Althusser and Macherey on Structure

Althusser triumphantly hailed the concept of structural causality which he saw as at the core of Marx’s theoretical revolution.  But what exactly does the word structure mean in such a form of causality?

Warren Montag, in his excellent book Althusser and His Contemporaries, shows that there is incoherence in the way that Althusser defines structure in his contributions to the 1st edition of Reading Capital published in 1965.  Montag records that when this edition was being made ready for publication, one of the other contributors, Pierre Macherey, wrote to Althusser pointing out the ambiguity of the latter’s treatment of structure in his chapter ‘The Object of Capital’.  Macherey suggests that Althusser sometimes implies that there must be some kind of totality – or whole – whose structure is exercising causative powers. At other times Althusser suggests that in structural causality the structures exist only in their effects – thus causation is an immanent process.

Macherey himself wants to hold to the immanent concept of structure, i.e. as having no existence other than in its effects. In his letter to Althusser he says,

it seems to me that when you speak of a set (ensemble) or of a whole, you thereby add a concept that is absolutely unnecessary to the demonstration and which may later become an obstacle.[i]

There certainly is a contradiction here. In a useful paper, Giorgos Fourtounis comments that, ‘the concept of the structured whole cannot but invalidate the thesis that structure is nothing outside its effects’.[ii]  He thus agrees that Montag is right to see an antinomy between holistic and immanent concepts of structure.  The danger is, as Macherey says, that in the totality variant, structure becomes the equivalent of an essence, a transcendent determining principle.  There is then a conceptual drift back towards the expressive model which, as I noted in a previous post, Althusser had argued that Marx had overcome in and through his repeated critiques of Hegel.

Althusser wrote back to Macherey accepting the criticism and acknowledging that, I have a tendency to take refuge in certain of Marx’s texts where there is a reference to an “organic whole”. At this stage Althusser made no alterations to the chapter in Reading Capital which Macherey was criticising and it was duly published, as it stood, in 1965  in the 1st edition of Reading Capital. However he did appeal to Macherey in the same letter, to suggest how he might, ‘replace the provisional concepts with better defined concepts. I still lack the latter’. Macherey responded in a further letter that, ‘the solution to this problem will take some time’ – but that he believes the elements of an alternative are to be found in Lucretius and Spinoza.[iii]

Macherey developed his idea of an alternative concept of structure in a text written in November 1965 and which can be found in his book A Theory of Literary Production as a chapter called, ‘Literary Analysis: The Tomb of Structures’.

Here I can only provide a very rough summary of Montag’s careful and detailed analysis of the account of structure in Macherey’s Literary Production book.  We are certainly in strange terrain here. Montag says little about the fact that the whole discussion in his own book has slipped away from structure as economic mode of production – to structure as employed by analysts of literature and other cultural material. Literary structure is the entire focus of Macherey’s book.  Evidently some kind of analogy between literary texts and socio-economic reality is being tacitly assumed by Montag, Althusser and Macherey. However let’s suspend judgement on this, and see where their discussion takes us.

Having read the Tomb of Structures paper Althusser wrote to Macherey that he now sees the ambiguity that the latter was criticising.  The division,

between a conception of structure as interioritythe “latent structure” or “latent dynamic” of the work… and another conception, very close to your own, in which structure is thought as absent exteriority, the concept of the dialectique à la cantonade.[iv]

La cantonade is the part of a theatrical stage not visible to the audience – in English, off-stage, the wings.  The metaphor is of a dialectic which operates immanently, in the action taking place on-stage. Structure is there, but is invisible and absent, existing only in the play as it unfolds.[v]

The 2nd edition of Reading Capital was about to go to press and Althusser responded to Macherey’s criticisms by making a number of cuts in ‘The Object of Capital’ chapter.  He did not however alert his readers to these changes or offer any explanation for them.[vi]  The cuts had the effect of inflecting his argument more strongly towards the concept of structural causality as operating in an immanent way, existing only in its effects.  But, in Montag’s view, enough of the ambiguity is still present to sow confusion in the minds of readers of the 2nd edition – and it was this edition which got translated into English and other languages.[vii]

Montag’s book contains a close study of the passages which were excised by Althusser.  Montag believes – correctly in my view  – that Althusser’s ambiguities and struggles with this issue are worth careful study.  It is not simply the case that Macherey was right when he said that the holistic totality version of structure should be abandoned in favour of a more correct immanent variant.  Both Macherey himself, and also Montag, see the difficulty.  Montag writes that, ‘Macherey’s question becomes all the more pertinentwhy preserve the concept of structure at all, if, even in Althusser’s own work it appears destined to transmit as if by contagion an ideology of the whole anterior to and greater than its parts?’  Surely, as a concept, ‘structure implies a totality or ensemble … if not, then  why use the word’.  And, Montag adds, it is also surely the case that ‘the concept of structure also implies a latent meaning or order’.[viii]  

What complicates the situation is that in his Tomb of Structures chapter Macherey rejects both of the above ways of defining structure.  He wants to retain the term – but to detach it from any association with a concept of order  He refuses to accept the traditional implication that whatever is structured is a unified whole. Such a way of defining the meaning of structure is associated with organic and conservative metaphors of the social order. Macherey writes that:

Structure should be used to identify ‘that which maintains the work as it is in its irreducible complexitystructure ‘holds it (la tient)’ all the more in that the work is diverse, scattered, irregular. To see structure is to see irregularity.”[ix]

Thus, in Macherey’s new concept, structure becomes the principle of the unevenness of a literary work – how its scatteredness is tied together.  But equally important, Macherey argues that structure is to be that which explains the necessity of this unevenness. He uses the phrase determinate disorder ­– a disorder which can be accounted for and given significance.[x]

Throughout his book on literature Macherey is attacking traditional literary criticism’s way of dealing with major works of art.  One of the things that makes a work major is that directly or indirectly it registers the social conflicts and tensions of the period in which it was written – in form, or imagery, or narrative plot, or via fantasy elements etc. etc.  But as social contradictions impact, the effect is to generate disorder in the text.  Macherey attacks forms of literary criticism whose impulse is to deny and repress the symptoms of social conflict and injustice as these show up in texts.  Traditional criticism seeks to identify an inner harmonious order out of the diverse meanings at play in the text. In reducing the text to a hidden order they become unable to account for the singularity of work – what makes it uniquely what it is.  In such an approach the interpretation of the work ends up by being treated as more real than the work itself.

But throughout all this Macherey clings on to the concept of structure as a way of resisting a drift towards an endless randomisation and proliferation of meanings.  There is, he insists, a causality at work which determines the significance which emerges in and through the disorder in a text. A structural causality.

Thus, as I have noted above, Althusser found that Macherey’s ‘Tomb of Structures’ chapter helped clarify an ambiguity in his own thinking about structural causality.  But, given the radicality of Macherey’s new direction, it is perhaps not surprising that Althusser’s immediate reaction was no more that a series of unexplained cuts in his ‘Object of Capital’ chapter as Reading Capital was revised in 1966 for its 2nd edition.  For indeed Macherey has laid out a formidable set of proposals.

He is arguing; (1) that structural causality in a Marxist analysis of history can be illuminated by the materialist assault on the way in which major literary works have been converted into ideology by traditional criticism.  (2) He wants invoke a causality in which there is concept of structure which: (a) exists only immanently in its effects; (b) does not deny or assume away the disorder and unevenness of social development; but (c) which is able to identify some kind of necessity or logic which operates to give significance and unity to that unevenness and disorder. In addition, when such concepts of structure are deployed in the analysis of socio-economic situations it must be in ways which allow for the operation of chance as well as logic.  After Althusser died in 1990, the archive of his papers were found to contain a huge number of unpublished manuscripts. Scholarly work on this material has show that, already in the early 1960s, concepts of the aleatory (i.e. chance) and of conjuncture were a central and obsessive focus in Althusser’s thinking about structure and causality.[xi]

Not surprisingly the commentary literature on Althusser and Macherey has found it difficult to know what to do with all this. To take only one example, it is Warren Montag who has provided the most detailed accounts of the evolution of thinking about these questions by Althusser and his team.  But Montag’s final evaluation is, in the end, that Althusser remained tangled in paradoxes.  For example, that, for Althusser, structural causality means that it is the economic which determines social structure – but only in the last instance … and Althusser insists precisely that the last instance never actually arrives. (See my last post) Montag refers optimistically to:

the diverse lines of enquiry that might be summarised under the heading of “structural causality” (the presence / absence of the structure in its effects, the site of an oscillation rather than a dialectical unity) merged to produce the fault that runs across Reading Capital giving it its unevenness and conferring upon it the permanent instability that is  source of its power.[xii]

Montag explains, in a fascinating account, that, in the Reading Capital period, Althusser found himself in sync with the paradoxical thinking of Jacques Lacan. For example Althusser suggested a parallel between how the economic acted as a cause which existed only in its effects, and the way in which, ‘the unconscious is manifested, that is, exists in its effects’. Montag adds that:

Like Althusser, and just as at ease with paradox and contradiction, Lacan recognises that the very inquiry he pursues demands a theory of causality that does not (yet) exist and which can only emerge from the very inquiry that cannot proceed in its absence.[xiii]  

 Good luck with that …. is the tempting and obvious response.

But a less dramatic but more practical way forward has been suggested by Panagiotis Sotiris.  In an exceptionally perceptive article, he reflects on Althusser’s contributions to Reading Capital in relation to the accounts of causality given in two of the earlier essays in  For Marx – ‘Contradictions and Overdetermination’ and ‘On the Materialistic Dialectic’.  Sotiris fully acknowledges the never-resolved tension in Althusser between: (1) a concept of structure as present but latent; and (2) a structural causality which is immanent in its effects and which can allow for, and account for, singularity and conjuncture in situations and events.[xiv] Sotiris suggests that:

instead of remaining within the contours of the supposed structure / conjuncture dichotomy, it is better to try to rethink new ways to theorise the differential effectivity of both structural and conjunctural elements: within a conception of social forms that combine relationality, singularity, and reproduction.[xv].

Sotiris proposes that we can and should read,

the existence of a structure in its effects … as a highly original concept of structural determinations and / or law-like tendencies that do not have any existence of their own other than in concrete social formations.  In this sense structure is not ontologically prioritised not is it considered to be beneath the surface. Moreover, structural causality should not be opposed to the dynamics of transformation and the possibility of historical change.’[xvi]

 In his reference to law-like tendencies Sotiris pointing to a direction not taken by Montag.  It is an approach which is powerfully developed by Vittorio Morfino in his astonishing book Plural Temporality (2014).  Morfino emphasises his conviction that Althusser and his team were on to something crucial and indispensable about Marx’s concept of modes of production, and associated structural causality  But Morfino argues that the necessary analogy which they needed to invoke was not with structure and unevenness in literary texts, nor with the treatment of the unconscious in psychoanalysis.  But rather with complexity in populations of living creatures.  Morfino has a chapter on how Darwin studied the contrasting patterns of natural selection at work in a two pieces of land in Staffordshire (how concrete can you get!) It is Morfino’s proposal that this would be an example of structural causality in action.

The approach developed by Morfino opens up promising questions of logics of competition and cooperation in the analysis of modes of production.  In case of capitalism it suggests an analogy between the selectivity operated by Marx’s law of value and Darwin’s theory of natural selection. In both paradigms a principle of structuration operates by asserting itself, via selectivity, in and through a haze of random encounters and events.  In Marx’s words:

[in] the division of this social labour and the reciprocal complementarity or metabolism of its products, subjugation to and insertion into the social mechanism, is left to the accidental [zufälligen] and reciprocally countervailing motives of the individual capitalist producers.

