Marx and Political Economy: Successive Confrontations

Takahisa Oishi
Professor of Economics
Takushoku University
Tokyo, Japan

An Overview of Marx-Studies in Japan

Many Marxist economists in Japan still believe that Marx's early writings, i.e. those preceding The German Ideology (manuscripts of 1845-46), are directed towards 'philosophy' or 'thought', and that this orientation was superseded through the ''self-clarification' recorded there. They portray the 'early Marx ' as essentially a 'philosopher' and the 'late Marx' as an 'economist'. They take the relationship of The German Ideology to Capital (first published 1867) to be similar to the relationship between Adam Smith's The Theory of Moral Sentiments and his The Wealth of Nations.
Wataru Hiromatsu conceptualised this 'rupture' between the early and the late Marx as a development 'from the theory of alienation to the theory of reification', and this view is widely supported in Japan. This 'rupture" is also conceived by some economists as a development 'from the negation of Ricardo's theory of value to its acceptance'. For example, Yoshiki Yoshizawa writes that the early Marx did not understand the terms of the classical labour theory of value and rejected it until The Poverty of Philosophy (first published 1847). Others say that the theory of alienation in the Economic Philosophical Manuscripts of 1844 (hereafter EPM) required Marx to reject the classical labour theory of value (Kiyoshi Matsui & Kyuzo Asobe). But some scholars within this group do admit a consistency between the theory of alienation and Marx's theory of value, they argue that the theory of alienation represents a philosophy underlying the labour theory of value (Shiro Sugihara & Yoshihiko Uchida).
Despite the discovery of the Grundrisse (manuscripts of 1857-8), which represent a link between EPM and Capital, a few researchers insist that there is a 'rupture' between the Manuscripts of 1861-63 and Capital, because the term 'alienation' can be found even as late as the early 1860s (Wataru Hiromatsu, Keizo Hayasaka). Hiroshi Nakagawa, whose view increased in popularity after N.I. Lapin's article, denies that there is a theoretical continuity between the early and the late Marx by claiming that his early economic theory exhibits a lack of unity between the following two analyses: the capital-labour relation and the commodity-money relation. Nakagawa presumes that Marx wrote EPM in the following order:
EPM "First Manuscript: Former Part", -> EPM "First Manuscript:
Latter Part" (analysis of civil society from the standpoint of the capital-labour relation, without analysis from the standpoint of the commodity-money relation: rejection of Ricardo's labour theory of value) -> "Notes on James Mill" (analysis of civil society from the standpoint of the commodity-money relation, without analysis from the standpoint of the capital-labour relation) -> EPM "Second Manuscript: Missing Part" -> EPM "Second Manuscript: Extant Part" -> EPM "Third Manuscript".
Nakagawa asserts that it was in the Grundrisse that Marx's analysis first encompassed these two standpoints: the commodity- money relation and the capital-labour relation. Following the order of composition as set out by N. I. Lapin, Seiji Mochizuki writes that Marx gave up the "First Manuscript" of the EPM at the halfway point because he found a theoretical contradiction in the theory of alienation. Mochizuki believes that the theory of alienation is 'idealist' in a philosophical sense, because it presupposes a 'non-alienated man', so Marx gave up using the term 'alienation' and came to use 'division of labour' instead. What Mochizuki has overlooked is the theoretical consistency between the first EPM manuscript "First Manuscript: Latter Part" and the third EPM manuscript "Third Manuscript".
He fails to understand the content of the "First Manuscript:
Latter Part" (comprehension of the laws of economics on the basis of the concept 'estranged labour' as 'general essence of private property'): this analysis also figures in the Grundrisse and the Manuscripts of 1861-63.
Yoshiki Yoshizawa (a specialist on Ricardo) writes that at first Marx 'rejected' Ricardo's labour theory of value (as did D.I. Rosenberg), but later 'accepted' it in The Poverty of Philosophy. Yoshizawa concludes by saying that the 'critique of Ricardo's value theory was a matter of the 1850s or after for Marx'. Shigeji Wada (a specialist on Adam Smith) and I, however, believe that the critical exposition on Ricardo's labour theory in the "First Manuscript" of EPM, even in the "Notes on Ricardo", if examined carefully, does not negate the theory, but is rather a critique of it.
In the Manuscripts of 1861-63 Marx writes that there are two types of value theory in Smith's The Wealth of Nations : the 'dissolving' type and the 'composing' type. Extracts from The Wealth of Nations in the "First Manuscript: Former Part" of EPM are limited to the passages in which Smith expounds the 'dissolving' type. At the beginning of the "First Manuscript: Latter Part" of EPM Marx put his position clearly by saying: 'We have proceeded from the premises of political economy. We have accepted its language and its laws'. Those who assert that the 'early Marx' rejected Smith's (or Ricardo's) labour theory of value reveal that they are not really sure what Marx's labour theory of value actually is. They cannot distinguish between Marx's value theory and Ricardo's because they do not discern the differentia specifica of Marx's theory and hence cannot successfully separate it from the classical view.
The classical labour theory of value led classical economists to affirm private property. Ricardo, like Smith, could not distinguish 'value' from 'price' and had no idea how to develop 'price' from 'value'. They did not understand that the law of value is only a specific historical way -- a capitalist way -- of distributing social labour. That is why they did not find the intrinsic connection between the categories 'commodity' and 'money', and hence the origin of surplus value. Marx's theory of value, however,exposes the historical character of commodity-production and leads us to question, rather than affirm, private property.

