Karl Marx: Revolutionary Scientist

Statues of Karl Marx and Frederick Engels in Berlin

The disinterring of Marx today is now common, even if the body dug up is usually not that of Marx but imposters like Zizek who claim to be Marxists but are really academics who never organise the workers struggle. Marx had to suffer many attacks in his own lifetime and further indignities in death as Marxism was plagued by a constant stream of caricatures and misrepresentations, the most important being that Marxism was never a ‘science’ and has no relevance today.  Some even attack Marxism as a utopia that diverts us from making meaningful, incremental, progressive ‘change’.
Danylmc writing in the Dimpost blog decides after a quick skimming of Marxism that it never was scientific and moreover is counter-revolutionary because it calls for “smashing capitalism” rather than evolving through many iterations into a new, better society…or not.  For some reason Danylmc does not include the ‘labour theory of value’ (LTV) as one of Marx’s utopian ideas gone wrong. Maybe because Marx did not originate this theory as it was a fundamental plank of the political economy of his day.  Either Danylmc understands the LTV as Marx does, or not. Either way by accepting it he fails to see that it makes a mockery of his argument. [i]

So let’s see what Marx means by science. Was he copying 19^th century chemistry and reducing social revolution to a law like water turning into steam at the right heat as Danylmc claims?  No, social science has to account for the interaction of conscious subjects and their material environment.   For example, humans learn over millennia how to boil water more efficiently (that is conserving labour time) a reality that the young Marx observed when as a radical journalist he campaigned for the right of landless peasants to collect firewood in the Rhineland. This experience proved that social interaction is not the random behavior of individuals because humans’ actions are ultimately determined by their social relations. And it was capitalists that burnt coal to heat water to drive their industrial revolution so as to exploit human labour power more efficiently/profitably and even enable workers to buy firewood or coal as a commodity.

So let’s go back to the make-or-break LTV.  The LTV was a theory shared by bourgeois political economy which observed the flood of peasants off the land into the factories.  Marx also began with the presupposition that humans must reproduce themselves by means of their labour. Marx was trained in philosophy and law which meant he had to test the meaning of the words he used against the social reality. What turned Marx onto the scientific analysis of society was the failure of Hegelian philosophy to account for the actions of humans as part of God’s plan. Similarly he rejected the bourgeois political economy that turned social history into a march of human progress culminating in the rise to power of the bourgeoisie.

The difference between natural and social science is that in the latter the scientist is a partisan or ‘interested’ observer. It was Marx’s taking the side of peasant wood collectors in the class struggle that converted him from a bourgeois intellectual into a proletarian intellectual.  He did this by critiquing political economy and developing the presupposition of the LTV into the Law of Value (LOV).[ii]  Political economy was empiricist and merely described value as the total labour embodied in commodities. Since this commodity production resulted from the contributions of workers, capitalists and landlords, each ‘class’ could claim a ‘fair share’ of the total labour/value as wages, profits and rents. It justified this expropriation of labour value as a reward to capital and land for the use of private property in the process of production. This empiricist rationale was elevated by Hegel into a divine mission. For Marx, it was one thing to defeat the bourgeois political and economic holy rollers in philosophical class struggle, but it would not stick unless the empiricist bourgeois political economy that justified the exploitation of labour in the process of production was blown apart by a scientific critique.

Marx’s Scientific Method

Marx’s method borrowed from Hegel in moving from concrete appearances to abstract essence and then back to the reconstituted concrete. Hegel observed the social classes, politics, state and law of German society of the early 19^th century as a contradictory unity of appearances accompanying the rise of capitalism. The appearances formed a real historical society (the market lives!) but the essence which explained them was the spirit of God.  The Political economy of Smith and Ricardo also took the appearance of developing capitalism but appealed to the idealism of material progress to resolve social contradictions into the universal freedoms of bourgeois society.

Marx put Hegel on his feet and argued that the essence was not ideal but material. God and material progress were just idealist slogans used by the bourgeoisie to claim it represented the interests of all classes and nations.  In the Critique of the German Ideology, Marx and Engels settled their accounts with the followers of Hegel.  History was one of social revolutions in which successive modes of production made up of social relations of production where the ruling class extracted the surplus product of the producing class and justified it by invoking Gods.  Each mode reached its limits when the ruling class oppression of the producing class produced a rising class consciousness leading to a social revolution.  Capitalism would follow course and give rise to its successor, communism.  For the young Marx this was still a philosophical critique. The real task of proving it scientifically began. Hegelian Marxists typically arrest at this point and explain history as a ‘lawful’ transition without any conscious subjective intervention unless it is the will to power of the heroic individual!

