[valuenotes]

“Political economy has generally been content to take, just as they were, the terms of commercial and industrial life, and to operate with them, entirely failing to see that by so doing it confined itself within the narrow circle of ideas expressed by those terms. Thus, though perfectly aware that both profits and rent are but sub-divisions, fragments of that unpaid part of the product which the labourer has to supply to his employer (its first appropriator, though not its ultimate exclusive owner), yet even classical political economy never went beyond the received notions of profits and rents, never examined this unpaid part of the product (called by Marx surplus product) in its integrity as a whole, and therefore never arrived at a clear comprehension, either of its origin and nature, or of the laws that regulate the subsequent distribution of its value.”

— Engels, preface to the English edition of capital volume I

[valuenotes]

Hitherto we have investigated how surplus-value emanates from capital; we have now to see how capital arises from surplus-value. Employing surplus-value as capital, reconverting it into capital, is called accumulation of capital. [1]

First let us consider this transaction from the standpoint of the individual capitalist. Suppose a spinner to have advanced a capital of £10,000, of which four-fifths (£8,000) are laid out in cotton, machinery, &c., and one-fifth (£2,000) in wages. Let him produce 240,000 lbs. of yarn annually, having a value of £12,000. The rate of surplus-value being 100%, the surplus-value lies in the surplus or net product of 40,000 lbs. of yarn, one-sixth of the gross product, with a value of £2,000 which will be realised by a sale. £2,000 is £2,000. We can neither see nor smell in this sum of money a trace of surplus-value. When we know that a given value is surplus-value, we know how its owner came by it; but that does not alter the nature either of value or of money.

In order to convert this additional sum of £2,000 into capital, the master-spinner will, all circumstances remaining as before, advance four-fifths of it (£1,600) in the purchase of cotton, &c., and one-fifth (£400) in the purchase of additional spinners, who will find in the market the necessaries of life whose value the master has advanced to them.

Then the new capital of £2,000 functions in the spinning mill, and brings in, in its turn, a surplus-value of £400.

The capital value was originally advanced in the money form. The surplus-value on the contrary is, originally, the value of a definite portion of the gross product. If this gross product be sold, converted into money, the capital value regains its original form. From this moment the capital value and the surplus-value are both of them sums of money, and their reconversion into capital takes place in precisely the same way. The one, as well as the other, is laid out by the capitalist in the purchase of commodities that place him in a position to begin afresh the fabrication of his goods, and this time, on an extended scale. But in order to be able to buy those commodities, he must find them ready in the market.

His own yarns circulate, only because he brings his annual product to market, as all other capitalists likewise do with their commodities. But these commodities, before coming to market, were part of the general annual product, part of the total mass of objects of every kind, into which the sum of the individual capitals, i.e., the total capital of society, had been converted in the course of the year, and of which each capitalist had in hand only an aliquot part. The transactions in the market effectuate only the interchange of the individual components of this annual product, transfer them from one hand to another, but can neither augment the total annual production, nor alter the nature of the objects produced. Hence the use that can be made of the total annual product, depends entirely upon its own composition, but in no way upon circulation.

The annual production must in the first place furnish all those objects (use values) from which the material components of capital, used up in the course of the year, have to be replaced. Deducting these there remains the net or surplus-product, in which the surplus-value lies. And of what does this surplus-product consist? Only of things destined to satisfy the wants and desires of the capitalist class, things which, consequently, enter into the consumption fund of the capitalists? Were that the case, the cup of surplus-value would be drained to the very dregs, and nothing but simple reproduction would ever take place.

To accumulate it is necessary to convert a portion of the surplus-product into capital. But we cannot, except by a miracle, convert into capital anything but such articles as can be employed in the labour process (i.e., means of production), and such further articles as are suitable for the sustenance of the labourer (i.e., means of subsistence). Consequently, a part of the annual surplus-labour must have been applied to the production of additional means of production and subsistence, over and above the quantity of these things required to replace the capital advanced. In one word, surplus-value is convertible into capital solely because the surplus-product, whose value it is, already comprises the material elements of new capital. [2]

