THE MARXIST REVIEW OF BOOKS
James Heartfield looks at some of the renewed interest
in Marxism and asks whether it is all good news
Marx and the Marxologists
One of the peculiarities of the present is that just when Marx's critique
of capitalism should be most pertinent, its name is mud. Associated with
the brutality and waste of the Stalinist regimes, Marxism's critical power
has for some time been obscured. On the other hand, the capitalist triumphalism
at the collapse of the old Soviet bloc has been punctured by economic slump - creating
new openings for Marxist criticism.
- Specters of Marx: The State of the Debt, the Work of Mourning
and the New International, Jacques Derrida, Routledge, £35
hbk, £11.99 pbk
- The Falling Rate of Profit: Recasting the Marxian Debate,
Stephen Cullenberg, Pluto Press, £35hbk, £10.95pbk
- Marx's Theory of Crisis, Simon Clarke, St Martin's
Press, £14.99 pbk
The French philosopher Jacques Derrida, until now known for his deconstruction
of rationalism, weighs in to the debate about the market system with an
aggressive polemic against the capitalist triumphalism of Francis Fukuyama.
It was Fukuyama, a paid ideologue of the American Rand corporation, who
trumpeted the fall of communism as 'The end of history', meaning the final
victory of capitalism. To Derrida, Fukuyama's 'good news' about the end
of history has rather too religious a ring to it.
Pointing to trade wars between the major economic blocs, 'pauperisation',
'the ferocity of the "foreign debt"' and the 'epidemic of overproduction',
Derrida suggests that 'in order to analyse these wars and the logic of these
antagonisms, a problematics coming from the Marxian tradition will be indispensable
for a long time yet' (Specters of Marx, pp63-64). Derrida's Specters
of Marx, along with Simon Clarke's Marx's Theory of Crisis and
Stephen Cullenberg's The Falling Rate of Profit, is indicative of
a renewed interest in Marxism provoked by the persistence of market failure
in spite of the West's victory in the Cold War.
Gratifying as this renewed interest in Marxism might seem, each of the works
reviewed here shows in its own way an unwillingness to draw Marx's conclusion
about the failure of capitalism: that capitalism is a historically limited
mode of production which must be overturned if mankind is to prosper. The
tentativeness with which each of these authors approach Marx's analyses
of the historical limits of capitalist accumulation shows that they approve
of the way that Marxism qualifies the case for capitalism, without embracing
his project of social revolution. This is a version of Marx which, at its
worst, reduces him from an optimistic propagandist for social change to
a cynical Jeremiah revelling in the failures of present-day society.
Indicative of the half-hearted return to Marx is the unwillingness of these
authors to embrace Marx's characterisation of the limitations of the capitalist
accumulation process, and in particular the theory of the tendency of the
rate of profit to fall.
It was in the latter half of the last century that Karl Marx elaborated
a critique of capitalist society that has stood as a guide for revolutionaries
ever since. The beauty of Marx's critique of capitalism was that it showed
how the dynamic character of capitalist society was intrinsically linked
to its limitations.
From the most advanced social theorists that preceded him, the political
economists Adam Smith and David Ricardo, Marx took and reworked the idea
that the value of commodities was an expression of the labour expended - at
the normal level of productivity - in their production. To the political
economists equal exchange on the market looked very fair, but their theory
could not explain the source of profits. Profit, as Marx explained had its
origin in exploitation. The surplus value that accrued to the capitalists
was the difference between the money laid out in wages, what Marx called
variable capital, and the value created by the workers employed.
Exploitation, the difference between the paid and unpaid labour of the working
class has often been understood simply in moral terms, as though it was
a question of workers being tricked by cunning employers. Marx showed that
exploitation was not the exception, but the norm, the real basis of the
profit system. For Marx, exploitation was the key to the dynamic character
of the capitalist system. The surplus value created through exploitation
was the basis of accumulation, the perennial reinvestment of profits back
into the production process.
Capitalist dynamism, however, also implies limitations, as the tendency
towards ever greater productivity overshoots the narrow basis of production
for profit. Marx explained how economic crisis arose out of the process
of capitalist production itself, not on the market. Marx points out that
the accumulation process tends to undermine the capitalist rate of profit.
The reason for that is that not all capital invested creates surplus value.
Apart from the variable capital laid out in wages, the capitalists also
invest in machinery, plant and raw material which, while they are necessary
for production, do not create new value. Marx called this portion of the
capitalists' investment constant capital. Furthermore, he pointed out, the
historical trend in the development of industry is towards a greater investment
in machinery relative to the investment in men.
