Capital and Method

Christopher J. Arthur

What provisional assumptions should we make when addressing capital, if we are to find a logic appropriate to it? There are fundamental methodological issues implicit in how this question is answered. An important preliminary point to make is that an object is best grasped when it is fully-developed. A corollary is that an object is not comprehensible at an early stage of its development, unless this is seen precisely only as a step towards its maturity. Marx made the point when he observed that the secret of the ape is man. Therefore, although the value form has a historical dimension, instead of ranging widely over exchange systems it is best to attend to the context in which it attains its maximum degree of completeness and distinctiveness; that is to say, the value form attains its ‘truth’ only when fully developed in capitalism.

Now, if we look at developed capitalism, surely it is striking that capital appears as a social power in its own right. This feature is well expressed in the historical contrast between two sayings: first we had “There is no land without its lord’; but now we have: ‘Money has no master”. Capital also has a totalising drive to include within its circuits an infinite variety of concrete products and services. Yet, this wealth is always under the sway of the same abstract category, exchange value; the notorious ‘bottom line’ is the sole effective determinant in setting the goal of the whole mode of production.

Given these observations, the task of appropriating in thought the system of capital requires appropriate conceptual tools. I suggest the research program should follow the principle of Hegel’s logic. The assumption to be tested in this endeavour is that capital has something of the character of an Absolute; moreover that this Absolute has an ideal, logical, form, which takes up into itself the real world of material production, and subordinates it to the spirit of capitalism; this last is to be understood not, like Weber has it, as a disposition of capitalists, but as an objective spirit in Hegel’s sense. What is meant by Absolute? It means that (at least relative to its domain) it has the form of the unconditioned. All the relevant conditions of its existence it reproduces in its own movement.

Where a self-reproducing totality is concerned, its abstractly grasped beginning could very well be said to be what will have become its concrete result, standing in an internal relation to it. Moreover I suggest that the totalising category here, namely value, allows us to develop it systematically from its more simple and abstract shapes to its most complex and concrete reality. Such a dialectic of the value-form from commodity to money to capital, may be exhibited in accordance with the Hegelian paradigm. The logic needed is that of systematic dialectic. The task of systematic dialectic is to organise a system of categories in a definite sequence, deriving one from another logically. Now, if a whole is built up in this way, the systematic ordering of its categories may be understood both ‘forwards’, as a progression, and ‘backwards’, as a retrogression. Although it is natural to read a systematic exposition as one in which later categories are developed from their antecedents — at least in the sense that the latter must be analytically presupposed — in Hegel’s view this cannot be the whole story, for he rejects any dogmatic founding category. The progressive development is therefore not securely established on a given presupposition. There is, however, another consideration. Since the categorial progression cannot be validated as a deduction, it can only be reconstruction of the totality. The whole, as the most concrete, complex, and complete reality, sustains all the elements that make it up, and thereby retrogressively justifies the logical sequencing from this viewpoint. Insofar as Hegel’s dialectics finish with something ‘absolute’, its absolute character grants validity retrospectively to all the stages of its exposition, and their dialectical relations; if ‘the truth is the whole’ the moments of the whole gain their validity within it; if the lower categories lead on to the highest, the reason is that the lower categories are only abstractions from it. It is the whole alone which is self-subsistent. The retrogressive grounding of the beginning, and the progressive further determining of it, coincide in the systematic dialectical exposition of the totality.

Indeed the progressive/regressive sequencing depends upon the presupposition that there is a whole, from which a violent abstraction has been made so as to constitute a simple beginning, which, in virtue of this negation of its positioning in the whole, has ‘lost its footing’, so to speak. Thus there arises a contradiction between the character of the element in isolation and its meaning as part of the whole. This provides the basis for the transitions in the development of the categorial ordering. Generally the basis of the advance is that each category is deficient in determinacy with respect to the next and the impulse for the transition is precisely the requirement that such deficiency must be overcome. Interrogation of the category reveals its limits and leads to the determining of a further category to complete or sublate it; each stage ‘takes care of’ the problem perceived with the previous stage, but in turn is found insufficient.

