“Is an Emancipatory Communism Possible?”
A talk by Allan Armstrong
Recorded Wednesday, April 13 at 7:00 PM at TRS, Inc. in NYC

Mention of the word “Communism” today conjures up visions of tyrants. Young people, even when they clash violently with the representatives of global capitalism in Seattle or London, call their protests “anti-capitalist,” not communist. However, anti-capitalism is not enough. Revolutions can lead to immediate feelings of intense liberation, but they are usually followed by much longer periods of defense, setbacks, and painful reconstruction. The 20th century was the “Century of Revolutions,” but it eventually produced so little for humanity at such a high cost, that it is not surprising that many are very cautious, despite growing barbarism.

Allan Armstrong will argue that it is vital that we outline a genuine new human emancipatory communism, which takes full stock of the failings of both “official” and “dissident Communism,” and which can persuasively show that human liberation can still be achieved. He will explore Marx’s vision, particularly as detailed in his “Critique of the Gotha Program,” which emphasizes the need to break with capitalist production relations rather than expecting a new society to come about through political changes.

Allan Armstrong, a republican, Scottish internationalist, and communist, is currently co-editor of Emancipation & Liberation, the journal of the Republican Communist Network. He is also involved with the commune, a collective dedicated to outlining a new communism for the 21st century. Armstrong is the author of  “Why We Need a New Emancipatory Communism” and “The Communist Case for ‘Internationalism from Below.’”

Presented by Marxist-Humanist Initiative & the New SPACE.

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In the “New Economy,” many of the available and newly created jobs require that the employees “work remotely.” The employee is expected to furnish the work environment…be it at the local Starbucks––with blaring music and deafening coffee grinding––or in the social seclusion of one’s home. Typically, the employee provides computer equipment, Internet connection, Smartphone with unlimited calls, e-mailing and texting, general office supplies (e.g., high-priced cartridges), and business transportation, subject to escalating fuel costs. Depending on the employer, all, some, or none of those expenses are reimbursed. There may or may not be healthcare benefits.

This is the modern version of the old home-work system prevalent in capitalism in centuries past. Women picked up fabric from the factory, worked on it at home, and were paid by the piece. They had to provide their own space, light, thread, tools, and sewing machines and electricity after those came in. They worked day and night to earn a pittance. Often, their children worked, too.

For years, I worked on the premises of my former employer, a large conglomerate. My new employer, a business start-up, requires that I work at home in order to minimize (their) overhead. While this gives me certain freedoms, I often yearn for the camaraderie and structure of my old environment. Yet, the world I left behind a short time ago no longer exists: the building that once housed hundreds of employees is now an empty shell, with most positions having been eliminated, outsourced, or converted to home-work.

Contrary to the stereotype of the home-work employee as someone who stays in her pajamas all day, I put on a suit each morning and focus on work. I dress for business because of personal preference, but also out of financial necessity. When I worked in an office, I always wore suits, so those are the items in my closet. I am sure I am not unique in this.

I do not own a TV, I do not take food breaks every 1-2 hours, and my online activity is generally job related. The one distraction I do have is cleaning. At 5 p.m., no one comes into my apartment to empty the trash, mop the floors, or restock the bathroom with toilet paper. It is up to me to maintain a hygienic, professional work space. The upside of my home-work situation is that I am autonomous and do not have a boss breathing down my neck eight hours a day. One downside is that I am simultaneously responsible for uncreative tasks like cleaning. Furthermore, as I am in sales and paid commissions only, the time I spend cleaning reduces my earnings potential. It doesn’t take the boss’s presence on the premises to make me work long and hard.

Another downside is the lack of social interaction. There are few opportunities for workers to relate to each other, discover mutual concerns, and put––at minimum––indirect pressure on management to improve their situations. People know better than to complain to each other about their jobs via e-mails that could get back to the boss.

For young employees, the physical isolation of working from home can stifle career growth. They miss out on opportunities to be mentored, learn from co-workers in the same role, expand their knowledge at cross-departmental meetings, and help out during emergencies, when they could acquire and visibly demonstrate new skills. Home-work employees are out of sight and therefore often out of mind.

What would a non-exploitative workplace look like? One Utopian vision guarantees the highest pay for the most distasteful, treacherous tasks. In this topsy-turvy world, I imagine executives who make far reaching, removed decisions being paid minimum wages, while the janitors who scrub the corporate washroom are rewarded as princes. A variant on this scenario is that all tasks––from the menial and mindless to the intellectually advanced and personally fulfilling––are distributed evenly among all members of society. I crave concrete, realizable examples, because home-work is far from non-exploitative.

From my study of Marx, I expect that it is impossible to escape the dictates of capitalism within capitalism. No matter the type of work, it will be exploitative as long as the essence of the system is to get the maximum labor out of people for the least expense. We need to look further than home or office to create non-exploitative work.

This article responds to recent works by Jonathan Nitzan and Shimshon Bichler, influential radical political-economic thinkers who teach, respectively, at York University in Toronto and at colleges in Israel. Part I, below, responds to Bichler and Nitzan’s (B&N)  “Systemic Fear, Modern Finance and the Future of Capitalism” (Bichler and Nitzan 2010). In this paper, they argue that (1) “systemic fear”–fear of the death of the capitalism–has gripped capitalists during the last decade, but (2) capitalists’ belief that their system is eternal is necessary for its continued existence. So (3) the alleged systemic fear is itself a threat to the system. And thus we have yet another version of the notion that capital itself may be the historical Subject that will bring it down.

B&N claim that fear of the death of the system’s death has gripped capitalists only during two periods in recent history–the Great Depression and the 2000s. Their evidence for this claim consists entirely of the alleged fact that these two periods of crisis were the only periods since World War I in which equity (stock) prices and current profits were strongly correlated, i.e. the only periods in which they closely moved up and down together.[1] However, using the exact same methods and the exact same data as B&N, I show below that that equity prices and current profits were also strongly correlated from the early 1950s through 1973–during the so-called golden age of capitalism!

In Parts II and III of this article, which will appear here later this month, I will respond to the critique of Marx’s value theory that pervades Nitzan and Bichler’s 2009 book, Capital as Power. In this book, they allege that Marx’s value theory is practically useless for the study of accumulation. So my response will show, among other things, that his theory sheds significant light on the long decline in the rate of accumulation (investment) that contributed to ever-increasing debt burdens in the U.S. and helped set the stage for the recent Great Recession.

Part I

In November, Nitzan presented his and Bichler’s “systemic fear” thesis–including the correlation data that supposedly supports it–in a presentation to a joint session of the prestigious Harvard Law School and Harvard’s equally prestigious Kennedy School of Government. And a different version of the same argument, featuring the same correlation data, appeared earlier in an article they published in Dollars & Sense, a left-liberal economics magazine.

But since their data actually show that equity prices and current profits were also strongly correlated from the early 1950s through 1973–during the so-called golden age of capitalism!–we should doubt their claim that systemic fear has prevailed in recent years. After presenting and discussing these data, I will argue that flaws in B&N’s reasoning should also cause us to doubt their claim that capitalists are normally convinced that capitalism is eternal, as well as their claim that this conviction is crucial to its continued existence. But if the future of capitalism doesn’t hinge on the conviction that the system is eternal, it also doesn’t much matter whether capitalists have recently been gripped by systemic fear in B&N’s sense.

Good old regular fear, “the dread and apprehension that regularly puncture [capitalists'] habitual greed” (Bichler and Nitzan 2010, p. 18), is another matter. There can be little doubt that good old regular fear was intense at the start of the last decade, and even more intense at the end. I believe that this good old regular fear was justified and that it remains so. The underlying long-run economic problems that led to the recent Great Recession, and to the weakness of the subsequent recovery, have not been resolved. As I will discuss in Part II of this article, slow growth of employment relative to investment during the last six decades has led to a persistent fall in the rate of profit; the fall in the rate of profit has caused capital accumulation and economic growth to be sluggish for decades; and this sluggishness has led to mounting debt burdens. I doubt that the fall in the rate of profit can be reversed or that the debt problem can be solved without much more destruction of capital value–i.e. falling prices of real estate, securities, and means of production, as well as physical destruction–than has taken place to date. And if these problems remain unresolved, the economy will continue to be relatively stagnant and prone to crisis.

