Marx’s critique of political economy was not a proposal for a new ‘socialist economics’. For Marx, socialism implied the disappearance of economics since it was related to capitalist production and exchange of commodities. Socialism will have no wages system, no labour market, with no wage labour producing value, no commodities and no profit through class exploitation. Socialism will be a society of abundance balanced with respect for the environment where there will be direct free access to what people need to live active and creative lives.
In a letter to Lassalle, Marx set out what his project entailed:
“The work we are discussing is a Critique of Economic Categories or, if you like, the system of bourgeois economy in a critical description”. (Marx to Lassalle 22/2/1858 in Marx and Engels, 1983 page 51).
For Marx, classical political economy represented the attempts by economists like Smith and Ricardo to grasp the nature of modern society. Their categories and methods of thought gave the highest theoretical expression to the contradictions of capitalist social relations.
Essentially, all these contradictions, including the struggle between capitalists and the working class, express a more fundamental one: the contradiction on the one hand between the workers-self-creation, self-consciousness and social relations to production and on the other labour power becoming an exploitable commodity, forced upon the labour market and sold for a wage and salary.
What economics took for granted as ‘natural’ and ‘rational’, Marx saw as a degrading and irrational shell inside which the human life of the worker was imprisoned. Marx’s critique is inseparable from the socialist struggle to release labour from capital and to free the forces of production from capitalist social relations of production.
Marx characterised the ‘classical political economists’ as those who, ‘since the time of W Petty have examined the real internal framework of bourgeois relations of production‘ (Capital Vol. I: 174-5 1976).
As he wrote in a well-known letter:
“Once insight into the connectedness has been gained, all theoretical belief in the permanent necessity of existing conditions collapses before the practical collapse”. (Marx to Kugelmann 11/7/1868, in Marx and Engels, 1983 p.149).
But as workers under capitalism, we all live inside these relations, so how can we get hold of this ‘insight into the connectedness‘? The critique of political economy was Marx’s answer to this question.
In examining the work of the classical political economists, Marx was investigating a social dysfunction. It was like his attitude to religion: it could not be cured by correcting some logical errors, but only by the working-class replacing capitalism whose contradictions they expressed with socialism. His critique opened the way for ‘revolutionary practice’, in which ‘human activity or self-change’ could be seen to coincide with ‘the changing of circumstances‘ (Theses of Feuerbach.).
Marx also drew a distinction between ‘classical’ and ‘vulgar’ economy. The latter tried to understand the inner workings of capitalist production but were imprisoned in their “bourgeois skin”; while the vulgar economists revelled in the appearance of capitalist production degenerating into various schools of apologetics; free market anarchism, Keynesianism, Neo-Ricardian and economic liberalism.
Marx argued that science starts with appearances to the discovery of the underlying reality.
Inquiry, he wrote:
“…has to appropriate the material in detail, to analyse its different forms of development, to trace out the inner connections. Only after the work is done can the actual movement be adequately described. If this is done successfully…the life of the subject matter is ideally reflected as in a mirror” (Capital, Preface to the second edition).
In Capital Marx pointed out that whereas the “vulgar economists” dealt only with the surface appearances of capitalism, his critique of political economy seeks to uncover the real relations of commodity production underlying the appearances, and on that basis explain the appearances.
“The way of thinking of the vulgar economists”, wrote Marx, “derives from the fact that it is always the immediate form in which relationships appear which is reflected in the brain, and not their inner connections. If the latter were the case, moreover, what would be the need for a science at all”?
And explaining his own method of scientific analysis of capitalism, he pointed out that at the end of it:
“…we have arrived at the forms of appearance which serve as the starting point for the vulgar: ground rent coming from the earth, profit(interest) from capital, and wages from labour. But from our point of view the thing is now seen differently. The apparent movement is explained” (Letters to Engels, June 27, 1867, and April 30, 1858).
And it is from Marx’s point of view that we suggest to workers to read Marx’s writings to understand how and why they are exploited; why capitalism causes the social problems they face and why it can never be made to run in their interest. Marx’s critique of political economy makes a compelling case for revolutionary socialism.
However, there are several difficulties with reading ‘Capital’, and this is partly the result of the technical language Marx used in his study of capitalism. There are three important expressions to come to terms with: “critique”, “economic categories” and “political economy”.
Why Critique
Why did Marx use the term Critique?
Marx had been drawn to political economy by his friend Friedrich Engels. Engels had written on political economy as early as 1843 when he published “Outline of a Critique of Political Economy”.
