Marx on the Use of History to Define Capitalism

8/6/2019 Marx on the Use of History to Define Capitalism

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dis tory of Political Economy r4:30 1982 by Duke University Press

Marx on the use of history in the analysis ofcapitalism

Richard Nordahl

Everyone know s that Marx has an historical approach. But there is con-fusion regarding the nature of that approach. How does Marx use historyto help understand cap italism? In o rder to understand the capitalist m odeof production, how important is historical knowledge, knowledge of pre-capitalist systems, and knowledge of how the capitalist system came tobe? How does Marx use and present historical facts to help make his theo-retical points regarding the capitalist mode of production? The purpose ofthis article is to explore such questions.

The logical-historica l approach

Marxs presentation inCapital is a step-by-step logical development of

the concepts and theories necessary in order to understand the capitalistmode of production. M arx begins (ch.I of Capital I) with the most simpleand basic form, the commodity. He examines its form, e.g., its twofoldnature as a use value and an exchange value, and then proceeds to examinethe exchange relationships between commodities; his labour theoryofvalue is presented in the courseof this examination and it leads to a dis-cussion of the nature of money, in particular how money is necessary in asystem of regularized commodity exchange. Marx proceeds (chs.2-3) todiscuss the circuit of com modity exchange, in termsof what he calls simple

commodity production (selling in order to buy). He then (chs.4-5)contrasts this simple comm odity production with the more advan ced, cap-italist commodity production (buying in order to sell). In order to an-swer the question of the source of the capitalists profit, Marx leaves thesphere of circulation and exam ines the sphere of production. He discussesthe social relationship between the capitalist and the wage labourers andshows how this relationship allows the capitalist to expropriate surplusvalue from the producers (chs.6-8). There then follows a long discussion(chs. 9-16) of the ways by which capitalists can increase the rate of sur-

plus value. Absolute surplus value is increased by extending the workingCorresponden ce for the author may be sent to Professor Richard Nordahl, D ept. of Econom-ics and Political Science, University of Saskatchewan, Saskatoon, CANADA S7N OWO.

I . References are to Capi ta l , vol. I, Penguin ed . (Harmondsworth, 197 6).

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Nordahl Marx on the use of history 343

day; relative surplus value by raising the productivity of labour, e.g. bydeveloping the division of labour and by introducing machinery. This dis-cussion of the production of surplus value contains within it a descriptionof the class struggle between capitalists and wage labourers. In chapters23 to 25 of Capital I (Part VII) Marx discusses the process of capitalaccumulation and the effect that this hason the working class. This isfollowed by a discussion in Part VIII (chs. 26-33) of primitive accumu-lation, in particular the creation of the propertyless proletariat. V olume I1(Capital 11) is mainly an analysisof the process of the circulation of cap i-tal, including discussion of circulation time and its effect on productionand discussion of the famous reproduction schem es. Volume I11 is princi-pally an examination of the distribution of the surplus amongst the indus-trial capitalists, commercial capitalists, banking capitalists, and landlords.Rent, commercial capital, and banking capital are dealt with in som e de-tail. There are also sections on econom ic crises.

In a review of one of M arxs econom ic works Engels notes that Marxspresentation of economic theory is logicaland historical at the sam e time.The order in which Marx presents his categories and develops his theoryof capitalism ( i.e ., the logical presentation) co rresponds, in general, to thereal history of capitalist economic forms. InCapital Marx is writing eco-nomic history at the same time that he is constructing his theory of thecapitalist mode of production. Influential Marxist interpreters in the twen-tieth century like Ernest Mandel have adopted a similar approach.*

From the standpointof this logical-historical interpretation, let us con-struct a reasonably plausible Marxist descriptionof the history of capitalso as to see the supposed parallels inCapital between the logical and thehistorical. Com modity exchang e begins with comm unities exchang ingtheir surplus products, e.g., copper bracelets for salt. In time, as tradeexpands and becomes more regularised, the ratios at which the productsare exchanged co me to correspond roughly to the amount of labour taken

2. Frederick Engels, Review of Marxs A contribution to the critique of political econ-o m y, appearing in Da s Volk, no. 16, 2 0 Aug. 1859, appended to a recent edition of Marxsbook (London, I97I), pp. 222-27. See also Engels Supplement to Capital I11 (New York,1967)~ p. 891-907. For contemporary Marxist examples of a logical-historical interpre-tation, see Ernest Mandel, Introduction to the Penguin edition of Capital I; Mandel, Marxisteconomic theo ry, 2 vols. (New York, 1970); Ronald Meek, Studies in the labour theory ofvalue (London, 1958), chs. 4 and 5 ; Meek, Some notes on the transformation problemand Karl Marxs economic method, both in his Economics and ideology (London, 1967);Meek, Smith, Marx, and after (London, 1977), ch. 7; and Roman Rosdolsky, The makingof Marxs Capital (London, 1977). Rosdolsky and Meek (especially in his Smith, Ma rx,and after) qualify their acceptance of Engels logical-historical interpretation. The logicalpresentation in Capi t a l , they say, does not correspond in all respects to the general courseof historical development, and Marx knew this. Meek, e.g., argues that the logical andthe historical correspond in Marxs analysis of the commodity form and money and in hisanalysis of the transformation of values into prices; but o n certain other topics the logicaland the historical do not correspond.

3. For an example of such a description, see Mandel, Marxist economic theo ry, vol. I .


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to produce them. There develops the need for a universal equivalent ofexchange, and thus money comes into being. W ith the decline of the feu-dal economic order, simple commodity production (sellingin order tobuy) becomes a dominant form of production in muchof western E urope.Free peasant households and urban artisans produce commodities to beexchanged on the market for money to buy their necessities. There arealso in the society large internationally oriented merchants and usuriousmoneylenders who engage in economic activity in order to make moneyout of money. Some of these large merchants who are interestedin money-making for its own sake (buying in order to sell) gradually come todominate economically some of the petty commodity producers. Eventu-ally, formerly independent craftsmen come to be grouped together in largemanufactories operated by the m erchants who are turning into capitalists;the craftsmen become wage labourers. Concomitantly with this develop-ment of m erchant capitalism, a numberof the petty comm odity peasantsare able to enlarge and improve their farming operations to the ex tent thatthey are able to employ agricultural wage labourers. B ut at the sam e time,many independent peasants lose their land and are forced to join the grow-ing ranks of the proletariat. A constant goal of capitalists is to increase therate of surplus value. In the early stages of capitalism an increased rate is,generally speaking, achieved by extending the workday. In later stagesofcapitalism increase in the rateof surplus value is mainly brought aboutthrough improvem ent in labour productivity. Capitalist competition forcesindividual capitalists continually to modernize and expand in size theirenterprises. The division of labour within the factory is perfected, and ata certain stage machinery is introduced and then improved upon . T he classstruggle between w orkers and capitalists which is built into the very struc-ture of the system becomes intensified in the later stages of capitalism,partly in response to recurring economic crises. The workers organizepolitically and at some point in the future will seize state power and beginto construct a socialist society. The parallels between thishistorical sketchand the logical presentation of concepts in Capital (briefly sketchedabove) are obvious.

In his brief discussion of Marxs so-called logical-historical approachEngels makes the point that history moves often in leaps and bounds andin a zigzag line, and thus not in a linear, step-by-step progressive fashion(as described in the preceding ~ a r a g r a p h ) . ~or example, commodity pro-duction was fairly well developed in parts of ancient Greece and Italy, butunderwent a dramatic decline in the early Middle Ages.5 The historicalpresentation in Capital is, then , according to Engels, a corrected version

4. Review of A contribution to the critique, p. 2 2 5 .5 . My ex ample, not Engelss.


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of the actual historical development of economic forms; the zigzags areeliminated. The history of the economic forms is presented as a step-by-step progression from the more simple and primitive forms to the morecomplex and developed. This corrected presentation is still in accord,Engels wou ld stress, with the general courseof historical development.

