Capital, Volume I

Summary

Capital, Volume I, subtitled The Process of Capitalist Production, is the only volume of Karl Marx's critique of political economy that he saw through the press. It was published in German in Hamburg in 1867, after more than fifteen years of research in the British Museum Reading Room, and revised by Marx for later editions. The first English translation, by Samuel Moore and Edward Aveling under the editorship of Friedrich Engels, appeared in London in 1887; the library uses that translation as revised by Ernest Untermann from the fourth German edition for the Chicago publisher Charles H. Kerr. The book begins with the commodity, which Marx treats as the basic cell of capitalist wealth. Following the classical economists, especially Ricardo, he argues that the value of commodities is determined by the socially necessary labour time required to produce them, and he analyses money and the fetishism of commodities, by which social relations among producers appear as relations among things. Parts II through VI explain how money becomes capital. The worker sells not labour but labour-power, the capacity to work, at its value, the cost of the worker's subsistence; because labour-power can produce more value than it costs, the capitalist gains surplus-value. Marx examines how this surplus is increased absolutely by lengthening the working day and relatively by raising productivity through cooperation, the division of labour and machinery. Long chapters draw on British factory inspectors' reports and parliamentary inquiries into child labour, hours and conditions, and on the Factory Acts that limited them. Part VII argues that the accumulation of capital tends to concentrate wealth while creating a reserve army of unemployed labour. Part VIII, on so-called primitive accumulation, traces the origins of capitalism to enclosures, the expropriation of peasants, harsh laws against vagrancy, colonial conquest and the slave trade, and predicts that capitalist private property will in turn be expropriated. Capital became the central text of the socialist and communist movements and influenced history, sociology and economics. It has also drawn sustained criticism: economists of the marginalist and Austrian schools, such as Eugen von Böhm-Bawerk and Ludwig von Mises, rejected its labour theory of value and argued that socialism could not calculate economically, and the record of twentieth-century states that claimed Marx's authority remains a subject of intense debate.

Plot or Argument

• Prefaces

  Marx's prefaces to the first and second German editions and Engels's prefaces to the English and fourth German editions explain the plan of the work, its method and its use of England as the chief illustration.

• Part I: Commodities and money

  The commodity has use-value and exchange-value; value is measured by socially necessary labour time. The fetishism of commodities makes social relations appear as relations between things. Money arises as the universal equivalent and medium of circulation.

• Part II: Money into capital

  In the circuit money-commodity-more money, value expands itself. This increase cannot arise from exchange alone; it comes from the purchase of labour-power, a commodity whose use creates new value.

• Parts III-V: Surplus-value

  Constant and variable capital; the rate of surplus-value; the struggle over the working day and the Factory Acts; cooperation, manufacture, machinery and modern industry as means of producing relative surplus-value.

• Part VI: Wages

  The wage form hides the division of the working day into paid and unpaid labour; time-wages, piece-wages and national differences of wages are examined.

• Part VII: Accumulation

  Surplus-value is reinvested as capital; accumulation raises the share of machinery relative to labour and produces a relative surplus population, or industrial reserve army, alongside growing wealth.

• Part VIII: Primitive accumulation

  A historical account of enclosure, expropriation of the peasantry, laws against vagrancy, colonial conquest and the slave trade as the violent origins of capitalism, ending with the prediction that capitalist property will itself be expropriated.

Lessons

• A theory of exploitation

  Marx argues that profit comes from unpaid labour time, even when wages are paid at their full value. Whether one accepts or rejects the theory, it is essential for understanding the history of socialist thought and labour movements.

  • How does Marx distinguish labour from labour-power?
  • What objections have economists raised to his account of surplus-value?

• Evidence from the factory

  Capital draws heavily on official reports of long hours, child labour and dangerous conditions in Victorian industry, and on the Factory Acts that limited them. These chapters are among the most vivid historical documents of the Industrial Revolution.

