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Marxism without revolution: Capital

July 1st, 2011

I’ve been writing series of posts examining the question – what is left of Marxism, as a way to understand the world, and as a way to change it, once it is accepted that capitalism is not going to be overthrown by a working class revolution. The first was about class and the second about crisis. Now for the final instalment: capital.

By the way, the first post got translated into Spanish, here. It’s one of the things that I still find stunning about the Internet that things like this can happen.

First there is Capital, the book,, and the value theory which is its main focus. Marx’s value theory is problematic, to put it mildly, in its own terms, as is shown by the notorious ‘transformation’ problem. But as long as Marx’s value theory formed the theoretical basis for a revolutionary workers movement, tthis and other problems was something that could be left for later resolution.

As the theoretical basis for a proletarian revolution, Marx’s value theory had some obvious merits. Given its central claims, that the return to capital arises from exploitation (scientifically derived as the expropriation of surplus value) and that the declining rate of profit means that the intensity of exploitation must increase, we are led to the conclusion that revolution is inevitable. The claim about the declining rate of profit (not specific to Marx – most of the classical economists also saw the rate of profit declining) hasn’t turned out to be true, at least not in a sense that requires steadily increasing exploitation or brings the system ever-closer to collapse.

Marx’s theory of value remains as unsatisfactory as ever, and the attempt by Sraffa to revive Ricardian economics, only showed up more problems. More to the point, once you abandon the idea of revolution, and of a society that divides neatly into workers and capitalists, the labour theory of value simply uninteresting[1]. What does it matter whether the incomes of the top 1 per cent are derived from ownership of capital or from some more complex combination of direct ownership, managerial control and straightforward corruption? It’s obvious either way that the growth of ultra-high income has come at the expense of stagnation for nearly everyone else (as discussed in the post on class, and in Zombie Economics, most of which is online here.

For those engaged in attempts to achieve a better, more equal and more sustainable society, Marx’s theory of value has little to offer. What can it tell us, for example, about the relative merits of trying to promote equality through higher minimum wages, through more progressive taxation or through expansion of public ownership? But, in the Communist Manifesto and elsewhere Marx had a lot to say about capital and capitalism that was, and remains, both interesting and insightful.

Most importantly, capital is not just an aggregate of machines, buildings, trading stock and so on[3]. It is a social relation, and gives rise to a kind of society quite different from previous societies where power over land was the core relation.

And, whereas Capital is generally concerned with a fixed-proportions, constant returns to scale economy, Marx, when not doing formal economic theory, was among the first to realise that capitalism is not about constant returns to scale. Marx saw the crucial importance of economies of size in permitting large capitalists to drive out smaller competitors. The dynamic pushing towards ever greater concentration is in inherent in the capitalist mode of production. By contrast, while earlier societies saw huge inequality in control over the means of production, that did not reflect the superior productivity of latifundia – quite the opposite. Rather this inequality was produced, and had to be maintained by, military power.

Capitalism is more dynamic than any previous society, but also, in its pure form at least, more unstable, and at least as unequal. These features have been amplified, in ways we have yet to fully comprehend, by the explosive financialisation of the last three decades or so. Of the books I’ve read recently, I found The Enigma of Capital to be the most useful on this.

The problem for social democrats is to keep the dynamism and innovation[2] while delivering more stable and sustainable, and less unjust outcomes. I’m planning to write yet more about this, but in the meantime, it’s open for comment.

fn1. Though not as uninteresting as attempts to justify the existing distribution of income on the basis of marginal productivity theory or Austrian metaphysics.

fn2. In important respects, particularly as regards the public good of pure research, social democracy can promise innovation that would not arise under either pure capitalism or central planning. The Internet is perhaps the most striking recent example.

fn3. Not to mention the fact that the aggregation is highly problematic, as the Cambridge controversy of the 1950s and 1960s showed. The value of capital assets depends on the return they receive, and the latter isn’t uniquely determined (the famous ‘reswitching’ concept being one way of showing this). BTW, commenters are free to point out that I’ve misrepresented the core of the controversy here. I’ve never worried much about the details, having never believed in capital as a meaningful aggregate value.

  1. July 2nd, 2011 at 10:16 | #1

    John, your analysis of Marx here seems fairly deterministic, or maybe a better way to put it is that you paint him as a dreary determinist, which he wasn’t. He didn’t have a crisis necessarily leads to revolution view. And he did see countervailing tendencies to the tendency of the rate of profit to fall – such as lengthening the working day, productivity increases etc.

    When you say there hasn’t been this falling profit rate trend, what does the evidence show? Since the end of the post war boom (of which there are some good explanations based on ideas of the permanent arms economy) what have profit rates been doing? Up and down but on a general downward trend perhaps?

    If so it puts the conscious distribution of wealth to the rich and owners of capital in context and also the failure of social democracy to provide progressive reforms as the social surplus dwindles.

    I hope to be able to address some of your points in more detail on my blog at some stage, but at the moment my day job keeps on intervening.

  2. BilB
    July 2nd, 2011 at 11:02 | #2

    John P,

    You have to ask your self that apart from

    “what have profit rates been doing? Up and down but on a general downward trend perhaps?”

    What fundamental other things have been going on at the same time?

  3. July 2nd, 2011 at 11:49 | #3

    The claim about the declining rate of profit (not specific to Marx – most of the classical economists also saw the rate of profit declining) hasn’t turned out to be true, at least not in a sense that requires steadily increasing exploitation or brings the system ever-closer to collapse.

    But the first claim (about the decline in profit) is true, at least in modified form. See here for instance:


    There are at least two ways to interpret the labour theory of surplus value (LTSV). The first is in terms of a logical, a priori account of production, profit and expropriation. To simplify, workers and owners/managers are always competing for the same slice of surplus value, and cannot but do so. I’ve seen many objections to this basic point, but never a refutation. In one fell swoop, it destroys the chicanery about rising tides lifting all boats, and corporate propaganda that places workers and owners on the same ‘team’. Class struggle is implied in the very process of production, and economics can therefore never be anything other than ‘political’.

    Secondly, there is an empirical element here. Bilb seemed deeply confused on the other thread regarding manufacturing profits. Nonetheless, profits in the sector have largely stagnated in the West, leading to increased financialisation in the developed world, whilst manufacturing shifts to cheap labour sweatshops in China and elsewhere. If labour is not a major determinant of surplus value, why move to China (or Guatemala, or Pakistan)? For the dumplings?

  4. BilB
    July 2nd, 2011 at 14:29 | #4


    The problem that you are having is that you are seeing living standards as being constant over time when in fact they are dramatically changing. NB(quality of life is a very different matter)

    The fact is that businesses (capitalists) have maintained and steadily improved profitability for the last 150 years. You seem to be calculating that business (industry) turnover as steadily declining under the pressure of steadily rising competition, driving workers and owners into conflict over declining profitability. This is only ever true for a business or industry that fails to improve product and process. Such businesses eventually die.

