of surplus value or profit. The latest stage of Capitalism is,
however, marked by the fact of the high organic composition of
capital, which means that living labour-power, the source of surplus
value, has relatively decreased. The decrease of variable capital
signifies manifestly a lower rate of profit. Capitalism in normal
times exhibits a tendency towards a lowering of the rate of profit.
Therefore it gives rise to a phenomenon which contradicts the aim of
the endeavours of the capitalists. The capitalist strives to
accumulate capital, but as variable capital and the rate of profit
relatively decrease, a tendency towards the depreciation of capital is
revealed. The capitalist endeavours to counteract this tendency, and
to achieve his object by extending the scale of production, so that
the mass of commodities will compensate him for what he loses on them
singly. But while he furthers this object by resorting to a higher
organic composition of capital, he squeezes out the middleman, reduces
the numbers of workers in employment, and creates a relative
over-population, a reserve of those who are only employed
intermittently; there is a substantial shrinkage in the demand for
commodities, as the impoverished masses of the people have obviously
less purchasing power. The capitalist extends production, and at the
same time contracts the market. The upshot is over-production,
under-consumption--crisis: wasting of capital, restriction of
production, paralysis of the productive forces. And if Marx lived
to-day he would add: the developed economy of large-scale capitalism,
that is, the high organic composition of industrial capital, requires
enormous quantities of raw materials, which, in part, are only to be
had from tropical and sub-tropical countries, and also from eastern
Asia; the struggle for these sources of raw materials, and for access
to them, leads to wars in which capital sums of unprecedented amount
are destroyed. Since 1894 these wars over raw materials and trade
routes have broken out every few years. Economic crises and
imperialist wars; immeasurable destruction of capital and productive
forces. This is a consequence which stands in sharp contradiction to
the historical task of the economic order of Capitalism, and to the
immediate aims of the individual capitalists.
Further, the capitalist tries from the beginning to create docile and
unresisting masses of workers, and yet unites and combines them by the
creation of large centres of production; the factories become centres
for the organisation of the workers, and for the welding of the
individual wills of the proletarians into a class will; they abolish
the scattered and antagonistic interests of single sections of the
workers, and consolidate them into a unified class interest. Finally,
the whole economic process, which began by resting on individualist
principles, has assumed a common character; thousands upon thousands
of hand and brain workers engage in production in economic
undertakings upon a single and uniform plan, with the aid of
productive implements which can only be used in common.
The significance and tendency of these contradictions are sketched by
Marx in the great finale, which properly belongs to the concluding
chapter of the third volume:
"As soon as this process of transformation has sufficiently decomposed
the old society from top to bottom, as soon as the labourers are
turned into proletarians, their means of labour into capital, as soon
as the capitalist means of production stands on its own feet, then the
further socialisation of labour and further transformation of the land
and other means of production into socially exploited, and therefore
common means of production, as well as the further expropriation of
private proprietors, takes a new form. That which is now to be
expropriated is no longer the labourer working for himself, but the
capitalist employing many labourers. This expropriation is
accomplished by the action of the immanent laws of capitalist
production itself, by the centralisation of capital. One capitalist
always kills many. Hand in hand with this centralisation, or this
expropriation of many capitalists by a few, develop on an
ever-extending scale the co-operative form of the labour process, the
conscious technical application of science, the methodical cultivation
of the soil, the transformation of the instruments of labour into
instruments of labour only usable in common, the economising of all
means of production by their use as the means of production of
combined, socialised labour, the entanglement of all peoples in the
net of the world market, and with this, the international character of
the capitalist regime. Along with the constantly diminishing number
of the magnates of capital, who usurp and monopolise all advantages of
this process of transformation, grows the mass of misery, oppression,
slavery, degradation, exploitation; but with this, too, grows the
revolt of the working class, a class always increasing in numbers, and
disciplined, united, organised by the very mechanism of the process of
capitalist production itself. The monopoly of capital becomes a fetter
on the mode of production, which has sprung up and flourished along
with it, and under it. Centralisation of the means of production and
socialisation of labour at last reach a point where they become
incompatible with their capitalist integument. This integument is
burst asunder. The knell of capitalist private property sounds. The
expropriators are expropriated."--("Capital," Vol. I. English edition,
chap. 84.)
FOOTNOTES:
[7] Compare M. Beer, "History of British Socialism," Vol, I., pp.
245-270.
CONCLUSION.
An appreciation of Marx can only be arrived at by adopting the Marxian
method. We must judge him in the same way as any other towering figure
in the realm of thought or of action. Marx was a child of his time,
and his system is a logical conception of certain economic and social
phenomena of his age, owing something to the pioneer work and thinking
of some of his predecessors.