Now in order to allow of these elements actually functioning as capital, the capitalist class requires additional labour. If the exploitation of the labourers already employed do not increase, either extensively or intensively, then additional labour-power must be found. For this the mechanism of capitalist production provides beforehand, by converting the working class into a class dependent on wages, a class whose ordinary wages suffice, not only for its maintenance, but for its increase. It is only necessary for capital to incorporate this additional labour-power, annually supplied by the working class in the shape of labourers of all ages, with the surplus means of production comprised in the annual produce, and the conversion of surplus-value into capital is complete. From a concrete point of view, accumulation resolves itself into the reproduction of capital on a progressively increasing scale. The circle in which simple reproduction moves, alters its form, and, to use Sismondi’s expression, changes into a spiral. [3]

Let us now return to our illustration. It is the old story: Abraham begat Isaac, Isaac begat Jacob, and so on. The original capital of £10,000 brings in a surplus-value of £2,000, which is capitalised. The new capital of £2,000 brings in a surplus-value of £400, and this, too, is capitalised, converted into a second additional capital, which, in its turn, produces a further surplus-value of £80. And so the ball rolls on.

We here leave out of consideration the portion of the surplus-value consumed by the capitalist. Just as little does it concern us, for the moment, whether the additional capital is joined on to the original capital, or is separated from it to function independently; whether the same capitalist, who accumulated it, employs it, or whether he hands it over to another. This only we must not forget, that by the side of the newly-formed capital, the original capital continues to reproduce itself, and to produce surplus-value, and that this is also true of all accumulated capital, and the additional capital engendered by it.

The original capital was formed by the advance of £10,000. How did the owner become possessed of it? “By his own labour and that of his forefathers,” answer unanimously the spokesmen of Political Economy. [4] And, in fact, their supposition appears the only one consonant with the laws of the production of commodities.

But it is quite otherwise with regard to the additional capital of £2,000. How that originated we know perfectly well. There is not one single atom of its value that does not owe its existence to unpaid labour. The means of production, with which the additional labour-power is incorporated, as well as the necessaries with which the labourers are sustained, are nothing but component parts of the surplus-product, of the tribute annually exacted from the working class by the capitalist class. Though the latter with a portion of that tribute purchases the additional labour-power even at its full price, so that equivalent is exchanged for equivalent, yet the transaction is for all that only the old dodge of every conqueror who buys commodities from the conquered with the money he has robbed them of.

If the additional capital employs the person who produced it, this producer must not only continue to augment the value of the original capital, but must buy back the fruits of his previous labour with more labour than they cost. When viewed as a transaction between the capitalist class and the working class, it makes no difference that additional labourers are employed by means of the unpaid labour of the previously employed labourers. The capitalist may even convert the additional capital into a machine that throws the producers of that capital out of work, and that replaces them by a few children. In every case the working class creates by the surplus-labour of one year the capital destined to employ additional labour in the following year. [5] And this is what is called: creating capital out of capital.

The accumulation of the first additional capital of £2,000 presupposes a value of £10,000 belonging to the capitalist by virtue of his “primitive labour,” and advanced by him. The second additional capital of £400 presupposes, on the contrary, only the previous accumulation of the £2,000, of which the £400 is the surplus-value capitalised. The ownership of past unpaid labour is thenceforth the sole condition for the appropriation of living unpaid labour on a constantly increasing scale. The more the capitalist has accumulated, the more is he able to accumulate.

1. “Accumulation of capital; the employment of a portion of revenue as capital.” (Malthus: “Definitions, &c.,” ed. Cazenove, p. 11.) “Conversion of revenue into capital,” (Malthus: “Princ. of Pol. Econ “ 2nd Ed., Lond.. 1836, p. 320.)

2. We here take no account of export trade, by means of which a nation can change articles of luxury either into means of production or means of subsistence, and vice versà. In order to examine the object of our investigation in its integrity, free from all disturbing subsidiary circumstances, we must treat the whole world as one nation, and assume that capitalist production is everywhere established and has possessed itself of every branch of industry.

3. Sismondi’s analysis of accumulation suffers from the great defect, that he contents himself, to too great an extent, with the phrase “conversion of revenue into capital,” without fathoming the material conditions of this operation.