But it is difficult to discuss these ideas with B&N, or at all, because they and others like them contend that the theory on which the ideas are based, Marx’s value theory, is internally inconsistent and circular. An internally inconsistent theory cannot possibly be correct.[2] All ideas resting upon such a foundation can thus be disqualified at the starting gate, without further ado. In order to clear the ground for a genuine discussion–one in which B&N’s approach to questions of crisis and the future of capitalism is compared with and contrasted to something rather than nothing–Parts II and II of this article will respond to the main criticisms of Marx’s value theory.

* * *

B&N (2010, p. 17, emphasis in original) note that “if we adhere to the scriptures of modern finance, we should expect to see no systematic association between equity prices and current profits.” And they claim that equity prices have indeed become decoupled from current profits since 1917, except during two brief and exceptional periods. “Figure 2 and Table 2 show two clear exceptions to the rule: the first occurred during the 1930s, the second during the 2000s. In both periods … equity prices moved together–and tightly so–with current earnings” (Bichler and Nitzan 2011, p. 17 emphasis altered).

However, their Figure 2 actually shows four clear exceptions to the alleged rule. Equity prices also moved together with current earnings–and tightly so–from the early 1950s to the early 1960s, and from the early 1960s to the early 1970s (see my Figure 1). 

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During the first of these additional “exceptional” periods, period 4 of Table 1, below, the correlation between equity prices and current earnings was stronger than during the Great Depression (period 2). During the other “exceptional” period that B&N fail to bring to our attention, period 5, the correlation was lower, but still considerably stronger than during the 2000s (period 7).[3] The percentage of the variation in one variable that is “explained” by, or attributable to, the variation in the other is the square of the correlation coefficient, r². Thus, as Table 1 shows, only about two-fifths of the variation in share prices during period 7 is attributable to variations in current profits; the explained variation during period 4 is almost twice as great, while the explained variation during period 5 is more than 50% greater.[4]

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Table 1. Correlations between the annual rates of growth of stock prices and earnings per share, S&P 500 companies (monthly data are expressed as 3-year moving averages)

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Table 1 also shows that share prices have been strongly and positively correlated with current profits more than 40% of the time since 1917, and almost half the time since 1929. So the “exceptions” are not exceptional; the “rule” that share prices and current profits have become decoupled is no rule at all.

But B&N haven’t merely gotten their facts wrong. Because their facts are wrong, so is their paper’s key claim that we can infer that investors are gripped by “systemic fear” when the relationship between current profits and equity prices is strong and positive. They tell us that the two periods in which systemic fear prevailed were two periods of acute crisis, the Great Depression and the 2000s. If a strongly positive correlation between current profits and share prices were another exceptional feature of these periods of crisis, then the notion that we can infer the existence of systemic fear from the positive correlation might be plausible. But the 1930s and 2000s were not exceptional in that respect, as we have seen. And the other two strongly positive-correlation periods, which run from the early 1950s through the early 1970s, cannot plausibly be characterized as a time of systemic fear. On the contrary, that era was the so-called golden age of capitalism.[5] So a strongly positive correlation between current profits and equity prices does not allow us to infer the existence of systemic fear.

But the correlation data are B&N’s only evidence that capitalists were gripped by systemic fear in the 1930s and 2000s. (The statements by the Financial Times, Alan Greenspan, Bernie Sucher, Gillian Tett, and Mervyn King quoted in their paper discuss a highly uncertain environment, economic crisis, and discredited economic theory and ideology, not fear of the death of capitalism.) So they have not given us a good reason to accept that claim.

* * *

Nor do they give us a good reason to accept that the opposite of systemic fear–the conviction that capitalism is eternal–is the norm. Their “demonstrat[ion]” that capitalists are almost always guided by this conviction is fatally flawed. And since the same demonstration is the basis upon which B&N (2010, p. 3) claim that “[t]his … conviction is necessary for the existence of modern capitalism, at least in its present form,” they also fail to give us a good reason to accept this latter claim.

The most glaring flaw in their “demonstration” comes at the end, when they write, “the fact that capitalists invest shows that they expect … that the value of their assets will grow, not contract–and that expectation means that, consciously or not, they also think that the ritual that valuates their assets will never end” (Bichler and Nitzan 2010, pp. 3-4, emphasis added). The italicized clause is simply false. Just as some people buy lottery tickets even if they don’t expect to hit the jackpot, some people buy shares of stock even if they don’t expect their prices to rise. A large enough jackpot or a large enough potential capital gain more than makes up for a low probability of success.  Hence, the fact that people invest does not mean that they normally expect capitalism to last forever.

Imagine, for instance, that you think that there’s only a 50-50 chance that capitalism will exist a year from now, and that you are considering buying shares of stock for $10,000 today. If capitalism doesn’t survive, you’ll lose the whole $10,000, so it would be better to spend the $10,000 now, not invest it. You believe that this outcome is as likely as not, but you also believe that if capitalism does survive, the shares will be worth $500,000 a year from now. If you are like most people, you’ll go ahead and invest.

Secondly, dozens upon dozens of experiments conducted by Nobel laureate Vernon Smith and colleagues (e.g. Smith, Suchanek, and Williams 1988; Porter and Smith 2003) during the past quarter century have demonstrated conclusively that people frequently invest in assets even when know that “capitalism” (i.e., its experimental equivalent) will soon perish. Participants in the experiments are given some cash and some shares of an imaginary equity. They are told that the shares will pay dividends for a fixed length of time, such as fifteen periods, and that the experiment will then end, at which point the shares will be worthless. The current fundamental value of a share–the sum of the average per-period dividends throughout the remainder of the experiment–is announced at the start of each period.[6] Participants can buy additional shares from other participants, sell their shares, or hold onto them and collect their dividends. At the end of the experiment, they get to keep their initial cash endowments, dividends, and any net capital gains they have obtained.

Now, B&N (2010, p. 3)  claim to demonstrate that if capitalists believed that the system “would cease to exist at some future point,” then share prices “would have no-where to trend but down,” and capitalists would therefore be unwilling to buy additional shares. But even though participants in the experiments are absolutely certain that the system (i.e., the experiment) will soon cease to exist and that the asset’s fundamental value is continually falling, share prices typically rise throughout  much or most of the experiment–big bubbles are formed–and the volume of investment in additional shares is typically heavy. This has been the routine outcome even when the participants in the experiments are over-the-counter stock dealers, businesspeople, or students at the California Institute of Technology or the Wharton School.

Research into why this “perverse” behavior occurs is still ongoing, but the basic reason why people buy shares that eventually become worthless, and whose prices must therefore eventually fall, is obvious. People think that they may well make a substantial profit in the meantime, by reselling the shares at prices higher than those they paid.

Finally, even if the rest of B&N’s “demonstration” were sound, it would not prove that capitalists are normally guided by the conviction that capitalism is eternal. At least it wouldn’t prove this if we use the word “conviction” in the normal way. B&N are undoubtedly aware that it would not, since they write that “consciously or not, [capitalists] also think that the ritual that valuates their assets will never end” (emphasis added).  I doubt that “unconscious conviction” is a coherent concept, but even if it is, B&N’s appeal to it turns what started out as a provocative and straightforward claim into a piece of unfalsifiable Freudian speculation.[7]

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References

Bichler, Shimshon and Jonathan Nitzan. 2010. Systemic Fear, Modern Finance and the Future of Capitalism, July. Available at bnarchives.yorku.ca/289/03/20100700_bn_systemic_fear_modern_finance_future_of_capitalism.pdf .

James, William. 1890. The Principles of Psychology, Vol. 1. New York. Henry Holt and Co.

Nitzan, Jonathan and Shimson Bichler. 2009. Capital as Power: A study of order and creorder. London and New York: Routledge.

Porter, David P. and Vernon L. Smith. 2003. Stock Market Bubbles in the Laboratory, Journal of Behavioral Finance 4:1, 7-20.

Skidelsky, Robert. 2010. Keynes: The Return of the Master. London: Allen Lane.

Smith, Vernon L., Gerry L. Suchanek, and Arlington W. Williams. 1988. Bubbles, Crashes, and Endogenous Expectations in Experimental Spot Asset Markets, Econometrica 56:5, 1119-1151.

