The Spectre of Capital: Idea and Reality

Front matter

The Spectre of Capital

Historical Materialism Book Series

Editorial Board

PART 1 Object and Method ı Capitaland Social Form 9 5 With What Must the Critique of Capital Begin? 46 PART 2

The Ideal Constitution of Capital

DIVISION I Capital in Its Notion

6 Commodity 69 7 Money gı

VIII

DIVISION II Capital Relation

9 Circulation 201 10 Production 217 11 Reproduction 256

DIVISION III The System of Capital

Introduction to Division 111 265 12 Capitalas a System of Capitals 267 13 The System of Industrial Capital 274 14 The Dual Ontology of Capital 329 15 Absolute Capital 338 16 Capital and Its Others: Labour and Land 17 TheSpectre 368 18 Review of the Presentation 372

Contents

Appendix 1: Commentary on the Hegelian Origins of the Logic of the

Value Form 395 Appendix 2: Tables 408 Glossary 432 Select Bibliography 441 Index of Names 446 Index of Subjects 447

Preface

This work is devoted to the explication of the idea of capital. But it is unique in that it argues that capital is itself ‘Idea’ in much the same sense that Hegel advanced in his philosophy. For him an Idea is not a mental entity, but the full actualisation of a concept, of its ‘truth’, one might say. So capital, as such an Idea, is continually making itself present in reality. This book aims to show that capital is the spectral subject of modernity.

The term ‘spectre of capital’ I coined in a journal article of 2001.! It echoes the Manifesto’s ‘spectre of communism’ But communism was a real movement aimed at abolishing the existing state of things, ruled by capital. However, just how ‘spectral’ and how ‘real’ is capital itself? Paradoxically it is both. Although it has purely a spectral presence, it is without doubt a real social power, and it retains this in the face of any critique such as that presented here. (Thus, in the phrase in our title — ‘Idea and Reality’ — the ‘and’ should not be taken contrastively; it is indicative of identity.)

The method followed in my presentation of capital, as a social form, rests on the logic proper to the peculiar character of its object. For a presentation of the inner logic of capital, the protocols of ‘systematic dialectic’ are required.? This systematic-dialectical presentation draws on Hegel’s philosophical logic. It is unconcerned with recovering the grand narrative of his philosophy of history, and then relating it to historical materialism. Rather it is focussed on his logic of categories. Here this is taken to be architectonically homologous with the social forms of capital.

Systematic dialectic is deployed to articulate the forms of this social order, namely capitalism. My method of logical development of form is rooted in the observation that the movement of exchange is analogous to the movement of thought, in that there is generated a realm of pure forms, which stand in logical relations to each other, any content absented. Thus the presentation is informed by ‘value-form theory’. This is a relatively new approach to the critique of political economy. It affirms that value relations play an active part in determining the shape, and purposes, of material production. The developed form of value (commodity, money, capital) is the characteristic social form of present economic relations.

1 See Arthur 2001.

2 Foran overview of the literature on systematic dialectic see Arthur 2002. Path-breaking books in the field were Reuten and Williams 1989, and Smith 1990. Relevant earlier works were Sekine 1984, and Eldred et al. 1982.

X PREFACE

Hegel is a natural reference for value-form theory because his logic is well suited to a theory of forms. Moreover, Hegel’s systematic development of categories is directed towards articulating the structure of a totality, showing how it supports itself in and through the interchanges of its inner moments. This presupposes that the totality is structured by internal relations; this is so by definition in the case of a logic of categories. I argue capital is such a totality. A theory of active social form, specifically the value form, requires a systematic-dialectical presentation, then.

So the scope of this project is restricted to a theory of a purely capitalist society. More than that, it is restricted to its ‘pure theory’, or principles, as distinct from the stages of development of capitalism, on the basis of which an empirical study of an existing capitalism may be carried out ina historically informed manner? Moreover, it is even more restricted in that its entire attention is directed towards the concept of capital itself. Indeed, I take the concept of capital so narrowly that even rent is excluded because I regard it as an impurity from the theoretical standpoint that elucidates only those forms which are necessary to capital as a concept, or, as I shall call it, the Idea of capital.

