In September 1867, Kapital Volume 1 by Karl Marx (1818-1883) was published in German language. This was the only volume of his multi-volume work on capital that Marx completed in its final version as he wanted it and saw it published in his life time. Marx left notes of the two other volumes — Volume 2 and Volume 3 — and these notes were used by his lifelong friend and collaborator Frederick Engels (1820-1895) to publish after Marx’s death: Volume 2 in 1885 and Volume 3 shortly before his death in 1894. Marx referred in his Volume 1 and in the notes of the other two volumes to his forthcoming Volume 4, but the work he left for that volume was published as three volumes of Theories of Surplus Value by Karl Kautsky (1854-1938) between 1905 and 1910.
The first foreign language translation of Capital Volume 1 was published in Russian in 1872. It was welcomed by Marx in these words: “An excellent Russian translation of Das Kapital appeared in the spring of 1872’. The first French edition also appeared in 1872. The first English translation appeared a few years after his death in 1887. By now, Kapital Volume 1 has been translated in all major languages, including Punjabi and Hindi.
Before Kapital Volume 1, Marx had given a clear indication of his theoretical project in the Preface to a short book titled A Contribution to the Critique of Political Economy that was published in 1859. The opening lines of the Preface are: “I examine the system of bourgeois economy in the following order: capital, landed property, wage labour; the State, foreign trade, world market”. Out of the six subjects outlined here, Marx managed to deal only with the first subject, ie capital and even that can be said to be not in full satisfactory form. Though, undoubtedly, in the work on capital, the subject of wage labour figures prominently and there are brilliant insights on the remaining four subjects as well. The opening line of the Preface to the first German edition of Kapital Volume 1 refers to the 1859 work: “The work, the first volume of which I now submit to the public, forms the continuation of my…A Contribution to the Critique of Political Economy published in 1859. The long pause between the first part and the continuation is due to an illness of many years’ duration that again and again interrupted my work.” No other work on the analysis of the capitalist economic system since the publication of Kapital matches the analytical rigour, historical sweep and empirical substantiation.
3 crises in capitalist economy
Marx identified three forms of crisis in a capitalist economy and all are inter-related to each other:
1 The crisis brought about by the tendency of the rate of profit to fall. The capitalist imperative of seeking the maximum rate of profit due to the pressure of competition leads the owners and managers of capital to intensify the rate of surplus by technical innovation which leads to replace of labour by machinery. As labour is the ultimate source of value and surplus value, its contraction through its replacement by machinery leads to drying up that source of value and surplus value. That is the central driving force behind the tendency of the rate of profit to fall.
2 The second can be called the under-consumption crisis. This results from to the capitalist attempt to increase the rate of surplus value by lowering the wages paid to labour. The declining aggregate wage share relative to profit leads to the mass of labour force with a purchasing power so low that it leads to glut of commodities in the market. This eventually leads to low profitability.
3 The third form is the disproportionality crisis, ie the crisis brought about by overproduction of machinery relative to its need to produce the means of consumption. This crisis form also manifests itself into declining rate of profit.
All the three forms have mechanisation as the common feature. The increasing robotisation in the modern world with the threat of mass unemployment is a telling confirmation of the trend identified by Marx 150 years ago.
The two other modern forms of crisis, ie the financial crisis and the ecological crisis were hinted at in Kapital Volume 3, but greater work needs to be done, especially on the growing financialisation of the capitalist economy and its relationship to the emerging ecological crisis and climate change.
The law of motion of capital
* The central objective of Marx in his research on capital was to discover the law of motion of capital. Marx had great appreciation for the work of biologist Charles Darwin (1809-1882) who was his contemporary and with whom he had brief correspondence about their respective spheres of work. Marx viewed similarity in method between Darwin’s work on the origin and evolution of species, and his own work on the origin and evolution of capital. Marx argued that as the examination of a cell of human body provides central clue to the understanding of the human body, the examination of commodity as a cell of the commodity producing capitalist economy provides the key to the understanding of the historical epoch of generalised commodity production, ie capitalist mode of production. Kapital Volume 1, thus, opens with a chapter on commodity.
* Commodity has both use value as well as exchange value. In this dual character lies the secret of the crisis of commodity producing capitalist economy. Labour power required to produce the commodity also has its use and exchange values. The exchange value is indicated by the wage paid to the labourer, ie the owner of the labouring capacity. However, labour has the unique quality of being used for more than what it has been exchanged for, ie wages. It is this unique character of human labour that produces surplus value, and it is this that determines the life and death of the commodity producing capitalist economy. Marx argued that an economy geared to the production of surplus value is prone to crisis.
The writer is Professor of Economics at Oxford Brookes University, UK