Here we have to begin with Capital Vol 1 and read it from start to finish. It is no good relying David Harvey as a guide because he recommends leaving the ‘difficult’ Part 1 for ‘later’.  Marx deliberately started Capital with the concept of the commodity because it was the “cell” of capitalism.  His method for arriving at the essence of value was to abstract from surface appearances of equal exchange down to the commodity ‘cell’ and then move back to the surface where the appearances are now understood as the result of “many determinations”.  The class struggles on the surface now reveal their deeper causes. The commodity had a dual character, a contradictory unity of use-value and exchange value. Labour power could be exchanged for its value and at the same time create surplus value as it was the only commodity to produce more value than its own value.

How did this come about?  The primitive accumulation of pre-capitalist material wealth in the colonial world gave capitalism its kick start in Europe.  But capitalism as a mode of production did not come into full existence until commodity production was generalised by commodifying labour power of wage labour as a result of creating a class of landless labourers.  The secret, hitherto denied by political economy, was that the use-value of labour power to the capitalist was defined as its capacity to create more value that its exchange value, i.e. the wage needed to reproduce it daily.
What is scientific about this discovery?  The dual nature of the commodity allowed Marx to resolve an anomaly in political economy where labour as the equivalent of value did not exchange at its value.  It if exchanged at its value capitalism would be all wages and no profits.  Therefore political economy had to fiddle with its LTV to account for this anomaly, adding qualifications to explain why some of labour’s value ended up as profits and rent. Marx resolved this so that the LOV explained the exploitation of labour-power and expropriation of surplus-value during the process of production.

Capitalism was not an equal opportunity society of the political economists assuming unequal exchange could be corrected. Capitalism was inherently unequal and would develop in a contradictory way until it could no longer reproduce itself giving rise to the conditions for socialism.
Marx learned from both Hegel as well as Smith and Ricardo, critiqued their errors, using a method of analysis that exposed their limitations and laid the foundations for his own science.  This was to be a scientific revolution greater than those of Copernicus, Newton, Darwin or Einstein.  From henceforth all social knowledge would have to be subjected to the rigorous methodology of the scientific method.   Social science not only incorporated natural science it had to explain the constant interaction between society and nature where social classes determine these relations within limits set by nature.

Marxism:  science or utopia in Russia?

Danylmc writes: “After the Russian Revolution the Bolsheviks were very disappointed to learn that (a) history and (b) humans didn’t work like this at all. Firstly their revolution happened in an underdeveloped, mostly agrarian economy, not an advanced economy like Marx predicted. Second, the revolution failed to spread so they were stuck with ‘Communism in one country’. Thirdly, it turns out that if you have a capitalist economy – even a very basic one like Tsarist Russia – and you take away the market and put the workers in charge of the means of production (and execute anyone trading on the black market) then instead of transforming itself into a utopia because of the scientific laws of history and the malleability of human nature, the entire economy collapses, and people in cities end up eating their own children to stay alive, and everyone who can still walk rises up and joins the capitalist counter-revolutionaries trying to overthrow you.”

This is a complete travesty of what happened in Russia. First as we have seen assumptions (a) and (b) bear no relation to Marxism.  Marx did not hold to an idealist view of capitalism following inexorable laws would arrive at a communist utopia. Rather class conscious workers must overthrow it and seize power.  He excoriated the German Social Democrats in the 1870s for thinking that capitalism would evolve peacefully into socialism by means of objective laws of progress. We have seen that Marx’s scientific method makes class struggle the driver of capitalist development. It motivates the contradiction that causes periodic crises which we can see today are now terminal since the bourgeoisie can no longer overcome these crises without the destruction of humanity and nature. Either we the workers become the gravedigger of capitalism, or capitalism buries us all.

We only know this because Marxism as a revolutionary science proves that the dual nature of the commodity contains the fundamental contradiction between use-value (nature) and exchange value (capital) that is the basis for determining what happens at the surface of capitalist society.  Class struggle over the rate of exploitation at the point of production explains class struggle at the level of the market, nation state and international relations. [iii] In Capital Vol 3 Marx shows how the LOV is the basis of other ‘laws of motion’ accounting for development of capitalist production, crises of falling profits, and the drive to expand capitalist production on a world scale. Here he sets out his theory of crisis whereby the periods of boom and bust, the concentration and centralisation of capital, and the widening income gap between capital and labour are explained. While both he and Engels anticipated many of the developments of capitalism in the 20^th and 21^st centuries, we have to look to the work of succeeding Marxists to see how they used his finished and unfinished work as the basis for the testing and validating of his scientific theory.