[valuenotes]

[valuenotes]

[valuenotes]

“In our view, the theory explains the present crisis is a way that is both scientifically legitimate and considerably better than the alternatives currently on offer from the Marxist left. A central mechanism of today’s economic crisis is the fact that the rate of profit in the U.S., UK and several other advanced capitalist countries is now falling, and has been falling since the early years of the postwar boom. The theory explains the cause of this fact: the accumulation of invested capital has outstripped the growth of employment, which tends to depress the rate of profit; and the various “counteracting factors” have failed to offset this tendency over any but short periods.2”

— The Unmaking of Marx’s Capital Heinrich’s Attempt to Eliminate Marx’s Crisis Theory

by

Andrew Kliman, Alan Freeman, Nick Potts, Alexey Gusev, and Brendan Cooney 1 (2013)

2 This crisis theory does not counterpose the fall in the rate of profit to credit-market disturbances and other kinds of financial instability, nor does it privilege the former over the latter. Financial instability is a crucial link between the LTFRP and economic crises, as Marx emphasizes throughout much of the final chapter on the LTFRP in Capital, volume 3. The following statements (by Heinrich and the editors of Monthly Review, respectively) wrongly try to counterpose the LTFRP and financial instability: “a systematic treatment of crisis theory is not possible on the immediate basis of the law of the tendential fall in the rate of profit (as suggested by Engels’s edition of the third volume of Capital), but rather only after a presentation of interest-bearing capital and credit” (emphasis in original). “Marx ... never ceased to discard earlier formulations; for example, at the end of his life he was focused on questions of credit and crisis.” For a discussion of the empirical trend in the rate of profit that takes financial investment into account, see Freeman (2012/13). [?]”

[valuenotes]

“Nonetheless, I wish to risk articulating outright the underlying rift that cleaves MMT and Marxism. Marxism attributes the greatest degree of being to immediate material relations and imagines monetary abstraction as a necessary diminishment and volatilization of said relations. By contrast, MMT treats remote obligations to a centralized currency issuer as ontologically prior to any decentered association and sees monetary abstraction as a means to at once socialize and enlarge relations of production and distribution. Hence Marxism assumes that money is a private, alienating, and crisis-ridden exchange relationship that ought to be overcome. Yet MMT holds money to be a boundless public utility that, while by no means untroubled, is well-equipped to actualize radical collectivist ends.

This ontological cleavage becomes clearest in the ways that Marxism and MMT explain employment and unemployment. For the Marxist, employment comes into being through private wage contracts between firms and workers. Unemployment is then understood principally as a negative relation, functioning as a constitutive excess that reciprocally shapes capitalist production and exchange from the outside. For the MMTer, however, unemployment is a positive relation that results from the tax obligation. No unemployed person sits outside this public obligation and government is ultimately responsible for determining the employment level.”

[valuenotes]

“Conventional economics: an ideological instrument that is central to capitalist reproduction

The discourse of conventional economics refers to the current system as ‘the market economy’. It is inadequate, even deceptive: it could equally well describe England in the 19th century, China of the Sung and Ming dynasties and the towns of the Italian Renaissance.

The theory of the ‘market economy’ has always been the backbone of ‘vulgar economics’. This theory immediately eliminates the whole, essential reality – social relationships of production (particularly, ownership as the immediate expression of these relationships, promoted to a sacred principle). It is replaced by the hypothesis of a society constituted by ‘individuals’ (who, in the final analysis, become active agents in the reproduction of the system and its evolution). These ‘individuals’ (homo œconomicus) are ahistorical, identical with those who, since the origins of humanity (Robinson Crusoe) have possessed the same, unchanging qualities (egoism, the capacity to calculate and to make choices that benefit themselves). Thus building the ‘market economy’ on these foundations does not therefore represent a serious formulation of historical and real capitalism. It constructs an imaginary system into which it integrates almost nothing of the essentials of the capitalist reality.

Marx’s Capital unmasks the ideological nature (in the functional sense of the word) of this construction of vulgar economics since Frédéric Bastiat and Jean-Baptiste Say, of which the function has been simply to legitimize the existing social order, likening it to a ‘natural and rational order’.