If the logical-historical interpretation is correc t, then know ledge of thehistorical process is obviously beneficial in helping understand the maturecapitalist system. A tracing of the historical development of economicforms would give one-assuming the zigzags were avoided-theoreticalunderstanding of the capitalist system. Ernest Mandel in his two-volumedescriptive study of Marxist economic theory, accepts this view. In fact,he says an historical approach is absolutely necessary: The secret of nocategory [e.g., commodity or money] can be discovered without studyboth of its origin and its evolution.6 True to this belief, Mandel ap-proaches his subject of economic theory historically. He traces the histor-ical development of the commodity form and the system of exchangerelations, describes the genesis of the capitalist system, and then followsthe development of this capitalist system through to its present stage. Inthe course of this detailed historical survey Marxist economic concepts aredeveloped and explained. Unfortunately, Mandel does not develop his ar-guments concerning why such an historical treatment is necessary, or atleast helpful, in order to comprehend the theory necessary for an under-standing of capitalism. But two examples of possible arguments readilycome to mind.

Take first the case of the commodity form and the universal equivalent,money. Commodities and money are difficult to understand in the perspec-tive of the developed capitalist system. Commodity fetishism obscures thelabour theory of value. Whatare really relationships between the produc-ers of commodities (expressed as exchange ratios) take on the appearanceof relationships between inanimate things, the commodities themselves.7The value of a com modity appears to be determined by the natural mate-rial making it up. And money appears to have magical powers, powersderived from its goldness (i. e., from the natural material making it up).Such fetishistic illusions vanish once the development of the commodityform is traced historically. Commodity exchange develops out of the ex-change of surplus products between primitive communities. These prod-ucts have a use value in that theyare wanted by some party. The relativevalue of the products-what they are worth in relation to one another-is

6 . Marxist economic theory, I : 1 8 .7. For Marxs discussion of commodity fetishism, see especially Capital I, 163-77; and

A contribution to the critique, pp . 32-36. Marx argues that the very nature of commodityproduction-production by independent private enterprises for an ifnpersonal excha ngemarket-results in fet ish ism .


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at first fairly arbitrary. But once the exchange becomes regularised be-tween the com munities, the relative values of the exchanged products willbe roughly determined by the quantity of labour time taken to producethem. At a certain point in the development of exchange relationshipsthere will arise the need for a universal equivalentof exchange, a desig-nated commodity in which all other comm odities express their values andwhich therefore can serve as the medium of exchange.* This universalequivalent, or money, derives its power from its function in exchange.Its value is determined the same way as any other commoditys, by thequantity of labour time taken to produce it. An historical tracing of thedevelopment of the commodity form and money makes these truths read-ily apparent. It gives us, according to this interpretation, a theoreticalunderstanding of the nature of the commodity and money in a capitalistsystem.

Consider a second case.Mam argues that the key to understanding muchabout the capitalist system, including the nature of capitalist exploitation,is understanding the nature of the social relationship between capitalista n d w a g e l a b ~ u r e r. ~he wage labourer, having no means of production,is forced to sell his or her labour pow er to the capitalist. O wnership of themeans of production allows the capitalist to use the labour power of theworker to create a value greater than what the capitalist pays the worker.This exploitative relationship is often obscured in developed capitalism.In the perspective of the capitalist system it appears to be natural thatworkers work for capitalists. The system of exchange relationships itselfhelps to obscure the nature of the social relationship. The wage laboureris free (unlike the feudal serf) and agrees voluntarily to work for the cap-italist. And his wage appears to equal the value of what his labour powercreates. lo Historical study of the genesisof the capitalist system bringsinto focus the unique nature of the capitalist-worker social relationship andthus helps to dispel the illusions which are naturally generated within adeveloped capitalist system. Petty commodity producers lose control oftheir means of production (often through the direct use of force) and thusmust sell their labour power if they are to su rvive. Those who have accu-mulated substantial quantities of money capital (often stolen from abroad)can buy means of production of such a quantity that they can hire theimpoverished to work for them. T he unequal power relationship between

8 . For Mam s discussion of the nature of m oney, see Capital I, 157-63, 178-244.9 . Capital I, chs. 6 and 7 .1 0 . In the capitalist system there is no distinction in time and space between necessary

labour, labour which produces the value of the wa ge, and surplus labour, the labour whichproduces the capitalists surplus value. Thus, Marx argues, i t appears to many that thelabourer receives the full value of what his or her labour creates. S ee , e . g . , Capifal I,ch. 19.


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Norduhl Marx on the use of history 347

the two parties allows the capitalists to exploit the wage labourers. Toconclude, according to this interpretation, knowledge of how the proletar-iat came to be provides us with the theory of the nature of the capitalist-worker social relationship.

Criticism of the logical-h istorical interpretation

There are some fundamental difficulties with the logical-historical in-terpretation. First of all, Marx is quite explicit on the point that the orderof the presentation of concepts and theory in his theoretical works is de-termined by the logic of the capitalist system, And this order isnot thesame as the historical izppearance and development of the economic forms.In Capital Marx begins with the simple commodity, not because it ap-peared first historically (of what cam e to be capitalist forms), but becauseit is the basic element-the c e l l - o f the capitalist mode of production.I 2Capitalism is commodity production par excellence. One cannot begin tounderstand capitalism without comprehending the nature of the commod-ity. In order to analyse the comm odity Marx assumes away non-essentialelements (non-essential for purposes of understanding the commodity),such as the capitalist-labourer relationsh ip, competition between comm od-ity producers, fluctuations in the marke t p r i ce o f commodi t i e~ .~~hiscommodity is not the commodity which first emerged historically in thetrade between primitive communities. It is the fully developed commodityof the capitalist mod e of production.14 Onlyin a capitalist mode of pro-duction (in which, e.g., there is commodity production of the means ofproduction, and generally speaking, freedom of entry into all linesof pro-duction) is the law of value in full effect.I5 (From the first chapter ofCapital Marx assumes that the law of value is fully operative.) The ex-change ratios of commodities was at first (in the trade between primitive

I I . It would . . . be unfeasible and wrong to let the economic categories follow oneanother in the same sequence as that in which they were historically decisive. Their se-quence is determined, rather, by their relation to one another in modem bourgeois society.Introduction, Grundrisse: Foundations of the critique of political economy (rough draft),trans. Martin Nicolaus (London, 1973), p. 107. See Maurice Godelier, Rationality andirrationality in economics (London, 1972), p. 205.

1 2 . . . . for bourgeois society, the commodity-form of the product of labour, or thevalue-form of the commodity, is the economic cell-form. Preface to the first edition ofCapital I, p. 90. And Mam makes it quite clear in this preface that what he is examining isthe capitalist mode of production.

13. For Marxs statement on the need for abstraction, see his Preface to the first edition,ibid. For a good introductory statement on Mams method in Capital, see Paul Sweezy, Thetheory of capitalist development (New York, 1942), ch. I .

14. As the commodity-form is the most general and the most undeveloped form ofbourgeois production, it makes its appearance at an early date, though not in the samepredominant and therefore characteristic manner as nowadays. Capital I , I 76 (emphasisadded). And see Capital I, 173.