    The reality is that business (industry) consistently improves both product and process. In the so doing they have been able to improve wages, improve working conditions, reduce work hours, increase throughput, increase profitability, and pay ever higher taxes, all for the last 150 years.

    The simple test for this is to look around you and then compare what you see to the historical accounts of the standard of living for the average person in the time of Marx. The difference in what you see would have been impossible if Marx’s theory in practice was correct.

    The real question is, again, what made this extreme transformation possible?

  5. BilB
    July 2nd, 2011 at 22:59 | #5

    Any questions, TMH, and I am here all weekend.

    Actually I am here all weekend manufacturing 2 components to replace the previous 3 more expensive and more difficult to manufacture components. In the process I have improved the functionality of the finished product, reduced future service costs, and improved my productivity…partly because I am here working when I should be at home, and secondly I am able with the new components to increase the production batch size which in turn reduces the cost of the next outside process when these parts are overmoulded with polyurethane rubber. This product change is part of 10 scheduled improvements, all planned to steadily make our end product work better for the customer, reduce our production costs and material consumption, and improve our profit. This also helps to keep our product export marketable as the Australian dollar remains strong internationally.

    From a class point of view for this production unit, there are 2 principles, 2 assistants, (all professionals) 5 CNC machines with 2 more planned. Everyone works at this product because they want to. This is not untypical of modern small business (50% of the work force), and nothing like the production environment of Marx’s day.

    While the machines are doing the work I am watching the brilliant coverage of the Tour de France. What spectacular countryside.

  6. July 3rd, 2011 at 11:07 | #6

    What a bizarre argument, BilB. Because you personally work in a high-tech industry and like your job, class apparently doesn’t exist.

    There is no iron law of capitalism that suggests that businesses (or industries) will maintain or improve profitability over time. The biggest companies of the 1920s (or 1990s, for that matter) are by no means as profitable today. Moreover, those that have remained profitable have done so by outsourcing labour-intensive work to wherever labour is cheap. Hence the massive shift of manufacturing into the developing world, a point which you’ve simply ignored hitherto.

    Secondly, class is not defined by how much affection you have for your job or boss, or by much much bonhomie the HR department is sharing around, but rather, by your relations to the means of production. A good boss/job/HR dept may very well attenuate class conflicts, but can never eliminate them.

    A final piece of confusion is here:

    The reality is that business (industry) consistently improves both product and process. In the so doing they have been able to improve wages, improve working conditions, reduce work hours, increase throughput, increase profitability, and pay ever higher taxes, all for the last 150 years.

    Wages in the US, for instance, have rather famously not improved since the Nixon era. Improvements in working conditions have arisen in spite of industrialists, not because of them (i.e. through legislation and union action). Working hours are long both in Australia and many other developed countries. And it’s by no means true that business has largely gotten more profitable, or paid more taxes.

    Manufacturing in the developed world is still extant as far as high-tech and luxury goods are concerned. The overwhelming bulk of production, however, has shifted to the developing world. My point is that this shift is not merely incidental, but is a function of labour costs.

  7. July 3rd, 2011 at 11:27 | #7


    It’s interesting that you should mention the transformation problem, as I have been examining this topic myself.

    A suggestion: a post on this subject, if possible going through the capital controversy.

  8. BilB
    July 3rd, 2011 at 13:55 | #8

    Good response THR,

    a). Not a bizare argument at all. I am relating to you the business reality of today.
    b). Yes there is still class in Australia, but it is not at all the calss structure of yester year. Today we have predominately 2 classes. The VIP class, and the everybody else class. The only way that you could argue that there is a third calss is to refer to homeless people as being in another class, an argument that I would reject. More importantly most capitalists in Australia reside in the same calss as the “workers”. ie Australia to all intents and purposes is a one class society as the VIP class has no intrinsic hold over the “everybody else” class. Also, being a boss or an employee does not amount to class differentiation as any person on even the basic wage has the means to start a business and become a “boss”. There is no barrier. More to the point there is no law that divides people in a manner that makes one group more protected than the other, in Australia at least.

    Now the shifting of manufacturing jobs to lower incomed countries is a big issue, and not as clear as you might think, nor does it have any connection with class differentiation. For starter you, even on your superannuation income have the ability to travel to China, buy a truckload of cheap products manufactured by a one class communist society, bring them back to Australia and sell them at the saturday markets or in a rented shop just as many other opportunists do. This is called TRADE. Where a business packs up its machinery and moves off shore this is called RELOCATION. When a business relocates it is then a foreign company and the sale of its goods in this country are called trade imports.

    If we are talking about China then cheap labour is not its main appeal for businesses determined to maximise their profits by operating in that country. The main advantage for China is that as a communist country with central control they have the ability to distort raw material costs in their favour. A recent statement from a representative of the US steel industry pointed out that the labour component for a tonne of steel was just $40, and it costs more than that to ship a tonne of steel from China to the US, so labour cost is not the real issue in a world with globalised raw material markets.

    Your impression of the advantages to business for exporting jobs oversees are entirely anecdotal, and not entirely true. The issue of US wages is also a very mixed bag and is more to do with the history of the US dollar than to capital and labour relationships directly.

    On the paid more taxes argument,


    if this link brings up a per capita taxation time line then you will see the history of taxation from 1860 to the present.

    you might think that most taxes are paid by individuals. This is true in one sense, but the fact is that all of that taxation is derived as a result of the business activity, and can only be supported by profitable businesses. So for per capita taxation revenues to grow over time as they have done then business has had to improve its profitability through out that time. The fact that government steps in and takes that increased profit away is neitrely another matter. The fact is that business profitability has steadily grown, and employees have benefitted from that growth through increased wages, conditions and benefits.

    You would have to be blind to not have noticed that the average new house is 3 times the size of a house for the same family size of the 50’s, it will have 2 automobiles not one for every three houses, all of the occupants enjoy low cost access to a far greater range of health care, all of these houes will have multiple high definition television sets and many other modern conveniences, and all city roads are paved and footpathed. The list of differences goes on. This does not mean that people are any happier, but they are dramatically materially better off from their higher share of higher profits.

  9. BilB
    July 3rd, 2011 at 14:32 | #9

    Some more reasons why trade with China is not based on labour cost sufficiently for that the be the primary attration and therefore not proof of failing business profitability in the “capitalist” West.

    China, being a communist country,

    China buys raw materials centrally and thus has greater puchasing leverage than most other entities.

