June 24, 2003

Notes: Desai, Marx's Revenge

The first thing to note about Marx's Revenge is that it is not in any sense a history of economic thought.

What do I mean by this? Well, consider Desai's description of Marx's argument in Capital's chapter "The General Law of Capitalist Accumulation"--which Desai describes as a chapter about cyclical growth:

There are three strands of analysis of the dynamics of capitalism [cyclical growth, balanced growth, and the falling rate of profit] in the three volumes of Capital. Since all three volumes were written in draft at the same time... these are not just mistakes... but consistent aspects of the same model. there is also... an apocalyptic vision, practically repeated from the Communist Manifesto, which sits uneasily with the rest of Capital. Thus Marx has three responses, not altogether contradictory, to the question of the dynamics of capitalism....

Cyclical Growth

There is a cyclical pattern to a capitalist economy which is due to the way in which the rate of profit fluctuates. Capitalists employ workers to make profits, but as they employ more workers, unemployment goes down. This puts pressure on real wages. As real wages, as well as employment, go up, th eshare of profit goes down, and there is a squeeze on the rate of profits. At this boom stage of the cycle, capitalists retaliate by investing in labour-saving technology, thus slowing down the growth of--even reducing--employment. As employment increases, the pressure on real wagse eases, and they may even go down. This is the slump. Profitability improves; this encourages capitalists to expand their business now, with the new technology, and the cycle continues its upward course.

This is succinctly described in Chapter 23 of Volume 1 of Capital, "The General Law of Capitalist Accumulation."... Marx was the first classical economist to develop a theory of the cycle.... Marx had a theory of the cycled in which the economy never quite rested in equilibrium at full employment, or at less than full employment. There is an inherent tendency to disequilibrium in tracing out a cyclical pattern.... Exactly a century after the publication of Capital Volume I a Cambridge economist, Richard Goodwin, devised an elegant mathematical formulation of Marx's model.... The mathematical formulation that Goodwin proposes generates cycles of constant length and constant amplitude. Thus the 'crises do not get bigger or more frequent in this scenario, as a lot of Marxist rhetoric asserts.... Thus one answer ot the dynamics of capitalism is that it will perpetually revolve around some steady average values of profitability and unemployment... (pp. -69).

One would think from Desai's description that the chapter of Capital called "The General Law of Capitalist Accumulation" is about cyclical growth, and focuses on how the capitalist business cycle is a self-reinforcing and self-generating cyclical process of unchanging amplitude over time. But that's not what the chapter "The General Law of Capitalist Accumulation" is about. If there's a single phrase saying that the magnitude of the cycle is constant over time, I've missed it.

What is the chapter about? Well--as one might guess from its title--the chapter is about the general law of capitalist accumulation. And the general law of capitalist accumulation is not about cyclical growth:

...The greater the social wealth, the functioning capital, the extent and energy of its growth, and, therefore, also the absolute mass of the proletariat and the productiveness of its labour, the greater is the industrial reserve army [of unemployed]. The same causes which develop the expansive power of capital, develop also the labour-power at its disposal. The relative mass of the industrial reserve army [of unemployment] increases therefore with the potential energy of wealth. But the greater this reserve army in proportion to the active labour-army, the greater is the mass of a consolidated surplus-population, whose misery is in inverse ratio to its torment of labour. The more extensive, finally, the lazarus-layers of the working-class, and the industrial reserve army, the greater is official pauperism. This is the absolute general law of capitalist accumulation. Like all other laws it is modified in its working by many circumstances, the analysis of which does not concern us here.

The folly is now patent of the economic wisdom that preaches to the labourers the accommodation of their number to the requirements of capital. The mechanism of capitalist production and accumulation constantly effects this adjustment. The first word of this adaptation is the creation of a relative surplus-population, or industrial reserve army. Its last word is the misery of constantly extending strata of the active army of labour, and the dead weight of pauperism.

The law by which a constantly increasing quantity of means of production, thanks to the advance in the productiveness of social labour, may be set in movement by a progressively diminishing expenditure of human power, this law, in a capitalist society -- where the labourer does not employ the means of production, but the means of production employ the labourer -- undergoes a complete inversion and is expressed thus: the higher the productiveness of labour, the greater is the pressure of the labourers on the means of employment, the more precarious, therefore, becomes their condition of existence...