15 . . . . the full development of the law of value presupposes a society in which large-scale industrial production and free competition obtain, in other words, modern bourgeois


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comm unities) quite arbitrary;I6 and even by the Middle A ges no countryhad a general rate of profit.I7

Once M arx demonstrates the nature of the commodity form (asit existsin the capitalist mode of production), he then derives from this the natureand necessity of money. 8 His line of reasoning is that if there is general-ized comm odity production, then there has to be a money form. His formof presentation is logical-analytical, not historical-genetical.

As his analysis in Capital I advances, Marx introduces, step by step,progressively m ore com plicated e lements, and thus fills out the picture ofthe capitalist mode of production. After having explained money, Marxproceeds (chs. 2 and 3) to examine the fundamentals of the circuit ofcommodity exchange. In doing this he works with an abstract model ofsimple commodity production (selling in order to buy). And then afternoting (chs. 4 and 5 ) that capitalist production is essentially concernedwith making money (buying in order to sell), he introduces the socialrelationship between capitalist and w age labourer and shows how this re-lationship gives to the capitalist the power to extract surplus value andthus enables him to make his money (chs.6 and 7). Note that Marx doesnot discuss commodity production before capitalist social relations be-cause simple commodity production p receded capitalism and evo lved intoit. To repeat, the order of his presentation is determined by the logic neededto explain capitalism. The simple commodity productionof Capital isconstructed from the elements of a developed capitalist system which Mamwants to explain at this stage of his an alysis .lg It thus presupposes certainfeatures only present in such a capitalist system, e.g., the commodity asthe predominant economic form, free entry into and out of production,

society. A contribution to the critique, p. 60 . And in a letter referring to this book Marxwrites that the theory of value developed in it presupposes the dissolution of all undevel-oped, pre-bourgeois modes of production not completely dominated by exchange . Thisdetermination of value [by labour] is merely the most abstract form of bourgeois wealth.Marx to Engels, 2 April 1858, Selected Correspondence, p. 105. Marxs concept of valueentails the idea of abstract labour. And the existence of abstract labour presupposes a fullydeveloped bourgeois society. See Grundrisse, pp. 104-5.

16 . E.g., Capital 111, 329; and Capital I, 182.17. Capital 111, 597.18. The principal difficulty in the analysis of money is surmounted as soon as it is

understood that the commodity is the origin of money. A contribution to the critique,

19 . Marx frequently refers to the circulation of commodities as the surface phenome-non of a capitalist economic system. This circulation of commodities on the surface of thecapitalist system, he notes, helps obscure the exploitative process of capitalist production.See Marx to Engels, 2 April 1858, Selected correspondence, pp. 106-7; Theories of sur-plus-value 111, 377-78; and Grundrisse, p. 509. Marxs conception of simple commodityproduction in Capital is, to repeat, an analytical device used to explain this circulationprocess. For a useful discussion of Marxs conception of simple commodity production, seeMichio Morishima and George Catephores , Is there an historical transformation prob-lem? Economic Journal 85 (June 1975): 312-18 .

P. 64 .


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and a fully operative law of value.*O The so-called petty commodity pro-duction of independent peasant producers which emergedin western Eu-rope following the decline of feudalism is not the same as the simplecommodity production in Marxscapi ta l . Generally speaking, in thatso-ciety there was not freedom of m ovement into and out of production. Anda great deal of the peasan ts production was production for his or her ownhouseholds use (that is, not production of commodities for sale on themarket).

It is not until Volume 111 of Capital that Marx discusses commercialcapital, moneylending capital, and ground rent. For purposes of analysishe assumes in Volumes I and I1 that the merchant capitalists, moneylend-ing capitalists, and landlords do not exist. (In actuality, they have alwaysexisted along with the industrial capitalists.) Surplus value has its originin the sphere of production. One of the main purposes of VolumeI is toanalyze this process of surplus creation and its expropriation from theproductive wage labourers. At this stage in the analysis a discussion ofcommercial and moneylending capital and ground rent would undulycomplicate and confuse matters. But by Volume111 Marx is ready to dis-cuss the distribution of the surplus amongst the industrial capitalists, thecom mercial capitalists, the moneylending capitalists, andth e landlords. Itneeds to be stressed that this order of presentation is determined by thelogic of the capitalist mode of production. The production of surplus valuecomes before its distribution. Marx himself notes that this logical-geneti-cal order is the reverse of the historical process of development.22 Inter-nationally powerful merchants appeared historically long before industrialcapitalists and were in fact instrumental in the development of capital-ism.23And a form of m oney capital (usury) existed long before capitalismand also played a role in preparing the way for capitalist social relation-ships 24

According to Marx, all modes of production, including the capitalist,are structured totalities. The most important elements are intercon-

20. Of course, the model of capitalism Marx works with in Capital is itself a simplifiedabstraction of the capitalist reality of his time. For example, in a concrete capitalist societythere is never complete capital and labour mobility. For discussion of Marxs simplifiedabstract model, see Sweezy, The theory of capitalist development, ch. I .

21. See, e.g., Marxs discussion of the peasants in his The Eighteenth Brumaire, i nDavid Fernbach, ed., Surveys fro m exile (London, 1973), pp. 238-39.

22. . . . nothing seems more natural than to begin with ground rent, with landed prop-erty, since this is bound up with the earth, the source of all production and of all being, andwith the first form of production of all more or less settled societies-agriculture. Butnothing would be more erroneous. . . . Capital is the all-dominating economic power ofbourgeois society. It must form the starting-point as well as the finishing-point, and must

be dealt with before landed property. Introduction, Grundrisse, p. 107.23. See, e.g. , the discussion in Capital 111, ch. 2 0 .24. See, e.g., ibid., ch. 36; and for discussion of pre-capitalist forms of ground rent,

see ch. 47.


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nected-in a sense , presuppose one another. W hile in the com pletedbourgeois system every economic relation presupposes every other in itsbourgeois economic form, and everything posited is thus also a presup-position, this is the case with every organic Capitalist owner-ship presupposes wage labour and commodity exchange. Rent in a capitalistsystem is of a particular form, reflecting the specific structural features ofthe system. It takes the form of a surplus above the average rate of profit;the landlord plays a passive role who through mere ownership of land isable to appropriate part of the surplus.26Similarly, moneylending capitaland commercial capital assume forms in the capitalist system peculiar tothe structural features of ~ a p i t a l i s m . ~ ~oth are subordinated to industrialcapital. As elements in different systems, rent, commercial profit, andmoney interest would be quite different.28In the very different feudal sys-tem, for example, rent absorbs, generally speaking, nearly all of the sur-plus, with the landlord playingan active role as exploiter. And as discussedabove, the commodities exchanged between primitive communities arenot the commoditiesof a capitalist system. T he law of value presupposescapitalism. This historical structuralist perspective means for Marx thatthe capitalist system (and any other econom ic system) can only be under-stood in terms of concepts and theories that reflect its particular structure(i.e., the particular nature of its elements and their interrelationships). Asdiscussed above, the analytical categories ofCapital, including the orde rof their presentation, reflect this capitalist structure. The categories andtheories d o not reflect econ om ic life in and the order of theirpresentation does not reflect the history of economic forms. The conclu-sion one should draw from Marxs historical structuralist approach is thatthe logical-historical interpretation is strikingly ahistorical; economicconcepts of the present (e.g., the developed commodity) are projectedback onto the past. And then this reconstructed past is used to help inter-pret the

25 . Grundr isse , p. 278. And to describe bourgeois property is nothing else than to givean exposition of all the social relations of bourgeois production. The poverty of philosophy(New York, 1963), p. 154. In a social system all relations coexist simultaneously andsupport one another. The poverty of phi losophy, p. I I I . The interconnectedness of theelements of the capitalist economy is clearly described in Capital 111, ch. 5 1 .

