Showing posts with label capitalism. Show all posts
Showing posts with label capitalism. Show all posts

15 Mar 2015

Marx & Engels (1) Manifesto of the Communist Party, Ch.1 ‘Bourgeois and Proletarians’, summary, b


by Corry Shores

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Karl Marx & Frederick Engels


Manifesto of the Communist Party


Ch.1
Bourgeois and Proletarians


Summary



Very brief summary:

The progress of history is a chain of revolutions where an oppressed class overcomes its oppressor and instates itself as the ruling class. Currently capitalists, the bourgeoisie or middle-class, have taken this position of power. But they do not deserve to keep it, since they exploit the masses and reduce their existence to unacceptably low levels. Also, the development of industry is creating a working class that is more homogenized, on account of increasingly mechanizing the labor, and thus this unity and solidarity of the laborers will eventually result in the overthrow of the bourgeoisie. They will do away with the bourgeoisie’s source of power by ending private property. But by doing so, they will eliminate the means that any one class can oppress another, thereby ending the history of class conflicts.

 

Brief Summary:
History can be understood as a sequence of class struggles in which revolutions instate new class divisions along with their own new class struggles. The most recent revolution was the change from feudal classes to the current bourgeoisie/proletariat [capitalist/worker] class structure, resulting from the rise of capitalism, modern industry, and global trade. The system works by exploiting laborers. They are paid as little as possible, worked as hard and long as possible, and the rise of the division of labor in the factory along with the increasing use of machinery has reduced labor from a rewarding human activity to a form of mechanized slavery. But since all jobs are becoming more and more mechanical, the importance of specialized skill is reduced, which puts all workers more on par with each other. This then creates the conditions for their solidarity, which is enhanced by technological developments in communications and transportation. Also, the bourgeoisie, besides the immorality and injustice of exploiting labor, have proven themselves unfit to rule, since they have overseen only the decrease in the quality of life of the majority of the population to bare subsistence and slave-like labor. They came to power as a part of a larger historical pattern of revolution. The conditions lending to their power are also what will make that power crumble. So not only should they fall, they inevitably will fall.



Summary


Marx & Engels offer a view of human history as being the ongoing story of the political, social, and economic struggles between hierarchized classes.

The history of all hitherto existing society is the history of class struggles.
(209b)


This struggle holds between such classes as “Freeman and slave, patrician and plebeian, lord and serf, guild-master and journeyman” or in other words, more generally between  “oppressor and oppressed” (209). These warring classes have “carried on an uninterrupted, now hidden, now open fight, a fight that each time ended, either in a revolutionary reconstitution of society at large, or in the common ruin of the contending classes” (209bc).


These clashing classes can be discerned in all epochs of history.

In the earlier epochs of history, we find almost everywhere a complicated arrangement of society into various orders, a manifold gradation of social rank. In ancient Rome we have patricians, knights, plebeians, slaves; in the Middle Ages, feudal lords, vassals, guild-masters, journeymen, apprentices, serfs; in almost all of these classes, again, subordinate gradations.
(209c)


Modern bourgeois society arose out of the prior feudal class system. Although their rise saw the end of feudal classes, it “has not done away with class antagonisms. It has but established new classes, new conditions of oppression, new forms of struggle in place of the old ones” (210a).


Although earlier epochs, as we noted, had a “complicated arrangement” of social classes,

Our epoch, the epoch of the bourgeoisie, possesses, however, this distinct feature: it has simplified class antagonisms. Society as a whole is more and more splitting up into two great hostile camps, into two great classes directly facing each other: Bourgeoisie and Proletariat.
(210a)


The bourgeoisie originated from the [merchant middle-class] burghers who were previously serfs in the Middle Ages (210b).


World exploration and colonization enriched and empowered the rising bourgeoisie (210b).


The guild system of feudal times was preplaced by the manufacturing system, to meet new market demands. “The guild-masters were pushed on one side by the manufacturing middle class; division of labour between the different corporate guilds vanished in the face of division of labour in each single workshop” (210c).


But even the manufacturing system could not keep up with demand, and so steam powered industry arose. “The place of manufacture was taken by the giant, Modern Industry; the place of the industrial middle class by industrial millionaires, the leaders of the whole industrial armies, the modern bourgeois” (210cd).


As the world markets expanded, so too did domestic industry and infrastructure (210-211).


The modern bourgeoisie is the result of a series of revolutions [and therefore may itself fall victim to yet another revolution undoing its order].

