12. The closure within Marx and the closure within Marxism

Submitted by libcom on October 28, 2005

12. The closure within Marx and the closure within Marxism


We have seen how, in coming to focus on the problematic of political economy, Marx came to impose a provisional two-fold closure within his broader thematic of 'capitalism and its overthrow'. Thus we have seen how the Marxian project implicitly points beyond Capital, and hence how Marx is, in a fundamental sense, incomplete. However, with the development of Marxism over the last hundred years, most Marxists have come to consider Capital as a closed work; a text that demands to be interpreted, supplemented or else applied, rather than a text that must point beyond itself. As a consequence, we contend that the provisional closure within Marx has become a final closure within Marxism.

To demonstrate such a contention would require us to answer the following two questions:

1) How did this provisional closure in Marx become a final closure within Marxism?


2) What have been the implications of this closure for the development of Marxism?

A comprehensive answer to either of these two questions lies well beyond the scope of this work. It would require a long and detailed historical account of the multitude of Marxist currents that have arisen since Marx's death. A task that would require a book in itself.

However, by way of a conclusion, we shall briefly examine two perennial controversies of twentieth century Marxism as an example of how the closure in Marx has become a closure within Marxism and the vital implications this has had. The first controversy we shall consider, which relates to the second part of the two-fold closure that we have identified in Capital, is that which concerns the validity of Marx's labour theory of value. The second controversy is that which concerns human praxis and the importance of human alienation to Marx, an issue which relates to the first part of the closure that we found enacted in Capital. With the consideration of both these crucial controversies we shall be able to indicate the importance of recognizing the incompleteness of Marx.

A) Value

The rapid industrialization of Germany following its reunification in 1870 brought with it a dramatic growth in both the German workers' movement and its political expression, the German Social Democratic Workers' Party (SPD). By the late 1870s the advance of socialist ideas had reached a point where they had begun to seriously alarm the German ruling classes. In response Bismarck, the German Chancellor, launched a two-pronged offensive against the SPD. Firstly, he introduced the anti- socialist laws which severely, but not completely, restricted the political activities and organization of the SPD and its associated labour organizations. Secondly, Bismarck proposed a series of limited social reforms of benefit to the working class(1) in order to diminish the appeal of socialism.

As a result of this two pronged offensive by the German State against the advance of social democracy, the German workers movement polarized into two main tendencies. Those who wished to sustain the SPD as a radically defiant socialist party looked towards Marx and Engels; those who sought to compromise with Bismarck, in order to maximize the benefits of his proposed reforms and to win his favour for the relaxation of the anti-socialist laws, looked back to the 'founding father' of the German workers' movement, Ferdinand Lassalle.

It was in the course of this struggle between these two tendencies that Engels came to publish Volume II of Capital in 1885. The followers of Lassalle had sought to discredit the intellectual authority of Marx by claiming that he had plagiarized the German socialist economist Rodbertus in formulating his labour theory of value, which of course lies at the heart of Capital. In response, Engels argued at length in his introduction to Volume II of Capital that Rodbertus had done no more than adopt the labour theory of value put forward by Ricardo, and had gone no further than the early English Ricardian socialists in adapting it to favour socialism. Consequently, Rodbertus had failed to solve the fatal contradiction of the Ricardian system that emerged with the systematic divergence of prices from labour-values. For Engels the decisive advance made by Marx's labour theory of value was that it was able to solve this contradiction by showing how prices must systematically deviate from labour- values through their transformation into production prices.

However, the solution to this problem was contained in the yet unpublished Volume III. Thus the critics of Marx would have to wait for the publication of this final volume before they could see the full and complete originality of Marx's labour theory of value and the advance it made over Ricardo and Rodbertus. While they waited Engels issued a challenge to anyone who could anticipate Marx's solution to this 'transformation problem'.

By the time of the publication of Volume III in 1894 Marxism had triumphed. With the adoption of the Erfurt programme in 1891 Marxism had become the official doctrine of not only the SPD but also of the newly formed Second International. Marxism had thereby become the dominant position within most of the European socialist movement. With Lassalle and all other rival tendencies vanquished, Engels could be content in his introduction to Volume III to merely assess the various attempts that had been made to anticipate Marx's solution to the 'transformation problem' of the previous nine years.

However, the apparent unassailability of Marx and his labour theory of value was not to last for long. Eduard Bernstein, the co-author of the Erfurt programme and an erstwhile member of the radical Marxist wing of the SPD, launched a serious attack on the newly established Marxist orthodoxy in a series of articles which culminated in an open letter to the SPD conference in 1898.

With the lapse of the anti-socialist laws in 1890, and the period of relative posterity that followed, Bernstein had come to the view that socialism could be achieved through the gradual reform of the existing capitalist society. The revolutionary rhetoric that predicted ever worsening economic crises, and the continued polarization of society into the two hostile camps of the proletariat and the bourgeoisie, which would sooner or later lead to social revolution seemed to Bernstein no longer relevant. It appeared in stark contrast to the day to day reformist work that he was involved in within the SPD and the wider German labour movement.

However, as a one time committed revolutionary Marxist and a close friend of the late Engels, Bernstein was reluctant to abandon Marxism altogether. Instead he sought to revise and update it to meet what he saw were the new realities. However, Bernstein's revisionism soon found itself having to strike at the heart of Marx's economic theory, the labour theory of value. We can identify three principal reasons for this rejection of Marx's labour theory of value.

Firstly, as Bernstein implicitly recognized, Marx's labour theory of value was the basis of his theory of surplus-value and hence of capitalist exploitation. With the theory of surplus-value Marx had shown how capitalist relations of production were inherently exploitative. It therefore followed that to end such exploitation it was necessary to overthrow the capitalist mode of production. For Bernstein, who now wished merely to reform capitalism, such a conclusion was unacceptable. For him the aim was no longer to transform the relations of production but rather to gain a more equitable distribution of the wealth and income generated by such capitalist relations of production.