The displacement of variable capital by constant capital implicit in the
development of the production process would reduce the portion of capital
that produced new surplus value. Of course the mass of surplus value has
to rise - if it did not then accumulation could not take place at all. But
the ratio of surplus value to the total capital invested, the rate of profit,
falls as a greater amount of capital is exploiting relatively fewer workers.
The falling rate of profit acts as a barrier to investment, eventually leading
to economic crisis. The rising mass of profits is not sufficient to finance
a new round of investment. What this means is that the tendency towards
crisis is inherent to capitalism.
Stephen Cullenberg is one of the editors of the American journal Rethinking
Marxism, as well as the organiser of the colloquium at which Jacques
Derrida gave the speech that was the basis of his Specters of Marx.
Cullenberg's book, The Falling Rate of Profit, looks back over the
debate among Marxists at the onset of recession in the seventies about the
tendency towards crisis.
As a reprise of the debate Cullenberg's book is very good. He shows that
the two contrasting standpoints - that there is an inherent tendency to a
falling rate of profit or that there is not - rest on different understandings
of society. First he shows that the adherents of the falling rate of profit
envisaged society as dynamic and therefore subject to transformation: 'If
a falling rate of profit, and hence crises, are not perm- anent, built-in
features of capitalism's laws of motion, then there is no objective necessity
for the transition to socialism.' (p11)
Second, and this is his own contribution to the debate, Cullenberg shows
that the different sides of the argument reflect different views about the
way that capitalist society is interrelated. He describes how the underlying
assumption of the adherents of the falling rate of profit is that capitalist
enterprises are jointly engaged in the exploitation of labour. As Cullenberg
puts it, the whole takes priority over each of its parts. This is an important
element in the Marxist analysis of exploitation, removing the theory from
the narrow relationship of a particular employer to his employees and seeing
it instead as a relation between wage labour and capital as a whole.
By contrast, says Cullenberg, the competing view of the rate of profit starts
with the opposite assumption: that the whole of capitalist society is nothing
more than the sum of its parts, the individual enterprises. Seen in terms
of individual companies, the source of profits in the exploitation of labour
Cullenberg looks at the best known radical alternative to Marx's theory
of the rate of profit, the Okishio theorem, first argued in Nobuo Okishio's
article 'Technical change and the rate of profit' published in the Kobe
University Economic Review in 1961. Cullenberg gives a version of the
formula by which prices of production are estimated in the Okishio theorem
which reads: p = (1+r)(pA + pbL). Without going into the definition of all
the terms, the one term that needs to be defined is 'r' which equals 'the
general rate of profit'.(p54)
For some reason Cullenberg thinks that the suspect part of the theorem is
the assumption of 'a single, uniform, economy-wide rate of profit'. In fact
the problem is that there is an assumption of a given rate of a profit at
all. Where does it come from? Why is it the magnitude it is? The Okishio
theorem can explain neither of these things because it is only a theoretical
representation of the way that any individual capitalist works out his prices.
After adding up his costs he adds his profit margin. He's not concerned
where it comes from, only that he gets it. The remarkable part of this story
is that anyone ever thought that the Okishio theorem was an alternative
to Marx's society-wide theory of the rate of profit.
At this point Cullenberg ought to have consigned Okishio to the accountants
and endorsed Marx's theory of the rate of profit. Instead he reacts against
the revolutionary implications of Marx's theory, which he calls 'a reductionist
approach to social theory and causality'. In particular Cullenberg accuses
the Marxists and the capitalists of sharing the same assumptions about how
'despite the tremendous differences in approach between the "capitalist
qua accumulator" of the traditional models of the tendency of the rate
of profit to fall and...the "capitalist qua profit maximiser"
of the Okishio models they share a fundamental similarity. They both reduce
the capitalist to a homogenous conceptual category which acts out its given
Yes indeed. Both the capitalists and the Marxists assume that capital has
to make a profit. Cullenberg thinks that assumption unjustified, to which
one could only answer that he would make a very poor capitalist. Behind
this weird point is Cullenberg's desire to visit a plague on both the Marxists'
and the capitalists' houses.
Cullenberg's ham-fisted attempts to qualify Marx's theory of the falling
rate of profit are an extreme version of the vulgarisation of Marxism, but
even the best of these authors is reluctant to wholly endorse the argument.
In Marx's Theory of Crisis, Simon Clarke, for many years a leading
figure in the Conference of Socialist Economists, gives an excellent and
exhaustive account of the development of Marx's theory. However, when it
comes to placing the role of the falling rate of profit in the theory, Clarke
is painfully tentative.
One of the more useful aspects of Clarke's book is that it shows how in
their earlier works Marx and Engels described economic crises in more or
less conventional ways. They believed crisis was due to overproduction of
commodities, or the disproportionality of different branches of production.