If the object of analysis is the capitalist economy, understood as a totality, then the order of presentation should not reflect a sequence of models of more complex objects, but be a progressive development of the forms of the same object, from a highly abstract initial concept of it to more concrete levels of its comprehension. For example, I shall argue that the sequence of exchanges Commodity-Money-Commodity (C – M – C) should be considered as an abstract level of development of the value concept which requires sublation in M – C – M. So I reject the model of ‘simple commodity production’ as a self-sufficient concretisation of C – M – C. What is wrong with ‘simple commodity production’? In such a situation exchange at ‘value’ is supposed to take place because otherwise people would switch into the less onerous occupation. Notice that this ‘law’ presupposes everyone knows what labour is expended by others; this is a very doubtful proposition historically. Even if it is accepted as an idealising assumption, nothing like an objective law is operative. This subjective hypothesis about a preference to minimise labour is a version of utility theory in which the disutility of labouring is taken as determining of individual choice. But it is unconvincing to assume that the only consideration affecting the choices of individuals is avoidance of ‘toil and trouble’. For other subjective considerations to do with the difficulty of learning a new trade, or the preference for one occupation rather than another, may be operative also. Even if Smith’s fishermen noticed their working day was longer than that of the hunters with whom they exchanged, they might simply prefer life on the river to the darkness of the forest. What should be taken as the ground of the process of circulation is the objective rationality of the system of capitalist competition, not an ideal type of ‘rational economic man’ read back into the natural state. Only in this context of capitalist competition is socially necessary labour time determinant. There is a stark contrast between the peasant saying ‘Time costs nothing’ and the capitalist motto ‘Time is money’. It is only in modern industry that competition within a branch, and the mobility of capital between branches, brings about the development of a common measure. When production is subordinated to valorisation, then an objective comparison of rates of return on capital is possible and competition between capitals allows for the enforcement of the law of value.

However, there is a more important logical point which constitutes a reason to make a transition to the category of self-valorising value inherent in the sequence M–C–M. It is not just a question of establishing a law of value mediating exchange between individuals, it is a matter of value acquiring the form of self-mediation and subordinating the ‘individuals’ to its aim of valorisation. There is a logical necessity for the argument to make a transition to capitalist production from commodity exchange in the abstract. What is this necessity? It is central to dialectical logic that a concept is fully grasped only when its entire potential is developed. Thus value is not properly understood until its potential to be its own ground is exhibited in the capital circuit. The explanation of capital’s self-determination must reconstruct its forms of being, beginning with the most abstract, until is clear how value develops its autonomy from the individual producers. The necessity for the exposition to make such transitions is internal to the theoretical project of exhibiting the inner moments of capital as more and more adequate to the realisation of the concept of value. I proceed to the more concrete forms precisely by drawing attention to the failure of a given stage to be theoretically complete; for this is required by the logical protocols of a totalising dialectic. An early, relatively abstract level of development of the form is defective just in so far as it is not able to sustain itself on its own basis but suffers from heterogeneous determinants.

Now I discuss three levels of concretisation: A) the transition to the general formula for capital; B) the transition to production; C) the transition to the capital relation.

A) I say logic demands a transformation of C – M – C to M – C – M. This has nothing to do with an empirical tendency because the logical potential may be blocked for various reasons. It is simply that value is more adequately grounded in M – C – M than it is in C – M – C. The problem with simple circulation is that value here is not self-grounded, thus it has failed fully to actualise its concept; this is a logical point of course, not a historical claim that people find there is a problem confronting them. The theory of capital further develops the concept of value to that of a self-grounded form. In a merely ‘market’ context the value form mediates extremes whose grounding lies outside it (such as the presupposition that the only thing individuals care about is ‘avoidance of toil and trouble’); it is a concept of equilibrium of external forces, e.g. experienced disutility of labour.

C – M – C is an example of ‘finite’ teleology, in Hegel’s terms, because the C – M serves as a means for the M – C, but with the aim here still being a use value as in simple exchange. Having served its purpose as medium money drops away. Or does it? In fact since every purchase is a sale the mediator money stays always in circulation. Here money that circulates endlessly has a kind of immortality; but as medium of circulation this still appears as an emergent property of the exchange system; it does not direct it. However, if this ‘bad infinity’ recoils back on itself in the circuit M – C – M, money makes itself origin and aim of its circuit. The mediator takes over from the extremes. Money now liberates itself from use value in setting the aim of exchange as its own. This is ‘infinite teleology’ in Hegel’s terms, because in M – C – M value is referred to itself. The self-reference of money in the circuit constitutes a new form of value, capital, which realises itself through the metamorphoses of money and commodities. Now commodities and money are its own determinations. In this way, posited as the totality of these determinations, capital is Individual; that is to say, self-grounded and self-determining value.

