Spinning Marx in His Grave: How David Harvey got rid of labor power in his unfaithful Companion

Part two

In part one of this series I emphasized the highly irregular, even dishonest, methods David Harvey employs in his introduction to Marx’s Capital, A Companion to Marx’s Capital. In particular, I called attention to Harvey’s use of the terms “a priori” and “cryptic” to characterize how Marx handles the fundamental categories of political economy, the critique of which is the project Marx undertook by writing Capital.

Since Capital is a critique of the theories of Marx’s contemporaries, it is not surprising that he begins with the categories already in place at the time he wrote his book. Harvey is essentially criticizing Marx for subjecting the categories of political economists like Ricardo, Malthus, Barbon, Mills and others to critical analysis, when this is precisely the project Marx had in mind when he began writing Capital.

When, for instance, Harvey criticizes Marx for making the ‘a priori’ assertion that the labor time required to produce commodities lay behind their exchange values, Harvey knows, or should know, that Marx is actually dismissing the argument of one school of political economists who claimed the values of commodities were expressions of their utility, i.e., of their capacity to satisfy human needs.

It is rather puzzling Harvey would call Marx’s argument that labor, not utility, gives commodities their values an  “a priori leap by way of assertion” unless he has another candidate for the job. In this part I will show that this is just Harvey’s motivation. Harvey does not think either labor or utility gives commodities their values; rather, Harvey is of the school that believes value itself is impossible until money has already emerged.

In Marx’s argument, money is just another commodity, while the value-form school believes value arises from exchange, not production. Thus exchange is necessary to reduce concrete particular use values into commodities. Knowingly or not, Harvey’s “Companion to Marx’s Capital” is a polemic against Marx’s Capital on behalf of the value-form school.

Cuckolding Marx: David Harvey’s ‘Unfaithful Companion’ to Capital

Part One

People often ask me what current books I recommend to help them understand Marx’s Capital. My answer to this is almost always the same. There is to my understanding no book out there written by anyone I know that accurately presents Marx’s argument except his own book, Capital.

How is it that almost 150 years after the publication of Capital is there not a simple and accurate popularization of his fundamental ideas that I can point to? This can’t be because of the complexity of his ideas. Einstein’s theory is no less complex than Marx’s, but you can find many good and accurate popularizations of his fundamental theories. I don’t know anyone who has ever read Darwin’s Origin of Species, yet there are many good and accurate popularizations of Darwin’s ideas. The same can be said of Freud.

Most of the great scientific discoveries of the 19th century are now widely understood by everyone in society. What is it about Marx’s ideas that make them so resistant to accurate and simple popularization? My answer to this is that I really do not know.

My hesitation in recommending books that might help folks understand Marx’s argument in Capital is probably best exemplified by a close reading of a section of one of the most popular books and lecture series in circulation today: David Harvey’s Companion to Marx’s Capital. As I will show, this “companion” is anything but faithful to Marx’s argument.

Why Keynes predicted a 15 hour workweek, but Marx did not

One final question raised by John Milios’ paper on crisis theory remains to be addressed.

I have shown that Keynes’ explanation of the Great Depression was identical to that underlying Marx’s prediction that commodity production would collapse, namely the constant reduction of the socially necessary labor time required for production of commodities.

I have also shown that the Great Depression took the form predicted by Marx: a collapse of production on the basis of exchange value. If, as Marx’s theory asserts, exchange value must take the form of commodity money, we should expect the collapse of production on the basis of exchange value to express itself as a crisis of commodity money. The minutes of the Federal Reserve from the outbreak of the Great Depression does indeed indicate that commodity money stopped circulating in the “economy” after 1929.

Keynes failed prediction

Moreover, Keynes initially argued this crisis made necessary both the reduction of hours of labor as well as existing “social customs and economic practices, affecting the distribution of wealth and of economic rewards and penalties”. In other words, Keynes thought the Great Depression established the immanent economic necessity for an end to a society founded on wage slavery. If the critical question debated by the classical Marxists was whether or not Marx had established the immanent economic necessity for socialism, Keynes appears to suggest he did — although he never mentions Marx in his essay.

That time when Ben Bernanke admitted Marx was right and John Milios was wrong

So what do we know regarding the validity of SYRIZA economist John Milios’ criticism of Marx’s alleged theory of crisis?

• First, we know Marx never had a theory of crisis. This has long been acknowledged by almost all scholars of Marx’s theory.
• Second, we know Marx predicted the collapse of production on the basis of exchange value. However, this fact is ignored by almost all scholars of Marx’s theory.
• Third, we know Keynes agreed with Marx on what caused the Great Depression: the improvement in the productivity of labor.

