Response to Harvey, part 2:

The obvious response to the preceding part (here) is that, while I am arguing that Volume One of Capital can be read and understood on its own, Harvey is arguing that capitalism cannot be understood on the basis of Volume One alone. I suspect that that is indeed Harvey’s position. I am not opposed to it. I admit in the Introduction to Marx’s Inferno that “volumes two and three may deepen our understanding of how, according to Marx, capitalism works” (p. 16). However, Harvey’s review of my book does not differentiate between understanding Capital and understanding capitalism. It simply proceeds as if the inability to understand Fordism or consumer society on the basis of Volume One invalidates my claim that Volume One can be read and understood on its own.

I am confident that we have to read much that Marx never wrote in order to understand the vagaries and varieties of twentieth century and contemporary capitalism. Nonetheless, I also think that Marx, in Volume One of Capital, does a better job than those who came before or after at getting at what is wrong with capitalism (of whatever vintage). He is able to do so because (a) he has a better grasp of the fundamental dynamics of the market, the workplace, the pattern of capitalist development, and the role of the capitalist state than most of his competitors, and (b) he shows how all of these offend against the all-too-human desire for freedom from dominating power.

Contra Harvey, the republican inclinations I detect in Capital are not evidence that “Marx went far beyond [the utopian socialist] tradition and reached back to an older tradition of republicanism.” The republican concern for freedom from domination was all over the place in the socialisms of Marx’s day. Marx married this concern for freedom to a systematic dissection of capital. He shows how and why the market dominates the producers, the capitalist and the factory dominate the wage-laborer, and capital comes to dominate the state. Capital doesn’t merely show us how capitalist production works; it shows us why we would, for the sake of freedom, want to get out from under the regime of capitalist production.

This argument prompts Harvey to claim that, while I have rightly drawn attention “to the political in Marx,” I have gone too far in the direction of “dismissing the economic.” I disagree. What I have tried to do, on the contrary, is to show that Marx had a better understanding of economics than Proudhon, the Owenites, or the St-Simonians, precisely because he saw what was political in the economy, and in arguments about the economy.

Take Harvey’s claim, already encountered, that, in Volume One, Marx assumed, contrary to his considered position, that commodities exchange at their values. According to Harvey, Marx did so “in order to make the value theory more palatable to his audience.” This badly misrepresents the political intention and stakes of Marx’s argument. The default position among socialists in Marx’s day was that the suffering and exploitation of workers was attributable to the fact that their labor and their goods were unable to command their fair value on the market. Marx’s insistence on treating prices as if they reflected value would have made his value theory more controversial, not more palatable. Marx was cutting against the grain here, picking a fight. Why? Because the prevailing diagnosis, by harping on the divergence between price and value, missed both the dynamics of the market (by which prices converge on value) and the distinctiveness of capital, which can accumulate without extracting rents, as a form of economic power. Far from soft-pedaling the complexities of his theory, Marx is concerned to confront head-on the weak points of existing socialist theory.

On the same theme, Harvey claims that, by assuming that all commodities exchange at their values, Marx is able to “avoid” the problem of effective demand, and thereby – “on the basis of these assumptions” – to construct “a model of capitalist activity that reflects ‘the hell’ of the laborer.” But, as I argue in Chapter 3, Marx does not “avoid” this problem at all in Volume One. Rather than assuming away the issue, Marx builds it into his accounts of the commodity, of exchange, and of money. (Ironically, Harvey himself points us to two places in Volume One where Marx raises this issue; in neither place does he say, “I will be treating this in Volume Two.”) That “the course of true love never did run smooth” is one of the reasons that using the market to mediate the social division of labor produces anxiety, uncertainty, and slavish watchfulness among those dependent upon the market for their livelihoods.

If every commodity found effective demand awaiting it with open arms, Proudhon’s scheme to “republicanize specie” would work (but would also be unnecessary). If effective demand was assumed into existence by Marx, he could not have produced his account of the production of relative surplus value, since the ratchetting up of productivity could not operate unless more productive firms could gain market share. Finally, if Harvey were right that Marx assumes away the problem of effective demand in Volume One, and that he is only thereby enabled to model capitalist production so as to reflect the hell of the laborer, this would be a damning indictment of Marx’s book. It would mean that Marx’s theory of exploitation, development, and accumulation rests on a premise “simplified even to the point of falsification.”

