– Hardial Bains –
Marx discovered the economic law of motion of capitalist society, the law of surplus-value. He demonstrated that the motive of production under capitalism is profit, which represents the unpaid labour of the working class, the new value created by the workers in the capitalistic labour process, in excess of their wages. Marx was the first to discover the origin of capitalist profit in the exploitation of the working class. He showed that the development of production under capitalism takes place amidst crises and upheavals, and that this is due to the anarchy of production which stems from the fundamental contradiction of the capitalist mode of production, the contradiction between the social character of production and the private capitalist appropriation of the fruits of production. At a certain stage, the growth of the productive forces comes into conflict with the growth of profits, with the private capitalist appropriation, and crisis breaks out, characterized by a seemingly illogical phenomenon: there is an oversupply of goods, but the workers cannot afford to buy them and must live in want. All the features of capitalist society as it has developed were predicted by Marx on the basis of its economic law of motion. Starting from this law, Marx was able to formulate the absolute general law of capitalist accumulation, which holds that as capitalism develops, and as greater and greater wealth is concentrated in the hands of the bourgeoisie, the lot of the working class necessarily deteriorates: the rich become richer, the poor become poorer.
“The greater the social wealth, the functioning capital, the extent and energy of its growth, and, therefore, also the absolute mass of the proletariat and the productiveness of its labour, the greater is the industrial reserve army. The same causes which develop the expansive power of capital, develop also the labour-power at its disposal. The relative mass of the industrial reserve army increases, therefore, with the potential energy of wealth. But the greater this reserve army in proportion to the active labour-army, the greater is the mass of a consolidated surplus-population, whose misery is in inverse ratio to its torment of labour. The more extensive, finally, the lazarus-layers of the working class, and the industrial reserve army, the greater is official pauperism. This is the absolute general law of capitalist accumulation.”1
Marx concluded that the capitalist system would be hit with recurring crises of increasing severity, and that this situation could be ended only by the violent revolution of the proletariat together with its allies against the capitalist mode of production. In this way, Marx reasoned, capitalist private property and the capitalist relations of production would be overthrown and replaced by the social ownership of the means of production, so that the contradiction between the social character of production and the existing property relations could be abolished.
With the law of surplus-value, Marx discovered the origin and growth of capitalist profit and laid bare the “economic law of motion of modern society”. This problem had puzzled all earlier political economists, who, however closely they had approached the labour theory of value, had been unable to explain the origin of profit in a scientific way. Engels explained:
“Marx also discovered the special law of motion governing the present-day capitalist mode of production and the bourgeois society that this mode of production has created. The discovery of surplus-value suddenly threw light on the problem, in trying to solve which all previous investigations, of both bourgeois economists and socialist critics, had been groping in the dark.”2
After the first industrial crisis of 1825, and with the complete ascendency to political power of the bourgeoisie in France and England after 1830, the bourgeoisie, confronted by the development of the proletarian class struggle, was forced to abandon all scientific political economy. Marx explained in the Afterword to the Second German Edition of Capital:
“In France and in England the bourgeoisie had conquered political power. Thenceforth, the class-struggle, practically as well as theoretically, took on more and more outspoken and threatening forms. It sounded the knell of scientific bourgeois economy. It was thenceforth no longer a question, whether this theorem or that was true, but whether it was useful to capital or harmful, expedient or inexpedient, politically dangerous or not. In place of disinterested inquirers, there were hired prize-fighters; in place of genuine scientific research, the bad conscience and evil intent of apologetic.”3
From the 1840’s onward, Marx developed his economic doctrine on the basis of the economic law of motion of modern society. Thenceforth, the scientific position in political economy was synonymous with Marxism. Scientific rigour became synonymous with proletarian partisanship, because Marxism showed that crises and the other ills of capitalism could be ended once and for all only by putting an end to the capitalist system, and that the condition of the working class under capitalism, the condition of wage-slavery, the chains which bound the worker hand and foot to capital, could be smashed only by the revolutionary overthrow of all existing conditions, of the bourgeois order.
With the growth of capitalism into monopoly capitalism and imperialism, all the contradictions of capitalism are aggravated to the extreme; the necessity for revolution to resolve these problems, far from becoming an increasingly remote prospect, becomes the issue of the day, the problem taken up for solution. Today, just as when Marx made his thoroughgoing analysis of commodity production under capitalism, the worker has nothing to sell but his labour power; he is a wage slave forced to sell himself in the marketplace in order to gain his living. The development of large-scale production, the relentless concentration of production and capital in fewer hands, the growth of finance capital, the export of capital around the world, the division of the world amongst the imperialist powers — none of this has negated the basic economic laws of capitalism discovered by Marx. The present objective conditions only reconfirm the validity of Marx’s economic doctrine.