Secondly, Marx's labour theory of value, as it stood, seemed to imply a highly restrictive definition of productive labour. For Marx, only labour that directly produced surplus-value could be considered productive. However, one of Bernstein's main political contentions was that the concentration and centralization of capitalist production did not, as Marx had predicted, lead to the polarization of society, since, although artisans and petit bourgeois producers were progressively ruined and thereby proletarianized, capitalist development also created a new middle class of salaried government officials and managers and supervisors of the big private corporations. Insofar as the working class was to be seen as being based on productive labour, Marx's labour theory of value seemed to exclude this rapidly growing new middle class whose votes were vital for the parliamentary strategy favoured by Bernstein. Thirdly, Marx's labour theory of value was, for Bernstein and his contemporaries, an important step in the development of Marx's theory of the tendency of the rate of profit to fall, and hence the question of the crisis and breakdown of capitalism. But for Bernstein the era of capitalist crisis was over. For him, the growth of giant cartels had replaced the 'anarchy of the market' by corporate planning. The problem was no longer recurrent economic crises but the public accountability of these giant cartels. Marx's theory of the falling rate of profit, and along with it his labour theory of value, for Bernstein, now appeared as redundant.

Revisionist criticisms of Marx have repeatedly surfaced in various guises since Bernstein, and for similar reasons they have been obliged to reject Marx 's value theory in favour of some radical bourgeois alternative. Bernstein's own retreat from Marx was no doubt hastened by the impact Bohm-Bawerk's short work Karl Marx and the Close of his System which had been published in 1896 shortly after the appearance of Volume III of Capital.

In this work, Bohm-Bawerk, who was the champion of the newly ascendant neoclassical utility theory of value on the continent, had charged that Marx had failed to make good Engels's promise that the 'transformation problem' would be solved in Volume III. For Bohm-Bawerk, who was oblivious to Marx's method of abstraction, the theory of price and profit in Volume III directly contradicted the theory of value put forward in Volume I in which prices were assumed to be equal to labour-values. For Bohm-Bawerk this was no surprise, since for him, Marx, like all classical political economists, had made the error of trying to determine value solely on the basis of supply which inevitably denied the importance of demand side factors in the determination of value and price. As a result, to Bohm-Bawerk's way of thinking, Marx's theory was based on a one-sided abstraction that found insurmountable contradictions once it came face to face with the concrete problems of supply and demand.

While such arguments served to cast doubt on the validity of Marx's labour theory of value for Bernstein, he was unwilling completely to embrace neoclassical utility theory, with all the conservative implications that may have entailed. Instead Bernstein maintained an uneasy agnostic and pragmatic position:

"At the outset, Marx takes so much away from the characteristics of commodities that they finally remain only embodiments of a quantity of simple human labour; as to the Bohm-Jevons school, it takes away all characterisics except utility. But the one and the other kind of abstractions are only admissible for definite purposes of demonstration, and the propositions found by virtue of them have only worth or validity within defined limits." (Bernstein, 1961, p. 34)

Having cast Marx's labour theory into doubt, Bernstein then had to cast doubt on his theory of exploitation. But Bernstein still needed a basis with which to indict present bourgeois society. In the absence of anything better Bernstein was obliged to on the purely empirical claim of the self-evidence of surplus labour. As he writes:

"...surplus labour...is an empirical fact, demonstrable by experience, which needs no deductive proof. Whether the Marxist theory of value is correct or not is quite immaterial to the proof of surplus labour." (Bernstein, 1961, p. 35)

Bernstein's problems in finding a middle way between Marxism and neoclassical economics has been solved by more recent revisionist theorists by looking back to classical political economy, particularly that of Ricardo. In terms of value theory this return to classical political economy is largely indebted to the work to another turn of the century economist, Bortkiewicz.

As Sweezy has pointed out in his introduction to the English translation of Bortkiewicz's On the Correction of Marx's Fundamental Theoretical Construction in the Third Volume of 'Capital', Bortkiewicz was one of the few remaining Ricardian economists who were still holding out against the remorseless advance of neoclassical and marginalist economic theory at the turn of the century. While Bortkiewicz would have had little sympathy for the socialist implications of Marx's theory he clearly saw in Marx's attempts to pose and resolve the 'transformation problem' the basis on which to salvage the Ricardian tradition. For Bortkiewicz, Marx promised not so much the critique of classical political economy but rather the realization of classical political economy. Hence, Bortkiewicz appropriated Marx as a classical political economist. An appropriation that, as we shall see, has been taken up more recently by the 'Neo- Ricardian school' of Marxist revisionists.

Bortkiewicz argued that, while Marx's transformation of values into production prices was basically correct, there remained an important technical error in Marx's solution to the transformation problem in that he had failed to transform the inputs that make up variable and constant capital of each industry into their respective prices. As a consequence, Marx's solution could only be regarded as a first approximation. To completely solve the problem, 'inputs' as well as 'outputs' had to be transformed into prices.

To do this Bortkiewicz, drawing on Marx's schema of simple reproduction, transposed Marx's transformation problem into a system of three simultaneous equations. Each equation represented one of three departments: Department I producing the means of production, Department II producing means of subsistence for the working class and a Department III producing luxury goods for capitalist consumption. In this way the output of each department entered as an input into the other departments. Then to each of the three output/inputs Bortkiewicz assigned a conversion coefficent which would transform their value magnitude into their corresponding price/cost magnitude.

This 'correction' of Marx's transformation problem has since been elaborated with the aid of modern matrix algebra to include an indefinite number of industries. The economic system then becomes represented in disaggregate terms as n industries, producing n commodities whose n values can be transformed into n prices. Given that we can standardize the system in terms of a particular commodity which then acts as the numeraire in terms of which the prices of all the other commodities are expressed, we have n unknowns, i.e., the n-1 conversion coefficent of all the commodities other than that of the numeraire plus the general rate of profit. With each industry represented as a particular equation, we have n unknowns and n equations. Hence, in general, the system is mathematically fully determined.

In 1960 Sraffa published his seminal work The Production of Commodities by Means of Commodities in which he sought to establish a fundamental reconstruction of Ricardian political economy as a new and radical alternative to the prevailing neoclassical orthodoxy. Like Bortkiewicz, Sraffa was radically opposed to the marginalist and subjective utility theories of value put forward by neoclassical economics and looked to Ricardo and the classical tradition for an objective and materialist 'supply-side' theory of value and price. Yet unlike Bortkiewicz, and previous defenders of the classical tradition, who saw adherence to a labour theory of value as the essential dividing line between Ricardo and neoclassical economics, Sraffa argued that the essential difference of Ricardo's political economy lay in his search for an invariant measure of value. Ricardo's labour theory of value was merely an unsuccessful means to this end.

