- I. JCP Reexamines Marx’s Theory on Revolution in Early 1970’s
- II. How to Read Marx’s Works
- III. Critical Turning Point in Writing of Capital Manuscripts—Theory of Economic Crisis and Revolution
- IV. Elaborating the Theory of “Inevitable Breakup” of Capitalism (1866-67)
- V. Look into the Process of Introducing the “Transition Period” Theory
- VI. Core of Future Society Theory in Capital
- Supplemental Explanation: Critical Review of Engels’ Theory on the “Fundamental Contradiction”
[Editorial Note: This is an English translation of a lecture which Mr. Tetsuzo Fuwa gave in Tokyo on January 31, 2015. Mr. Fuwa is Director of the Social Sciences Institute of the Japanese Communist Party. He is also a former Chair of the JCP and a former member of the House of Representatives of Japan. For editorial purposes, all quotations from Marx and Engels in this translation are based on Karl Marx/ Frederick Engels Collected Works, Progress Publishers, Moscow, 1975-2004.]
Around the late 1960’s to the early 1970’s, the Japanese Communist Party (JCP) conducted its own theoretical review on Scientific Socialism which brought Marx’s theory of revolution into sharp focus for us. By that time, the Mao Zedong group of the Communist Party of China had already begun to attack the JCP. They repeatedly denounced us for not following their dogma of advancing an “armed revolution” which was apparently based on Lenin’s writing in State and Revolution (1917). The CPC’s attack against us started immediately after the breakdown of the Shanghai meeting between the JCP delegation and Mao Zedong in March 1966 and was then escalated from backstage accusations to public polemics.
In addition, we saw “the Prague Spring”, a reform movement in Czechoslovakia in 1968 which resulted in a military intervention by the Soviet Union and four other members of the Warsaw Pact. In the face of the situation, we realized that we had to reexamine the question of political systems and socialism.
Lenin’s theoretical works and the then-accepted traditional interpretations of his works were not useful in this regard and this drove us to go back to Marx’s original thoughts, including his theory on revolution and his view on a post-revolution state-power structure.
Lenin made the point clearly in his State and Revolution that the principle of a Proletarian Revolution is a revolution by force. During the Civil War following the October Revolution, he established his theory of revolution by setting the Russian experience as the one to emulate. Lenin claimed that a leading revolutionary group cannot get the support of a majority of people before seizing power, and that it can get their support only through implementation of policies that take into consideration the desires of peasants and others after it takes the position of power. Lenin instructed revolutionary movements in various capitalist countries to follow the Russian example. In other words, he set the theory of revolution by a minority group of revolutionaries as the principle to follow.
At the same period, Lenin also asserted that power born by a socialist revolution must have Soviet-style characteristics similar to the power held by the Paris Commune, although Marx had advocated for a democratic republic rather than a Soviet-type power structure. This previously well-accepted theory of socialist power of Lenin’s had been a “significant hurdle” for further theoretical advances to be made in the field of revolution movement theory.
At the 11th JCP’s congress in 1970, we made it clear that a revolution in an advanced capitalist country should be “a new field of great human endeavor and practice”, and accelerated our study efforts on revolution theory based on Marx’s original works. Then, we elucidated a set of questions from a historical angle: (1) a course of “a revolution by majority” was already established in its basics through the 19th century movement of scientific socialism: (2) Lenin’s definition of “proletarian dictatorship”, which was an integral part to “a revolution by force” and was defined as “a power which entirely depends on force”, was completely different from Marx’s original terminology: (3) Marx’s view that a democratic republic is the most suitable form for a post-revolution power leading to socialism/communism was consistent throughout his works. Through these studies, we overcame the “Lenin hurdle”.
How to read Lenin’s works
To be fair, I would like to emphasize that Lenin is, without doubt, the best researcher and the best man of deed in regard to the theory of scientific socialism in the post-Marx period. Lenin was, in particular, one of the few theorists who paid special attention to Marx’s theory on revolution.
One of the reasons why such a great theorist as Lenin misunderstood Marx’s theory on revolution is the limited nature of published works at the time. The Collected Works of Marx/Engels did not exist at the time and only a limited number of the works of Marx and Engels were available to him. Marx and Engels did not compile their formulations on revolution theory into one comprehensive body of work, but left them in various letters exchanged between them or sent to activists in foreign countries. Those important letters were published after Lenin died.
Moreover, the Russian state against which Lenin struggled was an authoritarian regime and there was no feasible way of enacting political change other than through an armed revolution. The world at the time of the October Revolution was characterized by harsh suppression and the use of military might on the part of imperialist countries. Against this historical backdrop, there seems to be justification for the argument declaring armed struggle as essential as presented in Lenin’s State and Revolution as being prima facie valid not only for the situation in Russia but also for the circumstances revolutionary movements throughout the world were facing.
We need to read Lenin’s works with a clear understanding about the situation revolutionaries faced at that time and its resulting constraints.
It is useful to classify Lenin’s works on the matter into three separate periods.
The first period is the one prior to 1916. The starting point of his controversial theoretical development later resulting in his State and Revolution was in his overall study conducted from late1916 to early 1917 with the focus on Marx/Engels theories on state and revolution. He conducted the study in Switzerland where he stayed while in exile. Although his remaining memos on theories of state and revolution up to late 1916 had shown flexibility, he reached a wrong conclusion on Marx’s theory on the matter during the period of this study, and this is apparent in the arguments presented in State and Revolution.
The second period is the one from the October Revolution in 1917 to the Civil War period where Lenin struggled against the domestic counter-revolutionary forces as forcibly as against the foreign military interventions until 1921. During this period, he went to a further extreme and attempted to establish his policy of “revolution by minority group” as a globally-valid principle, as previously noted.
The third period is the one after 1921. In this period, Lenin poured a remarkable energy into theoretical activities while simultaneously struggling with the newly emerging domestic and foreign challenges. He drastically changed his previous policies in various fields without sticking to his old theses introduced during the Civil War. Such new policies included the introduction of the “New Economic Policy (NEP)” and a peaceful coexistence stance in its foreign policy. In the Communist International, he also newly introduced bold policies such as a pursuit of the support of the majority of the proletariat and a use of unified front tactics with social democratic forces even endorsing establishing a unified front government through elections.
At the final stage in this period, Lenin became determined to wage a decisive struggle against Stalin after he clearly recognized Stalin’s great-power-chauvinistic character.
While the “final three years” (Lenin died in January 1924) is an important period in his theoretical achievements, a significant portion of them was deleted from the Collected Works of Lenin published during the Stalin era.
If we study Lenin’s works with that background in mind, we can still find in them valuable insights into scientific socialism.
II. How to Read Marx’s Works
All Manuscripts of Capital Became Available Only After Late 1990’s
Now, let me start on today’s main topic. Although we had been studying Marx’s thoughts, a full-fledged study became possible only after all Marx’s manuscripts of Capital became available to us.
The history of the writing process of Capital is as follows.
(1) It was in 1857, after a long period of research and reflection on his intensive studies, when Marx began writing drafts of papers dealing with economic matters. The manuscript of this period is called the “1857-58 Manuscript”.*
*This manuscript is included in the Second Department of Marx-Engels-Gesamtausgabe (MEGA): “'Das Kapital’ und Vorarbeiten”.
(2) Based on this manuscript, Critique of Political Economy (Volume 1) was published in 1859, though it contained only a theory of commodities and money. A series of notes Marx made while preparing for the next volume are also included in the Second Department of MEGA.
(3)In 1861, Marx began to write a continuation of Critique of Political Economy, and he ended up writing reams of manuscripts called in published form the “1861-63 Manuscript”. It was not until the mid-1990’s when these manuscripts became available. Until then, we were unable to study Capital with an inclusion of an analysis of all the manuscripts.
(4) It was in 1863 when Marx began to write Capital after he changed the title from Critique of Political Economy. He finished the final draft of Volume 1 by the summer of 1864. However, the manuscripts of the original version of the Volume 1 are lost except for Chapter 6: the results of direct production process.
