MARX BOOK DAY THIRTEEN

At last, Marx is able to solve the problem that his predecessors scarcely even perceived and for which they had no satisfactory answer, namely whence profit?  An individual entrepreneur may succeed in striking a good bargain with those from whom he buys his inputs or to whom he sells his output, but every such gain is balanced by another entrepreneur’s loss.  The profit in the economy as a whole cannot therefore come from the consumption in production of the non-labor inputs, for by the assumptions of this discussion, they are purchased at their labor value. The profit realized by the entrepreneur must instead come from the consumption of this one peculiar commodity, labor – power, whose consumption does not merely transmit to the product the labor embodied in it but at the same time creates new labor value.

 

Marx notes one oddity of this peculiar commodity, labor – power.  “In every country in which the capitalist mode of production reigns, it is the custom not to pay for labour-power before it has been exercised for the period fixed by the contract, as for example, the end of each week. In all cases, therefore, the use-value of the labour-power is advanced to the capitalist: the labourer allows the buyer to consume it before he receives payment of the price; he everywhere gives credit to the capitalist.”

 

Marx concludes his analysis of the origin of profit thus: “The money-owner buys everything necessary for this purpose, such as raw material, in the market, and pays for it at its full value. The consumption of labour-power is at one and the same time the production of commodities and of surplus-value. The consumption of labour-power is completed, as in the case of every other commodity, outside the limits of the market or of the sphere of circulation.”

 

For the first 140 pages of Capital, Marx has been deploying his considerable literary talents in an effort to persuade the reader that the realm of the marketplace is mystified, not filled with plain, unproblematic bushels of wheat and yards of cloth, but populated by fetishes, by mysterious beings who systematically misrepresent their true nature. This effort is organized by Marx around the attempt to solve a problem that the classical political economists scarcely realized existed, the problem of the source of profit. By turns mocking, mystifying, and didactic, he has finally located the source of profit in the distinction, introduced by him, between labor-power and labor. “Coquetting with Hegel,” as he put it in the preface to the French edition of his book, Marx has striven to undermine the unquestioned assumption of the classical political economists that they were examining a world free of the mystery and miracle of the medieval church. Now, as he concludes this portion of the text, Marx reaches back to the works of Plato for the most powerful and enduring literary representation of the distinction between appearance and reality, The Allegory of the Cave, and in a brilliant inversion of that iconic image, finally reveals the truth about capitalism.

 

Let us take just a moment to remind ourselves of Plato’s Allegory.  In Book 7 of the Republic, Socrates asks Glaucon and Adeimantus to imagine a people chained to the floor of a cave in such a way that they can only look forward to one wall of that cave. Behind them burns a fire which casts flickering images on the wall. Between the fire and the chained men is a parapet, behind which servants walk back and forth holding little models of objects – tables, chairs, and the like – whose shadows are then visible on the wall of the cave. Having lived their entire lives thus chained, the individuals imagine that these images are reality.   One individual is freed from his chains and dragged out of the cave, where he is at first blinded by the light. But as his eyes adjust to the brightness, he finally sees real objects, tables and chairs, whereas before he had seen only shadows of little models of these objects. Eventually, he turns his eyes to the sun itself and recognizes it as the source of all light and truth.

 

This dramatic image, of the brightly lit reality above and the dark, shadowy appearances in the cave below, had for 2000 years been the ruling metaphor in Western philosophy for the distinction between Reality and Appearance.  Now Marx inverts that metaphor to complete his argument.

 

“Accompanied by Mr. Moneybags and by the possessor of labour-power, we therefore take leave for a time of this noisy sphere, where everything takes place on the surface and in view of all men, and follow them both into the hidden abode of production, on whose threshold there stares us in the face “No admittance except on business.” Here we shall see, not only how capital produces, but how capital is produced. We shall at last force the secret of profit making.”

 

“No admittance except on business” is of course Marx’s brilliant rendition of the sign that greets the damned in Dante’s Inferno:  lasciate ogni speranza, voi ch'entrate,  relinquish all hope, ye who enter.

 

“This sphere that we are deserting,” writes Marx, “within whose boundaries the sale and purchase of labour-power goes on, is in fact a very Eden of the innate rights of man. There alone rule Freedom, Equality, Property and Bentham. Freedom, because both buyer and seller of a commodity, say of labour-power, are constrained only by their own free will. They contract as free agents, and the agreement they come to, is but the form in which they give legal expression to their common will. Equality, because each enters into relation with the other, as with a simple owner of commodities, and they exchange equivalent for equivalent. Property, because each disposes only of what is his own. And Bentham, because each looks only to himself. The only force that brings them together and puts them in relation with each other, is the selfishness, the gain and the private interests of each. Each looks to himself only, and no one troubles himself about the rest, and just because they do so, do they all, in accordance with the pre-established harmony of things, or under the auspices of an all-shrewd providence, work together to their mutual advantage, for the common weal and in the interest of all.”

 

This realm, where rule Freedom, Equality, Property, and Bentham, was for Adam Smith, for John Stuart Mill, for David Ricardo, and is for all the neoclassical economists who have followed them, the realm of reality, transparent, rational, un-mystified.  Marx, and Marx alone, recognizes it as nothing more than the flickering of images on the wall of Plato’s cave.

 

Marx now leaves the realm of Appearance and accompanies the capitalist and his employee into the realm of capitalist Reality. 

 

“On leaving this sphere of simple circulation or of exchange of commodities, which furnishes the “Free-trader Vulgaris” with his views and ideas, and with the standard by which he judges a society based on capital and wages,” Marx says, “we think we can perceive a change in the physiognomy of our dramatis personae. He, who before was the money-owner, now strides in front as capitalist; the possessor of labour-power follows as his labourer. The one with an air of importance, smirking, intent on business; the other, timid and holding back, like one who is bringing his own hide to market and has nothing to expect but — a hiding.”

 

There now follow a series of chapters in which Marx expands upon his analysis, leading finally to the great chapter 10, The Working Day, the final page of which brings to a conclusion this dramatic inversion of the ancient distinction between appearance and reality. I shall return to Chapter 10 and discuss it at some length, but now I wish to make an unexpected detour into some rather gnarly mathematical matters. This will take a while, so settle down, get yourself something to drink, cleanse your mind of the metaphors and images that Marx has conjured, and let us return to the formal analysis of Ricardian labor value theory.