Reading Capital

I read Max's post on part one several months ago and remembered that he argued "all three circuits come together in the fourth chapter." And while that is true on some level -- analytically, at least -- I feel like the short chapter three on commodity capital is really the key to understanding the three circuits.br /br /I want to do some theoretical speculation in this post. I want to avoid redundant summarization but I feel like chapter three is too important not to summarize at least a bit. If you're uninterested in summarization, skip to the next part.br /br /span style="font-size:130%;"span style="font-weight: bold;"1. Why is third figure, the circulation of commodity capital, distinct from figures I and II (money and productive capital)?/span/spanbr /br /Marx is constantly differentiating figure III from I and II, and I started numbering all the different ways he does so. Ultimately, they are related but heuristically we can see perhaps four:br /blockquotea) "First, in this case the total circulation with its two antithetical phases opens the circuit, while in the Form I the circulation is interrupted by the process of production and in Form II the total circulation with its two complementary phases appears merely as a means of effecting the process of reproduction and therefore constitutes the movement mediating between P ... P."/blockquoteI take this to mean that C' is caught between P and M where P and M, in theory, could end at P and M without further reproduction.br /span style="font-size:100%;"/spanblockquotespan style="font-size:100%;"b) "Secondly, when circuits I and II are repeated, even if the final points M' and P' form the starting-points of the renewed circuit, the form in which M' and P' were produced disappears."br //span/blockquoteThis is pretty self-explanatory. But it requires a bit more of an understanding of why P and M are inward-looking circuits, which I'll try to explain a bit more below.br /blockquotec) "As commodity-capital it is always two-fold. From the point of view of use-value it is the product, in the present case yarn, of the functioning of P whose elements L and MP, coming as commodities from the sphere of circulation, have functioned only as factors in the creation of this product. "/blockquoteThis is not a big one, but I guess you could think "M = x-value" and "P=u-value" and C combines both x and u-values.br /blockquoted) "C is presupposed twice outside the circuit. The first time in the circuit C' — M' — C { L+MP . This C, so far as it consists of MP, is commodity in the hands of the seller; it is itself commodity-capital, so far as it is the product of a capitalist process of production; and even if it is not, it appears as commodity-capital in the hands of the merchant. The second time, in the second c of c — m — c, which must likewise be at hand as a commodity so that it can be bought."br /l+mp this="" consists="" itself="" far="" product="" capitalist="" process="" and="" even="" if="" is="" appears="" capital="" hands="" in="" the="" second="" of="" c="" m="" which="" must="" likewise="" at="" hand="" as="" a="" commodity="" so="" that="" it="" can="" be=""l+mp this="" consists="" itself="" far="" product="" capitalist="" process="" and="" even="" if="" is="" appears="" capital="" hands="" in="" the="" second="" of="" c="" m="" which="" must="" likewise="" at="" hand="" as="" a="" commodity="" so="" that="" it="" can="" be=""/l+mp/l+mp/blockquoteThis is not so much a logical distinction as it is a deeper theoretical implication emanating from the first two. So let's talk about that a bit. l+mpbr /span style="font-size:130%;"br /span style="font-weight: bold;"2. Why is the circulation of commodity capital critical, and what is total social capital?/span/spanbr /br /In theory, the circuits M and P could die with the second M or second P. That actually is too psychologizing; rather, one must emphasize that with M and P, the circulations are isolated from one another. As Marx says, P-P' implies that production is the "purpose of the process." M-M' is at least more honest in implying that valorization is the purpose, but it fails to take into account the whole circuit of P.br /br /Think of it this way. If you only dealt with money, as most of us do, we could presume that zero production occurs, but logically we know it happens somewhere. But we just can't see it. If we only dealt in production, say as workers who never have a chance to personally spend the money we earn, we would know that commodity transactions occur, but we would have no idea how it happens.br /br /In other words, M and P circuits represent standpoints in the total circuit that need to be connected, and C is the best way to connect them.br /br /One really easy way to think about this is to look closely at the total process:br /br /div style="text-align: center;"Figure I: M - C' - P - C'' - M'br /Figure II: P - C' - M - C'' - Pbr /Figure III: C' - M - C - P - C''br //divbr /For every M or P, C appears three times! C is always in transition between M or P, always in anticipation to be valorized, always the mediator between two isolated standpoints. C does all the traveling.br /br /I think we can argue that unlike M or P, C is outward looking beyond individual capital circuits in two ways.br /br /span style="font-weight: bold;"A) Temporally./span Every C is always in anticipation of future realization in money, and it always contains valorization from the past. It implies a history that is non-existent in P and M circuits.br /br /span style="font-weight: bold;"B) Spatially. /spanThe quote I use to demonstrate point d) above speaks to this. From the standpoint of individual commodity capital, other commodity capitals must exist in order to enter as a capital to be bought (labor-power and means of production, where do these workers come from? who made these machines for them to use? These questions must be answered); and they must come in the form of commodities to be bought by the individual capitalist for its individual consumption. Who feeds workers, what keeps them reproducing?br /br /This movement outwards thus implies a key concept which, I believe, symbolically moves Volume II beyond the abstract, individual focus of production: total social capital. What is total social capital?br /blockquoteBut just because the circuit C' ... C' presupposes within its sphere the existence of other industrial capital in the form of C (equal to L + MP) — and MP comprises diverse other capitals, in our case for instance machinery, coal, oil, etc. — it clamours to be considered not only as the general form of the circuit, i.e., not only as a social form in which every single industrial capital (except when first invested) can be studied, hence not merely as a form of movement common to all individual industrial capitals, but simultaneously also as a form of movement of the sum of the individual capitals, consequently of the aggregate capital span style="font-weight: bold; font-style: italic;"[translated also as "total social capital"] /spanof the capitalist class, a movement in which that of each individual industrial capital appears as only a partial movement which intermingles with the other movements and is necessitated by them. /blockquoteTSC is thus contrasted to particular, individual capitals. It is the regulatory framework within which the accumulation of capital occurs. What is the significance of this?br /span style="font-size:130%;"br /span style="font-weight: bold;"3. Combined and Uneven Development/spanbr //spanbr /To return to my previous post about Geoff Eley, and to which Max responded, I think the question about how slavery and non-wage labor fits into the histories of capitalism is best answered by distinguishing between individual and total social capital. Consider the a href="http://www.ingentaconnect.com/content/brill/hm/2003/00000011/00000003/art00004"Jairus Banaji article/a which argues that unfree labor has been, contra most Eurocentric and developmentalist accounts, part of the history of capital accumulation. The reason people say "capitalism as a system can't perform underneath a regime of slavery" stems from a conceptual conflation of individual with TSC:br /blockquoteRegarding the related issue of whether capital can exploit workers who are truly unfree (who represent bondage in Kant’s sense), the major problem with Brass’s way of handling this thesis, apart from his definition of unfree labour, is that uthe needs of individual and social capital are conflated throughout his argument. Brass conceives capitalism entirely from the standpoint of individual capital, ignoring the fact that the logic that regulates capitalist economy is, necessarily, that of the total social capital. Thus, the real issue of theory here is whether we can sensibly visualise the accumulation of capital being founded on unfree labour (in the strict sense just noted) at the level of the expansion of the total social capital. And the obvious res pons e is , no, since the mobility of labour is essential to the mechanism of capital at this level./u (80)br //blockquoteBanaji could have written this paragraph more easily, so allow me to try to translate: Yes, of course slavery cannot function as the underlying framework for total social capital. Total social capital is still premised upon free (as in, free to move; not free to decide) labor. But given that total social capital, there is always the possibility of the entrance ifrom the outside/i of commodities produced in non-free labor situations. Hence, slave-produced cotton on the world market in competition with cotton produced under superficially free conditions. Banaji says as much on the next page:ibr //iblockquotei /iThus the overworking of slaves in the Southern states of the American Union was, [Marx] tells us in span style="font-style: italic;"Volume I,/span a question of the ‘production of surplus-value itself ’.58 In the span style="font-style: italic;"Grundrisse,/span he refers to ‘[t]he fact that we now not only call the plantation owners in America capitalists, but that they are capitalists’ 59 and implies that these ‘anomalous’ forms of capitalist enterprise could exist because capitalism as a whole was based on free labour. u(My interpretation of this is: the American slave owners are capitalists because they are part of the total social capital.)