THIRD DAY (Morning)

On the first day, a debate was held on the point that every system of commodity production is a capitalist system, since mass production by masses of men results in masses of commodities. Capitalism and mercantilism will retreat together from their subsequent fields of action or spheres of influence in the modern world.

It was resumed on the second, moving from the general process to that of the present Russian economy and, holding the denounced laws of its structure as correct, it was affirmed that from them resulted the full diagnosis of capitalism, at the stage of “State grand-industrialism.”

According to our interlocutor, Stalin, this rather defined and concrete process, applied to an immense area and population, can lead to an accumulation and concentration of heavy production, second to none, without necessarily having to repeat the phases of fierce reduction to propertylessness of the poor classes enclosed in local economic circles and in the small-scale technique of labor – as in England, France, etc. – and based solely on the foregone (since 1917) liquidation of large landowners.

If this second point were reduced to the thesis that, centuries later, the in-depth introduction of the large-scale labor technique with the resources of applied science arises, in such a different universal framework, this could be a subject of separate study, in the “agrarian question” especially. The opponent may be allowed to prove that he will reach full capitalism not by carriage but by airplane; but in turn, let him confess the “direction of the motion.” We are passing to him from the ground, we poor pedestrians, the exact data of a series of bases – but even radar can go crazy.

And now a third step: the framework of world relations across the complex horizon of production, consumption, exchange; State and military power relations.

The three are aspects of one single and great problem. The first could be called the historical aspect, the second, the economic aspect, the third and concluding, the political aspect. The direction and endpoint of the research cannot but be unitary.

Products and Exchanges

It happens, self-evidently, to the head of the Russian State and party that he has to change the front of his doctrinal corrections, and of the corresponding dry reprimands to the objections of the “comrades,” whenever he passes from the economic circulation within his own circle to circulation through it. We have already noted, the reader may recall, that this point of arrival had made the vigilant ears of the West perk up. Far from singing once again the hymn to a millennial autarky, the man of the Kremlin had calmly braqué (aimed) the telescope – tomorrow, those with a studied air wondered, the rangefinder? – toward the spaces beyond the curtain; and old tales of partitioning spheres of influence, as an alternative to breakout sorties, resurfaced. A key, however, less shrill and foolish than than that of the crime of genocide or the delusion of aggression.

The manner of getting industrial goods within Russia – and connected countries – to the farmers, and rural goods to the city dwellers, crushing with passages from Marx and Engels the John Does, and when necessary, rectifying ex officio, terms, phrases, and formulas of the authors, was asserted in full accordance with Socialism. The kolkhozy sell their products “freely,” and there is no other means of obtaining them; thus, via the market, yes, but with special rules: State prices (a novelty! an exclusive specialty!), and even special “pacts” of decommodification, in that no money is given but is “carried on account” against supplies from national factories (supreme originality! downfall of the corner grocer, of the American marine who establishes the equivalence between sexual favors and packs of cigarettes, and the banal clearings of Western countries!). Actually, the Master says, I wouldn’t say de-commodification but exchange of products. We wouldn’t want it to be the translations’ fault; in short, every system of equivalents, more or less conventional, from the barter of savages to money as the universal equivalent for all, to the hundred thousand systems of bookeeping for balanced accounts, ranging from the maid’s little notebook to the complicated bank filing systems, where additions are made by atomic brains, and thousands of recruits daily swell the suffocating fleet of sellers of navel-scratching-labor-power – why were they born and why do they exist, if not for the exchange of products, and for that alone?

But Stalin wants to silence the worm that from the “balances” of equivalent exchanges comes private accumulation, and says that the guarantees are there.

Even for the most general of generals, it’s hard to stay in the saddle on such a thesis, and to parry alternately in two directions, a blow to doctrinal rigidity, a blow to revisionist concession. Elasticity of the true Leninist Bolshevik? No, eclecticism, was our answer; and then the Bolsheviks would fly into a rage.

