Chapter 8 The Secret of Capital’s Self-Valorisation ‘Laid Bare’: How Hegel Helped Marx to Overturn Ricardo’s Theory of Profit
Patrick Murray
At the core of Marx’s Capital lies his revelation of capital’s secret, how capital makes money out of money, or, in Marx’s more technical language, how value is valorised. In Marx’s theory of surplus-value, capital’s secret is ‘laid bare’: money makes money by appropriating – without needing to violate commer- cial fair play – the unpaid labour of wage-workers. Marx’s theory of surplus- value begins his complex theory of profit, which overturns both Ricardo’s theory of profit and his individualistic theory of value. Profit includes incomes in the forms of profit of enterprise, interest and rent; the total annual profit is the sum of those incomes for the year. Profit, and another basic capitalist social form, wages, keep capital’s secret well hidden. Profit measures itself against the sum of money invested; the ratio of the two sums, of profit to investment, is the rate of profit. The rate of profit, then, appears to have nothing to do with what part of the investment goes to pay wages, much less with how much unpaid labour a capital appropriates. And this is not merely a matter of appearances. The action of competition among capitals all chasing higher rates of profit tends to bring about a general rate of profit, so the size of individual profits is determined by the size of the individual capital invested. Since capital per se appears as the variable deter- mining profit, capital seems to valorise itself. A general rate of profit implies that the profit returned to an individual investment in fact bears no direct rela- tionship to the fraction of the investment devoted to wages or to the unpaid labour appropriated through that investment. Turning to the wage, it presents itself as compensation for the labour done by a wage-worker, as the ‘price of labour’. That appearance puts a stop to the thought that profit arises from unpaid labour: there isn’t any. The appearances and realities involved with profits and wages seem to torpedo Marx’s claim that the source of profit is unpaid labour – and with it his theory of exploitation. But, as Marx was fond of saying in the face of an impasse, ‘let us consider the matter more closely’. In order to overturn the extant theories of profit and wages, Marx has to introduce two key distinctions, between labour and labour-power and between constant
© koninklijke brill nv, leiden, ���4 | doi 10.1163/9789004270022_010 190 murray and variable capital, and to revolutionise (in a second way) the classical labour- theory of value. Marx had already put the labour-theory of value on a new conceptual basis by identifying value as a historically specific social form. In A Contribution to the Critique, Marx writes, ‘the labour which posits exchange-value is a specific social form of labour’.1 With this conception of value as the consequence of the peculiar social character of commodity-producing labour, which neces- sarily appears as money, Marx reveals one of capitalism’s secrets. Value is some thing strictly social, and money is the displaced social form of commodity- producing labour: ‘Although it is thus correct to say that exchange-value is a relation between persons, it is however necessary to add that it is a relation hidden by a material veil’.2 That ‘material veil’ is money and the price-system. By revealing money to be the necessary expression of value, Marx demon- strates that ‘money, though a physical object with distinct properties, repre- sents . . . nothing but a material expression of a specific social form of labour’.3 To solve the conundrums that the general rate of profit poses for the classical labour-theory of value, Marx first argues that the labour-theory of value is false at the level of individual commodities and capitals. Marx responds not by aban- doning a labour-theory of value; that would be to give up on scientific under- standing. Rather, he reconstitutes value-theory, directing it at the level of the totality of commodities and prices, capitals and profits (and, by implication, their representative or aliquot parts). Political economy’s failure to reconcile the theory of value with the forma- tion of a general rate of profit, like its tin ear for the social specificity of value and value-producing labour, is not accidental; inattention to matters of form show its confinement to the ‘bourgeois horizon’. Marx’s term ‘bourgeois hori- zon’ refers to the mindset that was the target of his criticisms of the philosophy and economics of Proudhon’s book The Philosophy of Poverty.4 Of classical political economy Marx writes:
Yet even its best representatives remained more or less trapped in the world of illusion their criticism had dissolved, and nothing else is
1 Marx 1970b [1859], p. 36. 2 Marx 1970b [1859], p. 34. 3 Marx 1970b [1859], p. 35. 4 Marx writes to Annenkov that Proudhon ‘does not rise above the bourgeois horizon’ (Marx and Engels 1975b, p. 190).