The Social Totality
Addendum to ‘On Credit’
(Note: This is a supplementary note to our previous article)
According to the Labour Theory of Value, profit obscures surplus value by spreading the apparent source of value across the total capital advanced rather than identifying it exclusively in variable capital, this mystification itself being a fundamental condition emergent to capitalist relations of production. The displacement of profit by credit, in the classical Marxist framework, would represent a change in form or an iterative development of an already unreliable surface signal, with the credit system extending and intensifying a mystification already constitutive of capital's self-presentation. However, rather than taking the simple one-sided interpretation of administered credit as mere iteration, the displacement of profit by credit as the dominant allocative signal represents both a form of the same fundamental indeterminacy latent to capital's relationship to its own productive basis, and at the same time a qualitative transformation at the level of the social totality, revealed acutely in the transformation of the content of the wage-form discussed in the article.
(Before proceeding, it’s useful to cover some familiar ground. Please bear with as we get that out of the way)
In Marx's formulation from Capital Vol. III, the rate of profit is
p' = S/(C+V)
where S is the mass of surplus value, C is constant capital, and V is variable capital. The rate of surplus value is defined as
S' = S/V
being the ratio of the mass of surplus value S to variable capital V, from which S = S'V follows as a direct rearrangement, so that p' can also be expressed as
p' = S'/(C/V + 1)
As capitalist development proceeds, the organic composition of capital C/V rises. More machinery and raw materials are deployed relative to living labour, because this is how individual capitalists gain competitive advantages. But since only living labour generates surplus value, a rising C/V means that surplus value grows more slowly than total capital advanced C+V, and given that surplus value can only be accounted for at the aggregate level, if the rate of exploitation remains constant the rate of profit must fall, and fall in general, at the level of the social totality.
The problem lies in the fact that the same technological advance that raises C/V also raises productivity, which means it necessarily also affects S'. When a capitalist introduces labour-saving machinery, the productivity of the remaining workers rises, potentially allowing them (in formal terms) to ‘produce more surplus value’ per unit of time. The question then becomes: does rising productivity raise S' fast enough to compensate for rising C/V, or does C/V always ‘win out’?
A rising C/V that represents investment in productive constant capital, machinery and science that expands the productive powers of labour, will necessarily manifest differently at the systemic level from a rising C/V that represents investment in socially wasteful expenditure, speculation, and capitalist consumption. For Marx, the categorical identity of a particular object is not intrinsic to the object and is instead determined by the social totality. If the value-category of any particular object within the productive process is only determinable from the standpoint of totality then, for instance, firm-level accounting cannot establish whether its product represents genuine surplus or mere simple reproduction. At the level of the firm, the capitalist only receives redistributed shares of aggregate surplus value.
In the classical schema, the tendency of the rate of profit to fall operates against countervailing tendencies, meaning that the outcome at any historical moment is dependent upon the balance of these various tendential forces. However, this schema as presented leaves political economy without a determinate measure of productive advance, something Marx identifies but doesn’t work to resolve into a single formula, being beyond the scope of Capital as a project. The question of what the measure would be is therefore left an open question, although one which Marx does provide the outline for throughout his work.
The framework of a solution is postulated in the Grundrisse machines fragment that, by the unfolding of material development itself, production “calls to life all the powers of science and of nature, as of social combination and of social intercourse, in order to make the creation of wealth independent” that the “development of fixed capital indicates to what degree general social knowledge has become a direct force of production,” with objectified knowledge itself taking a decisive significance over and above labour time spent. The measure of productive advance at higher qualitative levels of development is then the relationship between the degree of scientific-technological capacity in relation to the expansion of social reproductive wealth across successive epochs, wherein “the human being comes to relate more as watchman and regulator to the production process itself” (we can map this development within the history of the capitalist mode of production in quantitative terms according to whether a given increment of C generates a proportionate or more-than-proportionate expansion of S' sufficient for expanded reproduction, over time and at the level of the social aggregate, achieving higher and higher states of the objectification of knowledge and the technical extension of the intellect towards an eventual qualitative productive shift which renders the value-categories C and S' obsolete. This formulation provides the framework for a transitional economic program, something which utilises categories of the value-form in recognition of their transient, inessential character at higher qualitative phases of development).
On one level, the credit system can be seen to merely manage, absorb, and redistribute the social product generated by rising productivity in a way that prevents the ballooning of socially unnecessary labour from becoming actual unemployment, at the cost of directing an increasing proportion of social labour toward activities that do not contribute to the net social surplus available for expanded reproduction. At the same time, in directly sustaining non-value-generating enterprises, the credit system prevents a resolution through the conversion of socially unnecessary labour time into leisure time. The credit system is therefore both the management of a tendency generated elsewhere and also a determinate mechanism that gives that tendency a definite and reproducible form.
Whether contemporary intellectual labour which does not presently or tangibly contribute to expanded reproduction may nonetheless, in increasing the cognitive capacity of labour over time, contribute to the further cultivation of expanded reproduction in future epochs. This is, of course, not a question that can be settled from the standpoint of any single productive period. The general intellect accumulates across generations, the contribution of a given epoch's intellectual labour to the productive powers of subsequent epochs is not measurable in the period of its inception or empirical development. This is structurally analogous to the temporal extension of the credit relation, in which anticipated future valorisation underwrites present investment; further than this superficial equivalence, it is itself the more fundamental form, of which credit is an institutional approximation operating within the inverted logic of capital. Where credit anticipates valorisation within the existing circuit, the general intellect develops the cognitive and scientific conditions for qualitatively new forms that exceed existing circuits altogether. The temporal horizon of genuine productive advance is thus the arc of social-scientific development, across which the general intellect constitutes itself, the foundational constitutive logic for the vector of socialisation; the revelation of a conscious, associative mode of production from its unconscious, pseudo-competitive capitalist form.