Lecture Notes on Marx (Spring 2012)

Lecture Notes on Marx

by Dr. Jan Garrett

This page last revised on April 30, 2012

This web page will be modified over the period we are discussing Marx in class.
There are hundreds of challenges to Marx. Many are based on misconceptions, some deliberately cultivated. See Challenges to Marx.
Introduction
I. Historical Materialism
     A. "Historical" and "materialism"
     B. Historical stages
     C. Base and Superstructure: the Explanatory Model
     D. Terms
          1. Mode of production
          2. Social formation
          3. Exploitation
     E. Dialectic
          1. In Plato
          2. In Modern Philosophy (as perceived by Hegel)
          3. In Hegel's philosophy
          4. The Hegelian Heritage reworked by Marx.
          5. Marxian Historical Dialectic in the Emergence of the Capital System
II. Critique of Political Economy
     A. The Production / Accumulation Cycle at the Heart of the Capital System
     B. Vocabulary of Marx's Critique of Capital and Political Economy
     C. Problems with Capitalism
III. The Transition to Socialism
     A. Passages from Lebowitz, The Socialist Alternative
     B. Comments on those passages by Dr. Garrett

Introduction

In connection with Marx, the term "socialism" has two primary meanings. On the one hand, it is a social movement that would thoroughly replace the capitalist socioeconomic system with a social arrangement based on cooperation, real or substantive equality, real rather than merely formal democracy, and respect for human and ecological diversity. The movement includes a thorough and unending critique of all illusions that hide the truth about oppressive and unjust social realities. Marx thought of this movement as based upon the industrial working class, which was a large and growing class in his lifetime. Thinkers in the Marx tradition today see it as based on the working class, which includes non-industrial workers, and the peoples of countries in the Global South dominated by the world capital system. "Peoples" includes workers and farmers and small shopkeepers. Middle-class allies have always been welcome.
On the other hand, it names the social arrangement itself that would replace the capital system as an outgrowth of the socialist movement.
Socialism as a movement has existed since the time of Marx, sometimes in a partial and distorted form, but it still exists today and is in what I think is an early phase of a major revival, along with a critical review of its own past. Socialism as a basic arrangement of an entire society has never yet existed. What has sometimes called itself socialism falls primarily into two categories:
1) so-called welfare states, as in Western Europe and Scandinavia. These are capitalist states with a substantial social safety net, such as socialized medicine, a strong social security system, strong protection of workers rights on the job, and public investment in education. Some of these features characterized even the U.S. in the middle 20th century. About the only clear difference is the presence of a large parliamentary party historically linked to the early 20th century Social Democratic movement. These societies, like the U.S., were formally democratic, or representative, in their political systems, combining electoral process with basic civil rights.
They are capitalist b/c they preserve the basic institutions of the capitalist market and private property rights, though the market may be regulated for various reasons.
2) so-called "state socialist" societies, like the Soviet Union, Peoples Republic of China, and the countries of Eastern Europe up till approximately 1990. Marxists today describe these societies as state capitalist or part of the capital system without being capitalist. They shared with capitalist societies a drive to accumulate productive wealth—not in private hands but in the hands of the state itself. For most of their time in existence, they were governed by a single political party. They too had formally democratic institutions but the system was set up so that the ruling party could not be replaced, and the ruling party itself was not internally democratic.
In the first part of our study of Marx we will be focusing on his ideas in their 19th century historical and social context, before the imperialist capitalism of the late 19th century, before the global North-South (or center-periphery) divide became visible, before the Russian and Chinese and Cuban Revolutions, and before the emergence of the global environmental crisis we continue to face. -->

I. Historical Materialism

A. "Historical" and "materialism"
This method is called historical materialism partly to call attention to the fact that everything has its historical context, later stages resting upon what has happened in earlier stages, that events and social structures make sense only in their context, and that the social structures of the past have come into being and, with the exception of capitalism so far, have in significant part passed away—although possibly not as much as "progressive" thinkers might wish or tell themselves. It suggests that contrary to what the defenders of capitalism say, capitalism itself is not eternal.
This is a way of getting a handle on the "big picture," the "long view" of history. It provides a framework for undertaking the more specific, more economy-focused analysis of the capital system itself.
The term materialism expresses Marx's rejection of idealism, especially the idealism of Hegel, the leading intellectual influence in German philosophy when Marx was a student and young adult. Hegelian idealism taught that historical events are somehow produced chiefly by ideas, perhaps by the "great thinkers" or political leaders like Caesar or Napoleon, or even by the Divine Mind. Marx wants to explain events in human social or economic terms as much as possible.
But he does not want to deny that ideas or systems of ideas have major consequences in the material world. In fact, the capital system, which has produced dramatic changes in the material and social and cultural world since it appeared in the early 16th century, could not exist would without the assumptions regarding justice and private property which have been embedded increasingly in the legal systems of modern Europe (and in human brains), just as it could not exist without the trade activities, the technologies, and scientific achievements of the preceding centuries.
Historical materialism presents a theory of historical stages and provides an explanation of how the parts of a social system fit together and require each other.