We see, therefore, how the modern bourgeoisie is itself the product of a long course of development, of a series of revolutions in the modes of production and of exchange.
(211a)


And, each small advance in the bourgeoisie’s rise to power “was accompanied by a corresponding political advance of that class” (211a):

An oppressed class under the sway of the feudal nobility, an armed and self-governing association in the medieval commune: here independent urban republic (as in Italy and Germany); there taxable “third estate” of the monarchy (as in France); afterwards, in the period of manufacturing proper, serving either the semi-feudal or the absolute monarchy as a counterpoise against the nobility, and, in fact, cornerstone of the great monarchies in general, the bourgeoisie has at last, since the establishment of Modern Industry and of the world market, conquered for itself, in the modern representative State, exclusive political sway. The executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie.
(211b)


Thus as we see from the political upheaval it brought about, “The bourgeoisie, historically, has played a most revolutionary part” (211bc).


This is seen especially in how it has “has put an end to all feudal, patriarchal, idyllic relations” and “pitilessly torn asunder the motley feudal ties that bound man to his ‘natural superiors’; and it has “drowned the most heavenly ecstasies of religious fervour, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation” (211d). [We notice here the violent rhetoric. If the bourgeoisie has committed such violent acts, it is only fitting that the communists should use in a similar way, metaphorically or otherwise, violence to change their order. As we will see in the next lines, their order is unjust and cruel:]

[The bourgeoisie] has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom — Free Trade. In one word, for exploitation, | veiled by religious and political illusions, it has substituted naked, shameless, direct, brutal exploitation.
(211-212)

[So while the feudal lords at least veiled their exploitation behind religious or political values, the bourgeoisie merely reduces human life to exploitative profit-making labor without any sugar-coating to conceal its injustice and immorality.]


Where previously certain occupations like doctor, lawyer, priest, scientist, and poet were held with “reverent awe” [and valued for their contributions to society’s well-being, functioning, knowledge, and culture], they are now viewed no more than as “paid wage laborers” [whose productive worth is quantifiable only in terms of currency value] (212a).


It has also reduced family life and relations to “mere monetary relations” [perhaps because people relate to each other only in terms of paying for one another]. (212ab)


Bourgeoisie has also demonstrated what humans are capable of when they are industrious. “It has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts, and Gothic cathedrals; it has conducted expeditions that put in the shade all former Exoduses of nations and crusades” (211b).


In the bourgeoisie epoch [on account of the forces of capitalism,] new methods and modes of production replace older ones [if they prove to generate more profit. As a result, the normally stable and secure structures of life and relations among people are made unstable and fluid, which is perhaps unsettling in a psychological and existential way.]

Constant revolutionising of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses his real conditions of life, and his relations with his kind.
(212c)


The capitalist need for more sources of and markets for production has caused the bourgeoisie to occupy all corners of the world (212d).


World trade and production has minimized the importance of national boundaries. Goods are imported and exported everywhere, making all parts of the world interconnected and interdependent. This even holds in “intellectual production” as for example cultural products. “National one-sidedness and narrow-mindedness become more and more impossible, and from the numerous national and local literatures, there arises a world literature” (213a-b). [This could also pave the way for a world socialism.]


The spread of the bourgeoisie’s influence has caused many other nations, no matter how developed, to enter into this capitalist system. “It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilisation into their midst, i.e., to become bourgeois themselves. In one word, it creates a world after its own image” (213c).


The bourgeoisie have moved populations and productivity into the towns. This has prevented many people from residing in the “idiocy of rural life,” but it has also made country depend on towns and lesser-developed nations dependent on more developed ones (213d).


The bourgeoisie has not only centralized populations into towns, but it as well has centralized property and the means of production into only a few hands. As a result, political power has been concentrated and centralized as well.

The bourgeoisie keeps more and more doing away with | the scattered state of the population, of the means of production, and of property. It has agglomerated population, centralised the means of production, and has concentrated property in a few hands. The necessary consequence of this was political centralisation. Independent, or but loosely connected provinces, with separate interests, laws, governments, and systems of taxation, became lumped together into one nation, with one government, one code of laws, one national class-interest, one frontier, and one customs-tariff.
(213-214)


The amount of productive potential that was realized by the bourgeoisie surpasses anything that was previously accomplished or even dreamed of.

The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together. Subjection of Nature’s forces to man, machinery, application of chemistry to industry and agriculture, steam-navigation, railways, electric telegraphs, clearing of whole continents for cultivation, canalisation of rivers, whole populations conjured out of the ground — what earlier century had even a presentiment that such productive forces slumbered in the lap of social labour?
(214b)


In sum, the bourgeoisie has overturned the feudal system, which had to be done away with given how production and trade were developing (214c).


Then into the place of the feudal structures “stepped free competition, accompanied by a social and political constitution adapted in it, and the economic and political sway of the bourgeois class” (214d).