Be that as it may, for domestic relations (whose examination does not end today nor here, as already stated), Stalin himself makes a wide reservation when he speaks of foreign relations. Comrade Notkin gets quite an earful for having maintained that the various machines and instruments built in State workshops are also commodities. They have value, their price is recorded, but they are not commodities: we see Notkin scratching his head. “This is necessary, secondly, to realize the sale of means of production to foreign States, in the interest of foreign trade. Here, in the field of foreign trade, but only in this field (italics in original), our products are indeed commodities and are actually sold (without quotation marks).”

In the text bearing the formal imprimatur, this last parenthesis appears: we think the incautious Notkin put the word “sold” in quotation marks, which to a Marxist and Bolshevik smells quite a bit. He must not have graduated from the youth classes, clearly.

In a couple of years, we will need this data: the quantum, please. The relative share of what is placed abroad and domestically. And another piece of information: is it considered desirable for this share to rise or fall? That the total product must rise to the point of vertigo, we already know from the law of “proportional” planned economy. Not knowing Russian, we suppose that the correct meaning is: production plans that increase production at a constant annual rate, in the form of the law of population growth or compound interest. The correct term we propose is this: planned development at a geometric rate. Having correctly traced the “curve,” with our little wisdom we would write this “law”: socialism begins where this curve breaks.

Today we note: that amount of even capital goods that go abroad are commodities, not only in the “form” of accounting but also in the “substance.”

There’s one. Argue for long enough, even across a thousand kilometers, and eventually you end up agreeing on something.

Profit and Surplus Value

A little more patience, and we will come to talk about high politics and high strategy: we will see furrowed brows relax, given that in those matters everyone understands instantly: is Caesar attacking? Is Pompey fleeing? Will we meet again at Philippi? Will we cross the Rubicon? Now that’s digestible stuff, because it’s “tasty.”

Another point of Marxist economics is necessary. The force of circumstances leads the marshal to the explosive problem of the world market. He says that the U.S.S.R. supports the associated countries with economic aid that enhances their industrialization. Does this apply to China and Czechoslovakia? Let’s go on. “Thanks to such rates of industrial development, we shall rapidly arrive at ensuring that these countries not only no longer need to import goods from capitalist countries but will themselves feel the necessity to export the surplus goods of their production.” The usual aside, or inclusion: if they produce and export to the West, then they are commodities. If in Russia, what are they?

The important fact, in this return with banners unfurled to mercantilism in form and substance identical to that of capitalism (if one were really to believe in the makeover of economic faces!), is that it is based on the imperative: export in order to produce more! And it is the same imperative that essentially prevails within the domestic sphere of the so-called “socialist country,” where instead it is a real import-export affair between town and country, between the famous allied classes, because even there we have seen that it arrives at the law of geometric rate, and at: Produce more! Produce more!

Here’s how much of Marxism remains standing! Because since “the workers are in power,” we must no longer – Stalin insists – use offensive formulas that distinguish between necessary and surplus labor; paid and unpaid labor! And because, as we will see, having made some concessions to the law of surplus value (which is then zoologically a theory, according to the Second Day’s terms, and not a law), from now on: “It is not true that the fundamental economic law of contemporary capitalism is the law of the fall in the average rate of profit.” “Monopoly capitalism (here we go: what did you know about this, poor Karl?) cannot content itself with average profit (which, moreover, as a result of the increase in the organic composition of capital, has a tendency to decrease) but seeks maximum profit.” While the parenthesis of the official text seems for a moment to revive the extinct law of Marx, the new one is then proclaimed: “The pursuit of maximum profit is the fundamental economic law of contemporary capitalism.”

If the flamethrower in the library goes a little further, not even the operator’s mustache will be left.

These counter-nails that are being hammered in, crooked as they are, from all sides, are intolerable. They claim that the economic laws of monopoly capitalism have proved vastly different from those of the capitalism of Marx. Then the same people claim that the economic laws of socialism can very well remain the same as those of capitalism.

The window, now!

Heroically, let’s start again ab ovo. We must remember the difference between mass of profit and mass of surplus value, rate of profit and rate of surplus value, and what the importance is of Marx’s law, meticulously exposed at the beginning of Volume III, concerning the tendency of the average rate of profit to fall. Understand, read! It is not the capitalist who tends to the fall of profit! It is not the profit (mass of profit) that falls, but the rate of profit! Not the rate of every profit, but the average rate of social profit. Not every week or with each issue of the Financial Times, but historically, in the development traced by Marx up to the “social monopoly of the means of production” in the claws of Capital, whose definition, birth, life, and death are written.