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Notes

[1] They interpret a strong influence of current profits on share prices as evidence that investors are acting on the basis of the current situation, having abandoned their supposedly normal “conviction” that the shares will yield returns ad infinitum because capitalism is eternal.

[2] An internally inconsistent theory may happen by accident to hit upon correct conclusions, but the arguments it provides in support of these conclusions are always invalid.

[3] The correlation was negative between February 1961 and May 1964. If we count this as a distinct period and shorten periods 4 and 5 accordingly, the correlations during these periods increase to 0.92 and 0.82.

[4] I computed a correlation of 0.65 for period 7, while B&N report a correlation of 0.64. My other results match theirs, so this slight discrepancy may be due to a recent revision of the data set, published by Robert Schiller Shiller on his website.

[5] Since I, like B&N, computed the correlations between 3-year average values, periods 4 and 5 use data from August 1950 through December 1973, which is almost exactly coextensive with the golden age as defined by Skidelsky (2010, p. 24)–the period “from 1951 to 1973.”

[6] In some experiments, shares pay a fixed dividend. In others, participants are told what the possible dividends are and the probabilities that each will be paid.

[7] As William James (1890, p. 163, emphasis omitted) noted, “the distinction … between the unconscious and the conscious being of the mental state … is the sovereign means for believing what one likes in psychology and of turning what might become a science into a tumbling ground for whimsies.”

by Andrew Kliman, author of Reclaiming Marx’s “Capital”: A refutation of the myth of inconsistency

[Editors' note, Oct. 8, 2011: Readers may also be interested in the related WSS article, concerning libel against the author: "Condemn Libelous Attack on Marx Scholar."] ,

The following text is the revised and corrected version of Dec. 29, 2010. For the original version of Dec. 23, click here.

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Marx’s Struggle against Defamation:

A 150th Anniversary Tribute to Herr Vogt

In 1857, Karl Marx resumed work on his critique of political economy, a process that culminated in the publication of Capital a decade later. He wrote a rough draft (the Grundrisse) in 1857 and 1858, parts of which he then reworked into the Contribution to the Critique of Political Economy, which was published in June 1859. Then, in 1861 through 1863, he wrote a revised draft of the whole of Capital, which was followed by a more polished draft written during 1864 and 1865. Finally, he revised the first volume yet again, during 1866 and 1867. It appeared in September, 1867.

The careful reader will have noticed a rather lengthy gap in this chronology. From the second half of 1859 through 1860, Marx was not working on his critique of political economy. What was he doing instead? What was so important, so much more of an urgent priority than his theoretical work?

The answer is that Marx was fighting back against Carl Vogt’s defamatory attack. He fought back in order to defend his reputation and that of his “party.” This month marks the 150^th anniversary of Herr Vogt, the book Marx wrote in order to set the record straight.

Vogt was a prominent radical German politician and materialist philosopher who had emigrated to Switzerland, where he served in parliament and was also a professor of geology. His position on the 1859 war over Italian unification had a pro-French tilt, which resulted in the publication of a newspaper article and an anonymous pamphlet that alleged­­–correctly–that Vogt was being paid by the French government. Vogt believed that Marx was the source of the allegation and that he had written the pamphlet. (The first belief was partly correct; the second was incorrect.)

Vogt fought back by attacking Marx. He published a short book that described Marx as the leader of a band of blackmailers who demanded payment in return for keeping quiet about their victims’ revolutionary histories. The book also contained other false and harmful allegations against Marx. “M[arx]‘s future [was] at stake, since Vogt [went] all-out to destroy his reputation” (Draper 1985, p. 93).

Yet these personal attacks were not merely personal. When it comes to someone like Marx, the personal is political. And Vogt, who had come to repudiate the cause of social revolution,

resorted to falsification of the facts and to barefaced lies to libel the Communist League, portraying its members as conspirators in secret contact with the police and accusing Marx of personal motives. The libel was taken up by the European bourgeois press and also by a number of German papers published in the USA.”  [editors' Preface 1985, p.  xxxiii]

Ferdinand Lassalle warned Marx that Vogt’s book “will do great harm to yourself and to the whole party, for it relies in a deceptive way upon half-truths,” and said that “something must be done” in response (quoted in Rubel 1980, p. 53). Frederick Engels also urged Marx to respond quickly, and he provided a good deal of assistance when Marx wrote Herr Vogt.

But the writing of Herr Vogt was only the last resort. At first, Marx tried to restore his reputation and that of his “party” by going to court. Two publications–the National-Zeitung of Berlin and the Daily Telegraph of London–had reprinted Vogt’s libelous accusations, so Marx sued them for defamation of character. In a February 23, 1860 letter to Ferdinand Freiligrath, he argued that these lawsuits were “crucial to the historical vindication of the party and its subsequent position in Germany” (emphasis in original).

When Marx referred to “the party,” he did not mean the Communist League, which was then defunct. In a follow-up letter of February 29 to Freiligrath, who refused to assist in the struggle against defamation on the grounds that he no longer belonged to the party, Marx explained that “by ‘party’ I [did not mean] a ‘League’ that expired eight years ago, or an editorial board that was disbanded twelve years ago. By party, I meant the party in the broad historical sense.”

Thus, Marx took legal action, and eventually wrote Herr Vogt, in order to vindicate the philosophical and theoretical perspectives for which the party stood. As Raya Dunayevskaya pointed out, these perspectives continued to guide Marx’s thought and activity, and thus “the party” lived on, even though a specific organizational expression of those perspectives was defunct:

Because … an independent proletarian organization, and one that would be both international and have the goal of revolution and a new society–was so central to his views, Marx kept referring to “the Party” when all that was involved was himself and Engels.

What Marx called “party in the eminent historical sense” (Letter to Freiligrath, 29 February 1860) was alive to Marx throughout the entire decade when no organization existed in the 1850s with which he could associate. [Dunayevskaya 1991, p. 155]

Unfortunately, Marx’s legal actions did not succeed. The Berlin court threw out the case against the National-Zeitung and its editor, citing “insufficient evidence” and stating that “no discernible public interest was involved” in the case. Marx appealed this decision multiple times, but the higher courts refused to reverse it.

A court’s declaration that Vogt’s accusations against Marx were false would have been more effective than his own protestations. It is simply to be expected that the victim of reputation-destroying charges will claim that they are false. It is a “dog bites man” story; who pays attention?  But when a disinterested body studies the evidence, deliberates, and then concludes that the charges are false, that is true vindication. It is a “man bites dog” story; people sit up and take notice.

But the bourgeoisie did not want to help Marx restore his reputation. On the contrary, as he noted in an April 24, 1860 letter to Engels, after the Berlin court stated that “no discernible public interest was involved” in the case, “It is, of course, ‘an issue of public importance’ to the Prussian government that we should be traduced [i.e., humiliated by means of malicious and false statements] to the utmost.” So, in order to try to set the record straight, Marx had only one option left–to write Herr Vogt. It came out on December 1, 1860.

Marx received a good deal of support in his battle against defamation. For instance, Engels helped defray his legal expenses and assisted him with Herr Vogt. The German Workers Educational Association “immediately supported him vigorously” (Mehring 1962, p. 297) and unanimously passed a resolution condemning Vogt’s libelous allegations. Charles Anderson Dana, editor-in-chief of the New York Daily Tribune, assisted Marx’s legal action against defamation by providing a testimonial letter. And Ernest Jones, the former Chartist leader, wrote a letter (included in an appendix to Herr Vogt) which stated,

I have read a series of infamous articles against you in the National-Zeitung and am utterly astonished at the falsehood and malignity of the writer. I really feel it a duty that every one who is acquainted with you, should, however unnecessary such a testimony must be, pay a tribute to the worth, honour and disinterestedness of your character. … Permit me to hope that you will severely punish your dastardly and unmanly libeler. [Jones, quoted in Marx 1981, p. 323]

In marked contrast to this, many intellectuals have evinced a shockingly hardhearted and dismissive attitude toward Herr Vogt and Marx’s struggle against defamation. Such intellectuals do not seem outraged by the fact that Vogt published untrue things about Marx, nor by the fact that his lies threatened the reputation of Marx and his “party.” Expressions of support for Marx’s actions in defense of himself and the “party,” or even signs of simple human sympathy, are rare.

