Marx, Classical Political Economy and the Problem of Dynamics - Henryk Grossman 1941


The results of our analysis are confirmed by every statement that Marx makes in which he deals with his relationship to the Classical economists and shows the place which he claims for himself in the development of political economy.


Marx's comments, both in the Contribution to a Critique of Political Economy and in Capital reveal that fundamentally Marx regarded Classical political economy as being concluded, with Ricardo as its final embodiment, as in Ricardo, 'political economy ruthlessly draws its final conclusion and therewith ends' .[1] Marx judged Mill's attempts to develop classical political economy beyond this barrier, and accommodate its principles to the demands of the working class, as a 'shallow syncretism' and 'a declaration of bankruptcy by "bourgeois" economics'.[2] So are we then to suppose that Marx himself completed yet again what already had been completed, and 'further developed' what already had been concluded? Marx's own conception stands in stark contradiction to Classical theory, as regards not merely its specific theories (such as wages, ground-rent, crises etc.) but also its theoretical foundation. His aim is therefore not 'to develop Classical theory further' but rather to undertake a 'scientific attempt at the revolutionising of a science .[3]


Marx made the nature of this 'revolutionising' quite clear: after expounding the dual character of the commodity in the first chapter of the Contribution, he proceeds, in the subsequent section entitled Historical Notes on the Analysis of Commodities, to provide a characterisation of its theoretical status and relation to its antecedents. 'The decisive outcome of the research carried on for over a century and a half by Classical political economy, beginning with William Petty in Britain and Boisguillebert in France, and ending with Ricardo in Britain and Sismondi in France, is an analysis of the aspects of the commodity into two forms of labour -use-value is reduced to concrete labour or purposive productive activity, exchange-value to labour time or homogeneous social labour .'[4] The question was therefore one of a contrast between two conceptions, one of which (the English), took exchange-value as its main object, whilst the other (the French) took use-value: that is, each only grasped one aspect of reality. Marx's real theoretical position does not emerge in all its true clarity until it is seen in the light of this historical background: we can then understand why Marx categorised the discovery of the dual form of labour as the 'decisive discovery of the research carried on for over a century and a half by Classical political economy'. Marx's theory of the dual character of labour is the critical synthesis, and as such, the further development, of these two conceptions.


The following analysis is intended to show that Marx fundamentally transformed the principal categories inherited from Classical economics from the new standpoint which he had reached. In Marx's work all the categories possess both a value and a material aspect.


The commodity is a dual entity, a unity of exchange-value and use-value. The commodity has this dual character because its source, labour, itself has a twofold character, 'a fact which of necessity reveals itself not only in the commodity, but in all the products of labour. The commodity is the unity of exchange-value and use-value.[5] The capitalist process of production is the unity of the technical labour process and the valorisation process.[6] Whereas the means of production, raw and auxiliary materials are transformed by human activity into material products, use-values, during the labour-process, the valorisation process is the site of the creation of new values, whose surplus over the values used in production yields surplus-value and its derivatives (industrial profit, ground-rent, profit from trade, interest etc.). In addition, this dual character is revealed in the direction of the production-process, the necessity of which is a product of the division of labour, the increasing size of the means of production employed, and the compelling need to ensure their proper use .[7] On the one hand the function of direction is necessary in any type of economy insofar as it is a product of a social process of production characterised by the division of labour, and resembles that of an orchestral conductor. On the other hand, in the capitalist mode of production the capitalist exercises the function of management by virtue of his ownership of capital, and it is therefore 'made necessary by the capitalist and therefore antagonistic nature of that process' .[8] The process of the reproduction of total social capital is also 'not only a replacement of value, but also a replacement in material and is therefore as much bound up with the relative proportions of the value components of the total social product as with their use-value, their material shape'.[9] The category of wages has the same dual character. The worker does not sell 'labour' i.e. the actual activity, on the labour-market, as the market is not the place where work is performed ; rather, the worker sells the commodity 'labour-power', the capacity to work, for which the worker receives as counter-value, as wage, (just as with the sale of any other commodity) an exchange-value. This labour-power is not made active, i.e. used by the employer, until later in the labour-process, and hence removed from the market.[10] Surplus-value is obtained from the use-value of the labour. By so dividing the classical category of (wage-) labour into its two aspects of use- and exchange-value, Marx was able to avoid the contradictions in which the Classical economists became entangled.


Capital also has a dual character. The Classical economists already possessed the distinction between fixed and circulating capital. Marx took this distinction over, but gave it an entirely different meaning, in which the difference between the use-value and exchange-value aspects of fixed capital became decisive. The distinction between fixed and circulating employed by the Classicals is meaningless within the sphere of circulation: it is only valid for productive capital within the labour-process. i.e. in the process of production.[11] As money, or as commodity, capital is neither fixed nor circulating .[12] The material basis of the distinction is constituted by the different character of the useful form of the fixed and circulating components in which they function as factors in the labour-process,[13] namely that circulating capital is used up in one period of labour, whereas fixed capital functions 'in a series of repeated labour processes', due to the durability of its natural form. The result of this difference in the life of different capitals -i.e. the time aspect -is the completely different manner in which fixed capital is replaced- on one hand as value,[14] and on the other as use-value, in natura, in kind, a distinction in the mode of replacement which Marx used to derive the necessity of periodic crises at the stage of simple reproduction.[15]


The category of the organic composition of capital changes in a similar way. Ricardo had already employed the difference between capital-intensive and labour-intensive spheres of production, which was important in his theory of profit: but for Ricardo it was conceived of purely in terms of value. Marx divided Ricardo's category into its aspects of use-value and exchange-value, in order to reunite them in a synthesis .[16] Having been transformed in this way, the category of organic composition takes on a completely different function -not only for explaining profit, as with Ricardo, but also as the 'most important factor' in the accumulation of capital .[17]