 Since these confront one another only as commodity owners, each trying to sell his commodity as dear as  possible (and seeming to be governed only by caprice [Willkür] even in the regulation of production), the inner law operates only by way of their competition [setz sich das innere Gesetz, nur durch vermittelst ihre Konkurrenz]  their reciprocal pressure on one another, which is how divergences are mutually counterbalanced.

 It is only as an inner law, a blind natural force [blindes Naturgesetz] vis-à-vis the individual agents, that the law of value operates here and that the social balance of production is asserted in the midst of accidental fluctuations [wirkt hier das Gesetz des Werts … inmitten ihrer zufälligen Fluktuationen].[xvii]

 Here are some of the themes which Macherey was invoking.  Structural patterns which emerge not because of external regulation or command – but as the result of the operation of an inner law – an immanent process.  Marx is talking about how the system controls what is to count as valid value-creating social labour and what will be treated as wasted labour.  This is determined not by fiat, but by the law of value asserting itself in and through the accidental fluctuations of capitalist competition.  The concept of law implies some kind of necessity operating, not as an underlying essence beneath the surface of an economy, but via the everyday competitive pressures [Drucks] on capitalists to reduce costs of production and circulation.

In a future post I’ll say more about Morfino, Marx and the Darwinian analogy.


[i] Montag 2013, p. 74.

[ii] Fourtounis himself prefers to see both of these concepts of structure as necessary to a Marxist concept of structure and urges that they be amalgamated.  The resulting combination, he optimistically hopes, can involve ‘creative tension’ rather than the contradiction of logical incoherence. (Fourtounis 2005 p.105.)

[iii] Montag, 2013, p.75.  Macherey found inspiration in a remarkable article on Lucretius which Deleuze published in 1961 and which is to be found as an Appendix in Deleuze 1990. Lucretius’ poem On the Nature of Things [de Rerum Natura] was based on the philosophy of Epicurus which was one of the main topics of Marx’s PhD thesis.  Deleuze emphasises themes in Lucretius which were resumed in Macherey’s work on literature.  Nature as diverse and non-totalisable; the swerving and thus aleatory movement of atoms [the clinamen]; hence the role of chance in causation.  But also an insistence on structure as linked to causation   ‘Lucretius’ naturalism’, writes Deleuze, ‘requires a highly structured principle of causality to account for the production of the diverse inside different and non-totalizable compositions and combinations of the elements of Nature’ (p.268),

[iv] Montag 2013, p.76.

[v] I have no space in this post to comment on the important question of Darstellung – i.e. the analogy between how capitalism represents itself and the staging of a play. Darstellung is a theatrical analogy occasionally used by Marx and picked up again by the Althusser team – especially in the brilliant chapter by Rancière in Reading Capital.  See also the perceptive discussion in Montag 2003 of Althusser’s Piccolo Teatro chapter in For Marx.

[vi] Also Deleuze had sent to Althusser a draft article about structuralism which the latter discussed with Macherey and sent back the comments which Deleuze had requested.  See the interesting account of this exchange in Stolze 1998.

[vii] Montag 2013, p.80.

[viii] Montag 2013, pp. 78 and 84.

[ix] Montag 2013, p.78.

[x] Montag 2013, p.79.

[xi] See Matheron 1997, p.10 for working notes made by Althusser in 1966.  These mention Epicurus and the clinamen [swerve of the atom], ‘theory of the encounter, conjuncture  (= structure)’,  i.e. structure as linked to role of chance. In an annotation made by Althusser on his copy of Macherey’s Literature book he writes: ‘Theory of a clinamen.  First theory of the encounter’.  Recent scholarship on Althusser has emphasised that categories of chance, encounter, and the aleatory were central in his thinking from the mid-1960s onwards and not just – as in the received mythology – a new last phase in the 1980s. See the introduction to Goshgarian (ed.) 2006.  But for a variety of reasons the encounter and allied concepts remained a submerged and repressed undercurrent in his published work of the 1960s and 1970s.  Recent scholarship has also traced the complex linkages in Althusser’s work between concepts of structure, chance and plural temporalities.

[xii] Montag in Nesbitt (ed.) 2017, p.176. See also the chapter on Lacan in Montag 2013.

[xiii] Althusser as quoted by Montag in Nesbitt (ed.) 2107, p.181.

[xiv] Sotiris 2014 p.30.

[xv] Sotiris 2014, p. 7.

[xvi] Sotiris 2014, p.14. See also Sotiris in Diefenbach et al. (eds.) 2013.

[xvii] Marx 1981, p.1020.


Althusser Louis 1977 For Marx, (Trans. Ben Brewer), London: Verso.

Althusser, Louis, Étienne Balibar, Roger Establet, Pierre Macherey, and Jacques Rancière, 2015, Reading Capital, (Trans. Ben Brewer and David Fernbach), London: Verso.

Deleuze, Gilles 1990 The Logic of Sense, London: Athlone Press.

Diefenbach, Katja, Sara R. Ferris, Gal Kirn and Peter D. Thomas  2013, Encountering Althusser: Politics and Materialism in Contemporary Radical Thought, London: Bloomsbury.

Fourtounis, Giorgos 2005, On Althusser’s Immanentist Structuralism: Reading Montag Reading Althusser Reading Spinoza, Rethinking Marxism 17,1.

Goshgarian, G.M 2006, Introduction to Althusser Philosophy of the Encounter: Later Writings, 1978-1987, London: Verso.

Marx, Karl 1981, Capital Vol. 3, London: Penguin Books.

Matheron, Alexandre 1997, Introduction to Althusser, The Spectre of Hegel; Early Writings (trans. G. M. Goshgarian), London: Verso.

Montag, Warren 2003, Louis Althusser, London: Palgrave.

Montag, Warren 2013, Althusser and His Contemporaries: Philosophy’s Perpetual War, Durham NC: Duke University Press.

Morfino, Vittorio 2014, Plural Temporality: Transindividuality and the Aleatory Between Spinoza and Althusser, Leiden: Brill.

Nesbitt, Nick (ed.) 2017,The Concept in Crisis, Durham NC: Duke University Press.

Sotiris, Panagiotis 2014, Rethinking Structure and Conjuncture in Althusser, Historical Materialism, 22,3: 5-51.

Stolze, Ted 1998, Deleuze and Althusser: Flirting with Structuralism, Rethinking Marxism 10, 3: pp. 51-63.

A Debate on Value Theory Guest Post by Pete Green

On the recent (2018) debate over value theory between David Harvey and his critics

A short essay by David Harvey, raising some questions about value theory in Marx, has  provoked the polemical responses he may well have expected. First onto the field to defend his version of orthodoxy came the redoubtable Michael Roberts, who was soon supported, though from a rather different angle, by Paul Cockshott. Links to the relevant pieces, including a response from Harvey to the Roberts critique, can be found most easily on the Michael Roberts blog. In what follows I  attempt to evaluate some of the central points of difference along with two other critical concepts (‘anti-value’ and ‘devaluation’) thrown into the debate by Harvey in his response. I will also refer to Harvey’s recent book Marx, Capital and the Madness of Economic Reason which ranges much more widely across the whole terrain touched on by his essay. Roberts refers to this text but does not appear to have read the whole book, as that might well have obliged him to correct, or at least qualify, his dismissal of Harvey as an under-consumptionist.

Harvey’s essay is titled “Marx’s Refusal of the Labour Theory of Value” and this in itself has provoked the ire of his most prominent critics. For Harvey the labour theory of value ‘belonged to Ricardo’ and Marx himself only ever refers to ‘value theory’. Harvey also gives a complimentary nod to Diane Elson’s ‘seminal article’ “The Value Theory of Labour”, an article which whilst certainly insightful effectively dismissed the quantitative dimension of Marx’s work.[i] (Elson was conceding the terrain of price determination to the Sraffian or neo-Ricardian school whilst defending the ‘qualitative’ dimension of Marx’s analysis of value-forms and the alienation of labour). Insofar as Harvey’s critics insist on defending the coherence and empirical relevance of the quantitative dimension of Marx’s theory they are, in my view, correct to do so. But that does not settle the arguments discussed below.

Cockshott, in particular, insists that on ‘ key components’ of value theory Marx and Ricardo were in agreement. He vigorously challenges the most problematic two sentences in Harvey’s essay which are as follows:

Ricardo’s hope was that the labour theory of value would provide a basis for understanding price formation. It is this hope that subsequent analysis has so ruthlessly and properly crushed

Harvey is seriously mistaken on this point and curiously it’s not a claim he makes in his latest book. Cockshott references studies by himself and others, such as Anwar Shaikh, revealing the strong statistical relationship between changes in the labour content of diverse commodities as a result of changes in the productivity of labour, and the movement of market prices. Marx’s claim that values are the underlying regulators of prices amidst the turbulent fluctuations of the market place is validated by these studies (and this is what Marx meant by the law of value in my view, a law which capitals seek to resist or overcome via price-fixing and monopolization). Yet little of what Harvey has to say about prices in his book, as distinct from the essay quoted above, is incompatible with what Shaikh and others have elaborated in detail.

However Cockshott’s own summary of how Marx progressed from Ricardo with, for example, the introduction of the concept of surplus-value, exposes a significant lacuna in his analysis. Neither Cockshott nor Roberts appear to attribute any weight to Marx’s critique of  Ricardo’s theory of money and the latter’s disregard for the specific social form of value. As Marx noted in Theories of Surplus-Value:

But Ricardo does not examine the form – the peculiar characteristic of labour that creates exchange-value or manifests itself in exchange-values – the nature of this labour. Hence he does not grasp the connection of this labour with money or that it must assume the form of money. Hence he completely fails to grasp the connection between the determination of the exchange-value of the commodity by labour-time and the fact that the development of commodities necessarily leads to the formation of money. Hence his erroneous theory of money. Right from the start he is only concerned with the magnitude of value…” (Marx 1968, p.164.)

See also the much-quoted footnote on p.174 of Capital Volume 1 in the Penguin edition, 1976.

Michael Roberts argues correctly that Marx’s distinction between abstract and concrete labour also distinguishes his value theory from that of Ricardo and on this he seems to differ from Cockshott who strangely claims that this distinction can be found in Adam Smith. In brackets Roberts defines abstract labour as “value measured in labour-time when ‘socially’ tested on the market”. This is to equate the concept of abstract labour with that of ‘socially necessary labour-time’, and at the same time disregard  the necessary connection between ‘abstract labour’ and money proposed by Marx himself. Those who share such a perspective might well be puzzled as to why Marx spends so much effort in the opening chapters of Capital Volume 1 on elucidating the forms of value and the ‘development of money’.

I am not going to dwell further on the complex question of Marx’s intellectual relationship with Ricardo or other classical economists, a relationship which certainly evolved over time.  Instead I want to focus on some critical issues raised by Harvey which deserve more serious consideration than either of his critics have managed to provide.

On “the contradictory unity of production and realization”

That’s a quote from Marx, and Harvey, who deploys the phrase (without a page reference!) in his response to Roberts, is certainly correct to emphasize its importance. This should not be controversial amongst serious Marxist scholars. Value is created in the process of production but it can only be realized in the course of exchange in the market, when the produced commodities are actually sold. Harvey suggests that the value created in production is only a potential value until it is realized, and just a little reflection on the meaning of the term ‘realization’ should support that interpretation, although as far as I am aware the word ‘potential’ (or its German equivalent ‘Potenzial’) is not used by Marx himself. If the commodity is not sold it has no value, or rather loses whatever value it potentially had (although it may reappear on the market at a lower price and as such ‘devalued’ – on which more below). It is also the case that a commodity can be exchanged for a sum of money whose value (or representation of value) is greater or less than the potential or ‘intrinsic’ value contained in the commodity as it goes to market – although, as Harvey notes, Marx  explicitly assumes that this is not the case, or that prices correspond to values, from Part 3 onwards in Volume 1 when he focuses on the production of value.  But Marx never forgets that the process of  exchange is always uncertain, and the possibility of a failure of realization ever-present.