B. The Time Dimension: Historical Stages

Based largely on European history, Marx distinguishes between
1) Precapitalism
chiefly slave-owning society and feudal society;
later he mentions Asiatic society, which is supposed to cover ancient China, India, Egypt of the Pharaohs, and Persia;
eventually, primitive communism is placed earlier than the socially stratified stages.
Around the beginning of the 20th century, most Marxists recognize:
     primitive communism
     Asiatic mode of production
     ancient slavery (e.g., Greece and Rome)
     feudalism
2) Capitalism - which rises in Europe in the early 16th century, and goes through a number of stages itself;
a) mercantile capitalism
b) manufacturing capitalism and early capitalist agriculture
c) industrial capitalism (as far as it gets in Marx's time)
d) 20th century Marxists add: late-capitalism, characterized by transnational corporations and the domination of finance capital (just developing when Marx died)
3) Socialism - yet to come

C. Historical materialism as an explanatory model.

Here the stress is upon the relationship between the so-called economic basis and the political and intellectual superstructures. A common error is to think that Marx's view is that what happens in the base necessitates or strictly determines what happens in the superstructure, so that idea-people would simply be tools of factors hidden to them and beyond their control, with no conscious freedom of choice or responsibility. While this may sometimes be true, it is not always or necessarily true.
"Necessary" is a tricky word. The same thing can be said about "determine." Sometimes it signifies the absence of freedom. "Having been thrown out of a tenth-story window, the gerbil necessarily plummeted to its death." But sometimes it signifies the only viable solution to a problem, a viable solution can we can easily imagine someone freely choosing. "Feeling utterly miserable, the man necessarily swallowed the medicine his doctor told him could cure him."
Marx is absolutely concerned about human freedom, he favors the abolition of the capital system because it is necessary for the genuine progress of freedom, because it ultimately will be the only alternative to barbarism. He thinks it matters what idea-people write, say, or do. He himself is an idea-person, although his ultimate goal is to overcome the distinction between idea-people and active historical agents. He thinks we all can be idea-people and active historical agents, but society will need changing if this unity of thought and action is to be available to much larger numbers of people.
But Marx does hold that the economic basis of society limits what ideas are possible at any given time. And he does hold that we can partly explain the ideas of a society in terms of what is happening in the economic and technological sphere or what the basic class structure of society is like. He does maintain that as the productive forces grow, which is primarily a matter of the "material base," the idea possibilities can change as well.
In spite of what Marx writes in the Preface to the Critique of Political Economy, today it is better and a more faithful expression of his over-all intention to emphasize interaction rather than base-to-superstructure "determination." Marx never wanted to deny the importance of thought as a part of the processes of change that occur between people, and between people and nature.
Handout on Historical Materialism
Sometimes Marx's historical materialism is diagrammed as a pyramid, divided into two main parts, the base and the superstructure. A more careful diagram such as the following might distinguish levels within the base (B1-B4) and within the superstructure (S1 and S2).
The Marxist claim that the (economic) basis generally determines the political-cultural superstructure needs to be understood as trying to counteract the idealist view, prominent in Marx's younger years, that ideas (or the divine spirit in history) have causal primacy.
A picture of the Base-Superstructure relationship in chart form:

S2 (Superstructure level 2): Religious Ideas, Philosophy, Social Theory

S1 (Superstructure level 1): Legal and political institutions

B4 (Base level 4): Relationships of production: including class-based modes of production

B3 (Base level 3): Productive forces: skill of workers and scientific knowledge applicable to production

B2 (Base level 2): Productive forces : simple tools, complex tools, tool-produced resources, machines, machine produced resources

B1 (Base level 1): Natural conditions, including human anatomy, and the natural environment

The so-called material or economic basis consists of: natural conditions including human anatomy (B1); the productive forces associated with material culture (simple tools, found resources, resources acquired through using tools, complex tools and machines, resources acquired through using machines, etc.) (B2); the productive forces include the acquired skills of workers and scientific knowledge when that knowledge can be applied to the manipulation of natural or artificially created materials (B3).
The economic basis also includes relations of production, which have to do with how human beings relate to each other in the productive process: the division of labor, power structure in production; class divisions as they affect production (owners and non-owner laborers). (B4)
[From Handout again, Spring 2011]
In fact, Marx rarely underestimates the importance of the so-called superstructure. The capitalist form of S1 is absolutely necessary for the capital system. Marx himself devoted most of his active life to a critique of the capitalist form of S2, believing such activity essential to promoting the transition to a socialist society.
In practice Marx's analysis traces interactions without restricting himself to one-way (bottom-up) causation. Moreover, he appreciates the way in which the diverse elements of the capital system reinforce each other and resist a systemic change, say, to socialism. Earlier, the diverse elements of the pre-capitalist tributary (more traditionally, "feudal") system reinforced each other and resisted the change to capitalism.
It is nonetheless true that the pre-capitalist system contained internal contradictions that enabled capitalism to grow and eventually overturn the pre-capitalist system. The capitalist system itself contains internal contradictions that enable the ingredients necessary for socialism— the productive forces as well as essential ideas—to develop and for socialism itself to possibly emerge victorious.
Marx's mature view is that socialism is not necessary in the sense of inevitable, or fated, but only in the sense of "needed": capitalism poses increasingly agonizing problems for humanity that only socialism can solve. His friend Engels put it this way: the alternative is socialism or barbarism.
The class struggle, which the Communist Manifesto understands as central to history, operates not only at level B4, for example, through struggles at the workplace, strikes, and temporary truces between workers and capitalists, but also at level S1, through struggles to change the laws and win reforms that benefit workers without changing the social system or allow them to organize their own unions or parties to struggle for their rights. It also operates at level S2, where (pro-capitalist) economists try to teach us that the capitalist system corresponds to human nature, which is always everywhere the same, and is essentially harmonious, while socialist theorists challenge their theories. It also operates at level B3, for example, when capitalists promote redesign of technology to produce de-skilling: the workers on whom the capitalists rely come to require fewer skills for most tasks, so that capitalists find it easier to fire and replace them than to give in to their demands for better working conditions and wages.[End added material]