Continuity in Marx's Theoretical System and Methodology

In recent papers I have attempted to demonstrate a continuity in Marx's theory and method from EPM to Capital by detailing the continuity between EPM and The Poverty of Philosophy. The point is not that the term 'alienation" can or cannot be found in these texts, but rather the role that the term plays in Marx's system as it developed. Hence I emphasise the importance of the following:
1) reading The Poverty of Philosophy as a whole, rather than reading its two chapters separately;
2) clarifying the deficiencies in Ricardo's theory of value and his method.
When we read Chapter II of The Poverty of Philosophy carefully, it is clear that Marx criticises not only Proudhon's but also Ricardo's method. This suggests that Marx criticises Ricardo's theory of value in Chapter I as well. In fact, Marx advances beyond Ricardo's theory there by grasping money as a relation of production and by trying to clarify the intrinsic relation between the categories 'commodity' and 'money'. On this basis an inadequacy common to both Proudhon and Ricardo emerges: their inability to comprehend what is historically specific to capitalist relations of production. Although Proudhon shares this inadequacy with Ricardo, his Philosophy of the Poverty was an attempt to criticise classical political economy, albeit an attempt that failed. Hence Marx wrote that Proudhon had 'arrived in this roundabout way at the standpoint of classical political economy" (letter to J.B. Schweitzer, 24 January 1865).
Through this investigation I demonstrated that The Poverty of Philosophy is not a text in which Marx accepted either Ricardo's method or his labour theory of value. Rather it is a text which shows how to criticise classical political economy, i.e. Ricardo, and it thus represents a critique of political economy in polemical form. Taking a critical approach to Ricardo's theory and method, Marx shows how Proudhon failed to advance beyond Ricardo. Marx's own critique of political economy is described there as a critique of the categories of classical theory based on an analysis of the historical conditions of capitalist society and its transitory relations of production.
In The Poverty of Philosophy the economic categories are defined as prerequisites for capitalist relations of production. Marx gives a critical analysis of the historical conditions of existence for each category (the circumstances which each category reflects) and of the other social relations which surrounded them. The theoretical system and the methodology of Marx's critique of political economy are clearly revealed in all these works: EPM, The Poverty of Philosophy, Grundrisse, Critique of Political Economy (first published 1859) and Capital.
Crucial to an understanding of these works and to reconstructing Marx's view is an understanding of EPM as a whole, as it is there that Marx outlines his method. This is a method of critical conceptual analysis of economic categories, beginning with 'alienated labour' understood as the 'general essence of private property'. [1] This is based on a view of capitalist production as the zenith of private property.
Until recently philosophers have read the "First Manuscript: Latter Part" and the "Third Manuscript" of EPM separately from the rest of the manuscript materials. On the other hand economists have studied only the "First Manuscript", separately from the others. However, EPM is actually the first draft of Marx's overall theoretical system -- 'A Critique of Political Economy' and each manuscript of EPM has an intrinsic logical relation to the others, detailed as follows 1) to 4):
1) "First Manuscript: First Part"; This develops a concept
(Vorstellung ) of bourgeois society; laws of private property; development of private property (landed property -- capital -- association); these laws are summarised at the beginning of the "First Manuscript: Latter Part". Here capital is determined as the governing power over the worker's labour and products. Thus we are witness to the way that Marx reads or interprets Smith's phrase 'wealth is power'. Considering political power, Thomas Hobbes wrote 'wealth is power' in Leviathan. Adam Smith added a paragraph to the third edition of The Wealth of Nations (Book I, Chapter V), interpreting this phrase as economic power or 'purchasing power' in the process of circulation. In EPM Marx redefines it as 'capital' or the 'commanding power' in the process of production.
2) "First Manuscript: Latter Part"; This is the first attempt at a comprehension (Begreifung ) of the 'necessary laws of private property' (Marx-Engels Collected Works, vol. 3, pp.270-1. Hereafter cited as 3 MEC 270-1); it is the first part of Marx's demonstration of how they arise from 'the very essence of private property' (3 MEC 271).
Judging from descriptions here and in the "Second Manuscript" we can say that the immediate production process of capital is divided into two component parts, each of which is analysed separately. These two component parts can be summarised as follows:
(a) 'the relation of private property as labour' (3 MEC 285) = 'this realisation of labour appears as loss of realisation for the workers' (3 MEC 272) = 'appropriation [of the worker] appears as estrangement, as alienation' (3 MEC 281) = 'the essence of private property' (3 MEC 296);
(b) 'the relation of private property as apital' (3 MEC 285) or 'the property relation of the non-worker to the worker and to labour' (3 MEC 281) = 'alienation [of the worker] appears as appropriation [of the non-worker], estrangement [of the worker] appears as truly becoming a citizen [Einbürgerung]' (3 MEC 281)[2] =
the concept of private property' (3 MEC 296).
The "First Manuscript: Latter Part" is the analysis of (a) above, which is logically basis. Paragraph (b) above is logically deduced from (a) as 'the product, the result, the necessary consequence, of alienated labour' via the four definitions of 'alienated labour' that Marx offers.
3) "Second Manuscript"; This is the second part of Marx's attempt to comprehend the laws of economics. Here he analyses the other component of 'alienated labour'. In other words, the immediate production process of capital is analysed from the standpoint of capital. The following paragraph, a note to a missing page of the "Second Manuscript", shows clearly what Marx did, or at least planned to do:

