In the Tracks of Marx’s Capital

Table of Contents

1. Frontmatter

2. Chapter 1. Introduction

   Sungur Savran, E. Ahmet Tonak

   Abstract

   This introductory chapter is an attempt to present the book and its authors to the reader in a manner consistent with the philosophical approach that underlies the economic analysis to be presented in the main body of the book, i.e. historical materialism. It recounts the historical destiny of Marxism within the last half-century in a nutshell by referring first to the intellectual atmosphere that was born all around the world in the context of the revolutionary atmosphere of 1968 and indicates how, over the subsequent decades, this was replaced by a thoroughly reactionary conjuncture in both the material world and the universe of ideas. The authors having been shaped, it is pointed out, by the fight for emancipation, first and foremost class struggles, that marked the earlier period, have remained unswervingly loyal to the Marxist perspective up until the present. The economic analysis presented to the reader in this collection is thus firmly based on the pathbreaking methodology that Marx developed in his Capital. The Introduction also offers an overview of the contents of the book, explaining the relations between the four parts respectively on the theoretical framework that informs the analysis in the following parts (Part I), the innovative empirical work that has been developed internationally within the last half century (Part II), examples of how Marxist political economy sheds light on contemporary twenty-first-century capitalism (Part III), and the most recent, though probably not the last, attempt to discard Marx’s value theory, i.e. neo-Ricardianism (Part IV).

3. Capital: An Overview

   1. Frontmatter

   2. Chapter 2. Grundrisse: An Introduction to Capital in the Making

      E. Ahmet Tonak

      Abstract

      This essay is an introduction to one of Marx's most important texts on political economy. Since it was not written for publication, there is a need to clarify the purpose and the theoretical status of the Grundrisse, especially in relation to Capital. The essay discusses the historical context and the content of the text in detail and summarizes Marx’s main arguments.

   3. Chapter 3. Capital: An Introduction to the Three Volumes

      Sungur Savran

      Abstract

      This chapter introduces Capital in its entirety to the reader who is a newcomer to the book, but is somewhat knowledgeable in the history of ideas and, in particular, Marxism. It starts by explaining how Capital aims to provide a theoretical analysis of capitalism but at the same time a basis for revolutionary activity under this form of society. It then discusses Marx’s work as a critique of political economy and briefly explains the dialectical method that Marx uses in the book. After defining the subject matter treated by Marx, it proceeds to a careful discussion on the architecture of Capital, thus making it possible for the reader to situate the different volumes of the book in relation to each other. Having touched upon the relevance of the book to the realities of the twenty-first century, the article finally summarises the concept of the “laws of motion of capital” according to Marx.

   4. Chapter 4. Critique of Political Economy

      Sungur Savran

      Abstract

      This chapter serves two distinct purposes. On the one hand, it introduces the reader to the general situation of economic science when Marx ascended the scene with Volume One of Capital, thus situating him in the history of economic thought. On the other hand, it dwells on the radical difference, despite the obvious continuities, of Marx’s understanding of capitalism in relation to the other schools of economic science, in particular the school known as the Classical Political Economy of Adam Smith and David Ricardo. It insists that the concept of “critique” in this context cannot be reduced to certain disjointed and partial criticisms Marx otherwise levels at the classicals but should be understood as a wholesale criticism of that school, and a fortiori of other more superficial schools, of economic analysis. Starting from the historical nature of the capitalist mode of production, Marx then deals with the categories of capitalist society, left unquestioned by the classicals, but a main focus of attention for Marx himself as the embodiment of the specific relations of production between classes under capitalism. Furthermore, Marx’s concept of “critique” also covers the practice of criticising capitalist society and thus has a practical revolutionary aspect as well.

   5. Chapter 5. Productive and Unproductive Labour: An Attempt at Clarification and Classification

      Sungur Savran, E. Ahmet Tonak

      Abstract

      This chapter starts out by trying to demonstrate why the distinction between productive and unproductive labour (PUPL) is crucial, both for the analysis of the trajectory of capitalism in general and for an understanding of the peculiar features of turn-of-the-millennium capitalism. This section brings the categories PUPL up to date in practical terms by surveying a panoply of different branches of activity in the modern economy. Subsequent sections provide the necessary clarification about the distinction between PUPL by focusing on the concepts of “productive labour in general” and “productive labour for capital” and attempt to classify all major types of labour in capitalism accordingly. The essay also deals with thorny questions about the status of labour in the services sector and state provision of social services. The last section addresses some common criticisms found in the literature concerning Marx’s distinction between productive and unproductive labour.