For example, Francis Wheen (2000, p. 238), a recent biographer of Marx, refers to Marx’s struggle against defamation as “a spectacular, pointless feud against one Karl Vogt” and an “absurd interlude.” David McLellan (1977, p. 311), another biographer of Marx, calls it a “quarrel” and “a striking example both of Marx’s ability to expend tremendous labour on essentially trivial matters and also of his talent for vituperation.” And in his chronology of Marx’s life and works, Hal Draper (1985, p. 92) dismissed the controversy as a “time-consuming foofaraw”–i.e., a great disturbance over a very insignificant matter–even though he recognized that Vogt was engaged in “a massive campaign to discredit M[arx] personally,” and that “M[arx]‘s future [was] at stake, since Vogt [went] all-out to destroy his reputation” (Draper 1985, p. 93). It is unclear why Draper regarded Marx’s future and reputation as insignificant.

Many of these intellectuals seem miffed that the struggle against defamation was a more urgent priority for Marx than was his theoretical work, and that this may have caused Capital to appear in late 1867 instead of in early 1866. Marcello Musto (2008, p. 394, p. 395), a political scientist, charges that the Vogt affair made Marx “neglect his economic studies” and “lose sight even of his project of critique of political economy”; Musto’s evidence seems to consist of the fact that Marx interrupted his work on that project. Wheen (2000, p. 254) alleges that Marx’s work on Capital was “catastrophically interrupted by the feud with Vogt,” but provides no evidence that the interruption led to any catastrophe.

Robin Fox (2004, p. 36), a Rutgers University anthropologist, cites the fact that Marx’s work on Capital was interrupted as evidence that “the future of Socialism was less important to Marx than the countering of heresy and libel.” Given that academics are supposed to be dedicated to the search for truth, Fox’s dismissive attitude toward the countering of libel is no small matter. But what is especially bizarre about his conclusion is the fact that he counterposes “the future of Socialism” to Marx’s struggle against Vogt’s libelous charges–as if the future of socialism depends only on theoretical works while the reputation of Marx’s “party,” and Marx himself, were irrelevant.

I do not at all mean to imply that Capital, or theoretical work generally, is unimportant, or unimportant to the future of socialism. I have spent a great deal of time studying and writing about Capital, and I have fought hard to help reclaim it from the myth that its value theory and law of the tendential fall in the rate of profit are internally inconsistent (see, e.g., Kliman 2007). But when crises arise, they take priority. And it makes no sense to me to treat Capital and Marx’s struggle against defamation as opposites. Marx was no “armchair radical.” Capital, and his “party,” and his personal reputation were all necessary and inseparable parts of the struggle for a new human society. After all, what would have been the fate of Capital, or the Marxian conception of socialism, if Vogt’s vile allegations had been accepted as true because Marx offered no defense against them?

The problem is not that intellectuals such as those quoted above dislike Marx.  Almost all of them like Marx. But one gets the sense that some of them like Marx in the way that people in certain Asian countries like dogs: not as friends and companions, but hacked into pieces and served to them as something to consume and digest. In contrast to Marx’s theoretical work, Herr Vogt offers them no benefits–Marx wrote it to benefit himself and “the party,” not readers–so they regard it as a worthless expenditure of his time and energy.

And one gets the sense that very few of them have any personal experience with libel. The fact that I am the victim of a libelous review recently published in the Review of Radical Political Economics–about which I hope to write more later–perhaps explains in part why I am more sympathetic to Marx’s struggle against defamation and less willing to second-guess his priorities.

Carl Vogt and the circumstances that gave rise to his defamatory attack against Marx and his “party” are dead and gone. But Herr Vogt and Marx’s battle against defamation remain living exemplars of how one responds in a genuinely Marx-ian way–i.e., the way of Marx. Do not separate theory from practice, or philosophy from organization. Do not retreat to the ivory tower or suffer attacks in silence; set the record straight. Use the bourgeois courts if necessary. Enlist the assistance of others.

References

Draper, Hal. 1985. The Marx-Engels Chronicle. Vol. 1 of the Marx-Engels Cyclopedia. New York: Schocken Books.

Dunayevskaya, Raya. 1991. Rosa Luxemburg, Women’s Liberation, and Marx’s Philosophy of Revolution, 2nd ed. Urbana, IL and Chicago: Univ. of Illinois Press.

Editors’ Preface, 1985. “Preface” to Karl Marx, Frederick Engels: Collected Works, Vol. 41. New York: International Publishers.

Fox, Robin. 2004. “Sects and Evolution,” Society 41:6 (Sept./Oct.) 2004, pp. 36-46.

Kliman, Andrew. 2007. Reclaiming Marx’s “Capital”: A refutation of the myth of inconsistency. Lanham, MD: Lexington Books.

McLellan, David. 1977. Karl Marx: His life and thought. New York: Harper Colophon.

Marx, Karl. 1981. Herr Vogt. In Karl Marx, Frederick Engels: Collected Works, Vol. 41, pp. 21-329. New York: International Publishers.

Mehring, Franz. 1962. Karl Marx: The story of his life. Ann Arbor, MI: Univ. of Michigan Press.

Musto, Marcello. 2008. “Marx in the Years of Herr Vogt: Notes toward an intellectual biography (1860-1861),” Science & Society 72:4 (Oct.), pp. 389-402.

Rubel, Maximilien. 1980. Marx: Life and works. London: Macmillan.

Wheen, Francis. 2000. Karl Marx: A life. New York: W. W. Norton & Co.

We had two national demonstrations in the summer organized by a leftist alliance, with about 20,000 participants at each. In 2009, there were also two national demonstrations organized by the same alliance with about 30,000 participants at each. So fewer people were mobilized this year than the year before. In the last weeks, we had a number of regional demonstrations organized by the trade unions with around 10,000 participants each. This does not generate enough pressure on the government. We face a difficult situation if you consider that even strikes and demonstrations with millions of people in France and several general strikes in Greece were not enough to force a change in the political direction.

While working class-based protests in Germany seem to be rather weak now, we have a revival of the movement against nuclear energy. And there is a very strong local movement in Stuttgart against the restructuring of the railway station. The government wants to build an underground station which would cost up to 7 billion euros. This issue is connected with ecological questions, democratic questions, issues of building speculation, urban restructuring, and railway politics, and also with the problems of fiscal politics. In the meantime, this local movement has taken on a national dimension. In the context of these struggles, the Green party is getting stronger again, while the Left Party (Die Linke) is rather stagnating.

Two years ago, a “Capital reading movement” was initiated by Die Linke/SDS, the student organization of the Left Party. Initially around 2000 activists were involved in reading Marx’s Capital in cities all over Germany. Sales of volume 1 of Capital soared. However, this movement is more or less over now because of the short-term campaign style activism of leading political activists. Members of Marx 21, the German organization of the International Socialists (the sister organization of the British Socialist Workers Party) played a leading role in this movement, and they were not persistent enough. However, in some cities there are still Capital reading groups. For instance, in Berlin there are regular reading groups organized by the Rosa Luxemburg Foundation. It just doesn’t have the character of a “movement” as it did a year or two years ago.

A year ago, there was also a movement at the universities against the neo-liberal restructuring of higher education. However, those movements come and go. It is very difficult to develop longer-lasting, permanent organizational structures from these protests. The economic and ideological pressure on students is much stronger today than it was 20 years ago.

All in all, there are many small struggles; however, they are not strong enough to really challenge the government and to force a political change away from neo-liberalism (let alone capitalism).

Tom Sawyer

In a April 18, 1976 piece, “Our Original Contribution to the Dialectic of the Absolute Idea as New Beginning:  In Theory, and Leadership, and Practice,” Dunayevskaya stated,

[A]t the height of Capital, we see [Marx] breaking up the Absolute Idea by speaking about the general absolute law of capitalist accumulation.  But its opposite was always taken to be only the unemployed army – and not the absolutely, totally opposite which we take it to be now.  Marx only mentioned it as ‘the new passions and new forces for the reconstruction of society.’  The negation of the negation at that point certainly wasn’t spelled out.