(5) In late 1864, Marx postponed writing Volume 2 until later and started directly on Volume 3, and managed to finish Parts 1 to 3. In the midst of the writing process, the first International (International Workingmen's Association) was born. He joined the organization and soon became the de-facto leader. After a long interval following the end of 1848-49 revolution, Marx had a chance to get involved in political activism. In 1865, he suspended writing Volume 3, and began to write Volume 2 and managed to finish it in large part. In late 1865, he again turned back to approach the latter half of Volume 3, Parts 4 to 7, and finished them by the end of the year.
(6) In1866, Marx told Engels that he had written up the manuscript for his economic treatise. He then conducted the final editing work of Volume 1 and continued with that till April of 1867 before he finally completed Capital Volume 1 (published on September 14th, 1867). The present edition of Capital Volume1 which we now read in Japanese translation is mostly based on this version, though some modification done in later versions, including the French language edition, the second edition, and the third edition are reflected in the current Japanese translated edition.
(7) Marx proceeded with finishing his drafts for Volume 2, but he died in 1883 without completing the work. Marx had various advanced concepts for Volume 3, but he could not start to rewrite his first manuscript written in 1864-65 for Volume 3. Engels edited Capital Volume 2 and Volume 3 based on those manuscripts Marx left unfinished.
Marx deliberately informed Engels little about his ongoing study because Marx knew if he had informed Engels, Engels would have hurried him to publish it. While once or twice, when Marx got some absolutely critical findings, he did inform Engels that he found such and such, he did not give Engels a progress report of his entire study. Even after the publication of Capital Volume 1, he informed Engels about only his rough plans for Volume 2 and 3.
After Marx died, his reams of manuscripts for Volume 2 and 3 were left to Engels under those circumstances. Engels struggled to decipher Marx’s infamous messy handwriting to make a fair copy, and then started to edit them. It must have been a painstaking task. While Volume 2 was completed relatively fast and published in 1885, the compilation work of Volume 3 took seven more years. Engels finally managed to publish it in December 1894 before he died the next year.
Reading Marx through his own history
That is the history of the writing process of Capital. We need to bear in mind that Capital is not a book written from the beginning of Volume 1 to the end of Volume 3 in sequence. It is made up of historical layers. Volume 1 is a part which Marx tried every means possible to finish and it belongs to the top layer. Volume 3, on the other hand, is based on his first manuscript and belongs to the bottom layer.
When I read through the manuscripts as well as the text of Capital, I had a strong feeling that Marx’s theories themselves, including his study of political economy, had its own unique history.
In fact, Marx intensively studied economic theories developed in the previous era—classical economy—, before he decided to write his own work on political economy. In the process, in the first half of the 1840’s, for example, he was even critical of the labor-value theory. He adopted the labor-value theory by the time he wrote Wage Labor and Capital (1849), though he had not reached the surplus-value theory at the time. After going through these preparatory years, Marx started writing his manuscripts on the theme of political economy in 1857.
Marx was never satisfied with his tentative achievements. He always confronted new theoretical problems and moved forward after resolving them. That is why we need to be well aware of problems he faced in his different theoretical advances and to trace his development and directions taken to the end.
Therefore, I have a cautionary word of advice when studying Marx; “Read Marx through his own history”. Collecting his manuscripts on a specific subject arbitrarily in disregard of when and under what circumstances they were written will not lead to a deep understanding of Marx’s theories. You may often find that the conclusions reached at one time are different from the conclusions he drew at another time.
Reading Capital from the viewpoint of revolution theory
Another point we need to keep in mind is the great significance of the theory of revolution to Marx’s economic theories.
Marx wrote about his method in Afterword to the Second German Edition of Capital.
“[I]t includes in its comprehension and affirmative recognition of the existing state of things, at the same time also, the recognition of the negation of that state, of its inevitable breaking up”.
There, he basically said that while he thoroughly analyzed a capitalist society by using the classical economy framework which he inherited, his main research approach was aimed to discuss the inevitability of social change from the standpoint of the promoter of such change.
So, we cannot comprehend the core point of Capital without understanding how Marx’ theory of revolution is embodied within it.
Lenin once categorized the whole theory of scientific socialism into “three composing elements”; philosophy, economics, and socialism. We previously used to follow his categorization. Lenin made this categorization in his commemorative article in 1913 for the 30th anniversary of Marx’ passing.
In the next year, however, Lenin re-examined the complexities of Marx’s entire theory after a Russian publisher had requested Lenin to write an article on Karl Marx for an encyclopedia. The most difficult issue he faced was how to place Marx’s theory of revolution in relation to his entire theoretical composition. In the end, Lenin added the element of “Tactics of Proletarian Class Struggle” to his previous “three composing elements” for expounding on the theory of revolution. Lenin recognized that his original three-fold understanding was not enough to capture Marx’s theory in its entirety.
In this regard, I usually explain the theory of scientific socialism by categorizing it into “four composing elements”; 1. worldview (philosophy), 2. economics, 3. socialism, 4. theory of revolution.
Although Marx’s theory on revolution has its own history, there is no specific paper or text written by Marx or Engels to expound on this topic comprehensively. I used Engels’ Foreword to ‘The Class Struggles in France, 1848-50’ as teaching material when I lectured on the history of revolution theory recently. I think it is very important to historically understand the development of Marx’s theory on revolution in order to obtain a full appreciation of Capital.
III. Critical Turning Point in Writing of Capital Manuscripts—Theory of Economic Crisis and Revolution
1. Before the Turning Point (1857-64)
When we read Capital and its remaining early drafts from the view point of revolution theory, we find that there was a critical turning point in Marx’s writing process. The content of his manuscripts changed greatly after this turning point. So, where is the turning point? It was in the first manuscript for Volume 2 of Capital written in the first half of 1865.
(1) Marx’s Formulation of “Crisis-Brings-Revolution” Theory (1850)
In his early years, Marx simply assumed that a revolution which transforms capitalism would follow a course similar to that taken in the French Revolution, in which a revolutionary class was not organized in advance. Marx and Engels in their early years thought that a revolution would break out when an ancien régime fell into crisis and that a revolutionary process would forge the mass into a revolutionary class. They simply concluded that a future socialist revolution would follow basically a similar direction.
From that theoretical viewpoint, they engaged in the 1848 revolution in France and Germany. Although they did their utmost to lead the revolutionary movement by publishing The New Rhein Newspaper, the organ paper for the revolutionary forces, they had to admit that the revolution came to end when they saw the German revolution facing defeat and the British economic crisis, which had been in the background of the revolution, overcome.
At that moment, Marx wrote a thesis in which he predicted a possible forthcoming revolution.
“A new revolution is only a consequence of a new crisis. The one, however, is as sure to come as the other.” (The Class Struggles in France, 1848-50).
The underling logic of the thesis is as follows: the 1848 revolution had broken out following the economic crisis of 1847, and although the revolution had failed, another crisis would surely come and so would another revolution, so, let’s do our best to ensure the next revolution is a success. I call this type of logic a “crisis-brings-revolution” theory. Marx kept to this theory even when he started writing manuscripts for a treatise on economics in 1857.
The economic crisis which hit Britain in 1847 was the first economic crisis Marx saw firsthand and its impact was so profound that Marx regarded the outbreak of the crisis as “the beginning of the breakup” of capitalism in his Communist Manifesto (January 1848) which was written during the crisis.
The long-awaited economic crisis did break out in 1857, but the anticipated revolution did not come about. Still, Marx continued to hold his “crisis-brings-revolution” theory while he tried to clarify the mechanism of economic crisis as a focal point of his study which resulted in the 1857-58 Manuscript.
(2) Inevitability of Economic Crisis and “Tendency of the Rate of Profit to Fall” (1857-64)
In the 1857-58 Manuscript, Marx concluded that the law of “the tendency of the rate of profit to fall” (TRPF) caused economic crises.
Although both Adam Smith and David Ricardo also recognized the phenomenon of the tendential fall of the rate of profit which came with the development of capitalism, no one was able to elucidate the cause. Ricardo, in particular, was so alarmed that he once said that no profits would mean the end of capitalism.
Marx found the full explanation of the mechanism of the TRPF phenomenon by introducing two new concepts: constant capital and variable capital. As the productive power of capitalism grows, the portion of constant capital (resources, machines, buildings, and so on) in the total capital composition increases while the portion of variable capital (wages) decreases. Accordingly, there is no longer any mystery about the tendency of the rate of profit to fall. He demonstrated this co-relation with a mathematical formula. That was a breakthrough that showed the advantage of Scientific Economics.
