler does not explode. This gives us an idea of the impressive possibilities that might issue from a reorganization of productive functions, the abandonment of useless, socially harmful sectors, and a generalization of productive labor among the members of society as a whole while reducing the individual’s working time, which would bring in its wake major changes from the very first stages of a revolutionary process.

At a time when, faced with the catastrophic prospects offered by bourgeois society, numerous currents are advocating “de-growth” [“decrecimiento” or “décroissance”—tr. note], the Malthusian restriction of the production of wealth, often in the name of ecology and protecting the planet, it is salutary to recall that the economic catastrophes that are now battering society have a social origin and that the leadership of society by the revolutionary proletariat is an absolute necessity.

4.4 The Role of the Modern Middle Classes

A large part of these unproductive wage earners comprise what are called the modern “middle classes”. The fact that they earn a wage or salary allows us to distinguish them from their predecessors in the past (artisans, peasants…), discussed above. Contrary to the claims of bourgeois commentators, the phenomenon of the expansion of the wage earning middle classes was perfectly anticipated by Marx. By living off of surplus value, that is, from the exploitation of the proletariat, these classes defend an interest that is “close to that of the exploiting classes” (Marx).

In Volume I of Capital, Marx explains the role of the managerial capitalist, defining his social function, his psychology and his development. The managerial capitalist (to distinguish him from those who only have legal claims on ownership of capital) personifies capital, he “functions only as personified capital”. It is his job to obtain the maximum production of surplus value, which in turn presupposes that he must obtain the highest possible yield from his labor force at any given time, and also that he must augment, in sheer size and extent, the accumulation of capital. Production for production’s sake, the exaltation of the constant growth of the productive force of labor by the productive force of labor, this is the job of the capitalist, “the fanatical agent of accumulation”.

The capitalist is only interested in exchange value, and this is why, among the first qualities displayed by the pioneers of capitalist development, one finds frugality, austerity, and avarice; these bourgeois “virtues” faded with the passage of time, however. The capitalist yielded to the sirens of the unproductive consumption of surplus value. It is true that the ongoing process of the concentration and centralization of capital have made the expansion of surplus value possible by means of which their consumption can be increased without making a significant dent in their accumulation. On the other hand, however, this consumption became a professional necessity; the display of their wealth is a way to obtain credit, to inspire confidence and to retain their positions in business and social circles. This tendency does have limits for the capitalist, however, and pleasure and spending money are experienced with a kind of bad conscience, for he is always aware of the contrary inclination, that he must fan the flames of accumulation.

If the capitalist were to renounce the pleasure of accumulation in favor of the accumulation of pleasure, he would renounce his function; the sanction that would fall upon the capitalist who would unproductively consume his surplus value rather than accumulate it, would be his disappearance under the blows of the competition.

From the point of view of capital as a whole, two obstacles stand in the way of the capitalist mode of production. If we imagine a society that is composed only of proletarians who confront a capital that has no other concern than the production and accumulation of surplus value, there would be a vertiginous growth of the productive forc