What I think Dunayevskaya’s original contribution was – what she made explicit that was only implicit in Marx – is her philosophic moment of 1953.  The revolutionary development of the working class is impelled by the logic of capital.  That’s the process of capitalist accumulation.  It has an Absolute: accumulated capital at one poll, misery and unemployment at the other.  There’s a diremption; we cannot go further.  To transcend this absolute opposition, we need a new beginning.  To have a new society, we can’t rest on the dialectic generated by capital.  There needs to be a second moment of negativity, one that doesn’t arise spontaneously from the logic of capital, but is self-liberation.  This second moment of negativity is rooted in a passion to reconstruct society on new beginnings, not just in the oppressiveness of capitalism.

Dunayevskaya is singling out the subjectivity of self-liberation, which Marx’s discussion of the negation of the negation only intimated.  It is at this point that Logic is “thrown out”; it gives way to a new relation of theory to practice.  There’s a new dialectic in which the movement toward freedom is not driven by the logic of oppressive capital; the movements from theory and practice now develop through one another.  This intermerging of theory and practice does not come spontaneously – this is Dunayevskaya’s original contribution – they must freely self-develop together.

To begin to flesh out the textual basis of the above interpretation, I offer the following comments:

(1) I believe that the “Our Original Contribution” text is, in part, a return to and elaboration of pp. 92-94 of Dunayevskaya’s Philosophy and Revolution, which also discusses the absolute general law of capitalist accumulation (AGLCA) in Marx’s Capital, the negation of the negation, and “new passions and new forces.”  It is an extremely important passage, in my opinion. Dunayevskaya refers to the accumulation of capital vs. misery and unemployment as a “diremption – absolute, irreconcilable contradiction[ ]” in the first paragraph on p. 93.  This is the basis of my comment that the AGLCA is “a diremption; we cannot go further.  To transcend this absolute opposition, we need a new beginning.”  In the next paragraph on p. 93, Dunayevskaya writes, “‘The negation of the negation’ allows in but the faintest glimmer of the new, ‘new passions and new forces’ for the reconstructing of society, but no blueprints of the future there.” It seems to me that this is another way of saying that “new forces and new passions” is only implicit in Marx’s discussion of “negation of the negation,” though other interpretations are perhaps also plausible.

(2) “[T]he absolute general law of capitalist accumulation” (AGLCA) is stated on p. 798 of Capital, Vol. I (Penguin/Vintage editions.), near the end of section 4 of Chapter 25, though the chapter as a whole is also called “The General Law of Capitalist Accumulation.”  To understand the importance of “absolute” here, it is helpful to read the whole chapter, and see how frequently the laws of capitalist development that Marx identifies here are not absolute, but “relative.”  Part of what is involved in this distinction, I believe, is that much of the trajectory of capitalist development depends upon (is “relative” to) contingent factors, but the growth of the reserve army (and the increasing misery – in a specific sense – of the proletariat (p. 799)) are inevitable (“absolute”) under capitalism.

(3) It is also helpful to read what comes before p. 798, including Chapters 23-24, to get a sense of the AGLCA as the culmination of a process of development.  This will be important to Dunayevskaya’s understanding of “the logic of Capital.”  This is a phrase from Lenin’s Philosophic Notebooks.  He didn’t refer specifically to a real process of development (he was referring to section 3 of Chapter 1 ofCapital, on the “form of value” being modeled on Hegel’s U-P-I (universal-particular-individual)). But in her May 12, 1953 letter on Hegel’s Absolute Idea and thereafter (e.g., Philosophy and Revolution, pp. 93-94), Dunayevskaya interprets “logic of Capital” as a real process, the logic of capital; her words are “the dialectic of bourgeois society.”  Both the May 12, 1953 and the discussions in Philosophy and Revolution compare Lenin’s claim (the “form of value” is based on U-P-I) – to her claim (the AGLCA is based on the Absolute Idea); apparently, Dunayevskaya sees her insight as being rooted in and as a further development of, Lenin’s insight.

(4) Dunayevskaya’s “new passions and new forces” comes from Marx’s phrase “new forces and new passions” in Ch. 32 of Capital, Vol. I (p. 928).  A page and a half later, Marx calls the revolution against capitalism “the negation of the negation,” because capitalism “negates” the individual property of the direct producers, while the revolution will restore their individual property (thus negating the negation), but on a “higher level” (in the Hegelian manner), i.e., as common property.  Dunayevskayavery audaciously reads the reference to “new forces and new passions” as part of the process of “the negation of the negation.”  This is very audacious not only because they are a page and a half apart, but also because Marx’s “new forces and new passions” is a reference to the bourgeoisie and their greed!  (See “the most infamous, the most sordid, … of passions” later in the paragraph on p. 928.)  Marx is referring to the so-called “primitive accumulation” he has been discussing in Chapters 26-31, the bourgeois expropriation of the direct producers (small, independent peasants) that gave rise to capitalism.  The connection of this to the negation of the negation is indeed very implicit!

(5) But there is some textual warrant for Dunayevskaya’s interpretation, and her point, if I understand it, is brilliant. Marx writes (p. 928) that “new forces and new passions spring up in the bosom of society, forces and passions which feel themselves to be fettered by that society.  It has to be annihilated; it is annihilated.”  If I understand Dunayevskaya’s point, it consists of two things.

• What’s sauce for the goose is sauce for the gander.  If Marx understood that revolution involves new forces and passions, why should we limit that recognition to the immediate context (the capitalist revolution against the free peasants)?  What is to prevent it from being part of the revolutionary process “as such”?  Why should it not apply equally to the revolution againstcapitalism, the negation of the negation?
• More importantly, Marx’s “feel themselves to be fettered …. It has to be annihilated” is a recognition that material conditions in the narrow sense are not the sole driving force of the revolutionary process (I say “narrow sense” because, in the previous sentence, Marx refers to the new forces and passions as the “material means of … destruction” of the old society).  Dunayevskaya undoubtedly saw in this passage not only the drive to be free (unfettered), and not only the subjectivity (feeling) involved in the process of liberation, but the anticipation of the new (in the case of the bourgeoisie, they were salivating after the money they could make in the new society!).  The reason I say this is that when she referred to “new passions and new forces,” she regularly defined this more precisely as “‘new passions and new forces’ for the reconstructing of society” (Philosophy and Revolution, p. 93), or some similar expression.

(6) There is a whole lot involved in this.  I’ll just single out one thing.  The standard post-Marx Marxist understandings of the revolutionary process were either vanguardist/voluntarist – the vanguard party, with its advanced consciousness “from outside,” was the driving force behind the revolutionary development of the masses – or fatalistic and spontaneist – the process of capitalist development creates its own gravediggers automatically, spontaneously, with the inevitability of a natural process.  The Johnson-Forest Tendency, of which Dunayevskaya (Forest) was co-leader, had already broken with the former conception a few years before 1953.  In the 1953 letters, I believe, Dunayevskaya was above all breaking philosophically from C.L.R. James’ (Johnson’s) spontaneism.  It is quite important that James continually stressed and stressed again Marx’s phrase “trained, united and organized by the very mechanism of the capitalist process of production” in the paragraph right before “negation of the negation” on p. 929 of Capital, Vol. I.  Taken by itself, the phrase, and indeed the whole paragraph, can easily be read as suggesting that Marx, too, had a fatalistic and spontaneist conception of the revolutionary process.  What I think Dunayevskaya was saying is that, while the workers are indeed spontaneously revolutionary – this flows automatically from them being “trained, united and organized by the very mechanism of the capitalist process of production,” and from the AGLCA that continually separates them from the means of making a living and from property, that makes technology an alien power, etc. – this is necessary but not sufficient for there to be a new society.  There also needs to be a positive moment, the creation of the new.  The new society is founded upon the idea of a new society, the passion to reconstruct society on new beginnings, but this is only a beginning. Subjective self-liberation is a process that requires self-development.  In her May 20, 1953 letter on Hegel’s Absolute Mind, Dunayevskaya writes, “Mind itself, the new society, is ‘the mediating agent in the process.’” And this requires a dual movement of theory and practice, in which both sides develop.  I could try to justify this last point through a fairly complex and difficult interpretation of her interpretation of the three final syllogisms of Hegel’s Philosophy of Mind.  In lieu of that, let me just refer now to p. 60 of Dunayevskaya’s Rosa Luxemburg, Women’s Liberation, and Marx’s Philosophy of Revolution (emphasis in original):

Luxemburg was absolutely right … that the Marxist movement … “reckons on the organization and the independent, direct action of the masses” …. However, she is not right in holding that, very nearly automatically, it means so total a conception of socialism that a philosophy of Marx’s concept of revolution could likewise be left to spontaneous action.  Far from it.  … in the 1905 Revolution, … spontaneity was absolutely the greatest, but failed to achieve its goal.