But this great system of production and trade is also unpredictable and dangerous. It “is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells” (214d). There have been crises that were caused by over-production, where

there is too much civilisation, too much means of subsistence, too much industry, too much commerce. The productive forces at the disposal of society no longer tend to further the development of the conditions of bourgeois property; on the contrary, they have become too powerful for these conditions, by which they are fettered, and so soon as they overcome these fetters, they bring disorder into the whole of bourgeois society, endanger the existence of bourgeois property. The conditions of bourgeois society are too narrow to comprise the wealth created by them.
(215a)

They solve these crises in three ways: 1) by destroying the excessive productive forces, 2) by conquering new markets, and 3) by further exploiting older ones. “That is to say, by paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented” (215cd).


Since it was these capitalist productive systems that overturned the feudal system, “The weapons with which the bourgeoisie felled feudalism to the ground are now turned against the bourgeoisie itself” (215d).


[These machines of production, which are in a sense no entirely within the control of the bourgeoisie, can also be appropriated by the working class and used against the bourgeoisie.]

But not only has the bourgeoisie forged the weapons that bring death to itself; it has also called into existence the men who are to wield those weapons — the modern working class — the proletarians.
(215d)


[Normally we think of the power of wealth of the bourgeoisie increasing as corresponding to the decrease of wealth and power of the proletariat. However, perhaps because these seem capitalist tools can be appropriated by the proletariat, who is already operating them, perhaps their potential power increases as well. Or perhaps the meaning of the following passage is more generally that the workers advance in training and abilities with increased sophistication of the industry.] The proletariat develops at pace with capital and the bourgeoisie. Laborers are dependent on this industry and are vulnerable to its fluxuations. (216a)


Because of the division of labor, factory work is less rewarding then it was back when workmen were more attached to their productions. Their work becomes machine-like. [Also, perhaps because the crappiest jobs produce only the least valuable goods, the worse the work, the lower the pay.] And the pay is as low as possible, and it gets lower with the repulsiveness of the work. Workers also must keep at pace with the machines.

Owing to the extensive use of machinery, and to the division of labour, the work of the proletarians has lost all individual character, and, consequently, all charm for the workman. He becomes an appendage of the machine, and it is only the most simple, most monotonous, and most easily acquired knack, that is required of him. Hence, the cost of production of a workman is restricted, almost entirely, to the means of subsistence that he requires for maintenance, and for the propagation of his race. But the price of a commodity, and therefore also of labour, is equal to its cost of production. In proportion, therefore, as the repulsiveness of the work increases, the wage decreases. Nay more, in proportion as the use of machinery and division of labour increases, in the same proportion the burden of toil also increases, whether by prolongation of the working hours, by the increase of the work exacted in a given time or by increased speed of machinery, etc.
(216b)


The modern factory is like a slave operation run by a despot. [It is thus unjust and deserving of change. But also, since workers are ‘organized like soldiers’, there is the basis for them to fight against the system like soldiers.]

Modern Industry has converted the little workshop of the patriarchal master into the great factory of the industrial capitalist. Masses of labourers, crowded into the factory, are organised like soldiers. As privates of the industrial army they are placed under the command of a perfect hierarchy of officers and sergeants. Not only are they slaves of the bourgeois class, and of the bourgeois State; they are daily and hourly enslaved by the machine, by the overlooker, and, above all, by the individual bourgeois manufacturer himself. The more openly this despotism proclaims gain to be its end and aim, the more petty, the more hateful and the more embittering it is.
(216c-d)


Mechanization and the division of labor have made physical strength and skill less necessary in factory work. This has made men and woman equally viable as workers, and since woman and children can be paid less, they are often preferred (216-217).


And even though the laborer earns a wage, it is instantly lost back to other parts of the bourgeoisie.

No sooner is the exploitation of the labourer by the manufacturer, so far, at an end, that he receives his wages in cash, than he is set upon by the other portions of the bourgeoisie, the landlord, the shopkeeper, the pawnbroker, etc.
(217a)


The lower middle-class, including “the small tradespeople, shopkeepers, and retired tradesmen generally, the handicraftsmen and peasants” do not really remain middle class but instead “sink gradually into the proletariat”. This is because their capital is not great enough to compete with larger industries and also because their specialized skills become less valuable when new methods of production make them obsolete (217b).



“The proletariat goes through various stages of development” (217c). At first it fights against the “instruments of production;”

They direct their attacks not against the bourgeois conditions of production, but against the instruments of production themselves; they destroy imported wares that compete with their labour, they smash to pieces machinery, they set factories ablaze, they seek to restore by force the vanished status of the workman of the Middle Ages.
(217cd)


[At this stage, for some reason, it seems that the workers are not organized against the bourgeoisie but rather somehow the bourgeoisie unites the workers against the bourgeoisie’s former rivals, the wealthy aristocrats from the prior monarchies.]