For Ricardo, an objective and invariant measure of value was a necessary prerequisite for political economy as an analytical and objective science. Indeed, it was vital if he was to adequately investigate the quantitative distributional relations which arose between the three great classes of bourgeois society. For Sraffa, it was in the course of this search for an objective and invariant measure of value that Ricardo had come to adopt a labour theory of value. Labour presented an obvious choice. Not only was labour required in the production of all commodities, its quantity could be taken as being determined by the technical and objective conditions of production in any particular industry prior to any process of exchange or distribution. Hence the labour time embodied in any particular commodity would establish the commodity's value which would only then be broken up into the three forms of revenue - profit, rent and wages - in the subsequent process of exchange and distribution.

However, as we have previously noted, Ricardo's labour theory of value foundered with his failure to either pose or solve the 'transformation problem'. It was his failure to reconcile the fact that commodities did not exchange directly in accordance with their labour-values due to variations in the composition of capital that had eventually led to the downfall of the Ricardian tradition and the rise of neoclassical economics from its ruins.

However, for Sraffa, since it was a search for an objective and invariant measure of value that was essential to Ricardo, rather than a labour theory of value, the project of reconstructing Ricardo's political economy did not necessarily imply a solution to the transformation of labour-values into prices, which had been central to previous attempts to salvage Ricardo. On the contrary, as Sraffa saw it, Ricardo's adoption of a labour theory of value was at best an arduous detour, and at worse a dead end, on route to an invariant and objective measure of value. Thus unlike Bortkiewicz, Sraffa did not seek a solution to the 'transformation problem' - he did not look to Marx - but instead abandoned Ricardo's labour theory of value and sought to reconstruct Ricardo on a radically new basis(2).

In place of labour time embodied in commodities as the starting point of his value/price theory, Sraffa took the actual physical quantities of commodities technically required for production. On this new basis Sraffa constructed an input/output analysis that represented the self-reproducing economy as a set of simultaneous equations in a manner similar to that of Bortkiewicz's 'correction' of Marx's solution to the 'transformation problem'. However, whereas Bortkiewicz had specified his system in terms of the embodied labour times, Sraffa specified his system simply in terms of the diverse quantitative measurements of the commodity input/outputs.

The production of each commodity requires a technically determined quantity of other commodities as inputs. If the system is to reproduce itself then the output of each commodity must be able to exchange for at least the necessary quantities of other commodities that act the inputs for its production. With the distribution of any surplus determined by the general rate of profit (or alternatively the supra-subsistence wage), the ratio in which commodities must exchange with each other becomes determined as a solution to a series of simultaneous equations.

Thus, whereas with Bortkiewicz the series of simultaneous equations was used to transform the labour-values into prices, with Sraffa the homologous mathematical procedure is used to transform a set of technical specifications determining the various quantities of commodity inputs and outputs - technical coefficents - in each industry into a set of exchange ratios or 'prices'. Again, with a numeraire commodity, we have n unknowns, the prices of all the commodities except for the numeraire which is taken as unity, plus the rate of profit, and n equations representing the production process for each commodity. So, in general, Sraffa can define a mathematical solution to his system.

Having established that this system could be applied to any degree of disaggregation so long as the number of commodity prices equals the number of production processes, Sraffa was then able to proceed to address three vital questions posed by his proposed reconstruction of Ricardian political economy. Firstly, with the rejection of a labour theory of value, what was to be the objective and invariant measure of value? Secondly, could the invariance of this measure be sustained in the face of varying compositions of capital? And thirdly, could this measure be used to explore the question of distribution between the three great classes?

For Sraffa, Ricardo's choice of labour as a standard with which to measure both value and the distribution of the economic surplus between wages and profits was essentially arbitrary. Indeed, as far as Sraffa was concerned, Ricardo could have chosen any 'basic' commodity - that is, any commodity that enters either directly, as means of production, or indirectly, as means of subsistence of the workers, in the production costs of all other commodities - as his standard. As such, for Sraffa, Ricardo's choice of labour as the measuring rod of value fell foul to the same insurmountable problem that confronted any attempt to single out a 'basic' commodity as an objective measure of value; that is, the problem that the price or value of any single standard commodity would itself be dependent on the rate of profit, and hence the distribution of the surplus between profits and wages, which it was designed to measure.

As Sraffa, demonstrated, it is only in the rather exceptional case in which the standard commodity enters as an input into the production of all other commodities in the same proportion as it is itself produced as part of the economic surplus that the value or price of this standard commodity will remain invariant to changes in the rate of profit, and therefore be able to provide an invariant objective measure. In all other circumstances the choice of a single 'basic' commodity is not sufficient to provide an invariant and objective measure.

As a solution to this problem, Sraffa proposed to use as a measure a standard composite commodity which would made up of all 'basic' commodities, in such proportions that, as a composite commodity, they would enter as inputs in the same proportions as they appeared as outputs in the economic surplus. Sraffa then proceeded to demonstrate that for any 'economic system' it was possible to mentally construct a standard composite commodity which could then be used as an invariant and objective measure of value which could be used as measure of the distribution of the economic surplus.

The next problem was to see if this invariant measure could hold up in the face of fixed capital, the very stumbling block that had proved insurmountable to Ricardo's labour theory of value. Sraffa's initial system, like that of Bortkiewicz, had excluded fixed capital. All means of production were assumed to be consumed in one production cycle. How could Sraffa's system, which was based on the simultaneous production of commodities, be extended to the case of fixed capital, which by definition required the consumption of the means of production to persist over several production cycles?

Sraffa's innovative solution to this problem was to regard the problem of fixed capital as a special case of joint production. Joint production arises when an industry or technical process produces more than one type of commodity as an output. The famous example being sheep farming, which produces both wool and lamb. It was relatively easy for Sraffa to extend his system to take account of joint production. So long as it was assumed that there existed alternative economically viable production processes to produce the commodities in question, so that the number of commodity prices still equalled the number of production processes, then the number of unknowns will still equal the number of knowns and hence a mathematically determinate solution remains possible.

Now, how can fixed capital be regarded as a special case of joint production? Let us consider the simple case of an industry that produces in the time of one year a single type of commodity, which we shall denote as x, and with the aid of fixed capital in the form of a machine that lasts three years. From the ordinary view point we have a single production process that uses a single machine that becomes progressively older. As the machine becomes older it may perhaps become less efficient and produce less output or require more maintenance, but apart form this nothing else changes.