Despite this narrow focus, an important result is demonstrated, namely that the logical tendency of the Idea of capital is to complete itself through its own immanent development, and therewith to posit all its presuppositions; it is self-grounded, self-determining, and self-reproducing. The qualifications required to this bold thesis are addressed in the course of the argument itself as appropriate.

Such a study as this is the necessary prolegomenon to any adequate scientific study of capitalism. However, it is purely a conceptual exercise, developing a system of categories that stand in quasi-logical relations. So this book is not a work in economics, but of philosophy. For example, the ‘capital concept’ presented here is far from a properly articulated economic one. The same goes for ‘production’ and many other themes touched upon.

This is because the peculiar logic of the object has itself a conceptual character. The very possibility of a pure theory, and of the reality of the capital Idea, depends upon an ontological claim about the way capital itself abstracts from its material underpinnings, and constitutes a realm of pure forms. I hope to vindicate this large claim in part by developing the categories of capital within a systematic-dialectical framework. At the same time, it is a critique of the economic categories it presents. A critique of political economy is understood here not as a criticism of bourgeois apologetic for capital, but as a critique of the capital system itself insofar as its own forms lack truth.

3 On such ‘pure theory’ cf. Uno 1980.

PREFACE XI

In developing my ideas, I have been fortunate to be a member of the International Symposium on Marxian Theory research group, founded by Fred Moseley in 1991.4 Beside Moseley himself, I thank especially, for their patient commentaries on my work-in-progress, long-standing members: Riccardo Bellofiore, Martha Campbell, Roberto Fineschi, Patrick Murray, Geert Reuten, and Tony Smith. (These thinkers are also those who have produced the most significant works in English on the critique of political economy.)

For commenting on the original manuscript of this book, I thank especially Geert Reuten and Tony Smith. They have saved me from many an error; but, of course, they bear no responsibility for the book itself.

4 The International Symposium on Marxian Theory has published a number of conference volumes as follows: Moseley (ed.) 1993; Moseley and Campbell (eds) 1997; Arthur and Reuten (eds) 1998; Campbell and Reuten (eds) 2002; Bellofiore and Taylor (eds) 2004; Moseley

(ed.) 2005; Bellofiore and Fineschi (eds) 2009; Bellofiore et al. (eds) 2013; Moseley and Smith (eds) 2014.

Abbreviations

ASV absolute surplus value

C commodity, also C' and C” c constant capital

GRP general rate of profit

I individual

lp labour power

M money, also M’ and M”

m increment of money

mp means of production

P particular

PP price of production

RP reproduction price

RSV relative surplus value

S singular

SP simple price

sv surplus value

TP transformation procedure

TFRP tendential fall of the rate of profit

U universal

URP uniform rate of profit

v ‘variable capital’ (or the revenue of the wage worker)

Introduction

Although I start from Marx, I go beyond him. So my book aims to reconstruct Marx’s work in the spirit of a systematic-dialectical logic. I do not take a position here on ‘what Marx really meant, still less on ‘what Hegel really meant’, nor yet on ‘whether Marx got Hegel right or wrong’! What I aim at is entirely substantive, even though I draw heavily upon my readings of Hegel and of Marx. Insofar as I appropriate their ideas for my purposes it is easy to discern the readings I favour; but nothing hangs on this. Insofar as I attribute to capital in part an ideal reality with a problematic relationship to the material it subsumes, I wish this theory to be assessed in its own terms. Its plausibility does not depend on whether, in borrowing from Hegel and Marx, I have read them correctly. Even if I have read them incorrectly — and I freely admit to revision at various points — it is the fruitfulness of the ‘incorrect’ readings for understanding capital that is to be judged. What I present here should be understood, then, as my own view, not as Hegel’s or Marx’s.

This book exemplifies the ‘homology thesis, namely that the logic of capital may be exhibited by reference to Hegel's logic. In particular, I take the architectonic of both orders to be in part the same. (For example, see the Table at the end of this Introduction.) This does not require me to take a position on ‘what Hegel really meant’. Tony Smith argues that Hegel’s metaphysical language disguises a sophisticated social ontology. But, for me, it is precisely ‘the metaphysical Hegel’ that is of interest in that capital models in its form the all-pervasive generation of its moments from itself. The presentation of capital in an ordered manner is, then, a question of actualising it in a sequence of logical levels of complexity, which I argue picks up nested internal relations.