At this stage, therefore, the proletarians do not fight | their enemies, but the enemies of their enemies, the remnants of absolute monarchy, the landowners, the non-industrial bourgeois, the petty bourgeois. Thus, the whole historical movement is concentrated in the hands of the bourgeoisie; every victory so obtained is a victory for the bourgeoisie.
(217-218)


But as the industry develops, labor becomes less specialized. It also puts all the workers on a more equal level and gives them a greater sense of solidarity. They form unions and may at times riot together (218b).

The victories of proletariat are slight. But with each one, their union grows stronger. New developments in communications and transportation also help them strengthen relations among them (218c-d).


Although the union of workers is at times weakened by their own infighting, it nonetheless “ever rises up again, stronger, firmer, mightier,” and it has been able to influence legislation in its favor (218-219).


The bourgeoisie is involved in its own battles: 1) with the former aristocracy, 2) with those parts of the bourgeoisie itself that are antagonistic to the progress of industry, and 3) sometimes with the bourgeoisie of other nations. In all these cases, the bourgeoisie [somehow] brings the proletariat into the fight. By doing so, they educate the proletariat in certain political matters that the proletariat can then somehow use against the bourgeoisie.

In all these battles, it sees itself compelled to appeal to the proletariat, to ask for help, and thus, to drag it into the political arena. The bourgeoisie itself, therefore, supplies the proletariat with its own elements of political and general education, in other words, it furnishes the proletariat with weapons for fighting the bourgeoisie.
(219b)


As we noted above, members of the bourgeoisie slip into the proletariat. [Somehow] “These also supply the proletariat with fresh elements of enlightenment and progress” (219c).


Progress is moving toward the dissolution of the ruling class. Some of its members, seeing that the future lie in the working class, are converting over to this other side. This is even seen among bourgeois intellectuals who understand the tide of this historical movement and also convert.

Finally, in times when the class struggle nears the decisive hour, the progress of dissolution going on within the ruling class, in fact within the whole range of old society, assumes such a violent, glaring character, that a small section of the ruling class cuts itself adrift, and joins the revolutionary class, the class that holds the future in its hands. Just as, therefore, at an earlier period, a section of the nobility went over to the bourgeoisie, so now a portion of the bourgeoisie goes over to the proletariat, and in particular, a portion of the bourgeois ideologists, who have raised themselves to the level of comprehending theoretically the historical movement as a whole.
(219d)


Since times are changing and the worker is the one who keeps up with them, the proletariat is in a special position to help bring about the future that is already set in motion.

Of all the classes that stand face to face with the bourgeoisie today, the proletariat alone is a really revolutionary class. The other classes decay and finally disappear in the face of Modern Industry; the proletariat is its special and essential product.
(219d)


The lower middle classes who fight the bourgeoisie only to hold onto their middle class status are not revolutionary but are rather conservative, since they do not want to change the class system (220a). In fact, they are reactionary, since the tide has already begun turning.


There are also those who are social scum, the ‘dangerous class’. They could join the revolution, but their life is so bad they are more apt to be bribed into service by the bourgeoisie [perhaps to stir trouble among the revolutionaries] (220b).


The proletariat are in a state where the system is of no use to them [and thus they have every reason to change it.]

In the condition of the proletariat, those of old society at large are already virtually swamped. The proletarian is without property; his relation to his wife and children has no longer anything in common with the bourgeois family relations; modern industry labour, modern subjection to capital, the same in England as in France, in America as in Germany, has stripped him of every trace of national character. Law, morality, religion, are to him so many bourgeois prejudices, behind which lurk in ambush just as many bourgeois interests.
(220bc)


[In previous revolutions, a portion of the society subjugates other portions. The proletariat, for some reason, if it wants control of “the productive forces of society,” it must do away with such a subjugating structure by getting rid of individual property. For, were no one group to have more property than another, then no group can subjugate another.]

All the preceding classes that got the upper hand sought to fortify their already acquired status by subjecting society at large to their conditions of appropriation. The proletarians cannot become masters of the productive forces of society, except by abolishing their own previous mode of appropriation, and thereby also every other previous mode of appropriation. They have nothing of their own to secure and to fortify; their mission is to destroy all previous securities for, and insurances of, individual property.
(220cd)


Previous revolutions have been conducted by or for some minority. The proletariat revolution, however, will be an act of nearly all of society.

All previous historical movements were movements of minorities, or in the interest of minorities. The proletarian movement is the self-conscious, independent movement of the immense majority, in the interest of the immense majority. The | proletariat, the lowest stratum of our present society, cannot stir, cannot raise itself up, without the whole superincumbent strata of official society being sprung into the air.
(220-221)


[Although eventually all proletariat of the world must unite,] the proletariat’s revolts must begin on the national level, [perhaps on account of the immediacies of their class conflicts.] (221a)


The authors have depicted how there has been a veiled civil war between bourgeoisie and proletariat that develops to open revolution (21b).