Harvey also emphasizes in his own distinctive way that constant changes in the productivity and intensity of labour ‘under pressures of competition in the market’ entail that:

Value becomes an unstable and perpetually evolving inner connectivity (an internal or dialectical relation) between value as defined in the realm of circulation in the market and value as constantly being redefined through revolutions in the realm of production”

Unfortunately,  ‘value as defined in the realm of circulation’ is  an example of the loose phraseology found elsewhere in his essay which opens Harvey up to serious misrepresentation of his argument. But his response, which insists on the distinction between production and realization as noted above, should be welcomed for its clarification of the fundamental issue. Harvey is also right to emphasise the instability which results from technological and organizational innovations but manifests itself in the process of circulation in the market.

What’s critically at stake, as far as both Harvey and Roberts are concerned, is a broader question about the relationship between the process of production and circulation not simply of commodities but of capital as a totality. Harvey in his earlier work on Volume 2 of Capital has quite correctly emphasized that the process of circulation of capital is essential to the capitalist mode of production, and should not be  regarded as secondary, or neglected because Volume 2 is such a tedious volume by comparison with the sparkling prose of Volume 1.[ii]

Harvey’s Companion to Capital Volume 2 is replete with illuminating insights into the multiple dimensions of that work. In particular, he emphasizes that for Marx the time spent in the circulation phase of capital’s circuit is time in which capital is not engaged in the production of surplus-value. Capital is therefore driven by competition not just to speed up the labour process within the factory but to reduce the time spent in transportation to and from the market-place itself, as well as the time lost waiting for commodities to be sold. Hence of course the need for massive spending on infrastructures which often only states with their capacities for taxation and borrowing can manage to deliver. But the consequence for capital will be a reduction in turnover time which will counteract any tendency for the rate of profit to fall.

In his latest book Harvey begins with the notion directly derived from Marx of capital as ‘value in motion’. He develops an extended analogy in diagrammatic form between the circuits of capital and the hydrological cycle of water. All such analogies can be overstated and Harvey acknowledges this. But I share his appreciation of the parallel between the ways in which H2O changes its forms (water, steam, rain, ice, snow, fog etc) and the diverse speeds at which they move, and the diverse forms taken by capital (money, commodities, means of production etc) and their differential turnover times. Only close attention to Volume 2 of Capital will enable us to grasp why Marx understood that it was necessary to explore these issues before developing an adequate theory of capitalist crisis. But as I’ve suggested in an earlier contribution to this blog, Michael Roberts prefers to ignore Volume 2 and in effect leap straight from the focus on production in Volume 1 to the fragments on profitability and crisis in Volume 3.

In the short essay, however, Harvey prefers a different analogy, ‘simple but crude’, with the circulation of blood inside the human body in which ‘the two phenomena are mutually constitutive. Value formation likewise cannot be understood outside of the circulation process that houses it. The mutual inter-dependency within the totality of capital circulation is what matters’.  But this analogy could be misleading if it implies that we can only talk about value formation as he suggests ‘under conditions of capital accumulation’. My own view is that value formation is necessarily tied to the existence of money and commodity exchange but these are themselves preconditions of capital accumulation and predate the consolidation of capitalism as a mode of production (which is not to endorse the notion of a simple commodity mode of production proposed by Engels). But how we analyse the necessary connection between value and money is itself controversial.

 The Question of Money

Harvey in his essay introduces money as a ‘material representation of value’. There is of course much, much more to be said about Marx’s analysis of money and the materiality of money is today certainly in question (see in particular the recent collection of essays by Costas Lapavitsas).[iii]  Arguably it is preferable to follow Marx in Chapter 2 of Volume 1 and introduce money as, in the first instance, the ‘universal equivalent’. But there should be no dispute that for Marx money serves as the external measure of value and the ‘social incarnation of labour’, and is “the necessary form of appearance of the measure of value which is immanent in commodities, namely labour-time” (Volume 1 p.188). So without money there is no ‘value’ as such and, at least in one sense of the term, no ‘abstract labour’.

Michael Roberts, who indirectly quotes the same passage from Marx I have just used, also agrees that without money there is no value. However, he also quotes at length Murray Smith’s critique of those whose emphasis on the ‘value-form’ lead them to “sever commodity values entirely from any determination in the conditions of production, and the way is paved for an effective identification of value and price”. Roberts extends this critique to Harvey without any justification other than the latter’s emphasis on the necessity of the realization of value in the exchange of commodities for money.

In this respect Roberts’ polemical arrows are aimed at the wrong target.  There are certainly writers in the ‘value-form’ tradition, dating back to the work of Backhaus and Reichelt in Germany in the late 1960s (rather than to Rubin whose earlier work is sometimes blamed for this construction) for whom money is the only possible measure of social value and who therefore cannot effectively differentiate value and price, or have any concept of unequal exchange. I have commented critically  on  examples of this tendency in a review essay in the Historical Materialism journal.[iv] (22.1, 2014 pp. 200-222)

But nothing that Harvey says in his essay justifies tarnishing him with the same brush. Indeed  in Chapter 5 of his book, headed ‘Prices without Values’, Harvey focuses in on the examples of commodities with prices but no values that Marx himself mentions, such as land and unique works of art, and argues that this has become a more widespread phenomena. Harvey is very interesting on how the ‘free gifts’ of human creativity, and scientific knowledge are being enclosed and  commodified via the enforcement of intellectual property rights. He then proceeds to explicitly reject any ‘monetary theory of value’ stating that

To ignore the money-value contradiction altogether is to cut off an important, though admittedly complicated avenue to understand the dilemmas of contemporary capital accumulation’.[v]

There are two treacherous paths that Marxists need to avoid in these debates, not just one. On the one hand there are those value-form theorists who deny that it is possible to measure socially-necessary labour-time independently of exchange and end up collapsing value into exchange-value or price. On the other hand, there are those for whom the moment of realization is always subordinate to the production of value, and who collapse the social category of value into the physical performance of labour, and even forget that value which is not realized is either devalued or negated completely. David Harvey, despite occasional hesitations, avoids the first path but Michael Roberts appears to be travelling along the second, although he would no doubt vigorously protest at the suggestion. 

‘Underconsumptionism and crises’

For Michael Roberts there is no doubt that Harvey’s cardinal sin is his ‘underconsumptionist theory of crisis’.  Everything that Harvey says about the necessity of the realization of value, or the significance of the circulation of capital, is interpreted by Roberts as a challenge to his own insistence that only a ‘falling rate of profit’ can explain each and every crisis of capitalism. In a sentence which opens. as I’ve already shown. with a serious distortion of Harvey’s argument Roberts sums up his critique:

If value is created only at the moment of exchange for money and ‘money rules’, then it will be (effective) demand that will decide whether capitalism smoothly  accumulates without recurring crises”

In his essay  Harvey  raises the  question of the reproduction of labour-power today in conditions which to some extent, given rising levels of poverty and precarity, recall those described by Marx and Engels in mid-19th century Victorian Britain. He also references the insights of social reproduction theory as explored in the recent collection edited by Tithi Bhattacharya (Pluto Press 2017) and this is a welcome development in my view. But typically Harvey offers up one sentence which for Roberts confirms Harvey’s cardinal sin:

As Marx notes in Volume 2 of Capital, the real root of capitalist crisis lies in the suppression of wages and the reduction of the mass of the population to the status of penniless paupers

Roberts rather predictably counters with another classic Marx quote (“It is sheer tautology to say that crises are caused by the scarcity of effective consumption….”) and a misguided attempt to downplay the significance of final demand by emphasizing the demand for intermediate goods and materials as if the two were not deeply interconnected. Roberts is on stronger ground when he emphasizes in his own book (The Long Depression) that investment has always been the component of demand which fluctuates most violently across the cycles of boom and slump. But as Anwar Shaikh has argued investment in capital accumulation depends on ‘expected profit-rates for the regulating capitals’.[vi] (Shaikh 2016 Capitalism). Such expectations are influenced not simply by past profit-rates as Roberts assumes but also by changing levels of effective demand and business confidence.

This is not the place for me to expand on my own pursuit of a ‘multi-dimensional crisis theory’. However, two distinct questions are frequently confused in these arguments and a little clarification might be helpful to those looking to move beyond the polarization evident in the Harvey/Roberts exchange.

Firstly, there is the fact that the limited consumption of the mass of the population is for Marx a precondition, or the ‘real root’ of capitalist crises simply because if all the net product is consumed by the masses, capitalism itself could no longer exist. But this ‘under-consumption’ is of course a permanent condition, and cannot by itself explain the periodic crises punctuating the  cyclical fluctuations which have beset capitalism since the early 19th century.

Secondly, there is the empirical question of the role played at specific historical moments by changes in wages, and levels of mass consumption (which in contemporary capitalism can also be financed by credit mechanisms and state distribution of benefits). The evidence presented by Atif Mian and Amir Sufi in their book House of Debt suggests that the housing crisis in the USA which first emerged 2006-7 led to a sizeable reduction in levels of consumption spending by those households squeezed by falling house prices and a high level of debt, as well as a fall in housebuilding. It is this fall in consumer spending along with a rise in the price of raw materials which explain most of the fall in the mass of profits in the course of 2007-8  in the USA which Roberts himself has highlighted. This preceded the sharp drop in non-residential investment spending which followed the collapse of Lehman Brothers and the paralysis of the credit system globally. Certainly that fall in the mass of profits cannot be explained by rising wages or a change in the underlying organic composition of capital and Roberts himself provides no alternative explanation. See the comment on Mian and Sufi’s analysis in a previous post by Jim Kincaid on this blog.

Harvey could have avoided some of the misrepresentation of his position if he had clarified the difference between the two claims made above. But we need to examine the specific features of each major historical crisis and not assume, as Roberts and others do, that the same mechanisms are at work in every crisis. The pattern of crisis in 2007-8 was very different, for example, from that in 1974-75 or in the early 1980s, when the combination of a fall in the rate of profit in the core economies with sharp hikes in interest-rates was the critical determinant. Harvey has certainly not provided a definitive account of the decade long period of crisis and stagnation which began in 2007 but he has drawn on Capital Volume 2 to outline a framework – the circuit of capital – which enables us to identify the multiple fault-lines in the system as distinct from the single fault-line on which Michael Roberts focuses. 

Anti-Value and Devaluation

In his response to Michael Roberts’ critique Harvey makes a passing reference to his own original conception of anti-value or not-value which he explores in a whole chapter of his 2017 Madness book. He connects this to the need for a ‘strong theory of devaluation to account for what happens in the market-place’. I agree with Harvey’s emphasis on devaluation and the fact that this critical process ‘rarely appears in Roberts’ accounts’. I am, however, reluctant to endorse his category of anti-value.

‘Anti-value’ is a new category in Harvey’s work and one which is explored in detail in a chapter of the book. Harvey’s analogy is with the concepts of matter and anti-matter in physics but as a non-physicist I suspect that the concept of ‘anti-matter’ is rather more precisely defined than ‘anti-value’. Harvey’s first examples are all about devaluation as a necessary moment of the circulation process. He draws primarily on quotes from the Grundrisse to argue that capital which for whatever reason suffers from a pause or even a slowdown in its movement through the phases of circulation will experience a loss  of value, or a virtual devaluation which may be overcome if capital’s movement is resumed. Harvey notes that in the Grundrisse capital lying ‘at rest’  is variously termed ‘negated’, ‘fallow’, ‘dormant’ or ‘fixated’ and this is clearly relevant to the mechanisms of crisis when unsold inventories accumulate or surplus money capital is immobilized rather than reinvested in production.[vii] This is a whole dimension of Marxist crisis theory which is widely ignored in the contemporary literature.