Finally, this same duality serves to reveal the category which occupies the central place in Marx's system: the falling average rate of profit, the 'motive power of capitalist production'.[18] In Capital we find it repeatedly stressed that 'the inner opposition of use-value and value hidden in the commodity, develops and grows along with the development of capitalist production.[19] The nature of the opposition between use-value and value in the commodity, and why it assumes constantly growing proportions, was never treated as a problem. However, when seen in connection with the presentation of the development of the productive power of labour in Volume I,[20] the presentation of the tendency of the rate of profit to fall in Volume III of Capital[21] shows that Marx also derives this category from the dual character of labour, namely the inverse movement of the mass of use-values and values as a consequence of the increase in the productive power of labour: the richer a society becomes. the greater the development of the productive power of labour, the larger the volume of useful articles which can be manufactured in a given period of labour; however, at the same time, the value of these articles becomes smaller. And since the development of the productive power of labour means that a constantly growing mass of means of production (MP) is set in motion by a relatively constantly falling mass of labour (L), the unpaid portion of labour (surplus-value or profit) must also progressively fall. In capitalist terms, growing social wealth is expressed in the fact that a given capital exhibits a tendential fall in profit. The fall in profits, the regulating and driving force of the capitalist mechanism, puts the continued existence of this mechanism into question:[22] the greater the mass of use-values, the more pronounced the tendency for the fall (in value terms) in the rate of profit.


In its interpretation of Marx's economics the dominant teaching has also expunged the theory of the dual character of labour, i.e. they have removed precisely what was specific to Marxism, and what distinguishes it from Classical theory, in order to be able, subsequently, to incorporate Marxism into the body of Classical political-economic theory. That this 'incorporation' was no accident is attested to by the fact that Benedetto Croce rated it as one of the merits of the dominant theory.[23] In demonstrating the untenability of the Classical doctrine, they can simultaneously prove the weakness of Marx's theory .[24]

[1]Contribution to a Critique of Political Economy p. 61 .

[2]Capital I p. 98.

[3]Marx, Letter to Kugelmann, 28 December, 1862.

[4]Contribution to a Critique of Political Economy p. 52.

[5]Capital I p. 131 .

[6]Ibid. p. 293.

[7]Ibid. p. 449.

[8]Ibid. p. 450.

[9]Ibid. II, p. 398.

[10]Ibid. I, p. 292.

[11]Ibid. II, p. 163, 156, 170-71.

[12]Ibid. p. 169-71 .


[14] Ibid. p. 186, 173-6 .

[15]Cf. Capital II 'Replacement of the Fixed Capital' 1 . in the Form of Money 2 . in Kind. pp. 553-62.

[16]'The composition of capital is to be understood in a twofold sense. As value and as material, as it functions in the process of production . . . I call the former the value-composition, the latter the technical composition of capital'. The mutual relation between the two is called the organic composition 'in so far as it is determined by its technical composition and mirrors the changes in the latter'. (Capital I p. 762) -See too Capital III p. 46, 145-6, 154, and Theories of Surplus-Value II p. 433.

[17]Capital I p. 762. The importance of the distinction between the technical and value composition is revealed by the fact that Marx creates a specialised terminology to express it: the technical composition becomes the symbol. MP:L (Relation of the means of production to labour, and the value-composition c :v (relation of constant to variable capital) .

[18]Capital II p. 259.

[19]Ibid. I p. 153.

[20]Ibid. p. 431, 438.

[21]Ibid. III p. 211 et seq.

[22]For a more precise proof of this deduction Marx comments: 'With the development of the productive power of labour, which 'is always the productive power of concrete useful labour', this same labour produces a growing mass of useful goods, of material wealth, which can, nevertheless, correspond to a fall in the quantity of value of this growing mass of useful objects. 'This opposite motion is the result of the two-fold character of labour'. It is an empirical law of the capitalist mode of production that its development is accompanied by a relative decline in variable capital in relation to constant. 'This is just another way of saying that . . . the same number of labourers . . . set in motion by a variable capital of a given value, operate, work up, and productively consume in the same time-span an ever-increasing quantity of means of labour, machinery and fixed capital of all sorts, raw and auxiliary materials. (Capital III p.212)'It is likewise just another expression for the progressive development of the social productivity of labour (ibid.). Looked at in terms of use-value, constantly growing masses of useful articles arise, which represent ever smaller amounts of value. 'Since the mass of the employed living labour is continually on the decline as compared to the mass of materialised labour set in motion by it . . . it follows that the portion of living labour, unpaid and congealed in surplus-value, must also be continually on the decrease compared to the total amount of value represented by the invested total capital'. (ibid. p. 213) 'The progressive tendency of the general rate of profit to fall is, therefore, just an expression peculiar to the capitalist mode of production of the progressive development of the social productivity of labour .' (ibid.)

[23]'One could have also incorporated to the permitted economic doctrines those of Marx, which appear to be revolutionary, but which are only schemas of a particular casuistic kind'. (Croce, Philosophie de la pratique, Paris 1911, p. 235).

[24]In a 'book published on the 150 anniversary of the publication of The Wealth of Nations, P. Douglas tries hard to show that 'the contribution of Adam Smith to the theory of value . . . (was) not great', which necessarily led to the failure not only of the Classical, but also of Marx's theory. But, 'the failure was not the failure of one man, but of a philosophy of value, and the roots of the ultimate contradiction made manifest of the world in the third volume of Capital lie embedded in the first volume of the Wealth of Nations' (Paul H. Douglas Smith's Theory of Value p. 95) .