In prior class conflicts, the oppressed classes were able to improve their situation. The condition of the proletariat, however, continues to decline [on account of the problems of mechanized labor that continue to worsen with its development]. Thus the bourgeoisie cannot be trusted to govern, since they are unable to keep the lives of the masses at a certain basic condition.

Hitherto, every form of society has been based, as we have already seen, on the antagonism of oppressing and oppressed classes. But in order to oppress a class, certain conditions must be assured to it under which it can, at least, continue its slavish existence. The serf, in the period of serfdom, raised himself to membership in the commune, just as the petty bourgeois, under the yoke of the feudal absolutism, managed to develop into a bourgeois. The modern labourer, on the contrary, instead of rising with the process of industry, sinks deeper and deeper below the conditions of existence of his own class. He becomes a pauper, and pauperism develops more rapidly than population and wealth. And here it becomes evident, that the bourgeoisie is unfit any longer to be the ruling class in society, and to impose its conditions of existence upon society as an over-riding law. It is unfit to rule because it is incompetent to assure an existence to its slave within his slavery, because it cannot help letting him sink into such a state, that it has to feed him, instead of being fed by him. Society can no longer live under this bourgeoisie, in other words, its existence is no longer compatible with society.
(221b-d)


The bourgeoisie’s power comes from capital, which is obtained and grown through wage-labor. Modern industry unites wage-laborers [as we saw above]. Thus modern industry’s development is bringing about the overturn of the class division that has been fostering and benefiting from this very same industrial development.

The essential conditions for the existence and for the sway of the bourgeois class is the formation and augmentation of capital; the condition for capital is wage-labour. Wage-labour rests exclusively on competition between the labourers. The advance | of industry, whose involuntary promoter is the bourgeoisie, replaces the isolation of the labourers, due to competition, by the revolutionary combination, due to association. The development of Modern Industry, therefore, cuts from under its feet the very foundation on which the bourgeoisie produces and appropriates products. What the bourgeoisie therefore produces, above all, are its own grave-diggers. Its fall and the victory of the proletariat are equally inevitable.
(221-222)

 

 

 



Works Cited


Marx, Karl and Frederick Engels. Manifesto of the Communist Party. In Karl Marx, Economic and Philosophic Manuscripts of 1844. Trans. Martin Milligan. pp.203-243. Amherst, New York: Prometheus Books, 1988 [1844].


Available online: https://www.marxists.org/archive/marx/works/1848/communist-manifesto/index.htm



 

10 Jul 2011

Money Circles (C-M-C and M-C-M): Marx, Ch.4 "The General Formula for Capital" of Das Kapital, Vol.1, Part.2


by
Corry Shores
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Money Circles:
Marx, Ch.4 "The General Formula for Capital" of Das Kapital, Vol.1, Part.2




What does commodity and money exchange got to do with you?

In order to obtain the things we want and need, we must spend money for them. But to get that money in the first place, we might for example sell our labor for money, or we may sell our things for money. But in the end, we have some sort of goods that we make some actual use of. But another mode of money-making would be when we for example would put our money in the bank and let it gain interest. The interest we gain in one year adds to the pile, and then that total gains interest, and so on.


Brief Summary

Value circulates. Our aim might be to obtain some commodity to consume. To get it, we would sell one commodity for money, then use that money to buy the other desired commodity (C-M-C, commodity-money-commodity). Or, our aim might purely be the continual increase of wealth. In that case, we would invest our money into some commodity, which we would then resell at a higher value. With the now greater sum of money, we would invest that for an even greater profit. Or, we might loan our money on interest. (M-C-M', money-commodity-money plus profit, and for loan interest, just M-M'.)


Points Relative to Deleuze

[Forthcoming]


Summary of
Karl Marx.
Capital / Das Kapital
Volume One
Part II: The Transformation of Money into Capital
Chapter Four: The General Formula for Capital


Capital begins with the circulation of commodities. It originates historically in the 16th century. (163 / 106)

We might consider commodities in terms of their use-values or instead in terms of their monetary-values [see
Aristotle's distinction between the shoe valued for protecting the foot and otherwise for making a profit through its sale]. So when we just examine the economic forms involved in the circulation of commodities, we see that the final result of this circulation is money. (163 / 107)

We will first look at capital rather than landed property. We find that capital begins as the moneyed wealth of merchants and money-lenders. We see money as capital also in our daily lives. We even come to give monetary value even to our labor. (163-164 / 107)

Marx distinguishes between two sorts of money: money itself and money as capital. Their difference lies in their form of circulation. (164 / 167)

Marx will now distinguish two types of circulation: C-M-C (commodity-money-commodity) and M-C-M (money-commodity-money). Both involve two antithetical phases. (164 / 107)