However, Harvey proceeds to extend the category of ‘anti-value’ to embrace other quite diverse phenomena and processes, such as resistance at the point of production or struggles over commodification of essential goods such as water, education  and health-care. He also regards debt as a ‘crucial form of anti-value’, which I find very curious indeed and finally throws various types of unproductive labour into the mix as well. By the end of the chapter the category of anti-value has become so copious and slippery that it is unlikely to be  widely adopted in the way that Harvey’s equally compendious but rather better focused category of accumulation by dispossession has been.

That said we should welcome Harvey’s efforts to stimulate debate on this and related questions. We need to hold onto all the core categories of Marx’s thought, but not treat their application to the contemporary world of global capital as a simple matter of finding correlates for those categories in the national income accounts constructed by economists and statisticians with very different models of the world. Harvey may get it wrong on occasions, as I’ve suggested above, but he is certainly right to challenge the reduction of the contradictions of capital as ‘value in motion’ to the sphere of production alone.


Harvey’s Critique of Moseley.

As a rather technical aside, I need to criticize Harvey’s own misrepresentation of Fred Moseley, whose book Money and Totality is the only work referenced in a footnote as an example of a ‘monetary theory of capital’. Moseley is certainly not someone who ‘ignores the money-value contradiction’ and has himself criticized adherents of value-form analysis such as Reuten for that error. Moseley’s primary target in his book is  the ‘physicalism’ of those neo-Ricardians who have turned to Sraffa’s equations for a solution to the so-called transformation question of the relationship between values and prices of production when profit-rates are equalized across sectors. Moseley is correct in my view to argue that both the constant and variable capital on which profit-rates are calculated are monetary quantities for the purpose of Marx’s transformation and once this is accepted the supposed ‘inconsistencies’ in Marx’s solution disappear. This, however, presupposes acceptance of a version of the MELT or the Monetary Expression of Labour-Time as an alternative to locating the value of the money commodity (Gold or Silver in Marx’s day) in the labour-time necessary for its production as Marx himself did. Shaikh, Fine and Saad-Filho are the most prominent critics of the so-called “New Interpretation” in this respect but on this they are stubbornly wrong-headed. Harvey does not directly address this question but it would be  consistent with his wider outlook to adopt the MELT formulation himself.

[i] The essay is in Elson (ed.) 1979.

[ii] Harvey 2013.

[iii] Lapavitsas 2017.

[iv] Green 2014, pp. 200-222.

[v] Harvey 2017, p. 105.

[vi] Shaikh pp. 619-637.

[vii] Harvey 2017, p.74.


Bhattacharya, Tithi 2017, Social Reproduction Theory: Remapping Class, Recentring Oppression, London: Pluto.

Elson Diane (ed.) 1979, Value: The Representation of Labour in Capitalism, London: CSE Books.

Green, Peter 2014, Review of Two Books edited by Riccardo Bellofiore et al., Historical Materialism, 22,1. pp. 200-222.

Harvey, David 2017, Marx, Capital and the Madness of Economic Reason, London: Profile Books

Harvey, David 2013, A Companion to Marx’s Capital Volume 2, London: Verso.

Lapavitsas, Costas 2017, Marxist Monetary Theory. Collected Papers, Leiden: Brill.

Marx, Karl 1968, Theories of Surplus Value, Volume 2, London: Lawrence and Wishart.

Mian, Atif and Amir Sufi 2014, House of Debt, Chicago: Chicago University Press.

Moseley, Fred 2015, Money and Totality, Leiden: Brill.

Shaikh, Anwar 2016, Capitalism, Oxford: Oxford University Press.

Causality and the Rate of Profit

I have returned to an long-standing interest in causality in Marx’s political economy as a result of involvement in controversies about the falling rate of profit. In particular a debate with Michael Roberts, currently one of the leading exponents of the thesis that the fundamental and decisive cause of capitalist crisis is the tendency of the rate of profit to fall.  Other subsidiary causes are added into the mix, but on an ad hoc ad lib basis – for example levels of debt and financial fragility.  See e.g. my post. This contains links to Michael’s reply.

I worry that many participants in these, and allied debates, rely too heavily on a simple conception of isolated and direct cause and effect processes – mechanical causation in  Althusser’s terminology.

A current example is the on-going controversy between David Harvey and Michael Roberts which has revolved round the question of whether the latter is too mono-causal in his account of the crisis. See the exchange between the two in the excellent collection of articles on the 2008 financial crisis edited by the Turkish scholar Turan Subasat. Also the further stage of debate reported here in Michael’s blog.

Pete Green has sent me a well argued critical comment on this latest round of the Harvey vs. Roberts debate which I will publish in the near future as a guest post.

One of the influential sceptics about a declining rate of profit as the master key to explain all crises  is Costas Lapavitsas.  He makes the case with particular sharpness in a recent interview.

A tendency has emerged explaining everything pretty much in terms of some putative tendency of the profit rate to fall. This kind of thinking has somehow mutated into the Marxist account of the macroeconomic performance of capitalism and the behaviour of capitalism over time. …. in theoretical terms I find this kind of practice by Marxists terribly poor and saddening. It tells you very little in theoretical terms. Empirically it has no substance at all. I have measured the rate of profit time and again. In fact, I’m publishing work now  on the rate of profit in the USA and there is no evidence that it has been falling in any serious ways since the early 1980s. Of course it fluctuates but there has been no evidence that is has been falling in the long term. …  crises are very complex events so a theory of crisis most also be complex… It is not enough to invent a decline in the rate of profit and then on the basis of that add some kind of low level of sociology which is presumed to explain the crisis from the rate of profit.

The falling rate of profit exponents often try to short-circuit theoretical debate by arguing that the available data provide conclusive empirical evidence to support their explanation of the 2008 crisis.  In a series of posts starting in March 2016 I show that the US National Accounts data provide no convincing evidence that a fall in the average rate of profit was the cause of the crisis.

In any case, apart from the huge technical limitations I and others identify, it is simply implausible that the comparatively small variations in profit rates which took place in the years before 2008 could be the major cause of such a deep financial crisis.

For example, tendencies in industrial profit rates cannot explain the rapid rise in mortgage default by US households in 2006; the general fall in house prices which resulted, and the impact of this on consumer demand.  See my summary of the important book by Mian and Sufi which explains this major dimension in the 2008 crisis.

There are also many other difficulties. For example, the questionable conception of the rate of profit as a linear variable; the higher it is, the healthier the system, and vice versa. This is rarely stated explicitly, but often implicitly assumed.

Or again, how can the continuous operation attributed to the falling tendency of  the rate of profit explain the cyclical patterns in economic growth, demand and employment which are so evident in empirical studies of capitalist economies?

To be clear: I’m not questioning that cause and effect processes are how the world operates.  Mechanical causality is not the happiest of terms – maybe transitive causality would be more accurate. But neither in science nor in everyday life can there be any question of abolishing the concept or denying the processes it refers to.

The objection is that when it you are trying to understand a system – it can be misleading to treat individual causes in isolation from each other.  Or to explain what happens in a system by taking a number of separate causes and trying to add them up together. Causes come in clusters and interact with each other.  Individual causes have different effects depending on the state of the overall system.  Chains of causation build up through the operation of feed-back loops.

Perhaps a better starting point is to think of capitalism as a complex adaptive system.[1] In such a system it would not be plausible that a single underlying cause (or contradiction) could have the direct, continuous, and overwhelming causative power which Michael Roberts and others attribute to the average rate of profit in the major economies. There, is for example, a logical glitch here –an often overlooked non-sequitur. The quest for profits drives the system. OK we are all in agreement about that.  But you cannot conclude from this that, if the system enters crisis, however major, it can only be because the rate of profit is not high enough.  There is a difference between what drives a system and the outcomes which result from failure in the system.

But does it make any sense to think of a system itself as acting as some kind of cause?  A capitalist system for example. Is something like this implied when attempts are made to capture and explain the structures and dynamics of capitalism by terms like complex adaptation, and system?

Many scholars have contributed to thinking about these and allied questions.  I have started with the account of structural causality by Althusser and his Reading Capital colleagues for several reasons.[2] They closely studied the text of Marx’s Capital. The rigorous philosophical training which they had undergone in the French higher education system gave then an unusual alertness and clarity about Marx’s methods of argumentation.  More important, their way of reading Capital, and the originality of their theoretical angle of vision, owed much to the context of their collective work.  Paris in the 1960s was the locus of an extraordinarily fertile and creative interaction between philosophical thought and political action.[3] It was the rich development of structuralist thought in France which enabled and predisposed Althusser to see patterns of structural causality in Marx’s account of history.[4]

It was Althusser’s argument that, though Marx may have said little about the logical status of this type of causality, he was able, in a practical way, to find ways of using the concept in Capital.  For example in his analysis of modes of production (slave, feudal. capitalist etc.) in which forces and relations of production were combined in differing structural patterns. But Althusser considered that it was important to explain how structural causality worked as an epistemological paradigm.  What kind of causality is at work when the mode of production, as a structure, acts as a determining influence in social development.

But what happens next is that Althusser himself then gets into intractable difficulties in trying to formulate clearly what he means by the concept of structure. For example he often seems to alternate between: (1) a holistic concept of structure –  the effects which the structure of a totality might have in ordering its constituent elements; and (2) a structure which has no existence except in its effects. A form of immanent causality.  

I’ll comment more about this inconsistency, and why it matters, in my next post.


Althusser, Louis, Étienne Balibar, Roger Establet, Pierre Macherey, and Jacques Rancière, 2015, Reading Capital, (Trans. Ben Brewer and David Fernbach), London: Verso.

Elliott, Gregory 1987, Althusser: The Detour of Theory, London: Verso.

Mason, Paul 2015 Post Capitalism: A Guide to Our Future, London: Penguin Books.

Mian, Arif and Amir Sufi 2014, House of Debt, Chicago: University of Chicago Press.

Montag, Warren, 2013, Althusser and His Contemporaries, Durham NC: Duke University Press.

Peden, Knox 2014, Spinoza contra Phenomenology: French Rationalism from Cavaillès to Deleuze, Stanford CA, Stanford University Press.

Subasat, Turan (ed.) 2016, The Great Financial Meltdown: Systemic, Conjunctural or Policy Created? Cheltenham: Edward Elgar.


[1] There is a a lively defence of the concept of capitalism as a complex adaptive system in Mason 2015,  in the chapter called ‘Was Marx Right’.

[2] Althusser et al. 2015.

[3] Elliott 1987.

[4] See Montag 2013, and Peden 2014.


Althusser on Causality in Marx

I have not posted anything for some months for two reasons.  First I had to complete a chapter on Money and Finance for the Handbook on Marxism, to be published by Sage, edited by Beverley Skeggs, Sara Farris and Alberto Toscano.

Then in November I had a meeting with Demet Dinler – unfailing source of inspiration and good advice – about what work to do next. Demet urged me to return to themes which I first explored in 2005-9 in a series of papers on Marx’s value theory and on the conceptual narrative of Capital.  (These are available on my ResearchGate website).

Roughly, what I was attempting at that time was to bring into alignment and interplay two areas of Marxist research: (1) ways of reading Marx’s text which register its metaphorical and performative dimensions; (2) the logics and selective pressures of the law of value, reconsidered in the light of recent developments in complexity theory and in ecology.

As her own outstanding research and editorial work will testify, Demet has a brilliant sense, of where in the present period, creative Marxist research can and needs to be done.  She has persuaded me that further work on the above topics, however modest, would be worthwhile.

It has taken me several months to catch up with only some of the necessary reading.  Partly this is because of the sheer volume of relevant material which has appeared over the past ten years.

