It is fair to ask what, if anything, Marxist theory has to tell us about the economic, political, and social circumstances we find ourselves confronting today in the beginning decades of the twenty-first century. After all, Marx wrote in the mid to late nineteenth century when industrial capitalism was emergent and the vestiges of aristocracy and feudalism were still apparent throughout Europe. The United States was yet a largely agricultural society and many decades away from assuming the mantle of the dominant global power it would eventually don. Over the course of the past 150–175 years, scientific and technological revolutions in the areas of transportation, communication, and manufacturing transformed the social and physical world far beyond the point of recognizability for the typical mid-nineteenth-century denizen. Certainly, post-industrialism, globalization, the digital information age, the gig economy and the “end of history” situate us in a twenty-first-century reality that can only be understood sui generis. As common wisdom would have it, such changes have far outstripped the reaches of nineteenth-century thinking; even that stemming from a brilliant theorist such as Karl Marx. His efforts might be appreciated as an intellectual achievement for its time, but hardly relevant today. As a correspondent put it to me recently in reference to an exchange about the implications of oligopolistic and monopolistic practices in today’s globalized economy, “Marx? I thought he ended up in the dust bin of history.” What could Marxist theory possibly have to offer to help to understand a twenty-first-century reality seemingly so different from the one Marx engaged?
The answer, actually, is quite a lot. As I replied to my skeptical correspondent, “[Marxist theory is] only irrelevant for those who don’t want to look reality in the face. Sometimes denial is the highest form of flattery. Since bourgeois political economists couldn’t answer his analysis, the response has been to dismiss him and ignore the social scientists who continued to work in that tradition.” To understand why Marxist theory not only has much to offer but needs to be central to any attempt to grapple with our present circumstances, one only needs to be willing to look beneath the surface of the social order. Delving deeper, seeking understanding rather than accepting things at face value, in fact, is the hallmark of all science. As Marx himself put it early on in his writings, we do not find answers by accepting a self-defining and self-legitimating explanation of what exists or of a society’s vision of itself. One must look elsewhere for a clear understanding of the realities that underlie social circumstances. In other words, we need to adopt a methodology for discerning the foundational relations that structure reality. That is the approach that Marx utilized in investigating the capitalist system in Capital.
Three key aspects of that method need to be brought to the fore: its use of abstraction, its dialectical method of analysis, and, concomitantly, its historicist perspective. Marx’s use of abstraction to home in on the essential, core components of the systemic relations of capitalism is most evident in his analysis as reflected in Volume I of Capital. The purpose, of course, was to apply various assumptive constraints on the analysis to clarify the essence of the systemic relations. At that level, the analysis “models” the dynamics of the system under the limiting assumptions imposed on that model. In that sense, Marx applied at the theoretical level what modern scientific methods accomplish empirically with “control variables ”. By holding constant various potentially complicating factors, it is possible to focus on what is deemed to be the most significant elements. While the approach highlights the most telling tendencies and imperatives of the system, it is not in itself a direct reflection of all the complexities of how the system operates in the actual world. Its virtue is in its ability to expose the basic underlying relations. As the analytic model is expanded by relaxing earlier assumptions (as occurs in volumes II and III), greater complexities are brought into the equation.
As Marx put it in his preface to the first edition of Capital in 1867, his intent was to analyze the inner economic dynamics of capitalist relations: “…it is the ultimate aim of this work to reveal the economic law of motion of modern society…” (1976: 92). Accordingly, he employed a dialectic method to look beneath the surface appearances of the emerging capitalist system to reveal its inner workings (see Ollman in Chapter 2 of this volume for a further discussion of these points). In contradistinction to prevailing economic theories at the time (and thus the subtitle: A Critique of Political Economy), Marx emphasized the social relations that were at the heart of competitive capitalism; social relations that established a defining structure which shaped, constrained, and largely determined economic dynamics within the system. Rather than accept the reified understandings of political economy with respect to such concepts as commodity, profit, price, value, labor, “the market ,” and capital itself, Marx laid bare the underlying social relations that defined them. Marx stated it thus, “…capital is not a thing, but is a social relation between persons that is mediated through things” (1976: 932). In the process of articulating the essential social relations of capitalism, he was able to explain how the interconnections among the basic relationships formed a determining structure that tended to follow its own logic, constrained the actions of those who participated in it, yet simultaneously generated conditions that systematically undermined its own stability. In other words, Marx’s dialectical analytic method pointed to the internal tensions within the capitalist system. Such tensions (contradictions, if you will) both provided an imperative toward change at the structural level as well as pointing to the inherent interconnection between human agency in the entire process and the economic, political, and social context in which such agency is enacted. The latter is a point to which we will return shortly. Thus, if abstraction allowed Marx to bring to the fore the structurally underlying and central elements of capitalist relations, it was only by coupling it with the analytic lens provided by the dialectical method that he was able to highlight the movement of capitalism.