We have already seen how the political economist establishes the unity of labour and capital in a variety of ways: (1) Capital is accumulated labour. (2) The purpose of capital within production -- in part, reproduction of capital with profit, in part, capital as raw material (material of labour), and in part, as an automatically working instrument (the machine is capital directly equated with labour) -- is productive labour. (3) The worker is a capital. (4) Wages belong to costs of capital. (5) In relation to the worker, labour is the reproduction of his life-capital. (6) In relation to the capitalist, labour is an aspect of his capital's activity. Finally, (7) The political economist postulates the original unity of capital and labour as the unity of the capitalist and the worker; this is the original state of paradise. The way in which these two aspects, as two persons, confront each other is for the political economist an accidental event and hence only to be explained by reference to external factors ( 3 MEC 312; emphasis added).

This paragraph above shows that Marx analysed the process of
production in the "Second Manuscript", defining the roles of the following three elements in the process of production: labour, materials and machine. The emphasised sentence indicates that Marx had already grasped that labour reproduces capital with profit in the process of production.
At this stage of the analysis the term 'capital' is used for the first time, so we can observe a genetic description. Marx proceeded from 'an actual economic fact' that 'labour produces not only commodities : it produces itself and the worker as a commodity' (3 MEC 272). Through the analysis of the 'fact', Marx derived 'the essence of private property' and 'the concept of private property' in the "First Manuscript: Latter Part". Here, after a twofold analysis of the immediate process of production of capital, 'commodity' and 'private property' are defined further as 'capital', 'accumulated labour' reproduced with profit , which has reached the stage of 'indifference to its content'.
A supposition concerning the contents of the missing pages of the "Second Manuscript" is that they would have covered the 'three stages of exchange' in the Notes on James Mill. This seems nonsense to me. History, qua history, is no longer Marx's concern from the "First Manuscript: Latter Part" onwards. Even in the "Notes on James Mill", Marx's concern is with the development of the economic categories, e.g. 'exchange' from 'private property'. The contents of these missing pages can be inferred from the descriptions in the extant pages of EPM.[3]
Moreover I would point out that the last paragraph of the "Second Manuscript" is a sketch of the development of the economic categories. The last paragraph of the Notes on James Mill ("First Note") is also the same kind of sketch. They are not descriptive history at all.
Some commentators say that Marx confused 'capital' with 'private property in general', but such comments display ignorance of his analysis. Capital should and must be developed or explained from simpler and more abstract categories within Marx's system. Crucial to comprehending 'capital' as 'self-realising value' is a grasp of capital as a social relation containing 'alienated labour' as a necessary element. 'Capital' becomes fully comprehensible through 'alienated labour', i.e. the 'essence of private property' which produces the 'property relationship of the non-worker to the worker and his products', i.e. 'the concept of private property'.
4) "ThirdÅ@Manuscript" (References to the "Second
Manuscript"): This demonstrates how 'alienated or estranged abour' is the logical basis of the following:
(a) the necessary development in economic theories: 'F. Quesnay as the transition from the mercantile system to
Adam Smith' (3 MEC 292);
(b) the real movement of private property: capital as a world-historical power' (3 MEC 293) and as a contradiction driving towards resolution;
(c) the development of economic categories: the overwhelming power that profit and rent have over labour is rooted in the immediate process of production, the misery of workers in capitalist society is the logical result of the alienation of creative abilities [Arbeitsvermögen] capitalists (see the critique of "The Trinity Formula" in the Manuscripts of 1861-63 ).
Commentators who have conceptualised Marx's theoretical development as culminating in the 'old Marx' have told us nothing new. What is crucial for those who want to learn from Marx's method is to absorb his intellectual development, to follow how he comes to define his terms. From this viewpoint I would like to remind readers of a paragraph in the Grundrisse, in which Marx analyses the failure of Smith and Ricardo to comprehend the origin of surplus value:

