Crisis, Constitution and Capital

:: Chris Wright

What is the relationship of class struggle to the laws of motion of capital?What was Marx's method in Capital? What implications do these things have politically? These questions really form the centerpiece of Giacomo Marramao's essay “Theory of Crisis and the Problem of Constitution”1. Marramao specifically addresses these questions through a discussion of crisis and the problem of constitution, laying out on one side the opposition to a notion of economic crisis/catastrophe/breakdown vis-a-vis the views of Raniero Panzieri, Karl Korsch and Anton Pannekoek, and on the other side, the defense of a notion of crisis/catastrophe/breakdown as inherent to capital vis-a-vis the views of Rosa Luxemburg, Henryk Grossman and Paul Mattick. This can also be posed as the difference between the notion that crisis is caused by the subjective element or the class struggle versus the idea that capital produces it own barriers and therefore its own crisis.

Marramao takes issue with Panzieri's claim that the theory of crisis developed in the Second International goes hand in hand with a fatalistic, gradualistic transition to socialism through the objective development of the productive forces. Marramao makes clear what is at stake:

…we are interested in showing how, at the beginning of the 1960s in Italy, an argument common to a large part of the European left in the 1920s and 1930s was proposed by a militant opposition within the labor movement: that revolutionary action should not attempt to insert itself into the presumed weaknesses and “internal contradictions” of the system, but should activate only the autonomous will, the modern “insubordination” of the working class-its exclusive organizability.

In other words, for Marramao, nothing less than the role of revolutionaries and the process of the constitution of the proletariat as a revolutionary force is at stake. The debates in the 1920's and '30's represented the last prior serious attempt to grapple with these issues in what seemed to be a situation ripe with revolutionary potential, especially in Germany and in light of the ongoing social crisis in Europe that began in 1917 and ended in Spain in 1939.

The debate had its roots in fact in the argument over the objective necessity of crisis, the possibility or not of overcoming such a crisis and the nature of the transition to socialism. Marramao takes issue with Korsch's critique of both sides as “passive and non-commital conceptions because they limit themselves to reflecting on the elapsed stages of the real movement.” (Section 3) Marramao critiques Korsch by claiming that he

avoids the complex problem of the “method of exposition”[l4] when, in his urgency to work out an economic analysis able to provide a “practical theory of revolution” supported by an “activist-materialist attitude,” he reads the dialectical method of presentation of the mature Marx as a mere allegory [15] meant to rouse the proletariat's will and revolutionary spirit.

Marramao claims that Korsch is unable to differentiate between Luxemburg and Kautsky, since Luxemburg

never conceived of the model she described in the Accumulation of Capital as a pure and simple “reflection” of historical and empirical evolution of the capitalist mode of production. Rather, against Kautsky, she always refused to attribute the character of fetishistic objectivity to economic laws. [17]

There are several immediate problems with Marramao's work. Firstly, Marramao, like Luxemburg, conflates the theory of crisis, the theory that capital is necessarily crisis-ridden, that crisis is an inevitable part of capital, with the theory of collapse. He uses the two terms interchangably. This conflation serves to protect the theory of collapse from critique by allowing Marramao to argue that anyone who disagrees with the automatic breakdown or collapse of capital disagrees with the idea that capital necessarily generates crises.

This point of view has been critiqued from several different points. Pannekoek in fact correctly critiqued this perspective, defended by Luxemburg first in her famous conclusion that the question of all questions was “socialism or barbarism”. In other words, when the collapse of capitalism comes, will capital be replaced by the victorious proletariat or will the world slide into chaos. This is indeed a theory of decadence, not merely a theory of crisis, and this is what, at bottom, all theories of collapse are. Simon Clarke took up this same critique in his discussion of Marx's Theory of Crisis, where he argued that while crises are indeed inevitable under capital, collapse is not. Nor is there any specific mechanism in isolation that one could take as the source of all economic crises. In fact, Clarke pokes holes in pretty much every specific theory of crisis from the point of view that all of the different moments of contradiction they fixate on can in fact be the well-spring of any given crisis.