D. Some Terms
1. Mode of Production
The mode of production is frequently linked to class divisions. Capitalism, or wage labor is a mode of production, so is feudal exploitation, or serfdom, so is slavery; tributary mode of production is characterized by warrior aristocratic domination of subordinate peasants. But there are modes of production that don't neatly correlate with class divisions. The petty-commodity mode of production exists when peasants not exploited by a tributary aristocracy produce goods for sale on the market. The primitive communalist mode of production exists when, before the rise of stratified, tributary society, peasants produce for themselves, for sharing within their small community, and barter.
2. Social Formation
It is possible to combine several modes of production. Ancient Rome had elements of tributary, slave, mercantile capital, and probably petty-commodity modes, but the dominant mode seems to have been tributary. We can call such societies tributary social formations, to indicate that the tributary mode is the dominant one. The United States, before the U.S. civil war, was characterized by capitalism in the Northern states, chattel slavery in the Southern states, and many small farms producing for the market in the Western states (petty commodity production). But because capitalism was the economically dominant mode (the young U.S. was a functioning part of an already global economic system dominated by the European capitalist powers), the U.S. could have already been characterized as a capitalist social formation.
3. Exploitation
Most modes of production are characterized by exploitation—this is a descriptive term to indicate that a dominating class (the master, the lord, the capitalist, or the tributary aristocracy) extracts surplus labor from the laborer. Surplus labor is the total labor the laborer contributes minus what the laborer gets to keep to keep himself and his family alive from day to day.
E. Dialectic
Marx's historical materialism is also informed by "dialectic." What does this mean?
Dialectic means somewhat different things in Plato, in Hegel, and in Marx, but we cannot understand what it means in Marx without understand how it came to be important for him.
1. Dialectic in Plato
This refers to a method consciously applied by Socrates to promote and reach philosophical enlightenment. It generally had two forms, a (first stage) recognition of one's own ignorance, which is often the result of Socrates' discussions with persons who think they know, for instance, what the essence of justice is; the second stage is positive, and it is exemplified by the main books of the Republic. The conversation-partners tentatively consider new insights, new approaches, to resolve questions; this may lead to wisdom. Platonic dialogues have these characteristics
a) Two opposed characters at any given time (The interlocutor, e.g., Glaucon, and Socrates)
b) The process of generation of greater wisdom through their interaction
2. Dialectic in Modern Philosophy
Looking back at early modern philosophy, Hegel noticed the following recurrent pattern in the history of philosophy: Thesis - Antithesis - Synthesis
For instance, in modern epistemology
Thesis: Rationalism (e.g., Descartes: [The most basic) knowledge must be based upon clear and distinct ideas of reason, not on the senses)
Antithesis: Empiricism (e.g., Hume: Knowledge must be based upon internal and external impressions, i.e., sense perceptions and the interior analogue of the same)
Synthesis: Kantian Transcendental Idealism - Knowledge must be based on both (without both our concepts are empty or our impressions lack definition)
3. Dialectic in Hegel is a sophisticated modern invention
In its most abstract form it consists of tracing the development of concrete ideas or realities or institutions from more abstract ones.
a. An example from Hegel's Logic (Study of the Idea): Being (T)-Nothing (A)-Becoming (S)
b. The "Moments" of Hegel's System
The "thesis" is what Hegel calls (the Absolute) Idea (the eternal set of philosophical categories and notions, each properly situated with respect to the others)
The "antithesis" is Nature, the "externalization" of the (Absolute) Idea. "Externalization" suggests space. Nature is understood geometrically. Time is present, but in natural cycles; there is no "development" in nature. (Hegel is pre-Darwin.)
The "synthesis" is Spirit, the "dialectical unity" of Idea and Nature. Spirit is "historical"; here we find time in the richer sense of historical development.
For more material on Hegel, see Hegel: An Overview.