Two important events dominated his thinking: the French Revolution and
the English Industrial Revolution. Even apart from the statement of
Arnold Ruge that in 1843-44 Marx had collected a vast amount of
material for a history of the French National Convention, we know from
the work he did between 1844 and 1852 how profound was the influence
of the French Revolution on his intellectual life. Still deeper,
however, were the traces left upon his mind by the studies he made on
the economic transformation of England during the period 1700-1825.
Both events are obvious, catastrophic expressions of class movements
and class conflicts, in which the middle class, as the representative
of a higher economic order, gains the victory over autocratic forms of
feudal authority and oligarchic systems of organisation through State
regulation, in which, however, at the same time, a new class--the
working class--raises its head and begins to make a stand against the
victor.
Marx was led to interpret these events in this way and to make them
the basis of his conception of history chiefly through the influence
of Hegel, Ricardo, and the English anti-capitalist school following
upon Ricardo. To the end of his life he clung to the opinion that
dialectic, as Hegel had formulated it, was indeed mystical but, when
materialistically conceived, contains the laws of the movement of
society. "The mystification which dialectic suffers in Hegel's hands
in no wise hinders him from presenting in a comprehensive and
intelligible manner its general processes."--(Preface to second German
edition of "Capital," 1873.)
The splitting up of the concept into contradictories, and the
attainment of a higher positive through the negation of these
contradictories, that was what, to Marx's mind, constituted the
essence and the deepest meaning of the French Revolution and of the
English Industrial Revolution. Society, the positive, split up into
feudal and bourgeois, into two sharply divided contradictories, the
bourgeoisie appearing as the negation, to be supplanted by the
proletariat and so to make room for a Communist society, the higher
synthesis.
What he got from Hegel in a mystical form found an economic expression
in Ricardo and the anti-capitalist school. Ricardo's writings, which
belong to the second decade of the nineteenth century and which
formulate, in the guise of a system of economics, the antagonisms and
the conflicts between industry and landed nobility, presented
themselves as a practical demonstration of the validity of dialectic.
The fundamental idea of Ricardo's system may be expressed as follows:
Capital is the motive force of society and the creator of
civilisation, but the fruits of its activity are enjoyed not by
capital but by the landed nobility. That is the thesis; now for the
proof. The value of all commodities which can be made in any quantity
desired consists in the quantity of labour which is expended for the
purpose of producing them. The value is expressed in the costs of
production, the most important components of which are wages and
profit. Wages and profit stand in opposition to one another: if wages
rise, profit falls, and conversely. Wages consist in a definite
quantity of the necessaries of life, sufficient to keep the worker
effective. Wages must obviously rise whenever the cost of living
rises. The facts show that this is actually the case. The following
reasons make this clear. In consequence of the civilising effects of
capital, there is an increase in the opportunities for work and in
population, resulting in an increased demand for the necessaries of
life. Agriculture must be extended, but agricultural land is limited
and of varying quality. The extension of agriculture brings into use
the inferior kinds of land, which demand a greater amount of labour
for their cultivation. And as the amount of labour determines the
value of the commodity, the cost of living increases, and there is a
rapid rise in ground rents. The workers demand higher wages, whereby
the profits of the employers are diminished. But there is still
another circumstance to be taken into consideration. Whereas the
prices of agricultural products rise, those of industrial products
fall, since, in consequence of the invention of machinery and of the
superior division of labour, smaller quantities of labour are required
to produce manufactured goods. The result of the entire working of
capital for the civilised community is accordingly the reduction of
profits, the depreciation of capital, and the increase of wages. This
latter, however, is of no advantage to the workers, for food prices
rise higher and higher; on the contrary, the whole advantage falls to
the landed nobility, who do nothing for the furtherance of
civilisation, but who, through ground rents and protective tariffs,
receive everything.
We have, then, in Ricardo a system of economic contradictions between
profit, wages, and rent, or between bourgeoisie, proletariat, and
nobility, in which the antagonism between bourgeoisie and proletariat
is still undeveloped.
The year of the publication of Ricardo's "Principles" (1817) is the
year which witnessed the rise of English Socialism. In that year,
Robert Owen, in a public meeting in the City of London, declared
himself a Socialist. Three years later appeared the first criticisms
of Ricardo's political economy. In these it was argued that, according
to Ricardo, labour is the source of value, yet he considers capital as
the creative factor of society and the working class as a mere
appendage of capital. It must be the reverse; for the workers create
values together with the surplus products which are appropriated by
capital. In 1817, Robert Owen openly declares himself a Socialist;
four years later appears the anonymous letter to Lord John Russell;
Percy Ravenstone publishes his "Criticism of Capitalism," John Gray
his Lecture, and Hodgskin his pamphlet on the unproductive nature of
capital, in which he establishes the existence of a raging class
struggle.
The deep impression which these writings made on Marx is clearly seen
in the second and third volumes of his "Theories on Surplus Value."