    Materials are processed and sold at cost by the centrally controlled industries. Therefore their basic materials iron, steel, copper, brass, plastics, etc arrive at maufacturers at a lower cost that nay where else in the world.

    When dealing with China all goods are paid for in advance, ie Chinese businesses do not have to finance their production or labour.

    Until recently the Chinese government paid a grant to exporters 13% of the invoice value. ie any Chinese business that attracted an export buyer had a free hand out from their government with which to bribe the buyer into buying their product, and this mechanism provided strong loyatly from Western corporate buyers.

    China, due to its size provides huge variety of product, and attraction for buyers for large retail outlets such as Woolworths, along with the temptation of the cash handout to buyers.

    Chinese businesses routinely do production overruns on foreign business tooling and materials and sell these overruns at very low prices. This has contributed to the myth of ultra low priced Chinese goods. These products were to all intents and purposes stolen goods.

    In other words dealing with China is not a straight out issue of cheap labour. Chinese businessmsn can operate on very thin margins because all goods are paid for in advance before production commences. Chinese trade organisors make small profits on very large quantities. That is their secret.

  10. July 3rd, 2011 at 14:44 | #10

    The reference you gave, to an article by the late Chris Hartman, illustrates one of the failings I’ve detected in contemporary Marxian analysis. (And, to be fair, I have seen the same error repeated by local Marxists).

    The key paragraphs where Hartman articulates his point are the following:

    “Each individual capitalist can increase his (or occasionally her) own competitiveness through increasing the productivity of his workers. The way to do this is by using a greater quantity of the ‘means of production’—tools, machinery and so on—for each worker. There is a growth in the ratio of the physical extent of the means of production to the amount of labour power employed, a ratio that Marx called the ‘technical composition of capital’.

    “But a growth in the physical extent of the means of production will also be a growth in the investment needed to buy them. So this too will grow faster than the investment in the workforce. To use Marx’s terminology, ‘constant capital’ grows faster than ‘variable capital’. The growth of this ratio, which he calls the ‘organic composition of capital’,6 is a logical corollary of capital accumulation.”

    Let me repeat the crucial idea: productivity is achieved through investment, according to Hartman.

    Now, have a look at the following articles published in the July/August 2011 issue of Mother Jones:

    All Work and No Pay: The Great Speedup

    “You: doing more with less. Corporate profits: up 22 percent. The dirty secret of the jobless recovery.”

    Productivity, currently and in the US, according to this article, is achieved by squeezing more work out of the same or smaller pay: an increasing rate of surplus value (s/v) is driving at least partially the increase in profits.

    I don’t know if you live in Australia, but I would be surprised if things in Australia were much better.

    PS: The article links to a series of 12 charts and to first person accounts of how work has intensified.

  11. July 3rd, 2011 at 14:48 | #11

    I agree that living standards have risen, but I think it’s highly contestable to attribute this to workers having a greater share in profit. The evidence I’ve seen suggests that this share is declining, particularly post-GFC.

    I think we are talking at cross-purposes on class. Australia is not a two-class society any more than China is one-class. As I indicated earlier, class is determined by one’s relation to the means of production. It is not determined by one’s take home pay, or by the colour of one’s collar. This is why the following statement is an avoidance of what people are discussing when referring to Marx’s theory of class:

    Also, being a boss or an employee does not amount to class differentiation as any person on even the basic wage has the means to start a business and become a “boss”.

    Being self-employed or a small business owner puts you, by the Marxist definition, in a different class to waged employees. This is true even if some employees make more money than some sole traders or what not. This is why small business and the self-employed constitute a kind of middle class, along with middle managers and the like. They ought to be distinguished from the execs and owners of big business, as their interests are often antagonistic.

    Where both classes coincide are on things like IR. Small business often loved Workchoices, for instance. This is precisely why Howard’s ‘battlers’ were not working class in many cases, but rather, low to mid income middle class folk.

  12. July 3rd, 2011 at 14:54 | #12

    Some more reasons why trade with China is not based on labour cost sufficiently for that the be the primary attration and therefore not proof of failing business profitability in the “capitalist” West.

    The problem with your argument is that is isn’t simply ‘communist’ China that has become a manufacturing destination. In the US, for instance, industry shifted (to a considerable extent) from the unionised North-East to the low-wage, de-unionised South, where it didn’t shift to Mexico or other parts of Latin America. In Europe, industry has moved to countries formerly behind the Iron Curtain – French and German manufacturers take advantage of cheap labour costs in Bulgaria, for instance. China is the most stunning example, but it’s far from being the only one.

  13. BilB
    July 3rd, 2011 at 15:32 | #13

    THR 10

    Yes, I did look up the definition of class and Marx’s use of the term is different to everyone else’s. To this I suggest that he was dishonest to define the relationship between employers and employees in this way. The use of the word class invokes in most people’s minds entirely different connotations to that which he was thinking. And therefore I declare that part of Marx’s argument irrelevent to the current day. a. Marx was miss using a common term, and b. the distinction of class in our world is irrelevent, c. By my observations dinky di capitalists directly support only a small percentage of the exploited workers. The rest of the employed workers in Australia provide services of many varieties, and so the realtionship between “capital” and workers is blurred beyond recognition to Marx’s image of society.

    Antagonistic: Entirely presumptive.
    I think that it could be said that todays young are indifferent to the notion of work. This is largely because they prefer something easier, like being a rock star, or famous actress. This does not constitute antagonism in the sense that Marx would be comfortable with.

    So lets look a the score card for capitalism versus revolt originated socialism.

    I’ve got to do some work so will have to come back to this, but I suspect that a comparative examination of the outcome of regime change favours capitalism hands down. Please feel free to prepare in my absense a pros and cons table for us to discuss.

  14. MikeH
    July 3rd, 2011 at 15:36 | #14

    BilB. You are so busy congratulating yourself on your own good fortune that you fail to notice the large numbers of workers in the outer suburbs who are struggling to pay the mortgage and meet the cost of living in the West’s best performing economy.

    I am yet to meet a wage earner struggling to balance the budget who thinks to themselves “Well I am better off than a similar wage earner in 1950 so it is all ok”. People look at their living standards relative to their contemporaries not their grand parents.
    In the 1950s you could survive in an Australian city without a car. I live in a former working class Melbourne suburb now gentrified that had more rail services in the 1940s than it does now. Workers have been forced out to the outer suburbs where a multi car household is mandatory and buy packaged up McMansions. Living standards have risen but the financial pressures on working class house holds are much the same as they have always been.

    You arguments about China are specious – how do you explain the outsourcing of manufacturing to Thailand, Indonesia, Latin America etc. Companies are primarily chasing cheap labour, low taxation and lax regulatory treatment – all factors designed to counter the tendency for their rate of profit to fall.