Aufheben has the most recent critique of this decadence theory in their self-admittedly somewhat outdated critique of theories of decadence in issues 2–4 of their journal. They specifically address Grossman, whom Marramao seems intent on defending in principle and I will allow them to speak for themselves:

Trotskyism as a tradition thus betrays its claim to represent what was positive in the revolutionary wave of 1917–21. The importance of the left and council communists is that in their genuine emphasis on proletarian self-emancipation we can identify an important truth of that period against the Leninist representation. However in the wake of the defeat of the proletariat and in their isolation from its struggle, the small groups of left communists began to increasingly base their position on the objective analysis that capitalism was decadent. However there was development. In particular Henryk Grossman offered a meticulously worked out theory of collapse as an alternative to Luxemburg's. Instead of basing the theory of collapse on the exhaustion of non-capitalist markets he founded the theory on the falling rate of profit. Since then, nearly all orthodox marxist theories of crisis have been based on the falling rate of profit. In his theory, which he argues is Marx's, the tendency for the rate of profit to fall[33] leads to a fall in the relative mass of profit which is finally too small to continue accumulation. In Grossman's account capitalist collapse is a purely economic process, inevitable even if the working class remains a mere cog in capital's development. Grossman tries to pre-empt criticism:

> Because I deliberately confine myself to describing only the economic presuppositions of the breakdown of capitalism in this study, let me dispel any suspicion of 'pure economism' from the start. It is unnecessary to waste paper over the connection between economics and politics; that there is a connection is obvious. However, while Marxists have written extensively on the political revolution, they have neglected to deal theoretically with the economic aspect of the question and have failed to appreciate the true content of Marx's theory of breakdown. My sole concern here is to fill in this gap in the marxist tradition.[p 33][34]

For the objectivist marxist the connection is obvious, the economic and the political are separate, previous writings on the political are adequate and just need backing up with an economic case. The position of the follower of Grossman is thus: 1) We have an understanding of economics that shows capitalism is declining, heading inexorably towards breakdown. 2) This shows the necessity of a political revolution to introduce a new economic order. The theory of politics has an external relation to the economic understanding of capitalism. Orthodox theories of capitalist crisis accept the reduction of working class activity to an activity of capital. The only action against capital is a political attack on the system which is seen to happen only when the system breaks down. Grossman's theory represents one of the most comprehensive attempts to declare Marx's Capital a complete economics providing the blueprint of capitalist collapse. He insists that “economic Marxism, as it has been bequeathed to us, is neither a fragment nor a torso, but represents in the main a fully elaborated system, that is, one without flaws.”[35] This insistence on seeing Marx's Capital as being a complete work providing the proof of capitalism's decay and collapse is an essential feature of the worldview of the objectivist marxists. It means that the connection between politics and economics is obviously an external one. This is wrong; the connection is internal but to grasp this requires the recognition that Capital is incomplete and that the completion of its project requires an understanding of the political economy of the working class not just that of capital. But Grossman has categorically denied the possibility of this by his insistence that Capital is essentially a complete work.

While at this point Marramao concerns himself with showing that Luxemburg is not Grossman and vice versa, we can already move beyond this point. Indeed, Grossman attempts an analysis of crisis from within the relations of production, not at the level of realization. However, Marramao is intent to claim that Grossman rescues Luxemburg's “political application” (Section 4) And what specifically is this political application? All we hear is that this discussion re-established the connection “between the theory of the crash and revolutionary subjectivity.” (Section 4)

The second point of crisis is in Section 5, where Marramao, following Mattick, defends Grossman's method of critique. Marramao writes,

The method by which the critique of political economy proceeds is not aimed at the historical and empirical description of real processes, but at the abstract isolation of certain fundamental moments, in order to define the unity of the laws of movement of capitalist society. “For Grossmann, too,” notes Mattick, “there are no purely economic problems. Yet, that does not prevent him, in his analysis of the law of accumulation, from methodologically limiting himself to the definition of purely economic presuppositions and thus to theoretically reach an objective limit of the system. The theoretical understanding whereby the capitalist system must necessarily collapse because of its internal contradictions does not imply at all that the real collapse is an automatic process, independent of men.[28]

This essential point however remains unexamined, except in so far as Marramao correctly points out the deficiency of Pannekoek's alternate conception, failing to establish as it does an internal relationship between subject and object. However, this cannot obscure the dubiousness of the method employed by Grossman, and later employed by Paul Sweezey, though with a different theory of crisis in mind.

