I picked up David Harvey’s Marx, Capital, and the Madness of Economic Reason a few months ago. I’ve struggled to make progress. The book is not terribly long — only 200 pages or so — but I’ve twice plodded through the first 50 pages only to give up shortly after. Harvey is a well-respected academic and interpreter of Marx, and his book has glowing reviews from the Financial Times and The Guardian, among others. It’s enough to make me think, if only briefly, that I’m the one in the wrong: that I fail to understand or appreciate the content being presented, in the same way that someone might (rightly) call you a philistine for watching The Wire and coming away unimpressed.
(Warning: I’m sure what follows contains elementary errors, but, in my defense, that might be as much Harvey’s fault for presenting the material poorly as my fault for misinterpreting it.)
Harvey’s book sounds like an economics book, but it is not one. Economics presents itself as a scientific and theoretical discipline. Both “scientific” and “theoretical” are important here.
“Theory” refers to the fact that economics involves building models that rest on assumptions, and concerns itself with working out the consequences of those models using (pseudo-)deductive logic, often mathematical in nature. As an example, we might have a model of a “perfectly competitive market”, where there are a vast number of buyers and sellers, and each of the sellers offers a good that cannot be distinguished from that of any other seller. From this follows a conclusion about how prices are set in this market, possibly in combination with other assumptions (free entry and exit, etc.).
“Scientific” refers to the idea that economics ostensibly revises its models when their predictions fail to accord with reality. If your model of a perfectly competitive market with an infinite number of perfectly rational, utility-maximizing actors fails to explain how real markets behave, you might toss the simple model aside and create a more sophisticated one (while, of course, continuing to teach the simple one to impressionable undergraduates).
By these standards, Harvey’s book is not scientific or theoretical. The scientific part is particularly lacking. There are very few (no?) testable predictions, which I suppose is convenient, because if no predictions are made, no models must be revised. The theoretical edifice is also peculiar. There are certain concepts that are defined — “capital” is “value in motion”, “value” is produced solely by labor, “surplus value” is appropriated by the capitalist as profit, etc. — but I find these to be alternately vague and useless. Mathematics need not be part of a theoretical structure, and it often serves to obscure the more fundamental concepts, but, at the same time, without mathematics it is difficult to see how we get from point A (definitions of capital and value) to point B (the capitalist system is exploitative or inherently susceptible to competition and crisis). I realize I am grossly simplifying Marx’s argument, but there does not seem to be much that I can grasp onto between, on the one hand, these rather strange Marxist redefinitions of economic terms, and, on the other, the equally strange and grandiose conclusions that Marxists arrive at. What’s even worse is that I tend to be somewhat sympathetic to these conclusions; I just wish I could follow the logic better, assuming there indeed is logic.
To take a specific example, let’s focus on the idea of “surplus value”, a core concept in Marxist “theory”. Harvey talks first about the concept of “valorization” of capital. He focuses on the example of a factory in which, say, an individual worker uses capital (a machine, for example) to make a good (a generic “widget”, say). Harvey introduces the concept of the “value of labor power”, which he describes as “equivalent to the cost of the commodities needed to reproduce the labourer at a certain standard of living”. I take this to mean that, if rent in New York City is $2000, and utilities are $100, and food is $400, and so on, then the value of my labor power is $2500(+) per month. For simplicity, let’s take it to be exactly $2500/month.
As I understand it (Harvey’s treatment is sparse, and I am trying to fill in some details here), we can then imagine this value applied on a small time scale. If I work 160 hours per month, then, for each hour, my value of labor power is $15.63. Suppose further that I can make one widget per hour, which can be sold at a price of $35, $4 of which are the raw materials. So, the profit per unit is $31. Marx refers to the difference between this number and the value of labor power as the “surplus value”, which he takes to be a measure of my exploitation by my employer. He describes it in the following way: I spend the first half of my hour in order to cover my standard of living, and I spend the other half of my hour to make profit for my employer. If I owned the means of production, I could instead have spent that other half hour enriching myself. Furthermore, Harvey mentions that each commodity being produced — each widget — contains “labor” that is “congealed” in it. This is the only source of value for Marx. Worryingly, though, if we imagine a device that allows each worker to be twice as efficient — so, in each hour, I can make two widgets, not one — less labor, and therefore less value, is congealed in each widget I produce. Previously, $15.63 was so congealed, per widget. Now, only half of that, $7.82, is. (Harvey, of course, does not use numbers, and he might complain vociferously about my attempt to quantify matters like this.). We have thus decreased the total value being created, unless we sell at least twice as many widgets. To quote Harvey directly, lest you think I’m misrepresenting him, “There is, however, an important contradiction here that Marx makes much of. The more sophisticated the technology the less labour is congealed in the individual commodity produced. Even more troubling, less total value may be created if the total output of commodities does not increase enough to compensate for the decreased value of the individual items.”
Let’s take some time to interrogate this example. The more I think about it, the weirder it becomes. First, there is no explicit discussion of wages, as opposed to the value of labour. In fact, the wage a worker receives and the value of his labor need not bear any close relationship to each other, using Harvey’s definition. My cost to “reproduce” myself is roughly constant. But the jobs available to me, from volunteer, to government worker, to private sector tech bro, are each associated with a different wage. In fact, my wage could, in theory, be less than the value of my labor power. In that case, I would sink deeper into debt the more I worked. It is not obvious to me why the discussion of wages is omitted, or why the concept of “value of labor power” is assigned primacy. Should a worker care if, as technology improves, less labor power is congealed in the widget he produces? Should society care? It seems that the worker should care that his wage rises commensurately. And, for some periods in capitalism, productivity and wages have risen in tandem, while in other periods, they have not. This does not seem to be a problem endemic to capitalism but instead the particular brand of capitalism in the modern era, and the corresponding weakness of labor and union power.