This account is unusual in the tradition of ‘Hegelian Marxism’ in that it does not rely on a view that Hegel provides a method of general heuristic value, but rather it shows that even the most objectionable feature of Hegel’s idealism, its apparent pan-logicism, is significant because this false ontology is abstracted from an inverted world in which the value form achieves priority over its material bearers, and the ideal logic of capital imposes itself on human beings.* (For more on my use of this Hegel see Chapter 18.)

For the aporias of Hegel’s philosophy, see Arthur 2000. Cf. Sekine 2020, pp. 40-1.

Smith 1990.

For a similar argument see Bellofiore 2014, especially p. 172.

Bw DY me

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2 INTRODUCTION

If on occasion I appear to be paraphrasing passages from Hegel and Marx, then the sense to be attributed to such words is to be understood only in the context of my own presentation. Nonetheless, because I draw very much upon Hegel’s categories, for the benefit of specialists, I give a commentary in an appendix showing in detail how and why my own terms, and their arrangement more especially, derive from my reading of his. I also provide in the Appendices three charts (organised in triads) of logical categories: (i) Hegel’s Science of Logic; (ii) Hegel’s Encyclopaedia Logic; (iii) The logic of capital (as I understand it) drawing on, but reconstructing, these versions of Hegel’s system. In addition, I provide (iv) one of the value-form categories, based on (iii).

Throughout I freely use Marx’s categories without any attempt at an exegesis of Capital. But, where I do not give my own glosses on the terms concerned, it may be assumed that I intend to follow Marx’s use. (Among the Appendices is a Glossary listing unusual terms, and terms used here in very specific ways.) My most obvious differences from Marx are as follows: a) I postpone discussion of the labour theory of value until the form of capital is adduced; b) I provide a ‘political’ theory of the source of value in labour; c) I provide my own solution to the so-called ‘transformation problem’; d) where the overall structure of Capital is concerned, I order my main divisions differently (see the Table on ‘the system of industrial capital’ in the Appendices); e) I take rent to be fully capitalised, but in any case I view it as supplementary to the core Idea of capital, to which I limit myself. I also note significant departures from the conceptual apparatus of Capital in my text.

If I rarely cite directly passages from Hegel, and from Marx, still less do I refer much to secondary literature. This is partly for reasons of space, and partly because I do not wish to attribute views to those who may not hold them (or may not now hold them). However, a selection of relevant books I have found stimulating may be found in the Bibliography.

This book is divided into two Parts. Part 1 is ‘scene-setting’ in that it justifies the approach to the critique of political economy taken here. With this background established, Part 2 proceeds to a systematic-dialectical presentation of the forms of capital, rising from abstract to concrete categorial forms of it, as ‘Idea’.

The ‘bridging’ chapter, Chapter 5, is the most difficult in the book. Its upshot is that the presentation proper must begin with the commodity, but with an entirely ‘negative’ characterisation of it: as absence of use-value. It would be possible to omit this chapter on first reading, and to move to the ‘affirmative’ development of the value form in Part 2. However, I regard it as central to my unique take on value-form theory.

INTRODUCTION 3 Capitalisation

In this book (and especially in Part 2), I capitalise initial letters of certain terms of art, fundamental to the presentation. (Note that in German all nouns have such capitals so Hegel could not call special attention to any one of them in this way. But, although German does not allow this honorary capital orthographically, I can.)