Keynes hypothesis of the cause of the Great Depression, which is fully consistent with Marx’s theory, completely disagrees with the dominant explanations of crises advanced by the underconsumptionists, the falling rate of profit school and the “multi-causal” school of Milios, Harvey and Heinrich. Keynes, like Marx, locates the cause of crises in the constant reduction of socially necessary labor time required for production of commodities.

How John Milios even screwed up Keynes’ argument

It seems to me that for John Milios to be correct in his argument, the following must be true:

1. Bernstein must be correct that Marx never demonstrated there was an immanent economic necessity for socialism.
2. Tugan-Baranowsky must have proved a fully automated capitalist economy was possible without a necessary intervening collapse of capitalism that Marx himself predicted.
3. Keynes must have corrected (or at least completed) Marx’s flawed analysis of the capitalist mode of production.

According to Milios, Tugan-Baranowsky’s analysis of Marx’s theory can be used as a point of departure to correct an apparent defect in Marx’s theory. Milios suggests the necessary connection between Marx and Keynes will be found by asking how investment can provide the demand that might be lost owing to the restriction on the consumption of the working class majority:

“What determines net investment and what dictates that it should occur to the extent required for unimpeded reproduction? And, by extension, what is it that, even if only temporarily, influences it in such a way as to generate disproportionality, and therefore crises? These questions open the way for creating a theoretical relation between Tugan-Baranowsky’s analysis and the Keynesian concept of effective demand.”

Thus, according to Milios, the problem Tugan-Baranowsky’s analysis uncovered is how to expand the net investment required for expanded reproduction. But is this actually the connection between Marx and Keynes? Drawing on Marx’s own argument on capitalist development in Capital and Keynes’ own discussion of the causes of the Great Depression, we find that what the two had much more in common than the alleged problem of managing net investment. What the two really had in common was an identical explanation for the Great Depression itself.

How SYRIZA economist Milios deliberately distorted Marx’s theory to serve his own purposes

In my previous post, John Milios’s strange explanation of capitalist crises, I noted Marx did not have a theory of crisis. Mind you, everybody who has ever studied Marx’s theory knows this is true and there is not the slightest hint of disagreement about this. Since the lack of theory of crisis is alleged to have such far-reaching theoretical implications, you would think scholars of labor theory would devote at least a paragraph or two to speculating why Marx himself did not feel the need to develop a theory of crisis.

Instead, folks like the German theorist, Michael Heinrich, suggest Marx was so overwhelmed by his subject that he was unable to complete it. Heinrich argues capitalism was rewriting its own code faster than Marx could transcribe it into a finished work. This argument, although having a hint of credibility, is actually self-serving hogwash on the part of Heinrich. For Heinrich’s version of history to be correct, capitalism has to be fundamentally different than what Marx describes in Capital. How different? In the Grundrisse, Marx predicts a specific historical event he believed was inevitable: the complete collapse of commodity production, but Heinrich argues collapse was never inevitable:

John Milios’s strange explanation of capitalist crises

I have been reading this paper by John Milios, a SYRIZA party economist, “Marxist approaches to economic crises”. The paper is interesting in that Milios is trying to advance an alternative hypothesis of the cause of capitalist crises that avoids both underconsumptionist explanations of crises and the argument that they are produced by the law of the tendency of the rate of profit to fall.

Among Marxists particularly those with only passing familiarity with Capital the underconsumptionist explanation for crises is quite popular. Of late that school has been challenged by folks like Andrew Kliman and others who claim crises are caused by the tendency of the rate of profit to fall. Milios is advancing what he says is a third explanation for capitalist crises in which the crisis may be caused by any number of situations.

Why Marxist can’t explain the collapse of Keynesian economic policies

Part Three

“Instead of understanding so-called ‘labour values’ as ontologically prior to money prices, the position adopted here is that order and regularity in the inter-relations of units of capitalist production is possible only because there is a form of value, namely money, as a precondition for it. Only once this form of commensurating products obtains is there any meaning to the supposition of a law of value rooted in labour time and appearing as price. The money-form structures such determinations as socially necessary labour time, deciding to what degree actual labour times are socially validated, or replaced by socially imputed amounts of labour.” –Chris Arthur, Value and Money

The collapse of Keynesian state management of the economy has never been explained by Marxists. Instead we have witnessed one Marxist scholar after another suggesting a return to Keynesian policies is both possible and necessary. In this part of the series, I will show why Keynesian policies ultimately collapsed. And, moreover, all talk of a return to the so-called Keynesian social state is a fantasy.