The method of successive approximations is critiqued by C.J. Arthur in his essay “Dialectical Development versus Linear Logic”,

Because of the lack of familiarity with dialectic of thinkers since Marx, it is not surprising that other methods have been employed. And what better method than the kind that had proved so successful in Newtonian science? Methodologically sensitive Marxists such as Grossman and Sweezey put forward the method of “successive approximations.” This depends on the notion that in order to exhibit value in its pure form a number of simplifying assumptions may be made. After this simplification of the forms, a model of value relationships may be outlined in which the law of value would be perspicuous.

This is a perfectly respectable scientific procedure: but it works only if it really is true that the reality concerned can be grasped by a linear logic such that nothing essential is changed when the more complex model is built on the basis of the simple one.

The immediate problem is where to start, what level of abstraction to begin with as the most simple. Which assumptions should be made? If I understand Marramao and Grossman correctly, the answer is contained in the following quote,

Marxist theory of collapse is … a necessary supposition for the comprehension of the Marxist theory of the crisis and it is intimately connected to it. The solution to both problems is in the Marxist law of accumulation, which constitutes the central idea of Capital and is in turn founded on the law of value.” (Section 4)

In this quote, however, it is worth noting that Grossman does, if Marramao does not, understand that the theory of collapse and the theory of crisis are not the same thing. Rather, Grossman sees the theory of collapse as the 'necessary presupposition' of the theory of crisis, which for Grossman is solved in the “law of accumulation”, itself founded upon the law of value. Does this resolve Grossman's potential logical infinite regress?

So we do indeed have a theory of decadence in Grossman, but at the same time attempted through a rigorous reading of the law of value. But what is this law of value? I am in agreement with both Grossman and Marramao that any notion of crisis is indeed grounded in Marx's critique of value, but as we will see, Marramao and Grossman throw out the qualitative element in this critique, of value as not merely a law, but as a form. In this, Grossman and Marramao represent a significant step backwards from Grossman's contemporary I. I. Rubin, who first argued that rather than a 'labor theory of value', what Marx actually had was a value theory of labor: why does labor take this form under these historical conditions?

More to the point, methodologically Grossman moves in exactly the opposite direction from Marx's work in Volume 2 of Capital. Grossman, pace Mattick, wants to show how capitalism must collapse, but Marx was interested in showing how capital could in fact reproduce itself in and through its contradictions and crises. Maybe this is why Clarke refers to “Grossman's (1929) idiosyncratic 'shortage of surplus value' theory of overaccumulation, based on a bizarre representation of Marx's reproduction schemas.” (p. 67, Marx's Theory of Crisis, 1994.)

Even more oddly, Marramao attributes to Pannekoek an economism-voluntarism and associates this with the reformist theoreticians like Hilferding and Braunthal. What is most intriguing in this statement is Marramao's seeming obliviousness to the fact that this movement of economism-voluntarism or what we could also call objectivism-voluntarism, is to be found in Lenin and the Bolsheviks as early as the turn of the century. Not only that, Luxemburg herself adopted a theory of decadence alongside a political passivism that displayed itself in 1918–19 in democratism and educationalist attitude towards the class struggle. Both sides in fact represented certain limits within Social Democracy, and both held to a notion of decadence, to which Grossman also holds.

In relation to the development of class consciousness, Marramao goes with Grossman and Mattick, even as he understands there is a problem in their approach. In Section 5 therefore he goes along with revolutionary class consciousness as developing through the inevitable collapse of capital, in the objective conditions of capitalist development and crisis. With Mattick as with Grossman, it seems that it is the collapse of capital that gives rise to consciousness. As Aufheben noted in their above article, this approach does not accidentally make itself felt in periods of defeat or retreat where there is the tendency to wish a good kick in the asses of the masses to get them going. Such was certainly the case in the late 1920's and early 1930's, with fascism victorious in Italy and Poland, the working class defeated in Germany, Italy, Hungary, Britain, and China, depression breaking out, Stalinism overtaking the Comintern, fascism rearing up in Germany, etc.