Marx, however, went too far along with an alarmist crisis theory of Ricardo’s kind when he regarded this theoretical discovery to legitimize his “crisis-brings-revolution” theory. He attempted to theoretically turn the discovery into a new thesis: the law of TRPF would worsen crises under capitalism so that an economic crash would follow.
He even wrote in his 1857-58 Manuscript that the TRPF law was critical to the fate of capitalism, causing an economic crash, and finally leading to “overthrow by force” of the capitalism itself— a revolution. But in that Manuscript, he did not proceed to clarify the logic of how the TRPF law causes an economic crisis.
In the 1861-63 Manuscript, he began the study of how the fall of the rate of profit would cause a crisis. His tentative conclusion was as follows: while large capital could cope with the tendential fall of the rate of profit because of their advantages of size, small capital was forced to engage in risky ventures in response to management crises driven by the fall of their rate of profit. He assumed that those risky ventures engaged by small capital would cause an economic crisis.
In the second half of1863, he decided on a working title for his planned book Capital, and started to write manuscripts. In the second half of the following year, he finished his drafts for Volume 1, and then proceeded to prepare for the first part of Volume 3. While he continued to tackle the same issue again in Part 3: The Law of the Tendency of the Rate of Profit to Fall in Volume 3, he could not find any other new logic than the “risky-small-venture-causes-crisis” theory as he had formulated in the 1861-63 Manuscript.
But, that logic is not convincing. As an economic crisis is a phenomenon which does shake the very foundations of capitalism, arguing that the cause of it is originates in activities of small capital rather than large capital is obviously no longer tenable.
Right after writing the manuscript for Part 3 of Volume 3, Marx reached a new discovery which broke through this conundrum.
(3) Three Pillars of Economic Crisis Theory
Since his new discovery is closely related to the mechanism of the outbreak of an economic crisis, I would like to touch upon the structure of Marx’s theory of economic crisis before getting into his new discovery.
A theory of economic crisis usually consists of two issues; “possibility of crisis” and “grounds for crisis”.
(a)Possibility of Crisis
Marx discussed the issue of the possibility of crisis in the beginning of Capital Volume 1. When money appears in the commodity-exchange process and the act of sale becomes separated from the act of purchase, the possibility of crisis immediately comes into play.
“If the interval in time between the two complementary phases of the complete metamorphosis of a commodity become too great, if the split between the sale and the purchase become too pronounced, the intimate connection between them, their oneness, asserts itself by producing – a crisis.” (Chapter 3: Money, or the Circulation of Commodities)
(b)Grounds for Crisis
As production of commodities per se gains capitalistic characteristics, the issue of exploitation of workers by capital appears. In the production process, capitalists attempt to exploit workers, or sellers of labor-power, to the maximum extent and produce more commodities at least cost. In the commodity selling process, on the other hand, capitalists have to depend on the purchasing power of the workers as consumers who the same capitalists have exploited as much as possible in the production process. Marx repeatedly pointed out in Capital that this inherent contradiction between production and consumption under capitalism is the basic grounds for an economic crisis (see Chapter 16: The Turnover of Variable Capital, Capital Volume 2, Chapter 15: Exposition of the Internal Contradiction of the Law, and Chapter 30: Money-Capital and Real Capital. I, Capital Volume 3).
(c )Activation of crisis
Marx thought that a third pillar must be added onto the two issues discussed above in the economic crisis theory. That is the issue of elucidating the mechanism of how a crisis realizes itself in the “grounds for crisis”. I call this pillar the issue of “activation of crisis”. What Marx struggled to theorize from the law of the “tendency of the rate of profit to fall” was basically this issue of crisis activation.
A market economy per se has a regulatory function. When various contradictions between supply and demand arise, a market economy solves them by regulating imbalance. In the case of the capitalistic contradiction between production and consumption beneath the surface of its supply-demand imbalances, however, the function cannot get to the root cause and the situation could reach a point of catastrophic explosion – an economic crisis.
If the reason for such crisis activation were a shrinking of the market due to severe exploitation, capitalism would not exist at all. Pierre Joseph Proudhon argued that workers cannot buy back what they have produced and he attempted to theorize exploitation as the reason for a crisis. But Marx fine-tuned the theory of reproduction with a lot of effort and proved that the exploitation does not prevent either simple or extended reproduction under certain conditions.
Thus, scientific socialism faced the issue of elucidating the mechanism of why and how contradictions of capitalism actually materialize itself as an economic crisis by overwhelming the market regulatory function. That is the core point of the issue of crisis activation and Marx continued to struggle with this challenge in and after the 1857-58 Manuscripts.
Impossibility to Explain Crisis by “Tendency of the Rate of Profit to Fall”
Marx was well-aware of the need to clarify the issue. After the end of the 1857-58 economic crisis, the British parliament published a research report on the cause of the crisis. The crisis, which broke out when the economy was seen to be going well, was a serious matter for both the British government and its parliament in their handling of economic policies. They established a special committee, summoned various people involved for testimony, and made a detailed report on problems related to economic management which led the economy into the crisis.
Marx read the report and wrote a scathing article for an American newspaper, the New York Daily Tribune to which he contributed.
“The question is rather how it happens that, among all modern industrial nations, people are caught, as it were, by a periodical fit of parting with their property upon the most transparent delusions, and in spite of tremendous warnings repeated in decennial intervals. What are the social circumstances reproducing, almost regularly, these seasons of general self-delusion, of over-speculation and fictitious credit?” (British Commerce and Finance, 1858)
At the time, Marx was apparently confident that he was succeeding in his effort to elucidate the mechanism of activation of crisis. But, his attempt at doing so at the time was based on his old hypothesis that an economic crisis comes from the TRPF law. That was not the best way to find the answer to the issue.
2. Turning Point – Discovery of Mechanism of “Activation of Crisis” (1865)
In early 1865, Marx tentatively suspended writing drafts for Capital Volume 3 at Part 3 and started to write the first manuscript for Volume 2: The Process of Circulation of Capital. But just after starting to work on Volume 2, he suddenly began to explore a new theory on the mechanism behind the outbreak of an economic crisis. It looks as if he had a flash of inspiration.
Merchant Capital and “Fictitious Demand”
At first, Marx saw the importance of the function of “credit” in the crisis activation, but he soon recognized its theoretical infeasibility and abandoned it. Then, he paid special attention to the role of merchant capital in the process and developed his new theory on crisis in detail in the Process of Circulation of Capital.
The basic point of his new theory is as follows.
An industrial capital produces commodities. It sells the commodities to consumers and receives payment – transformation of commodity capital into money capital – before it reinvests the money capital obtained in a new production process. The capital proceeds to the next cycle of production after confirming the actual sale of its commodities to consumers.
Once merchant capital intervenes in the market, a change to the process occurs. For a producer, transformation into money capital reaches completion just when merchant capital purchases the product and that enables the production capitalist to continue his/her production process by reinvesting the money capital obtained before his/her product actually reaches consumers. At this stage, the commodities produced are still in the hands of the merchant capital and nobody knows whether merchant capital is able to actually sell them to consumers. In other words, the sale process of commodities has not yet reached completion while the process of commodity circulation for the production capitalist appears to be completed and it allows him/her to start the next cycle of production. Marx called this change as “shortening of the time of circulation”.
Thanks to that function of merchant capital, producers can assume that their products are sold before they actually reach consumers, and start the next cycle of production process. In this way, the production process is able to continue in successive cycles on the basis of “fictitious demand” in which producers do not know whether their commodities will actually be sold to consumers.
That “fictitious demand” grows as merchant capital intensifies purchase activities using funds borrowed from banks. As the sale of a commodity goes beyond national borders onto the world market, the imbalance between the scale of production and that of consumer demand becomes grave. The real reproduction process which is based on such “fictitious demand” has to continue itself precariously before it reaches its peak – the moment of collapse.
From this theoretical assumption, Marx conducted theoretical simulations on economic cycles and concluded that this was in essence the process of crisis activation.