    As living standards rise in SE Asia and Latin America, I expect to see the same companies chase low wages in Africa

    This is the point that Lora made in her contribution on “Class” when she quoted Marx

    “Capital drives beyond national barriers and prejudices as much as beyond nature worship, as well as all traditional, confined, complacent, encrusted satisfactions of present needs, and reproductions of old ways of life. It is destructive towards all of this, and constantly revolutionizes it, tearing down all the barriers, which hem in the development of the forces of production, the expansion of needs, the all-sided development of production, and the exploitation and exchange of natural and mental forces”.

    The old German was a pretty smart guy. He recognised the international character of capitalism and realised that capitalism would not exhaust itself while there was a place somewhere on earth where it had not penetrated.

  15. July 3rd, 2011 at 16:05 | #15

    To this I suggest that he was dishonest to define the relationship between employers and employees in this way…Antagonistic: Entirely presumptive.

    There’s nothing dishonest or presumptive about the definition I provided. A nurse, for instance, is a worker, whilst a self-employed tradie is not, irrespective of wage levels, and quite irrespective of whether the nurse feels a warm and fuzzy glow for his or her employer.

    The relation between employer and employee is therefore necessarily antagonistic, regardless of how many canapes are wheeled out on team building days. Each class is competing for the same shared of income. The revolutionary Marxist thinks that the wage system itself should be overthrown and replaced with other social and economic arrangements. The social democrat, as I understand it, thinks that many aspects of the Marxian critique are broadly correct (particularly as regards antagonisms) but that we should tilt things in favour of workers, and help them get a better share of income, since revolution is a rather risky endeavour.

  16. BilB
    July 3rd, 2011 at 16:41 | #16

    There is one thing that you have forgotten, Mike H. That is that the flow of capital out of Australia and the US is entirely the product of a political decision made in 1974 dubbed the Lima Convention to seduce Asian countries away from joining the USSR. In Australia’s case this decision was made by that good old socialist, Geof Whitlam. So again there is no connection between the real world and Marx’s ideas other than the analogy that water flows down hill, or energy flows from hot to cold, high pressure to low pressure, etc.


    By extention, THR, your definition means that babies should be antagonistic to their mothers, apples should resent trees, Carts should be indignant to horses. In other words if one thing comes before the other then the follower should be antagonistic to the former. I take good King Wensleslas’s story view of one supporting the other and visa versa.

    It is true that when Marx was formulating his ideas ordinary people had few options available to them and the distinctions between exploiters and the exploitees was very pronounced. But in today’s world we all have equal opportunity. MikeH thinks that I am being self congratulatory, but my wife knows better. It takes extreme sacrafice to build a complex business. Employees have the luxury of turning off the moment that they leave work, of enjoying the week end, of taking holidays, of spending their earnings on their own desires, of being able to plan and fulfill those plans, of being contrary to their employer, of changing their situation at a whim. To be in business is to really be everything that an antagonistic employee imagines of his own situation.

    But in a mindset of envy we project others into the role that we think of them, never what they really are.

  17. July 3rd, 2011 at 17:20 | #17

    When I speak of ‘antagonism’ in a Marxian context, it refers to a structural conflict, not an affect on the part of antagonists. This is where your analogies fall down – of course there is a division of labour/differentiation of roles within the family structure, but there is also (often) collectivisation within the same family structure. Further, most people would regard workers as somewhat more deserving of autonomy than apples, babies or horses.

    So there’s no envy here, and no bashing of business owners. The latter purely and simply have interests that are at odds with their workers. Yes, cooperation can ensure to a limited degree, but ultimately, income has to be shared out, and there must be winners and losers.

    Your claims about ‘equal opportunity’ are also dubious, but I’ll stick to the Marxian claims for now.

  18. BilB
    July 3rd, 2011 at 18:19 | #18


    This is the hub of it

    “The latter purely and simply have interests that are at odds with their workers”

    In principle this is not at all true. Sometimes it is. But usually not. The assumption that one is “ripping off” the other is purely perception.

    In my business I have the same relationship with my customers that my assistants have with me. I ask a price, the customer makes a counter offer. We agree and I set about filling the customer’s needs. Now if I make an offer to my assistants that they can share the profit proportionally they would not accept, and that is because profit is often a loss in which case the assistant would have to contribute from their savings or property. At this point there is no antagonism, there is judgement. The assistant wants and needs security. That security has a price. Another judgement. I have to look at my available resources and make a judgement to proceed with the customers order covering all material costs, providing all equipment, providing security to my assistants, and attempting to not make a loss. That is the process of business.

    Now if Marx used loaded words to call that an antagonistic relationship, when he simply meant “competing interests”, then he was being at best manipulative of his readers, or just plain dishonest.

    As you have used the word “collectivisation”, let me say that I am a great fan of collectives. But I would never completely risk my autonomy to the gamble of a collective. More likely I would prefer to share part of my output with a collective while developing the other part of my output independently. A bob each way. I have had a few business partners over the years, business partners being a form of mini commune, and the absolutley worst thing that can happen is to have a partner who decides, for whatever reason, to disable the performance of a business. You might wonder why anyone would want to do that. A real life example was a partner with great promise, but had had an acrimonious divorce and did everything possible to give nothing to his previous wife or his children, so while giving every appearence of performing for the business he was in fact doing every thing possible to slow it down so that he could appear to be earning very little for the Department of Social Welfare’s benefit until his children had left school. This was of course so that he could make the minimum maintenance payments. The cost to the business was massively out of proportion to anything that he thought that he had gained.

    This is what is wrong with socialism. Every good meaning person gets dragged down by those who have other objectives, and as Russians know only too well there are far too many of them. The other extreme is the Libertarian “every man for himself” approach, and we all know how that one plays out. I prefer, as do most human beings on this planet, something in between the 2 extremes. And not surprisingly that is the most common economic solution.

    That something in between will never be perfect, just acceptably better.

  19. BilB
    July 3rd, 2011 at 19:27 | #19

    By the way, THR, when I say equal opportunity I am referring to equal opportunity to perform independently. No doubt there are many areas of inequality, so yes, I accept that there can be many tragic situations. The biggest disadvantage that people can have is that of a difficult childhood. We don’t get to pick our parents, genes or circumstances. But arriving healthy and educated (highschool) at age 20, we are all relatively equal. It is up to our energy and imagination what happens next. In Australia, that is.

  20. July 3rd, 2011 at 19:42 | #20

    In principle this is not at all true.

    On the contrary, it is true, in principle and in practice.

    Now if Marx used loaded words to call that an antagonistic relationship, when he simply meant “competing interests”, then he was being at best manipulative of his readers, or just plain dishonest.

