Bulletin of the Conference of Socialist Economists Spring 73 BULLETIN OF THE CONFERENCE OF SOCIALIST ECONOMISTS SPRING 1973 Contents Foreword Vulgar Economy (Part,II), Bob Rowthan 1 The Theory of Permanent Arms Economy - A Critique and an . Alternative, David Putdy 12 The Curve of Capitalist Development by Leon aotAy Introductory Note by S. Zienan 35 Some Remarks on the Falling Rate of Profit, Geonge Cataphote6 42 British Capitalism in 1972 and 1973, Andtew Gegn 49 Productivity, Organic Composition and the Falling Rate of Profit, Robin Muhhay . 53 A Note on Marx on the Rate of Profit, S. R. MoadbAidge 56 J. Ann Zammet (ed) The Chilean Road to Socialism (IDS, University of Sussex, 1973) £2.50, Stephen PaAkek 58 FOREWORD • This is the first printed issue of the Bulletin. Membership has grown to the point where xeroxing is no longer economical in terms both of money and of comrades' time. After some investi- gation with printers (of whom Pluto Press was particularly help- ful) Barbara Coysh of Oxford has undertaken to produce the Bulletin. However the present print order leaves quite a sub- stantial number of unclaimed copies0 Members should help to alleviate this situation by finding new people who are prepared to subscribe. Although subscriptions are still flowing in, we could do with a lot more. We hope that the article on the present position of, and prospects for, the British economy will be the first of a regular series of short topical pieces. Contributions (not more than 5,000 words) on broad subjects, like this issue's piece, or on more narrowly defined subjects (e.g. North Sea oil, the B.S.A. bankruptcy, the price of gold, the talks on world trade, the rise in commodity prices etc), should be sent to Andrew Glyn, 58 Lonsdale Road, Oxford. Contributions from overseas would be especially welcome given the lack of information generally available on developments abroad. Editorial Board • VULGAR ECONOMY (PART II) Bob Rowthan The capitalist mode of production It is well-known that Marx criticised Ricardo (and other classical econom- ists) for thinking of capitalist production as something 'eternal' or 'natural'. This has been widely interpreted to mean that Ricardo was unhistorical in his approach, and that the main distinction between Marx and Ricardo is that Marx saw capitalism as a mere passing phase in the history of human society, whereas Ricardo did not, Indeed, Marxism is seen as Ricardianism plus history, The trouble with this view is not so much that it is wrong, but that it is superficial. Marx did not criticise Ricardo for failing to analyse capitalism as a system which grew out of an earlier form of society and will in turn be replaced by another form, nor for failing to analyse or describe the historical developments of this system. On the contrary, he admired Ricardo's analytical and, in the first instance, a-historical method, Where Ricardo failed, in Marx's opinion, was in his characterisation of the capitalist system, and as a result in his analysis of 'the economic law of motion of modern society', More- over, the intellectual reason he failed to characterise the capitalist system adequately is quite simply that he lacked a concept - the concept of a 'mode of production', Virtually every one of Marx's specific criticisms of Ricardo can be traced back to the absence of this concept in the latter's work - his confused treatment of prices and values, his failure to distinguish adequately between production and circulation, between surplus value and profit, or between labour and labour power. Thus, when Marx says Ricardo thought of the capitalist system as something eternal' or 'natural', he is not criticising Ricardo for his unhistorical analysis, but saying that, because Ricardo thought of capitalism in this way, he failed to see it as a mode of production with specific features differenti- ating it from other modes of production, Marx's use of the concept of a 'mode of production' marks a radical shift in problematic, which has been largely unrecognised or ignored by Marxist political economists, Seen in its most general terms, a mode of production is simply the set of social relations within which men produce, In his famous Preface to a Contri- bution Marx says: In the social production of their life, men enter into definite relations that are indispensable and independent of their will, relations of pro- duction which correspond to a definite stage of development of their material productive forces. The sum total of these relations of production constitutes the economic structure of society, the real foundation, on which rises a legal and political superstructure and to which correspond definite forms of social consciousness, The mode of production of material life conditions the social, political and intellectual life process in general, (Selected Works p, 182) Any mode of production has two distinct aspects or levels: the mode of appropriation of nature, and the mode of appropriation of the product. This distinction can be seen clearly in the following passage where Marx describes the capitalist labour process, 1 The labour-process, turned into the process by which the capitalist consumes labour-power, exhibits two characteristic phenomena, First, the labourer works under the control of the capitalist to whom his labour belongs; the capitalist taking good care that the work is done in a proper manner, and that the means of production are used with intelligence, so that there is no unnecessary waste of raw material, and no wear and tear of the imple- ments beyond what is necessarily caused by the work. Secondly, the product is the property of the capitalist and not that of the labourer, its immediate producer. (LIELLIL Vol. 1 pp. 184-5) In their appropriation of nature men combine together in a definite set of social relationships specified by such characteristics as production techniques, organisation of the labour process, division of labour, authority and control. Notice that the appropriation of nature, as it is defined here, is a social affair. It is not man in the abstract acting upon nature, nor is it the 7.on- human world of technology' as the neo-Ricardian Baradwaj has described the labour process. It is social man producing within a definite set of social re- lationships. The manner in which the product, and therefore the surplus product, is appropriated varies from one mode of production to another. In feudal or slave society, for example surplus product is directly appropriated by extra-economic force. In capitalist society it is appropriated on the basis of apparent free- dom, according to the economic laws of commodity exchange.. This aspect of a mode of production is widely recognised to involve social relationships. In- • deed, under the name 'distribution' the neo-Ricardians treat it as the only level at which social relations occur, and, as the above quotation of Baradwaj shows, treat the equally important appropriation of nature as an asocial or • natural process. The two levels of a mode of production are relatively autonomous and can- not be reduced, one to another. The laws of motion of a mode of production are based upon the articulation and interaction of the two levels, and these laws can, therefore, only be understood by means of an analysis which takes account of both levels. With these distinctions in mind, let us examine Marx's characterisation of the capitalist mode of production. To understand his characterisation, one must recognise that Marx was seeking, on the one hand, to contrast the capital- ist mode with slave, feudal and other modes of production, in which the labour- er is permanently tied to an individual owner or master and does not have the freedom to dispose of his labour power as he wishes, and, on the other hand, he was seeking to contrast industrial capital with merchant, userers' and other • forms of capital. Capitalist production is characterised by two things: it is the production of commodities - goods are produced for exchange and social production is spon- taneously organised, by means of this exchange; and every element in the labour process has become a commodity, including labour power itself - the capacity of the labourer to work. Thus, capitalist production is commodity production, generalised to the point where labour-power has become a commodity. The worker cannot, of course, sell himself for an indefinite length of time, for then he would cease to be a freeman. As a commodity owner, the worker is free to sell or not sell his labour power, as he chooses, subject only to the economic constraints imposed by the 2 exchange of commodities. This is in contrast to feudalism and slavery, where the worker does not possess such freedom. As Marx says in the Grundrisse, In the slavery relationship the worker belongs to an individual, particular owner, whose labour machine he is ... In the bondage relationship, the worker is an element of landed property; he is a chattel of the earth just as cattle are ... Labour power seems to the free worker to be entirely his property, one of his elements which he as a subject, controls, and which he retains in selling it. This freedom is, however, formal rather than real, for, although the worker is not compelled by open force to work for others, he does not possess the means to work on his own account, and therefore must out of economic necessity work for others. He is, as Marx says: free in the double sense, that as a free man he can dispose of his labour- power as his own commodity, and that on the other hand he has no other commodity for sale, is short of everything necessary for the realisation of his labour power.