26. For Marxs theory of rent, see Capital 111, Part VI.27. For discussion of commercial capital, see ibid., Part IV; and for discussion of bank-

28 . See ibid., chs. 4 7 , 2 0 , and 36, respectively.29 . Marx is critical of the ahistorical tendency in bourgeois political economy of uncrit-

ically applying concepts and theories developed on the basis of the capitalist system inanalyses of pre-capitalist economies. As an example, Marx criticises Ricardo for applyinghis conception of rent, which he developed out of his analysis of capitalism, to the landedproperty of all ages and all countries. Poverty of phi losophy, p. 1 6 0 .

3 0 . In The poverty of philosophy Marx makes a similar criticism of Proudhons approachin his Systtme des contradictions tconomiques.

ing capital, see Part V.


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Even if the logical-historical interpretation were correct, it is difficultto see how knowledge of the historical development of economic formscould be used to attain understandingof the present capitalist system with-out some prior theoretical knowledge of the capitalist system. Otherwise,the investigator w ould not know what to look for. There is a vast varietyof economic forms in pre-capitalist systems, most of which are irrelevantto understanding capitalism (except for purposes of contrast). Knowledgeof the capitalist system is necessary to direct one to the relevant economicforms, e.g ., the comm odity, in order to trace their development. And then,of course, there is the problem of the zigzags of history. Knowledge ofcapitalism would b e necessary to avoid the zigzags and to trace historyforward linearly. 1

The logical-historical interpretation has an undercurrent of Hegelianteleology which is alien to Marxs historical materialism. H istory becom esthe development of economic forms progressing to the goal of the freecomm unist society. There is the suggestion that the present, the developedcapitalist system, is the logical working out of the past, the early com-modity form. The present is contained in the seed of the past. The logi-cal development of the early commodity results in the historical emergenceof money; the logical developmentof money results in the historical emer-gence of capitalism; and the logical development of capitalism results inthe socialist revolution. In the logical-historical scheme there is, then, acertain abstraction from the social process, from the men and women whoproduce the m aterial goods and who m ake history.

The most developed form of a logical approach to history is that ofHegel. H istorical development (presented as Spirits efforts to know itself)is viewed as being parallel to the logical development of the C oncep t.32Marx, of course, was very critical of Hegels idealist and abstract ap-proach to history. From the time he began to work out his historical ma-terialist approach, he stressed that history should not be interpreted interms of some abstract, idealist construct such as Hegels Spirit, but interms of the productive activities of concrete men and Marxexplicitly rejected the view that history has a goal immanent in it. Com-munism is not the goal of history, but the concrete historical goalof capi-talisms wage labourers, the goal developed in response to the problemsencountered in capitalism.History does nothing. . . . It is men, real liv-ing men w hodo all this, who possess things and fight battles.. . . History

3 I . Mandel him self ackno wledg es the need for some prior theoretical know ledge of thecapitalist system before one can historically trace the development of economic forms.Marxist economic theory, I , 18.

3 2 . S e e , e . g ., Hegel , Lectures on the philosophy of world history. Introduction: reasonin history (Cambridge, 1975).

33. See Marx and Engels, The German ideology, Part I , in Robert C . l hcke r, ed . , TheMarx-Engels reader , 2d ed. (N ew York, 1978).


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is nothing but the activity of men in pursuit of their ends.34For Marx,history has had no predetermined courseof development. It is ironic thatthe later Engels and certain other Marxists incorporate into Marxism,inthe form of their logical-historical interpretation, an element of Hege-lian-like teleology .5

A non-Hegelian mechanistic form of historical determinism is also aliento Marxs thought.36 There was, according to Marx , nothing in the struc-tures of the old primitive communist society which dictated that it had toevolve into ancient slave society. In fact, in theGrundrisse Marx notesthat there were alternative routes out of primitive communist society, an-cient slave society being only oneof them.37 And the feudal system didnot automatically generate the new bourgeois society out of its own struc-tures and in accord with so-called underlying economic laws of develop-ment. The transition to capitalism was a very complex phenomenon,involving a great many factors (some exogenous to the feudal economic

The formation of a new mode of production is a disjunctive a

34. Marx and Engels, The Holy Family, in T. B. Bottomore and M. Rubel, eds., Se-lected writings in sociology and social philosophy (New York, 1956), p. 63; also pp. 57-58. See also The German ideology, in The Marx-Engels reader, pp. 164-65, 172. It is truethat in his earlier works, e.g., The economic and philosophic manuscripts, Mam does havean Hegelian-like teleological conception of history. In these works the purpose of history isviewed as the realisation of mans essence. For the interpretation that Marx does have a

teleological conception of history (the early an d late Marx), see Leszek Kolakowski, Themain currents of Marxism: the foun ders (Oxford, 1978); and Nathan Rotenstreich, Basicproblems of Marxs philosophy (Indianapolis, 1965).

35. Engels does not have a consistent view regarding historical development. He criti-cises much in Hegels idealist and abstract approach to history. He makes many commentsconsistent with Marxs anti-teleological conception of history. (One must not forget thatEngels, in his early years, co-authored The Holy Family and The German ideology . )WhatI am arguing is that to the extent that Engels has a logical-historical interpretation heimplicitly takes on elements of a Hegelian-like teleology. This matter is much too complexto be adequately dealt with here. For discussions by the later Engels on historical develop-ment, see, e.g., his Socialism: utopian and scientijic in Selected works (Moscow, 1962), 11;and Supplement to Capital 111. For a good discussion of the idealist, Hegelian-like (and

thus non-Marxist) elements in the thought of the later Engels, see Lucio Colletti, Marxismand Hegel (London, 1973); and Colletti, From Rouseau to Lenin: studies in ideology andsociety (London, I972), Part I.

36. If history did proceed in accord with underlying economic laws and advanced auto-matically from less primitive forms to more developed forms, then the relevance of histor-ical knowledge would be obvious. Knowledge of these laws of history, and an understandingof the underlying process giving rise to them, would enable the social scientist to compre-hend present developments and predict the future. Karl Popper attributes such an interpre-tation to Marx. See his The poverty of historicism (Boston, 1957); and The open societyand its enemies (New York, 1 9 6 9 , esp. ch. 15. See also M. M. Bober, Karl M arxs inter-pretation of his tory, 2d ed. (Cambridge, Mass., 1962).

37. In Pre-capital ist economic orm ations, ed. Eric Hobsbawm (New York, 1964). (This

book contains the relevant sections from the Grundr isse . ) And see Hobsbawms excellentintroduction. For a general summary of Marxs views on historical periodisation see MichaelEvans, Karl Marx (London, 1975), pp. 72-79.

38. Marx did not systematically or very clearly deal with the transition. But for relevantcomments, see The German ideology, in The Marx-Engels reader, pp. 176-88. For a col-


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process. T he elements of the old system change, d isintegrate and/or comeapart, and there is a new combinationof elements (including perhaps in-puts from outside the old system). The form of the new combination isdependent upon a number of factors, including the class struggle. Thedisintegration of the feudal system left behind a society in which peasantfreeholders predominated. This form of peasant production probably couldnot out of the logic of its own structures have led to capitalism. ThoughMarxs discussion of the transition is incomplete and obscure, it is clearfrom h is discussion of primitive capitalist accum ulation that the direct andbrutal use of force played a major role, in his opinion,in creating a prop-ertyless proletariat.39 In England, fo r exam ple, many independent peasantproducers were forcibly evicted from their lands by landlords and thenwere forced by their circumstances to become wage labourers. Conceiva-bly, if the peasants had won their class struggle against the landlords cap-italism in England might not have developed or might have taken a verydifferent course of development.40 Anyway, this discussion should makeit clear that, according to Marx, the enterprise of understanding a partic-ular mode of production ( e. g ., capitalism) is very different from the en ter-prise of understanding how that particular mode of production came tobe.41A s already discussed , the former entails the analysis of the elementsof the system, and how these elements are interrelated; the latter is theanalysis of how the elements, and their combination, came to be. Thelogical-historical interpretation fails to recognise this distinction.