C-M-C is the simplest form of commodity-circulation. Here we sell commodities in order to buy more commodities. We transform commodities into money, then money back into commodities. (164 / 107)

In M-C-M's first antithetical phase M-C ('the purchase'), money is changed into commodity. In the C-M phase ('the sale'), the commodity is then transformed back into money. There is a single movement in the combination of these phases. [In C-M-C, our concern was getting a different commodity than what we began with, and money was the means. But in M-C-M, our concern is getting a different amount of money, and commodity is our means. So in M-C-M, there is motion of money increase, with the commodity part just an arbitrary means to it.] The thing bought is both the object of purchase and sale, and purchase-sale can be considered one movement, because there is the movement of money increase mediated by the commodity purchase-sale process. Thus the phases vanish, and our exchange becomes a matter of M-M. "If I purchase 2,000 lbs. of cotton for £100, and resell the 2,000 lbs. of cotton for £110, I have, in fact, exchanged £100 for £110, money for money. " (164 / 107-108)

There would be no point to M-C-M if in the end we exchange £100 for £100. And yet sometimes a merchant will for certain reasons sell goods for no profit or even at a loss. Yet the process of M-M remains the same nonetheless. This is different from the peasant who sells corn so to have money to buy clothes [perhaps C-C]. Marx will now further differentiate M-C-M and C-M-C. (165 / 108)

But first he will show what the two forms of circulation have in common.

Similarities: Components, Phases, and Agents

Both have the same two antithetical phases: M-C and C-M. In both circulations, there is the exchange of commodities and money, and there are two figures, buyers and sellers. And both circuits are unified by three parties: one who only sells, one who only buys, and one who both buys and sells. (165 / 108-109)
[To offer a possible interpretation for these three parties, let's consider for C-M-C someone who has corn, sells it for money, then buys clothes. In this case, this person both buys and sells. There is also the buyer he sells the corn to. And there is the seller who sells the clothes. In M-C-M, let's consider someone who exchanges shoes for a profit. There is the person who both buys the shoes with money then sells them for money. There is also the seller who sold the shoes to the merchant. And there is the buyer who buys the shoes from the merchant.]

Dissimilarity 1: Order of Conversion

C-M-C begins with a sale (peasant sells corn) and ends with a purchase (peasant buys clothes). M-C-M begins with a purchase (merchant buys shoes) and ends with a sale (merchant sells shoes). In C-M-C, both the starting-point and the goal are commodities. In M-C-M, origin and aim are both money. C-M-C's movement is mediated by money; M-C-M's is mediated by a commodity. (165 / 109)

Dissimilarity 2: Purpose of Money

In C-M-C, the money buys a commodity that will be used by the buyer. In M-C-M, the person buys a commodity so that he may recover more money by means of the sale of that same commodity. His intention for putting his money into circulation is not to obtain the use-value of the commodity, but rather to obtain more money. (165-166 / 109) "He lets the money go, but only with the sly intention of getting it back again. The money, therefore, is not spent, it is merely advanced." (166 / 109)


Dissimilarity 3: The Thing Changing Place


In C-M-C, the buyer sells his commodity to someone for money (the money's first change of place, from hands of seller to buyer), and with this very same money, he buys another commodity from a third person (the money's second change of place, to the hands of the new buyer). So here money changes its place twice. In M-C-M, the buyer/seller buys a commodity from one person (the commodity's first change of place) and sells it to someone else
(the commodity's second change of place). In this way, there is a reflux of money back to its source of departure. (166 / 109-110)

Dissimilarity 3: Reflux

The reflux of money back to money in M-C-M does not require that more money is attained in the end, but only that the purchased commodity is also then sold. In this way, money is circulated as capital rather than it just being money [as would be the case in C-M-C]. (166 / 110)

The C-M-C circuit closes to an end as soon as the second commodity is purchased.

But for a reflux back to the source to happen, there needs to be a renewal or repetition of the operation. If we sell corn for
£3, and with that money buy £3 of clothes, then the circuit is complete [so long as we wear the clothes rather than immediately resell them]. Then, if we sell some more corn, while it is true that the money comes back to us, it does not do so as a continuation of the first transaction. Thus in C-M-C circuits, spending money has nothing to do with its reflux. However, in M-C-M circuits, spending money is part of an operation whose intended outcome is acquiring more money in the end. Thus the reflux of money is built into the mode of money's expenditure. (166-167 / 110)

Dissimilarity 4: Final End of Process

In C-M-C, the commodity is the end. It will satisfy some want, and for that reason it has 'use-value' as the aim of the operation. M-C-M begins with money and ends with money. Money is "the goal that attracts it" and for this reason its aim is exchange value. (167 / 110)