    Well, there are ‘competing interests’, but they are not merely competing interests. The working classes and the industrials are, logically speaking, at contradictories with one another, not merely contraries. The same piece of surplus value cannot be expropriated by both industrialist and worker. Yes, growth can and does occur, but at any given moment in time, income distribution is a zero sum game.

    In none of this am I trying to argue that business owners have easy working lives, that they do not incur risks, or that they are somehow sinister, top-hat wearing caricatures. But, by virtue of owning and controlling production, they are in a position whereby they have to expropriate surplus value from workers. (Subsequently, they are in many cases compelled to re-invest it as capital in the pursuit of everlasting growth, but that’s another story). This is not a case of immorality, but of structural necessity.
    For this reason, workers and owners cannot and should not swallow the team building corporate tripe of their HR departments.

    But arriving healthy and educated (highschool) at age 20, we are all relatively equal.

    Yes, but many aspects of health and education are linked to one’s economic situation at birth. Meritocracy exists largely on paper.

  21. BilB
    July 3rd, 2011 at 20:40 | #21


    Competing interests will only lead to conflict where ego becomes a factor. Differing managerial styles will lead to differing profit sharing offers for similar businesses. Where Labour seeks a common outcome this can lead to missunderstanding. But if your belief that all “surplus value” should be distributed according to the understandings of Labour, then I can see how conflict can arise as this is a certain formula for business failure.

  22. July 4th, 2011 at 14:34 | #22

    I’ve posted the first part of a response to JQ’s series on Marxism at Left Flank: http://left-flank.blogspot.com/2011/07/john-quiggin-marxism-without-revolution.html

    Part 2 tomorrow.

  23. July 4th, 2011 at 23:16 | #23

    You should really read Donald Mackenzie’s Engine Not a Camera on the financialization of the economy. Explains the role of economy by interviewing the protagonists in the story and carefully develops a theory of the ‘performativity’ of that theory as a source of the instability in the economy.
    Mandatory for anyone researching or teaching economics, I’d say. His ‘Material Markets’ is a simple entry into the (growing) field of Social Studies of Finance

  24. BilB
    July 5th, 2011 at 07:19 | #24

    This series of articles has caused me to read a little more of Marx, not a very satisfying experience. Point s to Marx for his efforts to define what he saw happening around him, but his conclusions are a very incomplete analysis and demonstrate a locked in frame of thinking based on a conflictual relationship between a “working class” and a “ruling class”. Marx completely dismisses self determination (individual private enterprise) as “pre capitalist” in order to focus on his perception of capital profit as being “theft”. From my reading so far he does not appear to register the “state’s” responsibility in ensuring the welfare of all members of the community. To explain this briefly: where everything is owned (land, flora and forna, infrastructure, etc) either by individuals or the state (crown land concept) thereby preventing displaced individuals from being able to legitimately secure their own survival (foraging, squatting) the state has a responsibility to provide such individuals the basic means of survival (this is the strength of the aboriginal concept of property).

    The other hole in Marx’s thinking (from what I can see so far) is that he does not recognise the possibility of a person developing “capital” that does not require exploitation at all. A current powered ferryboat for instance which has the ability to generate “surplus value” with no means of resolution ie no workers to disperse the surplus amoungst. Here I suppose he would see the exploitation being in the charge for the service, it would need to be a free service when there is no working class to benefit.

    Marx’s model is very incomplete, and I do not accept the argument that Marx’s definition of “class” was simply a term to differentiate between employers and workers. Marx was heavily into painting the “ruling class” as immoral demons, from my reading of it, in which case Marx’s work is almost completely political ideology rather than economic theory.

    From a book review point of view it fails to offer anything more than can be derived from a personal weekend of clear economic critical analysis and good common sense.

  25. July 5th, 2011 at 08:03 | #25

    BilB, I’m not sure what of Marx’s you’re reading but I don’t think you’ve even come close to grasping Marx’s argument. But then Marx can be difficult to read as he is presenting something that is quite counter-intuitive.

    He doesn’t start from the presumption that most features of our current society (including things like “individual private enterprise”, the “state”, etc) are eternal features of human society, but interrogates whether they are specific to a particular historical period. So when you suggest that the modern “state” is the same thing as notions of collective responsibility within Aboriginal society, or that Aboriginal notions of “private property” are somehow akin to private property under capitalism you repeat that error — of seeing modern social relations (or their superficial features) as eternal.

    He also attacks the idea (and that perhaps accounts for his sarcastic tone and derogatory humour in some places) that surplus value can emerge from machines without human labour being involved. Indeed, that is the centre-piece for what JQ refers to as his “value theory”. Value for Marx is the direct product of the social organisation of capitalism at the point of production, which also involves the theft of part of the social labour of the working class as surplus-value (or profit), and that’s called exploitation.

    Exploitation is not a moral category but a scientific description of the nature of the social relationship that is capitalism. We can argue over whether the science is correct, but let’s not presume that it’s just Marx having a rhetorical flourish at bosses’ expense.

  26. BilB
    July 5th, 2011 at 09:04 | #26

    If what you are saying that Marx was refering to a particular period then that automatically turns Marx’s work in to a narrative rather than an a theory or philosophy. The fact is that survival is a perpetual process and any thorough economic theory should reflect and encompass that from the hunter gatherer through to the space station outpost astronaut.

    Seperately though, Marx does not appear to recognose that the capitalist adds value themselves through their organisational skills and is entitled to a share of the value gained by enterprise. From what I have read so far he does not address the notion of savings whether by capitalist or worker. His theory suggests that savings should represent surplus value and should constitute theft potentialy by both worker and capitalist. To my mind Marx’ analysis is just not comprehensive enough to warrant serious study as anything other than a historical document.

  27. July 5th, 2011 at 14:56 | #27

    BilB, Marx has a general theory of all human history but he tries to distinguish which features are universal (e.g the need to reproduce life and social organisation), which pertain only to societies where there are classes (e.g coercive state apparatuses, the presence of some form of measurable exploitation) and which are specific to the capitalist mode of production (e.g generalised commodity production, the specificity of capitalist exploitation, a social dynamic of “accumulation for the sake of accumulation”).

    My criticism of some of the concepts you mention is that they are used as if they are applicable universally when in fact they aren’t. There was nothing that could be reasonably considered a “state” in egalitarian hunter-gatherer societies, for example. “Private property” in class society actually means control over the means of production (rather than just owning a few things), and in a capitalist society very few workers have any such control but under feudal society peasants often owned a productive piece of land as well as being exploited by the feudal lord through the extraction of a tithe of some sort.