The later theories of value – utility and the general economic equilibrium, developed in response to Marx in the last third of the nineteenth century, as well as those of their subsequent heir, contemporary mathematicized economics, described as classic, neoclassic, liberal, neoliberal (the name does not really matter) – do not diverge from the framework defined by the basic principles of vulgar economics.

The discourse of vulgar economics helps to meet the requirements of the production and reproduction of actually existing capitalism.

It brings to the force a eulogy of ‘competition’ above everything else , considered as the essential condition of ‘progress’. It denies this attribute to solidarity (in spite of examples from history), which is confined to a straitjacket of compassion and charity. It can be competition between ‘producers’ (i.e. capitalists, without greatly considering the oligopolistic form of contemporary capitalist production) or between ‘workers’ (which assumes that the unemployed, or the ‘poor’ are responsible for their situation). The exclusivity of ‘competition’ is reinforced by the new language (‘social partners’, instead of classes in conflict) as well as by practices – of, among others, the European Union Civil Service Tribunal, which is a fierce partisan of the dismantling of trade unions, an obstacle to competition between workers.

The adoption of the exclusive principle of competition also invites society to support the aim of building a ‘consensus’ that excludes the imaginary prospect of ‘another society’, based on solidarity. This ideology of the consensus society which is well on the way to being adopted in Europe, destroys the transformative outreach of the democratic message. It conveys the libertarian rightwing message that considers the State – of whatever stripe – as ‘the enemy of freedom’ (which should be interpreted as the enemy of the freedom of capital enterprise) while the practice of democracy is amputated from social progress.”

— Samir Amin, Ending the crisis of capitalism or ending capitalism in crisis? (2010)

[valuenotes]

“Moving out of the Crisis of Capitalism or of Capitalism in Crisis?

Behind the financial crisis, a systemic crisis of the capitalism of oligopolies

Contemporary capitalism is first and foremost a capitalism of ‘oligopoles’ in the full sense of the term (which so far capitalism was only in part). What I mean by this is that the ‘oligopoles’ alone command the production of the economic system in its entirety. They are ‘financialised’ in the sense that they alone have access to capital markets. This financialisation grants monetary and financial market – their market, on which they compete with each other – the status of dominant market, which in turn fashions and commands the labour and commodity exchange markets.

This globalised financialisation expresses itself by a transformation of the ruling bourgeois class which has become a rent-capturing plutocracy. The oligarchs are not only Russian, as is too often presumed, but rather and much more so US, European and Japanese. The decline of democracy is the inevitable product of this concentration of power to the exclusive benefit of the ‘oligopoles’.

The new form of capitalist globalisation which corresponds to this transformation – by contrast with the one which characterises the first ‘belle époque’ – is also important to specify. I have expressed it in a sentence: the passage from imperialisms (that of the imperialist powers in permanent conflict with each other) to the collective imperialism of the triad (the USA, Europe and Japan).

The monopolies, which emerge in response to the first crisis of profit rates, constituted themselves on the bases that have reinforced the violence of competition between the major imperialist powers of the time, and led to the armed conflict begun in 1914, which continued through the peace of Versailles and then the Second World until 1945. That is what Giovanni Arrighi, André Gunder Frank, Immanuel Wallerstein and I described already in the 1970s as the “war of thirty years”, a notion that has been taken up by others since then.

By contrast, the second wave of oligopolistic concentration, begun in the 1970s, constituted itself on totally other bases, within the framework of a system which I have described as the ‘collective imperialism’ of the triad (the USA, Europe and Japan). In this new imperialist globalisation, the domination of the centres is no longer exercised by the monopoly of industrial production (as had been the case hitherto) but by other means (the control of technologies, financial markets, access to the planet’s natural resources, information and communications, weapons of mass destruction). This system which I have also described as “apartheid on a global scale” implies a permanent war against the states and the people of the recalcitrant peripheries, a war begun already in the 1990s by the deployment of military control over the world by the USA and their subordinated NATO allies.

According to my analysis, the financialisation of this system is inextricably linked to its clearly oligopolistic aspect. What pertains between them is a fundamentally organic relation. This point of view is not prevalent, neither in the expansive literature of conventional economists nor in the majority of critical writings on the current crisis.”

