problems of long-term fixed capital investment and so on. In order for that to happen, the primary form of capital circulation has to subdue both finance capital and merchants’ capital to its particular needs. In Volume III of Capital, Marx will take up the question of how this happened and with what consequences.
From our present perspective it is important to evaluate the positionality of merchants’ and interest-bearing capital within capitalism in general. Certainly a plausible case can be made that they went from being hegemonic and dominant in the sixteenth and seventeenth centuries to becoming subservient to industrial capital during the nineteenth century. But many would now argue—myself included—that finance capital has become dominant again, particularly since the 1970s. If so, it is up to us to assess what this means and what it portends.
This is not a matter we can take up here, however. For our purposes, what is important to note is that Marx presumed (and this was probably correct at the time) that the circulation of capital in its industrial form had become hegemonic, and therefore it was within that framework that the question of surplus-value production had to be resolved. He therefore concludes:
Capital cannot therefore arise from circulation, and it is equally impossible for it to arise apart from circulation. It must have its origin both in circulation and not in circulation … We therefore have a double result … The transformation of money into capital has to be developed on the basis of the immanent laws of the exchange of commodities in such a way that the starting-point is the exchange of equivalents. The money-owner, who is as yet only a capitalist in larval form, must buy his commodities at their value, sell them at their value, and yet at the end of the process withdraw more value from circulation than he threw into it at the beginning. His emergence as a butterfly must, and yet must not, take place in the sphere of circulation. These are the conditions of the problem. Hic Rhodus, hic salta! (268–9)
Which in rough, colloquial translation means, “Here is the ball, now run with it.”
CHAPTER 6: THE SALE AND PURCHASE OF LABOUR-POWER
The contradiction turns out to be easy to resolve. It is given away in the title of this chapter. Marx sets the argument up as follows:
In order to extract value out of the consumption of a commodity, our friend the money-owner must be lucky enough to find within the sphere of circulation, on the market, a commodity whose use-value possesses the peculiar property of being a source of value, whose actual consumption is therefore itself an objectification … of labour, hence a creation of value. The possessor of money does find such a special commodity on the market: the capacity for labour … in other words labour-power. (270)
Labor-power consists of the physical, mental and human capacities to congeal value in commodities. But in order to be itself a commodity, labor-power has to have certain characteristics. First, “in order that its possessor may sell it as a commodity, he must have it at his disposal, he must be the free proprietor of his own labor-capacity, hence of his person.” So the idea of the free laborer becomes crucial—slavery and serfdom will not do. The laborer cannot give up his or her person; all he or she can do is to trade the physical, mental and human capacities to create value. “In this way he manages both to alienate … his labour-power”—that is, to pass it over to somebody else—“and to avoid renouncing his rights of ownership over it” (271).
So the capitalist cannot own the laborer; all the capitalist owns is the capacity to labor and to produce value for a certain period of time.
The second essential condition which allows the owner of money to find labour-power in the market as a commodity is this, that the possessor of labour-power, instead of being able to sell commodities in which his labour has been objectified, must rather be compelled to offer for sale as a commodity that very labour-power which exists only in his living body. (272)
Laborers, in other words, are not in a position to work for themselves.
For the transformation of money into capital, therefore, the owner of money must find the free worker available on the commodity-market; and this worker must be free in the double sense that as a free individual he can dispose of his labour-power as his own commodity, and that, on the other hand, he has no other commodity for sale, i.e. he is rid of them, he is free of all the objects needed for the realization … of his labour-power. (272–3)
The laborer must, in short, already be dispossessed of access to the means of production.
Marx’s commentary on freedom is really apposite to our own times. What did it mean, for example, when President George W. Bush went on and on about bringing freedom to the world? He used the words “freedom” and “liberty” in his Second Inaugural Address some fifty times. On Marx’s critical interpretation, this would mean that Bush was mobilizing a campaign to free as many people in the world as possible of any direct control over, or access to, the means of production. Yes, indeed, individual laborers will have rights over their own body and individual legal rights in the labor market. In principle they have the right to sell their labor-power to whomsoever they choose and the right to buy whatever they want in the marketplace with the wages they receive. Creating such a world is what the capitalist form of imperial politics has been about for the past two hundred years. Indigenous and peasant populations were dispossessed of access to the means of production and proletarianized wholesale across the globe. In more recent neoliberal versions of this same process, more and more social strata in populations all around the world, including in the advanced capitalist countries, have been dispossessed of their assets, including independent access to means of production or other means of survival (e.g., pensions for older workers or state welfare payments).
The ideological and political ironies involved in the promotion of this “double-edged” form of bourgeois freedom are not lost on Marx. Today we are sold a bill of goods on the positive aspects of freedom and forced to accept as inevitable or even natural the negative aspects. Liberal theory is founded on doctrines of individual rights and freedoms. From Locke to Hayek and onward, all the ideologists of liberalism and neoliberalism have asserted that the best defense of such individual rights and liberties is a market system founded on private property and the bourgeois rules of independence, reciprocity and juridical individualism that Marx described (and, for purposes of inquiry, accepted) in chapter 2.
Since it is hard to protest against universal ideals of freedom, we are easily persuaded to go along with the fiction that the good freedoms (like those of market choice) far outweigh the bad freedoms (such as the freedom of capitalists to exploit the labor of others). And if it takes a little repression to dispossess people of their access to means of production and to ensure the sustenance of market freedoms, then that is justified as well. Pretty soon we find ourselves in the midst of McCarthyism or Guantánamo Bay without an oppositional leg to stand on. Woodrow Wilson, that great liberal president of the United States who sought to found the League of Nations, put it this way in a lecture he delivered at Columbia University in 1907:
Since trade ignores national boundaries and the manufacturer insists on having the world as a market, the flag of his nation must follow him, and the doors of the nations which are closed against him must be battered down. Concessions obtained by financiers must be safeguarded by ministers of state, even if the sovereignty of unwilling nations be outraged in the process. Colonies must be obtained or planted, in order that no useful corner of the world may be overlooked or left unused.
Marx’s essential ideological objective is to pinpoint the duplicity that lies at the heart of the bourgeois conception of freedom (much like he questioned Proudhon’s appeal to bourgeois conceptions of justice). The contrast between George Bush’s rhetoric of liberty and freedom and the reality of Guantánamo Bay is exactly what we should expect.
But how did the laborer come to be “free” in this double sense? Why the free worker approaches the capitalist with his labor in the market, Marx observes, “does not interest the owner of money … And for the present it interests us just as little” (273). Here Marx simply assumes that proletarianization has already occurred and that a functioning labor market already exists. But he does, however, want to make “one thing” clear:
Nature does not produce on the one hand owners of money or commodities, and