Lenin finished off Marx’s unfinished volumes in one small pamphlet entitled “Imperialism: the Highest Stage of Capitalism”. To do this he had to go back to Vol 3 and show how the state, world market and international relations were explained by the laws of motion underlying crisis and counter-crisis tendencies motivated by class struggle.  This enabled him to break with the mechanical evolutionary Marxism of the 2^nd International in Europe and the Mensheviks in Russia.  The result was Bolshevism, the concrete application of Marxist revolution that made the revolution in Russia, the “weakest link in imperialism”, and which led the 3^rd Communist International.

The most important breakthrough of Lenin was to recognise the need to form a proletarian party as the mechanism of uniting theory and practice to test the scientific method of Marx.  Without Marxism that penetrated the veils of capitalist exploitation revealing the essence of the fundamental contradiction contained in the commodity, then workers would lack the “consciousness” necessary to fight to overthrow capitalism and replace it with socialism. While Marx had stood as the scientific ‘authority’ against the lapses into bourgeois idealism within the ranks of the workers movements, it remained trapped in by bourgeois ideology and constantly lapsed back into class struggle over the distribution of ‘fair shares’ that did not require the overthrow of capitalism.

The result was the Bolshevik party that was as response to the extreme contradiction between European imperialism and the old Tsarist feudal regime. The party became the Marxist scientist that tested theory in practice in the “weakest link” of imperialism in Russia. The old evolutionary Marxist utopia was destroyed in theory and practice. The February Revolution that began as the strike of women textile workers threw up a bourgeois Provisional Government which was incapable of breaking from British and French imperialism. It proved this by collaborating with the Tsarist General Kornilov in a Tsarist Coup. The Bolsheviks quickly drew the conclusion that the workers must take the road to socialist revolution in the almost bloodless October insurrection.

Far from ‘disappointment ‘resulting from the Revolution it inspired world wide support from workers who rose to defend it when it was invaded and isolated by the invasion of the imperialist nations. The Bolsheviks already knew that socialism could not be built in one country, let alone a backward isolated country. The survival of the Russian revolution depended on the spread of revolution and they knew in advance what was necessary to make this happen.  They formed the Communist International to organise Bolshevik type parties, the worker scientists, in every country. Only the failure of workers to break from their ties to the bourgeoisie and its ideology of market equality to form such parties capable of leading revolutions, allowed the imperialist ruling classes to hang onto their decrepit capitalist system and condemning the revolution to degenerate into a Stalinist caricature of “communism”.

The Bolshevik Revolution still stands as the most advanced struggle of the international proletariat against the reactionary utopia of rotting, dying capitalist society.  If we look around the world today we can see the bourgeoisie “eating their own children by the million” as they fight to our death to hold onto the stolen wealth of generations of workers.  Our hope must be in the revolutionary science of Marxism, embodied in the international revolution party, capable of putting into practice the scientific program that can guide our struggle to take power and replace capitalism with socialism.

NOTES
[i] The Labour Theory of Value was the issue in Marx’s “The Modern theory of Colonisation” Chapter 25 in Capital Vol 1. Mr Peel emigrated to the Swan River (Perth, Australia today) with capital, machines and men. The men shoot through to the bush to become independent producers, so Mr Peel’s machines rust and his land lies unproductive. Never mind, Mr Peel does what any good capitalist does when he cannot profit from the exploitation of labour-power, he becomes a land agent and speculates in founder’s rent.
[ii] The LOV means that value equals the socially necessary labour time required to produce it. Socially necessary labour time equals the average time of work enabling wages to buy the average commodity basket to allow the working family to live at the average standard of living.
[iii] Vol 2 examines the circuit of capital including the transformation of value into prices in the market while holding competition constant.  Vol 3 moves to the more concrete level of competition among capitalists in the market. He had planned 3 other volumes on the State, World Trade and International Relations to return to the most complex concrete level of reality which he never completed drafting.

