History in Capital and Capital in history

By Radhika Desai

In Das Kapital or Capital, Karl Marx resolved the key conundrums of the classical political economy: what was value, where surplus value came from, why crises occurred, why the profit rate declined and how wages were determined – in the only way possible, by exposing its exploitative, crisis-ridden and internationally aggressive character.

Traditional political economy increasingly struggled to legitimize capitalism and when Europe’s capitalist classes needed an alternative, one arrived, as if on cue: a systematization of what Marx had criticized, lambasted and lampooned in Capital as “vulgar economics” particularly in a section about the fetishism of commodities.

We know it today as neoclassical economics. It narrowed the focus of analysis: To exchange, leaving out production. For prices, leaving out values and to the agency of individuals, leaving out classes. Its equilibrium assumptions left out capitalism’s contradictions and crisis. Since they clearly existed, they were considered exogenous, as if striking capitalism from the outside.

Around such an economics, Max Weber, originally trained as an economist, founded a new social scientific division of labor, first hiving off sociology from economics claiming that modern, i.e. capitalist, societies differentiate into autonomous spheres needing separate study. Of course the economy’s autonomy mattered most, permitting capitalists to keep control over the pace and pattern of economic growth irrespective of performance. Today Western intellectuals perceive the problems with this organization of knowledge only dimly, lamenting the separation of the social sciences and conjuring with “inter-” and “multidisciplinarity. ” In Marx’s historical approach, organized human collectivities – classes, parties and states – made choices, acting in given inherited situations to drive history forward. In the new social sciences social arrangements, the products of human historical decisions and actions confront individual humans as “laws” to be obeyed, not changed. No wonder such social sciences couch everything in simple present tense: Parties do this, governments do that, inflation does this, unemployment does that, all the while forgetting that parties change over time, no two episodes of inflation or unemployment are the same and the actions of historical agents change the terrain of the further unfolding of history.

The capitalism of economics – and the rest of the social sciences, which take economics’ word for it – is not only eternal but also cosmopolitan. The historical work of necessarily national classes, parties and states in managing capitalism’s contradictions through domestic and international actions were written out of the script. Nothing could be farther from Marx’s thinking or from Capital.

Unifying the two main types of capitalist contradictions — the inter-class contradiction of exploitation and the intra-class contradiction of competition – between firms and nationally organized blocks of capital, value production had lurched from crisis to crisis and experienced increasing legitimacy deficits thanks to its anarchy and injustice. Once economics eliminated value production as the historical distinctiveness of capitalism and its contradictory as well as progressive motor, we had ahistorical capitalism: stable, eternal and unchanging. We lost the central plot that makes its tumultuous history intelligible.

Such intellectually impoverished understanding would have been no match for Capital. However, Marxists themselves wheeled the neoclassical Trojan horse into the Marxist citadel. Within a decade or so of the emergence of neoclassical economics, intellectuals coming over to the side of Marxism and the working class were bringing their neoclassical training with them. They began trying to fit Marxism into the antithetical theoretical and methodological framework of neoclassical economics.

This tendency was already at work in the Second International: Rosa Luxemburg battled its first incursions when she questioned her comrades’ interpretation of the reproduction schemas in the second volume of Capital. It also lay behind the Second International’s Marxism becoming “positivist.” Today it has grown into an anti-Marxist “Marxist economics” making absurd claims: that Capital suffers from a “transformation problem” as it could not translate values into prices, that capitalism does not suffer from deficits of consumption demand, that the rate of profit does not fall and that Marx has a commodity theory of money. The list could go on. The rest of the allegedly Marxist social sciences warn against economic determinism, which is only possible after economics is separated from other social spheres as it is not in Capital. Today these trends offer us the stunning spectacle of rock-star Marxist scholars who have taught Capital for decades telling us there is no history in Capital.

What does all this mean for those approaching Capital today? Quite simply, Marx and Capital are profoundly historical. We need to prevent capitalism taking humanity down with it and reconnecting the history. We must park our ahistorical economics and social sciences at the door before engaging with Marx and Capital. They are obstacles to understanding the greatest analysis of how we got here and where we might be headed. We must read what Marx actually says: His writing is our invitation card to history.

The author is professor at the Department of Political Studies, University of Manitoba, Winnipeg, Canada.

Source: People’s Daily/Global Times