Deciphering Capital?

Making capital out of Capital

Do we really need another book about CAPITAL? In recent years one of the few books which have added any notable understanding and clarity to CAPITAL is Professor Andrew Kliman’s Reclaiming MARX'S CAPITAL: A REFUTATION OF THE MYTH OF INCONSISTENCY (Lexington 2007).

Kliman’s project was to reclaim CAPITAL from the myth of internal inconsistency which had been levelled at Marx no sooner had the third volume of CAPITAL edited by Engels, left the printing press. Kliman went on to show that there was no inconsistency either with Marx’s theory of the tendency of the rate of profit to fall, the transformation of values into prices of production or the Marxian theory of profit which showed that surplus value and its subsequent division into the unearned income of rent, interest and industrial profit, derived from the exploitation of the working class.

Professor Kliman’s clarification of the valid scientific status of Marx’s theory of profit is particularly important. Marx’s theory of Profit is based upon his labour theory of value and is applicable to all commodities including the commodity, labour power. The exploitation of labour power in the productive process not only generates value but also surplus value; the source of the capitalist’s profit.

The proof of class exploitation in the productive process undercuts all academic theories of profit which have been offered by academic economists since the 19th century. Not only does this include the trite nonsense that employers are “the wealth creators” but equally the fashionable theory that erroneously claims that profit derives from “the total factor of productivity” in which the exploitation of living labour is not the only source of new value.

The implication for the class struggle and the case against capitalism is that Marx conclusively shows that total profits equals total surplus value, total prices equals total value and the aggregate “price” rate of profit equals the aggregate “value” rate of profit. Class exploitation through the minority class ownership of the means of production and exchange is at the heart of capitalism. Workers will remain an exploited class while capitalism lasts as a historically formed social system with a beginning and a potential end in the class struggle. The only conclusion from reading CAPITAL is that capitalism must be replaced by socialism.

Professor Kliman‘s book was useful to socialists because it cleared away the academic debris of what Kliman called the “The disintegration of the Marxian School” (CAPITAL AND CLASS, February 2010), a modern parody of the disintegration of the Ricardian School commented upon by Marx in his THEORIES OF SURPLUS VALUE (Part 3 chapter 20). This so-called “Marxian School”, consisted of a group of academics all of whom claimed to be “Marxist” but spent their careers misinterpreting what Marx wrote about political economy. These academics claimed Marx was inconsistent and tried to correct or “improve” what he wrote while writing-off those who gave a different interpretation of Marx, in line with his own method and presentation, as “fundamentalists” who merely followed “a new Marxist orthodoxy”.

Now we have another book on CAPITAL by the Socialist Workers Party’s leading theoretician, Alex Callinicos. Alex Callinicos is editor of the SWP journal, International Socialism and professor of European Studies at King’s College London and has just written a three-hundred and twenty-four page book, DECIPHERING CAPITAL: MARX'S CAPITAL AND ITS DESTINY (Bookmarks, 2014). In his book, Callinicos tells the reader how Capital should be deciphered and read under the chapter headings of “composition”, “method”, “value”, “labour” and “crises”. It does not make for an easy read.

There are no permanent crises

In his book, Callincos acknowledges that Marx’s CAPITALis back where it belongs at the centre of a critique of political economy and modern capitalism. And he gives three useful tips on the reading of CAPITAL

* First, follow Marx’s formulation and reformulation, his orderings and reordering of economic categories like the commodity, while not losing sight of the big picture (p.22).
* Second, find out what Marx is for and what Marx is against (p.23).
* And third, recognise what Marx is saying in CAPITAL in order to help clarify the understanding of capitalism itself (p. 24).

Very few of the ensuing chapters in his book meet with the rigour of these three commendable suggestions. Nevertheless, in the chapter on economic crises we see a radical theoretical departure in Trotskyist thinking which is of interest to Socialists (see chapter 6, pp 235 to 286).

Callinicos asks the question whether Marx puts forward an economic mechanism that will produce capital’s “violent overthrow”. According to Callinicos; “there is no evidence that he is” (p. 263).