I happily admit that my reading of Marx’s economic arguments in Volume One is not the standard reading. Nonetheless, it is far from sui generis: it accords with some of the theses advanced by value-form theorists, for one thing. These approaches to Marx situates him as a proto-Austrian rather than a post-Ricardian (yes, I know that will be a controversial claim!), and they transform the reading of both Marx’s value theory and his account of exploitation. These are fundamental economic matters. What my book brings to the table is the additional claim that the political context and intent of Marx’s argument is crucial for understanding the true content of Marx’s position. When you appreciate Marx’s opposition to all the labor-money schemes, and you see what was motivating those schemes to begin with, you are better positioned to understand Marx’s arguments in Part I. When you recognize the contrast between Marx’s approach to exploitation and all of the St-Simonian-inspired accounts of exploitation-as-extortion, you are better able to appreciate the force of Marx’s argument in Part III. That is my gamble, at least: Marx’s political context animates his economic arguments.

In the final part of this reply, I will turn squarely to the relation between Marx’s political context and our own. 

[Addendum: I forgot to include a discussion of primitive accumulation!

Finally, there is the matter of primitive accumulation, which Harvey ties into the same issue of Marx’s simplifying assumptions. According to him, there is a “dramatic shift of assumptions” at the beginning of Part VIII, and “the figures of the usurer, the banker, the merchant, the landlord, the state (and its debt) flood back into the narrative, as does the power of effective demand in the market.” I agree that the landlords and the state are centrally important to Marx’s account of primitive accumulation, and say so in Chapter 6 of my book. Our real disagreement regards the importance of usurers, bankers, and merchants. According to Harvey, it is the autonomous spread of these “antediluvian” forms of capital that drives primitive accumulation: “the spread of commodification and monetization from Europe,” he tells us, “played a necessary even if not sufficient role in the rise of industrial capitalism in Britain,” for it “engendered the demand for wool that led to Britain being overrun by sheep farming.” “Land, labor and money were commodities way before industrial capital came upon the scene,” he continues. “The problem for Marx is to show how these pre-capitalist forms were transformed and adapted to work within the framework of industrial capital.”

There are at least two problems here. First, Harvey claims that, while my reading of primitive accumulation “may be historically true,” it “is not what Marx says.” However, Harvey does not – and cannot – point to anywhere in Part VIII where Marx actually stresses the role of merchants or usurers. Harvey points to the Manifesto, to Volume Three, to the Grundrisse, and complains that I “ignore all of these,” but he fails to show how Marx’s argument in Part VIII depends upon or reproduces Marx’s claims in these other places. In fact, there are only two places in Part VIII where the antediluvian forms of capital play a role in Marx’s presentation, and in both cases it is a distinctly secondary one. First, in Chapter 26, Marx says that the demand for wool in Flanders motivated lords to clear their estates and turn them into sheep pastures. This episode is integral to my own account, so I can’t see what Harvey’s complaint is on this score. Second, in Chapter 31, Marx claims that “The money capital formed by means of usury and commerce was prevented from turning into industrial capital, in the country by the feudal constitution, in the towns by the guild organisation. These fetters vanished with the dissolution of feudal society, with the expropriation and partial eviction of the country population.” In other words, primitive accumulation empowers money capital to begin functioning as industrial capital. Money capital does not, by its own action, dissolve the feudal constitution of society. Marx’s claim here is the very opposite of Harvey’s. If we are talking about what Marx says in Volume One, then I don’t see any justice in Harvey’s criticisms.

More importantly, I think Harvey’s reading of primitive accumulation erases one of the most important aspects of Marx’s argument: the sharp, epochal break between the feudal constitution and the capitalist mode of production. Harvey seems to take me for a Brennerite, who thinks capitalism sprang up in the British countryside and then spread around the globe. This is far from the truth; settler colonialism and slavery and empire were essential to the constitution of capitalism from the very beginning. I will say, though, that what Brenner and his followers get right is that the capital relation that structures production – the relation between wage-labor and capital – is irreducible to either the antediluvian forms of capital or the directly coercive relations of production experienced by serfs, peasants, and slaves. Only once the capital-relation has seized on the production of basic commodities – in the British context, it was corn – can “the spread of commodification and monetization” really take hold. Commodification and monetization are not, according to Marx, autonomous processes. They do not spread by contagion. A revolution in the relations of production is necessary. Yes, Marx does claim that “the circulation of commodities is the starting point of capital.” But, as I argue, he also begins each major section of Volume One with a new origin story for capital: in the circulation of commodities, in the exploitation of labor, in large-scale production, and in the primitive accumulation of the factors of production. Harvey’s reading, by stressing only the first origin, risks making the market into the root cause of evil, and Marx into another socialist moralizer, inveighing against money and commodities, merchants and usurers, cheating and gouging.]