In so doing Marx was able to analyze the historically dynamic component of capitalist relations. He analyzed the movement of capitalist relations as historically distinct yet connected to both prior and future socioeconomic formations. Capitalism arose out of the internal contradictions of feudal society . But at the same time, by generating its own set of contradictory tensions and conflicts moves toward restructuration that resolves them, eventually culminating in a potential transcendence of the social order itself. In the broadest sense, of course, this is manifest in the conflict between classes. The emergent bourgeoisie contended with and eventually overthrew the feudal aristocratic manorial and mercantilist status quo in part by appealing to the other classes to align in support of a new social order. But that new social order would set the new dominant class in material opposition to those who also sought the freedom and liberty not possible under feudal rule. Rather than resolving class conflict , the historical shift to capitalism only served to move it to a new level of clarity. The claims of post-feudal bourgeois society of individual freedom and equality of opportunity rapidly reduced to freedom for capitalists to pursue profit from a production process that extracted surplus value from the labor of workers and the freedom of the working classes to sell their productive labor for wages. Intermediary classes (artisans, craftspeople, peasants, sole proprietary operators, and small agricultural landholders) were left to try to rise to the higher strata, scramble to maintain their standing in an increasingly untenable competitive environment or sink to working class status.
To the extent that the ideological claims of prior social formations rested on a basis of inherent “inequality” among social actors, the underlying economic relations tended to be masked. A presupposed ideological naturalism justified the inherent inequities in the system. Slaves were inferior to free citizens, serfs, peasants, and all others were inferior to aristocrats. Thus, their social status dictated their material condition and location in the social order. Material inequities of life, it was ideologically held, followed from the supposed “natural” inequalities that distinguished the members of one class from the others. While the presumptions of bourgeois society negated that claim the material divide still existed. If all members were “equal” and “free” whence the great inequalities that capitalism produced? Leisure, luxury, and fulfillment for the bourgeoisie and constant labor, a minimal standard of living, and alienation for the proletariat. For Marx, that divide in the material circumstances across class lines meant that capitalist society had the potential for revealing its true nature to all its participants. And that, of course, was the overriding focus of Capital: explaining the underlying reality to capitalist relations. And what was that underlying principle that tied capitalism to its predecessors and its heirs?
In his discussion of the commodity early on in the first volume of Capital, Marx explained that it is human labor. Interestingly, he did so in the context of his reference to Aristotle’s inability to incorporate the concept of value in his attempt to analyze the value form. According to Marx, Aristotle could not equate two different objects of production because he failed to see “what is really equal, both in the bed and the house. And that is – human labour” (1976: 151). He goes on:
However, Aristotle himself was unable to extract this fact, that, in the form of commodity-values, all labour is expressed as equal human labour and therefore as labour of equal quality…because Greek society was founded on the labour of slaves, hence had as its natural basis the inequality of men and their labour-powers. The secret of the expression of value, namely the equality and equivalence of all kinds of labour because and in so far as they are human labour in general, could not be deciphered until the concept of human equality had already acquired the permanence of a fixed popular opinion… Only the historical limitation inherent in the society in which he lived prevented him from finding out what ‘in reality’ this relation of equality consisted of. (1976: 151–152)
Thus, it is human labor that is intrinsically tied to “commodity-value,” whether or not recognized and understood as such at the time. It thus provides the connective thread for understanding the contradictions, dynamics, and class conflicts that defined the movement from one historical epoch to the next: a historical process of which capitalism is a moment, not an endpoint.
Of course, the value-form takes on a distinct character in capitalist relations (see the contributions by Belina, Honkanen, and Fishman in Section Two of this volume). In that light, it is important to note the implications held by the emphasis in capitalism on the overarching fixation on exchange- as opposed to use-value and abstract versus concrete labor. Each in its own way suggests the distortion of social priorities and an internal estrangement associated with capitalist economic relations. The emphases in capitalist relations on the value-form as associated with exchange-value and abstract labor reduces the essential connection between human (concrete ) labor and meeting human needs (use-value) to a base-line element that is then overlooked as a taken-for-granted component in the broader economic dynamic. The emphasis on abstract labor’s relation to value and exchange value as the basis of commodity transaction to the near exclusion of use-value fits neatly with the overarching emphasis on profit-seeking in the production process and commodity markets which is the hallmark of the capitalist political economy. What this does, however, almost by definition, is to place profit-seeking ahead of meeting true human needs as the key priority. That then leads to the tautological imperative of the system such that the market “value” of a commodity then stands for itself. Commodities become self-validating relative to other self-validated commodities and the ability of any commodity to actuality meet a tangible human need gets entirely lost in the shuffle. This was part of Marx’s point in the section of the first chapter of Capital Volume I entitled “The Fetishism of the Commodity and its Secret” (see Oittinen in this volume for a further discussion of this concept). Even commodities with little in the way of any direct connection to use-value are sought after for their ability to be traded later at a higher level. For example, consider in the contemporary environment shares of corporate stock traded on exchanges at levels of “valuation” with little connection to real productive output or even “profitability.” An overheated pursuit of monetary returns on essentially fictitious capital underlies most market “bubbles” that eventually burst (see Ricciardi in Section Three and Eren in Section Four of this volume for historically disparate but not unrelated considerations of fictitious capital). More pernicious, perhaps, is the creation of financial vehicles that, at best, build on the fetishist house of cards (e.g., credit default swaps) that eventuated in the Great Recession of 2007. And as we’ve seen in the past few years great efforts have been made to roll back constraining regulations intended to inhibit a repeat performance of the greatest financial collapse since the Great Depression of the 1930s, even as new, more complex, and even riskier vehicles are finding their way into “the market.” We see the perverse distortion of the focus on exchange-va...