However, with the development of the theory, Marx began to show how these
particular forms of crisis were just expressions of the underlying limitations
imposed by the profit system. The importance of this approach was that it
showed how crises were endemic to capitalist accumulation, rather than being
merely conjunctural disturbances at the level of the market.
Clarke cites one passage from Marx that has been used to argue that his
theory of crisis was based on the overproduction of commodities. There Marx
talks about 'necessary labour as the limit on the exchange value of living
labour capacity or on the wages of the industrial population'. Many commentators
have assumed this means that the low amount paid out in wages sets a limit
on how many goods can be sold. However, Clarke explains that Marx is 'not
referring to the limited consumption power of the mass of the population',
but to the fact that the workers will only be employed if their wages are
low enough to facilitate exploitation (p147). The key to the crisis tendency
is always the ability or inability of the capitalists to exploit living
In a similar fashion, Clarke shows how Marx dealt with the theory that crises
were a consequence of disproportionality between different branches of production:
'he reformulates the problem of proportionality...in terms of the proportionality
between necessary and surplus labour' which is to say the rate of exploitation.
Clarke adds that 'Marx defines this as the specifically capitalist form
of disproportionality, which underlies the pre- disposition to crisis in
the capitalist mode of production.' (p151)
But good as Clarke's reading of Marx is, he is reluctant to place the theory
of the falling rate of profit at centre stage. Having shown that the crises
of disproportionality and overproduction are just particular forms of the
underlying limits of the accumulation process, Clarke fails to show how
these forms are linked to that process. So he writes:
'Although all three aspects of disproportionality, underconsumptionist and
the tendency of the rate of profit to fall play a role in determining the
vulnerability of capitalism to crisis, the underlying cause of all crises
remains the fundamental contradiction on which the capitalist mode of production
is based, the contradiction between the production of things and the production
of value, and the subordination of the former to the latter.' (p285)
This sounds very profound, but in fact it is just too general to be of much
use. Demoting the tendency of the rate of profit to fall to just one of
many conjunctural crises that may occur in capitalist production misses
the point. The tendency of the rate of profit to fall is not a superficial
characteristic of capitalism, like unsold goods or uneven development, but
a fundamental law. Clarke himself quotes Marx as saying that it is 'in every
respect the most important law of modern political economy, and the most
essential one for comprehending the most complex relationships'. In fact
the tendential fall in the rate of profit is just the same law as the law
of capitalist accumulation, only seen from the other side, looking at its
limitations instead of its dynamism. More superficial expressions of crisis
can only be understood by relating them to this inner dynamic.
For that reason no actual crisis has ever broken out under the immediate
spur of a fall in the profit rate, but the susceptibility of capitalism
to crisis is conditioned by its relatively narrowing basis of profit. Even
the contradiction that Clarke makes central, that between 'the production
of things and the production of value', reaches its clearest expression
in the falling rate of profit. In recent times the conflict between making
useful things and making profits has been pushed to new heights by the difficulties
of profitable investment. Consequently investors prefer to make money by
speculating on the stock exchange, trading on shares and other assets, leading
to an ever greater divergence between the productive economy and the fictitious
paper economy of the City of London.
Clarke's reworking of Marx's theory of crisis undermines the programmatic
conclusion of the investigation of capitalism's inherent limits. Rightly
arguing that there can be no single catastrophic crisis that will bring
the capitalist era to a close, Clarke wrongly draws the conclusion that
Marxism is just a theory of 'the permanent instability of social existence
under capitalism', adding that 'from this perspective Marx is the first
and most radical theorist of the "postmodern" condition' (p280).
The weakness of both Clarke and Cullenberg's investigations of the theory
of the limits of capitalist accumulation is that they divorce the theory
from the understanding that capitalism is historically limited. Clarke's
point above would be correct if he were only arguing that the objective
limitations of capitalism were not enough to make a revolution without the
intervention of the working class. But assuming a condition of permanent
instability assumes the permanence of capitalism.
Cullenberg's mistake is yet more grievous: looking at Marxism only as an
interesting theory not as a means to transform society. As he writes of
the competing theories of crisis, 'each theory literally constructs its
own truth, and criteria for the validity of that truth' (p13). At which
point theories become works of art where one can just as easily imagine
that capitalists do not have to make a profit as imagine that Emma does
not marry Rochester in the end.
The attraction of the idea of Marxism to modern radicals is best illustrated
by Derrida's belated endorsement of Marx. Derrida fans will know that for
some time the controversial philosopher has been avoiding saying anything
about Marx, while promising to do so at a later date. Derrida jokes: 'Already
I hear people saying: "you picked a good time to salute Marx!"