But also because a further difficulty had to be faced.  In my training and approach to the reading of Marx, the central philosophical reference point was always Hegel.  But some of the most powerful strands of Marxist thought in recent years have roots less in Hegel than in Spinoza.  Think only of the many currents which derive from the autonomist project and the debates which it has provoked in areas such as: labour process, cognitive capital, social reproduction, and eco-Marxism.

There is too the literature of commentary on Althusser by scholars working in the tradition he established. When Althusser died in 1990 he left a large archive of manuscripts, many of which have now been published.  This new material, together with revised ways of reading his earlier books, have posed a radical challenge to the earlier, and widely held view, that Althusser was a doctrinaire structuralist who distorted Marx by denying the role of human agency in history.  Instead of the implacable dogmatist, Althusser now emerges as a tortured thinker, exploring conflicting positions, within and around Marxist thought, in a highly productive way.  But, on many important issues, without being able to come to a final and definitive resolution.  Warren Montag, one of the finest of recent commentators on Althusser, writes that:

In opposition to the mechanistic doctrine attributed to him by E. P. Thompson and others, Althusser worked to overcome the opposition between chance and necessity by defining historical necessity as the product of chance encounters between absolutely singular entities.[i]

The intense exploration of paradoxical propositions like this, not surprisingly, led to texts characterised by severe tensions. Montag, in the final summary of his magnificent book Althusser and His Contemporaries (2013), comments on,

the tumult of Althusser’s oeuvre, its risks, its tragedies, its exultations, the way in which he frenetically pursues a meaning that constantly eludes him, even if this meaning is none other than the pursuit itself, producing … a new way of inhabiting philosophy, that is, the philosophical conjuncture, that makes visible the lines of force that constitute it, opening the possibility of change … the shattering of obstacles that opens new perspectives.[ii]

What has been carefully studied in recent research on Althusser by Montag and others, are the implications of his characterisation of himself as a follower of Spinoza. As Althusser explained: ‘We never were structuralists … We were guilty of an equally powerful and compromising passion: we were Spinozists’[iii]

I believe that recent scholarly work on the Spinoza-Hegel connection, and on ‘the new Althusser’, can point the way to some promising developments in Marxist theory.

Here I start with the question of causality in Marx.

The year 2015 saw the publication, for the first time, of a complete English translation of Reading Capital written by Althusser and four of his students. Lire le Capital had appeared in Paris in 1965, but until three years ago the only English translation available was of the severely truncated second edition of 1968).

In the studies of Marx’s Capital which Althusser and his team summarise in this book, a huge weight is placed on the concept of structural causality.  In their view it was the central and decisive element in the theoretical revolution effected by Marx in Capital.  Here, they argued, was a new form of causality, without precedent in earlier scientific work.

They considered however that Marx did not have available to him the concepts with which to formulate explicitly and clearly the innovative form of causality which he was using in a practical way in his political economy. But were Althusser and his co-workers able to do any better?

Althusser has a chapter in Reading Capital, called ‘Marx’s Immense Revolution’, in which he explores at length the question of causality.  He explains that in the scientific and philosophical tradition which Marx inherited there were only two systems of concepts with which to think causation.

  • Mechanistic causality. This term (not a very happy one) covered the concepts and forms of causality operative both in everyday life and in scientific work.  Here particular causes were seen as having particular effects.  The link is some kind of direct transitive effectivity.  Such a model, Althusser suggests, has a serious limitation. It cannot register the effectivity of a whole – a totality – on its constituent elements.[iv]
  • Expressive causality. This second system was one conceived precisely in order to deal with the effectivity of a whole on its elements.  It was classically formulated by Leibniz in his concept of expression. The parts express the essential character of the whole. ‘This’, says Althusser, ‘is the model that dominates all Hegel’s thought. It presupposes that the whole in question be reducible to an inner essence, of which the elements of the whole are then no more than the phenomenal forms of expression’.[v]

As an example of expressive causality in Marxism, consider the influential account of Capital in History and Class Consciousness by Georg Lukacs. In this, two concepts are central – totality and commodity. What Lukacs argues can be summarised as follows:

(1) It is not the primacy of economic motives in historical explanation that constitutes the decisive difference between Marxism and bourgeois thought, but the point of view of totality. The category of totality, the all-pervasive supremacy of the whole over the parts, is the essence of the method which Marx took over from Hegel and brilliantly transformed into the foundations of a wholly new science.[vi]

(2) In the dialectical totality the individual elements incorporate the structure of the whole. This was made clear on the level of theory by the fact that e.g. it was possible to gain an understanding of the whole of bourgeois society from its commodity structure.[vii]

(3) The commodity can only be understood in its undistorted essence when it becomes the universal category of society as a whole. Only in this context does the reification produced by commodity relations assume decisive importance both for the objective evolution of society and for the stance adopted by men towards it.[viii]

Althusser and his colleagues were hostile to all variants of expressive causality in Marxist thought.[ix]  These seemed to them to represent a regression into idealism.  They accepted of course that commodity fetishism was an element in Marx’s account of capitalism, and the chapter by Pierre Macherey in Reading Capital discussed what Marx wrote about the commodity in the first section of Capital Vol. 1.  But not the commodity as some kind of essence which, once identified, allows the analyst to read off at sight the entire structure of a capitalist society.[x]

Instead their attention was focused on Marx’s account of the differing modes of production in historical development.  Here they emphasised the interrelation between forces of production and relations of production, and the patterns of uneven development which result. They saw the political, legal, religious and other major institutions as determined in the last instance by the economic structure.

Althusser asks: how is it possible to define the concept of structural causality? He comments that:

This simple theoretical question sums up Marx’s extraordinary scientific discovery: the discovery of the theory of history and political economy, the discovery of Capital. But it sums it up as an extraordinary theoretical question contained ‘in the practical state’ in Marx’s scientific discovery, the question Marx ‘practised’ in his work, in answer to which he gave his scientific work, without producing the concept of it in a philosophical opus of the same rigour…

This simple question was so new and unforeseen that it contained enough to smash all the classical theories of causality – or enough to ensure that it would be unrecognized, that it would pass unperceived and be buried even before it was born.[xi]

Althusser is arguing that Marx’s breakthrough was so revolutionary that the subsequent  commentary literature on Marx has simply overlooked that a new concept of causality is operative in Capital. They have been able to avoid this recognition because Marx himself did not have the categories to clarify the profound shift in scientific procedure which he was implementing in practice.

What we find instead in the Marxist theory of the 2nd International and in the Communist Parties is a reversion to simple transitive causality. The economic base determines the superstructure of politics, law, ideology etc.

But how could Althusser and his Reading Capital co-authors argue that it was the economic structure which was fundamentally determinative, while,at the same time, avoiding mechanistic cause-effect patterns?

Here I mention only one of the paths they tried to take through this difficulty.  This was by invoking Marx’s suggestion that economic relationships were decisive in the last instance.

Balibar notes,

the principle explicitly present in Marx of a definition of the determination in the last instance of the economy. In different structures, the economy is determinant in that it determines which of the instances of the social structure occupies the determinant place. Not a simple relation, but rather a relation between relations; not a transitive causality, but rather a structural causality.[xii]

As Balibar explains, the Marxist vision is of societies characterised by,

a certain type of complexity, the unity of a structured whole containing what can be called levels or instances which are distinct and ‘relatively autonomous’, and co-exist within this complex structural unity, articulated with one another according to specific determinations, fixed in the last instance by the level or instance of the economy.[xiii] . 

So, if we follow the contortion of this prose, does the economic structure in fact predominate?  Well yes … sort of … but only in the last instance.

But this implies that the last instance must eventually come along to exercise the causative powers of the economy on the superstructure. But such a final arrival is just what is flatly ruled out by Althusser in some memorable phrases:

In History, these instances, the superstructures, etc. — are never seen to step respectfully aside when their work is done or, when the Time comes, as his pure phenomena, to scatter before His Majesty the Economy as he strides along the royal road of the Dialectic. From the first moment to the last, the lonely hour of the ‘last instance’ never comes.[xiv]

More is involved here than simple inconsistency or confusion.[xv]  The Althusser team are wrestling with some serious difficulties in Marxist theory which are often ignored or treated evasively in the literature. I believe their difficulties about the concept of structure are illuminating and worth careful study.  In my next post will try to show why.


Althusser, Louis 1977 For Marx, (Trans. Ben Brewer), London: Verso.

Althusser, Louis, Étienne Balibar, Roger Establet, Pierre Macherey, and Jacques Rancière, 2015, Reading Capital, (Trans. Ben Brewer and David Fernbach), London: Verso.

Eliot, Gregory 1987, Althusser: The Detour of Theory, London: Verso.

Lukacs, Georg 1971, History and Class Consciousness, (Trans. Rodney Livingstone), London: Merlin Press.

Montag, Warren, 2013, Althusser and His Contemporaries, Durham NC: Duke University Press.

Sotiris, Panagiotos 2014, Rethinking Structure and Conjuncture in Althusser, Historical Materialism, 22,3: 5-51.

Thomas, Peter 2002, Philosophical Strategies: Althusser and Spinoza, Historical Materialism, 10,3: 71-113.


[i] Montag 2013, p. 10.

[ii] Montag 2013, p. 210.

[iii] Althusser 1974, p.132.

[iv] Or not at least without contortions.  Althusser here refers to mechanistic causality as theorised by Descartes.  He notes that when Descartes tried to formulate the type of causality through which a whole (e.g. the mind) controls another whole (e.g. the body), he was compelled to fall back on the famous absurdity of the pineal gland as acting as a point of transmission and control.

[v] Althusser et al. 2015, p.342.

[vi] Lukacs 1968, p. 27.

[vii] Ibid, p.198.

[viii] Ibid, p. 86.

[ix] See Elliot 1987 for a valuable discussion of the political reasons why Althusser and co. attacked alienation centred Marxism – its adoption by the French CP as central to the theoretical justification of the pro-Stalinist position.

[x] See on this question, and on some of the other topics I discuss here, two meticulously argued articles: Thomas 2002 and Sotiris 2014.

[xi] Althusser et al. 2015, p.342.

[xii] Ibid p. 385.

[xiii] Althusser et al. 2015, p.244.

[xiv] Althusser 1977, p.113.

[xv] Though inconsistency there certainly is: see Thomas 2002 for a lucid analysis.

Value, Natural Forces, and Productivity

One of the most frequent objections to Marx’s value theory is that there are many commodities which are not produced by labour, yet can be given a price and sold. Marx writes that:

Since money is the transformed shape of the commodity, it does not reveal what has been transformed into it: whether conscience or virginity or horse dung (Capital Vol. 1, p.1073).

Or, as he says at the very beginning of Capital:

A thing can be a use-value without being a value.  This is the case whenever its utility to man is not mediated through labour.  Air, virgin soil, natural meadows, unplanted forests, etc. fall into this category (Capital Vol. 1, p.131).

And, in a later formulation,

Labour is not the source of all wealth. Nature is just as much the source of use values (and it is surely of such that material wealth consists!) as labour, which itself is only the manifestation of a force of nature, human labour power.[i]

 Marx distinguishes between the use-value of commodities as underlying what he calls wealth [Reichtum] – and value [Wert] whose substance is labour and whose measure is socially necessary labour-time.

For commodities produced by labour, labour-time determines value, but the selling price of such a commodity will usually differ from its value.  Among the reasons why exchange-value (i.e. price) differs from value, one of the most important is the operation of supply and demand.  If there is a greater demand than supply of a given commodity, its price will rise above its value.  If supply is greater than demand then price will be below value.  Marx spells out this  argument in detail in Capital Vol. 3, pp.278-96.

In the case of commodities which are not produced by labour, yet are sold for a price, it is the balance of supply and demand which determines what that price will be.  Air has no value because not produced by labour, and no price because its supply is, for most practical purposes, without limit.