NZ: Piketty vs Marx

 

The publication of Piketty’s book “Capital in the 21st Century”, on the historic inequality of capitalism, has sparked a debate globally, and in NZ with the publication of “The Piketty Phenomenon: NZ Perspectives”. We have commented that Piketty fails to understand the basic cause of capitalist inequality so that his wealth tax cannot be the solution. The OECD Report on Inequality goes further that Piketty to show that income inequality has a negative impact on economic growth. It argues that income must be redistributed to increase labour productivity. We explain that this solution means further increasing the exploitation of labour by capital. It will fail because capital in the 21st century has outlived its capacity to meet the needs of humanity so that humanity will refuse to be super-exploited. What is needed is Socialism in the 21st Century!

Piketty’s New Law

Piketty challenges the crude assumption of neo-liberal economics, that capitalist growth works automatically (‘trickle down’) to produce equality. He has discovered a ‘new’ law where capitalism works so that those with wealth accumulate more wealth at a faster rate than everyone else unless the state steps in to regulate this inequality. The solution is to tax wealth by 1 or 2% to keep it in line with long-term GDP growth. Several contributors to the Piketty Phenomenon (PP) see this challenge as a ‘paradigm shift’ in economics that carries a ‘progressive payoff’ for social democrats. (Geoff Bertram in PP)

The rejoinder from the right is that the Gini Index for NZ has been flat at 32 since the late 90s. So Piketty’s law didn’t operate during the Clark and Key governments. Bernard Hickey in PP, points out that wages, benefits, ‘Working for Families’ and subsidised health and education kept the Gini rate flat. But Hickey says Piketty’s work is a warning against any further erosion of the welfare state.

Radicals critique the Gini Index as a blunt statistic, and GDP as a measure of growth. Inequalities around gender, ethnicity, youth etc., fly under Piketty’s radar. Given the prevailing labour market super-exploitation of women, Maori and Pacifica, and youth workers, such groups are doubly unequal. Radical economists have been doing much more detailed work for years to redress such inequalities. (Susan St John in PP) For Gareth Morgan (in PP) a reformed tax structure that includes a Tax on Capital Assets and an Unconditional Basic Income will do this. Feminists and unions have been actually fighting on the streets for such reforms. For Prue Hyman (in PP) taxing capital is not the answer. Capitalism as a system that demands destructive and wasteful growth at the expense of inequalities must be ‘unplugged.’

OECD says inequality stops growth

The IMF and OECD have taken this challenge to neo-liberal economics a step further. They say inequality stops growth. The OECD research paper says that in NZ rising inequality since 1985 has cut GDP growth by 10%. The solution is a wealth tax in some form provided it is targeted at increasing labour productivity. In the OECD language GDP growth depends on Human Capital Accumulation (HCA). It argues that taxing the top 10% will not damage growth, implying that much of this income is not productively invested. The state should redirect this ‘surplus’ unproductive capital into ‘human’ capital’.

Unlike classic Keynesian attempts to boost consumption, or the bailing out of the banks, the OECD fixates on education. Putting money into the pockets of capitalists and/or consumers does not necessarily restore growth. Just look at the printed money that has flooded into the pockets of the rich. And raising the dole may lead to more consumption but not necessarily to more investment. Work for the Dole everyone?

The research shows that increasing labour productivity will increase profits and hence encourage capital to invest in more production. So improving the quality and quantity of education [HCA] and creating incentives to work is the answer. Has the OECD come up with education and workfare as the ‘holy grail’ of Social Democracy? No. We will show that while education is related to rising labour productivity, there is no guarantee that that will induce capitalists to invest in more production. This is no guarantee of profits. This is because increasing labour productivity means rising labour exploitation. Piketty/OECD type policies can’t work if the owners of capital resist taxation. Or the owners of labour power resist super-exploitation. The progressives seem to have overlooked one small detail and that is the class struggle!

Marxist critique

Piketty is really lost without Marx. He lumps real productive capital (that produces value) together with unproductive assets (that don’t produce value) to make up his ‘Pikapital’. He discovers booms periods when the wealthy accumulate much more rapidly, then busts when they lose much of their wealth. Had he bothered to read Das Kapital, he would have realised that the switchback rides of the wealthy is a symptom of the inbuilt tendency for capitalist crises.