Note the linkage of automaticity and spontaneism, the implication that a total conception of socialism is needed for a successful revolution, and the claim that this cannot be left to spontaneity. There needs to be a new relation of theory and practice, a new relation of masses to Marx’s philosophy of revolution. Groups like ours are needed to help the masses acquire the total conception of socialism that they themselves will need in order to have a successful revolution.

There’s a lot more I could say.  For instance, I haven’t even touched on what Dunayevskaya called Hegel’s “throwing out of the Logic” at the end of the Philosophy of Mind, which I think was related, in her view, to the subjectivity of self-liberation, as against the development of the proletariat by means of the logic of capital.  I hope to take this up in a future essay.

Marx’s critical dialogue with the work of the French anarchist thinker Pierre Joseph Proudhon spanned several decades-from his youth haunting the cafes of Paris, where he had occasion to meet Proudhon and discuss German philosophy, through the writing of the Grundrisse, Capital, and theCritique of the Gotha Program. While largely ignored in the present, Marx’s critique of Proudhon remains of real import for all of us struggling to break the hold of capital over our lives and our world.
Three aspects of Marx’s critique will be explored here: (I) the limits of reforms in the sphere of circulation; (II) economic laws and the possibilities which politics and consciousness offer for their transcendence; and (III) Marx’s still largely uncharted concept of “directly social labor.”

‘Fair Trade’

In his 1846 Philosophy of Poverty, Proudhon locates a contradiction between use-value and exchange-value-a contradiction which he holds as the basis of poverty, inequality, and economic crises. With what he terms “constituted value” or “synthetic value,” Proudhon, drawing on the value theory of classical political economy, endeavors a resolution of the contradiction. “Synthetic value,” Proudhon maintains, is the ground for abolishing unequal exchange. (1) What Proudhon is proposing, in practical terms is that one commodity which requires, for instance, four hours to produce will exchange with any other commodity that requires four hours to produce. For Proudhon this would be a situation of equality: equal contributions to society receiving equal rewards from society.

A year later, in his 1847 Poverty of Philosophy, the only book that he wrote in French, Marx tears this formulation to pieces. Proudhon, Marx argues, “give[s] as a ‘revolutionary theory of the future’ what Ricardo expounded scientifically as the theory of present-day society, of bourgeois society, and…thus take[s] for the solution of the antinomy between utility and exchange value what Ricardo and his school presented long before him as the scientific formula of one single side of this antinomy, that of exchange value.” Moreover, says Marx, “relative value [or exchange-value], measured by labor time, is inevitably the formula of the present enslavement of the worker, instead of being, as M. Proudhon would have it, the ‘revolutionary theory’ of the emancipation of the proletariat.”

Marx understood the law of value rather differently than Proudhon: not in terms of “equality” but in terms of “inequality.” What appears as an equality is just that-an appearance-because it is not individual, concrete labor that has a tendency to exchange in equal ratios, but only socially average, abstract labor. In Capital, Marx shows that the value of a commodity is determined by the amount of “socially necessary labor-time” required for its reproduction-any labor-time beyond that which is socially necessary is simply wasted (i.e., labor-time during which no value is created). (2)

The fact that our labor doesn’t count equally is not because of unequal exchange, but because our labor is not counted equally in the first place-in the process of production. The labor of some workers counts more than the labor of other workers in production. One worker, for instance, may be stronger or faster than another worker; one worker may be working with more modern technology than another. Only socially necessary labor, labor which measures up to the social average, is registered in our society.

Marx maintains that relations of exchange are rooted in the relations of production. Unequal exchange, or rather what appears as unequal exchange, ultimately can’t be overcome without uprooting present production relations and transcending value production.

Much of the Left today-including both anarchists and Marxists-continues to locate the roots of poverty, inequality and economic crises in the realm of exchange and to prescribe remedies that focus on exchange. This is particularly pronounced in the anti-globalization movement. Think about campaigns for “Fair Trade” (rather than “Free Trade”) and the work of organizations like Global Exchange and Trade Craft. Consider also the recent Life After Capitalism conference at the CUNY Graduate Center, which featured panels promoting gift-exchange and barter as alternatives to capitalism. The panel on the latter was called “The Barter System in Argentina: is it Possible in our Town?”

Marx’s critique of Proudhon demands that we consider whether efforts at abolishing markets or changing property relations can offer ground for real social transformation. In this, it also demands that we rethink the experience of the Soviet Union, China, Cuba and the other so-called “socialist” countries. The new global justice movements have largely rejected this experience as a model-they have rejected the vanguard party, the seizure of state power, the five-year plan. This is plainly sensible-but it is a partial critique: it is not sufficient to counterpose new decentralized and anti-authoritarian movements to the old vanguardist movements. Like with Proudhon’s work, there is a failure to look closely at the mode of production itself. To be sure, some property relations were changed and some wealth was redistributed in the so-called “socialist” countries, but value production was simply not overcome and labor remained alienated.

A second feature of Marx’s critique of Proudhon that deserves attention is his treatment of economic laws and their transcendence.

Can Politics Break the Law of Value?

Proudhon argues that the contradiction he finds between “use-value” and “exchange-value” is also a contradiction between “supply” and “demand.” Proudhon’s concerns are practical in nature. The 1840s, known as the “hungry forties,” witnessed severe economic crisis across the continent, culminating in the revolutions of 1848. In a crisis demand drops off-things can’t be sold and prices fall. Proudhon says that the contradiction between supply and demand can be overcome if commodities are made to exchange directly in proportion to the amount of labor required for their production. Set prices equal to values, so that supply and demand find equilibrium, and voila: commodities will always be exchangeable and at a fair price.

Marx maintains, in the Poverty of Philosophy, that Proudhon “inverts the order of things.” For it is when supply and demand come into balance that prices equal values. (3) Marx jokes that while everyone else ventures outside for a walk when the weather is good, Proudhon would have us leave the house to insure good weather!

In the course of his discussion of these issues in the Poverty of Philosophy, Marx draws an important distinction between the role of a “legislator” and that of an “economist.” As a legislator, Marx tells us, Proudhon is free to decree the abolition of the law of supply and demand. However, says Marx, “[i]f…he [Proudhon] insists on justifying his theory, not as a legislator, but as an economist [my emphasis], he will have to prove that the time needed to create a commodity indicates exactly the degree of its utility and marks its proportional relation to the demand…” A legislator-and for Marx’s legislator we could easily substitute a central committee, a workers’ council or a worker-run co-op-may be able to decree that one hour of labor is equal to another. However, what will happen when demand for a product-as with typewriters in the advent of the personal computer-drops off? The labor that went into the production of the typewriters will no longer count -they simply won’t sell, their price will fall, workers will lose their jobs.

While Proudhon was content to remain a captive of the commodity-form, there are many of us today who want to transcend commodity production and transcend capital. Can we legislate the abolition of commodity production? Can politics break the law of value?

Too often we seem to be thinking like Marx’s “legislator.” Much of the Left today-from Stalinists to social democrats to anarchists-seems to believe that politics are in command. Too often, regardless of whether one’s program demands seizing state power or smashing state power, the problematic remains limited to matters of political power, consciousness, and organizational form.

Proudhon’s interest in the equilibration of supply and demand led him to advocate the abolition of money. In the course of his critique of this aspect of Proudhon’s thought, Marx elaborates a crucially important notion-namely that of “directly social labor”-which is still not well understood.