The central cases are ‘The Concept’, ‘The Idea’, and ‘The Absolute’. These are virtually personified in Hegelian logic. So, in order to indicate its peculiar status ‘The Concept’ is capitalised. On the rule of parity, if ‘The Idea’ takes a capital so too should ‘Nature’ and ‘Spirit’. Likewise, to maintain parity with ‘the Concept; ‘Being’ and ‘Essence’ take their own capital. However, there is a complication here to be noticed. It is very common in Hegel’s triads that the term standing for the whole also appears as the first term of the triad. This is so with Being, Essence, and Concept. For example, under ‘Essence’ there is the triad: essence/appearance/actuality. The reason for this is that the general principle of moving from the abstract simple determination to the concrete one is at play in every triad. Thus the triad of essence begins with ‘essence’ itself taken in its simple immediacy and then dialectically developed through its opposite to their unity. Only the whole triad expresses the nature of essence. It is convenient here then to mark the ‘Essence’ that is the topic of the whole Doctrine of Essence with a capital, and to give the ‘interior’ use of the term without a capital. Yet I do not follow this same rule with Being and Concept. I regard the founding opposition of the whole Logic, Being and Nothing, to be of such importance as to be worth flagging with capitals. The first moment of the Concept is ‘the formal Concept’ Here, the reason given above for writing Concept with a capital would also apply. But to distinguish more clearly ‘the formal Concept’ from the Doctrine of the Concept, I take advantage of the presence in English of a similar term, ‘The Notion’, to achieve this (for more discussion see Commentary on Hegel below). Moreover, second in importance only to the founding triad is the triad of Universality, Particularity, Singularity; hence these moments together are given the dignity of ‘the Concept’; as also Individual.

Here then is the full list of capitalised categories:

(Doctrine of) Being; Nothing;

Being;

Nothingness; (Doctrine of) Essence;

4 INTRODUCTION

(Doctrine of) The Concept; Notion;

Universality;

Particularity;

Singularity;

Individual;

The Absolute;

Idea;

Nature;

Spirit.

‘One’ is a special case (mostly employed in Chapters 5 and 6). Where the context demands it, for example ‘a One’, it is dignified.

Where there are contexts in which these words are used in non-technical ways, they do not take capitals. Note that the economic categories are not usually capitalised, unless they are qualified with a logical category that is so, for example ‘Value-as-Concept’.

Paragraph Numbers

In Part 2, I provide the strictly dialectical presentation of my system of categories. From here on, much of the text is broken up with paragraph numbers. These indicate the logical relations of the categories concerned. At the beginning of Part 2, I give a list of its contents organised in these paragraph numbers.

Table of Correspondences

Hegel Encyclopaedia §18

I. Logic: the science of the Idea in and for itself,

II. The Philosophy of Nature; the science of the Idea in its otherness,

1. The Philosophy of Spirit; as the Idea come back to itself out of that othemess.

Arthur

1. Value Form: as the science of Capital in its Notion, I. Capital Relation: Capital and its other,

III. Capital as systemic unity.

INTRODUCTION 5

Hegel Encyclopaedia § 83 Logic falls into three parts: I. the Doctrine of Being, ul. the Doctrine of Essence, 1. the Doctrine of the Concept and the Idea.

That is, into the theory of Thought in: I. its immediacy: the concept implicit and in germ, ul. its reflection and mediation: the being-for-itself and show of the concept, Ill. its return into itself and its developed being-by-itself: the concept in-and-for-itself.

Arthur

The dialectic of the value form falls into three parts:

I. Commodity,

Ii. Capital.

That is, into the theory of Exchange in:

I. its immediacy: value implicit and in germ,

ul. its reflection and mediation: value for-itself, the showing-forth of value, Ill. its return into itself, and its development of itself: self-valorisation.

Hegel: Logic Arthur: Dialectic of the Value Form

I. The Doctrine of Being I. Commodity

A. Quality A. Exchangeable commodities

B. Quantity B. Quantity of commodities

C. Measure C. Exchange-Value of commodities

ul. The Doctrine of Essence 1. Money

A. Intro-reflection A. Value-in-itself

B. Appearance B. Forms of Value

C. Actuality C. Money

ui. The Doctrine of Concept 11. Capital (General Formula)

A. Subjectivity A. Price

B. Objectivity B. Metamorphoses of commodities (C-M-C’)

C. The Idea C. Capital (M-C—M')

PART 1

Object and Method

Chapter 1

The question of social form is central to the proper understanding of economic systems. It is only in virtue of differences in social form that Marx can insist that there is no such thing as ‘economics’ in general, but that each mode of production has its specific and peculiar laws of motion. Before directly addressing the logic of capital, then, let me summarise the general context in which it is placed, a peculiar social form of production.

