In the third volume, the entire process – both production and distribution – are dealt with. The concreteness is greater than in both the previous volumes, and thus also the proximity to empiricism. Profit and interest, shares and banks are the central themes. The theme of class turns up only in the very last chapter, and that in a fragmentary account. The reader is reminded that the third volume was built on a relatively early and unfinished manuscript that Engels was forced to complete.
In principle, Capital begins in the same way as A Contribution from 1859: with the question of how wealth ‘presents itself’ (erscheint) in a society in which the capitalist mode of production prevails. The answer is also the same: with ‘an immense accumulation of commodities’. It is thus this quantity of varied commodities that we first catch sight of when we search for clarity in the question of what capitalism is. Other modes of production also had commodities that were bought and sold. But these commodities did not have the same dominant role at all as they do in capitalism.
Commodities have two different factors, Marx said: use value and exchange value. Once again, the classical distinction from Aristotle comes into favour. Use value is the quality of the commodity, Marx said. It informs us how the desirable object is constructed. It has to do with benefit, with usefulness. A commodity is acquired because it is needed, whether it be iron, paper, food, or luxury articles.
Exchange value, on the other hand, is quantitative, and thus answers questions such as ‘How many?’ or ‘How much?’ Exchange value makes commodities with completely different properties comparable. A kilogramme of coffee is worth as much as so much ground beef, or so many apples. Where exchange value is concerned, the physical properties of the commodities are completely ignored. The incomparable becomes comparable.
Marx was not satisfied with talking about exchange value. When use values are ignored, it is the value that appears in the exchange values, he said. In other words, exchange value is what we can immediately observe, value is what we can infer from it.
The distinction between exchange value and value may seem like an evasion, and a few words of explanation are therefore required. It is that much more important, as we can then figure out how Marx generally constructed many of his concepts. Exchange values are surface phenomena; values lie under them. The relationship, which Marx only fully elucidates in the second edition of Capital, has its foundation in the classical distinction between essence and phenomenon.25
It is important that the essence Marx spoke about is changeable. He has thus not relapsed into the ideas of his youth, according to which it is possible, for example, to speak about an unchanging human essence. What he was talking about here is a rapidly changeable surface (exchange value) and a more slow-moving, underlying essence (value). The central thing is the word ‘appear’ (or, in German, erscheint, ‘shines through, becomes visible’). We already encountered it in the first sentence of Capital on the wealth of society appearing as commodities. Here, it is thus a question of the relationship between the exchange value a commodity has, and its value. Exchange value is immediately empirically accessible. We discover value only after an analysis. The distinction has significance for the interpretation of certain central – and controversial – parts of the whole of Capital.
There is another central pair of concepts that have a certain degree of similarity with the previous pair without being exactly the same; namely, form and substance (or form and content). This is found throughout all of Capital and is applied even in the initial pages to the relationship between exchange value and use value: use value is the material content, exchange value the social form. Often, the form signifies the immediately observable, and substance (or content) the part that must be uncovered. But it is not so here. Value is what the exchange value expresses, and the sensuous (or intellectual, if any) properties of a commodity constitute the basis of its use. A kilogramme of bananas can be exchanged for a given amount of bread, a book for so much cloth. If I have no bananas but I have bread, I can exchange the one for the other; if I have cloth but nothing to read, my clothless neighbour can get my cloth by giving me a book I want to read.
The important thing in this exact relation of form and substance lies in the determination of the social against the material. Exchange is a social relation; use value is linked to the specific properties of the commodity. We part with what we do not need in favour of getting something else that satisfies a need within us.
But there is something that unites all the commodities we exchange: they cost labour. Something that has not done so – the air we breathe, for example – is no commodity. Through labour, all the specific objects we can get in exchange because we covet them are created. The work that produces them is equally as specific as the commodities themselves. The carpenter makes a table, the tailor sews a coat, the programmer compiles a specific programme. But there is still something we can compare, and that is what Marx called labour power. The worker is not their labour power, but they can sell it to someone who can pay a wage so as to do business with the commodities produced – that is, a capitalist. But the worker always sells their labour power against time, and it is time that determines the compensation.
Different kinds of work can be differently productive, depending on which tools – machines and the like – are on offer. Using a concept of Adam Smith’s – productive force (which can also occur in the plural, productive forces), Marx narrows down this productivity as follows: ‘This productiveness is determined by various circumstances, amongst others by the average amount of skill of the workmen, the state of science, and the degree of its practical application, the social organisation of production, the extent and capabilities of the means of production, and by physical conditions.’