Directly Social Labor

Marx develops the concept of “directly social labor” or “immediately social labor” in critical dialogue with the work of Proudhon, the Ricardian socialists and later with the followers of Ferdinand Lassalle. In endeavoring an equalitarian application of Ricardo’s theory, Proudhon and left Ricardian thinkers like John Gray, advocated what we would today call monetary reform: they sought to replace money with “time chits” or “labor money.” These “time chits” were designed to directly reflect labor time. In other words, in exchange for a commodity that took, say, 12 hours to produce, the producer would receive a certificate from a bank entitling her to any other commodity that took 12 hours to produce. Proudhon and Gray wanted every commodity to be directly social, directly exchangeable, with every other commodity in the same way that money is directly social. Proudhon and the other “time-chitters,” as Marx calls them in the Grundrisse, thought the mediation of money stood in the way. (4)

Marx, however, cautions us not to get caught up in money’s dazzle and sheen. Money, Marx argues in Volume I of Capital, crystallizes out of a contradiction within the commodity itself: a contradiction in the commodity between “use-value” on the one hand and “value” on the other hand; a contradiction between “concrete labor” (labor which produces use-values) and “abstract labor” (labor which produces value); and a contradiction between “private labor” (the labor of the individual) and “directly social labor” (the labor that society counts). One can’t then abolish money without abolishing the commodity-form.

Proudhon’s “pious wish” to abolish money without abolishing commodity production, Marx says inCapital, is rooted in “the illusion…that all commodities can simultaneously be imprinted with the stamp of direct exchangeability, in the same way that it might be imagined that all Catholics can be popes.” In other words, as long as there are commodities, one commodity will necessarily take the form of Pope ruling over all the other commodities.

In the 1875 Critique of the Gotha Program, Marx again returns to the issue of “directly social labor.” Marx’s characterization here of a higher phase of communism in which society will inscribe upon its banners “from each according to her ability, to each according to her needs” is well known. His characterization of the lower phase of communism remains poorly understood. In this lower phase, Marx says:

[T]he individual producer receives back from society…exactly what he gives to it…He receives a certificate from society that he has furnished such-and-such an amount of labor…and with this certificate he draws from the social stock of means of consumption as much as the same amount of labor costs. The same amount of labor which he has given to society in one form, he receives back in another.

This sounds very much like the proposals of Proudhon and other “time-chitters” that were the subject of decades of invective from Marx. There is, however, a real difference between what Marx is suggesting and the formulations of Proudhon-if we can get at this difference, we will have understood not only Marx’s critique of Proudhon but also have discovered one of the real clues that Marx has left us for figuring out how to transcend capital.

The difference is that, here, labor is “directly” or “immediately” social. Unlike in the formulations of Proudhon and unlike in our own commodity-producing society, where the exchange of equivalents exists only in the average, here there would actually be an exchange of equivalents in the individual case. “[N]ow,” as Marx notes, “in contrast to capitalist society, individual labor no longer exists in an indirect fashion but directly as a component part of total labor.” So here, right from the beginning, Marx is telling us that the law of value will not hold. The labor, Marx says, employed in the production of products will no longer take the form of a material quality possessed by them; the products of our own hands will no longer have control over us.

While Proudhon is not well remembered today, the kinds of ideas that he advanced have become conventional wisdom on the Left, particularly in the new global justice movements. A return to Marx’s critique of Proudhon offers a salutary antidote to such conventional wisdom and, perhaps, a path forward for all of us searching for real alternatives to capital.

Footnotes:

1. Ricardo’s Principles of Political Economy and Taxation, which posits labor as the source of value and labor-time as its measure, had been translated into French more than a decade before Proudhon’s Philosophy of Poverty was first published.

2. “Socially necessary labour-time is the labour-time required to produce any use-value under the conditions of production normal for a given society and with the average degree of skill and intensity of labour prevalent in that society” (Capital, p. 129, Penguin edition). In the Philosophy of Poverty, Marx posits the labor-time required by the most productive workers (rather than “socially necessary labor-time”) as determining the magnitude of value.

3. Strictly speaking, as Marx shows elsewhere, when supply equals demand, prices in the market equal prices of production, not values.

4. Ideas of this kind still remain with us today -e.g., alternative currency schemes like “Ithaca Dollars,” the “LETSystem” and “Burlington Bread” (which is denominated in “slices”).

(This essay originally published in News and Letters, July-August 2005)

7 Comments on “Marx, Proudhon, and alternatives to capital”

1. 1Nickglais said at 4:23 pm on May 5th, 2009:P. J Proudon’s The Philosophy of Misery, or the System of Economical Contradictions (1846)strong contains a long section on competition which attempts to show that because the aims of communism are hostile to competition, communism is utopian, that it is merely a dream. (We quote from the English Edition of 1888″ competition is as essential to labour as division, since it is division itself returning in another form, or rather raised to its second power.. competition is in a word is liberty in division and in all the divided parts (Page 223) Competition is a principle of social economy, a decree of destiny, a necessity of the human soul.. (p229) ” Man rouses from his idelness only when want fills him from anxiety; and the surest way to extinguish his genius .. is to take away from him all hope of profit and of social distiction which results from it (page 234) competition on its useful side should be universal and carried to its maximum of intensity. (page 251).

   “Can competition in labour be abolished ? It would be as well worth while to ask if personality, liberty, indivudual responsibility can be supressed (page 258) there can be no question of destroying competition, as impossible as to destroy liberty: the problem is to find its equilibrium,
   I would willing say its police (page 261)

   ” They ( the communists) say : emulation is not competition. But emulation is nothing but competition itself. There is no emulation without an object: just as there is no passional initiative without an object, and as the object of every passion is analagous to the passion itself, woman to the lover, gold to the miser, crown to the poet – so the object of industrial emulation is profit. Why substitute for the immediate object of emulation, which is personal welfare, that far away and almost metaphysical motive called general welfare, especially when the latter is nothing without the former and can result only in the former.

   “My sole reply to him ( the communist) shall be : In denying competition you abandon the thesis: henceforth you have no place in the discussion.

   The question is the solution of the problem of competition – that is the reconciliation of egoism with socal necessities: spare your moralities (page 225-6)

   But if they the ( the communists) now fall back upon the hypothesis of transformation of our nature, unprecedented in history.. its is nothing more than a dream… a contradiction given to the most certain economic sciences; and my only reply is to exclude it from the discussion (page 228)

   Man may love his fellow well enough to die for him; he does not love him well enough to work for him”

   Because of its hostility to competition ” Communism is the very denial of society in its foundation” and the communists are “incessantly confounding matters of reason with those of sentiment” (page 283)

   The above may have been written by the great annd fearless revisionist Marxist Ota Sik himself.

   But let us see how the unrepentent Communist Karl Marx replied to the Philosophy of Misery in the Misery of Philosophy (1848) and we will see the aptness of his reply to the present day philosophers of misery, the solemn, long faced, mournful and miserable ideologists of market socialism.

   “M Proudhon begins by defending the eternal necessity of competition against those who wish to replace it with emulation. Competition is emulation with a view to profit. Is industrial emulation necessarily emulation with a view to profit, that is competition ? M Proudhon proves it by affirming it. ( page 163)

   “If the immediate object of a lover is a woman, the immediate object of industrial emulation is the product and not the profit.”

   “Competition is not industrial emultion it is commercial emulation.In our time industrial emulation exists only with a view to commerce. There are even phases in the life of modern nations when everybody is seized with a sort of craze for making profit without producing. This speculation craze which recurrs periodically, lays bare the true character of competition, which seeks to escape the need for industrial emulation (page 165).

   The distinction between competition and emulation is of crucial importance. “Competition is not industrial emulation, It is commercial emulation” ” The immediate object of industrial emulation is the product and not the profit”.

   This distinction between competition and emulation is blurred by all varities of opportunism. It is easy to see why revisionists should wish to blurr it so as to make competition appear as a category of production as such instead of being mere a category of the commercial system.

   On the other hand there are some so called anti revisionists who represent Stakhanovism, for example as a system of competition instead of industrial emulation. Thus revisionism and petty bourgeois Utopianism blur this vital distinction.

   Bu it is clear that industrial emulation, in which the object is the product, is entirely different from , and of infinitely more significance in the development of the productive forces than, competition, whose object is profit made on the sale of the product.

   As for Proudhon’s good and bad sides of competition which recurrs in modern revisionism, and the notion that what is required is to abolish the bad side of competition, while maintaing and developing its good side;

   ” They all want competition without the lethal effects of competition. They all want the impossible, namely the conditions of bourgeois existence without the necessary consequences of those conditions (page 213)

   The “bad side” is an integral part of the competitive relationship.Thee is no possibility of retaining the competitive realtionship while eliminating is “bad side”.