    In Capital Marx does directly address the other two issues you raise. On the organisational role of the capitalist, it only appears that they deserve some surplus value because we live in a society where only capitalists can realistically organise production. It’s akin to saying in a slave society that the slave-owner deserves the surplus from slave labour because they organise production by slaves. Those slaves should be more thankful! Organise society differently and these appearances no longer apply… and the end of slavery marked the end of an entire class of exploiters. Is life so unimaginable without them?

    Marx doesn’t generally see savings as theft, but they can represent hoarding of value rather than it being set in motion for further production, thereby slowing down accumulation. But the other face of savings is as part of a financial system where interest can be paid by some and earned by others. That can shift surplus value but it’s not really theft; rather a price that capitalists are willing to pay. Indeed, a modern capitalist economy would grind to a halt if there wasn’t a system of finance to lubricate its movements (as we briefly saw after Lehman Brothers went down in 2008).

    The usefulness of Marx really depends what project you’re interested in. If you want a theory that helps you perpetuate existing capitalist social relations (whether or not they are actually sustainable or just) then he’s not useful because his analysis points to the need to reorganise society. Perhaps, as JQ seems to do, you can pluck bits out of Marx to justify particular reforms to address bits of capitalism you don’t like but not challenge the system more fundamentally, but then they have to be substantially transformed to make sense away from their anti-capitalist origins. I guess that’s part of the argument I’ve made over at Left Flank (Part 2 soon).

  28. James Haughton
    July 5th, 2011 at 16:04 | #28

    As someone who occasionally pipes up to defend Sraffa and the neo-Ricardians, I have a lot of problems with this. In what way did Sraffa’s reformulation of Marx’ value theory “only show up more problems”? It’s true that in Sraffa’s economics prices are not equal to labour equivalents, but the sum total surplus which is shared out between the various social classes is still generated by exploitative class relations (using Marx’s definition of exploitation, here). No net exploitation, no net profit; which is pretty much what Marx and Engels argued was the solution to the transformation problem in Capital III. Steve Keen also has a good take on the interrelationship between Marx’s value/price theory and “financialisation” as you call it, in his paper “A Marx for Post-Keynesians”, which I recommend.

    To further support Sraffa and the neo-Ricardians, I remind readers that Ricardo (but not Marx) said that the ultimate long-run cause of a falling rate of profit was ecological; as we systematically sweated all our natural resources into the bank accounts of rentiers (RSPT, anyone?), we would run out of fertile land and eventually the capitalist system would grind to a halt, then rust and fall apart. Replace “fertile land” with “livable climate”, (or in China “breathable air”, “drinkable water”, “baby milk that doesn’t kill your kids”, “factories that don’t drive their employees suicidally insane”, and on, and on) and he may yet get the last laugh.

    Why would we want to abandon the concept of “a society that divides neatly into workers and capitalists”? Despite various proclamations about how well-off we all are, it’s quite clear from income and wealth distribution statistics that Australia and most of the western world has a distinct 3 class structure of about 2-5% capital owners (not many old style top-hatted Randite “capitalists”; they are owners, not managers, with diversified portfolios which are heavy on rental income, broadly defined), 80-85% wage earners, and 10-20% welfare- and crime-dependent lumpenproletariat. (There is less of a break-point between class I and II than there used to be, partly because of the presence of a very high-paid executive/managerial class who are paid in profit-share to safeguard the interests of the class I. )

    As Andrew Leigh has pointed out, most of the Canberra pollies and press gallery have no real idea of how little the average australian earns, which partly explains why they keep offering tax cuts when the public wants better public services (the rest of the explanation being that Canberra benefits from tax cuts; only state or territory with more kids in private than public schools, I remind you all).

    As that dangerous Marxist radical Paul Krugman put it last month “Financial securities are overwhelmingly held by the rich — more than 60 percent by just one percent of the population, more than 98 percent by the top 10 percent.” And they aggressively use that financial clout to drive deflationary, anti-Keynesian policies which benefit their portfolios. Where, exactly, is this class division of the political economy accounted for in either neo-classical or Keynesian economics?

    If Marxist and Sraffian value economics offers one genuine insight to Keynesians like Quiggin and Krugman, it is that economic policy is not a contest of ideas but a contest of force (one useful result from Sraffa; for any division of wages and profits, a set of prices exists that will clear the market; the concept that rewards are for marginal effort, or that raising wages will create unemployment, etc, is therefore clearly bunk). You can point out all you like that higher minimum wages, health care, maternity leave, etc are better for everyone in the long run; they aren’t better for the top 2-5% right now, and that’s who control the media, the lobbyists, and the governments who respond to them. Krugman seems to be belatedly getting this point, having gone from bewailing the incomprehensible dark ages of macroeconomics to directly attacking rentiers recently.

    On the whole crisis, rising or falling standards of living thing, etc, it’s fair to say that you can find bits of marx which support either a one-way progression to revolution, or a cyclic view of capitalist economies. Marx predicted that workers would receive a shrinking piece of the pie; if the pie itself was also shrinking due to the long-term decline in profit, that means immiseration, but if the pie is growing then that can translate into real improvements in worker standard of living, combined with growing inequality; which is pretty much what we’re seeing in western economies (Most marxists I know would also make the point that we have exported our immiseration to the developing and third world and that Marx’s theory only applies in toto to a world which is completely capitalist, which ours isn’t by a long shot – still plenty of warlords, peasants, smallholders and slaves out there, grinding out the diamonds, coltan and cotton, killing the gorillas and poisoning the Aral sea to give us our diamond encrusted watches, mobile phones and cheap branded clothing).

    Furthermore, Marx’ view of crises was that they can have a corrective effect on the falling rate of profit, because they destroy debts and capital over-accumulation through default, bankrupcy, obsolescence, forcing wages down, etc, which means that the ratio of organic to variable capital drops and profits rise afterwards. This is what Kalecki would later build into his theory of business cycles, and what the GFC seems to have done. In the US, corporate profits are flying again while wages and unemployment stagnate; job done, crisis! Golden handshakes all round!

    One current interpretation seems to be that economics is cyclical, but class consciousness is often cumulative; so the revolution comes not so much after the crisis to end all crises, but when the workers get sick of paying for yet another one (see Greece).

    PS Bilb, if, at the time that Marx was writing, you had stood up and said that the state had the responsibility to care for the welfare of all members of the community, if you were lucky you would have been transported to the penal colony of NSW – look up the Tolpuddle martyrs sometime – and if you were unlucky you would have been murdered by a hired thug. To be frank, everything you have said about who Marx was, what he said, what his economics predicts, etc is 95% wrong, which leads me to suspect that the 5% correct is blind luck.