We saw in Part IV., when analysing the production of relative surplus-value: within the capitalist system all methods for raising the social productiveness of labour are brought about at the cost of the individual labourer; all means for the development of production transform themselves into means of domination over, and exploitation of, the producers; they mutilate the labourer into a fragment of a man, degrade him to the level of an appendage of a machine, destroy every remnant of charm in his work and turn it into a hated toil; they estrange from him the intellectual potentialities of the labour-process in the same proportion as science is incorporated in it as an independent power; they distort the conditions under which he works, subject him during the labour-process to a despotism the more hateful for its meanness; they transform his life-time into working-time, and drag his wife and child beneath the wheels of the Juggernaut of capital. But all methods for the production of surplus-value are at the same time methods of accumulation; and every extension of accumulation becomes again a means for the development of those methods. It follows therefore that in proportion as capital accumulates, the lot of the labourer, be his payment high or low, must grow worse. The law, finally, that always equilibrates the relative surplus-population, or industrial reserve army, to the extent and energy of accumulation, this law rivets the labourer to capital more firmly than the wedges of Vulcan did Prometheus to the rock. It establishes an accumulation of misery, corresponding with accumulation of capital. Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, agony of toil slavery, ignorance, brutality, mental degradation, at the opposite pole, i.e., on the side of the class that produces its own product in the form of capital...

the Church of England parson, Townsend, glorified misery as a necessary condition of wealth. "Legal constraint (to labour) is attended with too much trouble, violence, and noise, whereas hunger is not only a peaceable, silent, unremitted pressure, but as the most natural motive to industry and labour, it calls forth the most powerful exertions." Everything therefor ' e depends upon making hunger permanent among the working-class, and for this, according to Townsend, the principle of population, especially active among the poor, provides. "It seems to be a law of Nature that the poor should be to a certain degree improvident" [i.e., so improvident as to be born without a silver spoon in the mouth], "that there may always be some to fulfil the most servile, the most sordid, and the most ignoble offices in the community. The stock of human happiness is thereby much increased, whilst the more delicate are not only relieved from drudgery ... but are left at liberty without interruption to pursue those callings which are suited to their various dispositions"...

"The progress of social wealth," says Storch, "begets this useful class of society ... which performs the most wearisome, the vilest, the most disgusting functions, which takes, in a word, on its shoulders all that is disagreeable and servile in life, and procures thus for other classes leisure, serenity of mind and conventional [c'est bon!] dignity of character." [28] Storch asks himself in what then really consists the progress of this capitalistic civilisation with its misery and its degradation of the masses, as compared with barbarism. He finds but one answer: security!

"Thanks to the advance of industry and science," says Sismondi, "every labourer can produce every day much more than his consumption requires. But at the same time, whilst his labour produces wealth, that wealth would, were he called on to consume it himself, make him less fit for labour." According to him, "men" [i.e., non-workers] "would probably prefer to do without all artistic perfection, and all the enjoyments that manufacturers procure for us, if it were necessary that all should buy them by constant toil like that of the labourer.... Exertion to-day is separated from its recompense; it is not the same man that first works, and then reposes; but it is because the one works that the other rests.... The indefinite multiplication of the productive powers of labour can then only have for result the increase of luxury and enjoyment of the idle rich."

Finally Destutt de Tracy, the fish-blooded bourgeois doctrinaire, blurts out brutally: "In poor nations the people are comfortable, in rich nations they are generally poor."

No cyclical growth here. And this is the analytical climax, the core message of the chapter.

Now there are passages in "The General Law of Capitalist Accumulation" on top of which you can build Desai's models of cyclical growth. But those passages are not central to Marx's project. The main point of the chapter is not that "capitalism... will perpetually revolve [in business cycles] around some steady average values of profitability and unemployment." The main point of the chapter is the absolute general law of capitalist accumulation: that the richer is the capitalist society, the more miserable is its working class.