/u In span style="font-style: italic;"Theories of Surplus Value/span, he writes that the ‘business in which slaves are used in conducted by capitalists’, though this is qualified by saying that here the capitalist mode of production ‘exists only in a formal sense’.60 Finally, in span style="font-style: italic;"Volume III /spanof span style="font-style: italic;"Capital,/span he writes, ‘Where the capitalist conception prevails, as on the American plantations, this entire surplus-value is conceived as profit’,61 and, in span style="font-style: italic;"Volume II, /spanslaves are described as ‘fixed capital’. (81)/blockquotebr /Now, this raises the conceptual question of how one defines what is TSC and what is merely one particular individual capital within the TSC. Doesn't this give rise to homogenization, precisely when the concept of TSC vs. individual capital seems to explain how a diversity of production regimes can co-exist? This is an important question.br /br /One way I've resolved this in my head is to rely upon a statement from one of the champions of the concept of uneven and combined development, a href="http://www.marxists.org/archive/mandel/1969/nicolaus/us2.html"Ernest Mandel:/abr /blockquoteThere is only one basic driving force which compels capital in general to step up capital accumulation, extraction of surplus value and exploitation of labour, and feverishly to look for profits, over and above average profit: uthis is competition./ubr //blockquoteWhat unites slave and free cotton is nothing but the competition between the two on the world market. To the extent that the average profit against which an individual capital must exceed is determined by the most advanced techniques, say industrial production, then all other modes of production are thus placed into the framework of industrial production as the regulator of total social capital. Once an industry becomes totally uncompetitive, then it withdraws or goes bankrupt, in either case it no longer interacts with the other individual capitals in the circulation of the commodity circuit.br /br /Hints at the existence of uneven and combined development, i.e. the competition between commodities produced under radically different conditions, can be found in chapter four:br /span style="font-size:85%;"blockquoteWithin its process of circulation, in which industrial capital functions either as money or as commodities, the circuit of industrial capital, whether as money-capital or as commodity-capital, crosses the commodity circulation of the most diverse modes of social production, so far as they produce commodities. uNo matter whether commodities are the output of production based on slavery, of peasants (Chinese, Indian ryots). of communes (Dutch East Indies), of state enterprise (such as existed in former epochs of Russian history on the basis of serfdom) or of half-savage hunting tribes, etc./u — as commodities and money they come face to face with the money and commodities in which the industrial capital presents itself and enter as much into its circuit as into that of the surplus-value borne in the commodity-capital, provided the surplus-value is spent as revenue; hence they enter in both branches of circulation of commodity-capital. uThe character of the process of production from which they originate is immaterial. They function as commodities in the market, /uand as commodities they enter into the circuit of industrial capital as well as into the circulation of the surplus-value incorporated in it.u It is therefore the universal character of the origin of the commoditiesspan style="font-weight: bold; font-style: italic;" [also translated as: "characterized by the many-sided character of its origins],/span the existence of the market as world-market, which distinguishes the process of circulation of industrial capital. /u/blockquote/spanMarx's point is here is not that they follow the same conditions of production but rather that they compete. They compete as commodity capital; hence, the unity of total social capital must be thought at the level of the commodity.br /span style="font-size:130%;"br /span style="font-weight: bold;"4. Other thoughts on Chapter Four./span/spanbr /br /Sorry this post is huge. There is not a lot to add from this chapter since I think the main points are covered in Chapter Three.br /br /It is noteworthy that Marx is constantly talking about how the circulation and production processes are interrupted and not internally connected. At one point, Marx writes that the continuity of individual capitals is interrupted on three levels: their quantities, division of portions (I assume how they are invested, consumed and utilized differently) and temporal variations (seasonal work, etc.). Thus Marx is setting the stage for crisis theory, although he will not go into the details yet. He simply points out there is no reason for the market to work. Disequilibrium, not equilibrium, should be the presumed state of affairs.br /br /Near the end, Marx also begs the question of where laborers come from, how the world market has actually worked outside of abstract models (the question of histories).br /br /To cap off this post, I thought I would highlight this line:br /blockquoteAs a matter of fact capitalist production is commodity production as the general form of production. uBut it is so and becomes so more and more in the course of its development only because labour itself appears here as a commodity,/u because the labourer sells his labour, that is, the function of his labour-power, and our assumption is that he sells it at its value, determined by its cost of reproduction. To the extent that labour becomes wage-labour, the producer becomes an industrial capitalist. For this reason ucapitalist production (and hence also commodity production) does not reach its full scope until the direct agricultural producer becomes a wage-labourer./u/blockquoteOne could interpret this to say "capitalism is ONLY when wage-labor appears and the divorce between labor and the means of production are complete." But could one interpret the line "full scope" to suggest that there is such a thing as capitalist production as a less than full scope? The semiproletarianization of some in a system (a total social capital) determined by the real subsumption and proletarianization of others? span style="font-style: italic;"/spanibr //i/l+mpdiv class="blogger-post-footer"img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/3397216998476879819-7612037818278986732?l=capitalreadinggroup.blogspot.com'//div

span style="font-weight:bold;"Part Two: The Turnover of Capital/spanbr /Returning to the text after a six month break has proven to be a little challenging; especially considering this section is rather dry in its object of analysis and Marx’s own method of presentation. Unfortunately I fear that I replicate the rather dry form/content under discussion here in my own engagement with it.br /br /At the most general level, if you look at the Contents page of Vol. II, you notice that Marx is moving through: (1) the specific and interrelated forms/circuits of capital – money, productive and commodity – each with their own necessary function within the dynamic of capital, yet in their interrelatedness, capital cannot be reduced to any one circuit (e.g., see Ch. 4); (2) into circulation (costs) which poses then question; (3) of turnover of capital and the interrelated yet specific temporalities of its components (Fixed/Circulating, production time vs. working period, general circulation, variable capital (and importantly, the location of surplus-value within this temporal dynamic), etc, into finally; (4) the reproduction of total social capital. One can see a similar move here that Marx conducted in Volume One: where the commodity form – the ‘hieroglyph’ of capitalism – opened into ever larger and expansive forms and processes. The task here then is to connect the multiple forms, circuits, and turnovers of capital into a larger and more general process of accumulation and expansive dynamic.br /br /Though somewhat buried in my discussion here, I should emphasize that Marx continues his immanent critique of political economy in order to not only to show the errors of political economy (here, Smith’s conflation of fixed/circulating capital and the displacement of the constant/variable capital component) but to also account for how/why these conflations or lacunae are necessary appearances of the socio-economic form. In other words, that these are not merely falsities, but falsities that are necessary at the level of political economy, industrial book-keeping, accounting, etc. Having read Postone recently, he would differentiate these two into two categorical levels of Marx’s understanding of capital: one of the deep structure of capital (value, labour-power, etc) and the appearances in everyday (prices, wages etc). Thus Marx is working within the conceptual apparatus of political-economy, working through its categorical logic in order to expose spaces through which a deeper structure of socio-economic categories are operating. It’s as if these forms are latent in political-economy itself, without the necessary move to bring these to the fore. With that......br /br /span style="font-weight:bold;"Chapter Seven: Turnover Time/span br /Marx begins by summarizing what was discussed in Chapter Four – namely the dynamics of each specific circuit of capital and their unique qualities. He reminds us that C’...C’ “span style="font-style:italic;"does not begin the process as capital advanced, but as capital value already valorized, as the total wealth existing in the form of commodities, of which the capital value advanced forms only a part. (234)”/span This is important as the commodity circuit necessarily entails prior augmentation – and thus an open and dynamic process of valuation (prior, present and anticipated). While the other circuits were necessary to the overall process due to the specific qualities of their forms and fetishistic effects, they, taken in themselves, appear segmented into a series of similar yet singular circuits; i.e., their beginning component (e.g., P for production, M for money advanced) did not explicitly entail prior augmentation – thus not containing within their specific circuit the opening out and multiplicity of the other circuits. Once again, the commodity stands in as a primary form that contains (or mediates/structures) larger processes.br /br /In contrast to this emphasis on the commodity circuit, Marx returns to the question of how political economy fails to understand the complexities of the interrelated circuits in one dynamic – reminding us that poli-econ and industrialists have fetishized M…M’. This is not just an error though, but is a necessary and real ‘appearance’ (i.e., necessary for the operation of calculation – what Marx earlier had called span style="font-style:italic;"“a symbolic reflection in the imagination”/span p. 211). br /br /With that, Marx begins by defining his concepts. Following classical political economy, turnover here is understood as when “span style="font-style:italic;"the circuit of capital...is taken not as an isolated act but as a periodic process…The duration of this turnover is given by the sum of its production time and its circulation time./span (235)”br /br /He ends this short chapter by noting that while the day “forms the natural measuring unit for the function of labour-power” (think of Ch. 10 of Vol. I), so “the year forms the natural measuring unit for the turnovers of capital in process. (236)” One question would be, why? Additionally, how can we think of this fiscal-year (derived obviously from industrial production) in relation to other temporal forms of capitalism (the temporal compression of financialization, etc)?br /br /span style="font-weight:bold;"Chapter Eight: Fixed/Circulating Capital/spanbr /Building off and clarifying the categories of political economy, Marx notes the distinction between fixed and circulating (or ‘fluid’) capital by noting that fixed entails that a span style="font-style:italic;"“part of its value always remains fixed in it as long as it continues to function, and remains distinct from the commodities that it helps to produce”/span while the latter are span style="font-style:italic;"“all other material components of the capital advanced” (23/span8). Towards the end of the chapter he makes this distinction clearer: “span style="font-style:italic;"The elements of fluid capital are just as permanently fixed in the production process – if this it to be continuous – as are the elements of fixed capital. But while the elements of the form that are fixed in this way are steadily renewed in kind (the means of production by new items of the same kind; labour-power by ever-repeated purchases), the elements of fixed capital are neither themselves renewed as long as they last, nor does their purchase have to be repeated/span. (248)” If I understand this specific distinction correctly, the key point is that fixed capital traverses multiple production processes (the slow wear of a machine which is incrementally transferring its value to a commodity over successive production cycles) as distinguished from the capital outlay which is exhausted within the single production circuit process. Tying together these two forms of capital outlays, both necessary for the production, will allow Marx to pose problems related to the hoard, credit, joint-stock companies, etc.br /br /However, more important than the distinction within fixed/circulating capital, is the distinction between variable/constant capital and fixed/circulating capital – which Smith, Ricardo and others failed to comprehend. Here, he tentatively notes that political economy’s conflation of the two sets emerges from the following points (both originally from Smith); (1) physical immobility is misunderstood as the sole determination of fixed capital, and; 2) that the circulation of value is confused with an inherent property of the material itself – span style="font-style:italic;"“as if things, which are never capital at all in themselves, could already in themselves and by nature be capital in a definite form” (241)/span We will see this repeated again and again in the later chapters.br /br /br /span style="font-weight:bold;"Chapter 9: Overall Turnover of Capital Advanced/spanbr /The logical problem that needs to be answered is, if there are multiple turnovers of fixed/circulating capital, it is “span style="font-style:italic;"necessary…to reduce the separate turnovers of the various parts of the fixed capital to a similar form of turnover, so that these differ only quantitatively, in the duration of their turnover (262)”/span – in other words, to generalize turnover cycles. br /br /This then reveals the necessity of credit (actual and apparent variations of turnovers) as well as business cycles/crisis:br /span style="font-style:italic;"“The result is that with the cycle of related turnovers, extending over a number of years, within which the capital is confined by its fixed component, is one of the material foundations of the periodic *cycle* [German text has ‘crisis’ here] in which business passes through successive periods of stagnation, moderate activity, over-excitement and crisis. The periods for which capital is invested certainly differ greatly, and do not coincide in time. But a crisis is always the starting-point of a large volume of new investment. It is also, therefore, if we consider the society as a whole, more or less a new material basis of the next turnover cycle. (264)”/spanbr /br /If we had more time, it might be useful to think this along with other theories of the ‘business cycle’ and its relation to credit, but that would take us well beyond our general discussion. Another point for consideration is what concept of crisis is being posed here? Obviously, here, crisis actually sustains the system (similar to Schumpeter’s ‘creative destruction’) – where large capital outlays in fixed capital underwrite more specific and periodic interruptions and/or crises of production/circulation. These crises in turn spawn new outlays of fixed capital.br /br /span style="font-weight:bold;"Chapter 10 and 11: The Physiocrats, Smith and Ricardo/spanbr /br /Marx then works through the classical theories of fixed and circulating theories in relation to turnover:br /br /span style="font-weight:bold;"Quesnay:/spanbr /Quesnay proposes the categories of avances primitives and avances annuelles, which Smith would later render as fixed, and circulating respectively. Although Quesnay correctly sees this distinction as internal to production itself (productive capital), he fails to see that this distinction extends beyond agriculture – i.e., the only production that Quesnay sees as ‘productive’ or value creating. It’s interesting to note Marx’s admiration for Quesnay though, as the first person that tried to systematically comprehend the production process – and correctly saw valuation coming from production itself, albeit via agriculture.br /br /span style="font-weight:bold;"Smith/span:br /Smith generalizes these terms, extending them to the economy as a whole, yet with some fundamental errors. Without reproducing the extended criticism that Marx levels at Smith’s theory, suffice it to note that Marx’s main criticism is that Smith fetishizes the fixity (materiality) and circulation (fluidity) of some elements of production and circulation, failing to clarify his terms. Marx argues that he fetishizes these forms span style="font-style:italic;"“as if…[these] characteristic[s] belonged to these things materially, by nature, and did not rather derive from their specific function within the capitalist production process. (281)” /spanbr /br /More importantly, however, this confusion over fluid/fixed capital then gets more muddled in relation to the capital outlay for labour in the production process. Ultimately Smith does not understand wages as circulating capital; rather he finds the commodities that constitute the means of subsistence for the worker as fixed. br /br /“span style="font-style:italic;"…it is only within the production process that the value laid out on labour-power is transformed (not for the worker, but for the capitalist) from a definite, constant quantity into a variable one, and the value advanced in capital value, in capital, is thereby transformed for the first time into self-valorizing value. But because it is not the value laid out on labour-power that Smith defines as a fluid component of the productive capital, but rather the value laid out on the worker’s means of subsistence, it is impossible for him to understand the distinction between variable and constant capital, and thus the capitalist production process in general. The characteristic of this part of capital as variable capital in opposition to the constant capital laid out on the objective elements of product formation is buried underneath the characteristic that the part of capital laid out on labour-power belongs to the fluid part of the productive capital with respect to the turnover. This burial is made complete in so far as in place of labour-power it is the workers’ means of subsistence that are counted as an element of productive capital. (291-92)”/spanbr /br /In other words, this confusion/conflation of various components of fixed and circulating capital WITHIN productive capital, and Smith’s extension of this out into the market, confuses both the dynamic internal to production (and the internal forms of productive capital) and its relation to circulation (i.e., commodity capital). Those following Smith would fail to see capitalist valuation as effected by labour power in the production process, set in motion by variable capital. This is where Ricardo’s labor theory of value comes in – though, as Marx notes here, it replicates Smith’s