This is a telling gap in Piketty’s economics. The underlying reality he ignores is the exploitative relation between capital and labour where wage labour is employed to produce more value than it needs to reproduce itself; that is, surplus value the source of profit. This is capitalist inequality at the level of productive relations. Crises arise when profits begin to fall when the amount of surplus value is insufficient to cover total capital investment. As the Tendency for the Rate of Profit to Fall (TRPF) kicks in capital in plant and machines and wages must be destroyed, and cheaper means of production employed, so that the amount of surplus value is now sufficient to return a profit on total capital outlayed. The destruction of the wealth of Piketty’s wealthy class then, is merely a symptom of capitalism’s crises of falling profits.

As Marx explains, this relation of production appears in the marketplace as a relation of exchange as capitalists buy the labour power as a commodity. Marx calls this ‘commodity fetishism’. The expropriation of surplus value in production is perceived to be based on unequal exchange in the market. Crises then occur when labour demands the full price of labour and profits fall. Or, capital demands low wages, so consumption falls; in both cases investment stalls.

Neo-liberal economics in the thrall of commodity fetishism argues that the market will automatically correct the share of wages and profits so that demand rises and production results. The crises, wars and depressions that Piketty stumbles over are such ‘corrections’. Yet as Keynes recognised in the 1920s, these painful ‘corrections’ might be avoided if wages were boosted by the state to create ‘sufficient’ demand that would then be supplied by thankful capitalists. Oh for a world with no more slumps!

NZ: a test of Marx v Keynes

However, Keynes was still a bourgeois economist. Boosting demand did not create new production unless investment was profitable. Demand was not the key factor; it was the rate of exploitation. The state could intervene in the market but only to the extent that it met the need for rising profits. In NZ the election of the First Labour Government in 1935 put this reality to the test.

However, far from representing a solution to capitalist crises, The Labour Party acted to guarantee profits for the emerging NZ capitalist class. The First Labour Gov't was able to create a ‘welfare state’ for workers because the protected domestic manufacturers operated at low efficiency and there was a demand for labour. Full employment was the hallmark of Labour’s social policy because it could be exploited profitably not because it could buy what it produced. This was proven after the WW2 created boom busted. The return of a crisis of falling profits could not be averted by the Keynesian state boosting consumption, so by the mid 1960s the TRPF re-emerged as the cause of a new slump.

This time the return to profits required the end of protectionism of both domestic capital and the labour movement. The destruction (restructuring) of productive capital (plants, machinery) and jobs and the driving down of wages, was achieved by opening up the domestic economy to the global economy. The conditions under which Keynesian intervention operated from the 1930s to the 1960s were replaced by neo-liberal globalisation. The destruction of wealth by depression, its revival by war/boom, and now its further restructuring by neo-liberalism, has inserted NZ into the global division of labour where the concentration of wealth and power in foreign and local crony capitalist hands results from the rise of inequality and deprivation in the working class.

So what are the prospects for “progressive politics”, a revival of Social Democracy in defence of the ‘Welfare State’, or even a modest Piketty/Morgan/OECD type wealth tax? Piketty knows that the power of the wealthy to resist a even a 1% tax on their wealth makes it a utopia. But this does not stop progressives in NZ from proposing various forms of wealth tax backed up by the OECD claim that profits flow from increasing labour productivity!

Marxist Revolution in thought and deed

The detail that is overlooked here is that greater labour productivity creates more inequality not less. Not the superficial market inequality measured by the national Gini Index, but the concentration of capital in fewer and fewer hands, and the accumulation of poverty and misery in the lives of the masses of workers. Raising the rate of exploitation means workers produce more per hour (because of HCA) but get a lesser share of the new value produced. This confirms Marx law that the rise in the rate of exploitation is set by class struggle and is ultimately the barrier that capitalism cannot overcome. Workers’ resistance to rising labour exploitation is the single factor that guarantees that capitalist crises will sooner or later result in the proletarian revolution and the rise of socialism out of the ashes of capitalism.

We need a Marxist revolution in thought and deed. A Marxist revolution in thought means understanding that capitalism is a finite social system based on the ultimate destruction of the only sources of wealth - labour and nature. The survival of humanity depends on this consciousness that capital is nothing but the expropriation of labour value, and that if labour is to survive it has to take control over the value it produces.

The Marxist revolution in deed is the task of organising the proletarian revolutionary class as capital’s “gravediggers”. It will require the formation of mass workers parties in every country that unite internationally to confront capitalism’s power and wealth on every front, creating workers governments with the power to socialise the wealth expropriated by capital over centuries as the basis for building a new socialist world that values the survival of humanity and nature.