For Desai, however, the centerpiece of the chapter lies elsewhere. Desai's focus is on the paragraph:

But if a surplus labouring population is a necessary product of accumulation or of the development of wealth on a capitalist basis, this surplus-population becomes, conversely, the lever of capitalistic accumulation, nay, a condition of existence of the capitalist mode of production. It forms a disposable industrial reserve army, that belongs to capital quite as absolutely as if the latter had bred it at its own cost. Independently of the limits of the actual increase of population, it creates, for the changing needs of the self-expansion of capital, a mass of human material always ready for exploitation. With accumulation, and the development of the productiveness of labour that accompanies it, the power of sudden expansion of capital grows also; it grows, not merely because the elasticity of the capital already functioning increases, not merely because the absolute wealth of society expands, of which capital only forms an elastic part, not merely because credit, under every special stimulus, at once places an unusual part of this wealth at the disposal of production in the form of additional capital; it grows, also, because the technical conditions of the process of production themselves -- machinery, means of transport, &c. -- now admit of the rapidest transformation of masses of surplus-product into additional means of production. The mass of social wealth, overflowing with the advance of accumulation, and transformable into additional capital, thrusts itself frantically into old branches of production, whose market suddenly expands, or into newly formed branches, such as railways, &c., the need for which grows out of the development of the old ones. In all such cases, there must be the possibility of throwing great masses of men suddenly on the decisive points without injury to the scale of production in other spheres. Overpopulation supplies these masses. The course characteristic of modern industry, viz., a decennial cycle (interrupted by smaller oscillations), of periods of average activity, production at high pressure, crisis and stagnation, depends on the constant formation, the greater or less absorption, and the re-formation of the industrial reserve army or surplus-population. In their turn, the varying phases of the industrial cycle recruit the surplus-population, and become one of the most energetic agents of its reproduction. This peculiar course of modem industry, which occurs in no earlier period of human history, was also impossible in the childhood of capitalist production. The composition of capital changed but very slowly. With its accumulation, therefore, there kept pace, on the whole, a corresponding growth in the demand for labour. Slow as was the advance of accumulation compared with that of more modem times, it found a check in the natural limits of the exploitable labouring population, limits which could only be got rid of by forcible means to be mentioned later. The expansion by fits and starts of the scale of production is the preliminary to its equally sudden contraction; the latter again evokes the former, but the former is impossible without disposable human material, without an increase, in the number of labourers independently of the absolute growth of the population. This increase is effected by the simple process that constantly "sets free" a part of the labourers; by methods which lessen the number of labourers employed in proportion to the increased production. The whole form of the movement of modem industry depends, therefore, upon the constant transformation of a part of the labouring population into unemployed or half-employed hands. The superficiality of Political Economy shows itself in the fact that it looks upon the expansion and contraction of credit, which is a mere symptom of the periodic changes of the industrial cycle, as their cause. As the heavenly bodies, once thrown into a certain definite motion, always repeat this, so is it with social production as soon as it is once thrown into this movement of alternate expansion and contraction. Effects, in their turn, become causes, and the varying accidents of the whole process, which always reproduces its own conditions, take on the form of periodicity. When this periodicity is once consolidated, even Political Economy then sees that the production of a relative surplus-population -- i.e., surplus with regard to the average needs of the self-expansion of capital -- is a necessary condition of modern industry...

That's the paragraph out of which Desai extracts the message of cyclical growth. It is in the chapter. Marx wrote it. And you can build a model of cyclical growth on it.

The problem is that Marx doesn't think this paragraph is a particularly important one. It is Desai who does. Desai takes what is central to Marx's project, calls it an "apocalyptic vision" that does not fit with "the rest of Capital," and dismisses it. He takes other passage--passages that he wants to focus on--and makes them central to Marx's "analysis" (as opposed to Marx's mere "rhetoric").

Thus Desai can end his own chapter by writing that the "scientific parts" of Capital:

...do not... fit in with the apocalyptic vision, since the analysis does not lead to this conclusion.... Marxists got hooked on the revolutionary message.. [instead of the] scientific...much more complex... innovative and unique analysis of capitalism, whic does not lead to such revolutionary conclusions.... It is the analytical parts which are of help to us in understanding the dynamics of capitalism.... For everyday political and economic conduct, it is the sober analysis of the course of the cycle and the projections of growth, the interplay of inequality and poverty, which are the most relevant... Engels asserted that Marx had discovered the laws of motion of capitalism.... No one has asked what these laws said about the future of capitalism. It has been taken for granted, even by some high authorities, that in Capital Marx provided an analytical argument for the breakdown of capitalism...

Now this is a standard mode of interpreting text: ignore the author's purpose and the author's central concerns, focus instead on something peripheral that can after a close and tendentious reading can be made to convey a different message, assert that the peripheral is the central, and furthermore assert that you are the first reader to have ever discovered the text's true and inner meaning.

