Das Kapital and Me

This presentation is about time-travel, but not 150 years into the future. We’ll go back, then forward to the present.

Let’s begin by stepping into our time-travel machine, and going back, not 150 years, but 50 years. More precisely, 47 years, Columbus, Ohio, mid-summer 1970. We enter a large, three-story house near the campus of Ohio State University, go up the stairs, and there we see a long-haired, bearded hippie, who is living in this “commune” with his wife, four brothers, their wives, and three children, one of them his.

He’s in the small study, pouring over a book, reading it very carefully—like the mathematician he was, trying to understand each sentence before moving to the next, reading every footnote, outlining the book as he read. Never before had he read anything like this. It was upending his world. He’ll never get over the experience.

That person, of course, is me. I’ve never gotten over the experience.

Some autobiographical context: I’d been a very Catholic math major at the University of Dayton, who went on to graduate school at the University of Virginia. I got my Ph.D. in mathematics, then, in the fall of 1969, I began teaching at the University of Kentucky.

During my five years at UVa, I’d become active in the Civil Rights movement. I’d also, during this period, abandoned my fierce anti-Communism and attendant support for the war then raging in Vietnam.

At the University of Kentucky, I began to question my career choice. I was mainly teaching differential equations to budding engineers, most of whom would soon be joining the military-industrial complex. I began reading Thoreau. “The mass of men lead lives of quiet desperation,” he said. I could see my future.

Then came the tipping point: Kent State. Shortly thereafter, the ROTC Building at UKy was burned to the ground. The next day I found myself sitting on a lawn with students and some faculty, holding a bag of the marshmallows that had been given us to throw at the advancing National Guardsmen. But they started teargassing us before coming within marshmallow range.

That night, eyes still smarting, I decided to make a career change: give up math, go back to school, this time in philosophy–so that I could study and teach about things relevant to leading a meaningful life. Some weeks later I notified my department chair that I wasn’t coming back in the fall, that I had been accepted into the Ph.D. program in philosophy at Ohio State.

It was that summer between my leaving mathematics and beginning philosophy that I decided to read Capital. Until then, despite my move leftward, I’d taken it for granted that capitalism was about freedom, whereas communism was totalitarian. There were problems with our current system to be sure, racism and militarism, but we were making great strides. Segregation had been declared illegal. The Voting Rights Act had been passed. President Johnson had declared “war on poverty.” And the anti-war movement was gaining strength. Indeed, Robert Kennedy had come out against the war—and would almost surely have won the presidency in 1968 had he not been murdered.

But now, after finishing Capital, the world looked very different.

Fast-forward 48 years, then back up some months—to April, 2017. I’d just finished teaching a large segment of Capital in my graduate Marxism course. It was a full class, fifteen students, with a couple of others sitting in. Among the enrollees were five young Jesuit scholastics, i.e., young men aspiring to become Jesuit priests. Lots of interest in Marxism these days–frankly, more than I’ve ever seen since my own graduate student days.

What was it like this time, reading Capital—as compared to reading it in 1970? That’s what I want to think about. There is, of course, much, much I could say. Let me make just a couple comparisons, focusing on several things that most impressed me during my first reading.

What Impressed Me Then

If you’ve read Capital, I’m sure you remember Part I, perhaps with a shudder. Marx takes the reader on a long and very abstract journey that begins with commodities, and ends, eventually, with money. Then comes the much shorter Part II, “The Transformation of Money into Capital.” First, we have just barter: C-C. Then money is introduced, itself a commodity, C-M-C. It’s no longer necessary for me to find someone who not only has what I want, but is willing to trade it for what I have to offer. But with money now in circulation, we can have M-C-M. Then, suddenly, things get strange. Throughout, Marx has been assuming the “labor-theory of value,” the classical theory of both Adam Smith and Ricardo, which maintains that, ultimately, the exchange-value of a commodity is determined by the amount of labor it took to produce that commodity. So, at each stage of the progression from C-C to C-M-C to M-C-M, equals exchange for equals. Needless to say, Marx knows that this is not strictly true, but he’s making simplifying assumptions to get at the underlying structure of a complex phenomenon. This is not at all strange to a mathematician. I was used to constructing greatly-simplified models, then proving theorems about them. (I still defend the labor-theory of value as an indispensable tool in understanding how capitalism works. It’s certainly vastly superior to the “marginalist” theory that replaced it.)