The term “Critique” had been used by the idealist philosopher Immanuel Kant in his works on reason and experience. In his Critique of Pure Reason (1781), Kant wrote: “Our age is the genuine age of criticism, to which everything must submit…there is nothing so important because of its utility, nothing so holy, that it may be exempted from the searching review and inspection, which shows no respect for persons”
(pp100-101 Cambridge 1999). Note criticism is just criticism. It lacks a political dimension.
This led Marx to state that philosophers have only interpreted the world in many ways; the point is to change it. And revolutionary change can only be political.
As early as 1843 Marx would write:
“It is all the more clear what we have to accomplish at present…ruthless criticism of all that exists, ruthless both in the sense of not being afraid of the results it arrives at and in the sense of being just as little afraid of conflict with the powers that be (MECW 1, p. 144).
Critique for Marx is political as well as being a critical examination or analysis that investigates what is correct and what is incorrect in an object of study. When a critique is applied by Marx to Political Economy it is to the texts of the Classical School of Economics from Petty to Ricardo.
Where Smith or Ricardo, for example, made valid points Marx acknowledges them. When they make mistakes, Marx shows why these were made and gives a solution to them. A critique is not the same as a simple attack or criticism. Marx used the term critique in his reading of the Gotha Programme in the same way as he did with Capital, carrying with it a revolutionary political dimension. Marx was not afraid of conflict “with the powers that be”.
What of the expression ‘Political Economy’? Political Economy was regarded by Thomas Carlyle as “the dismal science”. And dismal it really is. A grounding in mathematics is the only in road into understanding most of what is now written as “economics”. And its practitioners are so smug. They all might disagree among themselves, but they all believe that we live in the best of all possible worlds, that markets are here to stay and there is no viable alternative to buying and selling.
Most, if not all of economics is produced by workers but it is extremely hostile to trade unions, and its writings on workers in what pass for labour economic theory you would be excused that they had been directly paid by Rupert Murdoch or Richard Branson. They praise employers for restructuring their business by making workers unemployed and congratulate workers for taking wage cuts in the present economic depression as through there is no alternative to the wages system.
Marx referred to political economy (now called economics) as “bourgeois science” because it only went so far; its practitioners like Smith and Ricardo could not get out of their “bourgeois skins” and think of capitalism as a social system in which social relations generate class struggle.
Marx drew a distinction between the Classical Political Economy of Petty, Smith and Ricardo who tried to understand capitalism and the vulgar economists like J. B. Say who followed them who were only interested in the appearance of capitalism and in defending the interests of the capitalist class. We could call them “gunslingers”, “hired hands”, and “intellectual whores” and there are thousands of them in the universities, the City and in government paid to attack the working class for being greedy, the cause of inflation, lazy and for daring to strike for better wages and working conditions.
Difficult as reading Marx may be at least he writes from the interest of the working class.
For Engels “Political Economy in the widest sense is the science of the laws governing production and exchange of the material means of subsistence in human society” (Anti-Duhring p.177-78). This means that Political Economy has a historical dimension. It is linked with capitalist production and exchange for profit. It’s subject matter is time specific not eternal as modern economics would have us believe.
Marx and Economic Categories
Marx used another term; “categories” to describe the various aspects of a capitalist economy. For Marx, categories like commodities, money, wages, and capital are historically specific to capitalism.
Marx criticised Proudhon for not understanding: “that economic categories are only abstract expressions of these actual relations and only remain true while these relations exist…the political-economic categories (are) abstract expressions of the real, transitory, historical social relations” (Letters, Marx to P. V. Annenkov, December 28, 1846).
Value, money, capital and wages would not exist in Socialism. Instead there would be free access to what is required produced by free men and women within the framework of common ownership and democratic control of the means of production and distribution by all of society.
We can consider three examples described by Marx as economic categories; capital, wage labour and money. They are not eternal but specific to capitalism.
Of capital Marx wrote:
“Capital consists of raw materials, instruments of labour and means of subsistence of all kinds, which are utilised in order to produce new raw materials, new instruments of labour and new means of subsistence. All these component parts are creations of labour, products of labour, accumulated labour. Accumulated labour which serves as a means of new production is capital.
So say the economists. What is a Negro slave? A man of the black race. The one explanation is as good as the other.
A Negro is a Negro. He only becomes a slave in certain relationships. A cotton- spinning machine is a machine for picking cotton. Only in certain relationships does it become capital. Torn from these relationships it is no more capital than gold in itself is money or sugar the price of sugar” (Wage-Labour and Capital, Foreign Language Press, p.29).
