Political economy had supplanted philosophy and theology as the primary object of critique. Presupposing an equilibrium of supply and demand, economists sought to explain the economy-wide pattern of relative prices-exchange values-by the same law which governed the class distribution of revenues between landlords, capitalists, and wage laborers. Following Engels, Marx concluded that they were unable to provide a coherent account of the inter-relationship between the economic oppositions within which their theories revolved- cost/price, supply/demand, labor/capital etc.- because they could not grasp the historically specific dynamic of development that stemmed from the social relations that imposed exchange dependency on producers. In all its variants, the discourse of the wealth of nations presupposed private property in the exchange value form and therefore the distribution of revenues into wages, profit, and rent. Marx noted that it did not, however, explain private property’s historical origins and structural logic of its development. “Economists explain how production takes place in the above-mentioned relations, but what they do not explain is how these relations themselves are produced, that is, the historical movement which gave them birth.” The real order of determination between these categories of political economy could only be adequately grasped in the unity of a self-undermining logic of development that its equilibrium assumptions concealed.
Marx’s dissertation had offered an internal critique of the Hegel’s conception of necessity in the form of laws by way of reconstructing Epicurus’s critique of determinism. The basic conceptual pattern of an inversion in which an apparently self-contained system of laws was shown to be the alienated form of an underlying chaos subject to the compulsions of atomistic strife-compulsions which were, to be sure, also laws, but ones with explosive antagonisms at their core- was extended into his critique of political economy.
“Mill commits the mistake, like the school of Ricardo in general, of stating the abstract law without the change or continual supersession of this law through which alone it comes into being. If it is a constant law that, for example, the cost of production in the last instance – or rather when demand and supply are in equilibrium which occurs sporadically, fortuitously – determines the price (value), it is just as much a constant law that they are not in equilibrium, and that therefore value and cost of production stand in no necessary relationship.”
Its abstract laws equating supply and demand, production costs, and market prices asserted themselves in the accidents of the exchange-dependent intercourse of individuals and expressed the subjection of individuals to the alienated results of their own intercourse operating as blind market compulsions. The laws of political economy presupposed the continual deviations and disruptions of these laws. But these deviations were themselves systemic in nature, although political economy could not explain this unfolding dialectic of law and exception. The competition of exchange-dependent individuals engendered their division into warring classes, and yet, political economy proved itself incapable of thinking through the consequences. Marx followed classical political economy in recognizing competition as the ultimate law of civil society, but imparted to it a brutal, cumulative logic of development.
- Karl Marx, The Poverty of Philosophy, in mecw vol. 6, New York 1976, p. 162.
2. Karl Marx, ‘Comments on James Mill’, in mecw vol. 3, New York 1975, p. 211.
“This is the law that grants it no respite, and constantly shouts in its ear: March! March! This is no other law than that which, within the periodical fluctuations of commerce, necessarily adjusts the price of a commodity to its cost of production.”
The tendency of supply and demand to adjust to one another would eliminate the temporary profits made by capitalists over their own costs of production, but, in reality, this equilibrium state was perpetually deferred by the expansionary economic dynamic unchained by the social relations of alienated labor. The influx of profit was thus the harvest of the expropriation of competitors and the displacement of laborers with machines- “these relations produce bourgeois wealth only by continually annihilating the wealth of individual members of this class, and by producing an ever-growing proletariat.” The forward march of the accumulation of capital presupposed the dispossession of the growing legion of those unable to compete and their reduction to an expanding multitude of pauperized proletarians.
The social relation of alienated labor- the exchange dependency resulting from the separation of labor from the means of labor- was predicated on a permanent excess of the supply of laborers over the demand for them.
“When political economy claims that demand and supply always balance each other, it immediately forgets that according to its own claim (theory of population) the supply of people always exceeds the demand, and that, therefore, in the essential result of the whole production process – the existence of man – the disparity between demand and supply gets its most striking expression.”
Involuntary unemployment was the most glaring premise of the capital-wage labor relation, although its very existence was denied by the economists. Just as the separation of coercive power from the sphere of exchange-based economic relations was what constituted the division of state from civil society, so too the competitive laws of motion of civil society arose out of the separation of producers from any direct access to means of their subsistence.
3. Karl Marx, ‘Wage Labor and Capital’ [1849], in MECw vol. 9, New York 1977, p. 224.
4. Karl Marx, Poverty of Philosophy, in MECW vol. 6, New York 1976, p. 176.
5. Marx, Economic and Philosophic Manuscripts, in MECW vol. 3, New York 1975, p. 314.
“The concentration of the instruments of production and the division of labor are as inseparable one from the other as are, in the political sphere, the concentration of public powers and the division of private interests.”
When Marx asserted that private property was derived from alienated labor, he meant by the latter a social relation of production between human beings subject to the following separations and therefore exposed to the laws of competition: a) the separation of the laborer from his product b) the separation of the laborer from the means of labor c) the separation of laborers from each other d) the separation of individuals and entire peoples from humanity as a whole. Political economy could not conclusively resolve its own theoretical problems because it did not understand the historical logic of development, the law of accumulation arising from these separations by which labor as self-activity gives rise to its opposite- capital, and capital comes to immiserate and displace labor: “labor, the subjective essence of private property as exclusion of property, and capital, objective labor as exclusion of labor, constitute private property as its developed state of contradiction – hence a dynamic relationship driving towards resolution.”
His distillation of what he understood to be the logic of development implicit in Ricardo’s ‘one-sided’ labor theory of value came to underpin his conception of history, one which was turned on the coming into existence of the antithesis of capital and labor, leading to either a revolutionary resolution or the decline of civilization. In contrast to the circular causality of Smith and Say whose systems failed to establish an order of determination between production costs and consumer demand Marx came to embrace Ricardo’s ‘one-sided’ focus on production costs reducible to labor quantities as the most adequate expression of an industrial revolutionary pattern of development that continually surmounted the limits imposed by any given level of demand, by expanding markets through the reduction of prices. (Marx rejected Ricardo’s own interpretation of this law of value, in which demand automatically adjusted to supply; he maintained that this equilibrium
6. Karl Marx, The Poverty of Philosophy, in MECw vol. 6, New York 1976, p. 187. 7. Karl Marx, Economic and Philosophic Manuscripts, in MECW vol. 3, New York 1975, p. 314.
8. Tbid., p. 294.
assumption obscured the socio-economic dynamic that unfolded in anarchic disproportions between the two, obeying a relentless, self-undermining law of accumulation.)