Here’s what has suddenly gotten strange. At each stage of development, equals have exchanged for equals. But suddenly, under capitalism, we get M-C-M’, where M’ is greater than M. How is that possible? Our model of capitalism is very simple: supply and demand are in equilibrium; everyone is equally skilled; there is no cheating or deception. Yet Marx wants to argue that even under these idealized conditions, it’s possible for the capitalist to make a profit. But how?

I scratched my head as I read this? How, if equals always exchange for equals, can the capitalist (who, in this simple model, contributes none of his own labor to the process) turn M into M’.

I was blown away by Marx’s answer. The capitalist pays full value for all the commodities he purchases—raw materials, tools, and . . . your labor power, i.e., your capacity to work. Not your labor—as mainstream economics tell us—but your capacity to labor.

How much does he pay for this commodity? Well, as the labor-theory-of value tells us: the amount of labor it took to produce that commodity, just as is the case with every other commodity. This makes sense. After all, what will you do with the wage you receive? You’ll buy food, clothing, shelter. That is to say, you pay for the labor that has been expended producing the items that you will consume, giving you the capacity to work. The prices you pay for these items reflect the quantity of labor that went into producing that food, clothing, etc.

Okay, fair enough. And how long will you have to work to repay this debt? Marx’s answer: much longer than the labor expended by those other workers on your behalf. For one key economic variable is not determined, under capitalism, by the invisible hand of market competition: the length of the working day! You will have to work longer than necessary to give back to society the value of what you have received—and that surplus value belongs to the capitalist. Which is to say, capitalism is, in a fundamental sense, no different from a slave or feudal society. In all these cases, those who work produce their means of subsistence, and then work more to produce the things consumed by the slaveowners, lords—and capitalists. Of course, there is one crucial difference: in the first two cases, the exploitation is obvious. In the case of capitalism, it is not, for this outcome is the result, not of force, but of an invisible hand setting the prices that free and legally-equal individuals use in determining what to do with their lives. The “free market” determines wages, not colluding capitalists. Or so it seems.

In working through all this, three things stood out for me, things I’d never thought about before:

  1. Capitalist exploitation is essentially invisible—since we can’t see, when we purchase something, how much labor-time went into producing it. We know how long we had to work for those wages, but not how long it took others to produce what we buy with them.
  2. The market, even in its most perfect and idealized form, plays no role in setting the length of the working day. That is set by class struggle. There is no inherent tendency under capitalism for productivity increases to translate into more leisure for workers.
  3. Capitalism requires unemployment— “a reserve army of the unemployed,” both to supply workers, when needed for industrial expansion and as a disciplinary stick to keep workers in line.

In addition to these and a number of other theoretical points, the concrete empirical and historical analysis Marx laid out in Capital also much impressed me, in particular:

  1. The hideous conditions of industrial work (and other forms of labor in Britain) as it rose to become the dominant economic power—conditions, well-documented by the factory inspectors quoted at length by Marx. I was shocked by the “brutal truth” Marx noted, quoting “the fish-blooded bourgeois doctrinaire,” Destutt de Tracy: “In poor countries the people are comfortable; in rich countries they are generally poor.”[1]
  2. The astonishing history of “primitive accumulation,” the answer to the question I’d never thought about before: How did it come to pass that a new, every-growing class should come into being consisting of individuals with no automatic access of means of production, “free” laborers, free, as Marx says, in a double sense—free to dispose of their labor-power as they choose, but also free from any access to means of production apart from selling this very special commodity. If I’d thought about it at all, it was in line with the “insipid childishness everyday preached to us in defense of private property”: diligent, intelligent, frugal people who, over time, accumulated wealth and property, and the “lazy rascals expending their substance and more.” [2] It had never occurred to me that “the emancipation of means of production” is “written in the annals of mankind in letters of blood and fire” nor that “The discovery of gold and silver in America, the extirpation, enslavement and entombment in mines of the aboriginal population, the beginning of the conquest and looting of the East Indies, the turning of Africa into a warren for commercial hunting of black-skins signalized the rosy dawn of the era of capitalist production.”[3]