The same applies to the category “wage labour” or the “wages system”. Workers only become employees-a class who receives a wage or salary -under capitalism because they do not own the means of production and are
forced by pain of starvation onto the labour market in order to get a job. The mental and physical ability the worker sells as a commodity to the capitalist is not “eternally binding” but forms part of a historical and transitory social relationship. Outside capitalism, say in Socialism, labour will just be labour, and machinery will be just machinery used together by free men and women to produce useful things for people’s needs. Marx’s conclusion to his study of capitalism-one he impressed onto the working class-was the abolition of the wages system.
Marx’s writings on money are totally at odds with those of the economists. One so-called “Marxist”, Suzzanne De Brunhoff decried Marxists who saw money in terms of social alienation, fetishism and a social relation between classes masquerading as a thing. She believed that a Marxist theory of money could be plucked out of Capital, reformulated into a mathematical model to compete with academic theories of money (Marx on Money, 1976, p..xii).
Even though Marx spent a great deal of time on the technical issue of money, he never lost sight of the corrosive and toxic social power money exercised in society generally and between classes specifically.
In Capital, Marx quoted Shakespeare, as support for the idea of money as a “God” which perverted human relations. Columbus was cited as saying that “gold can even enable souls to enter paradise”, Sophocles as stating that “nothing so evil as money ever grew to be current among men” (Capital Volume 1 Ch. 3 pp. 229-30), and Boisguiollebert, an early French political economist, as saying that “money declares war on the whole of humanity” (Capital, Volume 1 Ch 3. page 239).
Commodity fetishism was inseparable from money fetishism. Money became the object of production-capital for the sake of capital, and in this process the social bond between people gave way to “Purely atomistic” relations which were “independent of their control and their conscious individual action” (Capital Volume 1 , Ch 3 p. 189).
In fact, Marx criticized economists like David Ricardo for only concentrating on the technical aspects of money rather than the alienating aspect of money. He would have characterized de Bronhoff’s analysis of money as false and one-sided. This is what Marx wrote:
“With Ricardo,…,this false conception of money is due to the fact that he concentrates exclusively on the quantitative determination of exchange-value, forgetting on the other hand the qualitative characteristic, that individual labour must present itself as abstract, general social labour only through its alienation” (Theories of Surplus Value Volume II, p. 504).
Marx argues that money becomes an object of worship and greed because it contains an alienated social power (Economic and Philosophical Manuscripts, p. 168). This train of thought is carried over into his critique of political economy. Just as “one man is king only because other men stand in relation of subject to him, and they, on the contrary, imagine that they are subjects because he is king” (Capital Volume I Ch. 15 p.570) so the appearance that money is all powerful, and all other commodities are subservient to money is also unavoidable.
Money as alienation has a social cost; money becomes an obsession; it unleashes negative human behaviour and creates disorganization in production. Overcoming the social alienation associated with money requires overcoming the social relations within capitalism through socialist revolution.
Marx began his critique of Political Economy with capitalism as it appeared to people in their ordinary lives; a world of commodities. Along the way he demolished one after the other; the various arguments used by economists to justify class exploitation. And it was precisely these failed arguments which were used to create academic economics after his death- market harmony, factors of production, capital as a thing, and so on.
There is no course of study within university departments called “A Critique of Political Economy”. A critique of political economy brings with it not only a labour theory of value but the materialist conception of history and a political concept of class struggle. It is inconceivable that the capitalist State would fund such a course.
The courses and books which claim to teach “Marxist economics” are run by either supporters of State capitalism and Trotskyists or those economists’ taking aspects of Marx’s Capital to apply to trends in academic economics.
The supporters of State capitalism with their journals like Critique, Review of Radical Political Economics, Conference of Socialist Economists or Capital and Class have added nothing to Marx’s own critique of Political Economy except to spread confusion and turn Marx into the means to secure papers for publication on the way to this or that professorial chair.
The “eclectics” have tried in vain to turn Marx into a mere economist by straining out his socialism, so he becomes lost in the history of economics; “a minor post Ricardian”, “a precursor to Keynes” or a “trace” in the economic theory of some more fashionable contemporary economist.
An example of the former is Political Economy (1952) by John Eaton, then a member of the Communist Party of Great Britain. The book claimed to be a study of Marxist Political Economy rather than a Critique of Political Economy and ends with a section misleadingly entitled “Wages in a Socialist Society” (182-185) in which Eaton made the fatuous and anti-Marxian claim that workers in the Soviet Union were not exploited. The Socialist Party of Great Britain applied Marx’s Labour Theory of Value to post 1917 Russia and argued that the law of value held there just as it did in any other capitalist country. Workers were exploited by producing more social wealth than they received in wages and salaries. Furthermore, Russian capitalism could not escape the vagaries of the world market.