Economic Crisis is not the End of Capitalism
As the generative mechanism of economic crises was clarified to that extent, it also became clear that such crises just belong to one phase of capitalism which appears periodically in a capitalistic life cycle rather than at the terminal phase of capitalism itself. The inadequacy of the “crisis-brings-revolution” theory which had closely been related to economic crisis resulting in socio-revolutionary outbreak also became clear.
After that discovery in the first half of 1865, Marx again suspended writing the first manuscript for Capital Volume 2 and turned back to writing the manuscript for Volume 3, and finished Parts 4 to Part 7. In Part 4: Merchant’s Capital, he fleshed out his just-discovered crisis-activation theory and discussed the role of merchant capital to be played in the process of crisis outbreak thoroughly. Although Chapter 18: The Turnover of Merchant’s Capital, in particular, has not drawn much attention till now, it is the most important chapter for the crisis theory where Marx discussed the issue in detail by using unique terminology such as “shortening the time of circulation”, “fictitious demand” and so on.
3. After the Turning Point – Marx’s View on Capitalism Also Changed
Crisis is a Barometer of Maturity of Capitalism
After establishing his new theory of crisis, Marx abandoned his previous view of regarding an economic crisis as an indicator of the terminal phase of capitalism. Although periodic outbreaks of such a catastrophic phenomenon show the intrinsic contradiction of capitalistic production, regarding them as “the beginning of the end” of capitalism as Marx wrote in Communist Manifesto is a mistaken understanding of the developmental stages of capitalism.
In Afterword to the Second German Edition of Capital (1873), Marx wrote, “Modern industry itself was only emerging from the age of childhood, as is shown by the fact that with the crisis of 1825 it for the first time opens the periodic cycle of its modern life”. Here, he described an economic crisis as an indicator of capitalism emerging from “the age of childhood” rather than “the beginning of the end” of it. This description clearly shows a significant change in Marx’s understanding of capitalism.
“Fall of the Rate of Profit” is Inevitable as Capitalism Advances
He also abandoned his previous view regarding the TRPF phenomenon as a sign of the decline of capitalism.
As productive power grows, it is inevitable that the portion of constant capital becomes larger while that of variable capital gets relatively diminished. Sticking to an idea of regarding the TRPF phenomenon as a sign of the demise of capitalism goes nowhere in the understanding of the development of capitalism as a whole. By overcoming the old theoretical assumption, Marx established a basis for the theory pertaining to the rising stages of capitalism. He discussed this matter in Chapter 25: The general law of capitalist accumulation, Part 7: The accumulation of capital, Capital Volume 1. This chapter was written in 1866-67 while Marx was completing the final draft for Volume 1. In this additionally-inserted chapter, he studied and elucidated in detail what happens to the transformational process of capitalism and the fate of the working class as the composition of capital rises.
Therefore, we need to keep in mind the fact that the current edition of Capital we read now includes some of the obsolete views which Marx himself abandoned after the “turning point” we discussed above. The turning point was in 1865 and the drafts written before that point and yet incorporated into the current Capital are in Parts 1 to 3 of Volume 3. Since the Part 1 and 2 are irrelevant to the theme discussed here, special attention is required when we read Part3: The law of the tendency of the rate of profit to fall.
Although the traditional interpretation of the TRPF regards it as the most basic law which reveals the existential crisis in capitalism, Marx himself rarely referred to the TRPF after the 1865 turning point.
He only once referred to the law in his letter to Engels in which he gave a rough sketch of Volume 2 and 3 of Capital. He told Engels that he would discuss the TRPF in Part 3, Volume 3. He just implied that he had won “the greatest triumphs over the pons asini [stumbling block] of all previous political economy” but never described the TRPF as a barometer of a deepening crisis of capitalism.
“III. The tendency of the rate of profit to fall as society progresses. This already follows from what was developed in Book I on the change in the composition of capital with the development of the social productive power. This is one of the greatest triumphs over the pons asini of all previous political economy” (Letter of Marx to Engels dated April 30, 1868)
IV. Elaborating the Theory of “Inevitable Breakup” of Capitalism (1866-67)
I already mention Marx’s reference in Capital to “[capitalism’s] inevitable breakup” (II. Reading Capital from the Viewpoint of Revolution Theory). Since an economic crisis was not a barometer to the “breakup” of capitalism, and since a theory of “crisis-brings-revolution” was already abandoned, as we saw above, where did Marx elaborate the discussion of the “inevitable breakup” of capitalism in Capital?
When Marx wrote the final draft of Capital Volume 1 in 1866-67, he discarded his previous plan of discussing “wage labor” in the other volume separate from Volume 1. Instead, he incorporated his study on “wage labor” fully in Volume 1, and discussed the growth of the working class as an actor promoting social transformation along with a deepening of contradictions within capitalism. I believe it is here that Marx elaborated his newly-developed theory of the “inevitable breakup” of capitalism.
Put at the Center the Development of Working Class as Socio-Transformational Actor
As I described above, the first manuscript for Capital Volume 1 is no longer available except for Chapter 6. We cannot compare the first draft with the final to see the exact parts Marx made changes to. I suppose he finished the final manuscript by editing or recomposing the first draft of Chapter 1 to 5. Even though the complete first manuscript is not available, we can infer the changes he made to the first manuscript, to some extent, from studying the context and circumstances. I will at another time corroborate this thesis, but the following three points surely emerge from our study on how he weaved together theories pertaining to the working class in Capital Volume 1.
(1) Inevitability of Class Struggle to Secure Workers’ and their Class’ Survival (Part 3, Chapter 10: The working day)
The first point of departure is in Part 3: The production of absolute surplus value in which Marx discussed working-day as the main theme.
Marx informed Engels in a letter (dated February 10, 1866) the parts to which he made changes in his draft. He stated in the letter that he significantly expanded the historical part. In fact, he discussed in Part 3, at full length, the history of the British working class struggle; how they were forced to suffer from the outrageously long working day; how they rose up in a civil war lasting half a century against the super exploitation; and how they finally won the Factory Act passed in parliament. I believe this is the main part he added to the final manuscript.
He emphasized several important principles which should become pillars of struggles in this field of activism. Those are summarized as follows.
--Capital is driven by greed to further increase exploitation in a market competition for the quest of profit in disregard of workers conditions, even when workers are forced to work themselves to death. Only “compulsion from society” [a factory act] can effectively regulate the profit-first imperative of capital.
“Après moi le déluge! [After me, the flood] is the watchword of every capitalist and of every capitalist nation. Hence Capital is reckless of the health or length of life of the labourer, unless under compulsion from society. To the out-cry as to the physical and mental degradation, the premature death, the torture of over-work, it answers: Ought these to trouble us since they increase our profits? But looking at things as a whole, all this does not, indeed, depend on the good or ill will of the individual capitalist. Free competition brings out the inherent laws of capitalist production, in the shape of external coercive laws having power over every individual capitalist.” (Section 5, Chapter 10, Capital Volume 1)
-- Precisely because the Factory Act which the workers won could not have been achieved if workers had sought it just through a contract between individual capitalist and individual worker, workers must form a “social barrier” by exercising their collective power for securing the continued existence of themselves and their class.
“For “protection” against “the serpent of their agonies,” the labourers must put their heads together, and, as a class, compel the passing of a law, an all-powerful social barrier that shall prevent the very workers from selling, by voluntary contract with capital, themselves and their families into slavery and death. In place of the pompous catalogue of the “inalienable rights of man” comes the modest Magna Charta of a legally limited working day…” (Section 7, Chapter 10, Capital Volume 1)
--While British factory capitalists had resisted the legislation of the Factory Act crying out that they would gain no profits if working hours were reduced, British industry instead regained its robustness after the law was passed and implemented to cap the length of a working day to 10 hours which led to the recovered health and vitality of workers. Even some major British industrialists in turn recommended for their fellow industrialists who had not yet accepted the legally-binding limitation of working hours to change their ways. Marx here pointed out that the working hour reduction is also helpful to the sound development of capitalism itself.