When I finally finished Capital, and reflected on the experience, I found that I’d been convinced that capitalism is a fundamentally unjust economic order: exploitative in its origin, exploitative in its daily operation, and exploitative at its theoretical core. That is to say, it was Marx’s moral critique that got to me. It persuaded me then. It persuades me still.

What was not convincing, however. was Marx’s famous conclusion in the penultimate chapter, “Historic Tendency of Capitalist Accumulation.” Here Marx offers a projection into the future: Capital becomes ever more centralized as the big fish eat the little fish, “the expropriation of many capitalists by a few.” Capitalism also expands geographically, “entangling all people in the net of the world market.” True enough, but then comes the punch line: Along with this grows misery, oppression and degradation—and with this grows the revolt of the working class. “The knell of capitalist private property sounds. The expropriators are expropriated.”[4]

I must say—this passage took me by surprise. I’d been following the argument very carefully to this point—but I didn’t see how this conclusion followed from what had preceded it. Why couldn’t capitalism keep expanding—and keep the standard of living of the proletariat rising as well—as had been the case in all capitalist countries in my lifetime. To be sure, by the early 70s there were ecological arguments in the air. The Club-of- Rome-commissioned Limits to Growth was published in 1972, about the time the economist Kenneth Boulding famously remarked: “Only a madman or an economist thinks exponential growth can go on forever in a finite world.”[5]

But that wasn’t Marx’s argument. Clearly his conclusion was Marxian hope, not Marxian science. It was Marx remaining faithful to his youthful vision, expressed so vividly in The Communist Manifesto (written when he was 30, well before he’d made it to the British Museum and begun the economic research that would lead to Das Kapital.): the bourgeosie “produces its own grave-diggers. Its fall and the victory of the proletariat are equally inevitable.”[6]

I can’t say I was disillusioned or disappointed by this dramatic conclusion to this amazing book. There was no way that Marx could have “proven scientifically” that a new and vastly better world would inevitably come to pass. If he had attempted a careful, methodical “proof,” it couldn’t have worked—as he surely must have known.

Instead he offered a hopeful, Hegelian ending, particularly hopeful when supplemented by the observation that “this struggle should be far less violent and protracted than the preceding expropriation of the many by the few.”[7]

Reading Capital Then vs. Now

Let’s return to the three claims I mentioned deriving from Marx’s theoretical analysis: 1) the invisibility of capitalist exploitation, 2) the determinants of the length of the working day, and 3) the necessity of unemployment under capitalism.

Re. 1: I was much struck by Marx’s theoretical demonstration that exploitation under capitalism is essentially invisible—which I found quite convincing. But at some level, this “exploitation” seemed odd, given the fact that the standard of living for workers—and everyone else—had been steadily improving over the past quarter century (since the end of WWII). But then I realized that this fact in no way refuted Marx’s claim. For if increases in productivity decreased the amount of labor necessary to produce the goods that workers were consuming by a greater percentage than the length of the working day was declining, they could actually be consuming more than before, while also be more exploited. How much less they could be working while consuming the same amount remains invisible.