Thus capital does not originally realise itself -- precisely because the appropriation of alien labour [fremde Arbeit] is not itself included in its concept. Capital appears only afterwards, after already having been presupposed as capital -- a vicious circle -- as command over alien labour (Pelican ed., p. 330).

As I have already shown above, Smith interprets Hobbes's 'wealth is power' as economic power, i.e. 'purchasing power', but meant the purchasing power of commodities in circulation only. Marx interpreted this once again and gave it another sense, i.e. capital is 'commanding power' over the worker and his products in the process of production. Marx criticised Smith because he grasped capital only as command in circulation but not as the power in production process. If Smith had seen power in the process of production, he could easily have understood the origin of surplus value.
By 'command' Marx understands 'capital' as a 'production relation of which alienated labour is one essential element", and thus he comes to define capital as 'self-realising value': value which increases itself through the labour of others. It is this understanding which leads him to explain the origin of surplus value and to define capital as a social relation of production, as a process and as a 'self-realising value'. It is with this idea that EPM begins:

What is the basis of capital, that is, of private property in the products of other men's labour? . . .Capital is thus the governing power over labour and its products. . . . Later we shall see first how the capitalist, by means of capital, exercises his governing power over labour,[4] then, however we shall see the governing power of capital over the capitalist himself (3 MEC 246-7).

Notes

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[1]. Crucial to a full understanding of Marx's communism is distinguishing the two terms: 'concept of private property' (der Begriff des Privateigentums ) and 'essence of private property' (das Wesen des Privateigentums ). See Marx's critique of 'crude communism'.

It has, indeed, grasped its [private property's] concept, but not its [private property's] essence (3 MEC 296).

The English version of EPM, however, prevents readers from understanding this fully by translating das Wesen into either 'essence' or 'nature' (see 3 MEC 271, 281, 290, 294 and 296).

[2]. Even in MEGA2, IV-2, the text is read as 'truly becoming a
citizen (Einbürgerung ). In my opinion, however, the term should be read as 'absorption (Einverleibung ) or, at least, the two should be taken to be similar. See the following passage in the Grundrisse :

Firstly: The appropriation [Aneignung ], absorption [Einverleibung] of labour by capital -- money, i.e. the act of buying the capacity of disposing over the worker . . .brings capital into ferment, and makes it into a process, process of production, . . . (Pelican ed., p.301).

In this connection, I would like to point out that the 'devaluation of men' (3 MEC 271) means 'wage labour':

His [The worker's] valuelessness and devaluation is the presupposition of capital and the precondition of free labour in general (Grundrisse, Pelican ed., p.289).

[3]. See "First Manuscript: Latter Part", 3 MEC 274, 279, 281; "Second Manuscript", 3 MEC 285, 289; "Third Manuscript", 3 MEC 312.

[4]. See "3. THE RULE OF CAPITAL OVER LABOUR AND THE MOTIVES OF THE CAPITALIST" (3 MEC 250).