Or else: "Its about time! Why so late?"' (p88)
Reading Derrida's extended and laconic essay, it is not hard to work out
why he has endorsed Marx just when he is out of fashion. The attraction
of Marx for Derrida is not the case for overthrowing capitalism, but the
case merely for calling it into question. All through the seventies and
eighties postmodernists inspired by Derrida were attacking Marxism precisely
for its claim to represent the interests of humanity as a whole. That offended
their preference for a plurality of different viewpoints. When capitalism
seemed to triumph in the wake of the Cold War, however, it was the capitalist
triumphalists who stood - or pretended to stand - for a common humanity. Consequently,
Derrida has turned his deconstructive ire on capitalism, and used Marx to
Derrida relates his own theory of deconstruction to Marxism: 'Deconstruction
has never had any sense or interest in my view at least, except as a radicalisation,
which is to say also in the tradition of a certain Marxism, in a certain
spirit of Marxism.' (p92) But the radicalism that Derrida reads into Marxism
is precisely its ability to undermine the claims of capitalism to be the
best possible society. The minute that the Marxists claim to have an answer
to the problems of how to organise society, deconstruction takes its leave
from Marxism, or as Derrida puts it 'radicalises' Marxism.
Throughout the long Cold War the radical intelligentsia flirted with Marxism.
The counterweight of the Stalinist countries and the left was a useful weapon
in its own academic criticisms of society. These academics rarely endorsed
any real social change, but always enjoyed the fact that the outlook of
the establishment was open to a challenge, leaving some room for their own
criticisms. Today the persisting failure of capitalism makes the project
of transforming society all the more pressing. But if Marxism is to play
a role in that project it will have to be a different Marxism than the rejuvenated
complaints of the radical intelligentsia. As Marx said, the philosophers
have only interpreted the world in various ways: the point is to change
Written by journalists, academics and Labour politicians, Turning Japanese
reflects the fear that Britain under the Conservatives is becoming a
one-party state. It looks at Japan - where 38 years of one-party rule ended
last year - as a model of how change could come to Britain.
- Turning Japanese? Britain with a Permanent
Party of Government, Helen Margetts and Gareth Smyth (eds), Lawrence
& Wishart, £14.99 pbk
There are some striking similarities between the two countries. Both the
Conservative and Liberal Democratic Party governments have been tainted
by corruption scandals - though the editors assert that while bribes and
pay-offs to MPs are a feature of Japanese politics 'we have not seen this
in Britain' (pix). Even if they did go to print before the cash-for-questions
scandal, this assessment borders on national naivety - as if British members
of parliament were more honourable than the Japanese.
But entertaining as these various comparisons are - especially Patrick Dunleavy's
reflections on the end of political debate - the similarities between Britain
and Japan end when you look at the relative strengths of the two economies.
After all one-party rule in Japan brought prosperity and an increased role
in the world.
For once the blurb on the back of the book is justified. Douglas Rushkoff
is to nineties cyberculture what Tom Wolfe was to sixties pop culture: the
chronicler of a generation, celebrating its aspirations and - between the
lines - describing its limitations, often self-imposed.
- Cyberia: Life in the Trenches of Cyberspace,
Douglas Rushkoff, Flamingo, £6.99 pbk
It's all here: surfing the information superhighway (something like a hi-tech
rerun of Jack Kerouac's On The Road - it's not the places/information
that matter, but the speed with which you pass them by); the New Edge convergence
between mysticism and the veneration of technology; drug-taking as a chemical
safety-blanket (the warm feeling of the E community); and the idea that
going with the flow is as subversive as anyone can be.
Rushkoff profiles all the recognised makers and shakers in West Coast cyberculture:
Mondo 2000 editor RU Sirius, Dr Timothy Leary (from LSD to virtual
reality as 'electronic LSD'), and ex-pat Brits such as Mark Heley, Fraser
Clark and Terence McKenna. He also introduces a bevvy of up and comers - the
face of 1996 is probably in there somewhere.
The world inhabited by the cyberculturists is narrow and blinkered. But
the idea of cyberculture appeals to a broad range of mainly young people.
Rushkoff succeeds in showing its appeal: solipsism is made to appear more
attractive than ever before.
Like Wolfe 30 years ago, Rushkoff arrived on the scene as an investigative
journalist, underwent something of a conversion, and left almost a missionary.
The tenets of cyberculture are fantasy. But they are fantasies which are
true to our times, and Rushkoff encapsulates them better than most. Read
Reproduced from Living Marxism issue 75, January 1995