It is the compelling truth of Marx’s economic doctrine and the power of his teachings that force the apologists of the bourgeoisie, all its hired prize-fighters, onto the field against Marxism, to “invalidate” and “disprove” it. Today, as in the past, these apologists come forward with arguments to justify the exploitation of the workers and the profit system. In Marx’s day, they claimed that the capitalist was entitled to a “return” for his “abstinence”, for his “risk-taking”, for his “wages of superintendence”. But all these arguments fell before the scientific proof that no matter what justification was given for profits, interest, rent and other returns to the owners of bourgeois property, this return could be paid only out of what was produced by the living labour of the working class and other toilers in the course of material production. The bourgeoisie denied the labour theory of value altogether. It made “value” synonymous with “price” and maintained that prices were determined by the forces of “supply and demand”, and especially by the satisfaction of the subjective desires of the consumers, so that there was and could be no objective measure of the value of labour.
With this psychological explanation of value, the bourgeois economists hoped both to eliminate the labour theory of value and to justify the unequal division of the fruits of labour between the exploiters and exploited, between the rich and poor. One of the originators of the psychological theory of value based on the utilitarian philosophy, W.S. Jevons, also put forward the theory that the periodic crises of capitalism can be explained by sunspot activity! And this new version of the value theory appeared simultaneously in England, Austria and France in 1871, at a time of sharp class battles, at the time of the revolt of the Paris proletariat and establishment of the Paris Commune.
With the development of capitalism to the stage of monopoly capitalism, the revisionist theoreticians sought to discredit the Marxist economic doctrine on the basis of so-called “new data” of economic development. They insisted that the rate of concentration and destruction of small-scale production was proceeding only very slowly in industry, and in agriculture not at all; that crises had become rarer and of less force; that cartels and trusts would enable crises to be done away with altogether; that the theory of “collapse” was unsound because class antagonisms were becoming less acute. As a whole, they argued that the development of capitalism into monopoly capitalism was easing and even eliminating the contradictions of capitalism. Lenin came out in struggle against the revisionists who sought to alter the conclusions of Marx, to eliminate the recognition of the economic laws of motion of capitalism and to eliminate the class struggle. Lenin showed that in its development, capitalism had proceeded on the basis of the economic laws discovered by Marx. It had developed into monopoly capitalism with the concentration of capital and production on a large scale, and this had intensified the class antagonisms. He pointed out:
“Realities very soon made it clear to the revisionists that crises were not a thing of the past; prosperity was followed by a crisis. The forms, the sequence, the picture of a particular crisis changed, but crises remained an inevitable component of the capitalist system. While uniting production, the cartels and trusts at the same time, and in a way that was obvious to all, aggravated the anarchy of production, the insecurity of existence of the proletariat and the oppression of capital, thereby intensifying class antagonisms to an unprecedented degree.”4
In his monumental work, Imperialism, the Highest Stage of Capitalism, Lenin described how capitalism had developed into the stage of monopoly capitalism, capitalist imperialism. He showed how the features of monopoly capitalism, its moribund and parasitic character, had developed on the basis of the economic laws discovered by Marx: the growth of concentration of capital and production and the emergence of monopolies; the development of finance capital through the merging of industrial capital and bank capital under the domination of the banks; the export of capital; and the division of the world among the capitalist monopolies and the imperialist powers. He described imperialism as the stage of capitalism when the revolution is the order of the day, the problem taken up for solution. In particular, Lenin analyzed the operation of the basic economic law of capitalism under modern conditions of monopoly capitalism and concluded that the capitalists seek maximum profits by exacting tribute from every cell of the society. Thus, he concluded:
“Finance capital, concentrated in a few hands and exercising a virtual monopoly, exacts enormous and ever-increasing profits from the floating of companies, issue of stock, state loans, etc., strengthens the domination of the financial oligarchy and levies tribute upon the whole of the society for the benefit of the monopolists.”5
Stalin formulated this law precisely in his work, Economic Problems of Socialism in the USSR, showing that the basic economic law of capitalism remains the law of surplus-value, which explains the origin and growth of capitalist profit, and that although the operation of this law is modified under imperialism, its principles are unchanged. Stalin concluded that the main features and requirements of the basic economic law of modern capitalism might be formulated as:
“the securing of the maximum capitalist profit through the exploitation, ruin and impoverishment of the majority of the population of the given country, through the enslavement and systematic robbery of the peoples of other countries, especially backward countries, and, lastly, through wars and militarization of the national economy, which are utilized for the obtaining of the highest profits.”6
Thus Stalin refuted the views of the modern revisionists such as Browder and Tito who claimed that monopoly capitalism in the U.S. was “young capitalism”, that the socialist economy was compatible with the capitalist market and commodity circulation and with the operation of the law of value as the regulator of production and distribution.