  29. Mel
    July 6th, 2011 at 00:13 | #29

    “There was nothing that could be reasonably considered a “state” in egalitarian hunter-gatherer societies, for example. ”

    I disagree. H-G societies always had Elders or some other leadership group that had what were effectively executive, judicial and military state functions. It is also a myth that H-G societies were egalitarian. In indigenous Australian cultures, for example, women were effectively chattels. Women were forced into marriage and it was standard practice for the Elders to have multiple wives while younger men had none. Invading the territory of neighbouring clans to steal their women was a normal pattern of behaviour in what were militant cultures.

  30. BilB
    July 6th, 2011 at 00:18 | #30

    James H,

    I would not have been saying that in Marx’ time as squatting was permitted at that time offering dispalced individuals the freedom of self determination…

    Australia has a long history of squatting. In the 1800s, wealthy farmers
    squatted huge tracts of land, and became a ruling class of landowners. The legal
    and judicial system, based on the British model, explicitly served the
    ‘landowners’ (squatters). The legitimacy of squatting has changed radically
    since those days.
    At certain periods in Australia’s more recent history, squatting has been
    tolerated as a necessary housing solution. In the depression years of the 1930s
    the authorities allowed unemployed people to live in shacks, which they built
    for themselves on unused pieces of land

    However that is not the case in today’s world. Fortunately we now have a more enlightened attitude to the disadvantaged.

    The nearest popular uprising triggered by blatant abuse of capital and power that ticked most of Marx’s boxes was the Bolivian water crisis, stage one. The Bolivian water crisis stage two is shaping up now with the melting of Andean glaciers due to global warming.

  31. Chris Warren
    July 6th, 2011 at 11:06 | #31

    I share John Passant’s initial reaction …..

    The piece was not particularly good. However John has at least recognised that Capital is a social relation.

    Is this all one can expect on a blog? A pretty good demonstration of misunderstanding (by omission) of socially necessary labour (aka labour theory of value), and an over indulgence in the artificial sideshows of ‘transformation problem’ and Sraffa’s ‘commodity’ styled presentation.

    Harvey’s Enigma of Capital and other works by him, is a good start, but no way to gain a real understanding of real ‘Capital as a social relation’.

    I should say, no Australian author has found a way of presenting Marx’s theory in a digestible form. Maybe the ongoing population/financial crisis will draw out some good work, if it is not too late.

  32. James Haughton
    July 6th, 2011 at 12:34 | #32

    Bilb, Marx was writing well after the landlords’ enclosures had closed off commons and waste lands from common use squatting, evicted small tenants, and forced large populations into the cities. Squatting was not permitted at that time, nor had it been particularly tolerated for a few hundred years before that; take a look at what Cromwell did to the Diggers and Levellers.
    This is what Marx refers to as the period of “primitive accumulation” which creates a “doubly free” proletariat; people who are both free to sell their labour in the market, but also “free” of possessing their own property and means of production. This process has been repeated again and again; Australia levied punitive tax regimes in PNG when it was our colony, for example, in order to force the workforce off their own tribal lands and into plantation labour – something we prefer to forget about when we complain about how corrupt and exploitative the PNG government system is.

  33. July 6th, 2011 at 15:13 | #33
  34. BilB
    July 6th, 2011 at 18:14 | #34


    Certainly for Europe that was the case. We know that Humans can be ultimately cruel to each other. The question ultimately comes down to which form of tyranny can people live with most comfortably. People can also create civil society out or total chaos. I prefer the look towards Alfred of Wessex, and his period of governance.

  35. Chris Warren
    July 6th, 2011 at 20:37 | #35

    I have to put BilB in the category of slow-learner.

    He is not using Marx’s concept of Capital if he thinks there is:

    the possibility of a person developing “capital” that does not require exploitation at all.

    A current powered ferryboat for instance which has the ability to generate “surplus value” with no means of resolution ie no workers to disperse the surplus amoungst.

    Here I suppose he would see the exploitation being in the charge for the service, it would need to be a free service when there is no working class to benefit.

    A ferryboat is “means of production” only. It needs converting into Capital by (sometimes violent) rearranging social and political relationships.

    This is the secret of Marx’s genius.

  36. James Haughton
    July 6th, 2011 at 21:16 | #36

    +1 Chris Warren.
    Marx and all the classical economists, plus the modern ones with any sense, deal with natural resources which produce an income through the concepts of rent and super-profits. If it produces an income it will be appropriated by a rentier.

  37. Chris Warren
    July 6th, 2011 at 22:36 | #37

    James Haughton :
    +1 Chris Warren.
    Marx and all the classical economists, plus the modern ones with any sense, deal with natural resources which produce an income through the concepts of rent and super-profits. If it produces an income it will be appropriated by a rentier.

    Natural resources produce income only when combined with labour.

    If wages are restricted then a surplus can arise in various forms (interest, rent, profits, tithes).

    This applies to all forms of social economics. It applies before capitalism.

    Marx then described what happened, after surplus had evolved in earlier forms, when specifically capitalism developed.

    He demonstrated with climate-change certainty, that once countervailling forces were exhausted, capitalism would end up in a global financial crisis.

    End of story.

  38. July 6th, 2011 at 22:39 | #38

    @Chris Warren

    “I should say, no Australian author has found a way of presenting Marx’s theory in a digestible form.” Not true. I think an Australian has actually produced the most digestible introduction to Marx. It’s Wal Suchting’s ‘Marx: an Introduction’ published by New York University Press in 1986.

  39. Mel
    July 6th, 2011 at 23:30 | #39


    “Natural resources produce income only when combined with labour.”

    Labour produces income only when combined with entrepreneurship.

  40. BilB
    July 7th, 2011 at 01:08 | #40



    “They make money not from producing anything new themselves, but purely from their ownership of property (which provides a claim to a revenue stream) and dealing in that property. Often the term rentier capitalism is used with the connotation that it is a form of parasitism or a decadent form of capitalism”

    Wow, Marx really had a chip on his shoulder for anything that represented commerce.

    Labour Aristocracy:
    “Thus, according to the ‘Finsbury Communist Association’, the British imperialists pay the overwhelming majority of Britain’s workers’ above the value of their labour power. Since there is not even a Marxist-Leninist party, much less a revolutionary situation, in Britain at present, this can only be out of the sheer goodness of their hearts! Clearly the ‘neo-Marxist’ picture of imperialism bears no relation to reality. It merely lends spurious support to the false thesis that, since the workers in developed capitalist countries are ‘exploiters’, the future for socialism lies only in the less developed countries in the East!”

    What a bitter and twisted “philosophy”, needing to divide people up into packages, good guys and bad guys, and the “tweenies” being loved one minute and hated the next. It is easy to see that Marxist socialism fails because there is no escape from the seperatism that it is founded on. A Marxist revolution can only yield a different kind of equally divided society, but one in which the individual has no hope for bettering their situation other than to claw their way through the politics of a “party class structure”. This is philosophy with no heart.


