At a recent talk I gave on
imperialism, there was an interesting question raised on what I thought about
Marx’s theory of value. This seemed to be prompted by my reference to Marx’s
theory, while I spent little or no time using the terminology in Capital.
So the logic of the question was: what is the point of Marx’s theory if one can
do without it when explaining what is going on in the world?
Partly, the question is answered
by saying that one does not always have to use specialist terminology to
express ideas. For example, I have found it to be simpler in presentations to
avoid Marx’s term ‘fictitious capital’, because that concept would take some
time to explain properly and most people are not familiar with it. Even those
who are commonly misunderstand it. Instead, I usually develop the same
ideas more directly through discussing the role played by equities and bonds
and their relationship to what the economy produces. However, the question
needs to be put in a broader context.
Marx’s value theory analyses
social labour under capitalism and the increasingly odd forms that it takes as
capitalism develops: from being represented in the prices of commodities, to
being the source of interest, profits, dividends, rents and tax revenues, to
underlying, in an even more distorted fashion, the prices of financial
securities. Marx’s theory shows how the capitalist market gives the system a
particular dynamic, one that leads to the monopolisation of production and the
creation of a world market as capital accumulates. The labour embodied in
commodities may not tally directly with the prices they command in the market,
but those (relative) prices remain strongly influenced by changes in social productivity.
Furthermore, we get a longer-term process by which barriers to capitalist
production are set by the tendency of the rate of profit to decline. Since the
logic of capitalist production is to make a profit, this is the key underlying
problem for capitalism as a social system. It is one that the (sometimes)
well-meaning reformers of the system do not want to contemplate, so they
exclude this from their analysis or go out of their way to deny this does, or
even could, happen.
These fundamental features of
capitalism analysed by Marx remain in place, although the system has of course
developed a great deal in the 150 years since Capital was written.
The changing forms of capitalism have led many to argue that Marx’s theory
is outdated or invalid today. But a proper Marxist analysis examines the dynamic
of the system and the new forms that evolve out of the old, rather than
simply to judge whether contemporary capitalism fits completely with an earlier
conception of it.
In Capital Volumes 1, 2
and 3, Marx did not investigate relationships between countries in the world
market. Some of this was done outside the three volumes, and plans for later
volumes included a more systematic coverage of the state, foreign trade and the
world market. So, for example, in Capital there was no real discussion of
colonies, just brief mentions, nor much on monopoly or national differences in
wages.
Lenin updated aspects of Marx’s
work in his 1916 pamphlet Imperialism, drawing on other analyses. He
correctly put greater emphasis on the division of the world economy between
oppressed/oppressor nations, the territorial division of the world between the
major powers, the propensity to war, on monopolies, bank/industrial capital and
a ‘financial oligarchy’. This was a key advance in the analysis, and consistent
with the idea of Marx’s value theory as being a theory of the evolution of and
barriers to the capitalist system – hence Lenin’s term ‘moribund capitalism’.
Many aspects pointed out by Lenin remain relevant today, even though these
century-old forms have, of course, also developed. There is now a largely
post-colonial world, although most countries are still clearly underdogs in the
imperial hierarchy. There remains a propensity to war, but now with many wars
by proxy, sponsored by the major powers.
I have some differences with
Lenin’s analysis, as explained in my book, The City: London and the Global
Power of Finance, especially on his understanding of finance, which was
taken largely from Hilferding. However, perhaps Lenin’s greatest weakness was
his analysis of the ‘labour aristocracy’, the unconvincing notion of how a
labour elite getting the benefits of imperial privilege influences the
broader working class with their pro-imperialist views. Even in Lenin’s time it
would have been more convincing to have taken into account how the mass of
people in rich countries were patriotic for their own reasons, ones that had a
strong basis in reality rather than a supposedly infectious ideology. They saw,
and still see, their economic interests tied up with that of their own states,
and they benefit in their wages and welfare conditions from this imperial privilege.
That is another sign of how it is important to conduct a thorough analysis.
I rely on Marxist concepts as
starting points for understanding the world today because they provide the best
way to explain what is going on. However, this is not to say that one can find
the detailed answers in a particular volume of Capital. To think so
would be almost as bad as believing in the prophecies of Nostradamus. Instead,
the significance of Marx’s theory is that it so clearly spelled out the dynamic
of capital accumulation that, much more than one might think plausible, his
analysis provides key building blocks from which to understand major features
of the world economy today.
Whether I use terms from Marx’s
value theory in my analysis, and which terms, depends on the context in which I
make my argument and how much time there is to do so. In any case, Marx’s work
is used as just described. His concepts, like Lenin’s, might need to be amended
– perhaps even rejected – according to an assessment of how the world has
developed since they wrote.
The observation that capitalism
in various forms has been around for several hundred years is commonly seen as
an argument that it will go on forever; that it is an eternal, natural system
for organising the economy. While economic crises are an undeniable reality and
sometimes bring protests, there remains little understanding or acceptance of
the Marxist conclusion that capitalist social relations are an increasingly
dysfunctional, reactionary way in which to organise the affairs of humanity.
Tony Norfield, 1 March 2017
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