For Sraffa, however, we have in this case not one machine operating in one production process for three years in order to produce the single commodity x, but three different machines operating in three different production processes. In the first year we have a joint production process that produces commodity x plus a one year old machine. In the second year the one year old machine enters the second production process which again is a case of joint production producing commodity x plus a two year old machine. Finally, in the third year, the two year old machine enters the third production process which is a single process, producing only commodity x - the three year old machine being scrapped on its third birthday. With the fixed capital being regarded as a joint product we find in this case two more unknowns added to the system of simultaneous equations; the imputed prices of the one and two year old machine. But at the same time we have three equations representing the three production processes, instead of one. So the system, in principle, remains mathematically determinate even in case of fixed capital. Simultaneity is then sustained by making the assumption that in any industry with fixed capital there will at any time be fixed capital of all ages in operation. So, Sraffa was able to overcome the hurdle of fixed capital. Once over this hurdle Sraffa could then introduce land as a non-produced input which then allowed him to extend his analysis to the question of rent. With this Sraffa was able to complete the foundations for his radical reconstruction of Ricardian political economy. However, while Sraffa's The Production of Commodities by Means of Commodities was, as its subtitle suggest, intended as a 'prelude to a critique of economic theory' ( i.e. of neoclassical orthodoxy), it has become a basis for modern revisionist attacks on Marx and his labour theory of value. The most cogent and comprehensive exponent of such Neo-Ricardian critics being Ian Steedman.

In Marx after Sraffa Steedman puts forward the contention that Marx's labour theory of value is, in the light of Sraffa, both redundant and inconsistent, and that therefore it should be abandoned in favour of a Sraffian theory of value and price. In support of this contention Steedman argues that Sraffa's system is based on an empirically verifiable set of data - the technical coefficients of production and the rate of profit - readily apparent to any capitalist. Indeed, in principle it would be possible, given sufficient technical and industrial data, to calculate the set of production prices corresponding to a given rate of profit, for any real economy.

In contrast Marx's 'system' was not based on directly observable data. While in principle the amount of living labour added in each production process could be simply calculated through observation, the amount of labour preserved and embodied in the means of production could only be calculated indirectly by knowing the technically determined quantities of inputs for each production process - that is, via Sraffa's very set of technical coefficient. Indeed, as Steedman shows, Marx's ' system', as presented in the tradition of Bortkiewicz, was derivative of the Sraffian system. It was only by knowing the set of technical coefficients of production that the set of labour values could be defined, let alone transformed in to production prices. Consequently, for Steedman, Marx's labour theory of value was redundant. Why calculate labour values from the set of technical coefficients of production and then calculate production prices when you could calculate production prices directly!? Labour values were nothing more than an unnecessary detour.

As if this was not enough, Steedman then goes on to charge Marx's labour theory of value of being inconsistent. Firstly, Steedman argues that central to Marx's labour theory of value is the claim that the total value should equal the total of prices and that the total surplus-value should equal the total of profits. In the solution to the 'transformation problem' presented by Marx in Volume III of Capital this equality could be seen to hold. As a consequence Marx was able to argue that the rate of profit in money terms equalled the rate of profit in value terms. However, once Bortkiewicz's solution is admitted it is no longer possible to sustain this double identity. In general, the system can be standardized such that price equals the total value or else the total profit equals total surplus-value, but not both at one and the same time.

If this is so, the money rate of profit is no longer equal to the value rate of profit. Steedman then takes this to mean that the value rate of profit cannot be used to determine the real money rate of profit facing everyday capitalists. Marx's value theory becomes inconsistent.

The second count of inconsistency arises with joint production. Steedman shows that the application of the Bortkiewicz system of transformation of values into prices in the case of joint production is liable to produce nonsensical results; namely negative values, or even worse, negative surplus-values with positive profits! On this basis Steedman argues that Marx's labour theory of value faces serious if not insurmountable problems in dealing with joint production. Indeed, if surplus-value is the basis of profit how can negative surplus-values produce positive profits? Is this not inconsistent?!

Such problems would perhaps be unimportant if they only concerned the pure case of joint production. It could be argued that joint production is insignificant and tends to be eradicated with the increasing specialisation of capitalist production. Sheep farmers tend to specialize in either wool production or lamb production, breeding different types of sheep to meet each of these two purposes. However, if it is accepted that fixed capital is a special case of joint production such an escape clause becomes void. Fixed capital is present in most if not all industries. Any theory of value and price must be able consistently to determine prices and values in the presence of fixed capital. Yet on this count, Steedman argues that Marx's labour theory of value fails. So, Steedman charges that Marx's labour theory of value is both redundant and inconsistent, and that therefore it should be abandoned. We do not intend to consider the controversy that such charges whipped up following the publication of Marx After Sraffa. Nor have we space for a detailed refutation of these charges. Instead we shall examine the fundamental error that Steedman and his fellow Neo-Ricardian, or Sraffian Marxists, make in rejecting Marx's labour theory of value(3).

The fundamental error Steedman makes, along with all other Neo-Ricardian critics of Marx is the error that we have already noted in passing in connection with Bortkiewicz, namely the misappropriation of Marx as a classical political economist. By viewing Marx as a classical political economist, as the heir to Smith and Ricardo, Marx is reduced to little more than a Ricardian who merely completed Ricardo's system. All the radical distinctions that oppose Marx to the traditions of classical political economy become submerged beneath an apparent continuity. As a consequence, Marx's labour theory of value appears as little more than the continuation and culmination of the labour theory of value put forward by Ricardo. Hence it is no surprise that once it was shown that Ricardo's value theory was no more than an unnecessary detour in the search for an objective and invariant measure of value a similar logic should be then applied to Marx.

This misappropriation owes not a little to Engels himself. As we have seen, Engels's polemic against Rodbertus in his introduction to Volumes II and III centred on the claim that Marx's single most important achievement was to go beyond Ricardo by setting and then solving the 'transformation problem'. This claim not only implied that Marx's work was a continuation of classical political economy but also highlighted the 'transformation problem' as the central feature of Volume III and the culmination of Marx's theory of value and price. Hence Capital became construed as a work of political economy.

By setting up the contest to solve the 'transformation problem' before the publication of Volume III, Engels, who no doubt thought Marx's solution would end the matter once and for all, had inadvertently placed this rather technical matter at the heart of many readings of Capital ever since. As a result Capital became something of a closed text. A text of political economy that either provided the correct solution to the 'transformation problem' or did not.