— Samir Amin, Ending the crisis of capitalism or ending capitalism in crisis? (2010)

[valuenotes]

“The explanation of the theory of value in the Critique is rather different from that in Capital. In the Critique the discussion of commodity fetishism is more closely integrated into the discussion of the theory of value and it is clear that for Marx it is the ‘qualitative’ rather than the ‘quantitative’ dimension that is important: i.e. the theory of value is a theory of the way in which, through money and exchange, private labours are brought into social relation with one another. In Capital the exposition emphasises the quantitative dimension first: the theory of value as a theory of the ratio in which commodities exchange, before discussing the qualitative dimension.”

— Reading guide to 'Capital' - Simon Clarke

[valuenotes]

Or – e.g. Ricardo – since production is itself regulated by the costs of production, it allegedly regulates itself, and if one branch of production does not realize itself then capital withdraws from it to a certain degree and throws itself on another point where it is needed. [30] But apart from the fact that this necessity of evening-up already presupposes the unevenness, the disharmony and hence the contradiction – in a general crisis of overproduction the contradiction is not between the different kinds of productive capital, but between industrial and loanable capital – between capital as directly involved in the production process and capital as money existing (relatively) outside of it.

op

[radicaleconomics]

Political economy is not a science of the relations of things to things, as was thought by vulgar economists, nor of the relations of people to things, as was asserted by the theory of marginal utility, but of the relations of people to people in the process of production.

Isaak Rubin, Essays on Marx’s Theory of Value (1924)

[valuenotes]

In so-called retail trade, in the daily traffic of bourgeois life as it proceeds directly between producers and consumers, in petty commerce, where the aim on one side is to exchange the commodity for money and on the other to exchange money for commodity, for the satisfaction of individual needs – in this movement, which proceeds on the surface of the bourgeois world, there and there alone does the motion of exchange values, their circulation, proceed in its pure form. A worker who buys a loaf of bread and a millionaire who does the same appear in this act only as simple buyers, just as, in respect to them, the grocer appears only as seller. All other aspects are here extinguished. The content of these purchases, like their extent, here appears as completely irrelevant compared with the formal aspect. As in the theory the concept of value precedes that of capital, but requires for its pure development a mode of production founded on capital, so the same thing takes place in practice. The economists therefore necessarily sometimes consider capital as the creator of values, as their source, while at other times they presuppose values for the formation of capital, and portray it as itself only a sum of values in a particular function. The existence of value in its purity and generality presupposes a mode of production in which the individual product has ceased to exist for the producer in general and even more for the individual worker, and where nothing exists unless it is realized through circulation. For the person who creates an infinitesimal part of a yard of cotton, the fact that this is value, exchange value, is not a formal matter. If he had not created an exchange value, money, he would have created nothing at all. This determination of value, then, presupposes a given historic stage of the mode of social production and is itself something given with that mode, hence a historic relation. At the same time, individual moments of value-determination develop in earlier stages of the historic process of social production and appear as its result. Hence, within the system of bourgeois society, capital follows immediately after money. In history, other systems come before, and they form the material basis of a less complete development of value. Just as exchange value here plays only an accompanying role to use value, it is not capital but the relation of landed property which appears as its real basis. Modern landed property, on the other hand, cannot be understood at all, because it cannot exist, without capital as its presupposition, and it indeed appears historically as a transformation of the preceding historic shape of landed property by capital so as to correspond to capital. It is, therefore, precisely in the development of landed property that the gradual victory and formation of capital can be studied, which is why Ricardo, the economist of the modern age, with great historical insight, examined the relations of capital, wage labour and ground rent within the sphere of landed property, so as to establish their specific form.

[valuenotes]

If the capitalist merely executes the logic of capital, then it is not he, but rather capital, self-valorizing capital, that is the “subject” of the process. Marx refers to capital in this regard as the “automatic subject,” a phrase that makes the paradox clear: on the one hand, capital is an automaton, something lifeless, but on the other, as the “subject,” it is the determining agent of the whole process.

As the "dominant subject" (ubergreifendes Subjekt) (Capital, 1:255) in the process of valorization, value needs an independent form and obtains it in money. Money is therefore the starting point and terminal point of the valorization process.