basic confusion over fixed/circulating.br /br /span style="font-weight:bold;"Ricardo:/spanbr /Ricardo inherits Smith’s conflation of fixed and circulating capital with constant and variable capital. Marx argues that following Smith, Ricardo and other classical economists span style="font-style:italic;"“no longer distinguished at all between the portion of capital laid out on wages and the portion of capital laid out on raw material, and only formally distinguished the former from constant capital in terms of whether it was circulated bit by bit or all at once through the product. The basis for understanding the real movement of capitalist production, and thus of capitalist exploitation was thus submerged at one blow. All that was involved, on this view, was the reappearance of values advanced. (297)”/span br /br /In other words, the categorical distinctions – between fixed/circulating, between that set and the constant/variable set, and the distinction between productive and circulating capital – had delimited the ability to see the relationship between value and labour-power. In one of the more powerful statements from these chapters, Marx argues that without the concept of variable capital, the distinction between value (both as process and objectified) and labour power (the subject of valuation) is lost: span style="font-style:italic;"“if we are to speak of a material difference that affects the circulation process, this is simply that it follows from the nature of value, which is nothing other than objectified labour, and from the nature of self-acting labour-power, which is nothing other than self-objectifying labour, that labour-power constantly creates value and surplus-value as long as it continues to function; that what presents itself on its side as movement, as the creation of value, presents itself on the side of its product in a motionless form, as created value. (300)”/spanbr /br /Along with this obscuring of the valuation process in the conflation of his own categories, Ricardo continues the material fetishism that was seen in Smith earlier – namely the fetish that span style="font-style:italic;"“transforms the social, economic character that things are stamped with in the process of social production into a natural character arising from the material nature of these things. (303)”/spanbr /br /Marx ends the chapter on Ricardo with a general statement on the errors of classical political-economy following Smith (304-5):br /(1) span style="font-style:italic;"“The distinction between fixed and fluid capital is confused with the distinction between productive capital and commodity capital. (304/span)”br /(2) span style="font-style:italic;"“All circulating capital is identified with capital laid out or to be laid out on wages.”/spanbr /(3) The confusion over variable/constant capital and its relation to fixed/circulating capital is eventually reduced to merely fixed/circulating capital. Constant and variable capital is lost.br /br /br /span style="font-weight:bold;"Chapter 12, 13 and 14: The Working Period, Production Time and Circulation Time/spanbr /br / In these chapters Marx distinguishes between multiple temporal periods part and parcel of the larger turnover cycle: (1) working period (not to be confused with the working day), (2) production time, and finally (3) circulation time – each illuminating specific tendencies or compositions of capital outlays. Generally speaking, turnover time, thus, is understood as span style="font-style:italic;"“the sum of its production time and its circulation time. (309)”/spanbr /br /br /span style="font-weight:bold;"(1) Working Period/spanbr /Distinct from the working day (Vol. 1, Ch. 10) the “working period” is “span style="font-style:italic;"the number of inter-related working days required, in a particular line of business, to complete a finished product. (308)”/span This is important because the production process includes multiples interruptions, disturbances or crises – ones that are not recorded within the category of the ‘working day’. This then allows for an analysis of the differential transfer (from means) and creation of (labour) value to commodities over different working periods. br /br /The category of the working-period enframes the relationship between fixed and circulating capital within the production process and allows for an analysis of the differential relationship between the two. For example, Marx, introducing the notion of “reflux,” explains that:br /span style="font-style:italic;"“According to the duration of the working period, and thus also the period till a commodity ready for circulation is completed, the portion of value that the fixed capital surrenders layer by layer to the product mounts up, and the reflux of this portion of value is delayed. This delay, however, does not necessitate a renewed outlay of fixed capital. The machine continues to operate in the production process whether the replacement for its wear and tear flows back quicker or more slowly in the money form. It is different with circulating capital. Here not only must capital be tied up for a longer time, in proportion to the duration of the labour process, but new capital must continually be advanced for wages, raw and ancillary materials. The delayed reflux this has a different effect in the two cases. Whether the reflux is slower or quicker, the fixed capital continues to operate. The circulating capital, on the contrary, becomes unable to function when the reflux is delayed, if it is tied up in the form of unsold, or unfinished and not yet saleable products, and there is no additional capital to renew it in kind. (314)”/spanbr /br /I quoted this as I think this is a clear explanation of these categories within Marx’s larger project. Related to the differential capital outlays that the ‘working-period’ illuminates, Marx also notes the role of credit in this dynamic, and the by-product of concentration and acceleration: br /span style="font-style:italic;"“If the shortening of the working period is thus generally bound up with an increase in the capital advanced for this shorter time, so that the amount of capital advanced increases to the degree that the time of advance is shortened, we should remember that, apart from the total volume of social capital available, it comes down to a question of the extent to which the means of production and subsistence, i.e. disposal over them, are fragmented, or united in the hands of individual capitalists, i.e., the extent reached by the concentration of capital. In so far as credit mediates, accelerates and intensifies the concentration of capital in a single hand, it contributes to shortening the working period, and with this also the turnover time. (313)”/spanbr /br /br /span style="font-weight:bold;"(2) Production Time/spanbr /Production time is the working day plus those interruptions or natural developments (chemical reactions, fermentation, etc) necessary for the creation of a final commodity. This differentiates how the productive capital is actually applied in the production process, here as two periods: span style="font-style:italic;"“a period in which the capital exists in the labour process, and a second period in which its form of existence – that of an unfinished product – is handed over to the sway of natural processes, without being involved in the labour process. (317)/span” In other words, span style="font-style:italic;"“the working period and the production period do not coincide (317).”/span This divergence illuminates variations in different production processes (industry proper, transport, agriculture, etc) and how specifically the outlay of circulating capital is unique to that specific branch.br /br /Here Marx reintroduced the role of the productive stock and its function in relation to the variations in production time. What’s interesting is that, just as credit allows for the extension of turnover time, this often takes the form of a productive stock – adding yet another intersection between multiple (synchronic) circuits, here, one between an extended production process and the market conditions that affect the acquisition of this stock. The reason I think this is important is this is yet another sight that makes this a general form of multiple capitals in relations to each other – here linking production and circulation; in other words, we move out of the realm of an individual capital circuit and into a much larger (and determinative) social process. This also sets the stage for the later discussion of how Dept I and Dept II are related. Anyway, here, after discussing market conditions, transport, proximity to market, etc Marx writes: br /br /span style="font-style:italic;"“All these circumstance affect the minimum capital that must exist in the form of productive stock, and thus the period of time for which advances of capital have to be made, and the volume of capital that has to be advanced at once. This volume, which also has an effect on the turnover, is determined by the longer or shorter time for which circulating capital is tired up in the form of productive stock, as only potentially productive capital. On the other hand, in so far as the extent of this stagnation depends on the greater or lesser possibility of rapid replacement, on market conditions, etc. it itself arises from the circulation time, from circumstances that pertain to the circulation sphere. (323)” /spanbr /This also opens the possibility of the onset of crisis not so much from overproduction, but of the inability to replenish the productive stock in an extended production time. br /br /br /span style="font-weight:bold;"(3) Circulation time/spanbr /Circulation time is understood as a dual process: selling time (as commodity capital) and buying time (conversion into money capital). As for the former, Marx notes again that it is essential that an individual capital finds an outlet for their commodity capital; in effect they are exposed to market conditions – not is the outlet itself necessary for the reproduction/accumulation of capital, but that within