The sequence C – M – C exhibits difference in the commodities sold and bought, but in so far as the ends of the chain pass out of circulation it lacks the reference to self in its differences that would make a totality of its determinations, a real individual. With M – C – M there is the opposite problem if there is no difference between the end and the beginning. For capital to emerge as a self-grounded form of value both the reference to self and the difference from itself must be united. In the case of money the only possible difference between two specifications of this incarnation of the value universal is in amount. In the M – C – M circuit the moment of identity is secured with the reflux of the original outlay; the moment of difference emerges if a monetary increment is thrown off; and if this new value is identified with the principal and employed together with it as capital once more the unity of the two is achieved. Thus, simply to be itself capital must become ever larger.

My transition is based on the argument that value is better grounded in M – C – M than C – M – C and that is why we must make the move to it in the exposition. But there are two further insufficiencies.

B) In the circuit M – C – M it seems we have closure, with money returning to itself; but we do not, because this is mediated in commodities; the commodities come into circulation (whence?) and disappear again (whither?); so orthogonal to M – C – M is still a C – M – C circuit which has presupposed to it the ‘production’ of commodities that are not created in it.

The simple movement of circulation does not contain within itself the principle of self-renewal. New commodities must be thrown into it again and again, from without, as fuel into the fire, says Marx in the Urtext of 1859. Thus if capital is to realise itself the movement of value must appear in a more complex form than in pure circulation; it must be the movement which simultaneously produces values as its own premise. The phenomenon of circulation may now be viewed in a new light; as an immediacy it is ‘pure semblance’; but as grounded in production it is the necessary form of appearance of capitalist relations of production. Value must be produced by value. Only if capital brings production within its circuits does it realise itself as an autonomous power.

C) The problem also arising is that the above-mentioned requirement that there be a monetary increment in the M – C – M circuit seems ruled out if, under the rule of equivalent exchange, the second money phase should be identical with the first. Since the one-dimensional logic of circulation fails to guarantee a surplus value it becomes necessary to look to the real content regulated by the form of capital to find a solution to the key contradiction: ‘Capital cannot arise from circulation and it is equally impossible for it to arise apart from circulation.’ This solution lies in the purchase of the value-producing agent itself, labour. However, here there is an unexamined precondition, namely that there be labour power available. But this condition of existence of valorisation, which at the outset is taken as a premiss, is later itself grounded as a result of the development of the capital relation. Free labour is derived as its consequence; in reproducing the capital relation capital ‘posits’ its own preconditions.

To conclude: there are fundamental methodological choices for constructing a theory of capital. According to Jacques Bidet, for example, there are two distinct theoretical objects. On the one hand, there is the logic of commodity production in general, based on a relation of exchange of equivalents. This is characteristic of market relations between individuals. On the other hand, there is capitalism, based on exploitation of one class by another. Crucially, the exposition of the value form is ‘theoretically complete’ within the parameters of the first object, i.e. prior to theorisation of specifically capitalist production. It was, of course, traditional in early radical theory to idealise equivalent exchange prior to its subversion by capital and class. In this way it failed to carry through the critique of capitalism to the value form itself with its inherent reificatory logic; hence failed to see that the inversion of the ‘law of appropriation’ is implicit (whether or not empirical conditions favour, or block, its realisation). The very separation of value from use value makes possible its autonomisation in money, and its capacity as capital to impose itself on the aims of production.

My method takes capital as a single object for theory; but as a complex concept it must be analytically reduced to its simple determinations and then reconstructed through a systematic dialectical presentation. Of course I do not deny that there is a difference between ‘market’ and ‘capitalism’ insofar as the existence of classes is not explicit in the concept of ‘market’. My argument that the two are conceptually linked presupposes the logical potential for some people to monopolise monetary resources, while some have nothing to sell but their labour-power, however this came about historically. These presuppositions, once given, are reproduced by the capital relation itself, on the very basis of the law of the market, not in opposition to it. It has, so to speak, ‘become true’ that the market reproduces the capital relation, and inverts its own law of appropriation.

I am not arguing a causal thesis that markets necessarily give rise to capitalism. I am arguing that they are internally related logically in that markets become the surface form of capitalism, rather than an empty form mediating self-subsistent extremes. When value becomes autonomous, rather than merely a passive mediator of other forces, this realises a new level of determination of the value concept. The theoretical transition from ‘value’ to ‘capital’ is not a ‘change of concept’ as Bidet thinks; the elementary form of value is what will have become the more concrete and complex one of ‘self-valorising value’, a fully-developed social power.1

In Hegelian terms, capital drives to become ‘Absolute Idea’. But in reality it may subsume, but can never reproduce, its internal other, the workers, and its external other, Nature.

  1. See the Symposium on my book The New Dialectic and Marx’s Capital that appeared in Historical Materialism 13.2 2005, especially the contribution by J. Bidet and my reply.