Money was already the independent, if inadequate, form of value within the process of simple circulation. As capital (to repeat: capital is neither money nor commodity taken by itself, but rather the limitless and ceaseless movement of appreciation, M—C—M '), value not only possesses an independent form, it is now “a self-moving substance, which passes through a process of its own,” a rather curious subject with extraordinary powers:

“In truth, however, value is here the subject of a process, in which, while constantly assuming the form in turn of money and commodities, it changes its own magnitude.... By virtue of being value, it has acquired the occult quality to add value to itself.” (Capital, 1:255: corrected translation)

It seems as if value is able to increase itself (some banks use the advertising slogan "let your money work for you” which is characteristic of this illusion). Now let's examine what this "occult quality" rests upon.

4.3 Class Relations: The Worker "Free in the Double Sense"

So far, we have only formally determined what capital is: a sum of value that valorizes itself, that executes the movement M—C—M'. But the question remains, how is this movement at all possible, or to put it another way, where does surplus value come from?

Within the sphere of circulation, valorization would only be possible if commodity C is purchased below its value or sold above its value. In this case, the sum of value advanced can be increased, but one capitalist's gain is only possible if another capitalist takes a loss of the same amount. At the level of society as a whole, the sum of value has not changed; it has simply been redistributed, just as if a simple act of theft had occurred.

Capitalist profit would therefore be explained as a violation of the laws of commodity production. If we assume the normal conditions of commodity production and circulation, then the "exchange of equivalents" applies: the commodities that are exchanged for one another have the same magnitude of value, the price paid is an adequate expression of the magnitude of value of the commodity and does not express a coincidentally greater or lesser magnitude; the commodities are exchanged "at their true values." If surplus value is a normal phenomenon of capitalist commodity production and not just an exception, then its existence must be explained under the presupposition of an "exchange of equivalents” and this is exactly the question that Marx poses.

Marx's deliberations can be summarized as follows: if equivalent exchange is assumed, then surplus value cannot be constituted in circulation, not in the first act of circulation, M—C, nor in the second act, C —M'. A change must take place between both acts. But outside of the sphere of circulation, the use value of the purchased commodity is merely consumed. Thus the owner of money must find a commodity on the market whose use value possesses the quality of being a source of value, so that the use of this commodity creates value, and more value than the commodity itself costs.

Such a special commodity exists. It is the commodity called labor-power. The term labor-power refers to the ability of humans to perform labor, and under the conditions of commodity production, the expenditure of labor can be a source of value. If I sell my labor-power, then I relinquish this ability to someone else for a specific period of time. In the case of selling labor-power, the entire person is not sold (I do not become a slave), but it is also not the case that labor is sold. Labor is the application of labor-power. That only the ability to labor was sold, and not labor itself, is shown among other things by the situation where raw materials are temporarily missing and the owner of money cannot use the labor-power he has purchased.

That the owner of money encounters labor-power as a commodity on the market is not a matter of course. Two conditions have to be satisfied for this to be the case. First, there must be people who act as free proprietors of their own labor-power, who are therefore in a position to sell their labor-power. A slave or a serf is therefore not in such a position, since the sellers of labor-power must be legally free people.

But if these people have means of production at their disposal and can produce and sell their own commodities or can subsist from the products of their own labor, then they will probably not sell their labor-power. They are only driven to sell their labor-power, and this is the second condition, if they do not own any means of production, if they are therefore not only legally free but also free of substantive property. Then they actually treat their labor-power as a commodify. The existence of workers who are "free" in this double sense is an indispensable social precondition of capitalist production.

Thus a specific relationship between social classes underlies the capitalist mode of production: on the one hand, there must exist a class of property owners (owners of money and means of production), and on the other hand there must exist a class of largely propertyless, but legally free workers. This relationship between social classes is usually what is meant when Marx speaks not of capital, but of the capital-relation.

Michael Heinrich, An Introduction to the Three Volumes of Karl Marx’s Capital (2012)

[valuenotes]

The three processes of which capital forms the unity are external; they are separate in time and space. As such, the transition from one into the other, i.e. their unity as regards the individual capitalists, is accidental.