Dissimilarity 5: Qualitative vs. Quantitative value

In C-M-C, the beginning and end have the same economic form. They are both commodities of equal value. Yet their use-value differs qualitatively, as corn is useful for nourishing and clothes for keeping warm. Here the exchange of products produced by labor is what fuels the movement. In M-C-M, the beginning and end also have the same economic form, in this case, money. Hence they do not have qualitatively different use values. When commodities are converted to money, their use-value vanishes. (167 / 110-111) "To exchange £100 for cotton, and then this same cotton again for £100, is merely a roundabout way of exchanging money for money, the same for the same, and appears to be an operation just as purposeless as it is absurd." (167 / 111) Yet although the two monies are qualitatively indistinguishable, they nonetheless can be quantitatively different. (167 / 111)
More money is withdrawn from circulation at the finish than was thrown into it at the start. The cotton that was bought for £100 is perhaps resold for £100 + £10 or £110. The exact form of this process is therefore M-C-M', where M' = M + ΔM = the original sum advanced, plus an increment. (168 /112)
So there is ΔM, the increase or surplus over the original value M. Marx calls this additional value the 'surplus value.' The process of turning invested money into more money is what bestows upon the original invested money the status of being capital. (168 /112)
The value originally advanced, therefore, not only remains intact while in circulation, but adds to itself a surplus-value or expands itself. It is this movement that converts it into capital. (168 /112)

Dissimilarity 6: Meaning of Breaking Even

It is possible that in C-M-C that the seller/buyer either obtains a commodity worth more than the original, or perhaps it is worth less. But one important difference between the two circuits is that in C-M-C, the basic idea is that there be an exchange of commodities of equal value. That gives the transaction its purpose or meaning. But in M-C-M, if someone ends up with the same amount of money as when she started, then the transaction would have been for nothing. It would be meaningless. (168 /112)

Dissimilarity 7: Closeability of the Circuit

In C-M-C, one sells and buys for the purpose of consumption and the satisfaction of definite wants, and this aim lies outside the sphere of circulation. However, in M-C-M, we buy in order to sell again. We begin with money whose purpose is to increase through investment, and we end up with money whose purpose is investment. For this reason, the movement is interminable. Now consider if we buy corn for
£100 and sell it for £110. If we then use that £110 to buy a commodity for its use value, then the money earned does not become capital but rather just serves as money. (168-169 / 112) However, if we reinvest the money along with its profit,
Money ends the movement only to begin it again. Therefore, the final result of every separate circuit, in which a purchase and consequent sale are completed, forms of itself the starting-point of a new circuit. The simple circulation of commodities - selling in order to buy - is a means of carrying out a purpose unconnected with circulation, namely, the appropriation of use-values, the satisfaction of wants. The circulation of money as capital is, on the contrary, an end in itself, for the expansion of value takes place only within this constantly renewed movement. The circulation of capital has therefore no limits. (169-170 / 112-113)
The conscious person conducting this double movement then becomes a capitalist. His aim is the expansion of value. For this reason, capitalists are never interested with the use-values of commodities. (170-171 / 113-115)

Dissimilarity 8: Perdurance of Money

In C-M-C, money serves the circulation of commodities, and the money vanishes at the result of the operation. However, in M-C-M, money and commodity are both different modalities of exchange-value.

On the other hand, in the circulation M-C-M, both the money and the commodity represent only different modes of existence of value itself, the money its general mode, and the commodity its particular, or, so to say, disguised mode. It is constantly changing from one form to the other without thereby becoming lost, and thus assumes an automatically active character. (171 / 115)

So self-expanding value takes-on in succession two different modalities. Hence, capital is money, and capital is commodity. But really it is an exchange value that is the active factor, because it is responsible for the continual production of greater value.

In truth, however, value is here the active factor in a process, in which, while constantly assuming the form in turn of money and commodities, it at the same time changes in magnitude, differentiates itself by throwing off surplus-value from itself; the original value, in other words, expands spontaneously. For the movement, in the course of which it adds surplus-value, is its own movement, its expansion, therefore, is automatic expansion. Because it is value, it has acquired the occult quality of being able to add value to itself. It brings forth living offspring, or, at the least, lays golden eggs. (171-172 / 115-116)

Because value maintains itself throughout its modulations between commodity and money, it must have some independent form that maintains its identity. This form is money, because it is with money that the circulation begins, ends, then begins again with "every act of of its own spontaneous generation." (172 / 116) For a capitalist, commodities, no matter how low their quality, are in essence money [because their purpose is to be exchanged for money]. (172 / 116)

Dissimilarity 9: Independence of Money

In C-M-C, the exchange-value for a commodity takes the form of money. [So money mediates the given value of the commodities. It is secondary to them.] However, in M-C-M, money circulates as increasing capital. It is like an independent entity [that uses commodities to mediate its growth, and thus the commodities are secondary to the money.]