If this much is grasped, it will be possible to see how the effort, not of the individual corporate capitalist, a secondary figure in Marx, but of the historical machine of capital, of this corpus endowed with vis vitalis and soul, to struggle in vain against the law of the falling rate, is precisely what makes us conclude on the classical theses that Stalin, amid Western bewilderment, deigns once again to embrace. First: the inevitability of war between capitalist States. Second: the inevitability of the revolutionary fall of capitalism everywhere.

This gigantic effort, with which the capitalist system struggles not to sink, is expressed in the slogan: produce in crescendo! Not only not to pause but to mark every hour the increase of the increase. In mathematics: curve of geometric progression; in symphony: Rossinian crescendo. And to that end, when the entire fatherland is mechanized, export. And know well the lesson of five centuries: trade follows the flag.

But this, Dzhugashvili, is your slogan.

Engels and Marx

For the demonstration, once again, we must return to Marx and Engels. Not, however, to organic, complete texts, written in one go, which each of them carved in the fullest vigor and direct impetus of one who has no doubts or gaps and sweeps obstacles from their path without any collision being felt. It is a question of the Marx, whom the testamentary executor gives an account in the almost dramatic prefaces to the second volume of Capital (May 5, 1885) and the third (October 4, 1894). First, it is a matter of justifying the state of the immense mass of materials and manuscripts (ranging from chapters in their final form to scraps of notes, notebooks, sketches, illegible abbreviations, promises of future research, and even pages uncertain and faltering in style) with Marx’s declining health, with the inexorable effect of repeated relapses of illness that forced him into pauses in which anxiety devoured his liver and powerful brain far more than the rest could heal them. Between 1863 and 1867, the labor furnished by that human machine was incalculable, and among it, the casting in a single fusion of steel the first volume of the greatest work. Already in 1864‑65, the illness had given the first troubles, and of its devastations, the unerring eye of the great helper marks the traces in the unpublished fascicles. But then the same exhausting work: deciphering, rereading, re-dictating, reordering the dictated text, giving order to the material, with the stubborn decision not to compose anything of his own, even overcame the resistance of the robust Engels himself: his generous eyes had watched too long over the pages of his friend, and a worrying weakness of eyesight condemned him for several years to reduce his personal work, forbidding him to write by artificial light. Not defeated, not discouraged, he offers his humble and loyal apologies to the Cause. Nothing else had been given him to do. With modesty, he recalls all the other sectors in which he “alone” has borne on himself all the weight. And his death follows a year later.

This is not for embellishment or effect. It is meant to highlight that the demand for technical fidelity, which dominates the compiler, has almost entirely deprived the two books those chapters of periodic synthesis and overall vision, which blaze forth in the one written in Marx’s lifetime. To Engels’s pen are owed, such overviews, neither few nor of little worth: but under Marx’s name, he did not want to extend them, and limited himself to analysis. Had it not been so, certain dual readings (today and for half a century) would be a vain effort, and for example, the sad legend that in the last book Marx had retracted something; and some want this in philosophy, some in economic science, some in politics, according to their personally confused tastes. As many explicit references and connections exist between the first volume and the early works or the Manifesto, so too between it and the later writings; and a thousand passages from the letters reaffirm it.

Less than that of Engels is this a place for analysis. We only note that in one passage Marx says, with one such overview, why he works so much on that law of the falling rate. Well, Engels hesitates to reproduce the passage, he frames it in square brackets because, although it was drafted according to a note in the original manuscript, it surpasses, in some developments, the materials found in the original…

[“The law of the increase in the productive power of labor does not, therefore, hold in an absolute way for Capital. This productive power is increased by capital NOT BY MEANS OF A SIMPLE REDUCTION OF LIVING LABOR IN GENERAL, but only when it saves, on the paid part of living labor, more than has been added to it of past labor, as we have briefly hinted in Volume I, XII, 2 (value transmitted from the machine to the product: quite topical, isn’t it?). Here the capitalist mode of production falls into a new contradiction. Its historical mission is to develop in an absolute geometric progression (sic!) the productivity of human labor. Now, it fails in this mission when it places, as in the present case (resistance of the capitalist to introduce higher-yielding machines), obstacles to the flourishing of productivity. It thus provides fresh evidence of its senility and shows that it is truly no longer of our time”]