   6. Chapter 6. Capital: The Book of Communism

      Sungur Savran

      Abstract

      This is an article written for the specialist on and the advanced student of Marx’s work. The main focus is to show that, far from being exclusively an analysis of capitalism, Capital really comes into its own by showing how the main law(s) of motion of capital inexorably lead humanity towards the threshold of communism by laying the technological basis that makes a classless society not only possible but also necessary. A parallel argument is that this progression towards communism is intertwined inseparably with Marx’s dialectical method and its application to the entire structure of Capital. A third strand of argument is the emphasis on how the advent of communism in Marx is entirely woven into the fabric of the development of capitalism, finally reaching a threshold when the individual interests of each person can be satisfied much more fully on the basis of the common property of the means of production, thus relegating the pursuit of self-interest in the narrow sense of the term to history. Hence it is shown that the struggle for a communist society is not a self-sacrificial moral act, but one totally based on the radical transformation of the material-practical world.

   7. Chapter 7. Marx’s Capital in Turkey

      Sungur Savran, E. Ahmet Tonak

      Abstract

      The purpose of this essay is to reconstruct the history of the dissemination and reception of Marx’s Capital in Turkey. The translations of Capital into Turkish, including attempts that remained uncompleted, are discussed, with detailed information on the year of publication, name of the translator etc. On that basis, an attempt is made to systematically trace the dissemination of all three volumes of Capital. The essay also evaluates the importance of Capital in terms of the overall reception of Marx in Turkey and its impact on the development of Marxist theory in Turkey. Finally, a brief outline is provided of the different generations of Marxist economists who have based their overall economic analysis on the methodology of Capital.

4. Operationalising Capital: Measuring Surplus-Value and the Welfare State

   1. Frontmatter

   2. Chapter 8. Clarification and Application of the Category Profit on Alienation

      Alper Duman, E. Ahmet Tonak

      Abstract

      This article presents profit on alienation (POA) as one of the sources of profit in capitalist economies. In addition to identifying and situating POA among other profit flows, we have attempted to operationalize it in the real estate and finance sectors. In the empirical part of the article, we estimate POA in those sectors in Turkey for the period 2010–2019. The extent of estimated profits based on POA in those sectors is not insignificant. These findings confirm our position that utilising POA in exploring capitalist dynamics would be a fruitful endeavour.

   3. Chapter 9. Are Unproductive Workers Not Exploited?

      Yiğit Karahanoğulları, E. Ahmet Tonak

      Abstract

      This essay clarifies the relationship between the exploitation of workers and the distinction between productive and unproductive labour. It first defines the meaning of exploitation based on the Marxian labour theory of value and then restates the criteria to distinguish productive and unproductive workers. The latter theoretical clarity provides the ground on which the sole criterion of being exploited becomes the appropriation of surplus labour—even of that of unproductive labourers. The latter part of the article empirically estimates rates of exploitation of those unproductive workers in Turkey’s government, finance and trade sectors.

   4. Chapter 10. The Net Social Wage , 1980–2019

      Yakup Karabacak, E. Ahmet Tonak

      Abstract

      This essay conceptualises the capitalist state’s taxation and expenditure activities in Marx’s circuit of capital. It also empirically shows how the net social wage has evolved in Turkey in the period 1980–2019 and in what direction it has influenced the rate of surplus-value. The essay’s empirical findings demonstrate the utter failure of the pseudo-welfare state of Turkey to ameliorate income distribution. Hence, the article contributes to demolishing the myth that the Islamist party AKP, in power since 2003, is pro-poor and pro-labour, and that its fiscal policies have been consistent with its glorified Islamic values and its self-ascribed image of an antipoverty stance.