“However, the principle [working hour reduction] had triumphed with its victory in those great branches of industry which form the most characteristic creation of the modern mode of production. Their wonderful development from 1853 to 1860, hand-in-hand with the physical and moral regeneration of the factory workers, struck the most purblind. The masters from whom the legal limitation and regulation had been wrung step by step after a civil war of half a century, themselves referred ostentatiously to the contrast with the branches of exploitation still “free.” “(Section 6, Chapter 10, Capital Volume 1)
In this manner, Marx wrote emphatically in Part 3 the inevitability of the class struggle in which workers as a class must line up against capital’s greed for exploitation and form a social barrier in order to secure the continued existence of themselves and their own class.
(2) Inevitability of Growth of Working Class as Main Actor in Building a Future Society (Part 4: Production of relative surplus value)
The next point is in Part 4: Production of relative surplus-value and it also contains a quite important theory pertaining to the working class.
In Part 4, Marx studied successive capitalistic stages or forms of social productive power; simple co-operation, manufacture, and large-scale industry. In the study, Marx focused on the development of workers as a main actor in the production process through the stages. Though “simple co-operation” is a primitive stage where workers just simply cooperate with each other, he found in it not only the emergence of new productive power created by a collectivized form of work but also a development of workers into “associated labourers”, or “collective labourers”. He put theoretical value on that feature in which workers exercise collective power in a collective way.
While Marx discussed the difference between the “simple co-operation” in a class society and cooperative work in a future classless society, he compared the latter to an orchestra. An orchestra needs a conductor, but a conductor is not a ruler. Interestingly, Marx argued that cooperative work in a future society would need a conductor but not a single ruler.
In capitalist production, on the other hand, a conductor is usually a mere agent acting on the behalf of a ruler. In other words, functions of directing and ruling are identical here. Marx predicted that the type of society following capitalism will have overcome this functional identification. (Chapter 13)
In the stage of manufacture which follows “simple co-operation”, the previous simple collective labor has already been dissolved into various “detail laborers” each of whom has their own independent and separate function.
The final stage is large-scale industry. While analyzing this stage, Marx particularly quoted and discussed Scottish scholar Andrew Ure’s “The Philosophy of Manufactures”.
Dr. Ure characterized a situation in a factory that while workers appeared to be subordinated to the machines, they also seemed to be the major actor who controlled the vast automatic machines through their collective endeavors. Critically reviewing Ure’s argument, Marx analyzed that the former part of the characterization was a description of capitalistic machine factory while the latter description implied the potential power of “collective labourers” in a future society. (Section 4: The Factory, Chapter 15)
In this way, in Part 4: Production of relative surplus-value, Marx traced the rising stages of capitalistic collective forms of labor from the viewpoint of how workers increased their power and prepare themselves to be a main actor in charge of the production process in a future society, while he made sharp accusations against capitalistic methods of production being introduced of having gravely harmful effects on workers.
Workers’ growth as the main builder of a future society is the second inevitability which Marx elucidated in the final manuscript for Capital Volume 1.
(3) Inevitability of Development of the Working Class into Fighter for Social Transformation along with Advancement of Capitalism itself (Part7, Chapter 25: The general law of capitalist accumulation)
The third point is in Chapter 25 of Part 7: “The accumulation of capital”. Marx wrote the whole chapter from scratch for the final draft of Capital Volume 1.
Marx stated at the beginning that the central theme of the chapter was to trace the process of development and transformation of capitalism along with the capital being accumulated. As the accumulation of capital continues, the capital composition changes and inevitably results in an expansion of the portion of constant capital as well as relative diminution of that of variable capital. In other words, the theme of Chapter 25 was to discuss the rising of the organic composition of capital as capitalism advanced. Since he had previously recognized this phenomenon as a negative process of a deepening of a crisis of capitalism which was arguably shown in “the tendency of the rate of profit to fall“, this chapter represents most vividly the change in Marx’s understanding of capitalism. When we read the first several paragraphs, economic phenomena such as concentration of monopolies, etc, which were still in their nascent stages at this time, appear one after another. It may give us the impression as if we were reading a preparatory study leading to Lenin’s Imperialism.
The main theme of this chapter is, however, not discussing the newest economic phenomena according to the first sentence in the chapter.
“In this chapter we consider the influence of the growth of capital on the lot of the labouring class. The most important factor in this inquiry is the composition of capital and the changes it undergoes in the course of the process of accumulation.”
He intended to conduct the analysis into such new and high-level forms of development in order to elucidate their effect on the fate of the working class. Clearly, he put working class theory as the main theme of this chapter.
In his detailed analysis of the capital accumulation process, he made it clear that the high development of capitalism, with the population law of capitalism being in effect, inevitably has turned a large part of workers into “relative surplus population”, increased poverty throughout society, and created an “industrial reserve army”, which is available for capitalist’s use at any time, creating a strong social pressure to deteriorate workers’ conditions further. The exploitation system of capitalism has become a social norm and the increase in poverty and the widening gap between the haves and have-nots cannot be eradicated within the framework of capitalism. Accumulation of wealth and increase in poverty has been expanding progressively at the opposite poles in capitalist society.
At the end of the analysis, Marx wrote;
“It follows therefore that in proportion as capital accumulates, the lot of the labourer, be his payment high or low, must grow worse. The law, finally, that always equilibrates the relative surplus population, or industrial reserve army, to the extent and energy of accumulation, this law rivets the labourer to capital more firmly than the wedges of Vulcan did Prometheus to the rock. It establishes an accumulation of misery, corresponding with accumulation of capital. Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole, i.e., on the side of the class that produces its own product in the form of capital.”
In this simile of Prometheus, Marx did not advise by any means the working class to resignedly accept the accumulation of poverty among themselves as an inevitable result of capitalism.
As capitalism itself expands its control and exploitation throughout society, the working class has to progress towards the overcoming of capitalist society itself in order to carve out a hopeful future for themselves. The working class must rise up against the wedges of society-wide capitalistic exploitation in order to liberate themselves and their society as Prometheus did against the wedges of Vulcan.
This is the prospect which Marx described in this chapter.
This is about the third inevitability being written in the final manuscript for Capital Volume 1; the working class inevitably becomes fighters for overcoming the capitalist system itself in order to liberate themselves from being mired in exploitation and poverty instead of just protecting themselves by forming tentative “social barriers” within the capitalist framework.
As we trace Marx’s points, we observe the important part of Marx’s understanding of the “inevitable breakup” of capitalism in his approach and get a clear view regarding his three points of inevitability in the growth and development of the working class in a capitalist society.
(4) “Inevitable breakup” – Final Overarching Formulation (Chapter 32: Historical Tendency of Capitalist Accumulation)
The last portion of Part 8: Primitive Accumulation is Chapter 32: Historical Tendency of Capitalist Accumulation. But this chapter is not the one for summarizing “primitive accumulation”. Instead, Marx recapitulated in this chapter the history of capitalism from its emergence to the present form, and discussed briefly the reason why capitalism will break up inevitably. We could read this chapter as the general conclusion of Capital Volume 1.
Please pay close attention to the latter half of the chapter in particular. After summarizing the process of the emergence of giant capital through their takeover of smaller capital ventures, Marx picked up for the first time the issue of how a future society can be prepared on a material basis within the process of capitalism. He pointed out some factors which would emerge in such material preparations:
--“the co-operative form of the labour process on an ever-extending scale”
--“the conscious technical application of science, the methodical cultivation of the soil”
--“the transformation of the instruments of labour into instruments of labour only usable in common” [mechanical industry]
--“the economising of all means of production by their use as means of production of combined, socialised labour”
--“the entanglement of all peoples in the net of the world market, and with this, the international character of the capitalistic regime”
These are all items which indicate the extent of maturity in material readiness for a new society being developed within a capitalist society.
In the chapter, he also described the development of the working class. I read the following paragraph as his general overview of the working class theory which he added to the final manuscript.