Indeed, the degree of Marxian exploitation is even more opaque today than it was in the 70s. Back then, the financial system was relatively transparent. The stock markets had been relatively stable for years. Banking was boring. No longer. To quote Paul Krugman, “How did things get so opaque? The answer is ‘financial innovation’–the alphabet soup of CDO’s and SIV’s , RMB’s. and ABCP’s”.[8]

It should be noted that the invisibility of capitalist exploitation in a key component of the system’s resilience. Since the inner workings of the system are incomprehensible to the vast majority, it is far easier to blame the government when conditions become dire than the “invisible hand” of an opaque economic system.

Re. 2–the fact that market plays no role in determining the length of the working day.

In 1970 the issue of overwork did not seem pressing. Although the eight-hour day, proposed in 1886 did not become law until a half-century later (1938) and had not come down since, labor conditions did not seem bad and seemed to be improving: most workers got time-and-a-half for overtime, paid vacations, maternity-leaves for women.

Keynes certainly thought that the long-term trends were good: “What work there still remains to be done will be as widely shared as possible–three hour shifts, or a fifteen-hour week.” This was written in 1930. His prediction was for “a hundred years hence,” i.e, 2030—thirteen years from now.[9]

How close are we now? Well, as James Surowieki reports in a 2014 New Yorker article, a 2008 Harvard Business School survey of thousands of professionals found 94% worked 50 or more hours per week (not 15), and almost half worked more than 65. In finance, it’s even worse. Junior investment bank analysts at Goldman Sachs had to be told not to work, on average, more than 75 hours/week. A nine-year study of two big investment banks showed people spent up to 120 hours a week on the job—and begin to break down after 4 years: depression, anxiety, immune-system problems, and decline in creativity and judgment.[10]

Re. 3: The necessity of unemployment

This came as a shock to me when I first read it—something I’d never thought about, the need for “a reserve army of unemployed.” Indeed, the reigning ideology of the day was Keynesianism. Keynes acknowledged that there exists no tendency in laissez-faire capitalism toward full employment—contrary to what the pre-Keynesian mainstream had dogmatically asserted. But, the new mainstream asserted, the government can step in and employ suitable monetary and fiscal policies to ensure full employment. Which seemed to be true in 1970. That was a time, long past, when no one, at least no one I knew, had to worry about getting a job. No need to go to college. A high-school degree was more than good enough. Marx seemed to be wrong about this one.

But then the Vietnam War ended—and with it the “Golden Age” of capitalism, or what Thomas Piketty calls “les trente glorieuses.” Suddenly we had “stagflation”—not enough unemployment to keep inflation in check. Milton Friedman’s argument for a “natural rate of unemployment” was quickly adopted by the mainstream—though not without a name-change. (We don’t want to say publicly that capitalism requires unemployment, so we’ll call it NAIRU—the non-accelerating inflationary rate of unemployment. We certainly don’t want to proclaim publicly that unemployment was the necessary disciplinary stick to keep this “free” workforce in line.)

Needless to say, Marx’s point is compelling today. It’s striking that today no “reputable” politician or pundit talks about ending unemployment or, for that matter, “ending poverty”—globally or even here at home. The only proposals on offer are (dubious) plans to “grow the economy” in hopes of decreasing somewhat the levels of unemployment and poverty.

Bottom line: The things I found compelling when reading Capital in 1970 are even more compelling now than they were in 1970. I can think of no exceptions.

Conclusion: One Other Matter

When I read Capital in 1970, I became convinced that capitalism is a deeply unjust, immoral system. But there was a huge, looming question that Marx did not address. Is there an economically viable alternative to capitalism that is morally preferable? Marx, in his “Afterward to the Second German Edition” of Capital sneered at critics who reproached him for not providing, in his words, “recipes for cookshops of the future.”[11] Marx responds to his critics, not in his own words, but by quoting other reviewers, who affirm that “Marx only troubles himself about one thing: to show by rigid scientific analysis . . . . both the necessity of the present order of things, and the necessity of another order into which the first must inevitably pass.” But, of course, Marx has shown no such thing. At that point in his argument, as I noted earlier, he invokes, consciously or not, the Left-Hegelian faith of this youth that the world will inevitably become more rational—and hence more “just.” (It’s worth pointing out that he concludes this “Afterword” by invoking Hegel, now treated, he says, as “a dead dog,” and “openly avowing [himself] to be the pupil of this mighty thinker.”)