the time it takes to deliver the commodity, market conditions (prices) can fluctuate. Under the rubric of selling time, Marx outlines multiple factors that affect the relative difference of selling time between individual capitals: distance of market, means of communication and transport (span style="font-style:italic;"“the speed of movement in space is accelerated, and spatial distance is thus shortened in time” p. 327/span), etc. However, the most interesting aspect is how this takes on a general social process of successive waves of goods constantly entering/exiting the market. For those interested in social geography, Marx’s description on pages 328-329 of this process – both of acceleration and spatial concentration – is interesting. As Marx connects selling time (commodity capital) to its necessary component, buying time (money capital), he makes the following observation:br /br /span style="font-style:italic;"“If the progress of capitalist production and the consequent development of the means of transport and communication shortens the circulation time for a given quantity of commodities, the same progress and the opportunity provided by the development of the means of transport and communication conversely introduces the necessity of working for ever more distant markets, in a word, for the world market. The mass of commodities in transit grows enormously, and hence so does the part of the social capital that stays for long periods in the stage of commodity capital, in circulation time – both absolutely and relatively. A simultaneous and associated growth occurs in the portion of social wealth that, instead of serving as direct means of production, is laid out on means of transport and communication, and on the fixed and circulating capital required to keep these in operation. (329)”/spanbr /br /br /As for buying time – Marx notes that the spatial distance between production and market not only causes a delay of selling time, but also a delay of the conversion of capital back into its money form (or at least its destination as a reinvestment in the new production circuit). He notes how if trade between nations occurs, not only do the products have to reach market, but the payment also has to return to the site of production – thus a delay before that money returns to begin a new production cycle – what he calls the span style="font-style:italic;"“delayed reflux of money”/span 331). Marx notes that because of this delay, credit is essential for keeping the continued process of capitalist production going – above and beyond the double-delay in circulation time. It is interesting to think how the financialization of the world economy has affected this process, both in the emphasis of finance speculation, but also through technology harnessed. How do contemporary production circuits experience this differential at the level of selling/buying time that Marx is emphasizing here? Is the latter obliterated, while the former remains (Wal-Mart production in the SOE’s of China, etc)? What crisis-possibilities can we imagine now through Marx’s understanding of circulation time?br /br /Finally, Marx notes that political-economy often overlooks this constant process of capital moving through its multiple forms (money, productive and commodity) and that the money form’s constant presence in this process – as credit, at purchase, etc - is “span style="font-style:italic;"very necessary for the understanding of the bourgeois economy. (333)”/spanbr /br /span style="font-weight:bold;"Chapter 15: Effect of Circulation Time on the Magnitude of the Capital Advanced/spanbr /br /The problem here is “span style="font-style:italic;"the influence of circulation time on the valorization of capital”/span (334). I found this chapter mind-numbing, with Marx working through the intricate differences between the composition of capital and its forms within various turnover scenarios. For those interested, you can jump to page 355 for the results of his analysis. br /br /The most important aspect in this exposition is that, as a general rule, capital is set free via the turnover process (and necessarily so as it functions to continue reproduction). Marx traces this process as capital moves through its various forms and, more importantly, the composition of its forms within a larger process of reproduction. He summarizes:br /br /span style="font-style:italic;"“as far as he total social capital is concerned, considering the fluid part of this, the setting-free of capital is the rule, while the simple mutual replacement of portions of capital functioning successively in the production process must form the exception. For the equality of working period and circulation period, or the equality of circulation period and a whole number of working periods, in other words a regular proportion between the two components of the turnover period, has nothing at all to do with the nature of the case, and can therefore occur, by and large, only exceptionally….A very significant portion of the social circulating capital, which is turned over several times in the year, will thus periodically exist in the course of the annual turnover cycle in the form of capital set free. (355)”/spanbr /br /Why is this important? This “set-free” capital – or the social circulating capital – becomes the credit in which the system can maintain itself at the level of interruptions/delays at the level of multiple individual capitals. Additionally, Marx notes how the contraction of the turnover period creates a ‘surfeit’ of money capital. In a passage that differentiates between relative surplus and surfeit money capital, Marx writes:br /br /span style="font-style:italic;"“We can see from this how a surfeit of money capital can arise – and not only in the sense that the supply of money capital is greater than the demand for it; the latter is never more than a relative surplus, which is found for instance in the depressed period that opens the new business cycle after the crisis is over. It is rather in the sense that a definite part of the capital advanced is superfluous for the overall process of social reproduction (which includes the circulation process), and is therefore precipitated out in the form of money capital; it is thus a surplus which has arisen with the scale of production and prices remaining the same, simply by a contraction in the turnover period. The mass of money in circulation, whether this is larger or smaller, does not have the slightest influence on this. (358)”/spanbr /br /This chapter ends with Marx looking at various cases of how price is affected by circulation/turnover fluctuations. I have to admit that I glossed over this section as I am more interested in the ‘transformation problem’ (value into price) that so many have harped on (Bohm-Bawerk, Sweezy), rather than the fluctuation of price in relation to circulation/turnover fluctuations. But maybe I missed something important…..Andy?br /br /span style="font-weight:bold;"Chapter 16: The Turnover of Variable Capita/spanlbr /br /Returning to the distinction between fixed/circulating capital and variable/constant capital, Marx notes that:br /br /span style="font-style:italic;"“What these two parts of the circulating capital – the constant and the variable – have in common, and what distinguishes them from fixed capital, is not that the value they have transferred to the product is circulated by commodity capital, i.e. circulates through the circulation of the product as a commodity. A portion of the product’s value, and hence of the product itself circulating as a commodity, of the commodity capital, always consists of the wear and tear of the fixed capital, or the part of the fixed capital’s value that it has transferred to the product in the course of production. The difference is rather that the fixed capital continues to function in the productive process in its old shape through a longer or shorter cycle of turnover periods of the circulating capital (=circulating constant+circulating variable capital), while any single turnover has as its precondition the replacement of the entire circulating capital that enters the circulation sphere from the production sphere in the shape of commodity capital. (370)”/spanbr /br /With this restated distinction, Marx then turns to dealing with variable capital’s function/transformation within the turnover period. The most important section being where Marx distinguishes, within the component of advanced capital, that surplus-value is ONLY produced when applied. This is Marx’s answer to Ricardo/Smith and others who had conflating the fixed/circulating and variable/constant distinction:br /br /span style="font-style:italic;"“The circumstances that differentiate the ratio between the advanced and the applied variable capital affect the production of surplus value – at a given rate of profit – only in so far as they differentiate the amount of variable capital which can actually be applied in a definite period of time, e.g. in one week, five weeks, etc. The variable capital advanced functions as variable capital only to the extent that it is actually applied; not during the time for which it remains advanced in reserve without being applied. But all circumstances that differentiate the ration between advanced and applied variable capital can be summed up in the difference in turnover periods (determined by a difference either in working periods or in circulation periods, or in both). The law of surplus-value production is that, with the same rate of surplus-value, equal amounts of functioning variable capital create equal masses of surplus-value. So if equal amounts of variable capital are applied by capitals A and B for the same space of time at the same rate of surplus-value, then they must produce equal amounts of surplus-value in this time, no matter how different may be the ratio between the variable capital applied in the time in question and the variable capital advanced during the same time, and hence how different also the ration between the mass of surplus-value produced and the total