“Along with the constantly diminishing number of the magnates of capital, who usurp and monopolise all advantages of this process of transformation, grows the mass of misery, oppression, slavery, degradation, exploitation; but with this too grows the revolt of the working class, a class always increasing in numbers, and disciplined, united, organised by the very mechanism of the process of capitalist production itself.” (Chapter 32)
These famous lines follow right after:
“The monopoly of capital becomes a fetter upon the mode of production, which has sprung up and flourished along with, and under it. Centralisation of the means of production and socialisation of labour at last reach a point where they become incompatible with their capitalist integument. This integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated.” (Chapter 32)
An important point here is that he finished the final manuscript for Capital Volume 1 with these lines which clarify his general viewpoint of capitalism. He used the term “fetter”. The term should have meant almost equally the term of “an economic crisis” at the time he wrote Communist Manifesto. But he did not confine the meaning of “fetter” to economic crises here. “Fetter” appears in the capitalistic reality in various forms including a widening gap of haves and have-nots, and the destruction of the natural environment on a global scale. It is important, in our time in particular, to understand the diverse appearances of “fetter” in its various forms.
(5) Notable Interaction between Activities in the International Workingmen's Association and the Writing of Capital
This period, from Marx’s theoretical transformation in 1865 to the time when he finished the final text for Capital Volume 1 in 1867, was in parallel with his activities in the International (International Workingmen's Association). His activities for the organization closely corresponded to the deepening of his study for Capital.
Until the founding congress of the International in September 1864, Marx had kept away from almost all practical activities. While he had been writing political commentaries to various newspapers and advised German activists, his personal activities had had almost no relation with political movements. Probably, he was writing a part on the “tendency of the rate of profit to fall” for Capital Volume 3, when he was invited to attend the founding congress which was held in London. Although he had not made any intervention in the congress, he was asked later to draw up the founding declaration and the constitution of the organization by the organizers who had found difficulties in doing so. By accepting the offer, he began again to be involved in the movement and soon came to play a leading role. It was his first contact in a couple of decades with working class members active in the movement.
The working class he met at the founding congress of the International was totally different from workers he had met in the 1848 Revolution. The majority of workers in the 1848 Revolution were craftsmen such as cabinetmakers or carpenters. But at the time of the foundation of the International, because of the spread of large-scale industry, there already existed many advanced forms of workers’ organizations such as trade unions or workers’ educational associations in various countries. Marx started involving himself in the working class movements at this new stage of development which had the possibility of growing into an emergence of workers’ political parties. Marx drew up the founding declaration and the constitution with contents satisfying activist leaders representing various streams of labor movements. His activities at the center of the International began in this manner.
We can find a quite interesting interaction between these activities and his writing endeavor of Capital.
A big debate erupted at the center of the International on a critical issue of workers’ movement almost at the same time Marx found a new theory of crisis in the first half of 1865. An Owenite carpenter, named Weston, brought up an argument that the wage struggles as well as labor unions would be essentially useless. Even if workers won pay raises, he argued, such gain would be quickly offset by the price hike of commodities. This was an absurd argument which directly denied the International’s main activity at the moment which focused on helping to support the economic struggles and strikes of workers in European countries. Marx gave lectures on June 20th and 27th 1865, countering Weston’s argument which later became widely known under the title of Value, Price and Profit.
He started the lecture with the basic theories of values and exploitation, and went on to elaborate the significance of economic struggles for workers’ interest. At the time of the lecture, he had already overcome his previous “crisis-brings-revolution” hypothesis and given shape to his newly discovered view on economic crisis. From that new theoretical point of departure, he explained in an easy-to-follow style not only how to conduct wage struggles in different economic situations, such as during times of boom or bust, but also the necessity of struggle to transform the society itself under the banner of “abolition of wage-labour” as their simple wage struggle transcends itself. There already was then apparent his new understanding of the process of the “inevitable breakup” of capitalism with the focus on the growth of the working class which he later described in the final manuscript for Capital Volume 1.
In 1866, he struggled with completing the final draft of Capital Volume 1 as the International held its first congress in Geneva in September.
Marx drew up several documents for the congress including the resolution on the “working day” and the resolution titled “Trade unions, their past, present, and future” which made clear the direction envisioned for workers’ class movements. In those resolutions, the issues which were later discussed in depth in Capital Volume 1 were covered as practical issues for the workers’ movement. The resolution on trade unions indicated a prospect that unions should eventually grow as central organizations working for the emancipation of the working class while carrying on with daily economic struggles.
As the publication of Capital Volume 1 came near, the second congress of the International was held in Roxanne in September 1867. Although Marx struggled to publish the volume before the congress was held, the publication was delayed. Regrettably, Capital Volume 1 was published on September 14th after the congress ended on September 8th. There remains a letter Marx wrote to Engels in which Marx was chagrined at the printers for missing the deadline.
We see here an active correspondence between the theoretical development later being shown in Capital and the activities of Marx who jumped into the workers’ movement which had entered a new stage. In other words, an interaction between theory and practice, or the importance of revolution theory in economic studies is clearly seen in the process of his completing Capital Volume 1.
V. Look into the Process of Introducing the “Transition Period” Theory
There remain two theoretical issues which we need to explore in regard to a post-capitalist social transformation. One is the issue of the “transition period” theory.
Formulation of the “Transition Period” Theory in Critique of the Gotha Programme
Regarding the transition to socialism, Marx once outlined this in Critique of the Gotha Programme written in 1875 as follows.
“Between capitalist and communist society there lies the period of the revolutionary transformation of the one into the other. Corresponding to this is also a political transition period in which the state can be nothing but the revolutionary dictatorship of the proletariat.” (Part IV, Critique of the Gotha Programme)
Marx had already discussed the transition process at the end of Chapter 32, Capital Volume 1. His conclusion at the time was that the process of economic transformation from a capitalist society to a socialist one would be “incomparably” shorter than the process of that from a pre-capitalist society to a capitalist one. The reason for that conclusion was, Marx argued, that a “socialised production” in which workers collectively take control of production process will already have been de facto developed in the womb of a capitalist society. He simply thought that we would just need to take away “a capitalistic integument,” or possession of productive means by capitalists in order to conduct economic transformation into socialism and that it would be easily completed in a relatively shorter period of time.
However, when Marx wrote Critique of the Gotha Programme in 1875, eight years after the first publication of Capital Volume1, he changed his previous conclusion and assumed that a process of economic transformation from a capitalist society to a communist one would take rather a long period of time. He called the period of transformation the “transition period”. Apparently, a substantial change occurred in his thoughts on this matter.
Marx’s Study on the Paris Commune Underlies the Change
What drove Marx to change his view on the issue of the “transition”? Was there any major incident that had influenced him during those eight years?
Reviewing Marx’s writings in this period with that in mind, we easily found such a major incident. What deepened his understanding of transition was his study on the Paris Commune, a revolutionary undertaking by French workers in 1871.
When the German Army defeated France and advanced toward Paris, workers in Paris rose in revolt and established their own government in March 1871 known as the Paris Commune. This uprising was not an armed revolution. After Parisian workers fought off the intervention by the French National Army, they implemented universal suffrage and conducted elections to establish a political governing organization, the Commune. The Commune demonstrated a stunningly innovative governing capability by managing the metropolitan Paris with its population of more than a million, one of the largest cities in the world at the time. Marx highly appreciated their achievements.
Following a decision of the General Council of the International, Marx began writing a document that would elucidate the historical significance of this struggle. The document was eventually published after the fall of the Commune as a statement of the General Council titled The Civil War in France. In the statement, Marx not only evaluated the situation of the Commune, but also characterized the Commune as “a working class government” and assessed this revolutionary undertaking linked with consideration of what kind of future the Paris Commune had opened up for the working class.
Marx described its future prospect as follows;
“They know that in order to work out their own emancipation, and along with it that higher form [meaning a communist society—Fuwa] to which present society is irresistibly tending by its own economical agencies, they will have to pass through long struggles, through a series of historic processes, transforming circumstances and men.” (The Civil War in France)
Although Marx did not use the term communist society in the statement, what was referred to here was obviously the issue of a “transition period” which he later called the issue of “the period of the revolutionary transformation of a capitalist society into a communist society” in his Critique of the Gotha Programme. Marx pointed out that the process would necessarily undergo “a series of historic processes” and “long struggles transforming circumstances and men”. Through this study on the Paris Commune, Marx reached a different conclusion from the one drawn in Capital, Volume 1.
While there was no additional explanation on those points he made in the statement, he left a detailed elucidation about the task of “transforming circumstances and men” in one of the two preparatory drafts for The Civil War in France.