5. Historical Dialectic (in Marxian Perspective) in the Emergence of Capitalism from Feudalism
…

a. The feudal aristocracy extracts surplus product (what the peasant-serf does not keep) from the peasant serfs under its control.
b. When possible, they seek weapons and other material goods beyond their immediate locality, to take advantage of a geographically distributed division of labor between regions. So they encourage the development of merchant class. As trade increases, this class increases along with craftspersons, organized into guilds. Both groups are increasingly located in cities, which increase in size.
c. The guilds, which are integrated into the seemingly static feudal society, resist the development of "free trade," because the master craftsmen who dominate them wish to protect their own standards and authority. They are more interested in security and stability than in "growing their businesses," i.e., accumulating capital, for its own sake.
d. Merchants, as they develop their own activity, become mercantile capitalists. They benefit from the support of the nobles.
e. When the centralizing monarchies arise, they encourage the merchants and ally with the merchants against the local nobles.
f. The merchants and the more powerful aristocrats, including those advising the centralizing monarchs, are interested in the development of the New Science (Copernicus, Galileo, Descartes, Newton) seeing it as helping to increase their own control over nature and other human beings.
g. Merchant capital encourages and benefits from the overseas adventures of seafaring states (England, France, Netherlands) in Renaissance Europe.
h. Merchant capital profits are invested in agriculture (with the result that agriculture itself becomes a capitalist enterprise) and in rudimentary forms of manufacture, leading to the expansion of the bourgeoisie. The bourgeoisie eventually becomes a class with aspirations to dominate the entire economy. Manufacturing capital, which favors the "free market," is opposed to the guild system, which resists the development of the "free market."
i. The capitalist groups support monarchs who are willing to limit their own powers and give the bourgeoisie even more room, against the absolute monarchy party, for instance, the Glorious Revolution of 1688 (defended by John Locke), which established the British constitutional monarchy.
j. Eventually, they support anti-monarchical revolutions (e.g., the French Revolution of 1789-1793). In this period the bourgeois occasionally become great advocates of liberty (including civil liberty, political liberty, and free trade) and non-monarchical political arrangements (republics). Under "bourgeois democratic" slogans like "liberty, equality, fraternity," their statesmen rally the masses against the feudal system and its institutions. The upshot is a near-total replacement of feudal (tributary) society in Western Europe by a bourgeois or capitalist system.

II. Marx's Analysis of the Capital System (Critique of Political Economy)

A. The Production/Accumulation Cycle: Commentary on the Chart — New Section April 27, 2011

See the handout on the Capitalist Production/Accumulation Cycle.
1. Symbols on the Chart
M = money invested at the beginning of the cycle
C = commodities purchased by M, which consist of
L = labor-power, the ability of workers to produce
and MP = means of production, consisting of machinery and raw materials (or semi-finished products)
The value of C = the value of L and the value of MP, since L and MP are the commodities purchased by M.
. . . P . . . = the production process itself, the outcome of which is
C' = commodities whose value exceeds the value of C
M' = the money realized, under average conditions, through sale of C'
The production/accumulation cycle consists of several stages:
M — C = The purchase of C, i.e., labor-power and means of production.
� P � = The production of C', involving the use of the machinery, raw-materials, and labor-power.
C' — M' = The sale of commodities resulting from the production cycle.
If M' is the money realized at the end of the production cycle, i.e., in the hands of the capitalist or his agents, it is also the starting point of the next production cycle. M (out of M') is used to replace labor power and used up means of production for the next cycle. But the increment, the difference between M' and M, is also available for investment; the capitalist can hire more workers and use a larger quantity of means of production in the next cycle. Under normal capitalist conditions, at the end of the next cycle, he will have an even greater mass of commodities, C", and, having sold them, an even greater quantity of money, M", available for reinvestment.
The cycle just keeps going—capital just keeps accumulating—until or unless, for some reason, it breaks down. The career of a successful capitalist— in Marx's description, the personification of capital—is essentially a lifetime of accumulation, and maintaining the rate of accumulation (the ratio of profit to invested capital that can be reinvested from year to year) at a high level is the aim of the capitalist as a capitalist.
But capital doesn't necessarily disappear with the death of individuals. It is potentially immortal, in the sense that it may continue to function with new personifications of capital, that is, the original capitalist's heirs or those to whom he or they sold their stocks, as long as the capital system survives. However, capital can be destroyed if, for instance, the machinery and raw materials in which it is embodied are destroyed in warfare or sabotage.