In fact, Marx holds the idea that:

…the crises, through the “violent destruction of capital” they involve, allow capitalism to “go on” – that is, to resume its course of development (p. 263)

Callinicos concludes:

Marx never sets out an economic theory of capitalist breakdown of the kind attempted by Luxemburg and Grossman ... crises interrupt rather than halt the upward expansion of the productive forces (p.263 264)

This is what Marx, in fact, wrote in his pamphlet Wages, Price and Profit at a time when he was writing the first volume of CAPITAL

…capitalist production moves through certain periodical cycles. It moves through a state of quiescence, growing animation, prosperity, overtrade, crisis and stagnation (SELECTED WORKS vol. 1, p. 440)

And to drive Marx’s point home, Callincos quotes Marx from THEORIES OF SURPLUS VALUE:

Permanent crises do not exist” (COLLECTED WORKS 32:128n)

This is not a view of Marx shared by Callinicos’s predecessors; Tony Cliff, Mike Kidron and Chris Harman. Central to their theory of crises is the belief capitalism is faced with serious and insurmountable problems generated by the tendency of the rate of profit to fall to which Marx drew attention to along with counteracting factors, in the third volume of CAPITAL(Part 3, chapters 13 to 15).

When the falling rate of profit did not lead to economic paralysis, Kidron introduced his theory of the Permanent Arms Economy to explain away why capitalism had not come to a grinding halt. Some might say that if Cliff and Harman had still been alive today then Callinicos’s book would never have seen the light of day and would have remained, in part, an unpublished doctoral thesis left for the gnawing criticism of the mice.

Why capitalism will not collapse

Professor Callinicos has taken the theoretical thinking of the SWP on crises somewhere towards the position held by the Socialist Party of Great Britain which was forcibly set out in its 1932 pamphlet “Why Capitalism will not collapse”. The pamphlet dealt with and dismissed the idea, held in the 1920’s by the Communist Party and the Independent Labour Party, that the capitalist system was nearing breakdown.

The SPGB has always insisted, with Marx, that crises are cyclical; that crises arise out of the contradictory laws of capitalist production and will not lead to the collapse of the profit system. Nowhere did Marx write that capitalism would collapse under the weight of it contractions nor did he see a “law” acting like a dead weight on the rate of profit which would lead to capitalism’s breakdown. In fact Marx saw the fall in the rate of profit as a “tendency” not a rigid “iron law”.

The socialist case for the abolition of capitalism holds true no matter wherever the profit system happens to be along the trade cycle. The continuation of the private ownership of the means of production and distribution prevents social need from being met. Therefore, capitalism has to be abolished by the conscious and political action of a socialist majority whether the profit system is passing through a boom period with low unemployment and rising wages or in an economic depression with high unemployment and falling wages.

There appears to be no causal link between periodic economic crises and trade depressions under capitalism and a subsequent rise in socialist consciousness and political action from the working class. In fact, historically, it has been quite the reverse. Whereas the material conditions of capitalism continually generates the class struggle, creating socialists and producing socialist ideas this has not been the case with economic crises. The dozens of economic crises over the last two hundred years has not seen a corresponding increase in socialists nor even a deepening of working class understanding of capitalism if the publications of trade unions and the TUC is anything to go by.

To date, economic crises and trade depressions have largely resulted in workers blaming other workers for their economic and social problems. This “blame game” has been exploited by politicians as a “divide and rule” politics which sits alongside an entrenched and deepening conservatism and the rise of fascism throughout Europe manifesting itself in attacks against migrants and refugees. The last economic crisis did not see a significant increase in the number of socialists even though it saw Marx’s reputation rightly restored and Capital being read again even by political representatives of the capitalist class like the former French President, Nicolas Sarkozy and hostile critics like Lawrence Eubank whose book WHY MARX WAS WRONG (2014) is indicative of the fear Marx’s ideas still have for the capitalist class and its political representatives.

What does count though, are socialists on the ground, a rising and powerful socialist movement and a socialist majority sending socialist delegates to parliament to capture the machinery of government through the revolutionary use of the vote. Publishing books on CAPITAL writing about Marx and attending seminars and conference has to form part of an active socialist politics leading to the growth of the socialist movement otherwise they are just abstract exercises producing nothing of any political consequence. Socialist theory and practice are interrelated; both informed by the political struggle to replace capitalism with socialism.