  41. Chris Warren
    July 7th, 2011 at 08:38 | #41

    Mel :
    “Natural resources produce income only when combined with labour.”
    Labour produces income only when combined with entrepreneurship.

    Don’t be silly – entrepreneurship only comes from labour.

    You do not get entrepreneurship from blocks of wood, or herds of cows.

  42. Chris Warren
    July 7th, 2011 at 09:06 | #42


    Wal Suchting and a few others associated certainly provided excellent explanations.

    Maybe the import of McLellan’s books destroyed the scope for Australian authors to publish our own works.

    In the 1970’s and 1980’s it was possible to study Marxism in detail at Sydney University and ANU. But this had little impact on the economic rubbish in the heads of graduates from these institutions. Then there was the Political Economy movement, but produces abortions such as Keen and his lunatic Ch13 (Debunking Economics).

    All this Marxology and Marxism is restricted to a few isolated enclaves within a few universities, and mostly in the past.

    Wheelwright, McFarlane, Curthoys, Sutching, and a few others (Kuhn etc) are exceptions.

    In general, it is a wasteland today.

  43. July 7th, 2011 at 12:57 | #43

    Wal doesn’t just provide excellent explanation: his two books on Marx are simply indispensible. Especially when you consider that he put them out, after Marxism had been eclipsed (in the 1980s).

    Mentioning the name Curthoys is indicative of where the wasteland came from. Her piece in McKnight and Manne’s recept book was really an appauling and hysteric statement of ‘Oh, I was lied to as a child: there is no Santa Claus! Hear me pout!’ She aims to say that Neoliberalism is as bad as Marxism, but doesn’t even establish what Marxism is. Instead she takes the assuptions of her readers as ideology, and bets – probably profitably – on it. It is like the way the new Transformers movie only works narratively if its audience is sexist and racist, the audience has to understand immediately what a long shot of a woman’s arse means, and understand that the middle east is where the bad guys are. I think for a philosopher to play on ideology in this way is openly to play the role of the Sophist, the natural enemy of philosophy. So that piece was more than a big fail, it was a big symptom of the sort of milieu that that book brought together; and noteably the book made no impact on the Left.

    However, I think the elements exist to fertilise this ‘wasteland’ (which I don’t really think is a good description of things), but it requires work to give what exists – or inexists – coherence. I mention Foucault’s comment about words and objects on Tad’s blog: the objects of the Left are there but we have no coherent way to talk about it. This can’t be ripped from pregiven theory, but instead theoretical work needs to be done to draw out this coherence from its obejct. &c.

  44. Mel
    July 7th, 2011 at 13:05 | #44


    Labour only becomes productive when it is organised. If I employ the kid next door to mow my lawn it is only then that labour is mobilised and an economic transaction occurs. A theory of value that ignores this is obviously rubbish.

    If capital/ entrepreneurship / employers are not factored into value creation then we are unable to satisfactorily explain the huge difference in value creation in North versus South Korea and West versus East Germany. We are also unable to explain how it is that workers in a free and society such as ours don’t simply organise themselves into boss free collectives and such like.

    As Prof Quiggin rightly points out, Marx’s Labour Theory of Value is simply uninteresting. It lacks insight, it explains nothing, it predicts nothing and it doesn’t give rise to any fruitful line of inquiry or suggest a particularly fructuous course of future action.

  45. Chris Warren
    July 7th, 2011 at 14:05 | #45


    If you are going to introduced concepts as “organised” labour, then what is “unorganised labour”.

    For Marx, all socially necessary labour in commodities is productive irrespective of whether it is management, entrpreneurial, or whatever. If it is socially necessary for production of commodities, then it is productive labour – end of story.

    Any presentation that ignores this fact is obviously rubbish.

    The differences between various states (post-WWII) are due more to factors of economic warfare than inherent forces.

    Noone wants boss free collectives and this is not even relevant to anything.

    Tough luck for John Quiggin. I would have hoped he would have learnt a thing or two by now.

  46. James Haughton
    July 7th, 2011 at 17:40 | #46

    Chris, Marx didn’t deny that soil, mineral resources, etc of different qualities could produce different profits and hence surplus value from the same amount of labour invested. He dealt with these situations through the concepts of Absolute and Differential Rent (I & II), the latter largely borrowed from Ricardo, which as I’m sure you know, David Harvey has written whole books about.

    Mel, you’re clearly unaware of the very large and successful industrial cooperative movement in Basque Spain and Northern Italy, where workers have indeed organised themselves into boss-free collectives.

  47. Dave
    July 7th, 2011 at 18:24 | #47

    Mel these things might be ‘bad’ but they don’t make a state.

  48. Dave
    July 7th, 2011 at 18:27 | #48

    @James Haughton
    Also as Marazzi etc have point out increasingly productive activity is external to wage-labour/ the workplaced proper itself – the production of cultural content, language, affect etc, all the elements that typify the knowledge economy. Capital chases after a creativity that is external to it, and the imposition of private property functions to distort and retard its growth.

  49. Dave
    July 7th, 2011 at 18:36 | #49

    Also has someone already pointed out that Marx didn’t have a labour theory of value? If anything he has a “value theory of labour” (Rubin) – that diverse concrete labours only become equivalents and take on a social form through exchange. For more on this see Postone, Bonefeld, Arthur etc. and of course Rubin! Or for those short on time http://www.oekonomiekritik.de/ and http://kapitalism101.wordpress.com/law-of-value-the-series/ (this one has videos!)

  50. Freelander
    July 7th, 2011 at 19:50 | #50


    Marx was hardly the only economist back then or before to believe there was something not quite morally right about ‘rentiers’. In fact, much of christian theology has a similar view being, for example, against ‘usury’. Of course, to ensure economic use of resources it is important that they are prices, that is, that there are rents and interest rates.

    However, who own certain resources and who gets those returns and the distribution of income and wealth are important issues.

  51. James Haughton
    July 7th, 2011 at 21:31 | #51

    Every economist between Marx and Milton Friedman says that heavily taxing rent is the best way for government to raise money. There is no other issue on which there is such agreement across all the political positions economists take. Naturally, the general public never hears this.

  52. Chris Warren
    July 8th, 2011 at 09:07 | #52

    James Haughton :
    Every economist between Marx and Milton Friedman says that heavily taxing rent is the best way for government to raise money. There is no other issue on which there is such agreement across all the political positions economists take. Naturally, the general public never hears this.

    That is right. Although, in addition, we are becoming more aware of having to control credit and oligopolies before rents arise.

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