Marxs conception of a genetical approach

Marx does stress the importance of a genetical analysis for understand-ing the capitalist system. Bourgeois economists are frequently criticisedfor not presenting suchan analysis and thereby obscuring essential featuresof the system. By the term genetical Marx does not mean historical-genetical, as many commentators have assumed, but instead logical-genetical.

Marxs logical-genetical approach and his criticism of those who do nothave this approach is well illustrated in his analysis of the money form.Many, says Marx, have been mistaken in believing that gold money hasthe value it has because of its intrinsic qualities, its go1dness.42Others,

lection of essays by contemporary Marxists on the transition, see Morris Dobbs et a l . , Thetransition from feuda lism to capitalism (London, I 978).

39. See especially Capi ta l I, chs . 27-28.40. Se e the exce llent article by Robert Brenner, Agrarian class structure and econo mic

development in pre-industrial Europe, Past and Presen t, no. 70 (Feb. 1976): 30-75. S e e

als o Brenner, The origins of capitalist developm ent: a critique of neo-Smithian Marxism,New Lef t Review ,no. 104 (July-Aug. 1977): 25-92.4 1 . Specifically, see Crundrisse, pp. 459-61. And see the commentary by Etienne Balibar

in Louis Althu sser and Balibar, Reading Capital (London, 1970), pp. 276-83.42. See, e . g . , Capi ta l I , 187.


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like Hume , have mistakenly viewed money as a mere Th e truenature of money is revealed by a step-by-steplogical analysis, beginningwith the simple comm odity form(x commodity A = y commodity B ) andproceeding on to the development of the money-form(x commodity A =2 ounces of gold;y commodity B = 2 ounces of gold).44Such a demon-stration shows that money is a comm odity and that it derives its powersfrom its function in the exchange system as the universal equivalent. Mamsanalysis is geneticalin that he explains the nature of money in terms ofits development from its origins in its most basic analytical form (thesimple commodity form)45

Ricardos lack of a genetical approach is revealed, according to Marx ,in his mistaken view that in a developed capitalist system commodities(normally) sell at their values. Marx argues that capitalist competitionresults in comm odities not selling at their values, but instead at their pricesof production. The organic composition of capital is not the same in allindustrial spheres. Through the m echanism of capitalist competition someof the value producedin spheres where the organic com position of capitalis below the average for the economy as a whole is transferred to thosespheres where the organic compositionis above the average. The law ofvalue is still in effect, but manifests itself in a roundabout fashion.% Ricardofails to understand this because he does not have a logical-genetical ap-proach. He thought that for the law of value to be valid, it has to manifestitself directly, that i s, in the formof commodities selling at their values.47In contrast, Marx follows his logical-genetical procedure. He traces stepby step the flow of value from its origins in the sphere of production to itsappropriation by individual competing capitalists.As we have already dis-cussed, in the first stages of his dem onstration Marx makes som e simpli-fying assumptions. In order to facilitate understanding the com modity form,comm odity exchang e, the valorization process, surplus extraction, and theprocess of the circulation of capital, he assumes that commodities sell attheir values. Once these basic subjects are understood (and the necessaryconcepts developed), Marx moves onto discuss other to pics -cap italistcompetition, the formation of a general rate of profit, distribution of sur-

4 3 . A contribution to the critique, 1 5 9 - 7 1 .44. ee Capital I , 138-63.45 . In introducing his logical-genetical demonstration of the nature o f mo ney Marx writes:

we have to show the origin of this m oney-form , we have to trace the development of theexpression of value contained in the value-relation o f comm oditie s from its simples t, almostimperceptible outline to the dazzling money-form. When this has been done, the mysteryof m oney w ill immediately disappear (ibid., p. 13 9) . Marxs use of such terms as originsand genesis has probably contributed to the mistaken belief that Marx has a logical-historical approach.

4 6 . For Marxs discussion o f the transformation of values into prices of production, seeCapital 111, chs. 8-12.

4 7 . S e e , e . g . , Theories of surplus-value, 11 (Moscow, 1968 ), 179-203.


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Nurdahl Marx on the use of history 355

plus amongst the different fractions of the capitalist class, etc. In his dis-cussions of these topicsin Volume 111 of Capital Marx drops his assumptionthat comm odities sell at their values. H e demonstrates hat given capitalistcompetition, commodities cannot sell at their values.48

Those commentators, like Engels, who argue that Marx is saying thatcomm odities sell at their values in the econom ic system historically pre-ceding capitalism (petty commodity production) and in early capitalism,but not in the more advanced capitalist system, misinterpretmar^.^^ Inthe system of simple commodity production described in the early chap-ters of Capital comm odities do sell at their values (as they d o in the capi-talist system described in the later chapters of Volume I and in Volume11). But, as discussed above, this simple commodity production isnut theeconomic system historically preceding capitalism. It is a simplified ab-stract model based on certain features of a developed capitalist mode ofproduction that Marx wants to discuss at this stage in his presentation.Comm odities could not sell at their values in the society of petty producerswhich historically preceded capitalism. The lawof value comes into fulleffect only with a developed capitalist system.50Tho se commentators also

48. In comparing his own approach to Ricardos Marx writes: Science consists pre-cisely in demonstrating how the law of value asserts itself. So that if one wanted at the verybeginning to explain all the phenomena which seemingly contradict that law, one wouldhave to present the science before science. It is precisely Ricardos mistake that in his firstchapter on value he takes as given all possible and still to be developed categories in orderto prove their conformity with the law of value. Marx to Kugelmann, I I July 1868, Selectedcorrespondence, p. 209. For a general comment on the tendency in bourgeois politicaleconomy to leave out the intermediate links in its analysis, see Theories of surplus-value,

49. See Engels, Supplement to Capital 111, 895-900; and Engels to Sombart, I I March1895, Selected correspondence, pp. 479-81. In his textbook on the history of economictheory Mark Blaug accepts Engels interpretation of Marxs views on simple commodityproduction and criticises Marx for holding such untenable views! Economic theory in ret-rospect (Homewood, 111. 1962) pp. 217-20. Ronald Meek offers a more sophisticated, andconsequently somewhat qualified, variant of the logical-historical interpretation. Accord-ing to Meek, the first part of Marxs Capital does not refer to an actually existing societyof simple commodity production. (N o pre-capitalist society was dominated by commodityproduction.) It is an abstraction based on the nature of the commodity relations in pre-capitalist societies. Marxs analysis in Capital depicts how these commodity relations be-come capitalistically modified. Meek also says that Marx probably did not believe thatcommodities in pre-capitalist societies (because of various forms of monopoly and lowfactor mobility) sold at their values. But in pre-capitalist societies with significant commod-ity production the prices of commodities nevertheless tended to reflect the labour inputs ofthe petty commodity producers. And in early capitalism commodities were exchanged attheir values. See above, n. 2 for the relevant works by Meek. For a critique of Meek, seeMorishima and Catephores, Is there an historical transformation problem?, pp. 309-28.