However, there is no short cut to socialism; there is no magic buttons to press. Instead there is hard repetitive work to convince workers of the need to establish socialism; a task made harder by workers being encouraged either to blame other workers for their predicament or to follow and a litany of reforms most of which have no chance of either being enacted or successful if implemented. Capitalism can only be replaced by the conscious and political action of a Socialist majority, without leaders through a principled and democratic socialist party.

Workers have to understand and want socialism, something which the SWP and its leadership does not exist for. What the SWP give to workers is not socialism but the pernicious politics of Leninism. During the last economic crisis the SWP did not offer the working class a Marxian analysis of the cause of mass bankruptcy, high unemployment and falling wages but fed off the workers’ blind anger and fear to boost membership of a political party which is not socialist and has no interest in making workers socialists.

Arrogantly assuming the working class were incapable of understanding the case for socialism, the SWP’s propaganda blamed the bankers for being too greedy, they told workers to take to the streets to protest against wealthy tax avoiders and they organised impotent demonstrations against the austerity cuts with no likelihood of success. No wonder the SWP has such a high turnover of membership; most of whom enter the SWP from a concern with particular social and economic problems caused by commodity production and exchange for profit not from an understanding of capitalism necessary to become socialists.

Socialist or abstract propaganda?

It is noticeable that the SWP leadership frequently produce books like “DECIPHERING CAPITAL” as a contribution to a particular “left-wing” academic political discourse to be found in the universities to the exclusion of the majority of workers. The seminars, the conferences, the papers published in “learned” journals and the discussion of political ideas circulate around a very small audience of “theoreticians” who all hold an utter contempt for the socialist critique of capitalism produced by the Socialist Party of Great Britain. The principled position of the SPGB reminds the capitalist left of its own continual failure and as a consequence of this failure we are politically hated, despised and ignored.

And it is understandable. Not only did the Socialist Party of Great Britain draw out a Marxian theory of inflation from the pages of CAPITAL and showed the mysticism of bank credit creation but also produced a theory of productivity related to the Marxian labour theory of value without the need of academics passing down theory like Moses with the Commandments. Socialists democratically produced our own theory about capitalism in the light of the class struggle. We showed the capitalist left to be erroneous on the socialist question of revolutionary Russia in 1917 and wrong on a whole number of practical political and economic questions faced by the working class throughout the Twentieth Century.

And the SPGB also showed that the capitalist left cannot be considered as part of the Marxist tradition if they choose to impose the capitalist political concept of leadership onto the working class, dismiss the revolutionary use of parliament to gain control of the machinery of government including the armed forces and dismiss Marx’s central political idea of the working class being capable of becoming socialists through their own effort alone.

So it is no surprising that the Socialist Party of Great Britain’s sound and valid explanation of economic crises and trade depressions set out some eighty-three years ago does not surface anywhere in Callinicos’s chapter on crisis. The SWP line is that the SPGB should either be ignored as though it does not exist or ridiculed as an impotent Kaustkyian sect rooted in the failed politics of the Second International.

Here is a flavour of SWP thinking on the Socialist Party of Great Britain written by the great intellectual leader himself:

… the most extreme case of the propagandism displayed by all the British left before the Russian revolution was undoubtedly the Socialist Party of Great Britain, formed as a breakaway from the SDF in 1904. Then as now the SPGB preached the utter futility of any struggle which did not have as its immediate objective the overthrow of the capitalist state. Their members’ activities as trade unionists were of no relevance to their work as socialists, since any attempt to improve workers’ conditions under capitalism was doomed from the start. The party’s task was simply and purely to make the case for socialism, on soap-boxes, in the SOCIALIST STANDARD and during the elections. For three quarters of a century now the SPGB have proved a sort of limit case of propagandism, demonstrating that those who are not prepared to sully their hands in the daily struggle of the working class are doomed to irrelevance (Alex Callinicos “Politics or Abstract Propagandism” International Socialism 2:11 Winter 1981, pp. 111:-128)

What is so “abstract” in a socialist propaganda that wants to persuade workers to become socialists and to form a socialist majority necessary for the establishment of socialism? What is so “abstract” about a socialist propaganda warning workers to avoid the futility of reformism and instead to advocate socialism and only socialism as the solution to the problems facing the working class under capitalism. And what is so “abstract” about repeating Marx’s sound advice to workers in his own day to “abolish the wages system”?