None of this is to take up Grossman directly, as much as Marramao's use of Grossman. There are ways in which, if Marramao is correct, Grossman is in fact attempting to link value, crisis, relations of production, and the proper degree of mediation between the movement of capital and class struggle. The discussion in Section 7 is especially prescient. Clearly, Marramao challenges the idea that Grossman and Mattick are per se 'closed' or whether or not they simply assume closure for the purposes of a certain analysis. And it is admirable of Grossman to attempt to show how the antagonism between capital and labor presents itself only in a mediate fashion vis-a-vis the separation of use-value and exchange-value, the contradiction between means of production and relations of production, etc. The critique of “workers' autonomy” and of the need to abolish the commodity and wage are all well taken.

One of the more novel moments in the essay is in footnote 39, where Marramao relates some discussion of an article that challenged Grossman for mistaking what Marx is doing. The comments and Grossman's response are both instructive and yet too short. To me it seems that Grossman wants his cake and to eat it too. On the one hand

The method by which the critique of political economy proceeds is not aimed at the historical and empirical description of real processes, but at the abstract isolation of certain fundamental moments, in order to define the unity of the laws of movement of capitalist society.

On the other hand,

To Marx-assures the critic- it is not important to explain the capitalist reality (as I claim). The same critic proposes, besides, to furnish a 'theory' of crises. But what significance does the theory have unless one proposes not only to describe the data, but to understand it in its functional connections and thus to explain it?“ Cf. Marx, op.cit., p. 99.

Can we in fact have it both ways? Is there a splitting here or simply an operation at different levels?

On this, I have several different objections, or rather I agree with several different objections to this method of operation. The first objection, and the core of the rest, is made by Erik Empson in his article “The Social Form of Value and Measure”, where he uses Rubin's work to critique Negri and Grossman as implicitly taking the same stance. I admit I find this a novel turn as Marramao is intent on showing that it is Panzieri and Pannekoek and Korsch who are on the same side, while implicitly Empson suggests otherwise. He writes the following pertinent points in his essay,

The a-historical character of the scientific exposition of Das Kapital, is testimony to the debt owed by Marx to the conclusions of his pre-cursors. Matteo following Negri sees this science as an incumberence or limited in regard to the real developments. The “simplifying assumptions” of the science – what Henryk Grossman was to unfairly hypostatise as the very basis of Marx's method – mainly found in Volume 1, perform a disservice to the posited content of Das Kapital, that is the appreciation of capitalist system as the total synthesis of both production and circulation, the conclusion aimed at in the incomplete Volume 3. Althusser is a friend of this point of view, infamously recommending in an introduction to a French edition that readers of Kapital ignore the first section of the work.

In so far as the abstract starting point of Kapital has led to so many confusions; take for instance the idea of 'simple commodity production' as both historical and logical premise of capital - these views are justified. But as for the immeasurability of value, they also introduce a confusion and a misrepresentation. Marx as Rubin argues, was concerned not so much to:

“seek a practical standard of value which would make possible the equalization of the products of labor on the market. This equalization takes place in reality every day of the process of market exchange. In this process, spontaneously, a standard of value is worked out, namely money, which is indispensable for this equalization.” (Rubin pp. 125)

What follows in Rubin's argument is pertinent to Negri's criticism of Marx. Negri looks at Marx's project through the distorted lens of Marxism, wherein overridingly Marx's theory of value is understood as positing that labour time is the practical means of the measure of value. Rubin on the other hand understands that because Marx was concerned with the social form of value, that his emphasis was really on demonstrating that labour power is the substance of value. The argument is theoretical, or ontological: the point is not a practical standard of value of labour, but to demonstrate how 'in a commodity economy the equalization of labor is carried out through the equalization of the products of labour”.

Rubin introduces material from Theories of Surplus Value, a text which incidentally qualifies for treatment by the standards of aleatory materialism due to the absence of a strict phenomenological and dialectical schema of exposition, where Marx treats the theory of value, not as an external pre-established criterion of measure, but as the “Immanent standard” and “substance” of value.