Enver Hoxha defended the Marxist teaching on the law of surplus-value and the development of this idea by Lenin and Stalin under the conditions of imperialism. In his important work, Imperialism and the Revolution, he notes that:
“The concentration and centralization of production and capital, which characterize the capitalist world today and have led to extensive socialization of production, have not in any way altered the exploiting nature of imperialism. On the contrary, they have increased and intensified the oppression and impoverishment of the working people. (…) Today, just as in the past, the colossal income and superprofits realized from the savage exploitation of workers are appropriated by a handful of capitalist magnates. Likewise, the means of production, with which the united branches of industry have been equipped, are the private property of capitalists, while the working class remains enslaved to the owners of the means of production and its labour power remains a market commodity.”7
Furthermore, Enver Hoxha exposed the operation of the law of value in the Soviet Union today, where the revisionists have seized power and restored capitalism. He showed how in this capitalist society, which was created on the basis of a retrogression from existing socialism, the surplus-value is distributed among the new Soviet bourgeoisie according to their positions in the economic, political, and scientific-institutional apparatus.
“Although it is claimed that the principle of remuneration according to work is applied” in the Soviet Union, Enver Hoxha writes, “in reality the different groups of the new bourgeoisie appropriate the surplus-value created by the workers and peasants. All this robbery is presented as a kind of material stimulus, allegedly to encourage productive activity, scientific work, artistic creativeness, etc. In reality, this is a typical capitalist exploitation.”8
Today the bourgeoisie is still as intent as ever to “refute” Marx’s theory of surplus-value, to mystify the origin and source of the growth of profit and to paint the system of wage slavery in a rosy hue. In 1983 the imperialists even awarded the Nobel Prize in economics to a “learned” professor, G. Debreu, whose life’s work has been the futile search for a credible alternative to Marx’s theory of surplus-value. The president of Gulf Canada claims that the big bourgeoisie, the monopolies and multinationals are the creators of wealth, while the workers merely consume the wealth! The constant refrain of the bourgeoisie is that corporate profits are the source of economic growth and of the well-being of the people, that the growth of profits is needed for economic expansion, and so on. It is claiming that the current crisis is due, in large part at least, to a decline in profits. According to this line of “reasoning”, what is required to cure the crisis is a rise in profits. This line is taken to the extreme by the bourgeois ideologues with their notorious refrain that profits are the key to “job creation” and that the workers’ interests are best served by sacrificing their wages, working conditions (even their jobs and job security!), in order that their employers’ profits might increase and jobs might subsequently be saved or “created”.
With these wild claims, the bourgeoisie is playing a cruel joke on the workers and the broad masses of the people. Both the Marxist theory of surplus-value and the facts of life prove that what the bourgeoisie is saying about the so-called benefits to the workers from profits is utterly false. The profits of the monopolies and multinationals rose substantially in 1983, but this “recovery” did not create jobs for the unemployed workers. On the contrary, unemployment remains at historically high levels of about 11 percent. But still the bourgeoisie and its publicists persist in dishing out this lying propaganda. The bourgeoisie has no concern for the well-being of the people, no interest in “creating jobs”. Its preoccupation is to secure maximum profits through the exploitation of the workers and the levying of tribute on the whole of society.
The law of surplus-value continues to operate today. The basic economic law of modern capitalism remains the law of surplus-value as it is modified in its operation under the contemporary conditions of imperialism. The law of surplus-value requires no “amendments” or “changes”, as the revisionists and opportunists are claiming. On the contrary, current economic development, characterized by the outbreak of periodic crises and the constant deepening of the general crisis, cannot be understood without proceeding from this basic economic law of modern capitalism.
Notes
1 Karl Marx, Capital, Vol. 1, (Moscow: Progress Publishers, 1971), p. 603.
2 Frederick Engels, “Speech at the Graveside of Karl Marx,” Marx and Engels, Selected Works Vol. 3 (Moscow: Progress Publishers, 1970), p. 162.
3 Karl Marx, Capital, Vol. I, op. cit., pp. 24-25.
4 V.I. Lenin, “Marxism and Revisionism,” Collected Works, Vol. 15 (Moscow: Progress Publishers, 1973), p. 35.
5 V.I. Lenin, “Imperialism, the Highest Stage of Capitalism,” Collected Works, Vol. 22 (Moscow: Progress Publishers, 1964), p. 232.
6 J.V. Stalin, “Economic Problems of Socialism in the U.S.S.R.,” in Selected Works (Tirana: 8 Nëntori Publishing House, 1979), p. 572.
7 Enver Hoxha, Imperialism and the Revolution (Toronto: Norman Bethune Institute, 1979), pp. 79-81.
8 Enver Hoxha, Report to the Eighth Congress of the Party of Labour of Albania (Toronto: Marx, Engels, Lenin, Stalin Institute, 1981), p. 240.