A near quarter of a century away from the publication of his article, socialists can ask Professor Callinicos the question; “just what positive results for the advancement of socialism has the SWP achieved”? The image of tumbleweed blowing across a deserted and silent Wild West town springs to mind.

Who needs theoretical leadership?

Given the current state of disarray within the SWP, a pushy dash for the throne of the theoretical leadership of the SWP by Alex Callinicos is hardly surprising. In recent years there have been a number of serious splits within the SWP most notably in 2010. The failure of the SWP’s association with Respect subsequently led to the formation of Counterfire under the leadership of two former and expelled SWP members; John Rees and Germaine Lindsay. And a few years later a vacancy opened up at the top of the SWP with the death of Chris Harman who had been Tony Cliff’s appointed heir.

Wanting to become a theoretical leader is very much in the Leninist tradition. Most capitalist political leaders – Clegg, Miliband and Cameron – leave the production of theory to either their respective policy institutes or to intellectual gurus. They travel light; image, vision and public relations are everything. Cameron’s Chipping Norton set was all about the discussion of thorough-bred horses, good food and fine wine; not conservative political philosophy, Adam Smith’s pin factory and the free market ideas of F. A. Hayek.

Not so Lenin and those who have followed him. Lenin, for example, not only wanted to become a political leader but a theoretical one too. For it was Lenin, in his bid to take the theoretical crown away from Plekhanov, who wrote

It is impossible fully to grasp Marx’s Capital, and especially its first chapter, if you have not studied thoroughly and understood the whole of Hegelian Logic. Consequently, none of the Marxists, for the past half century have understood Marx!! (Collected Works p. 300)

The passage makes clear that in reading and understanding Hegel’s logic, Lenin and only Lenin holds the key to decipher Marx and understand his method, meaning and critique of political economy. And Lenin’s followers have been fighting each other for this illusory key ever since. And now it’s Professor Callinicos’s turn, for as he notes “Behind these arguments over the interpretation of Marx’s Capital lie political preoccupations (p.312). And Callinicos’s “political preoccupation” is to work out how the SWP can exploit the non-socialist anger and discontent “on the streets” for its own anti-working class political ends.

Is there anything to decipher in Capital?

Which leads us on to the pertinent question of whether or not there is anything to decipher in CAPITAL. Is CAPITAL similar in complexity to deciphering hieroglyphics and encodement through the use of complicated mathematics, logic and computing machines? Does the reader of CAPITAL need someone to hold their hand as they work their way through subsequent chapters of the book? Or can the reader think for themself?

In fact, there is nothing to decipher. Marx, in the first chapter of CAPITAL unmasks the fetish nature of the commodity showing the commodity as a social relationship between producers masquerading as a thing (see CAPITAL vol. 1 chapter 1, Part 4 pp 163 to 177). And in the third volume of CAPITAL he goes on to show that capital is nothing more than a social relationship; the underlying reality of “the bewitched, distorted and upside down world” of capital-profit, land - ground-rent and labour-wages which Marx disparagingly described in religious terms as “the trinity formula” (see CAPITAL vol. III ch. 48 The Trinity Formula, pp 953 to 970).

This is all pretty clear to a reader and although there have been useful books written for students by the likes of Aveling (THE STUDENT'S MARX: AN INTRODUCTION TO THE STUDY OF KARL MARX' CAPITAL. London: Swan Sonnenschein & Co., 1892) and Kautsky (THE ECONOMIC DOCTRINES OF KARL MARX, 1887) which have given abridged accounts of CAPITAL the best advice to anyone wanting to understand Marx’s account of capitalism and the necessity for socialism is to read CAPITAL for yourself.