In order to explain the specificity of the social form of capitalist commodityproduction I employ the triad of categories: sociation, dissociation, and association. All economy begins with some particular mode of sociation of those productively active. In our society this is disrupted by the dissociation consequent on the social division of labour, immediately labour is private. It becomes posited as social labour only through a most peculiar form of association, namely the process of exchange of products. Let me elucidate.

By sociation is meant the universal, ahistorical reality that, in order to be active economically, people engage in social relationships and social practices.

By dissociation (the negation of sociation) is meant the historically specific reality of the separation between economic agents predominant in the bourgeois epoch; ‘separation’ here does not mean a geographical distance, but a social barrier. Dissociation has four dimensions: first that useful objects are held by persons as their private property and hence are not immediately available for satisfying the needs of others; second that production is carried out in enterprises likewise in the hands of private owners; third that labour power is separated from its object in that the most important means of production are held as the property of members of the capitalist class; fourth that production and consumption are separated, production is carried on by enterprises and consumption by households.

By association is meant that the opposition of sociation and dissociation is mediated in the form of exchange whereby consumers acquire the objects they require, production units acquire inputs and dispose of outputs, and through contracts of labour people find work and capitalist enterprises find workers. It is important to understand that when dissociation is negated through asso-

1 Here I draw on the terminology of Reuten and Williams 1989, although I do not pretend to follow their definitions exactly.

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ciation this is on the same ground; that is to say, the basic element of privatised appropriation of goods is retained, but in mediated form. Thus association does not replace dissociation; rather it replicates it through developing its conditions of existence; sociation now takes the contradictory form of their unity.

Since the exchange relation provides the first moment of association it is the conceptual starting point of the presentation of the bourgeois epoch. The presentation proper will thus start with commodity exchange. Since exchange is a voluntarily undertaken transaction, not indicated by any central authority but rooted solely in the private purposes of the agents concerned, it is on the face of it extremely unlikely that any coherent economic order could emerge at all, still less one characterised by some beneficent ‘hidden hand’. The problem is to determine the form of social cohesion that unifies a system in which all decisions to produce and to exchange are private.

So far, I have not mentioned capital, the theme of this book. The point is that capital is a social form that emerges from the contradictory relationship of dissociation and association. Exchange is the historically specific condition of existence of this relationship, and of the capitalist system in general. This condition must be reproduced by the movement of the system of capital itself. Exchange, for example, must extend its reach, rather than die away. Only generalised commodity production requires universal exchange as its necessary foundation.

The main thesis to be explored is that capital itself achieves the reproduction of its own conditions of existence. Although the form of capital is shown to be the overriding moment in the system, the drive that provides the impulse for reproduction, I cannot start with it right away, because it is far too complex a determination. Rather this presentation of capital (in Part 2 below) deliberately starts with the most indeterminate characterisation of the whole, namely what is implicit in the commodity form. The argument develops precisely because of the need to overcome the inadequacy of this characterisation, measured either immanently, for example by its self-contradictory implications, or by reference to its failure to be self-subsistent. In this way thought is impelled onward to conceive a more concrete totality; only when the presentation reaches the whole is the starting point grounded in its connection with the whole and thereby validated as a true determination in this relative sense of being inadequate on its own but valid as one of the determinations that come together in a mutually grounding interchange to constitute the concrete whole. The whole is mediated in its elements, and these elements ground themselves in the whole. Commodities are the starting point; I do not at first raise the question of where commodities come from, whether they are produced or non-produced goods, or, if they are produced, under what relations of production. But the development of the argument itself eventually grounds them as results of capitalist production.

A notable feature of the presentation to come is that I do not thematise labour until after conceptualising the general form of capital. To begin with I analyse the commodity form itself, and only at the end give reasons for picking out as systematically important those commodities that are products of labour. In this way, by exploring to the full the dialectic of form, and letting the form itself reach the content it demands, I do something very different from those who are always in a hurry to address the material content. However, under definite historically emergent conditions, the value form comes to acquire a ground in labour, or, conversely, labour comes to express itself in value.