I’ve never faulted Marx for not offering a detailed blueprint for a post-capitalist society. Marx was, at this stage of his life, committed to a “scientific investigation” of the facts of this world. But at that time, there was no data to which to appeal in constructing an economically viable blueprint.

In 1970 this was no longer the case. At that time there was a lot of data out there, not only various “communist” states experimenting with different models: Soviet central planning, the “Chinese road to socialism,” Yugoslav self-managed socialism, East Germany, Hungary, Cuba, but also the proliferation of cooperatives—most notably the “Mondragon” experiment in the Basque region of Spain, and the network of industrial cooperatives in Northern Italy.

I was fascinated by all this, and immediately began researching the topic—which became my dissertation, then the book that got me tenure at Loyola, then the focus of most of my subsequent writing. Along the way, I frequently revisited Capital—and saw things I hadn’t noticed that first time through. First of all: that Marx’s argument does not rule out market socialism. As Marx makes clear in that first part of Capital, capitalism emerges only when a very special commodity emerges, namely labor-power, only when a large class develops who must sell this special commodity to those who own the means of production, and who can thus tell them what to do.

But what if we had a market economy based on worker-self-management, one in which the workers themselves controlled their enterprises? It was then that I noticed Marx’s footnote in Capital to the Rochdale cooperative experiments, which “showed that associations of workmen could manage shops, mills and almost all forms of industry with success, and they immediately improved the condition of the men, and did not leave a clear place for the masters.”[12]

Then there was that moral dimension to Marx’s theoretical critique of capitalism. What exactly was wrong with the fact that the surplus value created by the working class is appropriated by the capitalists, who, unlike their class predecessors (slave owners and feudal lords), invested most of this surplus in developing new technologies that increased the productivity of labor? It occurred to me that Marx was suggesting here a democratic critique. Even if the increased productivity did, over time, lead to a higher standard of living for the workers, the fact of the matter is, investment determines the future of an economy, affecting almost everyone. And yet the vast majority of those who will affected have no say in those decisions.

Indeed, I’ve since argued, Marx’s overall critique of capitalism is a democratic critique. Workers in enterprises have no democratic control over their conditions of work, nor do workers in society at large have any democratic control over the long-term development of their society.

These considerations suggested to me a model of socialism that I’ve come to call “Economic Democracy,” a form of socialism in which democratically-run enterprises compete in (regulated) markets, while investment funds come from a network of public banks, investment priorities determined democratically.

I’ll end on that note. Needless to say, I could say much, much more about Economic Democracy.[13] Here I am simply noting a key inspiration—a book published 150 years ago that transformed far more than a single bearded hippie.



[1] Karl Marx, Capital, v. 1 (International Publishers, 2003), p. 606.

[2] Ibid., p. 667.

[3] Ibid p. 669, 703.

[4] Ibid. p. 715.

[5] Quoted in Mancur Olsen and Hans-Martin Landsberg (eds), The No-Growth Society (New York: Norton, 1973), p. 97.

[6] Karl Marx and Fredrick Engels, The Communist Manifesto (International Publishers), p. 21.

[7] Marx, Capital, p. 715.

[8] Paul Krugman, New York Times, December 3, 2007.

[9] John Maynard Keynes, “Economic Possibilities for Our Grandchildren,” in Essays in Persuasion (New York: Norton, 1963), pp. 368-72.

[10] James Surowieki, “The Cult of Overwork,” New Yorker, Jan. 27, 2014

[11] Marx, Capital, p. 26.

[12] Ibid. p. 313, N2.

[13] For a detailed exposition, see David Schweickart, After Capitalism, revised edition (Rowman and Littlefield, 2011)


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2024: Vol. 23, No. 1

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2024: Vol. 23, No. 1