Yet Marx was not a classical political economist! Far from it; he could be nothing less than radically opposed to the cynical defence of bourgeois society paraded by the likes of Smith and Ricardo. Capital was never merely an exposition of the principles of political economy, on the contrary, it was above all a critique of political economy. It is this failure to grasp Capital as a critique that has led to the misappropriation of Marx. Let us then look at this in a little more detail.

In making a critique of Classical Political economy's defence of capitalism, Marx did not seek merely to deny its arguments and then simply counter pose his own, since he realized that such a defence grasped certain essential truths regarding bourgeois society. Indeed they were the conscious reflection of bourgeois society itself in thought. Yet, in grasping these essential truths of capitalist society the political economists could only grasp them one-sidely - they remained only partial truths In order to make a critique of these classical political economy it was therefore necessary to go beyond it by pushing these partial and one-sided truths to their logical conclusion, to their extreme limits where they would come to reveal their very one- sidedness and thereby explicitly posit their own negation. Thus Marx's critique demanded both the realization as well as the suppression of bourgeois political economy. As can be expected, this two-fold process of critique inheres within Marx's labour theory of value and it has been the failure to grasp this that has allowed Steedman and the Neo-Ricardians to so easily conflate Marx's value theory with that of Ricardo.

As the ideological champions of the ascendant industrial bourgeoisie the classical political economists were obliged to assert the internal coherence of capitalism as a social/economic totality. Against the underconsumptionist theories of their most ardent contemporary critics - such as Sismondi - who warned of the inherent crises of the capitalist mode of production - political economists denied the possibility of any crisis of overproduction or underconsumption except for accidental or external factors. If capitalism was limited it was not due to itself but due to external factors. For Marx, capitalism was inherently crisis ridden, but this did not deny its relative coherence as a social totality. In fact, for Marx the two sides of this dichotomy were connected. Crisis emerged from the very conditions that ensure the coherence of capitalism just as subsequently the coherence of capitalism is reimposed by means of crisis. To understand this, capitalism had to be considered as a contradictory unity - a unity in opposition. Both the classical political economists and their critics failed to fully grasp this and instead grasp capitalism one-sidely; the critics emphasizing crisis, the political economists denying it.

Yet as we have previously shown, in order to grasp the contradictions of capitalism was first necessary to grasp it in its unity. Thus it was with classical political economy, rather than its critics, that Marx came to locate his starting point; and it is this emphasis on the unity of capital that, as we have seen, guides the principal line of theoretical development that we find throughout the three volumes of Capital. Of all the classical political economists, it was Ricardo who was most important for Marx. This was because Ricardo, in adopting and then persistently defending, a labour theory of value, had, however obliquely, connected the coherence of the capitalist economy to its essential foundation - wage-labour. However, from Ricardo's bourgeois perspective this connection could only remain obscured. Like all classical political economists, Ricardo's principal concern was the quantitative distribution of the economic surplus between the 'productive' capitalists and the 'unproductive' landowners. Yet Ricardo recognized that such relations of distribution arose from the inner relations of production. It was in asserting production as the essential foundation of economic relations that Ricardo came to adopt a labour theory of value. However, from Ricardo's bourgeois perspective, any detailed analysis of production relations threatened to raise the rather awkward question of the social relation between the worker and the capitalist. So as to foreclose any question of the exploitation of wage-labour, Ricardo came to view the relations of production as a purely technical relation; as a relation that was predetermined and constituted by natural and technological factors. Consequently Ricardo could only grasp labour as an objective and technical relation - which he could then use as an objective and invariant measure of value.

Hence, as we saw in chapter 8, Ricardo came to adopt an embodied labour theory of value. The value of a commodity was, for Ricardo, determined by the technically necessary labour embodied in its production. Yet as we also saw in chapter eight, this embodied labour theory not only reduced the social relations of production into purely technical relations, but at one and the same time precluded rupture and crisis. Labour became immediately identified with value; and value immediately identified with (natural) price. It was through this very double identity, implicit within an embodied labour theory of value, that Ricardo came to assert the coherence and unity of capital. Yet, as we saw in chapter eight, Marx in the opening chapters of Capital, sets out an abstract social labour theory of value which is a radical departure from Ricardo's embodied labour theory of value. For Marx value is not simply labour, but the social and historical form of labour under capital. As a consequence, Marx goes to great lengths in setting out this theory to distinguish labour from value, and value from price. For Marx they cannot be simply conflated within a double identity as Ricardo would have it. As a result crisis and rupture are not precluded; they remain implicit within Marx's abstract social labour theory of value.

However, as we have also seen, in order to set out his theory of surplus-value, Marx came to attenuate his abstract social labour theory of value in to what we have termed quasi-embodied labour theory of value. With this attenuation of his value theory Marx can be seen to have preserved the radical distinctions between labour, value and price by reducing Ricardo's double identity to the provisional assumption of a double equality (i.e. labour = value = price). Hence, throughout Volumes I and II of Capital the prices of commodities are provisionally assumed to be determined by the labour embodied in their production, all labour being assumed to be realized as value. Only in Volume III is this assumption relaxed so that production prices can be seen to systematically diverge from labour-values.

Yet, despite Marx's efforts to preserve the distinctions set out in the opening chapters of Capital, it has been easy to ignore all this and reduce Marx's quasi- embodied labour theory of value into a mere continuation of Ricardo's fully embodied labour theory of value. In fact, in a limited sense this is correct. Marx does critically develop Ricardo's embodied labour theory of value; but as a onesided aspect of his own abstract social labour theory of value. In developing this theory beyond Ricardo, Marx is able to show the exploitative nature of capitalist production, the precarious character of the capitalist circulation process and so forth, all in terms of the unity of capital. This then culminates in Volume III with the transformation problem where the unity of capital reaches its most extreme point.

Here, in Volume III, the convergent tendencies of capitalist competition are seen to forge a uniform rate of profit so that all capitals produce and realize surplus-value to the same degree. Each capital acts as if it were merely a part of a homogeneous totality of social capital; as if it were itself merely capital-in-general. All the fractures and oppositions that emerge within the totality of capital due to its particularization as individual capitals appear submerged within an overall unity of capital as a social totality.