   5. Chapter 11. Recasting Input-Output Networks in a Marxist Framework

      Alper Duman, E. Ahmet Tonak

      Abstract

      This study shows the differences between structural changes in various economies by treating I-O (Input-Output) tables as weighted directed networks and applying the best suited centrality measure to those networks. This is important especially in the context of the ongoing global economic crisis, which continues to be a challenge for economists. The theoretical premise is that the Marxian distinction between production and non-production activities is essential to understanding the dynamics of capitalism. Therefore, to explore the structural changes one must include a sectoral reclassification based on such a distinction. The essay argues that network analysis of reconstructed I-O tables in a Marxian framework reveals different and important patterns across countries, for example, United States, Germany and Spain.

5. Capital and 21st Century Capitalism

   1. Frontmatter

   2. Chapter 12. Does the Digital Sector Produce Surplus-Value? The Case of Facebook

      E. Ahmet Tonak

      Abstract

      This article shows that the digital economy can, as opposed to the opinion of many, be analysed on the basis of Marx’s theory of surplus-value and profit. What we show through a study of the political economy of Facebook is that the product produced by the company in question is a commodity just like others. Moreover, the surplus-value produced by the productive workers of Facebook is the main source of the profits of the company and the wages of its unproductive workers.

   3. Chapter 13. Lean Production and Flexibility: The Highest Stage of Taylorism

      Sungur Savran

      Abstract

      This chapter aims at a wholesale criticism of the entire set of theories that claimed after the 1980s that the world capitalist economy had entered a new stage that could be characterised as “post-Fordist”, a setup that involved “flexible specialisation”, “Toyotism”, “flexibility”, “total quality management” and a transition towards the “flat organisation”. Being very much in the vogue in the last two decades of the previous century in mainstream business literature, these concepts were taken over by many left-leaning authors together with the ideological baggage they involved, implying that somehow flexibility was equally good for the worker as it was for the capitalist, that the new setup eliminated age-old ills such as deskilling, excessive specialisation, and the division between mental and physical labour, that the new system was good for both classes. The chapter is a systematic attempt to show the vacuity of such ideologically loaded claims. It demonstrates that the present methods of labour process control are but even more brutal forms of the subordination of labour to capital. In the process it demystifies the concept of “flexibility”. It also aims to discard the concepts of “Fordism” and “post-Fordism”, by now almost of axiomatic status, as baseless fictions.

   4. Chapter 14. “New” Imperialism: Moribund Competitive Capitalism

      E. Ahmet Tonak

      Abstract

      This essay starts with an observation that new theories of imperialism mostly focus on its political manifestations (such as wars and military invasions) or on the economic consequences of capitalistically imperialistic relations (such as inequality and poverty). Without denying the political significance and urgency of developing analyses of the political dominance of the advanced capitalist countries over the less advanced ones, the focus here is on the role played by uneven economic relations between North and South in constituting the basis of political domination. It is recognized that the sources of domestic and international unevenness are built-in characteristics of capitalist development for which the profit motive is fundamental. On the basis of the latter premise, the mechanisms of value transfer must be viewed as the means of reproducing unevenness among capitalist economies sustained by the global processes of capital accumulation.

   5. Chapter 15. The World in Economic Crisis: The Twilight of Capitalism

      Sungur Savran, E. Ahmet Tonak

      Abstract

      This chapter is the pinnacle of our effort to show the relevance of Capital for the world in the twenty-first century. Its subject matter is the state of the world economy in the aftermath of the so-called “global financial crisis” of 2008–2009. We characterise this as a Great Depression in the lineage of the 1873–1896 Long Depression and the Great Depression of the 1930s. We contend (1) that great depressions are peculiar to the epoch of the socialisation of labour and of the means of production, leading to an ever-growing incapacity of the capitalist mode of production to regulate the economy through the market and private appropriation in the face of the socialisation of productive forces and (2) that they are thus an expression of the historic decline of capitalism. We first develop a survey of economic theories and show the superiority of Marxist theory in the comprehension of crises under capitalism. We then delve into different Marxist theories of crisis. We rely on the law of the tendency of the rate of profit to fall for understanding the post-2008 crisis. The last sections establish the link between this great depression and the historical decline of capitalism.

