Marx’s Capital – Philosophy and Political Economy. Geoff Pilling 1980
Chapter 2. Marx’s Critique of Classical Economics

The class struggle

The failure on the part of political economy to separate out the natural from the social, resulted in its entirely superficial view of the place of the class struggle in the analysis of bourgeois society. This is an important question if only because many have seen the significance of the recent revival in political economy as lying in the fact that the class struggle has been reintroduced into the analysis of capitalism. It is certainly true that the neo-classical (vulgar) school tried to eliminate any consideration of class antagonisms from its system – this it did with its asocial ‘factors of production’ and its claim that the distribution of income was a function of technology. And it is equally true that this marked the sharpest contrast with the Ricardian tradition where a consideration of the interrelations of classes was brought to the forefront of the analysis. Marx certainly saw this emphasis on class relations as one of the greatest strengths of Ricardo’s work. (The American writer, Carey, denounced Ricardo for precisely this same emphasis.) Furthermore, Marx, in explicitly rejecting the notion that he was the first to discover the class struggle in history (this was the achievement of earlier French historians), gave priority to English political economy for having been the first to investigate the ‘anatomy’ of this struggle. But does this mean that Marx and Ricardo shared a similar theoretical position in their attitude to this class struggle? This is by no means the case.

Let us first make a general point, not about political economy, but about historical materialism. Marx and Engels never held the view that the basic contradiction of the bourgeois mode of production was to be found in the antagonism between wage labour and capital. Nor, extending this point, did they see the class struggle as the basic contradiction in history. The materialist conception of history, on the contrary, saw the fundamental contradiction in history as one between the development of the productive forces on the one hand and the existing social relations of production on the other. A glance at the Preface to the Critique of Political Economy proves this to be so. In this short Preface, where the essential points of historical materialism are outlined, there is no mention of classes, or of class struggle. Marx does, however, speak about the ‘basis’ of society, a basis which lies in the social relations of production, relations which ‘correspond’ to the stage reached in the development of the productive forces. Only at a given level of the growth of the productive forces do the relations of production take the form of classes, which in turn disappear at a higher level. Class antagonisms are not, therefore, to be taken as things-in-themselves; they are rooted in the deeper, more basic contradictions between the productive forces and the production relations. These antagonisms are a driving force in class society solely because they are the expression, the result, of this deeper contradiction, which in the case of capitalism consists of the contradiction between the increasingly socialised nature of production and its ever-narrowing private appropriation.

It should be clear that this was not Ricardo’s view of the class struggle. He starts his work by assuming, as given, the existence of the three basic classes – workers, capitalists (tenant farmers) and landowners. They appear in the opening chapter of the book, and he proceeds to reveal their antagonism as a function of their economic interests. (As we know – and this stood to his credit – Ricardo became increasingly unsure whether the development of machinery would actually benefit the working class.) Despite this achievement Marx attacks Ricardo for ‘naively taking this antagonism for a social law of nature’ (Preface to Marx, Critique of Political Economy). What Ricardo took as ‘given’ Marx had to explain. Only at the very end of Volume III (in the famous unfinished chapter) does Marx start to deal with the class relations of the bourgeois system as they appear on the surface of society. It is precisely in this class struggle that the outward forms of society are continually ‘smashed up’ as Marx at one point says (Marx and Engels). Thus the structure of Marx’s work is once again seen to be the very opposite of Ricardo’s and this opposition is in no way fortuitous. For Marx set out not merely to prove that the interests of the two basic classes of bourgeois society were antagonistic (this had been recognised by the leading bourgeois thinkers as well as in the practice of the working class), but to uncover the historical roots of this antagonism. For only in this way could it be scientifically demonstrated that capital not only produces this antagonism, but provides also the material basis for overcoming it. In short, Marx set out to prove that the working class is not merely an exploited class, but a revolutionary class, a revolutionary class because it is the most important and decisive element in the productive forces of modern society. These productive forces are driven into increasingly sharp historical conflict with the social relations of bourgeois society. Here lies the ultimate source both of capital’s crisis and of the social revolution alike. Marx’s task (and the task of Marxism) was to make the working class aware of this spontaneous process. Hence Trotsky’s aphorism ‘Marxism is the conscious reflection of an unconscious process.’