But this is only the extreme extrapolation of a tendency. All the oppositions and contradictions, the divergent tendencies of competition, appear to be resolved. It is capital taken only in its coherence. If we are to go on beyond Capital to consider the incoherence of capital, its crisis and rupture, then the movement of attenuation within Marx's value theory must be reversed. It must be seen how labour may not become value, how price may break from its systematic determination of value. It must be seen how labour becomes not only valorized but devalorized; how capital becomes not only totalized but detotalized.

Unlike Ricardo, such a reversal is possible for the Marxian project because rather than being precluded from Marx's value theory it is implicit within it; it is not foreclosed once and for all, but rather is only provisionally attenuated. Indeed, it is a reversal that repeatedly, and ever more incessantly, demands to be made within the text of Capital. But it is a reversal that Marx never made. Crisis and rupture, as we have seen, remain marginal to the principal line of theoretical development in Capital which is still only pursuing the unity of the dialectic of capital.

The failure to go beyond Capital - the failure to make this reversal - has meant that the full implications of Marx's abstract social labour theory of value have not become apparent. As a consequence, it has been easy for the modern economist to dismiss the opening chapters of Capital as at best an unnecessary philosophical digression and at worst incomprehensible throwback to Marx's Hegelian youth. Once this dismissal has been made it is then possible, by considering the rest of Capital, to conflate Marx's labour theory of value with that of Ricardo. In the end, as with Sraffa et al., Marx becomes reduced to little more than a precursor to modern input/output economics who lacked the benefits of present day matrix algebra!

However, in claiming Marx as a classical political economist - by conflating his labour theory of value with that of Ricardo - these Neo-Ricardians not only fail to grasp capital as a social relation, which is condemnation enough, but they find themselves only able to grasp capital in its unity. For them, like Ricardo, crisis and rupture are precluded. They find themselves unable to venture beyond their world of static equilibrium. Any notion of change or development shatters the rigour of their mathematical systems.

This becomes clear if we examine the Sraffian proposed solution to the problem of an invariant and objective measure of value. At least Ricardo's embodied labour theory of value recognized, albeit obliquely, that the essence of capital was wage- labour. Hence the intrinsic measure of value had to be labour time. By discarding labour as the measure of value in favour of the standard composite commodity, Sraffa refuses to grasp the essence of the capitalist system; he can only ever grasp a measure of a particular existent economic system at a precise point in time. As soon as a new commodity or a new technique of production appears then the old economic system ceases to exist and a new one arises and so Sraffa needs a completely new standard composite commodity! Sraffa's measure of value may only be an objective and invariant measure for a instantaneous point in time! All notion of change, let alone rupture and crisis, thereby becomes lost.

Before concluding we must also mention that, on the other hand, there are those who concentrate on the opening chapters of Volume I of Capital to the exclusion of all else. The failure to see Marx's quasi-embodied labour theory of value as the a necessarily onesided development of Marx's abstract social labour theory of value, has also led to the abandonment of labour as the content of value. Instead we have an emphasis on value-form, and thus on money, rather than a standard composite commodity, as the measure of value(4).

It is only in the context of the incompleteness of Marx that these criticisms of Marx's value theory can be fully understood. If we are to go beyond them we must therefore recognize the provisional closure enacted in Capital; a closure whose provisionality has been overlooked ever since Engels came to pose the 'transformation problem'.

Yet it is not only in terms of the theory of value that Engels served to transfer the provisional closure within Marx into a final closure within Marxism. He has more to answer for, as we shall now see in our consideration of the question of the theory of human praxis.

B) Human praxis

The invasion of Hungary in 1956, by revealing to the West the overtly repressive nature of Russian 'Socialism', marked the beginning of the end of the hegemony of Soviet Marxism that had dominated and stultified Marxist thought for almost three decades. An ending that has only recently been concluded with the break up of both the Eastern Bloc and the Soviet Union.

Consequently, the various heterodox currents of modern Marxism that have developed in opposition to Soviet Marxism were obliged to address the fundamental question of the 'fate of Marxism' posed by its degeneration in the hands of Stalin. How was it that the revolutionary theory of Karl Marx which had originally aimed at human liberation ended up as a conservative state dogma which sought to liberate the productive forces at whatever human cost? Was it possible to separate a theory that had sought to change the world from its own consequences?

To answer such questions without completely surrendering Marx required a close critique of orthodox interpretations of Marxism. A critique that was readily found in the writings of both Karl Korsch and the 'Young' Lukacs. Indeed it is reference to this critique that much of what has become known as Western Marxism can be located.

In 1923 Lukacs published his great seminal work The History and Class Consciousness, and in the same year Karl Korsch published his Marxism and Philosophy(5). Both of these two works were explicitly aimed at attacking the basis of the Marxist orthodoxy of the Second International, and both were a part of a general theoretical assault by the newly emergent revolutionary communist movement against the old reformist social democracy. Yet the critique of Lukacs and Korsch went far beyond that being levelled by Soviet Marxism at that time.

Soviet Marxism, far from wishing to uproot the old orthodoxy of the Second International, from which they had themselves sprung, sought to extend it by adding the political voluntarism of Lenin's political theory to the economic determinism of the old International. For Soviet Marxism, Marxist-Leninism was the true and rightful heir to the old orthodoxy that had been betrayed by the political timidity and opportunism of the leaders of the Second International.

Thus, in pressing home a radical critique of the old orthodoxy, Lukacs and Korsch found themselves making an implicit attack on the newly emerging orthodoxy of the Third International and Soviet Marxism. As a consequence, they began to draw the vehement criticisms of leading Soviet Marxist theorists. This was further intensified by the current political situation within the European communist movement at that time.

In 1923, with the subsidence of the revolutionary wave that had swept Europe following the First World War and bolstered by the great prestige of the 'success' of the socialist revolution of 1917, Soviet Marxism had more or less established its domination over the European communist movement. The left communist opposition within the Third International had been defeated and the International was rapidly becoming a mere arm of Russian foreign policy. Yet this dominance had still to be consolidated. It was vital for the Soviet Marxism to impose its line without serious opposition which might jeopardize the use of the Third International to defend the gains of the Russian Revolution and the Bolshevik Government.

As a result both Korsch and Lukacs found themselves under serious attack. In response to this attack Lukacs was led eventually to retreat from the positions he had set out in History and Class Consciousness and became concerned with less controversial questions so that he could remain within the Hungarian Communist Party. Korsch, on the other hand, refused to bow to such pressure and was consequently expelled from the German Communist Party. In response he wrote The Present State of the Problem of Marxism and Philosophy - An Anti-Critique in 1930, which explicitly extended his critique of the old Marxist orthodoxy of the Second International to the new orthodoxy of Soviet Marxism.