6. Marxism Versus Neo-Ricardianism

   1. Frontmatter

   2. Chapter 16. The Controversy Between the Neo-Ricardians and the Marxists

      Sungur Savran

      Abstract

      This article was written as a contribution to the Elgar Companion to Marxist Economics, edited by Ben Fine and Alfred Saad-Filho (2012). It is an overview of a very complex set of debates between, on the one hand, the so-called neo-Ricardians and, on the other, Marxists that took a more “orthodox” attitude on the validity of the Marxist theory of value. This controversy raged among left-wing economists throughout the decades of the 1970s and 1980s. Although it has now subsided, each side going their way without any conclusive results commonly acknowledged, it is nonetheless important for several reasons. The most important is that it is full of lessons as to how the Marxist critique of political economy should be taken up. It became clear, in some of the more “orthodox” Marxist interventions, including ours, that this critique is much broader in scope than any school of economics can cover and thus the abandoning of the Marxist theory of value and surplus-value would lead to a loss of immense insights into the dynamics of capitalism. The conclusion of our overview is that, in fact, there is no need to abandon the Marxist theory of the capitalist economy.

   3. Chapter 17. The Negation of “Negative Values”

      Sungur Savran

      Abstract

      This article provides a rebuttal of one aspect of the neo-Ricardians’ claim that Marx’s theory of value is inconsistent. Out of the several areas in which this claim of Marx’s inconsistency was advanced, the one in which no one, to our knowledge, refuted the neo-Ricardian criticism was the intriguing concept of “negative values”. Ian Steedman, the main spokesperson for neo-Ricardianism, had put forward a set of equations which generated negative values under certain assumptions in the framework of the Marxist theory of value. As “negative values” were pure nonsense, Marx’s theory was to be consigned to history. This article shows, following a very strict logical chain of arguments, that Steedman’s equations simply did not represent Marx’s procedure for determining values under the circumstances defined by Steedman. Thus “negative values” were a fiction and at least on this score Marx’s theory of value could not be deemed to be inconsistent.

   4. Chapter 18. On the Theoretical Consistency of Sraffa’s Economics

      Sungur Savran

      Abstract

      This piece is an entirely original challenge to Piero Sraffa’s economic theory. In the overall debate, the initiative always remained with the neo-Ricardians as they were the ones to attack and the Marxists to defend. No one else has, to our knowledge, ever questioned the internal consistency of Sraffian theory. There was almost a silent understanding between the two sides that Sraffian theory was impeccable on its own grounds. This article forms an exception to that universal consensus. It argues that whether distribution is fixed in terms of the wage or the rate of profit, and further on whether the wage itself is fixed in physical terms or as a price, in all three cases there is nothing that would act to make the wage rate to be consistent with the survival of the workers, a condition that would be expected of any economic theory but also shown textually here to be one of the assumptions of Sraffa’s own system. Thus, Sraffa’s system is internally inconsistent. This deals a serious blow to the claim of the neo-Ricardians that Sraffa’s theory is superior to that of Marx because while it is itself perfectly consistent, Marx’s is contradictory through and through.

   5. Chapter 19. Confusions Concerning Sraffa (and Marx): Reply to Critics

      Sungur Savran

      Abstract

      The article that was the basis for the previous chapter became a target for criticism from a series of authors. Among the critics were Ian Steedman, the single most important spokesperson for the neo-Ricardian school after publishing his Marx After Sraffa in 1977, and John Eatwell, a world-renowned economist. The criticism made was different in the two cases: Steedman reminded us that Sraffa’s fixing of the distribution variables really gave primacy to another, fourth alternative. Eatwell, on the other hand, admitted that our argument was “trivially correct” but then it thereby condemned all theories, including that of Marx, based on the concept of surplus to inconsistency. In our reply, reproduced here, we showed that Steedman’s “fourth alternative” is no more immune to our criticism than the former three earlier criticised. As for Eatwell’s generalisation of our criticism to all surplus theories including Marx’s, we showed that Marx’s theory of the surplus (i.e. surplus-value under capitalism) is different from all others who use the concept of surplus in that the capitalist here first makes the worker produce the surplus before appropriating it, which gives a built-in immunity in Marx’s case against the kind of inconsistency that afflicts Sraffa’s economics.

7. Backmatter