variable capital advanced, rather than that actually applied. (374-5)”/spanbr /br /From this distinction between advanced and applied, Marx moves into various examples of how this effects the turnover of variable capital, which leads him to posit an equation outlining the annual rate of surplus value, or S’: S’ = s’vn/v = s’n, wherein s’ = real rate of surplus-value, v=variable capital advanced and n=annual number of turnovers. Thus if there is only one turnover in the year (n=1), you get S’=s’ x 1 = s’. In other words, turnover affects the annual rate of surplus-value even if the mass of surplus value remains the same across individual capitals. To clarify the definition of advanced, Marx reminds us that this span style="font-style:italic;"“capital value is always advanced and not genuinely spent, in that one this value has gone through the various phases of its circuit/span [e.g., M – P – C – back to M] span style="font-style:italic;"it returns again to its starting-point, and moreover, it does so enriched with surplus-value. This is what characterizes it as advanced. (382)”/spanbr /br /In the section on the turnover of individual variable capital, Marx reminds us that based on the turnover period, and the resulting augmentation of value through this circuit, that in its own turnover cycle, it is a completely NEW value created; a different value, yet still in the same form (variable capital – see 386).br /br /The last few pages of this chapter has some really interesting observations related to the turnover of variable capital:br /br /a) Marx suggests that in a communist society (a rare projection for him) through planning span style="font-style:italic;"“the society must reckon in advance how much labour, means of production and means of subsistence it can spend, without dislocation, on branches of industry which, like the building of railways, for instance….” “In capitalist society, on the other hand, where any kind of social rationality asserts itself only post festum, major disturbances can and must occur constantly…(390)”/span br /br /b) The notion of effective demand emerges to show how “prices rise, both for the means of subsistence and for the material elements of production. During this time, too, there are regular business swindles, and great transfers of capital. (390)” On the next page, Marx ties effective demand, wages, and the reserve army of workers into the fluctuations of prices, demand and wages. br /br /c) In a long footnote Engels includes some cursory notes on contradiction and crisis that Marx had jotted down. It reads: span style="font-style:italic;"“Contradiction in the capitalist mode of production. The workers are important for the market as buyers of commodities. But as sellers of their commodity – labour-power – capitalist society has the tendency to restrict them tot heir minimum price. Further contradiction: the periods in which capitalist production exerts all its forces regularly show themselves to be periods of over-production; because the limit to the application of the productive powers is not simply the production of value, but also its realization. However the sale of commodities, the realization of commodity capital, and thus of surplus-value as well, is restricted not by the consumer needs of society in general, but by the consumer needs of a society in which the great majority are always poor and must always remain poor. This however belongs rather to the next Part. (391)”/spanbr /br /span style="font-weight:bold;"Chapter Seventeen: the Circulation of Surplus-Value/spanbr /br /Here Marx is trying to logically explicate accumulation within the conceptual apparatus he has outlined thus far. This provides a transition into Part Three, which will deal with simple reproduction and accumulation at the level of society. br /br /Marx is outlining an expanding and accelerating system of interconnected turnovers; where one capital emerges from a turnover cycle with real accumulation (in money) this then becomes the basis for credit to someone else. Marx returns to the stages of the development of the surplus money capital: in its most basic form, the latent hoard – but in its expanded social form – social capital (most clearly expressed in credit). br /br /Marx then moves into preliminary outlining simple reproduction and accumulation (i.e. capitalization of surplus-value)br /br /span style="font-weight:bold;"Simple Reproduction:/spanbr /Surplus value is consumed unproductively by its span style="font-style:italic;"“owners, the capitalists. (399)”/span However, the bulk of this section seems to be a working through of the problem of reproduction in regards to the assumption that span style="font-style:italic;"“the total quantity of money must be equal to the quantity of money required for circulation plus a sum of money existing in the hoard form which increases or decreases according to the contraction or expansion of circulation…(403)”/span In other words, if money is hoard, or value unproductively consumed by the capitalist class, from where does the money come from that replaces/sustains reproduction? In critiquing Tooke, Marx argues that the span style="font-style:italic;"“question is not: here does surplus-value come from? But rather: were does the money come from which it is turned into? (404)/span” Tooke and other have failed to deal with this question – and Marx provides a curious answer – the problem itself does not exist:br /br /span style="font-style:italic;"“the general answer has already been given: if a mass of commodities of x times £1,000 is to circulate, it in no way affects the quantity of money needed for this circulation whether the value of this commodity mass contains surplus-value or not, or whether the mass of commodities is produced under capitalist conditions or not. Thus the problem itself does not exist.” He continues later “there does exist, from the standpoint of capitalist production, the semblance of a special problem. For here it is the capitalist, the man who casts the money into circulation, who appears as the point of departure. The money that the worker spends in payment for his means of subsistence existed previously as the money form of the variable capital, and was therefore originally cast into circulation by the capitalist as a means of purchase or payment for labour-power. (407-9).”/span br /br /The worker’s payment for his means of subsistence is only secondary (think of Smith’s error outlined before) – rather span style="font-style:italic;"“In point of fact, paradoxical as it may seem at the first glance, the capitalist class itself casts into circulation the money that serves towards the realization of the surplus-value contained in its commodities. But note well: it does not cast this in as money advanced, and therefore not as capital. It spends it as a means of purchase for its individual consumption. Thus the money is not advanced by the capitalist class, even though this class is the starting-point of its circulation. (409)”/spanbr /br /Here is a great example of Marx’s mode of immanent critique – where taking the problem posed by Tooke and others as, at one level, a false question, but accounting for why there is a ‘semblance’ at the level of appearance (i.e., political economy). br /br /span style="font-weight:bold;"Accumulation and Expanded Reproduction/spanbr /Marx makes the (logical) transition to accumulation by positing a historical moment of development:br /br /span style="font-style:italic;"“Hence the increased supply of precious metals from the sixteenth century onwards was a decisive moment in the historical development of capitalist production. In so far as we are dealing with the further supply of money material needed on the basis of the capitalist mode of production, we can say that on the one hand surplus-value is cast into circulation in the product without the money for its conversion, while on the other hand surplus-value in gold is cast into circulation without its previous transformation from product to money. (418)”/spanbr /br /The distinction between unproductive surplus-value (capitalist consumption) and productive surplus-value (reinvestment) is a matter of application since it exists in both forms. br /br /Towards the end of this section Marx returns to the necessary function of credit in expanded reproduction, and this can only happen with a diversification of forms of surplus-value (what was called ‘capital set free’) into various bearers of value, since expansion would clearly run into limitations of metallic money production/circulation. Marx notes that capitalists span style="font-style:italic;"“all possess a certain money fund which they cast into the circulation sphere as means of circulation for their consumption, and of which each receives a certain part back again from the circulation sphere. But this monetary fund is then precisely a circulation fund, acquired by the conversion into money of surplus-value…(422-423)/span. Specific examples are: (1) bank deposits, (2) government bonds and (3) shares. He argues “span style="font-style:italic;"In all these cases, there is no storage of money, and what appears on the one hand as storage of money capital appears on the other hands as the continuous real expenditure of money. Whether the money is spent by the person it belongs to, or by other people, by people in debt to him, does not affect the situation. (423)” /spanbr /br /This rather short section on understanding the circulation of surplus-value in regards to accumulation (in contrast to simple reproduction) sets us up for Part Three – The Reproduction and Circulation of the Total Social Capital.div class="blogger-post-footer"img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/3397216998476879819-8988422877225835638?l=capitalreadinggroup.blogspot.com'//div

The Urban Roots of the Fiscal Crisis
Lecture by David Harvey
The American University of Beirut
May 29, 2009

Sponsored by The Masters in Urban Planning and Policy and Urban Design in the Department of Architecture and Design and the Center for American Studies and Research.