Indifferent to the Pharisaical objection that after another sixty years of (stinking yet strong) capitalism, instead of removing it, the square bracket should have been tripled for the usual imprudent Marx, we note the usual programmatic theses that Marx loved to regularly intersperse with acute and profound analyses. Capitalism will collapse. And post-capitalism? Here it is: given that the productive power of each unit of labor increases, let us not increase the mass produced, instead, let us decrease the labor time of the living. Why does the West not want this? Because the only way to escape the “law of the falling rate” is that one (to overproduce). And as for the East? Ditto. But justice demands it be said that over there, it is youthful capitalism.

Rate and Mass

It will be appropriate to resume, avoiding both numerical examples and algebraic symbolism, the deduction of the law, which, not yet having lost the light of our eyes, we are not inclined to retire; maintaining brevity and lightness, as much as possible, in the tone of an apologue. “If commodities could speak,” says the immense Karl in that jewel of a paragraph, “they would say: our use-value may certainly interest men; we, insofar as we are objects, laugh at it. What interests us is our value. This is proved by our mutual relation as things of sale and of purchase. We mutually regard each other only as exchange-values.”

We have therefore brought for you the microphone to the square where commodities meet, coming from Russia on one side, and from America on the other. From above, it has been admitted that they speak a common economic language. For both, it is sacrosanct – and if not, they would not have come so far – that the market price they aspire to must prevail over the cost of production. In both countries, they aspire to produce them at low cost and sell them at a high price.

The commodity that comes from the country with a capitalist theory speaks: I am made of two parts, and you can see only one joint. The cost of production, the living and burning advance of the one who produced me, and the profit, which added to the first gives exactly the figure below which, don’t delude yourselves, I will not betray my principles. I settle with a modest profit to encourage the buyer; you can verify the rate of it with a little division: product divided by cost of production. If I cost ten and for just eleven I let myself be possessed, will you be so stingy as to find the ten percent rate exaggerated? Come on, gentlemen, etc.

We pass the microphone to the other commodity. Thus it speaks: Among us, we follow Marxist economics. In me, you see (I have no reason to hide it) two joints; I am made of three and not two parts. In the other, the trick is there but not visible. To produce me, the expenses made are of two kinds: raw materials, consumption of instruments, and the like, which we call constant capital (invested in me) – wages of human labor, which we call variable capital. The sum forms the cost of production of the other young lady who spoke first. Also for me, add a balance, benefit, profit, which is my third and last piece, and which is called surplus value. For the constant part of the advance, we ask nothing in addition because we know that it is incapable of producing any additional value: this is all in labor, or the variable part of the advance: you will therefore want to verify then, the rate, not of profit, but of surplus value, with the simple division of that surplus value by only the second part of the capital spent on me, that on wages.

The common buyer responds: go tell it to the doorman: what matters here is the total cost to my purse of both of you, that is, your respective selling prices.

A squabble arises between the two commodities, each claiming to want to make a less lucrative deal, contenting itself with a derisory rate of profit. Since neither can reduce it to zero, the one that really has the lower cost of production wins, as even Stalin invokes at every turn. For the constant part, the raw materials must be present in the necessary quantity and quality. The dispute will, in the two exporting camps, revolve around the variable part. There is the obvious method of paying the worker less and making them work more, but above all, there is productivity of labor, linked to technological improvements, the use of more profitable machines, the more rational organization of the factories; and here both sides show off flashy photos of vast installations, boasting of having increasingly lowered, for the same mass produced, the number of workers employed. One thing that matters even less to the purchasing agent on the contested market, is knowing in which case the workers are better paid and treated.

We do not believe it will be painful for the reader to note the difference between the two methods of value analysis. The rate of surplus value is always much higher than the rate of profit, and this all the more as constant capital prevails over variable capital.