  • What do the factory inspectors' reports reveal about working conditions?
  • How did legislation change those conditions, and why?

• Things that hide relationships

  The idea of commodity fetishism suggests that market prices can conceal the human relationships behind the goods we buy. Readers can test the idea against their own experience of buying products made far away.

  • What does Marx mean by the fetishism of commodities?
  • Do prices reveal or conceal information about how goods are made?

• Testing a theory against history

  Marx predicted the growing concentration of capital and the impoverishment of workers. Comparing these predictions with what actually happened in industrial countries, and with the record of states that claimed his authority, is a lesson in weighing theories by their results.

  • Which of Marx's predictions were borne out, and which were not?
  • How do Mises and Hayek explain the problems of socialist economies?

Context

Marx wrote Capital in London, then the centre of the world's most advanced industrial economy. After the failed revolutions of 1848 he turned to a scientific critique of political economy, drawing on Smith and Ricardo, on Hegel's dialectic, and on British government reports about factories, mines and agriculture. The book appeared as trade unions and workers' parties were growing in Europe.

Composition

Marx's research began in the 1850s and produced the Grundrisse manuscripts (1857-58) and A Contribution to the Critique of Political Economy (1859). Volume I was published by Otto Meissner in Hamburg in September 1867, with a revised second edition in 1872 and a French translation in 1872-75. After Marx's death Engels edited the third and fourth German editions and the English translation of 1887, and prepared Volumes II (1885) and III (1894) from manuscripts. Ernest Untermann revised the English text for Charles H. Kerr's American edition of 1906.

Reception

Capital was at first little noticed outside socialist circles but became the foundational text of Marxism, translated into many languages and studied by labour movements and revolutionary parties. Economists of the marginalist schools rejected its theory of value, Böhm-Bawerk's Karl Marx and the Close of His System (1896) being a famous critique, and Mises argued in 1920 that socialism could not perform economic calculation. Its influence on history, sociology and political movements has been very large and remains contested.

Comparisons

• The Communist Manifesto

  The 1848 pamphlet announces in brief the theory of class struggle and the downfall of capitalism that Capital attempts to demonstrate in detail.

• On the Principles of Political Economy and Taxation

  Marx's theory of value develops Ricardo's labour theory, which he regarded as the high point of classical economics, while drawing conclusions about exploitation that Ricardo did not draw.

• The Wealth of Nations

  Smith's account of the division of labour and the pin factory is a starting point for Marx's chapters on manufacture and machinery, which stress its costs to the worker.

• Principles of Political Economy

  Mill, writing a generation earlier, also asked how industrial wealth is shared, but looked to cooperatives and gradual reform; Marx calls Mill the best representative of a shallow syncretism in his afterword to the second German edition.

• Principles of Economics

  Published four years after Capital, Menger's subjective theory of value undercut the labour theory of value on which Marx's analysis depends.

• Socialism: An Economic and Sociological Analysis

  Mises's sustained critique of socialism argues that without private ownership of the means of production there can be no market prices and no rational economic calculation.

• Economic Calculation in the Socialist Commonwealth

  Mises's 1920 essay directly challenges the feasibility of the socialist economy that Marx's followers sought to build.

• Capitalism and Freedom

  Friedman argues the opposite case: that competitive capitalism is a necessary condition of political freedom and has raised the living standards of ordinary people.

Quotes

For Students

A reading companion for classical Christian high school students. See the student guide.

Reading Guide

Watch for

• The two factors of a commodity and the idea of socially necessary labour time in Chapter I.
• The section on the fetishism of commodities at the end of Chapter I.
• The distinction between labour and labour-power in Chapter VI.
• The evidence from factory reports in Chapter X on the working day and Chapter XV on machinery.
• The historical narrative of Part VIII and its closing prediction.

Key terms and names

Commodity

A product made for exchange, having both a use-value (usefulness) and an exchange-value.

Socially necessary labour time

The labour time required to produce a commodity under normal conditions with average skill and intensity; for Marx, the measure of value.