This determination shows that Marx takes various kinds of factors into account. The word ‘average’ is important; Marx was not talking about the exceptions, the particularly unskilled or the particularly outstanding workers, production taking place with out-of-date technology or with tools so advanced that they have not yet become prevalent in the industry. Nor was he talking about the clumsy or extremely efficient co-operative organizations. There, as wherever the entire scope of the means of production are concerned, competition compels an equalization. The productive forces are continually being developed under capitalism. Everyone must keep up – or be eliminated. But the more production increases, the more the labour time necessary for production decreases.26
The distinction between concrete and abstract labour plays a key role in the construction of Marx’s conceptual apparatus in Capital. Concrete labour has a use value. Through it, concrete products – whether bread, bananas, books, or coats – are manufactured for the market. Abstract labour, on the other hand, is exchangeable; it has an exchange value that involves a cost for the capitalist and wages for the worker. As always, the exchange values are comparable. The many stages of labour that are required to produce a loaf of bread cannot be compared with the assuredly equally as many stages that differentiate the idea for a book from a book in the bookshop. But the compensation the baker receives for their labour can be compared with the compensation for the printer (or publisher’s reader, or author).
Through its exchangeability, abstract labour is a commodity among other commodities in capitalism – that is, something that is bought and sold. One hour’s labour can be worth the same as a certain number of litres of milk.
All commodities can thus be exchanged for all other commodities in fixed proportions. Marx was talking about equivalent forms. Completely different objects are worth the same as each other in fixed proportions. Three apples = one cup of coffee = eight caramel candies = a bus trip across London. Everything can in turn be put on an equal footing with so many minutes of net income for a certain kind of work.
This may seem trivial. But Marx had the researcher’s ability to be surprised at the most obvious relationships. How could a fixed use value be made equal to all other, equally specific use values? Apples and
railroad trips – to say nothing of a worker’s labour time – are completely different in their natures. In contrast to use values, exchange values have nothing to do with nature, but with society.
There is reason to remember the opposition of nature and society. It is crucial for Marx’s entire theoretical construction. A number of concepts – we do not have to note all of them here – can be deduced from it. Money can be deduced from the exchangeability of commodities. Pure barter would be unspeakably difficult to manage. A perhaps wants what B is selling, but A does not have exactly what B needs. B then has to go to C, who has the desired object on offer, but C in turn has to go hunting for someone that can meet their needs. The results would be complete chaos.
The solution is a commodity that can be exchanged for all other commodities: the money commodity. The material form the money commodity takes is unimportant. In Marx’s time, both coins made of precious metals and paper notes were in circulation. Today, the money form also takes many other, more abstract shapes, but nothing substantial has changed.
Marx is thus ready for one of the most important sections in Capital: the one where he introduces the concept of commodity fetishism. In Marx’s time, the word ‘fetish’ was associated with a form of religious faith that belonged among what were called primitive peoples. These ‘savages’ regarded many objects as animate, and equipped with magic powers.
It was therefore provocative when Marx claimed that the society regarded as the most advanced – capitalist society – was characterized by the same kind of ideas. Fetishism here applied to commodities. Outwardly, a commodity seems like a completely trivial thing. But if it is analysed, it turns out that it is ‘abounding in metaphysical subtleties and theological niceties’, Marx said. A table is made of wood, but as soon as it is to be sold it becomes ‘something transcending’ (a not entirely satisfactory translation; Marx says a ‘sensuously supersensual thing’ – something contradictory in itself). In relation to other commodities, it no longer stands on firm ground, but on its head. This has nothing to do with its use value, but instead the commodity form itself.
The peculiar character of the commodity form is in turn due to commodity-producing labour. Specific labour – of the baker or the machinist – becomes a commodity as a result of the fact that its value becomes comparable to all other specific labour. Why is this so? The secret lies in labour time, which makes itself felt in commodity value with the power of a natural law. The relationship is valid without anyone needing to be aware of it.
Commodity fetishism is not something timeless, but is the result of the capitalist mode of production. Bourgeois economists do not realize this; they search for timeless categories instead. They vary the story of Robinson Crusoe in different ways, but always so that the social character of a commodity remains the same. But think about the Middle Ages, Marx said. Everyone was dependent on everyone else back then – serfs and landowners, laymen and priests. Under capitalism, the worker is free to sell their labour power – or to starve; the capitalist free to purchase labour – or to go without commodities to sell and thereby no longer a capitalist.