So what was the basis of this attack on Marxist orthodoxy?

Both Lukacs and Korsch argued that orthodox Marxism had served to vulgarize and distort Marx. A vulgarization that could be traced right back to the late Engels and his attempt to expand historical materialism, and hence Marxism, into a scientific world view that could compete with rival bourgeois theories for the allegiance of the expanding German workers' movement of the 1870s and 1880s. The basic cause of this vulgarization was Engels's attempt to extend the dialectic to nature.

Engels had sought to give historical materialism a strong scientific foundation by arguing that the dialectic was a basic principle of nature which preceded human thought. In doing so Engels was clearly following Marx's advice with regard to the need to 'stand Hegel on his feet'. The idealist dialectic of Hegel which saw the absolute idea immanent within the natural world was now to be stood on its feet to reveal the idea prefigured by the principles and processes of the natural and material world.

Yet, by rooting the dialectic in nature, Engels effectively discarded the revolutionary implications that Marx had sought to rescue from the idealist mystifications of Hegel. The dialectic of subject/object, which had been central to Hegel, and which allowed Marx to pose the question of human praxis, and hence the question of human alienation, was lost. Instead, Engels's simple materialist inversion of Hegel led him to preserve the Absolute Idea (God) in the guise of the forces of production which must continually seek their highest expression in the course of human history.

So, by extending the dialectic to nature, Engels had come to discard the theory of praxis and human alienation. Consequently the very criticisms Marx had made against Feuerbach way back in 1846 could be levelled against Engels:

"The chief defect of all hitherto existing materialisms...is that the thing, reality, seriousness, is conceived only in the form of object or of contemplation, but not as sensuous human activity, practice, not subjectively...Hence he does not grasp the significance of 'revolutionary', of 'practical-critical', activity." (Marx, 1970, p. 121)

In the hands of Engels, the dialectic became little more than a question of the constant flux and dynamics of nature which then becomes reflected as a mode of human thought through contemplation and observation. A dialectic that owes more to Heraclitus than to Hegel, and one that served to construct Marxism as a positive science. The implications of Engels's rejection of praxis, and the consequent degradation of the dialectic, were to have servere effects for the development of Marxism within the international workers' movement.

The works and influence of Engels undoubtedly played a vital role in the development of the Marxist orthodoxy of the Second International. It was through Engels that the first generation of Marxists, such as Kautsky, Plekhanov, Labrola, and Mehring, came to Marxism. It was with Engels's help that these leading theoreticians forged the basic tenets of Marxist orthodoxy.

In the non-revolutionary conditions of the late nineteenth century, and with the intellectual ascendancy of positivism and the natural sciences, the vulgarization of Marxism initiated by Engels became further consolidated by this first generation of Marxists. A generation whose intellectual backgrounds owed far more to the impact of Darwin than to the philosophy of Hegel.

As a consequence, Marxism became consolidated as a positive and deterministic science of history and society, stripped of all revolutionary content despite its protestations to the contrary. The principal aim of Marxism became not so much the liberation of human praxis, the free development of human beings, but rather the democratic planning of production to eliminate the irrationalities of the market. Hence, for orthodox Marxism, whether of the Second or Third Internationals, communism was postponed almost indefinitely and replaced by the transitional stage of socialism that meant nothing more than state capitalism in the workers' interests.

Indeed we may follow Levine and argue that what was to become known as Marxism was not Marxism at all, but Engelsism! An ideology which was to reach its most extreme form with the rigid and mechanical diamat of the Stalin era(6).

Clearly, if the failings of the Second and Third Internationals and the iniquities of Stalinism and Soviet Marxism are a product not of Marxism but of Engelsism, the way is open for a return to Marx. A return that would be free to reconstruct a true Marxism based on a theory of human praxis and aiming for the full liberation of humanity in communism. Yet this thesis of an Engelist degeneration of Marxism, which owes its origins to the work of Lukacs and Korsch, has faced two serious objections since its re-emergence in the immediate aftermath of the Hungarian uprising.

Firstly, how was it possible for Engels, who was the co-founder of historical materialism and such a close friend and life-long collaborator of Marx, to make such a gross misinterpretation of Marx's critique of Hegel? How was it possible for him to reduce Marxism into a vulgar materialism? In answer to such a objection it may be pointed out that, although traditional histories of the intellectual development of Marxism make Marx and Engels almost synomous it is clear from recent studies of the life of Engels that they had important differences with respect to both temperament and background. Differences which Engels himself admitted. It may be argued that, although they were in remarkable accord though much of their life, the determinism inherited from his Jesuit background and his rather dilettante approach to study - particularly in his youth as a Young Hegelian - together with the practicality of his work as a factory manager, made Engels far more susceptible to the positivistic intellectual climate of the late nineteenth century than Marx.

While Marx undoubtedly moved towards a 'critical positivism' during his last years of his life, he never rejected the importance of Hegel. Hence it may be claimed that praxis always remained central to his thought. For Engels, who never came to grips with Hegel in his youth, it was far easier to take Hegel and the question of human alienation as a 'dead dog' and accept the positivistic and inevitable laws of the historical development of the productive forces.

Of course to such a defence of the Engelsist thesis it may be objected that Marx himself accepted the proposal to extend the materialist dialectic to nature and approved of Engels's work Anti-Durhing in which such an endeavour was first presented. Furthermore, to be fair to Engels, he also warned against over deterministic interpretations of Marx towards the end of his life. Thus if there was a difference between Marx and Engels it was perhaps more a matter of emphasis. But even if Marx was following Engels towards a more deterministic and positivistic position towards the end of his life, this would not be that serious so long as it can be shown that his principal works are to be animated by a theory of praxis. It is here that the second and more serious objection makes its mark.

While it is true that the publication of Marx's early works, such as the 1844 Manuscripts and his Theses on Feuerbach have lent added weight to the Lukacs/Korsch critique of orthodox Marxism and have underlined the importance of human praxis, at least for the early Marx, the fact remains that Marx's 'ultimate' theoretical work - Capital - in all three Volumes lends itself to an orthodox reading. Except for the opening chapters of Volume I (particularly the section on commodity fetishism in Chapter 1), Capital is marked by the objectification of its categories. The questions of human praxis, of human alienation and subjectivity, are notable by their absence. If the theory of praxis is not central to Capital how can it be central to Marx?!