Grundrisse 8

[valuenotes]

“Marx’s labour theory of value is a further development and perfection of the labour theory of value as it emanated from the ‘classical’ school of political economy, and especially of Ricardo’s version. But the changes Marx brought into that theory were manifold. One especially was to be decisive: the use of the concept of abstract social labour as the foundation of his theory of value. It is for this reason that Marx cannot be considered as in any way an ‘advanced neo-Ricardian’. ‘Labour quantities as the essence of value’ is something quite different from ‘labour quantities as numéraire ’ –a common measuring rod of the value of all commodities. The distinction between concrete labour, which determines the use-value of commodities, and abstract labour, which determines their value, is a revolutionary step forward beyond Ricardo of which Marx was very proud; indeed he considered it his main achievement, together with the discovery of the general category of surplus-value, encompassing profit, rent and interest. It is based on an understanding of the peculiar structure of a society of commodity-producers, that is of the key problem of how to relate to each other the segments of the global labour potential of society which have taken the form of private labour. It represents, therefore, together with Marx’s concept of necessary labour and surplus labour (necessary product and surplus product), the key nexus between economic theory and the science of social revolution, historical materialism.”

Ernest Mandel, Introduction to Capital Volume I

[valuenotes]

“In reaction against all those who mistakenly claimed that Volume 1 of Capital was concerned with showing that commodities actually exchange under capitalism according to the quantities of abstract socially necessary labour they contain, some authors have contended that the labour theory of value is concerned only with a qualitative problem and not with a quantitative one, the ‘socially necessary’ labour content of commodities being un-measurable. This bends the stick too far in the other direction. It is true that the quantitative measurement of the labour quantities in commodities is difficult But the difficulty is not so much a conceptual one (one could, for example, start from macro-economic aggregates, the total sum of man-hours spent in the whole realm of material production–industry, agriculture and commodity transport–in a given country, its division between different branches of industry and key groups of commodities, their interrelationship through an input-output table, the labour spent for the average unit produced in ‘autarchic’ branches where no raw material has to be imported from foreign lands, and so climb up towards an estimate of total labour expenditure per branch and per commodity produced…) as one stemming from a lack of accurate information. It will be necessary to ‘open the books’ of all capitalist enterprises and to verify these figures on the basis of shop-floor evidence in order to approach a quantitative measurement of the labour content of commodities in capitalist countries. 40”

Ernest Mandel, Introduction to Capital Volume I

[valuenotes]

“From the place of Volume 1 in the total final plan of Capital , we can immediately draw an answer to two misconceptions which occur again and again in discussion of Marx’s economic theory. It is true that according to Marx and Engels capitalists do not exchange the commodities they own on the basis of their value, whereas under petty commodity production exchange of commodities is roughly based upon their value. 30 But it does not follow at all that Capital Volume 1, which assumes the exchange of commodities according to their value, is concerned with pre-capitalist commodity production and exchange, and that only in Volume 3 do we start to examine what capitalist commodity circulation is all about. On the contrary, Marx abstracts from the problem of redistribution of surplus-value among competing capitalists–that is, the problem of the equalization of the rate of profit–in Volume 1 precisely in order to isolate and demonstrate the laws of capitalist commodity production and circulation in their ‘purest’, most fundamental way.

In the same way it is wrong to assume that Volume 1 deals only with the ‘essence’ or with ‘abstractions’, whereas ‘concrete’ capitalism is analysed only in Volume 3. Nothing could be more ‘concrete’ and closer to immediately perceived economic data (‘appearances’) than the analysis of the working day, of wages and of machinery in Volume 1. Commentators here confuse the type of question solved in Volume 1 with the method of answering. Volume 1 abstracts from capitalist competition, from uneven and combined development and therefore from prices of production and equalization of the rate of profit and even more from market prices, in order to reveal the basic origin of surplus-value in the process of production, which is a process of consumption of labour-power by capital. But this problem is dealt with by a combination of theoretical insight and empirical verification, by a constant attempt to discover the mediating links between ‘essence’ and ‘appearance’, by a thorough analysis of how and why the ‘essence’ (the value of labour-power) is manifesting itself through the ‘appearances’ (the fluctuations of real wages).”

Ernest Mandel, Introduction to Capital Volume I