“They know that the superseding of the economical conditions of the slavery of labour by the conditions of free and associated labour can only be the progressive work of time (that economical transformation), that they require not only a change of distribution, but a new organization of production, or rather the delivery (setting free) of the social forms of production in present organized labour (engendered by present industry), of [read from] the trammels of slavery, of [read from] their present class character, and their harmonious national and international co-ordination.”
The key term of this sentence is “trammels of slavery”.
Previously, Marx had argued in the last part of Capital, Volume 1 that a “socialised production” has been already existent in practice in the womb of a capitalist society. However, with conducting the further analysis in detail, he found that the “socialised production” in capitalism has still to be carried out under control of capital, and that the discipline there has inevitably to be one tied directly to the domination of capital. He called this “trammels of slavery” in the draft above. Inheriting this capitalistic production system without any change in its character, Marx pointed out, would only change the possessor of means of production but not create relationships of cooperation among free producers. Without transforming the system from the bottom and creating “socialised production” where free producers cooperate on an equal footing, we would not be able to establish a new production system on which a communist society would be founded. This was the point Marx paid special attention to.
I referred earlier to a comparison between the production process in a classless society and an orchestra when we discussed the development of the working class along with capitalism. There is a conductor but no ruler in an orchestra. Marx brought up a challenge of creating new human relationships in every production site with no ruler but a conductor in the same fashion of an orchestra, as a major task for the working class in their effort to establish a new society.
He forecast that workers’ struggles to defeat rulers’ resistance to social transformation would be completed in a relatively short period of time while a challenge to create new human relationships would be far more difficult and take a protracted period to be accomplished. The challenge he raised is closely related to the self-transformation of workers themselves in the process of which workers shed their old skins which they have inherited from previous generations and develop themselves into the main actor in charge of the production process with a sharp awareness of their responsibility. That is why Marx concluded that the transforming process would go through various complicated phases for workers to overcome.
Marx pointed out this aspect when he alluded to long struggles “transforming circumstances and men” in his The Civil War in France.
We can reach a new stage where a society, composed of communes, will be able to develop by itself with no need to be intervened by state power -- a stage of development where a society does not need statehood any more – only when we achieve a success in the endeavor to create new human relationships of “free associated labour”. This was the new prospect Marx elaborated upon.
From that theoretical assumption, he concluded that completion of a transition from capitalism to socialism would take as long a period of time as the one from pre-capitalism to capitalism had.
Critique of the Gotha Programme was the only paper in which Marx explicated the future prospect of social transformation by using the term “transition period”. I believe his study on the Paris Commune is at the root of this theoretical foundation.
State Configuration in the Transition Period and Democratic Republic, and Disappearance of Statehood
Once we recognize that a major challenge on the economic side in the transition period is to establish human relationships of “free associated labour”, we can understand more deeply the reason why Marx emphasized that a form of democratic republic must be the form of state in the transition period. It does not make any sense to argue that a state which is supposed to protect endeavors of creating such communal relationships can be an authoritarian regime, especially when a major challenge is the task of establishing autonomous partnerships at production sites without a ruler. Unless the superstructure is a democratic political system based on universal suffrage, the transition period will be out of question and the beginning of the process of a “disappearance of statehood” following the period will not be possible.
By understanding in depth the nature of the transition period as such, we can understand more logically and vividly the theoretical point that a state is going to cease to exist after passing through the transition period.
Regarding this issue, Marx’ left some interesting notes of explanation.
Marx made Notes on Bakunin’s Statehood and Anarchy (Extract) from April 1874 to January 1875 before he wrote Critique of the Gotha Programme. In the Notes, Marx countered Bakunin’s view of a future society expressed in Statehood and Anarchy (1873), which had criticized Marx’s view. Bakunin was expelled from the International because of his disruptive activities inside. He regarded Marx as an enemy and continued to criticize Marx before and after the disqualification of his membership of the International.
Bakunin had criticized Marx by arguing that while Marx argues there will be no government and no statehood, there will remain administrators chosen by elections in various sections in a society, and therefore, there will still remain a small group of rulers, and therefore, the state will not disappear.
Here is Marx’s response to Bakunin’s criticism.
“The character of the election does not depend on this name, but on the economic foundation, the economic situation of the voters, and as soon as the functions have ceased to be political ones, there exists 1) no government function, 2) the distribution of the general functions has become a business matter, that gives no one domination, 3) election has nothing of its present political character.”(Notes on Bakunin’s Statehood and Anarchy)
When we read these phrases along with the words in the first draft for The Civil War in France we discussed earlier, we can get a rough picture of Marx’s consideration on what kind of process the economic system will encounter in the transition period, what changes in the field of political regime will correspond to it, and what kind of process in which a state is going to cease to exist will follow once the economic task in the transition period is completed and support from state becomes unnecessary.
VI. Core of Future Society Theory in Capital
Problem in the Traditional Interpretation of Critique of the Gotha Programme
The remaining theoretical issue in the post-capitalist social transformation is the theorization of a future society.
When I first read the thin booklet, Critique of the Gotha Programme, right after the end of WWII, I was a high school student. To be honest, I read it at the time even without knowledge of what “Gotha” meant. Naturally, I understood little of the content, but still, I got Marx’s point that there would be two separate stages in a communist society, one of which is supposed to be distinguished from the other by the different method of distributing products; one characterized by the principle of “according to labour” and the other by “according to need”. Lenin’s State and Revolution, which happened to be the next book I read, emphasized the point as a main issue in the theory of a future society.
This interpretation was widely accepted as an ironclad theory in Scientific Socialism until recently. The Japanese Communist Party’s previous program adopted in 1961 closely adopted the terminology used in Critique of the Gotha Programme regarding the view of a future society.
Although this definition was widely accepted, a future society based on this theory appeared to me not so attractive because the shift of distribution principle from “according to labour” to “according to need” just meant that a society would continue to be inundated with products.
Marx once wrote in Preface of a Contribution to the Critique of Political Economy(1859), “The prehistory of human society accordingly closes with this social formation [capitalist mode of production —Fuwa]”. This implies that the “true history" of human society will eventually start after capitalism. Marx expected a future society to achieve a great leap forward which could even be characterized as the “true history” of the human race. Is it really adequate to define such a glorious future society just by characterizing it as being so materially affluent that products are available “according to need”? I had pondered this question on the traditionally-accepted theory for years.
When I revisited Critique of the Gotha Programme later with that question in mind, a passage drew my special attention: Marx had inserted a caveat just after his discussion on the principles of “according to labour” and “according to need”.
Marx emphasized with caution that his discussion there was just intended to present a counter-argument against Lassalle’s wrong characterization of a socialist society under his slogan of “fair distribution” and that it was nothing more or nothing less than an attempt to show Lassalle’s theoretical failing. Marx warned that if the German Social-Democratic Workers’ Party leadership misunderstood his intention and came up with a theory of socialism based on a particular distribution system in a society, they would make a huge mistake.
That led me to the answer for my long-standing question.
Core of Marx’s View on a Future Society —“Realm of Freedom” and “Realm of Necessity”
The place where Marx elaborated on his own characterization of a future society was in Capital itself. His view was centered around the issue of a full human development of each individual in a society and he had pursued the theme as a focal point in his future society theory since he started writing his first manuscript dealing with economics in 1858.
Marx in his early years had already envisioned a fully developed human being freed from the division of labor as an image of the human individual in a future society as was seen in German Ideology (1843) which Marx co-authored with Engels.
He theorized and fleshed out his ideas by basing them on a realistic analysis of a future society founded upon his economic inquiry into capitalist society. That is the theory concerning the “realm of freedom” which Marx explicated in the beginning of Part 7, Capital Volume 3.
While the current edition of Capital Volume 3 places the theory at the middle of the first chapter of Part 7, Marx originally began writing Part 7 with the introduction of the theory. This editorial change was supposedly made by accident when Engels misread Marx’s editorial instructions while he was editing the volume. Marx created his theory of “realm of freedom” by building on his studies conducted since the 1857-58 Manuscript.
The main point of Marx’s theory can be summarized as follows.
