Theory as Critique Historical Materialism Book Series Editorial Board Sébastien Budgen (Paris) David Broder (Rome) Steve Edwards (London) Juan Grigera (London) Marcel van der Linden (Amsterdam) Peter Thomas (London) volume 161 The titles published in this series are listed at brill.com/hm Theory as Critique Essays on Capital By Paul Mattick LEIDEN | BOSTON Library of Congress Cataloging-in-Publication Data Names: Mattick, Paul, 1944- author. Title: Theory as critique : essays on Capital / by Paul Mattick. Description: Leiden ; Boston : Brill, [2018] | Series: Historical materialism book series, ISSN 1570-1522 ; Volume 161 | Includes bibliographical references and index. Identifiers: LCCN 2018015156 (print) | LCCN 2018015903 (ebook) | ISBN 9789004366572 (e-book) | ISBN 9789004366565 (hardback : alk. paper) Subjects: LCSH: Marxian economics. | Capitalism. | Marx, Karl, 1818–1883. Kapital. Classification: LCC HB97.5 (ebook) | LCC HB97.5 .M353 2018 (print) | DDC 335.4/12–dc23 LC record available at https://lccn.loc.gov/2018015156 Typeface for the Latin, Greek, and Cyrillic scripts: “Brill”. See and download: brill.com/brill‑typeface. ISSN 1570-1522 ISBN 978-90-04-36656-5 (hardback) ISBN 978-90-04-36657-2 (e-book) Copyright 2018 by Koninklijke Brill NV, Leiden, The Netherlands. Koninklijke Brill NV incorporates the imprints Brill, Brill Hes & De Graaf, Brill Nijhoff, Brill Rodopi, Brill Sense and Hotei Publishing. All rights reserved. No part of this publication may be reproduced, translated, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission from the publisher. Authorization to photocopy items for internal or personal use is granted by Koninklijke Brill NV provided that the appropriate fees are paid directly to The Copyright Clearance Center, 222 Rosewood Drive, Suite 910, Danvers, MA 01923, USA. Fees are subject to change. This book is printed on acid-free paper and produced in a sustainable manner. Contents Acknowledgements vii 1 Introduction 1 2 Marx’s Abstraction 11 Science 15 Idealisation 22 Explanation 31 3 Questions of Method 38 Marx’s Abandonment of Philosophy 44 Logic and Abstraction 50 Marx’s Dialectic 66 4 Theory as Critique 72 Political Economy as Text and Discourse 78 Representation and Reality 82 The Starting Point 85 The Argument in Capital 89 5 Labour as Activity and as Representation 102 Value as Representation 106 Abstract Labour and Value 109 Abstraction in Practice 113 The Reduction of Skilled Labour 115 The Causal Reality of Value 119 6 Value and Price: Marx’s Resolution of a Ricardian Conundrum 123 Labour and Value 133 Value and Price 142 7 Ricardo Redux 157 After Sraffa 164 Between the Devil and the Deep Blue Sea 168 vi contents 8 Economic Form and Social Reproduction 175 Capital 178 Circulation and Reproduction 185 9 Class and Capital 191 Economic Appearances and Social Reality 196 Economic Class and Social Structure 201 Class Struggle and Revolution 214 10 Trend and Cycle 219 Theoretical Issues 228 Breakdown 232 11 Value Theory and Economic Events 241 Categories and Data 257 Prosperity as Depression 263 Bibliography 269 Index 281 Acknowledgements As the origins of this book date back to 1970, the people with whom I have dis- cussed these ideas and from whom I have learned are too many to list. Fred Moseley, Tony Smith, and Pepe Tapia read parts of the manuscript; each found cause for serious disagreement and thus provoked rethinking and rewriting on my part, though I believe their disagreements will remain. Duncan Foley and Tony Norfield read the whole book and made many useful comments. This book is dedicated to Katy and Felix, the people I love the most. chapter 1 Introduction As I write these words, the world economy seems mired in a period of serious difficulty such has not been seen for some time, although the extent and future duration of the disaster is not yet clear. What began in 2007 with the popping of a real estate bubble in the United States, and in particular with the collapse of ‘sub-prime’ mortgage lending, was quickly transmitted throughout the global financial system, affecting the largest banks as well as hedge funds and equity investment groups. Economists have been at a loss to explain these develop- ments, other than as an over-correction to an earlier period of reckless lending. (In the words of a New York Times correspondent, taking up an expression of former Federal Reserve chief Alan Greenspan, ‘If the housing boom was a mani- festation of irrational exuberance, some say it has swung too far in the other direction to irrational despondency’.)1 The financial crisis, in turn, led to a slow- ing of growth rates internationally, to widespread bankruptcies, the collapses of other bubbles (in Ireland, Iceland, Spain, and