50. But Marx does say in one place: it is quite appropriate to regard the values ofcommodities as not only theoretically but also historically prim to the prices of production.This applies to conditions in which the labourer owns his means of production, and this isthe condition of the landowning farmer living off his own labour and the craftsman, in theancient as well as in the modern world (Capital, 111, 177). This passage is frequently usedto show that Marx does have a logical-historical interpretation. See Meeks discussion in

I11 (MOSCOW, 971), 500.


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are mistaken who see a contradiction between Marxs discussion in Vol-ume I where commodities are said to sell at their values and his discus-sions in Volume I11 where commodities are said to sell at their prices ofproduction. According to this interpretation, Marx did not realise thatcomm odities could not be sold at their values until after he wrote V olumeI. The d iscussion in Volume I11 on the p rices of production is viewed as atortuous attempt to reconcile his previous theoretical discussion in VolumeI with economic reality, and thus a crude attem pt to save his labour theoryof value.51The publication of Marxs rough draft forCapital , the Grun-drisse, shows that M arx did know that comm odities could not sell at theirvalues before he wrote Volume I.52 Anyway, an understandingof Marxslogical-genetical approach is enough to refute this interpretation.

Engels approach to this transformation problem shows his lackofunderstanding of Marxs genetical approach. In his supplement to V olumeI11 of Capital Engels refers to the controversy concerning the so-calledcontradiction between Marxs treatmentof value in Volume I and his treat-ment in Volum e 111. Engels briefly summarizes the discussion of two com-mentators who wrote in support of Marxs position (and thus who arguethat there is no contradiction). Engels qualifies the approval he gives totheir theoretical justifications of Marxs position: Sombart, as well asSchmidt, . . . does not make sufficient allowance for the fact that we aredealing here not only with a purely logical process, but with a historicalprocess and its explanatory reflection in thought, the logical pursuance ofi t s i n n e r c o n n e c t i o n ~ . ~ ~ngels then goes on to give a brief historicalsketch of the development of commodity production, from the first ex-change of commodities between primitive communities to the highly de-

his Smith, Marx , and a fe r, ch. 7 . But i t is obvious from Marxs general theoretical posi-tion as well as from many specific comments (see, e.g., nn . 1 5 , 16, and 17 above), thatMarx believed the category of value existed in pre-capitalist societies only in an immatureand embryonic fo.rm. Commodities could not sell at their values. Engels, then, is at vari-ance with Marx when he writes without qualification that the law of value existed in pre-capitalist societies whenever there was commodity production: the Marxian law of valuehas general economic validity for a period lasting from the beginning of exchange, whichtransforms products into commodities, down to the 15th century of the present era. . . .thus the law of value has prevailed during a period, of from five to seven thousand years.Supplement to Capital 111, 900. And much of Mandels discussion of pre-capitalist com-modity economic life assumes that the law of value is in effect to a significant extent in pre-capitalist societies. See, e.g., Marxist economic theory, 1 ~ 8 2 , 3 , 1 0 0 .

5 1 . See, e . g . , E. von Bohm-Bawerk, Karl Marx and the close of his system (Clifton,N.J., 1973) . For a contemporary account of the great contradiction between Volume I andVolume 111, see Blaug, Economic theory in retrospect, pp. 209 ff.

52. See the discussion by Rosdolsky in The making of Marxs Capital , 371-75. Andin a letter to Engels, dated 2 Aug. 1862 (some five years before the publication of CapitalI), Marx states that commodities cannot sell at their values, given an average rate of profitand spheres of production with different organic compositions of capital. Selected corre-spondence, pp. 128-33.

53. Supplement to Capital 111, 895 .


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veloped capitalist system where commodities no longer sell at their values,but at their prices of production. By providing this historical sketch, Engelsobviously believed he was giving a theoretical defense of Marxs positionin Capital . In fact, he seems to be arguing that such an historical sketchis needed to prove that Marx was right!54 H e implies that if Marx had hadthe opportunity to go over the third volume once more, he would havesupplied this historical sketch.)

Many other examples of how Marx used his logical-genetical approachto refute what he considered to be erroneous theories can be given. Ac-cording to the abstinence theory, the capitalist is entitled to his profitbecause he invested in his enterprise a part of his own savings (he ab-stained from spending).55 This justification vanishes, M arx a rgues, oncethe movement of surplus is traced from itsorigins in the production sphere,into the hands of the expropriating capitalist, and then back into the en ter-prise as newly invested capital. It now becomes clear that this newly in-vested capital does not really come from the capitalist, but from hisworkers.56 Similarly, a tracingof the circuit of surplus value from its ori-gins in production refutes the theory that money capital and land are sourcesfor new value, and thus moneylenders and landlords are entitled to theirinterest and rent. The industrial capitalist expropriates the surplus valueproduced by workers (not necessarily only from his own workers); he thenpays out parts of this surplus value (the interest and the ground rent) tothe moneylender and the landlord. Money capital and land yield revenueto their owners because ownership of money capital gives to moneylend-ers, and ownership of land gives to landlords, the power to expropriatepart of the surplus value.57

Knowledge of the present a s an aid in understanding the past

So far we have seen that, according to Marx , theoretical understandingof capitalism is achieved by m eans of a structural analysis of that system .The theory reflects the particular socio-historic logic of the capitalist modeof production. This theory of the capitalist system can , Marx believed, aidthe social scientist in understanding the past. In theGrundrisse Marx notesthat a correct understanding of the laws of the capitalist system pointtowards a past lying behind this system . These indications, together with

54. And note the comments by Engels on some proofs of Capital I (evidently the earlysectio ns on m one y and the circulation proce ss): At most the points here established dialec-tically might be set forth historically at somewhat greater length, the test to be made fro mhistory, so to speak, although what is most necessary in this respect has already been said.Engels to Marx, 15 une 1867, elected correspondence, p. 186 emphasis added).

55. S e e , e . g . , Capital I , 744-46.56. ee especially ibid., chs . 23 and 24.57. ee Marxs discussion in Capital 111, ch . 48, nd Theories of surplus-value 111,

453-540.


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358 History of Political Economy I4:3 (1982)

a correct grasp of the present, then also offer the keyto understanding ofthe past-a work in its own right wh ich, it is hoped, we shall be abletoundertake as .well.58 Take the example of the genesis of the capitalistsystem, i .e ., the historical process of its formation. Understanding of thisprocess presupposes some theoretical knowledge of capitalism. The cap i-talist-worker relationshipis at the basis of the capitalist system. The wagelabourer does not possess his own means of production. And capitalistownership of the means of production presupposes a prior accumulationof a considerable sum of money capital.59In order to explain the genesisof capitalism, the historian, then, must focus on this accumulation ofmoney capital and on the process of the dispossession of the peasants andartisans. (Of course, many other factors would have to be considered aswell.) In conclusion, the structure of the capitalist system provides thehistorian with the knowledge of what has to be investigated and under-stood in order to explain the formation of the capitalist system.60

Marx also believed that some of the economic concepts and theoriesderived from the study of the capitalist system-and thus fully applicableonly to that system-are useful in helping to understand aspects of pre-capitalist systems. There was, after all, commodity production of asortand thus market and m oney relationships (though in a very restricted form)in a great numb erof pre-capitalist societies. Understanding the nature andfunction of money (in a capitalist system) aids the historian6* in under-standing such problems as why certain commodities (especially gold andsilver), and not others, developed as forms of money,62and how coins astokens of value cam e to be.63 And in theGrundrisse Marx states thattheoretical understanding of modem credit provides the key to the under-standing of the historical development [of credit institutions].64 In Capi-

5 8 . Grundrisse, pp. 460-61.59. For Marxs discussion of what he terms primitive accumulation, see especially

60. See Balibars discussion in Althusser and Balibar, Reading Capita l, pp. 276-83.61. Re-capitalist writers, Marx notes, had a very imperfect understanding of the nature

of money. Aristotle could go only part of the way in understanding commodity exchangeand the nature of money, for he had no knowledge of the labour theory of value. This theorywould be discovered only later, with the development of capitalism (Capital I , 151-52) .The monetarist and mercantilist theorists, the predominant theorists in the early years ofbourgeois society, also did not understand the nature of gold money, viewing the value andfunction of money in terms of its physical qualities. A contribution to the critique, pp.157-59

Capital I , ch . 26.