In short, I fail to grasp the importance of the “contradiction” Marx identified, and I fail to perceive why the theoretical structure he has built helps to illuminate the situation. The purpose of theory and modeling is to reduce a complicated system to something simpler; to make clear the connections between concepts that were previously hidden. Is that happening here? Suppose we accept these peculiar definitions of “capital” and “value”, and suppose we take “labor power” to be a concept of fundamental importance. What do we gain by it? The understanding that the profit from a good being produced does not accrue entirely to the laborer? Is this intended to be a revelation?
The second thing to mention is that Marx’s analysis is appropriate only for specific types of labor. We can follow Harvey’s exercise of subdividing time and measuring surplus value in terms of that time (in the case presented above, for 0.5 hours) only for workers who make goods. What about other types of workers? I used to work for a clothing company. The warehouse workers who picked and packed clothes to ship to customers could be treated straightforwardly in Marx’s model. They add value to each box shipped, and their surplus value could be quantified in terms of time. The white collar workers who managed the website, or built data systems, or dreamed up new product concepts could not be analyzed analogously. I did not add a constant value to any box, mostly because I did not contribute directly to any single box in the way that a factory worker contributes directly to the making of every widget. What fraction of my time was spent adding my labor value to the box of clothes, and what fraction did my employer appropriate as surplus value? It seems difficult, even impossible, to say. The surplus value concept does not exactly pertain to workers who, in the best case, are necessary for the company’s technology to function, and, in the worst case, can be fired with little or no impact on the unit economics of the business. I’m reminded of David Graeber’s Bullshit Jobs essay:
While corporations may engage in ruthless downsizing, the layoffs and speed-ups invariably fall on that class of people who are actually making, moving, fixing and maintaining things; through some strange alchemy no one can quite explain, the number of salaried paper-pushers ultimately seems to expand, and more and more employees find themselves, not unlike Soviet workers actually, working 40 or even 50 hour weeks on paper, but effectively working 15 hours just as Keynes predicted, since the rest of their time is spent organizing or attending motivational seminars, updating their facebook profiles or downloading TV box-sets.
If anything, exploitation in capitalism has taken on a bifurcated character, where “that class of people” who actually make things is exploited, and that exploitation can be characterized in Marxian terms, but the other class of people, the salaried paper-pushers, often add so little value to their business that their situation might be thought of as reverse exploitation. But, regardless, “surplus value” does little to improve our understanding of the situation.
The whole book, or at least the 50 pages I read and re-read, are like this. Concepts are introduced and abandoned, examples are presented without deep interrogation, the scientific method remains waiting in the wings, and grandiose statements about the crises of capitalism are made, seemingly untethered to the paragraphs that preceded them. I find it exceedingly frustrating! On one side, I have classical economics, which is theoretical but pseudoscientific. I can follow the path of model development but I often fail to see how the model’s predictions comport with reality. On the other side, I have, well, this, which is almost atheoretical and certainly unscientific. There is no real theoretical superstructure that informs model development, or at least not any that I can grasp, and the point is not exactly to do “economics” but to explain Marx, as if Capital were some sacred text like the Bible. (Perhaps my appreciation for Harvey’s book would be enhanced if I viewed it as a literary and historical work, rather than an economic one.)
While doing some research for this post, I found an interesting essay called “Zombie Marx and modern economics, or how I learned to stop worrying and forget the transformation problem”. The author is a Marxist, but also accepts that Marxist economics is not an easily described thing, and that it has grave theoretical problems. (The “transformation problem” in the title refers to one such unresolved issue with Marx’s labor theory of value: the difficulty in translating the value of labor power congealed in a good into the price at which the good sells.) He tries to pinpoint the essence of what makes an analysis Marxist, and what Marxist economics really means. Here’s the upshot:
The way to apply [Marx’s thought] today is not to maintain the form and content of Capital as a complete, separate way to approach economics, as if we are superior because we begin from superior principles. Instead, I think it is to approach modern economics as we find it and ask the same kinds of critical questions: what are the social conditions that make economics phenomena appear like that? We deal not only, not even mainly, with economic high theory, but also with the applied economics produced every day in the reports and statements of central banks, Treasuries, the IMF, etc., and ask, what are the implicit class relations here? Why are these the driving issues, at this point in history? What are the deeper social contradictions lying behind them? The pursuit of a separate system of economics as something wholly other from mainstream economics isolates us from the political and ideological space where these things take place: better, instead, to fight from the inside, to make clear the social and political content of the categories.
This is what I would love to see more of in our intellectual discourse. It is also what I have tried to do, at various points, in this humble blog. Accept the theoretical edifice of neoclassical economics — the supply and demand curves, the income vs utility relationships, and so on. And then ask the questions that many economists don’t ask: first, does this agree with reality, and, if not, why not, and second, why do we take as given the things we take as given? Economics has such large gaps because its models treat so much as exogenous and uncontrollable instead of contingent. If I find Harvey inordinately frustrating, it is because this is the opportunity he has not seized.
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