And he links on to them. He completed what Ricardo hinted at and what
the anti-capitalist school deduced from Ricardo. How Marx continued
and elaborated these deductions we haw already seen in Chapter 3,
"Outlines of Marx's Economics," and Chapter 7, "Surplus Value as the
Motive Force of Society," where capital is shown to be the mass of
surplus value of which the workers have been deprived.
The deductions made by the English anti-capitalist school from Ricardo
signified, politically, the first awakenings of the English workers to
class-consciousness, to the struggle against capital. Just as
Ricardo's theory of value and rent was the battle-cry of capital
against the aristocracy--a battle-cry which created the free trade
movement and shattered the economic power of the landed nobility, so
the theory of value and surplus value was to become the battle-cry of
the proletariat against the bourgeoisie, the declaration of
independence, so to speak, of the working class. The English
proletariat lacked a philosopher who could work out the idea to its
logical conclusion, until Marx applied himself to the problem and
solved it, so far indeed as philosophical problems can be solved, by a
science which places itself at the disposal of a class movement.
For it is impossible to set aside the view that Marx's theory of value
and surplus value has rather the significance of a political and
social slogan than of an economic truth. It is for Marx the basis of
the class struggle of the workers against the middle class, just as
Ricardo's theory of rent was the basis of the class struggle of the
bourgeoisie against the aristocracy, or as the doctrines of the social
contract and of the natural rights of man formed the basis of the
struggle of the middle classes against autocracy and divine right.
Such militant philosophies need not in themselves be true, only they
must accord with the sentiments of the struggling mass. It is with
such philosophical fictions that human history works. Marx's theory of
value explains neither the vast and unparalleled accumulation of
wealth nor the movement of prices during the last sixty years. Wealth,
measured in values, has, in the last few decades, increased by many
times the increase in living labour-power. In this connection the old
formula can be reversed: wealth increases in geometrical, living
labour-power in arithmetical progression. The greatest difficulty in
Marx is that the inventors and discoverers, the chemists and
physicists, the pioneers and organisers of industry and agriculture,
are not regarded by him as creators of surplus values. Thinkers, who
by chemical researches and discoveries double the productive capacity
of the soil and conjure forth values in millions from the waste
products of industry: physicists who place new sources of power and
new means of production at the disposal of mankind and multiply the
productivity of labour; organisers who co-ordinate the forces of
production and introduce new methods of working--all this creative and
directive work, demanding, as it often does, an infinite amount of
intensive intellectual effort, is not considered to increase the total
sum of exchange values of the nation.
However, as far as the distribution of products is concerned, Marx's
theory is, generally speaking, correct; distribution is carried out
under the capitalist economic system not according to the amount of
productive work done, but in proportion to the outlay of capital and
the skill in commercial manoeuvring which obtains in the sphere of
circulation.
Unique as an investigator of the laws of the proletarian movement,
eminent and even a great pioneer as a sociologist, Marx is, in respect
of economic theory, predominantly an agitator. His system, more than
any other system of Socialism or of political economy, is the
revolutionary expression of proletarian thought and feeling. His
doctrines of value, surplus value, the economic determination of
history, the evolution from Capitalism to Socialism, the political and
economic class struggle, will for long have the force of truth for the
masses and will continue to move them.
Marx's heart must have been filled with joy and gladness when, out of
the elements of Hegel, Ricardo, and the English anti-capitalist
school, out of his studies of the French Revolution, of the English
Industrial Revolution, and of French and English Socialism there arose
a unified system whose destiny it was to lead mankind out of the
earth-bound history of the past into the new world wherein a spiritual
civilisation should fully blossom forth. Man is to quit the realm of
necessity and to enter into that of freedom, where he shall cease to
be a tool for the profit of others and shall rise to have a purpose of
his own, freely associating himself with his fellow men to work in the
service of all.
"The realm of freedom, indeed, only begins there where work
conditioned by necessity and external utility ceases. According to the
nature of the thing, therefore, it lies beyond the sphere of actual
material production. Just as the savage must struggle with nature for
the satisfaction of his needs, for self-preservation and
self-reproduction, so too must the civilised man, whatever be the form
of society or the methods of production obtaining. Side by side with
his own evolution develops this constitutional necessity, because his
needs increase; but, at the same time, the forces of production which
satisfy these needs likewise increase. Freedom in this sphere can only
consist in this--that men in their social relationship, the associated
producers, should regulate this material exchange with Nature in a
rational manner and bring it under their united control, instead of
being governed by it as by some blind power; it should be carried on
with the minimum expenditure of energy and under conditions most
adapted to and most worthy of human nature. Yet it remains all the
same a realm of necessity. It is beyond this where that development of
human power, which may be called independent purpose, begins, the true
realm of freedom, which, however, can only flourish upon the basis of
that realm of necessity."--("Capital," Vol. III., 2, p. 355.)
The National Labour Press, Ltd., Manchester and London. 31258
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End of Project Gutenberg's The life and teaching of Karl Marx, by M. Beer