To sum up: the sociation-dissociation contradiction is the presupposition of the entire epoch, and hence of our presentation below; it is association through exchange that gives this contradiction ‘room to move’; exchange is a primary mode of social synthesis in the bourgeois epoch, and it reproduces the dissociation of social production into autonomous units; the first concrete category is therefore this mediation, and we study its further development; this first category of movement determines goods as commodities, and hence the first object of analysis is the commodity, a unity of use-value and exchange-value; this doubling is a relation in which form dominates matter; the value form is therefore the theme of the categorial dialectic.

An important foundation of this book is that the argument is shaped by the protocols of value-form theory. This sets itself against those who neglect the relevance of the form of value, as if this form passively reflects the material metabolism of production. On such an account, money veils — or even distorts — the real relations of production; value itself is often simply identified with labour in such interpretations of Marx’s theory of value. By contrast, value-form theory affirms that the money form has an active role in directing economic life; it is not merely a mediator of more fundamental forces. It follows that theory must accept the reality of formal determination, distinct from — albeit working alongside — causal determination. It is the value form that determines the dimensions of the so-called ‘production’ of value.

For example, when it is claimed that the magnitude of value is a function of socially necessary labour time, it may be considered that the former is ‘caused’ by the latter. However, such a view fails to account for the very existence of such a relation. It is only the social form of commodity exchange that determines why, and how far, such a function can exist. Moreover, the actuality of value presupposes a fully developed capitalist social formation. Two things follow. First, that the ideality of the value form develops from commodity to money to capital in accordance with a dialectical logic of totalisation; second, the material pole develops in response to formal determination, but predicated on what is materially possible for the available human and natural resources.

My aim is to reconstruct the inner nature of capitalism through interrogating the founding category of value. The truth of value becomes real only in the totality of its forms. While the dialectic of the value form appears at one level as a self-referring system, at another level it depends on a material ground from which it is estranged. Conversely insofar as social labour finds expression in this system of estrangement it appears only as an abstraction from itself, as reified labour. The material and ideal moments of the economic system are never coherently unified. I come back to this at the end, but it must be borne in mind throughout.

I argue (in Chapter 5) that the starting point of a systematic presentation of the idea of capital is the pure form of exchange, from which both use-value and labour are absented. Since it is common for these to be considered superior foundations for ‘economics’, we address them in the remainder of this chapter. (After all, nothing is exchanged unless it has use-value for others, and nothing is there at all unless someone makes it!)

I begin with ‘use’. In Marx’s terminology, the nature of commodity exchange is analysed using the categories of ‘use-value’ and ‘exchange-value’ It should be explained that in his usage ‘use-value’ is identified with the material body of the good concerned. It is the various properties inherent in it that allow it to have various uses, but rather than focussing on such relations Marx employs the term substantively, such that it is possible to speak of a commodity as ‘a’ use-value. Putting the point this way heightens the sense of paradox when it is contrasted with its ‘value’, because, again, this too is to be taken, not in a relational sense in which it stands for an exchange ratio, but substantively again, such that the commodity is ‘a’ value. Now, while speaking of a commodity as ‘a use-value’ might be deemed a somewhat peculiar locution, there can be little objection, in that the material body of the commodity taken under this description is clearly something present to inspection. By contrast, to speak of ‘value’ as such (as I do in Part 2) could be taken as highly objectionable.

To proceed, in exchange a practical abstraction from the material properties of goods leaves a pure form, namely the form of value, within which they are determined as commodities for both parties. Value contains not an atom of matter; it is in effect an ideal social form opposed to the material characteristics that give the commodity some sort of use-value. Here we presuppose the objective validity of the ‘abstraction’ predicated on exchange relations.2 Whatever may be true before and after exchange, in the sphere of exchange itself the commodity is entirely abstracted from its character as a use-value.

It is of great importance here that this abstraction is not effected by consciousness but is objectively constituted in the real process of exchange. This is a practical abstraction from the character of the commodities as use-values, which latter is ‘absented’ for the period of exchange. The commodities acquire as anew determination the character of values; and the bodies of the commodities concerned play the role of bearers of this determination imposed on them while passing through this phase of their life cycle. They become subject to the value form.