When talking about prices Marx often stresses the role of rent.  If someone can establish control of the supply of a commodity for which there is a demand, then a higher price can be charged.  Thus the price of commodities is affected by property relations.  These in turn are underpinned by the power of law, and/or violence.

Marx brings great care to the analysis of means of production which have not been produced by labour-power.  One notable example he uses is – the waterfall.

Marx’s analysis runs as follows. Access to a waterfall increases the productivity of labour employed by the firm which uses the water as a source of power. Higher productivity allows a surplus profit to be achieved.  But for a firm to get such surplus profits depends on: (1) the fact that there is a limited supply of locations which have a waterfall, and (2) that the owner of any  given waterfall has monopoly control of its use a source of power in production. Marx writes:

Those manufacturers who possess waterfalls exclude those who do not possess them from employing this natural force, because land is limited, and still more so land endowed with water-power…. Possession of this natural force forms a monopoly in the hands of its owner, a condition of higher productivity for the capital invested, which cannot be produced by capital’s own production process.  The natural force that can be monopolized in this way is always chained to the earth. A natural force of this kind does not belong to the general conditions of the sphere of production in question nor to those of its conditions that are generally reproducible… a capital cannot create a waterfall from its own resources (Capital Vol. 3, p.784).

There is however another way in which a waterfall may be used to increase productivity and so get surplus profits. Technical modifications can be made to increase the efficiency of its operation.

Although the number of natural waterfalls in a country is limited, the amount of water-power that industry can use may still be increased. A waterfall can be artificially channelled to make its motive power fully useable; a water-wheel can be improved in order to use as much of this water-power as possible; where the ordinary type of wheel is not suited to the supply of water, turbines can be used, etc. (Capital Vol. 3, p.784).

Thus use of the natural power of a waterfall to increase productivity can be enhanced if technical improvements have been made to it. This higher productivity will tend to increase profits.

But who gets those profits?  Marx argues that the surplus profits which derive from the natural existence of the waterfall are realised in the particular form of rent.

Here Marx defines rent as the extraction of a flow of profit based on property ownership and monopoly control of a means of production. This is because the profitability advantage is then based on the fact that competitors can’t get access to the waterfall and use their capital to get a share in its operation.

What is impressive is the precision with which Marx analyses the difference between these two different sources of surplus profit: natural location and technical efficiency.  In turn this leads him to distinguish between two sorts of rent – he calls them Differential Rent 1 and 2. [DR1, DR2].

DR1 is based on the higher productivity and profit achieved through the use of the natural power of the waterfall.  Marx refers to, the use by capital of a monopolizable and monopolized natural force. Under these conditions, the surplus profit is transformed into ground-rent, i.e. it accrues to the owner of the waterfall (Capital Vol. 3, p.785).

DR2 arises from the investment of capital to enhance the efficiency of a natural means of production.  In the case of the waterfall, the extra profit is shared between the owner of the waterfall and the capitalist whose technical improvements increase the productivity of the labour making use of it as a power source.

If the industrial capitalist happens also to be the owner of the waterfall then he or she gets both sorts of rent.

Marx says that the natural location and power of the waterfall is only one instance of a much broader category of what he calls free gifts of nature.  When these are generally available for capital to exploit they add use-value – but no value — to the commodities being produced.

Again and again, Marx stresses that where private ownership and monopoly control has been  established over a freely available force of production, the rent extracted is not derived from value added to commodities produced by its use.  Rather, rent is money captured by landowners from the capitalists who use the land in productive operations which extract surplus-value from the workers they employ.  Rent is a transfer from the class of industrialists to the class of landowners.

The same argument about the waterfall is used by Marx when discussing agricultural land.  If a particular piece of land has a higher natural fertility, there is more use-value, but not more value, to be generated from its cultivation.   However labour employed on relatively more fertile land has higher productivity.  This allows a higher rate of surplus-value to be extracted from those workers, and it is Marx’s argument that monopoly enables the owner of the land to appropriate the extra surplus-value in the form of rent.

A similar case can be made about oil and other mineral resources.  There can be huge differences in costs of extraction or in the quality of available reserves.  The labour employed in the processes of extraction is correspondingly more or less productive. Where higher productivity generates an extra profit this is captured by the owner of the land and its mineral rights.

Why does it matter to Marx to make such an elaborate and precise distinction between the labour productivity which derives from: (1) a force of production which is a free gift of nature, as opposed to, (2) technological improvements?  Often, in practice, they are combined. Marx discusses for example how industrialisation increases the scale of the natural forces which can be deployed in production.

It is cooperation on a large scale with the employment of machines that first subjugates the forces of nature on a large scale – wind water steam electricity – to the direct production process, convert them into agents of social labour… Since these natural agents cost nothing, they enter into the labour process without entering into the valorisation process.  They make labour more productive without raising the value of the product, without adding to the value of the commodity.[ii]

What is crucial for Marx, is maximum clarity that living labour is the only source of surplus-value. We have always to distinguish clearly between the extraction of surplus-value as commodities are produced, and its subsequent redistribution in the circulation process.  As, for example, in the rent which industrial capitalists are compelled to pay to the owners of land and its resources.

As I emphasised in my last post – for Marx, a rise in labour productivity does not, in itself, increase the quantity of value produced.  But a firm is able to capture more profit at the expense of its competitors if it can improve the productivity of its labour force. However, to the extent that higher productivity is due to use of a monopolised natural force, then it’s owner of this who captures the increment in profit in the form of rent.

In the above I have spelled out an argument in rather abstract terms.  To finish I will look briefly at two examples of research which build on Marx’s analysis of the use of natural forces as means of production.

1]   Andreas Malm, in his deeply researched and vividly written book, Fossil Capital, (2016) explores the switch from water to coal power in the English textile industry in the first half of the 19th century.  Water power was cheap compared with the cost of extracting and transporting coal.  But to stabilise the supply of water via systems of reservoirs etc. would have required collaborative and collective organization which was impossible given the competitive capitalism of the period. Coal and steam won out because their use gave higher profits to individual capitalists. After Watt’s invention of the double-rotating engine in the 1770s, it required decades of technical innovation before coal-driven steam became clearly more efficient than water power.  Malm shows that what was decisive was that the portability of coal allowed capitalists to build factories in urban centres where a larger supply of labour was available, than in the upland valleys with waterfalls.  Control of labour by capital was the crucial factor in the transition from water to coal.

2]    In recent article called Value, Nature and Labor: A Defense of Marx, Matthew Huber[iii] has analysed the production of nitrogen fertiliser – a major input into the global agro-food complex:

 Take a nitrogen fertilizer factory for example…the nitrogen that these factories depend upon is freely appropriated air. The atmosphere is 79 percent nitrogen, but this nitrogen is non-reactivein forms that could be taken up by plants. The HaberBosch process of synthesizingreactive nitrogen takes freenitrogen from the atmosphere and combines it with hydrogen (along with tremendous levels of heat and pressure) to produce ammonia. Since there was no labor involved in producing the nitrogenous air,it bears no value. Yet the pernicious aspect of this free appropriationof the atmosphere is that capital also treats it as a freesink for its pollution. One of the main by-products of ammonia synthesis is carbon dioxide. The fertilizer industry is one of the major industrial emitters of carbon (p.43).

Because capital has yet found a way of enclosing the atmosphere and establishing private property rights, its use as a source of nitrogen in fertiliser production (and its abuse as a pollution sink) costs the industry nothing, but is not, in itself, a source of value, profit or rent.  However in this industry, the main economic cost is also a natural resource, but one which is monopolizable, namely natural gas.

Most estimates suggest the price of natural gas forms 7090 percent of the operating cost of nitrogen fertilizer facilities…Thus, it should be no surprise that chemical capital has substantially increased its efficiency in the use of natural gas over the last 5 decades … This is what Marx calls economy in the use of constant capital (Capital Vol. 3 Ch. 5.).

Natural gas is a cheapand not easily replaceablesource of hydrogen to combine with free atmospheric nitrogen to form ammonia. The hydrogen is extracted from natural gas through the material-energy-water intensive process of steam reformingand carbon dioxide is the primary waste product. With this cheap yet pollution-generating and finite source of hydrogen, natural gas forms the material basis of cheap fertilizer, and with it cheap grain, cheap meat and our processed food culture (p. 48).

The shale gas boom based on hydro-fracking has created a renaissance of cheap natural gas-based fertilizer. The plant I visited was in the middle of a $2.1-billion dollar expansion, and the company had made investments in new fertilizer plants throughout the United States. All this expansion is made possible by the fracking that has produced cheap natural gas. A Marxian value perspective should seek to understand how the technical transformations of hydraulic fracturing have reshaped the socially necessary labor time it takes to produce natural gas across the industryand how those value shifts have also reshaped geographies of the chemical industry, electric utilities, and household heating fuel (p. 49).

The fertiliser industry is pollution-intensive and reliant on two natural resources, nitrogen and hydrogen. However, the hydrogen is not a free gift of nature like the nitrogen, but is produced by industrial processes from natural gas.  As Huber explains, It is the huge advance in labour productivity in the production of natural gas – most recently via fracking – which  has underpinned the drop in fertiliser prices, kept costs of production down, and supported profitability right across the world-wide agro-food industrial complex.

[i] Critique of the Gotha Programme, in, Marx and Engels Collected Works, Lawrence and Wishart, Vol. 24, p.81.

[ii] Marx and Engels Collected Works, Lawrence and Wishart, Vol. 34, p.32.

[iii] Published in, Capitalism Nature Socialism, Vol. 28, 1, pp. 39-52. Huber is also the author of an excellent Marxist analysis of the linkages between cheap oil, the politics of neoliberalism, and the construction of a certain ‘American way of life’ based on suburbanisation, and mass availability of cars, roads and retail petrol stations. See Huber 2013, Lifeblood: Oil, Freedom, and the Forces of Capital, Minneapolis: University of Minnesota Press.

Value Theory and the Schism in Eco-Marxism

In the eco-socialist movement there have been frequent complaints that Marx’s value theory, with its central emphasis on labour-time, is fatally flawed and irrelevant. It seems to discount the exploitation of nature in the pursuit of profit. Students of Marx have responded by tracing the close attention which Marx and Engels gave to ecological research and debate in their period.  Crucially, it has been argued that it is precisely its central focus on labour productivity which enables Marx’s value theory to generate a unique and powerful account of the environmental destructiveness of capital.

Here, two writers associated with the New York journal Monthly Review have produced an outstanding body of work. John Bellamy Foster’s brilliant book, Marx’s Ecology (2000) is now an established classic, and Paul Burkett’s Marx and Nature (1999) not far behind as a standard reference. Since then, both writers have produced further influential work in eco-Marxism, most recently the jointly authored Marx and the Earth, which has just come out in paperback. What they have emphasised above all is Marx’s thesis that capitalism tends to use natural resources without concern for sustainability.  He uses the term Stoffwechsel ­ for the metabolic exchange of matter and energy between humans and nature, and notes, for example, how capitalist industrialisation,

produces conditions that provoke an irreparable rift [Riss] in the interdependent process of social metabolism, a metabolism prescribed by the natural laws of life itself. The result of this is a squandering of the vitality of the soil. (Capital Vol. 3, p.949).

Recently however, the Monthly Review account of the ecological dimension in Marx has been challenged by a new kid on the block.  Jason Moore’s Capitalism and the Web of Life (2015), [Web] accuses the Monthly Review team of failing to develop a properly dialectical account of Marx’s ecology.  They remain mired in Cartesian dualism. They counterpose two separate and opposed entities: Society vs. Nature. Thus their focus is too confined to a one-way account of the damage which capitalism is currently inflicting on the environment.