that same value now in the circulation M-C-M, or the circulation of capital, suddenly presents itself as an independent substance, endowed with a motion of its own, passing through a life-process of its own, in which money and commodities are mere forms which it assumes and casts off in turn. (172 / 116)

So in C-M-C, money exists primarily in relation to commodities. But in M-C-M, "it enters now, so to say, into private relations with itself." (172 / 116) Even though the profit can be distinguished from the initial investment, they both come together as another new investment. (172-173 / 116-117)

In M-C-M, money is a value in process (of quantitative variation), and for this reason, it is capital. M-M': in capitalism, money begets money. (173 / 117) (capital begets capital)

Industrial vs. Merchant vs. Interest-Bearing Capital

Buying in order to sell at a higher price, M-C-M', is merchants' capital. Industrial capital is money that is changed into commodities (through investments in industrial production), which are then changed back to money at a profit, and it is likewise M-C-M'. Yet there is also interest-bearing capital. Here money is not first converted to commodity, and so it is without the intermediate stage. Thus it takes the form M-M'. (173 / 117)

Conclusion

"M-C-M' is therefore in reality the general formula of capital as it appears prima facie within the sphere of circulation." (173 / 117)



Marx, Karl. Das Kapital: Kritik der politischen Oekonomie. Erster Band. Buch 1: Der Produktionsprocess des Kapitals. Hamburg: Verlag von Otto Meissner, 1867.
PDF available online at:
http://www.archive.org/details/daskapitalkritik00marx

Marx, Karl.
Capital: A Critique of Political Economy. Ed. Frederick Engels. Transl. Samuel Moore & Edward Aveling. New York: The Modern Library, 1906.
PDF available online at:
http://www.archive.org/details/capital00marxgoog


Online text available at:
http://www.marxists.org/archive/marx/works/1867-c1/ch04.htm

http://www.marxists.org/archive/marx/works/1867-c1/index.htm


4 Dec 2009

Kvond Update, Ideas in Currency



Summary of kvond’s ideas, by Corry Shores
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Kvond has been writing about the market-bubble nature of professional academics. I highly recommend these entries, which I am compiling here. I added this entry to the list:



"When people do not write directly about the world, it is hard to compare what they say against the world. So the main corrective mechanism in the humanities is reputation built on publication and, since publication is often based on reputation, the danger of a bubble is extreme. Someone who takes a supervisor’s advice to base a career on writing about Slavoj Zizek is in the position of an investor deciding to invest in Bear Stearns on the advice of Lehman Brothers. The price is high and predicted – by those who have a vested interest – to rise further…"


23 Nov 2009

Ideas in Currency


Summary of kvond’s ideas, by Corry Shores
[Search Blog Here. Index-tags are found on the bottom of the left column.]

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[Spinoza Entry Directory]


Kvond at Frames / sing has been posting some really incredible and mind opening postings. He uses economic concepts to examine the creation and propagation of philosophical ideas.


"As I heard audio lectures that followed my reading of his theory it seemed that indeed there was a kind of “debt” of explanation or coherence that Harman simply pushed into the future, a kind of doubling down into the next book (Latour) and a refinancing that went along with a method of repackaging. First his philosophy was part of a whole movement called “Spectulative Realism” (composed of thinkers who agree upon almost nothing), then it became “OOP” and had even spawned its own “splinter group” called OOO (insuring it the position of an imagined orthodoxy). One cannot help but feel with some force that this is running parallel to the dividend markets that simply cut and repackaged “risk” under new names creating a bubble of excitement which simply fed upon itself."

"in the general sense that philosophers are in the business of selling their texts, one has to think about the “genuine” products of philosophers, what it is about the philosophical endeavor that gives it its importance, its foothold amid our more commercially vested institutions. When we write a paper, any such paper, what is it that we really would like to show? That is what matters."

"If we may be monks, the conditions that allow our speculation are brought along with it, and if we really are pursuing, not just speculation for its pleasures of freedom and imagination, not just some kind of run-around of Institutional restraint, searching for cheaper prestige, but true ideas and ideas that inherently should matter to the world, the consequence of our ideas (politically, ethically, socially) must be embraced. In this way there is an epistemological mandate for our ontological speculation which immediately connects ethics to metaphysics."


Kvond quotes Philip Gerrans
When people do not write directly about the world, it is hard to compare what they say against the world. So the main corrective mechanism in the humanities is reputation built on publication and, since publication is often based on reputation, the danger of a bubble is extreme. Someone who takes a supervisor’s advice to base a career on writing about Slavoj Zizek is in the position of an investor deciding to invest in Bear Stearns on the advice of Lehman Brothers. The price is high and predicted – by those who have a vested interest – to rise further…



[To be continually updated]