62. See, Capital I, 183-84; nd A contribution to the critique p. 49.63. Our [logical-genetical] exposition has shown that gold in the shape of coin, that is

tokens of value divorced from gold substance itself, originates in the process of circulationitself and does not come about by arrangement of state intervention. Marx then gives an

historical example: Russia affords a striking example of a spontaneously evolved token ofvalue.A contribution to the critique, p. 143; nd see Capital I, 221-26.

64. Grundrisse, pp. 672-73.


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Norduhl Marx on the use of history 359

tul he uses his theoretical understanding of credit to illuminate such factsas the birth of credit associations in Venice and Genoa in the 12th and 14thcenturies, and the development of banking in Holland in the 17th centuryand then, in the 18th century, in England and France.65

Knowledge of capitalism helps in understanding the past in another way,according to Marx. The correct approach in understanding a society(termed by Marx historical materialism), and the theoretical postulatesconnected with this approach, were developed after the rise of the capital-ist system and in the course of attempting to understand this system. Toillustrate this point of Marxs, let us first examine the concept of abstractlabour. The concept of labour in general (as opposed to specific forms oflabour) is one of the most fundamental concepts in bourgeois classicaleconomics and in Marxist economics. According to the labour theory ofvalue, the value of commodities is determined by the quantity of sociallynecessary (abstract) labour embodied in them. In value formation there isindifference to the particular type of labour, whether weaving, bootmak-ing, or agricultural labour. All that matters is the quantity of labouringactivity that it takes to make the products. This concept of abstract labour,Marx argues, could not have been discovered before the advent of a fairlydeveloped capitalist economy. Labour in general presupposes societal in -difference to any particular type of labour. All types of labour, not onlyagricultural or manufacturing (or particular forms of these), must bewealth creating:

Indifference towards specific labours corresponds to a form of societyin which individuals can with ease transfer from one labour to an-other, and where the specific kind is a matter of chance for them,hence of indifference. Not only the category, labour, but labour inreality has here become the means of creating wealth in general, andhas ceased to be organically linked with particular individuals in anyspecific form. Such a state of affairs is at its most developed in the

most modern form of existence of bourgeois society.66Marx suggests that the concept of labour in general provides us with

clues in understanding the general nature of p r ~ d u c t i o n . ~ ~ n reflection itbecomes evident that production is at its basis human labour, and for allmodes of production, not just the capitalist. This opens up the way forunderstanding a societys process of production in terms of the nature thatlabour takes in that process. In addition, the way is open for viewing

65 . Godelier, Rationality and irrationality in economics, p . 177; and for Marxs discus-

sion, see Capital 111, ch. 26.66 . Grundrisse, p . 104.67. See, e.g., Marxs discussion in the Introduction to th e Grundrisse, pp. 103-6.


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history itself as a labouring process, a seriesof productive activitiesthrough which men and women transform the world.68

The connection in Marxs mind between capitalism and the develop-ment of historical materialism can be illustrated with other examples.There are various aspectsof capitalism which, Marx suggests, help engen-der understanding of the determining effect that the process of materialproduction has on other spheres of society-in all system s, not just thecapitalist. The importance of economic activity is more obviousin a cap-italist society than in pre-capitalist societies, especially a new dynamiccapitalism emerging from a restrictive feudal society. The sphere of ma-terial production in capitalist society is, generally speaking, separate fromexplicit political structures and thus more naked, while in the feudalsystem the political and the economic structures are intertwined. The dy-namism of a new and robust capitalism and its effects on all spheres ofsociety are prominent themes inThe Communist

The interconnections between the elements of a society (particularly theeconomic elements) become more obvious in a capitalist society. The na-ture of capitalist economic life underlines the system ic nature of a society,how the various elements are interconnected. Capitalist enterprises pene-trate into all areas of the society; generally speaking, there is free move-ment of capital, labour, and commodities throughout the country. Civilsociety is tied together by the interpenetration of this free econom ic activ-ity. Economic activity in a pre-capitalist society was much less intercon-nected; the production units were much more self-sufficient. In order toexplain capitalist econom ic activity (however inadequately) the bourgeoisclassical economists had to demonstrate the inner connections between thekey economic phenomena-profit , rent, economic competition, etc.70 Indoing so, they showed (though unconsciously and esoterically) how allsocieties are structured totalities.

To canclude, historical materialism had its genesis, Marx believed, inthe capitalist era. Historical materialism is applicable in the study of pre-capitalist systems, but could not have been formulated before the adventof capitalism. Elem ents that went into the making of historical materialism

6 8 . In The German ideology, Part I , Marx lays the beginnings for such an approach tohistory.

69. Part I of The Communist manifesto. Of cou rse, the best source for Marxs descriptionof the features of ca pitalism is Capi t a l . Concerning pre-capitalist societies, see Grundr isse ,esp. pp. 156-59, 16 3-6 5, 471-502, 540-42; Economic and philosophic manuscripts, trans.Martin Milligan (Moscow, 1 9 6 1 ) ,pp. 61-63; Critique of Hegels Philosophy of right,trans. and ed. Joseph OMallory (Oxford, 1970), p . 32 ; and On the Jewish question, inMam-Engels, Collec ted Works, I11 (New York, 1975 ), 165-66.

7 0 . For discussions by Marx on classical economics, see e.g. , A contribution to thecritique, pp. 52-63; and Theories of surplus-value, I and 11.


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belief held by many classical economists that general overproduction crisesa r e i m p ~ s s i b l e . ~ ~hese economists view capitalist production as eco-nomic production per se. It is not; it is production of exchange value forprofit. The drive of the capitalists to obtain their profits results in a tre-mendous expansion of the productive capacity of the system. The capacityof the society to consume what is produced lags behind its productivecapacity. A large proportion of the society are wage labourers. Their abil-ity to consume is severely restricted by the nature of their social relation-ship with the capitalist class. Their relatively low wages will not enablethem to consume enough of the commodities coming onto the market. Theresult will be general overproduction crises, increasing in severity overtime.77

Marx believed that historical knowledge can be an aid in understandingthe distinctive features of capitalism. He often gives contrasting examplesfrom pre-capitalist systemsso as to illuminate the particular nature of cap-italism. As already discussed, in Marxs opinion many of the features ofcapitalism help hide its class and exploitative character. For example, thevoluntary contractual relationship between the wage labourer and the cap-italist, and the absence of the direct use of political-military power toextract surplus, help conceal the exploitation. In contrast, it is obviousthat in the feudal system producers work part of the week for themselvesand part of the week for the lords, andare thus exploited.78Th e serfs aretied to the land andare compelled through political-military means to workfor the lords.79 Kno wledge of this feudal system helps make clearer thegeneral nature of exploitation and thus helps us to see through the dis-torting effects produced by capitalist commodity forms. The capitalisteconomic forms can be seen in terms of the particular way exploitationtakes place in capitalism. Just like the producer-serf, the wage labourerworks part of the time free for the owner of the means of production.During the part of the day he works for himself he produces the valueofhis money wage, which he takes to the market to exchange for economic

76. This idea was known as Says Law. For Marxs discussion and critique of this theory,see especially Theories of surplus-value, 11, 492-35; ut also Grundr isse , pp. 410-23, ndTheories of surplus value , 111, 100-104.