   Proudhon saw it as a necessity of thre human soul that only competitive struggle for profit roused man from ihe innate tendency to idelness and stagnation.

   This notion also recurs as a fundamental part of political economy of modern revisionism. The effect of the bourgeois system is represented as the cause of the bourgeois ( or market socialist ) system in human nature.

   Marx commented;

   ” the bourgeois man is to them the only possible basis of every society; they cannot imagine a society where men have ceased to be bourgoeis (213).

   “M. Proudhon does not know that all history is nothing but a continuous transformation of human nature” (page 165)

2. 2Andrew Kliman said at 1:13 am on May 6th, 2009:Hi Nick,On your comment that “Proudhon saw it as a necessity of the human soul that only competitive struggle for profit roused man from the innate tendency to idleness and stagnation,” and Marx’s response.

   The following year, in the _Communist Manifesto_, there’s also this response (which I really get a kick out of):

   “It has been objected that upon the abolition of private property, all work will cease, and universal laziness will overtake us.

   “According to this, bourgeois society ought long ago to have gone to the dogs through sheer idleness; for those of its members who work, acquire nothing, and those who acquire anything do not work. The whole of this objection is but another expression of the tautology: that there can no longer be any wage-labour when there is no longer any capital.”

   I’m also reminded of the engineer, a socialist, who worked for Edison (or maybe Bell) about a hundred years ago, and attacked pretty hard the notions that profit is necessary for or even conducive to invention. Does anyone remember/know more about this? My memory is shot.

   In regard to “history is nothing but a continuous transformation of human nature”: if this is consonant with Maoism, why did Mao think that the law of value would persist for hundreds of years under socialism? (This is a genuine question I have, not a rhetorical one.)

3. 3Nickglais said at 5:13 am on May 6th, 2009:Andrew,Thanks for your comments, and thanks for your innovative work recovering Marx’s Political Economy.

   I have attached a note on Mao and the Law of Value for your critical consumption.

   Mao on the Law of Value

   The law of value serves as an instrument of planning. Good. But the law of value should not be made the main basis of planning.

   We did not carry through the Great Leap on the basis of the demands of the law of value but on the basis of the fundamental economic laws of socialism and the need to expand production. If things are narrowly regarded from the point of view of the law of value the Great Leap would have to be judged not worth the losses and last year’s all-out effort to produce steel and iron as wasted labor. The local steel produced was low in quantity and quality, and the state had to make good many losses. The economic results were not significant, etc.

   The partial short-term view is that the campaign was a loss, but the overall long-term view is that there was great value to the campaign because it opened wide a whole economic construction phase. Throughout the country many new starts in steel and iron were made, and many industrial centers were built. This enabled us to step up our pace greatly.

   In the winter of 1959 over 75 million people were working on water conservancy nationwide. The method of organizing two large-scale campaigns could be used to solve our basic water conservancy problems.

   From the standpoint of one, two, or three years the value of the grain to pay for so much labor was naturally quite high. But in the longer view the campaign could considerably increase grain production and accelerate it too, and stabilize agricultural production, and so the value of commodities per unit gains. All this then goes toward satisfying the people’s need for grain. The continuing development of agriculture and light industry creates further accumulation for heavy industry.

   This too benefits people in the long run. So long as the peasants and the people of the entire country understand what the state is doing, whether money is gained or lost, they are bound to approve and not oppose. From among the peasants themselves the slogan of supporting industry has been put forward.

   There is the proof! Stalin as well as Lenin said, “In the period of socialist construction the peasantry must pay tribute to the state.” The vast majority of China’s peasants is “sending tribute” with a positive attitude. It is only among the prosperous peasants and the middle peasants, some 15 percent of the peasantry, that there is any discontent. They oppose the whole concept of the Great Leap and the people’s communes.

   In sum, we put plans ahead of prices. Of course we cannot ignore prices. A few years ago we raised the purchase price for live pigs, and this had a positive effect on pigbreeding. But for the kind of large-scale, nationwide breeding we have today, planning remains the main thing we rely on.

   Page 521 refers to the problem of pricing in the markets of collective farms. Their collective farm markets have too much freedom. It is not enough to use only state economic power to adjust prices in such markets. Leadership and control are also necessary. In our markets, during the first stage, prices were kept within certain bounds by the government. Thus small liberties were kept from becoming big ones.

   Page 522 says, “Thanks to our command of the law of value, the kind of anarchy in production or waste of social labor power the law entails under capitalism is not found in a socialist economy.”

   This makes too much of the effects of the law of value. In socialist society crises do not occur, mainly because of the ownership system: the basic laws of socialism, national planning of production and distribution, the lack of free competition or anarchy, etc., and not because we command the law of value. The economic crises of capitalism, it goes without saying, are determined by the ownership system too.

   This extract is from Mao – Critique of Soviet Economics

4. 4Joe said at 3:44 am on May 9th, 2009:You missed the biggest difference between Marx’s labor vouchers and labor money. As Marx says in the second volume of Capital, “The producers may eventually receive paper checks, by means of which they withdraw from the social supply of means of consumption a share corresponding to their labor-time. These checks are not money. They do not circulate. “
5. 5Andrew Kliman said at 12:06 pm on May 22nd, 2009:A reply to Nick and to Joe
   ==========================

   To Nick:

   Hi! Thanks for the reply. I think the key issue here is Mao’s initial premise: “The law of value serves as an instrument of planning.” Or in other words, “we command the law of value.”

   I don’t see how that can be, if one means socialist planning rather than capitalist planning. A law is something that is in control, not something one controls. The continued operation of the law of value thus implies that the direct producers are subject to economic imperatives that they cannot control and to which they must submit.

   There is a similar difference between Marx and Proudhon about this. As Seth notes in the article, Marx wrote in _The Poverty of Philosophy_ that “relative value, measured by labor time, is inevitably the formula of the present enslavement of the worker, instead of being, as M. Proudhon would have it, the ‘revolutionary theory’ of the emancipation of the proletariat.”

   To Joe:

   Okay, I’ll bite. Why is the fact that Marx’s labor vouchers don’t circulate “the biggest difference” between them and “labor money”?

   After all, there are potentially “black markets.” So there are economic relations that determine whether or not, IN FACT, the labor vouchers circulate. Thus it seems to me that the biggest differences are the differences that CAUSE the labor vouchers not to circulate.

   So I think Seth has it right when he asks, “Can we legislate the abolition of commodity production? Can politics break the law of value?” I don’t see that the non-circulation of vouchers is something that can be instituted and sustained by decree.

   Take the case that Seth presents: “what will happen when demand for a product-as with typewriters in the advent of the personal computer-drops off?” Unless there are profound changes in real economic relations that can enforce the non-circulation of the labor vouchers, what is likely to happen, I think, is

   (a) the typewriter workers don’t receive any vouchers-because their labor is not deemed necessary by “society”; or

   (b) facing imminent unemployment, they keep their jobs by “willingly” offering to accept a 1-hour voucher in exchange for a typewriter that took 2 or 3 or whatever labor-hours to produce; or

   (c) the economy breaks down because inefficiency is being rewarded and because labor and other resources are being used to produce things for which there isn’t demand, and diverted away from production of things for which there is strong demand.

6. 6nickglais said at 11:29 am on April 10th, 2010:Here is my book on Marxism against Market Socialismhttp://democracyandclasstruggle.blogspot.com/2010/04/democracy-and-class-struggle-publishes.html

   Take a look !

   Nickglais

7. 7bcooney said at 12:52 pm on August 19th, 2010:Andrew,I’ve read this essay multiple times but it is just now that it occurs to me to ask this. When Marx says, “and with this certificate he draws from the social stock of means of consumption as much as the same amount of labor costs.”… how do we know how many items of consumption can be withdrawn from this social stock without any measure of the average labor time it takes to make a commodity? Are you saying that commodities in the social stock are worth whatever the individual labor time went in to them, so that same commodity has a heterogeneous measure of its labor time? Or are you suggesting that centralization of production is enough that individual deviations in productivity are wiped out…. Or am I missing something crucial?