Moore is not denying that we may be currently heading towards environmental disaster.  But he argues that the stark Monthly Review conclusion – abolition of capitalism or planetary destruction – can lead to fatalism rather than creative political responses. Moore writes that:  A dual systems approach to metabolism gives us only one flavor of crisis —the apocalypse (Web p.8o). But the combination of economic and environmental crisis which we face may take many forms in the coming period, and all sorts of technological and political action will be needed in response.

Much of Moore’s book is an exploration of the historical background to the present situation.  From its inception in the long 16th century, capitalism has been hit by successive waves of crisis as it came up against limits in the availability of necessary means of production such as raw materials, energy, and land.  Moore traces major turning points over the past 500 years as capitalism has reacted to resource limits by expanding geographically and technically to absorb new and cheap supplies of necessary means of production and labour. What is distinctive in this approach is Moore’s enormous stress on appropriation as opposed to exploitation.  In discussing the historical evolution of capitalism, he talks, for example, about islands of exploitation in oceans of appropriation.

As originators and guardians of the reigning paradigm in eco-Marxism, the Monthly Review writers have responded aggressively to Moore’s accusation that their work is not dialectical. According to Foster, for example, Jason Moore,

abandons value theory … and has joined the long line of scholars who have set out to update or deepen Marxism in various ways, but have ended up by abandoning Marxism’s revolutionary essence and adapting to capitalist ideologies’.  See interview.

My own view is that, despite many criticisms which can be made of Moore’s work, he has identified some dimensions of Marx’s value theory, which have not had the attention they deserve, not just by eco-Marxists, but more generally across the spectrum of mainstream Marxist political economy. He is asking us to look again at a fundamental question: the relationship between use-value and value in the productive process – and how they intersect when labour productivity rises.  His thinking, for example, has implications for current debates about trends in profitability.

What is striking in the dispute between Moore and the Monthly Review writers is that both sides start out from the same reading of Marx’s value theory. They both strongly defend its central emphasis on socially necessary labour, against the view, widely shared among radical critics, that Marxist doctrine is complicit in a devaluation of nature.

Competition forces capitalists to reduce prices by increasing labour productivity.  This is achieved mainly by mechanisation and by advances in the organization of production.  As Marx pointed out, an increase in productivity will generally require an input of larger quantities of means of production, such as e.g. raw materials and energy.  To sustain the rate of profit these should be obtained as cheaply as possible.

From this starting point, Moore develops a less orthodox line of argument: that the advance of labour productivity can take place without a hit to profits if capital can tap into what he calls a rising “ecological surplus” of Cheap Nature – especially in the form of low cost energy, land, and raw materials.  Also labour-power, kept cheap because its reproduction is not paid for by capital – but secured, for example, by enslavement or domestic labour.

But where capital appropriates means of production cheaply and without paying the full costs of their reproduction, it tends to exhaust its own social-ecological conditions. Moore thus posits a general tendency for the ecological surplus to fall, and for cheap nature to become less cheap. Hence recurrent crises as capital runs up against limits in available resources. If the ecological surplus falls – as Moore argues is happening in the current period – then inputs into production rise in price. Capital must absorb an increasing share of the costs of reproduction.  As costs rise, productivity and profits are threatened with stagnation. Thus Moore traces linkages between environmental devastation and the current economic crisis.

Let’s look more closely at the theoretical underpinning of these conclusions. Central to value theory is that the pressures of competition require firms to lower prices – and the major way in which this is done is by increasing productivity.  At the centre of Marx’s law of value is labour productivity.

Marx’s basic propositions about productivity are formulated as follows:

  • a working day of a given length always creates the same amount of value, no matter how the productivity of labour may vary ­(Capital 1, p.656). If productivity rises, more commodities are produced in a given time period, but the average value of each commodity – and therefore its selling price – will fall correspondingly.
  • However, as productivity rises there tends to be an increase in the rate of surplus-value. As Marx puts it,

an increase in the productivity of labour causes a fall in the value of labour-power and a consequent rise in surplus-valuethe value of labour-power is determined  by the value of the means of subsistence habitually required of the average worker (Capital Vol. 1, pp.655-7).

There are some complications here: Marx accepts that more value can be produced in a given time period if there is an intensification of labour (working harder) or an increase in the skill level of workers. But these qualifications can be initially set aside in order to clarify the fundamental issue.  The source of surplus-value is unpaid labour-time.  An increase in productivity does not increase the total value produced in a given time, but it does increase the rate of surplus-value.

But does it also increase the rate of profit?  Here the key issue is that a rise in productivity, for example via mechanisation, tends to increase the amount of constant capital which capitalists need to use in order to stay competitive.  A rise in the ratio of constant capital to labour will tend to reduce the rate of profit. More capital has been advanced relative to the unpaid labour which is the basis of profit.

As productivity advances there is likely to be a rise in the mass of means of production (machinery, raw materials, energy etc.) required in production.  As Marx notes,

the consequence of …the  application of machinery is that more raw material is worked up in the same time, and therefore a greater mass of raw material and auxiliary substances enters into the labour process…  [An increase in] the mass of machinery, beasts of burden, mineral manures, drain-pipes, etc. is a condition of the increasing productivity of labour… [For example] the mass of raw material, instruments of labour, etc. that a certain quantity of spinning labour consumes productively today is many hundred times greater than at the beginning of the 18th century. (Capital Vol. 1, p.774).

A rise in the ratio of constant to variable capital threatens to lower the rate of profit. A given rate of surplus-value has then to be divided by a larger amount of capital advanced when calculating the rate of profit.

But there is a counteracting tendency.  If the advance in productivity is general, then it will apply in the sector of the economy which produces means of production.  The value of a given unit of constant capital will be reduced. This fall in the cost of producing the means of production required will thus limit, or even reverse, the decline in the rate of profit as more constant capital is used.

Thus Marx emphases that as labour productivity rises, this also lowers the value and therefore the price of the constant capital required for production.  The result is what Marx calls a cheapening of the elements of constant capital.  The value of means of production rises, as productivity advances, but at a lower rate than the mass of means of production being used.

For example, the quantity of cotton that a single European spinning operative works up in a modern factory has grown to a most colossal extent in comparison with that which a European spinner used to process with the spinning wheel. But the value of the cotton processed has not grown in the same proportion as its mass.

 It is the same with machines and other fixed capital. In other words, the same development that raises the mass of constant capital in comparison with variable reduces the value of its elements, as a result of the higher productivity of labour, and hence prevents the value of the constant capital, even though this grows steadily, from growing in the same degree as its material volume, i.e. the material volume of the means of production that are set in motion by the same amount of labour-power… In certain cases, the mass of the constant capital elements may increase while their total value remains the same or even falls. (Capital Vol. 3, p.342).

Thus, in summary, as productivity rises, there is likely to be an increase in the mass of means of production in use.  But the value – and thus the price – of those means of production will tend not to rise to a corresponding extent. A general rise in productivity will also reduce the cost of means of production and so slow down the fall in the rate of profit.

In clarifying this analysis, Marx introduces an important distinction: between the technical composition of capital and the organic composition of capital.

There are two ways of looking at the capital / labour ratio.  As a relation between two values – constant and variable capital. Or as a ratio between a mass of physical means of production and a mass of labour-power.

The organic composition of capital is determined by the ratio of the value of the means of production, as compared with wages. I.e. the value ratio between constant capital and variable capital

 The technical composition of capital refers to material use-values- here capital is divided into means of production and living labour-power. Marx writes that:

the technical composition is determined by the relation between the mass of the means of production employed on the one hand, and the mass of labour necessary for their employment on the other. (Capital Vol. 1, p.762) [i]

It is here that Moore’s account moves in a distinctive direction.  Mechanisation and improved organization of production are not the only ways in which cheaper means of production may be secured.  If means of production can be appropriated – at low cost, or, better still, at zero cost – then the hit to profits because of rising organic composition of capital can be reduced or nullified.  This is Moore’s central argument, one which is directly founded on Marx’s value theory.  By seeking geographical or technological frontiers where the four Cheaps (raw materials, food, land and labour) can be appropriated, capital can raise productivity while protecting the rate of profit.  Recurrently in the history of capital, the appropriation of new forms of cheap inputs has,

allowed capital to advance labour productivity while reducing (or checking) the tendentially rising value composition of production. The technical composition of production—the mass of machinery and raw materials relative to labour-power— could rise without undermining the rate of profit. Capitalism, we have seen, is a frontier process (Web, p.107).

Cheap Nature, as an accumulation strategy, works by reducing the value composition—but increasing the technical composition—of capital as a whole; by opening new opportunities for the investment; and, in its qualitative dimension, by allowing technologies and new kinds of nature to transform extant structures of capital accumulation and world power. In all this, commodity frontiers – frontiers of appropriation – are central. (Web, p.53).

Here Moore is challenging the analysis in Burkett’s Marx and Nature. Although Burkett – like Moore – starts out from the basics of value theory, his treatment of the mass and value of constant capital employed in production remains at a rather elementary level. I can find no reference to the organic composition of capital in either of Burkett two ecological books.  There are many general comments on profit as driving the system. But no discussion of the counter-tendencies which operate to limit or reverse the downward pressure on the rate of profit as productivity rises. No attention is given to the increase in the capital/labour ratio, which Marx calls the technical composition of capital.

The monopoly capitalist tradition of Monthly Review is flawed precisely in its relative lack of interest in competition and price movements, and in Marx’s account of the determinants of rates of profit.  The monopoly capitalist thesis is that, because of the concentration of capital, companies are now able to evade competition by cartels, and determine prices by fiat.

There is one moment in Burkett’s Nature book where he does discuss one of the examples of appropriation which preoccupy Moore.  Burkett has a section discussing ‘child rearing labour’ and the ‘natural force of household labour power’. He writes that,

The exploitable [sic] labour power associated with domestic activities is freely appropriated by capital. It is a use value, not a value.

Burkett then notes that the appropriation by capital of this use value has implications for surplus-value.

Capital’s free appropriation of the domestic enhancement of labour power increases the rate of surplus value in so far as domestic activities lower the value of labour power (by raising the productivity of wage-labour or reducing workers’ commodified causation requirements).  (Marx and Nature, p.105).

So appropriation of unpaid domestic labour by capital does not increase the total value produced, but does increase the rate of surplus-value.  Capital gets its labour cheaper, and retains more of the value produced.

What Moore is proposing is a generalisation of this account of domestic labour – extending it to capital’s appropriation of natural resources.

But is it right to assimilate domestic labour, as Moore does, into a wider category of work/energy?  This leads him to talk, for example, about how natural resources are kept cheap because they ‘do unpaid work for capital’. However, Moore is clear that this kind of ‘work’ has nothing in common with the abstract labour which creates value.  ‘Work’ here is a use-value concept – but one which follows capital in treating use-value abstractly.  The objective here is to trace capital’s abstractification of nature and its consequences.

Meticulous research by Burkett and Foster has clarified the engagement of Marx and Engels with the thermodynamic and energetics debates of their period. In their Marx and the Earth book, they trace how Marx used energy concepts to think through the use-value dimension of the labour process.  There is, of course, no suggestion that the creation of value and surplus-value in the labour process is in any way determined by concrete labour. But the creation of value is also a physical metabolic process which can be studied in terms of amounts and transfers of abstract energy.  In words which resonate with Moore’s work/energy concept, Burkett and Foster summarise Marx’s thinking about this as follows:

In energy terms, ‘What the free worker sells is always nothing more than a specific, particular measure of force-expenditure’; but ‘labour capacity as a totality is greater than every particular expenditure’ (Grundrisse p.464). ‘In this exchange, then, the worker … sells himself as an effect’, and ‘is absorbed into the body of capital as a cause, as activity’ (Grundrisse p.674). The result is an energy subsidy for the capitalist who appropriates and sells the commodities produced during the portion of the workday over and above that required to produce the means of subsistence represented by the wage (Marx and the Earth, p.145).