As an example of the “eclectics” we have the economist, P. N. Junankar. In his book “Marx’s Economics” (1982), Junankar writes:” Marx provided an interesting analysis of money and circulation which in effect, was the first growth model of the von Neumann or Harrod type” (p12) as though Marx’s Capital was politically neutral and just a contribution to capitalist economics.
Worse still is the book “Fifty Major Economists” by Steven Pressman (1999) which sees Marx inserted between the economists John Stuart Mill and Leon Walras. Marx was no more an “academic economist” than he was a “philosopher”.
So, what has happened to Capital? On the one hand the questions it asked have been politically blocked by academics who claim Marx was either “inconsistent” or held to a theory of value that is now “out–dated”. Marx had anticipated this reaction. He wrote that: “In the domain of Political Economy, free scientific enquiry meets not merely the same enemies, in all other domains. The peculiar nature of the material it deals with, summons as foes into the field of battle the most violent, mean and malignant passions of the human breast, the Furies of private interest”. (Capital, Preface to the First German edition p.21).
If someone wants to change society in a revolutionary way, there are vested interests who want society to remain exactly as it is and they will do whatever it takes to try and silence the revolutionary. Marx was no exception.
How much the ruling class and its agents fear Marx and his ideas can be seen by the almost daily negative references to him in the media –the Tory MP and Times columnist, Michael Gove, recently wrote off Capital’sliterary style as an example of “stale flatulence” (Times,10.06.08). Not much intellectual rigour there, then, Mr Gove, an example of conservatism displaying the highest form of ignorance and the lowest form of thought.
On the other hand, Marx’s Capital and his scientific objective “to lay bare the economic law of motion of modern society (p. 20 ibid) has been kept alive and developed by Socialists of The Socialist Party of Great Britain. Socialists are not dogmatists. If a theory is wrong then the accusation has to be taken seriously, and if true, the theory replaced by a better explanation.
However, socialists have seen neither inconsistency nor irrelevance in Marx’s labour theory of value and the ideas he developed in Capital. The relationship of the production of gold to other forms of commodity production, money and price is not “out-dated” and gives useful insights to an understanding to productivity and inflation. The mystical school of banking has been rightly criticised on the basis of the labour theory of value by demonstrating that wealth cannot be created “by the stroke of a pen”.
The class struggle is explained by the extraction of surplus value from the working class. Taxation has been shown to be a burden that ultimately falls onto the capitalist class. And Marx’s political conclusion has been kept clear-the abolition of capitalism and establishment of socialism by a class-conscious working class. More importantly Socialists have treated the three volumes of Capital as a whole rather than a pick and mix of theories to be improved or corrected.
One word of caution.
There is a comedy sketch from Not the Nine O’clock News about a group of earnest young professional revolutionaries poring over a copy of Capital. One of them looked up and began reading out a particularly difficult passage. He paused, turned to his fellow conspirators and uttered words to the effect of: “Sod this for a game of soldiers, let’s just go out and bomb something…”
Of course, Marx did not write for “earnest young professional revolutionaries” any more than he advocated terrorism. But the prose style of volumes II and III are very dense, difficult, and often stilted and clumsy. And for a very good reason. The second and third volumes of Capital were not completed by Marx at his death.
Both volumes dealt with important topics relating to capital’s movement and the discussion of value started in the first volume. The second volume was a study of circulation, reproduction and extended accumulation while the third volume was a study of capital as a whole. Volume II was worked up in draft form, but the third volume was in a more difficult state to edit coherently. A lengthy discussion of the various independent forms of money capital, including credit, occurs in part 5 of the third volume of Capital, but this material was pieced together from a “disordered jumble of notes” (Engels, Preface Capital Volume III, p. 95).
Engels edited and published what he considered to be a definitive edition of Vol. I of Capital in 1890, and brought out Volumes. II and III of in 1885 and 1894 by carefully editing and arranging Marx’s draft manuscripts.
Engels took the view of not presenting a polished text similar to the first volume of Capital. He tried to present, where possible, Marx in his own words from primitive drafts which would have been worked up by Marx in a more lucid and approachable style.
Consequently, the prose-style in Volume II of Capital is often hard to read even though it is basically complete. However, there were further problems with the drafts Marx left for volume III. Engels was faced with sentences in which thoughts are written down just as they arose which “became instead longer and more intricate” (Preface, p. 93). Engels retained the character of the original draft but as a result Marx’s presentation is laid out in an unfinished way, peppered with gaps, repetitions, and silences.