Now, Marx’s law on the fall of the average rate of profit considers all profit, that is, the overall benefit on the production in question, before establishing to whom such profit will go (banker, industrialist, landowner). Marx in Chapter 13 of Volume III reiterates having treated the law “by design” before moving on to the distribution of profit (or surplus value) among the various social types, because the law is true independently of such distribution. It is therefore true even when the State acts as landowner, banker, and entrepreneur.

The law is founded on the general historical process, denied by none, apologized for by all, that with the application of increasingly complex instruments, tools, machines, devices, technical and scientific resources to human labor, its productivity grows unceasingly. For a given mass of products, fewer and fewer workers are needed. The capital that had to be put out, invested, in order to have that given mass of products in hand, continuously changes what Marx calls its organic composition: it contains more and more material capital and less and less wage capital. Few workers suffice to give an enormous “added value” to the materials worked, as they can work much more of them than in the past. This is also agreed upon. And then? Even assuming that capital, as is often the case (though this is not a necessary Marxist law, as it is for the operetta revolutionary), increases exploitation, increases the rate of surplus value by paying workers less, the surplus value and profit obtained will rise, but given the much greater increase in the mass of materials purchased and worked through that employment of labor alone, the rate of profit will always fall, as the rate is given by the ratio of profit, grown somewhat, to the entire advance for wages and materials, grown, for the second part, enormously.

Does capital seek maximum profit? Certainly, it seeks and finds it, but it cannot prevent the rate of profit from falling in the meantime. The mass of profit increases, since the mass of the population is larger, the proletariat more still, the materials worked more and more, the mass of production greater and greater. Small capitals divided among many at the beginning and invested at a good rate, in the end, very large capitals, divided among very few (and here the effect of concentration parallel to accumulation), invested yes at a fallen rate, but with the result of the incessant rise of social capital, social profit, average enterprise capital and profit, up to dizzying heights.

Therefore, there is no contradiction to Marx’s law on the falling rate, which could only be stopped by decreased labor productivity or a degenerated organic composition of capital, things against which Stalin fires with the heaviest artillery, things upon whose ground he desperately aims to surpass the adversary.

Nineteenth and Twentieth Centuries

In the last issue of this paper, some sobering figures from a capitalist source on the American economy appeared. Let us take from them the confirmation of the law established by Marx and denied by Stalin. In 1848, says the statistics, at the birth of industrial capitalism in the United States, out of 1000 units of value that were added in production to the raw material, 510 went to workers as wages and salaries, 490 to the bosses as profits. Avoiding details on depreciation, general expenses, etc., the two figures precisely give variable capital and surplus value: their ratio, or rate of surplus value, is 96 percent.

What would have been, according to bourgeois reasoning, the rate of profit? We should know the value of the materials transformed. We can only surmise it, assuming that in an infant industry, each worker on average transforms a value about four times the wage. The material will represent 2000 against 510 of wages and 490 of profits. Total production cost 2510. High profit rate: 19.5%. Note, however, that it is always below the rate of surplus value.

After the great cycle of hallucinatory ascent, in 1929, out of 1000 units of value added to the product, workers receive no more than 362, and capitalists 638. (Do not start equivocating: up until Black Friday, wages had risen and the workers’ standard of living had also risen significantly, this does not contradict). Here then, the rate of surplus value or of exploitation has greatly increased: from 96% to 176%. (If after using the vocal cords for a lifetime, there is still someone who does not understand that one is more exploited even while having more money and eating better, let him go to bed: he does not understand the effect of the increased productivity of labor power that resides in the worker’s carcass and ends up in the purse of the cuckolded bourgeois).