There certainly are some major criticisms to be made of Moore’s work and I’ll look at these in a future post. Some valuable commentaries on Moore’s work have already been published. [ii].  Some valid objections have come from the Monthly Review camp. For example, Foster is right to say (in the Climate and Capitalism blog cited above) that Moore neglects the question of rent.  There is too little in his Web book about how private property control gets established over raw material and energy sources. The theme of enclosure, so strongly emphasised in Marx’s account of primitive accumulation, is under-weight in Moore.  Often industrial capitals find that the so-called Cheap inputs are not actually so cheap  – after rent is extracted by the monopoly owners of oil wells and mineral resources.

The strength of Moore’s book is the way it traces, from the long 16th century onwards, how the abstract logics of labour productivity are implemented and play out concretely – as crises of resource limits are encountered and overcome by the violence of capital, science, and state power. His focus on appropriation may at time be over-pitched, but Moore consistently directs much needed attention on the necessary conditions for the operation of the law of value.  How the economic and technical requirements that make possible exploitation and value creation are established and maintained.

An addendum on profit.

Marx used the term circulating capital to refer to raw material and energy inputs.  Moore’s  focus on these highlights the neglect of circulating capital in current Marxist debates about trends in profits. For example, profit rates are generally calculated solely on a denominator of fixed capital (machinery etc.).  This fact is rarely even mentioned in current work using National Accounts data.  An exception is Andrew Kliman who mentions casually in his Failure of Capitalist Production book (pp.80-82) that:  ‘My rate of profit measures … exclude circulating capital … expenditures for inventories of raw materials and the like – because information on the turnover of circulating capital is not available’.  One of many instances in which the easily available National Accounts data are used and their limitations ignored.  Company account based data is more difficult to obtain and use, but can be a more accurate corrective to national account based data.

[i] For a lucid  account of the TCC/OCC distinction, see: Ben Fine and Alfredo Saad-Filho 2010, Marx’s Capital, Ch. 8.

[ii] See, for example, an excellent critique of Moore by the radical geographer Sara Nelson, on the Antipode website February 2016.  Benjamin Kunkel has produced an outstanding account of debates around the anthropocene / capitalocene concepts – and the disagreements between Moore and the Monthly Review team.  See London Review of Books 2 March 2017.

Crisis Theory Needs a Demand Story

In an essay dated June 2005 (and republished in 2009 as Chapter 2 of The Great Recession) Michael Roberts has a perceptive account of what he calls ‘the property time bomb’.  He notes that never before had real house prices risen so fast for so long in so many countries, and quotes an Economist article of June 2005 which called it, ‘the biggest bubble in history’.

The total value of residential property in the OECD had more than doubled from $30bn to $70bn in the previous five years.  House values had never been higher in America, Britain, Australia, New Zealand, France, Spain, Holland, and Ireland. This was a bigger bubble bigger than the stock market boom of the 1990s that collapsed in 2000, or the great boom of the 1920s which ended in the Great Depression of 1929-33.  In The Great Recession [TGR]  Michael writes that:

World capitalist growth now depends on US household spending and US spending depends on housing prices in the US rising forever.  This is a pyramid scheme that will topple over eventually… the US housing bubble is set to burst …the US economy will drop like a stone, as many Americans face bankruptcy when they cannot make their mortgage payments, while others will have to pull in their spending horns … this year the UK and Australian housing markets have slumped.  With that economic growth has slowed to under 2 per cent a year. Spending in the shops has stopped growing altogether (TGR p.10).

Here Michael’s line of causation directly accords with the analysis which Atif Mian and Amir Sufi were to elaborate in their 2014 book, House of Debt which has attracted much attention.  In Michael’s 2005 discussion, a fall in profits is mentioned only in passing, and as a  consequence of a fall in consumer demand, not as a cause of the crisis – ‘if the housing market collapses that will make a huge hit on the profits of big business’ (p.12).

In Feb 2006 Michael published another accurate and well-documented analysis of the growing crisis caused by falling house prices in the UK, Australia and the US.

The downturn in the US housing market has now started … housing affordability, particularly in the coastal cities is stretched to the limits. America’s households are leveraged up to their eyeballs and now rely on rising housing prices to supplement their incomes … so even just a slowdown in house price rises would hit consumption (TGR p.17).

What has already happened in the UK and Australia, he suggests, shows what lies in store for the US.

The collapse of a house price boom in the UK (and in Australia) last year is the future for US homeowners.  The price fall deducted something like 2-3 per cent from real spending growth in these economies.… UK retail sales are now growing at their weakest rate for 20 years and recorded the worst figures for January sales since 1945 … and unemployment is steadily rising. (TGR p.17).

This fall in demand – and the reasons for it – is a major dimension of the 2007 -09 crisis in the US and in the way in which the crisis unfolded in other countries, notably Ireland and Spain.  It is essential that the house price / housing debt / demand story be incorporated into any fully developed Marxist account of the crisis.

Yet in recent years Michael’s thinking about the 2007-09 crisis has taken a radically different direction.  His new book The Long Depression is to be welcomed as currently the most thorough exploration of the crisis from a falling profits standpoint.  It contains a wealth of indispensable empirical material, the analysis covers the major sectors of the global economy, and it is a lively read. Here I focus only on Michael’s account of the US phase of the crisis.

In arguing for the tendency of the rate of profit to fall as the crucial underlying cause of the 2007-09, Michael has given far too little weight to other causal forces which were in play.  The house price/consumer demand dimension of the crisis is mentioned only occasionally and briefly. In his main discussion of the 2007-09 US crisis (Chapter 5), housing as such is not discussed.  There is only a passing mention that:

investment in real-estate took an almighty plunge after the credit-fuelled boom up to 2007, but investment in productive assets also tumbled.  The mass of profits dropped like a stone, especially for the financial sector (TLD p. 67).

Factually this is not correct.  The general category of real-estate includes the vast sector of commercial property and this did not collapse in 2007.  The initial crash was in residential house prices and it started at the beginning of 2007, well before the banking crisis became serious. Certainly investment in the house construction sector fell, but overall investment levels in the non-financial sector did not fall until 2009. (See my earlier post  for a summary of the evidence).  The effect of a fall in investment by firms in the residential housing sector was more than counterbalanced by an increase in investment in other sectors. The Economic Report of the President for 2008 says that:

In contrast to residential investment, real business investment in non-residential structures grew at a strong 16 per cent annual rate over the four quarters of 2007… investment in equipment and software grew 3.7 per cent, a bit faster than the 2006  pace. (ERP 2008 p.32).

It was in late 2008 and early 2009 that ‘investment spending (other than structures) plummeted’ (ERP 2010 p.126).  But by the fourth quarter of 2008 well over than a million jobs had been lost as a consequence of the fall in household demand which happened as a reaction to the collapse of house prices from the beginning of 2007 onward. (See Table 5 in my recent post.)

Michael does discuss debt, but now sees it as a secondary question – a trigger of crises, rather than a cause.  In his book, Chapter 6 is called Debt Matters and it contains much material of great interest.  But the analysis is focused almost exclusively on corporate debt.  There is a section on housing but it is very brief.

By mid-2006 the residential boom in the United States had reached mega proportions.  Household debt expanded rapidly during the so-called neoliberal era As a result of falling interest rates that reduced the cost of borrowing and created the ensuing property boom in many advanced capitalist economies in the past fifteen years.  The creditors were the banks and other money lenders. The assets (home values) eventually collapsed, placing a severe burden of deleveraging on the financial sector (TLD p.99).

The discussion that follows concentrates only on debt in the corporate sector.  Astonishingly there is no mention of the collapse in consumer demand as millions of households across America had began to deleveraging following the drop in house prices at the start of 2007.  No note is taken here of the mass of evidence, painstakingly presented in Mian and Sufi’s House of Debt book, that before the banking crisis went critical (when  Lehman folded in September 2008) jobs and businesses in large parts of the US had already been severely hit as a result of the contraction in consumer demand from the start of 2007 as household borrowing began to fall, and income was switched to debt repayment. See my recent post.

Michael had already dismissed the analysis in the House of Debt when it was published in 2014. Rightly he criticises its authors for lack of discussion of profit. But he then argues:

Sure consumption falls in recessions, but investment falls even more. The Great Recession and the subsequent weak recovery is not the result of consumption contracting. But investment virtually stopped (see my post ) And behind investment (whether in productive or unproductive sectors) lies profitability.

Certainly there is much to criticise in Mian and Sufi’s book, not least their failure to discuss profitability. The surplus money capital which poured into the financial systems of the US and other countries – and which fuelled the expansion of mortgage lending and housing prices was not just based, as they suggest, on East Asian trade surpluses.  As I have shown, there were two other major sources: (1) accumulations of money wealth in the hands of the rich as inequality increased, and (2) the swelling cash reserves of the corporate sector, as profits recovered faster than investment after the 2000 downturn.  Mian and Sufi also play down the impact of the banking crisis on the continuing rise in unemployment at the end of 2008 and in 2009.

But it is not convincing to say simply that a Marxist analysis must entirely reject their convincing analysis that the 2007 crash in house prices and fall in consumer demand directly led to large increases in unemployment before the banking crisis went critical. Marxism needs a demand story.

There are sections of Michael’s book which show a commendable alertness to the complex forces which determine a major crisis.  The analysis of five inter-twinned cycles in the history of capitalist development is a promising line of theoretical and empirical advance which needs to be followed. Three of the cycles are clearly evident in the 2007-09 crisis. A construction cycle (housing) was interconnected with credit processes (mortgage financing) and with the profitability for the banks of mortgage-based securities.

But Michael’s way of tracing the linkages between these dimensions of crisis runs into difficulties He creates difficulties for his account by misreading some basic elements in Marx’s value theory.

In my view, and I think in Marx’s, circulation and distribution are at a lower plane of causal abstraction, or if you like, closer to the proximate than the ultimate or underlying causes. A collapse in the stock market or in real-estate prices will not lead to a collapse in production unless there are already serious difficulties in the latter. There have been many stock market collapses without a slump in production (1987) but not vice versa.

But the stock market deals with fictitious capital, in which contractual claims on the flow of surplus-value are traded.  It is external to the circuit of productive capital. As Marx says at the start of Capital Vol. 3, ‘the capitalist production process, taken as a whole, is a unity of the production and circulation processes (p.117).  Capital in the money form is both the starting point and the necessary terminus of the social reproduction sequence. Only to the extent that demand is available at each stage in the circulation process can value and surplus-value be realised in the money form.

Levels of abstraction are not the same as a hierarchy of causal processes.  Michael is right to say that a large-scale collapse of demand needs explanation and that Keynesian accounts are inadequate.

To say the cause of the Great Recession was due to a lack of demand is bit like saying that that the cause of the streets being wet today is because it is raining today. That tells us nothing about why it is raining today and/or what causes rain to happen. Describing the Great Recession as a lack of demand is just that, a description, not an explanation.

The critique of Keynesian demand management in this article is well argued and deserves careful study. But in his insistence that demand is simply and directly determined by the level of productive investment, Michael seriously weakens the explanatory power of Marxist political economy. In his review of the Mian and Sufi  book he writes:

It’s investment that is the swing factor in recessions and recoveries, not consumption. Or to be more exact, it is profits that call the tune, because investment demand drops off when profits do. As profitability falls over time, eventually the mass of profit will fall and this will force weaker businesses to cut back on investment or even close down. Then there is a cascade of falling ‘effective demand’ as companies go bust or lay off labour.

Here some of the tendencies identified in Marxist analysis are treated as direct causal determinations operating automatically.  Both factually and theoretically the explanation of the 2007-09 crisis which results is seriously flawed, given that overall investment levels in the US non-financial sector did not fall until 2009.