What Rubin introduces us to here, is a possible misinterpretation of 'measure' as being a quantitative consideration, a simple matter of addition and calculation. However, in the Hegelian dialectic, measure is understood rather as “qualitative quantum”. In 'measure' Hegel finds an immediate identity between quantity and quality. Something 'lurks behind' quantitative changes, which makes measure an antinomy. The example Hegel uses in the shorter logic, is the ancient Greek problem of whether the addition of a single grain makes a heap of wheat – at what point does a quantitative change equal a qualitative change. There is for Hegel a necessary qualitative aspect of measure, we might say it has an ontological relevance. In ratios, which are relative kinds of measure (quantitative ratio), “quantity seemed an external character not identical with Being, to which it is quite immaterial”. The contradiction of quantity then, is that it is an “alterable, which in spite of alterations still remains the same”. The resolution of this contradiction is not just a return to quality, “as if that were the true and quantity the false notion”, but “an advance to the unity and truth of both, to qualitative quantity, or measure.” (cf Hegel encyclopedia Logic $105 -$111 – (end of the first subdivision of logic). Hence though this unity produces the immeasurable, this is a relative form and “measureless” is also a measure. And then the gem: “Measure is implicitly essence.”

This treatment of value and labor in fact goes beyond Korsch, Pannekoek, Grossman, Mattick and Panzieri. Grossman and Mattick's single biggest error is in taking an essentially economistic stance on a social question. For that reason, Pannekoek may not in fact be able to provide an adequate alternative formulation (Rubin in fact does the most satisfactory job of that), but at the same time neither does the counter-critique levelled by Grossman and Mattick actually address the fullness of Pannekoek's criticism. Grossman in essence fails to understand what Marx is doing in Capital. However, Pannekoek is not able to formulate exactly what is wrong with Grossman's position. He points out correctly the problem that economic crises are not the same as the collapse of capitalism, but he attempts to refute Grossman's formulas instead of his misreading of the content of Marx's analysis. Panzieri and those like and following him, from Castoriadias to Zerowork and later Harry Cleaver and Antonio Negri. Only Rubin, at the time, really achieves something close to an adequate critique.

Of course part of my point is that the two sides go back and forth without quite ever seeing that the objectivist and subjectivist positions are merely two poles on a continuum. So, while Harry Cleaver, in his essay “Karl Marx: Economist or Revolutionary?” can lay forth the following essentially correct critique,

“Luxemburg’s book was followed by arguments by Nikolai Bukharin, Otto Bauer, Henryk Grossman, and others.[11] All of these authors approached the reproduction schemes in the same manner as Luxemburg: as a basis for their reasoning about crisis, and as economists studying conditions of equilibrium. In modern terms they were reading Marx’s reproduction schemes as a two- or sometimes a three-sector growth model.[12] Luxemburg, like the others, was studying stability conditions. Many years later, after Leontief’s adaptation of those schemes had been incorporated into macroeconomic modeling, we would find capitalist planners doing something similar with multisectoral growth models. But where Luxemburg and these other Marxists were content with the observation that the model would (or would not) automatically generate contradictions and therefore that crisis was (or was not) inevitable under capitalism, the planners would use the model to help them figure out what adjustments could be made so that accumulation could proceed smoothly.

At first glance one might say it was a stroke of genius to figure out this way of using Marx’s schemes for the analysis of crisis. Were not these Marxists extending Marx?

Marx had developed the reproduction schemes during his work on the Grundrisse. He did so within the context of examining some of the factors that could lead to the breakdown of accumulation. He was led to them through his examination of capital’s problems of reproducing its social totality. As Mario Tronti has shown in his book Operai e Capitale (1966), the reproduction schemes constitute one approach to the examination of “social” capital, where social capital includes not merely the sum of the individual capitals but also the production and reproduction of the working class and therefore the struggles of that reproduction.[13] This view of the schemes sees them not as schemata of purely interindustrial flows but as one approach to a political totality.

This is absent in an economic reading of part 3 of volume 2. Luxemburg and the others deal with “reproduction” the way contemporary growth theorists do – in a very narrow and fetishistic “economic” way that leaves social and political relations out of account and reduces Marx’ s problem to one of abstract quantitative proportionality.