In reply to this second objection Levine has argued that Engels's efforts in editing and publishing the final two volumes of Capital produced a marked 'shift in meaning' in these volumes towards an Engelsist reading of Capital. After a careful and scholarly comparison of various passages in the original manuscripts of Marx and the corresponding passages in the published version of section 1 of Volume II of Capital, Levine concludes:

"In this instance, a structural change in the text did cause a 'shift in meaning'. Engels's replacement of one passage by Marx with one content with another passage by Marx with an entirely different content brought about a 'shift in meaning' in this particular part of Section I Volume II of Das Kapital. This is not enough evidence to argue conclusively that a 'shift in meaning' occurred throughout Section I Volume II of Das Kapital. It does indicate that a 'shift in meaning' took place in this particular portion of the text, and does introduce the possibility that a 'shift in meaning' occurred throughout Das Kapital generally." (Levine, 1984, p. 245)

Yet even if this possible 'shift in meaning' proves to be true generally, it is only a matter of emphasis, and, what is more, it only applies to Volumes II and III. It remains the case that the overall movement of Capital, with its objectified categories, greatly circumscribes the question of human praxis and class subjectivity. In fact, it may be argued that what is remarkable is not that Engels introduced a 'shift in meaning' in the process of editing Volumes II and III, but that he was able to prepare Marx's almost illegible manuscripts for publication with such fidelity.

Unlike Levine however, most defenders of the importance of human praxis in Marx have tended to retreat to the works of the 'Young Marx'. But this has only served to open the way for their opponents to go on the offensive and to declare that the 'Young Marx' was merely immature. The most forceful exponent of this line of attack has been Althusser.

In his efforts to reconcile Western Marxism with the reformed Marxist-Leninist orthodoxy of the French Communist Party of the 1960s, Althusser attempted to close off the 'Young Marx' cited by praxis theorists. He argued that Marx made an 'epistemological break' from the 'humanist' and 'ideological' formulations of his earlier works to develop the scientific theory of historical materialism - of which his critique of political economy was a central part. Thus against the 'ideological' and 'bourgeois' conceptions of the 'Young Marx' cited by the proponents of human praxis theory, Althusser was able to counterpose the authority of the scientific, mature Marx of Capital.

Although Althusser's rigid demarcation between the 'Young' and the 'Old' Marx has proved difficult to sustain, particularly in view of the Grundrisse, Marx's apparent progression away from his 'youthful' emphasis on human praxis and the problem of alienation towards a 'scientific' analysis of the laws of capitalism evident in Capital weighs heavily against the heirs of Lukacs and Korsch. As a consequence, Western Marxism has retained an ambiguous relation to Marxist orthodoxy. It has largely failed to fully break with the 'scientific' readings of Marx.

Yet his apparent progression only exists if it is accepted that Capital is Marx's ultimate and culminating theoretical work. If, as we have argued throughout this work, the Marx of Capital is in a fundamental sense incomplete; that Capital is merely provisionally closed; that the marxian project points through and beyond Capital, then the objections advanced against the centrality of human praxis and the Engelsist thesis fall to the ground. We can follow Negri and pose a 'Marx beyond Marx'; a Marx in which human praxis and class subjectivity emerge in their full force on the objective foundations set forth in Capital. A Marx freed once and for all from the scientific and deterministic readings and practice of orthodoxy of Soviet Marxism. The realization and suppression of philosophy and science becomes possible.


In this chapter we have sought to indicate how the provisional closure in Marx has become a final closure within Marxism. As has been indicated in our discussions concerning both the issues of value and human praxis, this failure to grasp the incompleteness of Marx has had serious implications for the development of Marxism. On the one side it has been all too easy for Marxists to fall foul of the dogmatic determinism of orthodox Marxism of the Second and Third Internationals, on the other side it has allowed Marxism to become prone to the revisionism and consequent assimilation into radical bourgeois theory.

This has meant that, for what has become known as Western Marxism, the flight from Stalinism that gathered pace after the events of 1956 in Hungary, has all too easily led into a dead end; either with an ambiguous rapprochement with a reconstructed orthodox Marxism or with a surrender to the fashionable radical currents within bourgeois academia. Of course this is not to say that there has been little progress made by Marxists over recent decades, particularly those within the Western Marxist traditions. On the contrary, it is only as a result of the enormous contributions that have been made that this work could have been written. But nevertheless we may concur with Banji when he concludes:

"...Marx's Capital remains incomplete as a reproduction of the concrete in thought. What is remarkable here is not that Marx should have left the book incomplete but that close to four generations of Marxists should have done so. There are, of course, historical reasons why this is so, reasons related to the renovated expansion and qualitative consolidation of capitalism. But one of the most striking manifestations of the underlying crisis in the movement as a whole is the contemporary state of Western Marxism - the ecstatic leap from the uppermost floors of an imposing skyscraper of immobilised dogma to the granite pavements of confused eclecticism." (Banaji, 1979, p. 40)

Yet, with the final collapse of Stalinism and Soviet Marxism, it now becomes more important than ever to come to an understanding of the incompleteness of Marx.


1. For an history of German Social Democracy under the Anti-Socialist Laws, see Lidkte (1966).

2. Sraffa sought to substantiate this thesis by interpreting Ricardo's early 'corn-price model' , that had sought to show how diminishing returns in agriculture would depress the rate of profit by using the physical quantities of corn inputs as a standard measure of value, as a less mathematically sophisticated precursor to his own general equilibrium system of technical co-efficents for determining a standard measure of value with which to measure changes in the distribution of the economic surplus. See Sraffa's introduction in (Ricardo 1951 : Vol.1).

3. For the main arguments that arose with the controversy following Steedman's attack on Marx's labour theory of value, along with Steedman (1979), see the collections of articles contained in Mandel & Freeman (1984), Fine (1986) and Steedman (1981). For a more comprehensive methodological critique of the neo-Ricardian approach offered by Steedman and others, see Fine & Harris (1979).

4. For an example of such a value-form analytical approach, see Eldred & Hanlon (1981). Also see De Vroey (1982) for a discussion of such theorists.

5. See Korsch (1970) and Lukacs (1971). For a critical history of the development of Western Marxism that developed in opposition to the Soviet Marxist orthodoxy, see Anderson (1976) or Jacoby (1981). Also see Cleaver (1979). 6. See Levine (1976, 1984).