Marx ends this chapter by saying "The circuit of productive capital is the form in which classical Political Economy examines the circular movement of industrial capital."br /br /I interpreted this chapter as how individual, industrial capitalists view the circuit of capital. It is important to bear this in mind, as money takes on a different function than it did in the last chapter, which was viewed from the standpoint of circulation and the market.br /br /But Marx clearly writes at one point that productive capital is indifferent to circulation. For instance: "For as soon as C' has been sold, been converted into money, it can be reconverted into the real factors of the labour process, and thus of the reproductive process. Whether C' is bought by the ultimate consumer or by a merchant for resale span style="font-weight: bold; font-style: italic;"does not affect the case"/span (156). Once a commodity is expelled into circulation, the industrial/individual capitalist just does not care.br /br /This indifference is detrimental to the capitalist, expressed most clearly in the form of crisis. Marx seems to presage his later remarks in volume III on the tendency of the falling rate of profit. For here, he simply limits himself to a few comments on how a focus on production to the exclusion of circulation and non-production factors (e.g. the market) can produce crisis. And crisis for Marx represents the most scathing critique of classical political economy's idea that supply and demand regulates the economy, or that production is always simple and premised upon the consumption and hence minimal existence of producers: "And this is something very different from production and even commodity production, which has for its end the existence of the producer. A replacement — commodity by commodity — thus contingent on the production of surplus-value span style="font-style: italic; font-weight: bold;"is quite a different matter/span from the bare exchange of products brought about merely by means of money. But the economists take this matter as proof that no overproduction is possible" (155).br /br /The exclusive focus on exchange-value over use-value results in capitalists producing without regard for external conditions. Products begin to lie unsold, prices are slashed, it snowballs and hence "crisis breaks out." It is interesting to note that in the early twentieth century, a debate existed over whether this phenomenon should be labeled underconsumption or overproduction. The stakes are pretty simple: one blames consumers, one blames producers. If you side with the Marxian stand that these things are determined by the logic of production and not a logic of consumption, then you probably wind up with some variation of the overproduction thesis. Again, Marx goes into this with more detail in Volume III.br /br /For now it enough to ask why there is this chain effect of price slashing and crises. Why won't supply and demand correct itself? It is because, as producers, the capitalists' exclusive concern is not to correct an overall imbalance between production and consumption; their concern has to do with "the absolute necessity of transforming commodities into money." This is, simply, competition: "the constant enlargement of his capital becomes a condition for its preservation" (159).br /br /It is important to note here NOT that historical reality is really so simple as to be determined by a single force or mechanism. It is rather to say that, among the several tendencies acting upon the economic and social, there is the tendency of industrial capitalists, and we need sufficient analytical rigor to separate and analyze that logic as one of many several logics overdetermining given historical circumstances.br /br /This is related to the change of tone when discussing money. Money has only limited functions for the capitalist: as the end of the process (at which time, it expects money to do nothing) and at the beginning of the process (at which time, it converts the money into commodities like labor power and means of production). Looking at the latter as the primary function of money for the capitalist, money can do one of two things: convert itself into mp or L,span style="font-style: italic; font-weight: bold;" OR/span wait until later to be converted. This is the hoarding function.br /br /But is this money as converter/hoarde a different money than the money which circulated in chapter one? Nope. MATERIALLY, they are the same thing. They play different functions but remain the same, and hence we must be careful not to reify money as money outside of money for production, money for commodities, etc. etc.:br /blockquoteHere the money-function and the commodity-function are at the same time functions of commodity-capital, but solely because they are interconnected as forms of functions which industrial capital has to perform at the different stages of its circuit. It is therefore wrong to attempt to derive the specific properties and functions which characterise money as money and commodities as commodities from their quality as capital, and it is equally wrong to derive on the contrary the properties of productive capital from its mode of existence in means of production" (161)./blockquotebr /But based on the interior logic of money and commodities, we do not see production. Money and commodities, reified as objects, cannot express the surplus-value and dead labor contained in them. They are only "money which breeds money"; money always appears as only M, and never M' or M+m.br /br /By upholding the process behind money, as well as the implication that money is merely an evanescent form of capital, the reified and fetishized appearance suddenly changes. Marx even calls this a "critique": "The semblance of independence which the money-form of capital-value possesses in the first form of its circuit (the form of money-capital) disappears in this second form, which thus is a critique of Form I and reduces it to merely a special form" (154).br /br /Other notes:br /br /span style="font-weight: bold;"Page 144:/span A contrast between industrial/capitalist and agricultural production:br /blockquoteThis part of value does not enter into the circulation. Thus values enter into the process of production which do not enter into the process of circulation. The same is true of that part of C' which is consumed by the capitalist in kind as part of the surplus-product. But this is insignificant for capitalist production. It deserves consideration, if at all, only in agriculture.br //blockquotespan style="font-weight: bold;"Page 151:/span A meditation on the temporality of the circuit (that each segment must be completed before moving onto the next) and the possibility that such temporality can be changed with the advent of loans and advances.br /br /span style="font-weight: bold;"Page 153: /spanMarx remarks on the presumed stability of the market, which is something outside the capitalists' control. Does this imply that the capitalists require the intervention of non-economic forces, such as the state, to regulate markets?div class="blogger-post-footer"img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/3397216998476879819-6685950867957377787?l=capitalreadinggroup.blogspot.com'//div

I have only skimmed the rant and the stuff about chapter one. I think the most important stuff is contained in the rant.br /br /I haven't read the Thompson but I have read the Althusser lately and understand it better. Logic vs. history is important, and it shows up most clearly in the moments when Marx says things like "so it is presupposed that somehow labor was separated from the means of production" but he refuses to speculate on how that happened. That is of course the lacuna for primitive accumulation and the historical backdrop to these economic models.br /br /I think the more one reads historical work, the more one can pick fights with Marx's arguments about the spread of capital and the function of capital throughout the world. It almost seems like one could use two highlighters to break down the text: blue for capital's logic and green for capital's history. And you could contest the green sections while fully accepting the blue. Or use the green to contest the blue. Is this a dishonest mode of reading? At any rate, I agree that the division between history and logic is, unsurprisingly, well and alive.br /br /I think that this distinction is perhaps what lies behind, for example, the recent call by Geoff Eley for looking closer at histories of capitalism. Namely, he argues that Marx and most Marxists presume capital's pure form to be free labor in urban settings. But if you look at the historical record of the last two centuries, those instances are a minority, at best (sorry for what I'm about to do):br /br /blockquoteOnce we revise our understanding of the early histories of capital accumulation by acknowledging the generative contributions of slavery and servitude, in fact, we have already begun questioning the presumed centrality of waged work in manufacturing, extractive and other forms of modern industry for the overall narrative of the