2. How is it that C', which is greater than C, is possible? How is it that C", which is greater than C', is possible? Marx explains this fact as follows.
The labor the worker adds to the raw materials or semifinished products, gives them greater value than they originally had. If he works with an average skill and intensity, he or she adds the same value to the commodities every hour he works.
After a certain amount of time, say, two hours, he will have added to the commodities the value of his labor-power, that is, the value of the wages he will receive for his day's work. But in fact he has contracted to work a full day for his day's wage, so in the next, say, six hours, he will add three times the value of his wages to the commodities produced. In sum, he will have added four times the value of his wages to the commodities produced, but only three quarters of that is new value.
The value of the commodities will also include the value of the raw materials consumed and the value of wear and tear on the machinery used. (The capitalist must put aside money from every production cycle to replace machinery that eventually no longer function plus the raw materials used up in that cycle.)
If we consider the value of the commodities produced minus the value the capitalist must put aside for machinery and raw materials, what is left is the contribution of the laborer. This is, as we noted, divided into two parts, the value that corresponds to the wages (L) and the value added by labor after the value of labor-power is reproduced in the commodities. The latter is called surplus value, because it is over and above the value put into the process at the beginning. In our example, there is a ratio of 3:1 (of surplus value to the value of labor-power). This ratio is called the rate of surplus value or the rate of exploitation.
What determines the value of labor-power is the mass of commodities the worker requires for survival, at a modest level of health and sanity, so that he or she can return to work the next day and produce yet another eight hours—not only the worker but also his or her children, since the next generation of workers has to be factored in.
Surplus value is the source of the capitalists' profits. The source of surplus value is the unpaid labor of the workers. From the capitalist perspective, Marx notes, there is no theft: the worker receives for [the use of] her labor-power an equivalent in [exchange-] value, i.e., enough for her subsistence and that of her offspring, considered as an average; but the use-value of labor power is unique: it can be used over a period of time greater than is required to reproduce itself. It reproduces itself, say, for two hours, but can be used for eight without totally exhausting itself.
3. Each stage of the cycle is potentially a point of conflict.
Consider M-C. By combining in unions and threatening to withhold labor-power, workers can affect the price of labor-power. By taking steps to expand the pool of unemployed, the employer (in possible collaboration with other employers or state officials) can put pressure on workers to accept lower wages, so that if the commodities produced sell for an unchanged price, he can make greater profits.
Moreover, by finding cheaper raw materials the capitalist can spend less at the beginning of the cycle and, if the commodities produced sell for an unchanged price, make greater profits.
Now consider P, the production process itself. Here the key is the division of the work day into necessary labor, the time needed to reproduce the value of the worker's wages, and surplus labor, the time that produces surplus value. This division, which is not announced by any overt event like the ringing of a bell, can be affected by increasing the intensity of labor, by pressuring workers to work harder or faster; or by the introduction of machinery that makes workers more productive, so that necessary labor is a shorter period and surplus labor longer. Lengthening the workday, say from eight to ten hours without an increase in pay, can have a similar effect. All these changes may expand surplus value, the source of capital's profits.
The end of the cycle, represented by C'-M' in the occurrence of the cycle diagrammed on the chart, is key to understanding the problems of capitalism. If the market for a given commodity is glutted, so that more commodities have been produced than can easily find buyers, the capitalist is faced with a crisis of "realizing" profits. He cannot achieve the money form of the value of C', and therefore cannot move onto the next cycle with an even greater mass of capital at work.
This is especially a problem in the monopoly or oligopoly phase of modern capitalism: capitalism is so successful in producing commodities that, other things equal, it produces more commodities that it can sell.
The story of capitalism in the 20th and 21st century is in large part the story of novel attempts to resolve this problem. One way is by convincing consumers by means of advertising that they need to buy more commodities than they would otherwise buy, and that they can afford those commodities even if they must go into debt to pay for them. Another way is by convincing governments --or politicians who control governments, or the public who vote for politicians--to purchase the equipment of warfare and the skills of soldiers, logistical staff, and other personnel required to support military activity. The result, if successful, is the consumption of commodities (destructively, for the most part) that would otherwise not be bought, and the government demand for more such commodities.