77. Marx summarises his argument thus: Over-production is specifically conditionedby the general law of the production of capital: to produce to the limit set by the productiveforces, that is to say, to exploit the maximum amount of labour with the given amount ofcapital, without any consideration for the actual limits of the market or the needs backedby the ability to pay; and this is camed out through continuous expansion of reproductionand accumulation, and therefore constant reconversion of revenue into capital, while on theother hand, the mass of the producers remain tied to the average level of needs, and mustremain tied to it according to the nature of capitalist production. Theories of surplus value ,111, 534-35.

78. See the comparison given by Marx in Wages, price and profi t , in Selected works

79. Capital 111, 790-91.(MOSCOW, 962), , 429-30.


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necessities. The fact that he is paid in the form of the money wage anddoes not produce his own means of subsistence does not alter in any waythe essence of class exploitation.80 n the capitalist society there is no needfor the use of overt political-military means to extract surplus. Wage la-bourers do not possess their own means of production and thus are forcedby circumstances to work in the factories of capitalists. Exploitation in thefactory takes place in a natural, impersonal manner, i .e., within the nor-mal course of production. The production process and the process ofextracting surplus value coincide in time and space. At the end ofthe production process the capitalist has sole ownership of the commodi-ties; and the wage labourer has been exploited (see especially Capital I,Part 111). *

Knowledge of the genesis of the capitalist system is also, Marx be-lieved, an aid in helping to dispel illusions about capitalism. The exampleof the creation of the propertyless proletariat has already been given in thesection on the logical-historical nterpretation. Knowledge of the processof how the proletariat came to be helps one comprehend the nature of thesocial relationship between capitalist and worker. * It becomes clear thatthe source of the capitalists profit is not his hard work and/or abstinence,as commonly believed. 3 Historical analysis reveals that the capitalist sys-tem was conceived in force and Much of the original stock ofmoney capital was stolen by force of arms, e.g., from the Indians of theNew World, or squeezed out of hard-working peasants by usurious mon-eylenders. And the propertyless proletariat had its origins in force (andnot in laziness); in England the peasant freeholders were forced from theirland and had to become wage labourers. Knowledge of this historical pro-cess, Marx is arguing, helps dispel the myth of the hard-working personwho becomes capitalist and thus also the myth that todays capitalist alsoearns his profit. In other words, such historical knowledge helps us seethrough the obfuscating mist associated with capitalist economic forms.

80. See, e.g., Capital I, 712-14.81. n the famous section of Capital on commodity fetishism Marx discusses a number

of non-capitalist examples of how societies organise their expenditures of labour power.These contrasting examples, he says, help reveal the truth lying behind the capitalist com-modity form. The whole mystery of commodities, all the magic and necromancy thatsurround the products of labour on the basis of commodity production, vanishes thereforeas soon as we come to other forms of production (p. 169). t becomes obvious that thevalue of commodities is determined by the amount of socially necessary labour embodiedin them (and not by the physical attributes of the commodities).

82. Though the logical-historical interpretation is not itself valid, knowledge of histor-ical development, including the genesis of capitalism, can, according to Marx, be an aid inunderstanding capitalist forms.

83. For references by Marx to this bourgeois belief that private property has its sourcein individual hard work, see Grundrisse, p. 247; nd Capital I, 873-74. For references tothe abstinence theory, see above, n. 5 5 .

84. Capital I, chs. 26-28, 31 , 3.


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364 History of Political Economy I4:3 (1982)

In previous sections we emphasised the point that Marxs analysis ofthe commodity form and the development of money should be viewed asgenetical-logical, not genetical-historical; and that Marxs genetical-logi-cal analysis helps one understand the actual historical process of the de-velopment of money. But in his discussions of money in Capital and in Acontribution to the critique of political economyMarx does give historicalexamples. These examples are given to illustrate the theoretical point un-der discussion. Though the theory of money is constructed in terms of thelogic of capitalist exchange relations, knowledge of the pre-capitalist moneyform and its development may have helped in the construction of the theoryand surely helps others understand the theory once it has been developed.The fact that primitive societies developed a form of money after com-modity exchange became regularised illustrates the connection betweencommodity exchange and money. A theoretical point which may be hardto grasp when examining a developed commodity system (in part becauseof the accompanying fetishism) becomes easier to see when tracing thehistorical development of the money form.

And, lastly, an historical perspective, Marx believed, opens up the wayfor revolutionary change:

. . . from the moment that the bourgeois mode of production and theconditions of production in distribution which correspond to it are

recognized as historical, the delusion of regarding them as naturallaws of production vanishes and the prospect opens up of a new so-ciety, [a new] economic social formation, to which capitalism is onlythe transition. 5

As indicated in preceding pages, according to Marx, in bourgeois eco-nomics the historically specific economic forms of capitalism-wage la-bour, private capitalist ownership of the means of production, rent as asurplus over average profit, etc.-are viewed as natural. Economic sys-tems, at least if they are to be rational and thus efficient, must take thiscapitalist form. It is unquestioned, for example, that owners of factoriesdirect the use of the labour power of others as they see fit. This is in thenature of economic production. The ideological conclusion of this ahistor-ical perspective is, of course, that the capitalist system is here to stayforever:

When the economists say that present-day relations-the relations ofbourgeois production-are natural, they imply that these are the re-lations in which wealth is created and productive forces developed in

conformity with the laws of nature. These relations therefore are

8 5 . Theories of surplus value III, 429.


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themselves natural laws independent of the influence of time. Theyare eternal laws which must always govern society.86

Historical understanding of pre-capitalist system s and the genesis of the

capitalist system would, Marx believed, make it apparent that capitalisteconomic forms are anything but natural.As already mentioned, in feu-dalism the labourers (serfs) possessed their own material and instrumentsof production, and they themselves directed the immediate productionprocess. But they were tied to the land and were forced to give up to theirlords a certain proportion of their economic produce. This form of labourwas most rational in terms of the logic of feudalism, just as wage labouris most rational in te rms of capitalist production for profit and the capitalistform of exploitation . In such an historical perspective capitalism ceases to

be seen in the technical-economic terms of production in general, but inthe socio-political terms of an historically specific form of class exploita-tion. T he way is then open for revolutionary change.

Concluding summary

Marx, first of all, has an historical approach in that he believes capi-talism can be understood only in terms of its historically specific socialstructures. He does not believe that an historical tracing of the develop-ment of economic forms can provide the theory for understanding capital-

ism. Thatcan be obtained only throughan analysis of the elements (includingtheir interrelationships) that make up the capitalist mode of production.Agenetical-logical approach is basic in that analysis. Knowledge of pastsocial systems, and knowledge of the genesis of the capitalist system, canbe of help in deciphering the logic of the capitalist mode. Such knowledgecan help in understanding its historically specific forms.As in so manyother aspects of his thoug ht, M arxs approach to history should be vieweddialectically. Historical knowledge is an aid in developing o ur understand-ing of capitalism. In turn, this understanding of the capitalist mode (and

the historical materialist approach which was developed in the course oftrying to com prehend capitalism) furthers our understanding of pre-capi-talist systems and the formation of the capitalist system.

86 . The povert y of philosophy, p. 121.

Documents

Marx on the Use of History to Define Capitalism