rise of capitalism. By shifting the perspective in that way, we effectively relativize wage labour’s place in the social histories of working-class formation and open our accounts of the latter to other regimes of labour. By that logic, the claim of waged work to analytical precedence in the developmental histories of capitalism no longer seems secure. As it happens, in fact, the de-skilling, de-unionizing, de-benefiting, and de-nationalizing of labour via the processes of metropolitan deindustrialization and transnationalized capitalist restructuring in our own time have also been undermining that claim from the opposite end of the chronology, namely from a vantage-point in the present. Today the social relations of work are being drastically transformed in the direction of the new low-wage, semi-legal, and deregulated labour markets of a mainly service-based economy increasingly organized in complex transnational ways. In light of that radical reproletarianizing of labour under today’s advanced capitalism, I want to argue, the preceding prevalence of socially valued forms of organized labour established after 1945, which postwar social democrats hoped so confidently could become normative, re-emerges as an extremely transitory phenomenon. The life of that recently defeated redistributive social- democratic vision of the humanizing of capitalism becomes revealed as an extremely finite and exceptional project, indeed as one that was mainly confined to the period between the postwar settlement after 1945 and its long and painful dismantling after the mid 1970s. /blockquotebr /So what? One response to Eley has been: "Well if you had been an Asian/non-European historian for the last twenty years, you would've known this all along, genius."br /br /But that is an unacceptable position too. Because the argument that Marx is too Eurocentric ignores the usefulness of span style="font-style: italic;"Capital/spanfor understanding places that, although not a purely capitalist PRODUCERS, are nonetheless enmeshed in capital MARKETS (I made this distinction in my last post). And then combined and uneven development, etc. etc.div class="blogger-post-footer"img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/3397216998476879819-1534941830496969015?l=capitalreadinggroup.blogspot.com'//div

Near the end of Chapter one, Marx demonstrates the simple idea that in the chain ofbr /br /div style="text-align: center;"M-C (P) -C`- M`. M-C (P) -C`- M`. M-C (P) ...etc.br //divbr /that one could either begin with M (money capital) and end with M`; C (commodity capital) and end with C`; or P and end with P.br /br /Is it simply arbitrary how one chooses to break up this series? Isn't it the case that all of these elements merely mutually presuppose one another in an unending cycle of reproduction?br /br /Marx writes that M-C is "not the presupposition, but is rather posited or conditioned by the production process. However, this holds only for this individual capital." In other words, gathering money is a form of preparation, but if you gather money you better damn well have a production process at hand to convert that money into commodities and more money. A capitalist won't get a loan without an idea of how to use that money to make more money. But this is from the standpoint of an individual capitalist.br /br /What about the standpoint of span style="font-style: italic;"total social capital?/span "The general form of the circuit of industrial capital is the circuit of money capital, insofar as the capitalist mode of production is presupposed" (143). Why is this so? I can only guess it has something to do with this line:br /blockquote"The circuit made by money-capital is therefore the most one-sided, and thus the most striking and typical form in which the circuit of industrial capital appears, the capital whose aim and compelling motive — the self-expansion of value, the making of money, and accumulation — is thus conspicuously revealed (buying to sell dearer)" (140). /blockquoteWhat does Marx mean? Only money has the ability to mask the changes done to it, to obliterate the past. When you turn one hundred into $102 does not appear as the $100 principal + $2 increment. It appears as $102. It appears, in fetishized form, as "money breeding money."br /br /On another level, it makes sense that in capital, the imperative is to make money for money's sake, not to produce for production's sake, not to make commodities for commodities' sake. When we speak of total social capital, we are talking about the competition between individual capitals. What drives competition? Not the scarcity of commodities or the imperative to produce. It is the imperative to accumulate wealth.br /br /div style="text-align: center;"span style="font-size:130%;"*/spanbr //divbr /Other comments:br /br /span style="font-weight: bold;"Pages 116 - 118: /spanMarx comments that the M-C-P-C`-M` chain presumes the prior separation between free workers and the means of production. This is the gap filled by primitive accumulation. But it also begs the question (sorry, I'm importing my own intellectual interests here) of what about commodity production that does not presume free labor? Bonded labor, slavery, etc? I suppose those forms assume the separation from the means of production, but they do not presuppose the same iterated process of reproduction that signifies free, wage labor.br /br /span style="font-weight: bold;"Page 120: /spanMarx makes an argument that prioritizes exchange and markets over production itself. Or rather, he makes the midas touch argument: span style="font-style: italic;"once you touch capitalism, you become capitalism./span This is the argument of both the development and underdevelopment schools: "wherever it takes root capitalist production destroys all forms of commodity production which are based either on the self-employment of the producers, or merely on the sale of the excess product as commodities."br /br /At the same time, Marx makes room for the possibility of uneven and combined development -- noncapitalist and precapitalist span style="font-weight: bold;"PRODUCTION/span for capitalist span style="font-weight: bold;"MARKETS/span: "at first apparently without affecting the mode of production itself. Such was for instance the first effect of capitalist world commerce on such nations as the Chinese, Indians, Arabs, etc."br /br /What is the difference between commodity production and capitalist commodity production in this sentence?br /blockquote"Capitalist production first makes the production of commodities general and then, by degrees, transforms all commodity production into capitalist commodity production."br //blockquotespan style="font-weight: bold;"128-9: /spanMarx on how the money form obliterates difference.br /br /span style="font-weight: bold;"130:/span Money has two functions. One, to circulate; two, to "breed" more money. But this second function is actually a function of commodities, not money.br /br /span style="font-weight: bold;"132: /spanThe antinomy between real and formal arises once again.br /blockquote"The change in value pertains exclusively to the metamorphosis P, the process of production, which thus appears as a real metamorphosis of capital, as compared with the merely formal metamorphosis of circulation."br //blockquotespan style="font-weight: bold;"134:/span "The yarn cannot be sold until it has been spun." Capital can only take on one appearance at a time. They are mutually exclusive. This implies the need for temporal sensitivity.br /br /span style="font-weight: bold;"136:/span Marx seems to give a definition of industry as:br /blockquote"The capital which assumes this forms in the course of its total circuit and then discards them and in each of them performs the function corresponding to the particular form, is industrial capital, industrial here in the sense it comprises every branch of industry run on a capitalist basis."/blockquotediv style="text-align: center;"andbr //divblockquote/blockquoteblockquote"Industrial capital is the only mode of existence of capital in which not only the appropriation of surplus-value, or surplus-product, but simultaneously its creation is a function of capital."/blockquotebr /How do we understand this in relation to industry's other: agriculture? What escapes capital in agriculture? Land? The soil? It'll be interesting to see in span style="font-style: italic;"Volume III./spandiv class="blogger-post-footer"img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/3397216998476879819-1513432412957312080?l=capitalreadinggroup.blogspot.com'//div

Video from the City from Below Conference of Professor Harvey’s remarks at the opening plenary. Baltimore, April 18, 2009. Read the transcript. Watch the rest of the plenary.

The Urban Roots of the Fiscal Crisis
Lecture by David Harvey
Harvard University Graduate School of Design
April 16th, 2009

How many fiscal disruptions over the last thirty years have been urban/property led? Why does this particular one takes the form it does? In what ways does this fits into a Marxist theory of urbanization under capitalism?

View the lecture