B. Terms for Marx's Analysis of the Capital System

commodity - an object that is intended to be exchanged with something of equal (exchange) value; typically, it is produced with that intention.
use-value - the specific human purposes to which an object, which may or may not be a commodity, can be put; the use-value of a product varies with the concrete qualities of the object, which can be quite complex.
exchange-value - the exchange value of a commodity relates to "how much it is worth" in relation to other commodities or to money. Exchange-value is a quantitative issue. One commodity's exchange value will be greater, lesser, or equal in relation to another. The term "value" is technically distinct from "exchange-value," but for most purposes, we can regard "value" as equivalent in meaning to "exchange-value" in the Marxist analysis of capitalism.
concrete labor - the specific labor activities required to produce an object with use-value.
abstract labor - what determines the exchange-value of a commodity; it is the quantitative measure of labor, which is what determines the value of a product.
socially necessary labor time - another term for the abstract labor embodied in a product. This term emphasizes that value is determined by the quantity of labor, measured in time, required on average under given social and technological conditions, for the production of the commodity.
labor-power - the worker's capacity to labor, say, for a day. Insofar as it is "sold" to an employer, which is of course typical under capitalism, it is a commodity; it has an exchange-value (see [value of] wages); it also has a use-value, which the capitalist controls once he has "purchased" it —namely, to recreate its own value (the wages) and produce a surplus value over the course of, say, a day.
(value of) wages - value of the commodities the worker requires for subsistence, i.e., the socially necessary labor time embodied in what the worker needs to survive and raise his or her family at a subsistence level, i.e., to recreate ("reproduce") labor-power, his own and that of his family.
surplus labor - under capitalism, this term designates the labor, measured in time, that the worker performs for the capitalist in, say, a day, after having added value to his products equivalent to the value of his wages. Surplus labor is the source of surplus value.
necessary labor - (not to be confused with socially necessary labor time). The labor added to the product in the part of the work period (e.g., day) in which the worker recreates the value of his or her wages for that period. (Should be understood in relation to surplus labor. Necessary labor + Surplus labor = total labor added to the product during the work period in question.
surplus value - what the labor of the worker adds to the commodities he or she helps to produce in a given unit of time (say, a day or week or year) over and above what she receives as wages. The total s.v. produced by labor under capitalism in a given period is the source of profit, rent, interest, and taxes
rate of surplus value (rate of exploitation) - the ratio of the surplus value produced by a worker in, say, a day, to the value of her wages. (This rate tends to rise with the growth of the productive forces, i.e., technology. The impulse of capital is to increase the rate of s.v.; this can happen with or without the monetary decrease of wages and is even compatible with a modest increase in wages.
realization of surplus value - the transformation of commodities into money by means of exchange, so that the capitalist can accumulate profits (after having replaced the investment in wages, raw materials, and depreciation of machinery that was absorbed into the commodities, and paid his rent, taxes, etc.)
(It is not enough for the capitalist that his workers have produced a mass of commodities and added surplus value to them in the process; the capitalist must also be able to sell them in order to complete the cycle that began with his investment of capital in machines, raw materials, and labor. Only then will he be a (for the time being) successful capitalist working with a greater mass of capital.)
profit - the portion of realized surplus value that a capitalist gets to keep after deductions for rent, interest on borrowed capital, and taxes.
variable capital - the capital investment a capitalist is making in wages
constant capital - the capital investment in raw materials and machinery
wear and tear on machinery - the cause of loss of value from machines in use (so that eventually they will have to be replaced); this value is typically incorporated in the commodities being produced and capitalists normally recover it when they sell their commodities
price - on average, price is determined by the capital absorbed into a commodity during the production process (raw materials, wear and tear and machinery, wages of workers) plus the quantity of profit determined by the average rate of profit for the industry.
(the individual capitalist's) rate of profit - the total profit realized after the sale of the commodities produced in the capitalist's factory divided by total capital investment (constant capital plus variable capital)
C. Problems with the Capital System Noted by Marx and 19th Century Marxists
"Primitive" (Original) Accumulation - In the period 1500-1800, leading up to full-fledged capitalism in Europe, European colonial powers conquered or subordinated the Americas, Oceania, and parts of Asia (plus engaged in the trans-Atlantic slave trade), extracting by force and violence precious metals, labor-power, and other valuable resources already developed by indigenous peoples. This helped provide sufficient wealth to jump-start classical capitalism.
Alienation of Labor -- to be alienated from X (in Marx's sense) is to be aware of X as a hostile, dangerous, or oppressive force over an extended period of time; alienation under capitalism is a part of social reality, not a mere subjective experience.
* Worker is alienated from the product of her (and other workers') labor—as he produces it, it belongs not to him but to capital that is not his; machines are used against her (forcing her to work at an unnatural pace or rendering her unemployable by performing more cheaply the tasks she was once paid for performing).