Now let’s try to evaluate the entire production. I admit (with the certainty that comes to those with some familiarity in constructing syntheses, always being cautious against their own thesis, for the benefit of some hair-splitter in fifteen who amuses himself checking things over) that the ability to process materials has, thanks to machinery, increased tenfold, with equal employment of labor, from 1848 to 1929. So, if with 362 given to workers instead of 510, the two thousand units of materials would have dropped to 1440, here they rise instead to 14,400. With the total invested expenditure at 14,762 lire, the known profit of 638 is 4.2%. Here is the fall in the rate of profit! Don’t just tip your hat to Marx, avoid pulling out your handkerchief to dry Uncle Sam’s capitalist tears! You may have guessed that we were looking for the rates, not the masses. To get an idea of the overall production figures, albeit not with the actual value but with a figurative comparison between the two eras, we’ll note that the two blocks that for 1848 give a gross product 3000 and for 1929 a gross of 15,400 refer to groups not very dissimilar in the number of producers. But in the eighty-year period, the worker population has at least increased tenfold, always using round figures, and therefore the total product can well be valued at 154,000, about 50 times that of 1848. Although the average profit rate of capitalists has fallen to 4%, the mass of profit has increased from 490 to 6380: thirteen times as much. It is quite certain that our figures are too conservative; the essential point was to reiterate that American capitalism obeyed the law of the falling rate and ran the race for maximum profit. Stalin cannot discover new laws for it. Nor have we accounted for concentration; let’s give this an index of ten, and the average profit of American industry will have (as mass) multiplied by 130. Here is the rush towards crisis, here are the confirmations of Marx.

We will indulge in another, even more hypothetical calculation. The American working class takes power with a situation similar to that of 1929: we repeat: 14,400 materials in work, 362 labor, 638 profits, 15,400 total product.

And then the workers read Marx and use “the increased productive power of capital by the simple reduction of living labor.” A decree of the revolutionary committee crushes production to 10,000 (where to cut… we’ll see then, just think that we will no longer have any more presidential elections or the like…). On this lot, the worker will be content to add to his 362 wages not the whole profit (which is gross of taxes and general services) but only a little, for now, bringing it to 500. For the general maintenance of public facilities and State administration, we even deduct more than the 638 of the former capitalists, namely, 700. Doing the math, there are only 8800 materials worked instead of 14,400, and if the number of workers is the same, each one’s working day drops by 62%, roughly from 8 to 5 hours. A nice first step. If we calculated hourly remuneration, we would see we have raised it by 120%: from 45 to 100.

It still wouldn’t be socialism. But while Stalin, where he sees in socialism a new law, purports to identify it with the capitalist one, that with increased labor productivity, production increases, we oppose him with the inverse law: with increased labor productivity, effort decreases, and production either remains constant or, after having crushed its capitalist branches of poison and blood, begins to regrow along a gentle curve, with human harmony.

As long as the call for the frenzied effort to produce, echoes, it can have no other meaning than that of exasperated resistance to the Marxist law of the fall in the rate of profit. Because for the rate to fall, but the mass of surplus value and profit not to begin to fall as well, the progressive-hangman rhetoric intervenes and cries out to a lost humanity: work more, produce more, and if, given their remuneration, the domestic workers would not be predictable buyers of the surplus product, find ways to export by conquering foreign markets for our consumption! This is the circle of hell of imperialism, which has found its inevitable solution in war, and its provisional way out from the supreme crisis in the reconstruction of an entire centuries-old apparatus of human labor destroyed.

All these same paths are followed by Stalin: reconstruction of the devastated areas, construction first of capitalist equipment in vast countries, and today the march towards markets. Such a march, whoever undertakes it, is done in two ways: low cost of production – war.

We shall close this exposition of Marx’s basic law with a new statement on capitalism that he presents in the Appendix – and which, as always, serves as a communist social program (end of Chapter 15, Volume III).
“Three cardinal facts of capitalist production:
“1. Concentration of the means of production in the hands of a few individuals. These means of production thus cease to appear as the property of the immediate producer and are transformed into social powers of production. At first, these powers are, it is true, private property of the capitalists who pocket all the benefits.”

Then… Marx does not write this, but it means that such secondary personal figures can disappear, and Capital remains a Social Power.
“2. Organization of labor as social labor, by means of cooperation (associated labor), division of labor, and the link between labor and natural science.
“In these two senses, the capitalist mode of production suppresses, albeit in different forms, private property and private labor.
“3. Formation of the World Market.”

As usual, the Thread has led where it was meant to lead. Let the reader know that the day has not passed but only reached noon. A morning perhaps harsh, heavy, like a Wagnerian symphony.

Will the closing afternoon be an easier song along the rugged path? Perhaps. “L’après-midi d’un faune” (“The Afternoon of a Faun”)? The Faun could only bear the coarse features and menacing movements of the sanguine Mars.