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International Socialism, Summer 1968


Joel Stein

Handle With Care


From International Socialism, No.33, Summer 1968, p.39.
Transcribed & marked up by Einde O’Callaghan for ETOL.


An Introduction to Marxist Economic Theory
Ernest Mandel
Young Socialist Alliance, 8s 6d

Ernest Mandel has attempted the nearly impossible in writing a 70-page pamphlet intended to outline Marx’s theory of capitalist production, the historical development of capitalism from pre-capitalist times to its modern State monopoly variety and provide a, somewhat detailed, analysis of the latter animal. The outline, while containing some useful and interesting discussions, is on the whole misleading.

It would be impossible to deal comprehensibly with even a fraction of the problems which Mandel raises since he raises, literally, nearly everything. Unfortunately, it is my feeling that he handles none of them adequately and the fault is not that of brevity alone. For example, he tells us that ‘Surplus-value is simply the monetary form of the social surplus product’ (p.23). It is easy enough to see the relationship between this misunderstanding and Mandel’s failure to acknowledge the State-capitalist character of ‘Communist’ societies. Leaving that aside, one can find not a few polemics in another ‘Introduction’ to this subject matter, Capital, against precisely such points of view. The difference between surplus-value and surplus-product is the difference between capitalism and its progenitors. The worker produces surplus-value because capitalism is a socialised class mode of production and because the capitalist depends upon the surplus-social labour which the workers’ surplus-product contains rather than simply upon the surplus product as such. Surplus-value is the capitalist expression of this surplus-labour. The difference between these societies and ‘forms’ is a ‘world’s history’ and not merely an old wolf in new clothing.

On other points, Mandel’s introduction is so clumsy as to be misleading. In explaining the tendency towards an average rate of profit in capitalist production he constantly confuses the attempt by capitalists to raise their profits by increasing the productivity of labour in their enterprises with the formation of an average rate of profit. While these are integrally related, one must make the distinctions clear in order to understand either. Marx’s theoretical discussion of the average rate of profit assumes that the organic composition of capital within any individual industry is homogenous, whereas the organic composition of capital, and therefore the productivity of labour, varies between industries. In this case, since the rate of surplus-value is theoretically the same between all various labours, the average rate of profit required for capitalist production to function requires that each capital obtain an amount of surplus-value in proportion to the amount of total capital which he invests, meaning that there is no direct relation between the amount of surplus-value which the products the capitalist dumps on the market contain and the amount of surplus-value which he obtains from the market. The capitalists’ struggle for higher profit rates by increasing the productivity of labour is based upon this process but remains a distinctive phenomenon.

Mandel’s discussion of ‘neo-capitalism’ is, likewise misleading. For example, he speaks of the tendency towards inflation in the arms economy as simply one in which more currency enters the market, e.g. the wages of labourers in the arms industry, while no new goods simultaneously enter the market. Mandel realises, however, that given this explanation of inflation, ‘military expenses would not be inflationary if they were completely paid by taxes.’ And if Mandel’s explanation were right, that would be true. But since the taxes of corporations would be passed on in higher prices and since workers would fight against these real income cuts, to which the capitalists respond with still higher prices, Mandel’s ‘non-inflationary situation’ would be, and is, very inflationary indeed. Even a bourgeois economist, Paul Einzig, realises that inflation can be checked only if ‘equilibrium is reached largely through a reduction of expenditures ... any attempt at disinflation by means of higher taxation alone is doomed to failure.’ Since inflation is one of the most important means by which workers’ living standards are attacked in modern capitalism, it is most important that this phenomenon be understood. By the way, for anyone who already has a grounding in Marxist theory Mandel has much that is interesting and stimulating to say. But, as an ‘introduction’ ... beginners beware.

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