The human society at its very first stage – primitive communism— had been able to have a strictly limited productive power enough to sustain the population. Only after increasing productive power up to a level enough to produce surplus, a ruling class which itself was freed from labor and governed the others was generated on the basis of the surplus labor of the population. In such a society, only a ruling class had the liberty and enjoyed the conditions to be able to conduct intellectual activities while the others who were caught in engaging in labor had to be put in severe living conditions under which they were only allowed to have time to eat and sleep. In other words, in the past class societies up until capitalism, intellectual activities were available only for a privileged ruling class or particular members of the society who were designated to engage in special cultural works (that particular portion of the population was also supported in its life by surplus labor of the others). This course of development was inevitable in the past societies with the yet-limited productive power.
However, that inevitability is not validated any longer with a highly developed productive power under a highly advanced capitalist society. Once such a fully developed capitalist society is transformed into a new society, labor will not necessarily belong to a particular class any more. There, all members of the society will voluntarily engage in labor and the working time of each individual will be significantly shortened accordingly and the society will enable all people to have free time as a result. The conditions for full human development will be generated. All members of such a society will be guaranteed time needed for human development.
In this way, the ideal of full human development for every individual was at the heart of Marx’s view on a future society.
He used the terms “realm of freedom” and “realm of necessity” when explicating the significant characteristics of a future society. As Engels also used the same terms in his Socialism: Utopian and Scientific with completely different meanings than those of Marx’s, it might be confusing.
Marx used these terms in order to explain a mode of living hours of human beings.
When we follow Marx’s terminology, the “realm of necessity” means a portion of living hours spent for material production. Since material production activities are necessary as long as human society exists, the portion of time spent for material production is called “realm of necessity” with the sense of compulsory activities for human beings.
It is true that when a society breaks away from a system of exploitation and becomes a human-centered socialist/communist society, the mode of labor itself will totally change in its nature from inhumane drudgery to more enjoyable, self-realizing activity by human beings. Even so, the portion of time for material production belongs to the “realm of necessity” as a part of living hours for indispensable compulsory activities.
The other part of living hours is free time for each individual and Marx called this the “realm of freedom”. The most significant feature of a future society is that all members of society are guaranteed sufficient time to take full advantages of the “realm of freedom”.
While each individual can use his/her own free time for any activity, the most important point here is that humans are able to develop their capability and capacity only when they have such sufficient free time, and that all humans are provided opportunities and conditions for such development in a future society. In this sense, Marx characterized the “realm of freedom” as a “realm” where the “development of human energy is an end in itself”. Although it is arguably said that the present modern time is an era characterized by its highly developed science and technology, the number of people who engage in intellectual activities makes up a quite small portion of the entire population. If a society where opportunities and conditions for full human development are guaranteed for everyone is brought into being, it is easy to predict that the advent of a new era of an unprecedented leap and development in human history will surely come along with it.
Marx explicated this point in the last part of Capital volume 3 as follows.
“Freedom in this field can only consist in socialised man, the associated producers, rationally regulating their interchange with Nature, bringing it under their common control, instead of being ruled by it as by the blind forces of Nature; and achieving this with the least expenditure of energy and under conditions most favourable to, and worthy of, their human nature. But it nonetheless still remains a realm of necessity. Beyond it begins that development of human energy which is an end in itself, the true realm of freedom, which, however, can blossom forth only with this realm of necessity as its basis. The shortening of the working-day is its basic prerequisite.” (Part7, Chapter 48)
Material Conditions for Opening the Door to “Realm of Freedom” Already Exists in Japan
What about Japanese society which already has highly developed productive power? When a new society is established based on such highly-achieved development, what will happen? The present conditions for material production are already sufficient to guarantee to all the people of Japan “the minimum standards of wholesome and cultured living” which the Constitution of Japan states as a basic human right.
Furthermore, there are many unneeded fields of production in the current highly developed capitalist society. Security brokerage businesses, for example, have dominated a large part of present economic activities while most of it will be unnecessary in a future society. Finance-related businesses will also need to be simplified. In addition, since capitalist society utilizes a profit-first production system, the present society is wasting human labor and resources to the extent that businesses produce and sell a barrage of new models of products even before previous models go around consumers.
If those wasteful practices disappear, and if all people voluntarily take a part in activities necessary for society such as material production in particular, it will not be a fantasy anymore to significantly shorten a normal working week to three days a week.
Under such circumstances, as Marx said, it will become the norm for every individual to engage in free activities in his/her free time and develop one’s own ability to achieve goals set by themselves.
The present form of capitalist societies is driven by the profit-first mandate which belongs to base of the socio-economic formation.
Although we cannot simply divide future society into superstructure and base as we do an economic analysis on class society, if we, for the sake of argument, regard the relation between the “realm of freedom” and the “realm of necessity” as similar relations between superstructure and base, the driving force of development of future society can exist in human development, or the “realm of freedom”. Human development will facilitate technological development and thus increase productive power which will shorten working hours. Such shortened working hours will, in turn, accelerate further human development in an extended “realm of freedom”. Such a cycle will be likely to be the mode of social development. I see here a prospect for a new stage of great social development worthy of being called the “true history” of human society to emerge.
In this regard, Marx’s view on a future society offers insights that need to be examined in detail.
Marx was never satisfied with his achievement at any point and continued his attempts to comprehend and cope with developing reality and to pursue theoretical advancement until the day he died. Regarding Capital Volume 3, he gathered various documents and sources on issues including the American credit system and Russian landownership for further study in order to complete the draft which Marx was not able to finish. He truly spared no effort to move forward.
Living in the 21st century, more than 130 years after Marx’s passing, we can understand the current reality more deeply by incorporating Marx’s methods of inquiry and theoretical orientation while we learn how Marx faced the reality of capitalist society and devoted much effort to make further theoretical advances, whether it was in economic theory or revolution theory. I myself continue to study keeping this in mind.
Supplemental Explanation: Critical Review of Engels’ Theory on “Fundamental Contradiction”
I would like to explain, as an addendum to my lecture today, the problem in Engels’ theory on “fundamental contradiction” before I conclude my remarks.
The previous JCP documents used to adopt Engels’ definition of the fundamental contradiction of capitalism as “the contradiction between socialized production and capitalistic appropriation”. But Marx never formulated such a contradiction.
Marx consistently saw the basic contradiction of capitalism in the expansion of surplus-value as its driving motive or definitive aim.
What is the problem with Engels’ definition? When we review his Socialism: Utopian and Scientific, we find that Engels’ formulation of the fundamental contradiction of capitalism was based on his logic as follows.
“The means of production, and production itself, had become in essence socialized. But they were subjected to a form of appropriation which presupposes the private production of individuals, under which, therefore, every one owns his own product and brings it to market. The mode of production is subjected to this form of appropriation, although it abolishes the conditions upon which the latter rests. This contradiction contains the germ of the whole of the social antagonism of today”. (Socialism: Utopian and Scientific)
In the age of private production of individuals, producers possessed their own means of production, and appropriated the products. However, in capitalistic production, the character of production has become a socialized one while the form of appropriation continues to be the same as in the age of private production of individuals. With that logic, Engels formulated his fundamental contradiction theory.
In the prior chapter to the passage above in Socialism, Engels had emphasized that the discovery of surplus-labor was at the heart of scientific socialism, but the surplus-value theory was not even mentioned when he discussed the fundamental contradiction of capitalism.
In the following discussion in Socialism, Engels argued that this contradiction between socialized production and capitalistic appropriation manifested itself in two forms; one was the antagonism of proletariat and bourgeoisie and the other was an economic crisis.
This assertion is also difficult to accept. The antagonism of proletariat and bourgeoisie is never a manifested form of the fundamental contradiction of capitalism. Capitalism already and always runs on that antagonism.
Regarding an economic crisis, Engels always discussed it by relating the phenomenon to the state of “anarchy of socialized production”. However, such an argument based on “the state of anarchy of production in society” only captured the possibility of economic crises and therefore, an issue of “activation of crisis” did not come into play at all. His view on crisis expressed in Socialism is different from Marx’s crisis theory.
On those points, I have serious doubts about Engels’ definition of the fundamental contradiction of capitalism.
I think it is reasonable to regard the profit-first principle as the driving force of capitalism which causes and intensifies various contradictions in society. On that note, I would like to conclude my lecture today.