Labour-power

The worker's capacity to work, which is sold to the capitalist for a wage, as distinct from the labour actually performed.

Surplus-value

The value created by workers beyond the value of their labour-power, which Marx identifies as the source of profit, interest and rent.

Commodity fetishism

Marx's term for the appearance of social relations between producers as relations between things and their prices.

Reserve army of labour

The unemployed and underemployed population that Marx argues capitalist accumulation constantly reproduces.

Primitive accumulation

The historical process, including enclosure and colonial plunder, by which producers were separated from the means of production.

Seminar Questions

1. Comprehension Why does Marx begin his analysis with the commodity?
2. Comprehension What is the difference between labour and labour-power, and why does Marx think it matters?
3. Comprehension What does Marx mean by the so-called primitive accumulation?
4. Interpretation How persuasive is Marx's use of factory inspectors' reports as evidence for his general theory?
5. Interpretation What does Marx mean by calling the commodity a fetish, and how does the religious language shape his argument?
6. Interpretation How do Menger's subjective theory of value and Mises's calculation argument challenge Marx's conclusions?
7. Big Question Is it unjust for an employer to profit from the work of employees who freely agree to their wages?

Faith Connections

• James 5:4 (Scripture)

  James condemns the rich whose labourers' wages are kept back by fraud; the verse has long been cited in Christian discussions of just wages that both overlap with and differ from Marx's analysis.

• Exodus 20:15 (Scripture)

  The commandment against stealing presupposes legitimate private property, which Christian critics of Marx have cited against his call to expropriate the owners of capital.

• Leo XIII, Rerum Novarum (1891) (Great Conversation)

  The encyclical responds to socialism by defending private property while condemning the exploitation of workers and supporting just wages and workers' associations.

Logic and Rhetoric

Central argument: Commodities exchange according to the labour time socially necessary to produce them. The capitalist buys labour-power at its value, the cost of subsistence, but labour-power creates more value than it costs; the difference is surplus-value. Competition drives capitalists to increase surplus-value and accumulate capital, which concentrates wealth, displaces workers by machinery and prepares the conditions for the system's transformation.

Rhetorical device: irony and mock-biblical language. Marx parodies the economists' praise of thrift with the cry: Accumulate, accumulate! That is Moses and the prophets!

Debate: Resolved: that the labour theory of value explains the source of profit.

Memory Work

Accumulate, accumulate! That is Moses and the prophets!

a definite social relation between men, that assumes, in their eyes, the fantastic form of a relation between things

Writing Prompts

Essay: Explain Marx's theory of surplus-value and evaluate it in light of at least one criticism from the marginalist or Austrian economists.

Comparison with Socialism: An Economic and Sociological Analysis: Compare Marx's account of capitalism with Mises's critique of socialism, and argue which better explains the economic history of the twentieth century.

Medical Lens

Marx cites official medical and public-health reports on the effects of long hours, night work, child labour and poor housing on workers' health, which make parts of the book a source for the history of occupational medicine.

Creative Prompts

• Classroom

  Using excerpts from the chapter on the working day, have students compare the hours and conditions described with modern labour laws, and research when and why each protection was introduced.

• Dialogue

  Write a debate between Marx and Carl Menger in 1871 over what makes a thing valuable: the labour it took to make or the importance people attach to it.

• Essay

  Marx predicted that capitalism would concentrate wealth and impoverish workers. Using evidence from the century after 1867, write an essay assessing how far the prediction was confirmed or refuted.

Further Reading

• The Communist Manifesto, Karl Marx and Friedrich Engels

• Karl Marx and the Close of His System, Eugen von Böhm-Bawerk

  Classic critique of the labour theory of value (1896).

• The Condition of the Working Class in England, Friedrich Engels

  Engels's 1845 study of Manchester and other industrial towns.

• The Worldly Philosophers, Robert L. Heilbroner