Commodity fetishism makes itself felt in all relations of exchange. People there appear only as representatives of commodities, and not as concrete persons. Their will seems to have passed into the thing. In relation to each other, they array themselves in their character masks as capitalists, workers, or something else.27
In a society like this, money becomes the bonding agent among commodities, and through them also among people. The seller of a commodity receives money from the purchaser, and the money can then be exchanged for other commodities. Marx lays out the formula C – M – C, in which C stands for commodity and M for money. It is a simple circulation. Money flows constantly onwards towards new acts of purchase. It is a monotonous repetition, Marx said. One person sells linen cloth and purchases a Bible. The seller of the Bible uses his money for whisky. So the money flows on; human actors seem lifeless in comparison with the transactions they are involved in.28
Money is a necessary condition for the formation of capital. Capital always emerges first as money. So it was historically: through accumulated fortunes, trade, or usury, capital at one point could assert itself in relation to landed property. And so it would remain: capital takes form again and again as money – money that makes commodity production possible and which, once the commodities are sold, becomes money again. Capital circulates and, in that way, is similar to ordinary, simple commodity circulation. But the form is different. Simple commodity circulation is static; the sum of money put into the purchase of commodities is the same as the one the seller gets in their hand: M–C–M. But capital must be dynamic in order to survive as capital. The form becomes M–C–M’, where M’ means more money. Profit, in other words, is the point of capitalist production: this profit cannot only, or chiefly, serve for the maintenance or luxury consumption of the owner of the capital, for in that case, the owner of the capital would be knocked out of competition with other, more thrifty owners of capital who invest their surplus into expanded production: M–C–M’–C’, which in turn is intended to generate even more money (M”), which makes even greater production of commodities possible, and so on.
Where does this surplus value come from? Marx is in no doubt about the answer: from the labour that the worker performs. The only commodity the worker has to offer is their own labour power, and the capitalist buys this labour power for a certain time and against a certain compensation that will cover the worker’s immediate needs. But the value of the labour the worker performs is greater than the compensation. The worker makes surplus value, Marx said, and this surplus labour provides the surplus value which in the formula is represented by M”, more money.
The capitalist has a constant hunger for increasing surplus value. This has nothing to do with any personal qualities, but is part of his character mask as a capitalist. Without this hunger, he will of course disappear from the scene. The hunger in turn makes him constantly want to extend the working day of the workers. But this has its inevitable limits, the day has twenty-four hours, and of these each person must have time to recuperate (a period that in early capitalism was pushed down to an inhuman minimum).
This limit forces the capitalist to look for another way, namely to increase the productive power of labour. Productive power is complex, as we have already seen, but it seems possible to limitlessly develop a significant factor: technology. Capitalism has put its inventions into the system. Researchers and technologists are necessary for great and constantly accelerating technological development. Thanks to technological development, more and more can be produced in an increasingly shorter time.
Marx also makes an important distinction between constant and variable capital. On the one hand, the capitalist must invest their money in raw materials, machines, and other equipment. On the other hand, workers who are willing to sell their labour power at a certain price are required. Raw materials and machines do not change their value (or the magnitude of their value, as Marx says) during the production process itself, but remain constant. Labour power, on the other hand, creates a value that exceeds the costs for it, thereby creating surplus value. In other words, it is variable.
The relationship between constant and variable capital, that is, the ratio between them (or c/v, with the symbols Marx used) plays a crucial role for his view of the development of capitalism. It is only in Volume III that he developed his idea in full.
It has already become clear that Marx placed special emphasis on two closely associated areas: the length of the working day and the development of machinery. Each received their own comprehensive chapter – 10 and 15 – which differ from the rest of the account in their detailed empirical data. Marx had use of his extensive studies of documents, official and otherwise, and in the chapter on the length of the working day an interesting picture emerges of a tug-of-war between capitalists and workers in which the outcome does not seem decided, in particular as state
power can go in and (to the dismay of the capitalists) legislate on the maximum legal length of the working day, as it can for the conditions for women’s and children’s work. Each such limitation intensifies the capitalists’ efforts to develop more efficient machinery that increases productivity, thereby compensating for the reduction in pure working time.
Marx was not satisfied with giving a fluent account, rich in detail, about both the modern history of technology and its consequences for the workers. He began with a definition, still often cited, of what a machine is. A machine has three parts, he declared. The first he called die Bewegungsmaschine, that is, ‘the motor mechanism’ that can either create its own movement, such as a steam engine, or draw it from some other source, for example water, as a waterwheel does. The second part required is a ‘transmitting mechanism’ that conveys, regulates, and perhaps converts the movement through driving shafts, gears, and so on. Finally comes ‘the tool or working machine’ which performs the tasks that the totality is intended for: it spins, it knits, it cuts, it glues together – the possibilities are endless.29
The machine does not have the limitations of the human organism. It also makes labour power relatively cheaper, since it increases productivity. In this way the limitations of the working day are compensated for. But as soon as a given piece of equipment has become standard in the industry, it is important for every capitalist to install even more powerful machinery. The race goes on.
Even before Marx got into the development of machinery, he introduced the concept of relative surplus value. One part of the worker’s labour time is equivalent to their wages, while another part provides surplus value for the capitalist. The time required for wages becomes shorter with more efficient machinery. More surplus value can thereby be created over a longer time. In other words, surplus value is related to technological development; in short, it is relative.
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