The result? I submit that this part of her analysis of crisis provides little of use to the working class other than a formal argument about the inevitability of imperialism.

he can simultaneously miss the point that you cannot just lump Grossman and Mattick with Luxemburg, that Grossman and Mattick share with Luxemburg the idea of the inevitability of the collapse of capital and the conflation of such a thing with the inevitability of crises in capital. Cleaver also mistakenly refers to the “political totality”, but such a phraseology would have been foreign to Marx. Rubin is more correct in formulating Marx's addressing of the totality. The “political” of Cleaver is connected to his essentially immediatist, for whom Capital is a book immediately about class struggle, without recognizing the mediations and levels of analysis to which a Grossman and a Mattick attend. Grossman in fact has in fact a quite excellent two part article that highlights his richness compared to Luxemburg theoretically, his attentiveness to dialectic and to the fact that Marx is not doing the work of political economy, originally reprinted in English in Capital & Class Nos. 2 and 3.¹⁾ This analysis is sophisticated and hardly can be ignored, though in English we have merely one abridged translation of his masterpiece and Mattick's work, which pretty much put forward Grossman's analysis.

This work has its own strengths, to which Marramao and also Ron Rothbart attest in their articles. Rothbart notes in fact that the only real limit of Mattick's work, and by extension Grossman's essential thesis,

As “objective” as this sort of analysis appears, in that it is developed in abstraction from class struggle, nevertheless it leaves room for the “subjective” in that it shows how the basis of relative class harmony must break down and aims to put into question the capital relation itself. It abstracts from class struggle in order to show that the crisis of profitability, the context in which the struggle develops, is inherent in the development of the capital-relation. There are limits to organizing production and thus, indirectly, all social life, by means of the capital-relation, by means of wage-labor. Such a system results in a multi-faceted degradation of work and life, including at times serious decline in many people's material well-being.

However, even if this objective approach holds up theoretically, its limits must be recognized. Capitalism, as it develops (and decays), transforms the labor-process and life in general, and, as a result, the character and forms of revolt change also. Strategy and organization are historically specific. The belief in or proof of capitalism's inability to surmount its internal contradictions at best sets the- stage for understanding the specific character of the present crisis, the specific character of present struggles and the relation between the two. If the crisis offers “the possibility of a transformation of the class struggle within the society into a struggle for another form of society”, it remains to be shown how this possibility can become a reality. What we need to do is 1) show how the intensified struggle over the rate of exploitation can actually become, or is in the process of becoming, a revolutionary struggle overflowing the bounds of the capital relation, how it can turn into a struggle against wage-labor, and 2) participate in this transformation.

Rothbart's article is in fact a kind of mirror of Marramao's piece, except it targets Cornelious Castoriadas, the journal Zerowork (with which Harry Cleaver was associated) and the work of Suitcliffe and Glynn, all of whom were arguing that the class struggle is directly responsible for crises and that there was no innate tendency to crises in capital. The critique is in fact quite persuasive, but the last two paragraphs that sum up the point indicate already several crucial problems which by extension seem to apply to Marramao as well.

Capital does not abstract from class struggle. Rather, it abstracts into the class struggle. You cannot directly explain the manifest ion of a strike by the separation of use-value and exchange-value, nor concrete from abstract labor nor social from private labor, but these abstractions form the content of the class antagonism as a specific class antagonism, as forms of social relations. Class struggle is present in Capital, but not in its phenomenal form, which would be exactly the kind of immediatism of which Grossman and Mattick accuse the subjectivist tendency in Marxism. At the same time, as Richard Gunn might point out, Marx is not in the habit of abstracting from, but of abstracting into because he is looking at the whole field of rich, densely layered mutual determinations. Marx is not doing what Grossman does, according to Mattick, following a method of successive approximations, in which one starts with a number of simplifying assumptions, around which one may then form a coherent model of value relations. As C.J. Arthur aptly points out, commenting on just this point in Grossman and Sweezey,

This is a perfectly respectable scientific procedure; but it works only if it really is true that the reality concerned can be grasped by a linear logic such that nothing essential is changed when the more complex model is built on the basis of the simple one. For example it is clear that no one has ever seen a body moving in a straight line at the same speed forever, because the forces Newton abstracted from in formulating his law of rectilinear motion are always present. Yet the law continues to hold in the more complex case, as one of a concatenation of circumstances combine to give rise to the phenomena observed.

This process however does exactly what Gunn criticizes, correctly, as the movement from the 'general concept' to the 'special case', or from a genus to a species. In the case of Grossman and Mattick, it also involves the above-mentioned treatment of quantity as just that, as mere quantity, rather than in its interconnection to quality and to form.

………….