This is a standard mode of textual interpretation. It is, however, really lousy as a mode for doing the history of economic thought. It can, however, be good intellectual politics. After all, the point behind claiming that Marx--properly understood, as nobody at all from his best friend Engels to today has properly understood ever, until Desai--has a lot to say to us about the present and the future is that Marx is a powerful name to conjure with. For a century, after all, his writings were the sacred revealed texts of a powerful world religion. An argument that is Marx's carries more manna than an argument that is just Desai's.

So don't read this book to find out what Marx thought, or what Marx would have thought of the world today. You won't learn what Marx thought--unless you believe that Karl Marx is some kind of sock puppet manipulated by Meghnad Desai.

What you will learn is what Meghnad Desai thinks, and that's fine, for Desai is a very smart man who stands on the shoulders of many tall giants (including Marx) and can in all probability see further than any of them. The book is Desai's revenge, not Marx's.

So let's drop Marx. What does Desai say? That's the interesting question here.

[TO BE CONTINUED]

Meghnad Desai (2002), Marx's Revenge: The Resurgence of Capitalism and the Death of Statist Socialism (New York: Verso: 1859876440).

Posted by DeLong at June 24, 2003 10:06 PM | TrackBack

Comments

Not manna. Mana.

The word comes from Maori (and related polynesian languages) and in its original language and society it was the most important thing that there was. Mana is power, prestige, and respect, and more, and is both yours (inherently!) and yet is a social thing.

Because in a stateless, tribal society, without money, Mana defines who rules, who owns, who keeps and who gets.

As a (barely adequate) analogy consider another tribal, stateless society - the Mafia. As don Corlioni put it: You ain' got respec', you ain' got nuthin'.

Sean

Posted by: sean on June 26, 2003 04:35 AM

Not manna. Mana.

The word comes from Maori (and related polynesian languages) and in its original language and society it was the most important thing that there was. Mana is power, prestige, and respect, and more, and is both yours (inherently!) and yet is a social thing.

Because in a stateless, tribal society, without money, Mana defines who rules, who owns, who keeps and who gets.

As a (barely adequate) analogy consider another tribal, stateless society - the Mafia. As don Corlioni put it: You ain' got respec', you ain' got nuthin'.

Sean

Posted by: sean on June 26, 2003 04:37 AM

Not manna. Mana.

The word comes from Maori (and related polynesian languages) and in its original language and society it was the most important thing that there was. Mana is power, prestige, and respect, and more, and is both yours (inherently!) and yet is a social thing.

Because in a stateless, tribal society, without money, Mana defines who rules, who owns, who keeps and who gets.

As a (barely adequate) analogy consider another tribal, stateless society - the Mafia. As don Corlioni put it: You ain' got respec', you ain' got nuthin'.

Sean

Posted by: sean on June 26, 2003 04:37 AM

Oops.

Ah well, my rhetoric teacher (back when I was doing trivial studies) told me to always say things three times.

Sean

Posted by: sean on June 26, 2003 04:39 AM

Oops.

Ah well, my rhetoric teacher (back when I was doing trivial studies) told me to always say things three times.

Sean

Posted by: sean on June 26, 2003 05:03 AM

Not Corlioni. Corleone. It's from the town of Corleone in central Sicily, from the Western Malayo-Polynesian for "a blindingly clever and ruthless man who would nonetheless never use "ain't" in conversation."

Posted by: consigliere on June 26, 2003 06:32 AM

"...assert that you are the first reader to have discovered the text's true and inner meaning.
This is a standard mode of textual interpretation."

Stipulating, nonce, that this is true; since when? (I thought the gnostic heretics had all been burned a long time ago...) And how well does it work in interpreting texts written by, say, physicists, mathematicians, and other objectivists?

Posted by: Melcher on June 26, 2003 11:18 AM

Melcher wrote:

>>"...assert that you are the first reader to have discovered the text's true and inner meaning. This is a standard mode of textual interpretation." Stipulating, nonce, that this is true; since when? (I thought the gnostic heretics had all been burned a long time ago...)<<

If you travelled in the wilder and woolier regions of academia, you would find all kinds of strange beasts grazing on texts using this mode of interpretation. Derridaians... other deconstructionists... Straussians... the remnants of the lost tribes of Marxists...

Posted by: Brad DeLongq on June 26, 2003 11:32 AM
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