In conclusion, the working class do not need leaders like Professor Callinicos to tell them what to think and how to act. Workers do not need intellectuals either to write their manifestos, construct their theory, organise their strategy or impose policy and tactics onto a passive and regimented “rank and file” membership. Nor do workers need to be told how to read Capital by a secular equivalent of a Jesuit priest as though the text is a theological mystery known only to the initiated. Workers can politically think and act for themselves as can be seen with the publication in 1904 of the SPGB’s OBJECT AND DECLARATION OF PRINCIPLES, many of whom had read and understood the works of Marx and Engels, including CAPITAL.

And Marx’s fundamental political idea that workers can politically think and act for themselves, is one he consistently held to throughout his entire socialist political life. As he wrote:

The proletarian movement is the self-conscious, independent movement of the immense majority, in the interest of the immense majority (The Communist Manifesto in The communist Manifesto and the Last Hundred Years, Socialist Party of Great Britain, 1948)

Workers can set up Socialist political parties which are open and democratic. They can make democratic decisions without leaders. And they can make a socialist revolution without a professional group of revolutionaries.

And this includes his socialist output. Marx did not write CAPITAL for university professors and their students but for the working class as a whole. On learning from the publisher Maurice Lachâtre that CAPITAL was going to be translated into French in serial form he wrote:

Dear Citizen,

I applaud your idea of publishing the translation of “Das Kapital” as a serial. In this form the book will be more accessible to the working class, a consideration which to me outweighs everything else.

That is the good side of your suggestion, but here is the reverse of the medal: the method of analysis which I have employed, and which had not previously been applied to economic subjects, makes the reading of the first chapters rather arduous, and it is to be feared that the French public, always impatient to come to a conclusion, eager to know the connexion between general principles and the immediate questions that have aroused their passions, may be disheartened because they will be unable to move on at once.

That is a disadvantage I am powerless to overcome, unless it be by forewarning and forearming those readers who zealously seek the truth. There is no royal road to science, and only those who do not dread the fatiguing climb of its steep paths have a chance of gaining its luminous summits

March 18th 1872 Preface to the French edition of CAPITAL

In fact, Marx does not believe his work needs “deciphering” only for the reader to expect a hard climb to comprehend “theoretically the historical movement as a whole”. All Marx expects is a reader “who is willing to learn something new and therefore think for himself “ CAPITAL Volume 1 Preface to the first edition p. 90 Penguin 1990 edition).

Quite so.

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Object and Declaration of Principles


The establishment of a system of society based upon the common ownership and democratic control of the means and instruments for producing and distributing wealth by and in the interest of the whole community.

Declaration of Principles


1. That society as at present constituted is based upon the ownership of the means of living (ie land, factories, railways, etc.) by the capitalist or master class, and the consequent enslavement of the working class, by whose labour alone wealth is produced.

2. That in society, therefore, there is an antagonism of interests, manifesting itself as a class struggle, between those who possess but do not produce and those who produce but do not possess.

3.That this antagonism can be abolished only by the emancipation of the working class from the domination of the master class, by the conversion into common property of society of the means of production and distribution, and their democratic control by the whole people.

4. That as in the order of social evolution the working class is the last class to achieve its freedom, the emancipation of the working class will involve the emancipation of all mankind without distinction of race or sex.

5. That this emancipation must be the work of the working class itself.

6. That as the machinery of government, including the armed forces of the nation, exists only to conserve the monopoly by the capitalist class of the wealth taken from the workers, the working class must organise consciously and politically for the conquest of the powers of government, national and local, in order that this machinery, including these forces, may be converted from an instrument of oppression into the agent of emancipation and the overthrow of privilege, aristocratic and plutocratic.

7. That as all political parties are but the expression of class interests, and as the interest of the working class is diametrically opposed to the interests of all sections of the master class, the party seeking working class emancipation must be hostile to every other party.

8. The Socialist Party of Great Britain, therefore, enters the field of political action determined to wage war against all other political parties, whether alleged labour or avowedly capitalist, and calls upon the members of the working class of this country to muster under its banner to the end that a speedy termination may be wrought to the system which deprives them of the fruits of their labour, and that poverty may give place to comfort, privilege to equality, and slavery to freedom.