* Worker is alienated from the process of producing, which is essential to his fulfilled creative, social existence; she has no control over the design of the production process or its pace. Compelled to do the same simple task repetitiously for 8-12 hours a day, she is deformed and rendered stupid by the work process itself.
* Worker is alienated from other human beings. He is alienated from capitalists, who try to extract as much s.v. from him as possible and usually demand that he use his body but not his creative mental capacities. The capitalist himself presents himself as "the producer" and gets to experience the power of realizing his plans, while using the workers as "[hired] hands," but the workers do not. The workers are also alienated from each other (as rivals for scarce jobs) and because the products of their labor are designed to make profits, not necessarily to meet genuine human needs.
Workers suffer from the booms and busts of the economic cycle: Employment and income are insecure; they depend upon the phases of the cycle; workers are employed only if what they produce can be sold at a significant profit but otherwise they are expelled from the workplace to fend for themselves.
They are regarded as means only; violation of the "categorical imperative" formulated by Kant: Always treat human beings as ends, never as means only. It rings hollow to say that the mutually voluntary nature of the labor contract respects workers as an end. The two parties to the labor contract rarely face each other with equal power. The worker may be one paycheck away from starvatiom or from losing his house b/c he cannot pay the mortgage.
In capital's early years, its representatives favor civil rights and civil liberties for the middle classes and their allies against absolute monarchies and hereditary feudal "nobility." But capital quickly becomes an anti-democratic force as the movement to empower workers, small farmers, and self-employed people grows. Capital's allies try to limit or suspend the civil and human rights of those most likely to resist its aggressive accumulation of capital. Hence forceful assertion of capital's "rights" is increasingly associated with use of brutal violence, up to and including torture, most dramatically in the transition from state "socialism" or relatively democratic nationalist regimes to the late 20th century's unbridled capitalism. This was the point of China's 1989 Tienanmen Square massacre of pro-democracy (but not pro-capitalist) students and workers. It was also illustrated by the mass executions and torture employed in the 1970's by military juntas in Latin America, who wished to remove resistance to their plans to privatize public works, deregulate the activities of private corporations, and open the economy wide to foreign corporate investment (and control). (The story behind Tienanmen Square and the violations of human rights in Chile and Argentina is well told and documented in Naomi Klein's book The Shock Doctrine (2007).)
Hostility between ethnic groups (or genders) is not original to capitalism, but it is used and promoted by the system because such divisions among the workers prevent them from uniting to form unions, from effectively carrying out strikes, and from organizing working-class political parties that can oppose the capital system.
Additional problems of capitalism noted in the twentieth and twenty-first centuries:
Creation of false needs by advertising to sell overproduced commodities and keep profits coming; promotion of unsustainable levels of consumer indebtedness for the same reason.
Creation of a solid-waste problem from the production and sale of short-lived consumer gadgets that end up in landfills; expansion of solid-waste and pollution problems as byproducts of manufacturing and mining processes, which have multiplied over the years.
Alienation from nature. (Not new but more obvious in recent years.) Workers are alienated from nature because they are compelled by economic desperation to take jobs even if those jobs are part of a production process that damages the environment. Capitalism is inherently unable to value nature or future generations for themselves; the reason is that nonhuman nature and future human generations do not participate in markets, either as direct suppliers of commodities or as potential purchasers (possessors of money) of such commodities.
The deliberate promotion of the arms trade and military buildup, and the cultivation of fear of the "other" so as to justify government spending that buys up otherwise overproduced commodities. To make the political case for this plausible, countries must actually fight wars from time to time. These have long-term costs in lives and in physical and emotional well-being, to the soldiers of the belligerent powers, to civilians and environments in the lands where the battles are fought, and in national financial indebtedness. Since WWII, nuclear war and possible annihilation of humanity have been a real risk.
The creation of global inequality between the relatively prosperous centers of the system (recently in the U.S.-W. Europe-Japan) and the periphery (chiefly in the poorer countries of Asia, Africa, and Latin America, where the local capitalist class serves as a junior partner to the capitalists of the dominant countries).
Capitalism has proven itself skilled at shifting its problems from the center to the periphery. Wars are fought mostly in the periphery; toxic waste is mostly dumped in the peripheries; the worst environmental damage, as a byproduct of processes that are profitable to the core capitalisms, tend to occur in the peripheries.
The global south, including the Middle East and south Asia, are part of the periphery. But regions in core countries like the United States, such as the Gulf Coast and Detroit and rural Pennsylvania (where natural gas "fracking" is poisoning the groundwater) are increasingly treated in the same way.
Ethnic antagonism in the 21st century. The immigrant labor issue is a direct reflection of the capital system. Capital and commodities can cross borders easily, but laborers lose their rights when they do. When capital moves easily to places like Mexico and Central America, traditional subsistence farming is destroyed and workers leave to earn income elsewhere. But if they come to countries like the US here they can get jobs, which are low-paid and often dangerous but at least provide income, they are subject to harassment as so-called illegals.