Greece, notably), and so to sus- tained high unemployment. Despite the recovery of the US economy in June 2009 announced by the Business Cycle Dating Committee of the National Bur- eau of Economic Research (NBER), sovereign and private debt crises in Europe have led to a Europe-wide recession, and attempts by governments to prime the economic pump, notably in China and the US, have not had long-lasting results. Under these circumstances, it is not surprising that there has been a revival of interest in Marx’s theory of capitalist society, a theory which sees recur- rent periods of depression as normal and expectable features of this form of social life. The stagnant state of economic affairs, and the obvious bankruptcy of mainstream economics, have brought new life to the marginal academic area called ‘marxist economics’,and even outside it made the geographer David Har- vey, whose wish to understand the spatial distribution of economic power led him to an engagement with Capital along with the analysis of current affairs, a minor international intellectual star. At the same time, this revival of attention has brought into view the fact that marxist economics shares with the rest of its parent discipline the absence of established, generally accepted theoretical principles and methods of data collection and analysis. 1 Vikas Bajaj, ‘Downturn Tests the Fed’s Ability to Avert a Crisis’, New York Times, 9 March 2008. © koninklijke brill nv, leiden, 2018 | doi: 10.1163/9789004366572_002 2 chapter 1 Marxist economists quarrel, to take two important examples, about whether Marx’s analysis of the market price system in terms of the labour performed in production is consistent or needs radical correction, and about how to under- stand the rate of profit, whose changes Marx held to determine the growth and decline of capitalism. A recent volume on the former question (the ‘transform- ation problem’) denounces all writers on the subject, except for those few who share the author’s viewpoint, as fundamentally un-marxist in their thinking;2 on the other hand, a widely circulated paper by Deepankar Basu and Ramaa Vasudevan argues that a variety of contending theoretical approaches to the study of profitability differ analytically despite agreement on empirical data. This is because ‘the precise causal mechanisms underlying the present crisis remain subject to intense debate among Marxist scholars’, reflecting the fact that ‘Marxist scholarship has not developed a single, overarching “general the- ory” of capitalist crisis’.3 As a result, even if we limit attention to the explanatory role of profitability, clearly central to Marx’s account of capitalist dynamics, there is disagreement among contemporary marxists about the origin of the current crisis. For example, both Simon Mohun and Gérard Dumenil together with Dominique Lévy present statistical evidence for rising profitability in the recent period, explaining the 2008 downturn as a ‘crisis of neoliberalism’, due to a distribution of profit away from investment towards speculation, result- ing from the social hegemony of financial capital.4 To take only two examples of competing explanations, both Robert Brenner5 and Andrew Kliman6 locate the cause of the crisis in declining profitability; but while the former explains 2 Kliman, Reclaiming Marx’s ‘Capital’. A Refutation of the Myth of Inconsistency (2007). As one of the few writers on this topic undiscussed in Kliman’s exhaustive treatment, I have unfor- tunately not been able to benefit from his critical eye. 3 Basu and Vasudevan, ‘Technology, Distribution and the Rate of Profit in the US Economy’ (2015), p. 2. I cite a publicly unavailable revised version; an earlier version of the paper can be found in Cambridge Journal of Economics, 37, 1 (2013), pp. 57–89. 4 Mohun, ‘The Crisis of 2008 in Historical Perspective’, Queen Mary Working Paper, 2010; Dumenil and Lévy, Capital Resurgent (2010); for a related view, since abandoned by the author but shared still by many, Fred Moseley wrote in 2008 that ‘Three decades of stagnant real wages and increasing exploitation have substantially restored the rate of profit [in the US], at the expense of workers. This important fact should be acknowledged … The main problem in the current crisis is the financial sector … The best theorist of the capitalist financial system is Hyman Minsky, not Karl Marx. The current crisis is more of a Minsky crisis than a Marx crisis’ (‘Some Notes on the Crunch and the Crisis’, [2008]). 5 Brenner, The Economics of Global Turbulence (2006). 6 Kliman, The Failure of Capitalist Production: Underlying Causes of the Great Recession (2012). introduction 3 this as due to ‘overcapacity’ and the