This naive conception of the class struggle found in political economy was in turn bound up directly with its treatment of economic crisis. Because they invariably confused material and social phenomena, the political economists did not so much deny the possibility of economic crises as attribute such crises to nature, rather than to society. Once more it is Ricardo who brings out this point most clearly. The cornerstone of his view of economic crises lies of course in his theory of rent. He starts by defining the rate of profit as uniquely determined by the rate of surplus value to variable capital (p’ = S/v). He then proceeds to confine his discussion of changes in the profit rate to one centred on changes in the value of labour power. Accepting the ‘principle of population’, as advanced by Malthus (which by pronouncing the supply of labour infinitely elastic assumes wages constant at subsistence level), Ricardo was then able to limit his analysis to one concerning the productivity of labour in agriculture. He believed – on the basis of the ‘law’ of diminishing returns – that the productivity of labour in this sector would decline over time. This, in turn, would force up wages and hence bring about a reduction in profits. Thus his famous dictum ‘The interest of the landlord is always opposed to that of every other class in the community’.

The fact that Ricardo was forced to rely upon the Malthusian law of population – with its corollary, the notion of differential rent – marked another betrayal of his central aim to found political economy on the law of value. For the decline in the rate of profit was not deduced – and given Ricardo’s empiricist method could not be deduced – from the law of value. It also landed Ricardo in another difficulty. According to him, as population rises – and given constant wages – rent increases and profits fall. He thus makes landed property the source of the decline in profit; yet, with the development of the industrial revolution, landed property was being increasingly subordinated to industrial capital.

Without examining all aspects of Ricardo’s work on the nature of capitalist crisis, it is clear that for him such crises rest finally upon nature. For he held that, in the last instance, the rate of profit is determined by the fertility of the soil. Given the protection of agriculture by the tariff system, there must be a secular decline in the rate of profit as increasingly infertile soil is brought into cultivation to feed a growing population. And the corollary to this conclusion was that this decline in the profit rate could be arrested if sufficient fertile land were available:

Profits of stock fall only because land equally well adapted to produce food cannot be procured; and the degree of the fall of profits, and the rise of rents, depends wholly on the increased expense of production. If therefore, in the progress of countries in wealth and population new portions of fertile land could be added to such countries, with every increase in capital, profits would never fall, nor rents rise. (Ricardo)

Marx certainly praised Ricardo in his efforts to understand the movement of the rate of profit. Not only did he probe this question much more deeply than Smith (who saw profit falling as a result of competition, which was no explanation at all) but Ricardo did grasp the significance of the rate of profit as the motor of capital accumulation: ‘What worries Ricardo is the fact that the rate of profit, the stimulating principle of capitalist production, the fundamental premise and driving force of accumulation, should be endangered by the development of production itself’ (III). But, adds Marx, Ricardo was concerned here, as in so many other matters, only with the quantitative aspect of the problem and was at best only vaguely aware of the real forces lying behind this tendency. He saw the problem, says Marx, ‘in a purely economic way – that is from the bourgeois point of view, within the limitations of capitalist understanding, from the standpoint of capitalist production itself’ (III).

And it was precisely because Ricardo assumed the capitalist economy to be natural that he was unable to examine the social roots of its breakdown, expressed amongst other things through the law of the tendency of the rate of profit to fall. In this connection Marx observes: ‘Those economists, therefore, who, like Ricardo, regard the capitalist mode of production as absolute, feel at this point that it creates a barrier to itself, and for this reason, attribute the barrier to Nature (in the theory of rent) not to production’ (III).

As we have attempted to show, this fusing of the natural and the social was not confined to the treatment of the falling rate of profit. It permeated every single aspect of political economy. When Marx speaks of Ricardo’s ‘purely economic’ way of viewing things he means essentially this: the fact that political economy transformed the properties of commodities, money, capital, etc. which arose from their social existence into properties belonging naturally to them as things. Here was the fetishism of political economy, a fetishism which was directly related to empiricism in that it attributed to the objects in their immediately perceptible form properties that in fact did not belong to these objects and had nothing in common with their perceptible appearance. This is why Marx speaks of that ‘fetishism peculiar to bourgeois Political Economy, the fetishism which metamorphoses the social, economic character impressed on things in the process of social production into a natural character stemming from the material nature of those things’ (II).

It was this fetishism, this ‘purely economic’ way of treating phenomena which Marx rejected in toto. Of course, Marx rejected many of the particular conclusions of the classical economists. But much more important as we have attempted to show, was his rejection of the faulty method which he considered led inescapably to these wrong conclusions and theoretical inconsistencies. In short, Marx’s critique of political economy was of a philosophical nature, rather than one concerned with the details of economic theory alone. It is therefore to some further aspects of these philosophical questions that we now turn our attention.