III. The Transition to Socialism

The handout Socialist Vision consists of passages from Michael Lebowitz, The Socialist Alternative (2010). It may be useful to have some further clarification of those remarks. Hence the following comments aim to assist your understanding.
Moving from one "organic system" to another
Marx understood, and the best thinkers in his tradition today understand, that capitalism is and has been what he calls an organic system, and that socialism, if it can ever be created, would be one too.
An "organic system" is an arrangement of structures each of which presupposes and is presupposed by the others, so that they make a totality that has a strong tendency toward self-perpetuation.
It's possible for one organic system to coexist with other organic systems for a while, even if they are in the long run incompatible.
Marx understood that the capitalism coexists with the biosphere (though he did not use the term), aka Nature or the environment. The biosphere itself is an organic system, and it was an organic system long before the emergence of capitalism.
It is part of the Marxist analysis that the capital system, with its endless drive to accumulate and its inability to value nature in its own right, is destructive of the biosphere. The endless drive to accumulate, at the expense of human well-being, is sometimes called the first contradiction of capitalism. The pronounced, and increasing, tendency to destroy the environment, the conditions of life on earth, humanity, and capitalism itself (since it presupposes these conditions) is sometimes called the second contradiction of capitalism. From the Marxist perspective, the second contradiction is an effect of the first, capital's drive to accumulate.
Some preconditions of capitalism, such as human beings, nature, production processes, and science, are also preconditions for socialism. The end of capital as an organic system would not require the end of nature, human beings, production, or science, quite the contrary in fact.
Socialism, as it is conceived by its advocates, must be conceived as an organic system too, but it is incompatible with capitalism; the defenders of Marxian socialism do not hide its incompatibility and the defenders of the capital system are not ignorant of it. The two organic system could coexist for an extended period of time—with capital weakened and socialism in an embryonic state but not yet fully developed. However, a mixed system would not be a stable one; the transitional period would be characterized by struggle between the old and the new, as was the period in which capitalism replaced feudalism and other tributary systems.
Comments on some of Lebowitz's specific terms and claims. (For the most part, they are directly motivated by passages in Marx's writings.)
Social ownership. Obviously, this is not private ownership, but it is also not state ownership. It can't be state ownership because that encourages a distinction between bureaucrats who have special privileges to control the property and others who lack them.
Ownership of our social heritage. This refers to the fact that the material wealth of society did not derive from a small group of "entrepreneurs" but from vast numbers of workers and researchers over hundreds of generations.
Real wealth. This is a reference to Marx's idea that the capital system impoverishes workers, not only by keeping their wages as low as possible or riding roughshod over our common heritage the earth, but by alienating us from each other and from our fellow human beings whom we are taught to distrust and, if we are able to become capitalists, to use as mere means. By contrast, according to Marxian socialism, the socialist aim is to produce "rich human beings," human beings rich in meaningful social connections (because we are able to respond to each other's needs for development, and are aware of each other as doing so). The "wealth" of "rich human beings" in Marx's sense also includes opportunities for creative expression.
Not limited to particular categories of producers. Not members of one nationality to the exclusion of others; not limited to one gender or sexual orientation to the exclusion of others. Not limited to one region: not limited to North America or Western Europe.
Organization of social production by workers includes shared governance of the workplace by the workers who work in them. Governance is a function of head labor (and social-political interaction) and the governed productive activity tends to be more physical, but if the same people are involved in both, the traditional head/hand division is breaking down. By crossing such traditional lines, workers will be motivated and able to redesign the production processes to avoid the deadening routines so common in production under capitalism. Workers who co-manage a company will learn how to communicate more effectively with each other. Reduction in the work week will free up time for the education of workers in what they need to know to intelligently govern their workplaces and coordinate those workplaces with other workplaces that produce inputs for their factories or take their factories' outputs as inputs. It will give them time to learn about the concerns of people in the region and elsewhere regarding possibly polluting consequences of their enterprise's production.
Satisfaction of communal needs as the goal. The goal is not maximizing abstract value in the search for the highest wage or profit possible for me or you as individuals. The goal is to meet human needs that our fellow human beings have. These are "communal needs" because they are not truly private needs. Yes, of course, other people have needs and they may differ from our own in specific details, but we all have needs to respond to other people's needs.
Perhaps only the smallest infants have purely private needs but even they very soon come to need the acknowledgement of others that they are contributing something positive to a project, a game, or a social encounter. There are also communal needs that can only be met by sizable numbers of people working together, such as the need to keep the shared environment interesting, aesthetically stimulating, and free of life-shortening chemicals; the need to enable movement (public transportation, a road or railroad system, ways of handling potential traffic congestion) around the community to take advantage of the opportunities various parts of it offer; the need to establish an education system to promote the integration of mind and body for everyone and to prepare people to contribute at a high level to society.
Other points mentioned in The Socialist Alternative:
Doing Away with Money
In the first period after parties promoting socialism come to power, it may be necessary to reward people according to their work contributions, but as soon as possible, this will be not from capitalists to employees, but from (socially owned and managed) stores to the workers who need what is in them.
The goal must be to replace payment in money that can be used to buy commodities with an exchange of activities. It's not a question of bartering—you do for me and I do for you— but all the members of the community contributing as needed (within their abilities) and all the members of the community receiving what they need, to the extent possible. Insofar as we are still concerned with fairness, we can keep track of contributions in terms of time. The accountancy based on money, exchange value, will be replaced by accountancy based on time.
The key reason for moving beyond money is that money serves to mystify what is going on. Reliance on money turns everything into commodities. On a lived level, people who encounter each other as buyer and purchaser end up confusing social relations with relationships between commodities. What you are in a commodifying society is a function of how much abstract value you possess or can sell your commodity for. Capitalism itself emerged from a society in which most things were becoming, or had become, commodities.
While the workweek will need to be reduced so that workers can educate themselves and be educated on how to actively co-manage their workplaces and communities, everyone who is physically and mentally able will be obligated to work.
Expanding the Commons
Lebowitz writes that
the thrust of capital is that we should pay for schools (and school supplies), health services (and medical supplies and medicines), and, indeed, everything else that it is possible to commodify. In short, nothing for people in their capacities as members of society, everything for them as owners of money. In contrast, the socialist alternative is to decommodify. Everything. (Lebowitz, 145-46)
How can the new society "make despotic inroad" on rights to property characteristic of the old society? The way, Lebowitz suggests, is by expanding the commons. "[Is there] any way other than by expanding systematically that which we are entitled to as human beings, in our capacity as members of society?" He continues:
Besides adequate schools and health services, there are many other premises for the development of people that can be made available to them as members of communities. Transit, food, shelter—all are requirements of people that could be the common property of the community. These can be introduced on a step-by-step basis in communities, and each step can strengthen both the communal institutions and the sense of solidarity within those communities. All this is part of a process of creating a new common sense, one in which expansion of the commons to provide more of people's needs in a non-commodity form as well as the taxation of capital to support the new distribution relations are increasingly seen as self-evident natural laws. (pp. 146-147)
The key [to avoiding the tragedy of the commons] is the existence of communal institutions-formal and informal arrangements by which common property is monitored and which provide sanctions for the abuse of the common interest by individuals. These communal institutions can be effective because � the individuals in these communities 'have shared a past and expect to share a future. It is important," Elinor Ostrom notes, "for individuals to maintain their reputations as reliable members of the community. (p. 147)
Expanding the commons acknowledges everyone's right to human development, and it thus produces social individuals who recognize their interdependence. But where will the resources that constitute the commons in each community come from? In [147/48] part, they will come from local workplaces as contributions to the community and from collective work within the community. And . . . they may be made available from . . . other communities. . . and the existing state. The solidarian society develops . . . by beginning at the neighborhood and community level, but it continues only by building solidarity between rich and poor communities-both within and between individual nations. And that, too, is an important part of the process of building rich human beings.