Framework & Discussion Points: Marx & Engels Selections

*PLEASE NOTE THAT THESE NOTES/POINTS MAKE REFERENCES TO PRIMARY & SECONDARY SOURCES NOT INCLUDED IN THE SYLLABUS; biblio info will be provided in independent reading/study list to be issued separately, or later [for this material, I am grateful for the instruction from, and generosity of M. Sayo]. Marxism: Critical Political Economy The purpose of this session is to examine the contribution of Marxism as a theory of capitalism on a world scale and a critique of that process an approach that has largely been marginalized in theories of international political economy. It seeks to explain key precepts of the classical Marxist tradition, including the dynamic and crisis-ridden nature of capitalist accumulation as well as changing state forms. The key focus is on contemporary applications of Marxist theory to understanding the global political economy, especially the nature of crises, globalization and the changing role of the state.

1. INTRODUCTION: HISTORICAL STRUCTURALIST PERSPECTIVES The term historical structuralist in the language of (International Political Economy) IPE encompasses a wide range of theoretical approaches, including classical Marxism, dependency theory, world-system theory and neo-Marxist analysis (see Hobden and Jones 2001; biblio data to be provided in separate independent reading list promised); the latter three we are unable to cover for obvious reasons. All derive some of their assumptions from classical Marxism, but have often diverged quite substantially from these roots to the point that some Marxists accuse dependency theory of being insufficiently Marxist.

2. MARXIST POLITICAL ECONOMY: KEY PRINCIPLES With Marxism, there are many possible vantage points from which can discuss political economy and international relations. Three basic principles are worth spelling out at the beginning. (a) The starting point has to be the critical analysis of capitalism as a mode of production the basic elements of his account have not been bettered (Hobden and Jones 2001: 201). (b) For Marx, the social world of capitalism should be analysed as a totality, and many modern Marxists insist on this point as capitalism has finally become univeralised, pervasive totalizing system: the social world has to be studied as a whole. 1

(c) The critical element in Marxism lies above all in its insistence on the historical specificity of capitalism with the emphasis on both the specificity of its systemic logic and on its historicity (Wood 1995, 2). The emphasis on the historicity of capitalism also suggests the possibility of capitalisms supersession instead of capitalist inevitability and the end of history. Among the key themes that have exercised Marxist political economists are: 1. The class process by which surplus value is appropriated under capitalism. 2. The nature of class conflict under capitalism 3. The role of the state in managing the interests and affairs of capital. 4. The political strategies both revolutionary activity to alter the political institutions of capitalism and the bargaining between capital and labour for control of the economic surplus that derive from class exploitation and inequality and that could lead to an emancipatory praxis.

POLITICAL ECONOMY Defined The use of the term political economy in Marxist theory does not directly refer us to the study of the relation between economics and politics. Instead, it connotes a way of thinking about the economy rooted in the method and theories of the classical political economists especially Adam Smith and David Ricardo. This method emphasizes the idea that a market economy operates according to laws rooted in the ongoing reproduction and expansion of a system of material interdependence between persons a social division of labor. This process follows laws through which the classical economists argued individuals have an interest in maximising their well-being defined by their preference ordering. The economy not only works to facilitate this process but, at least ideally, originates in order to facilitate it. In short, in classical economics, causation [or as we have been calling it, (the relationship of) DETERMINATION] runs from individual interest to economic structure. For Marx, causation/determination runs in the other direction, hence Marxs claim that he was advancing a critique of political economy. [Think here of the notion of driving forces/productive forces in the passages quoted and discussed in my powerpoint presentation; separately attached] This immediately makes the individual interest a more complex subject than as it is elucidated in classical economic theory or classical bourgeois economics (sometimes called classical liberalism in US circles, the primary thinkers of which would not only be Smith and Ricardo but later epigones like John Meynard Keynes, J.K. Galbraith and Hayek]. In the Marxist method, the key problem involves how we connect individual interest to the social order. In examining this problem, the major question under scrutiny is: What is the relationship between individual material (or economic) interest, politics and the agenda of the state?

3. MATERIAL INTERESTS, ECONOMIC CLASS AND CHANGE The concept of class is central to Marxist theory and his method, historical materialism. In order to study the totality of the social world, Marxs method is deceptively simple he starts with the simplest of social relations and then proceeds to build them up into a more and more complex picture. The central idea here is that the processes of historical change are ultimately a reflection of the economic development of a society. As the means of production develop (for example, through technological advance), previous relations of production become outmoded in fact, they can become a hindrance to the new productive capacity. This in turn leads to a process of social change whereby relations of production are transformed and so is the broader society as a whole: Marx: the mode of production of material life conditions the social, political and intellectual life process in general (Contribution to the Critique of Political Economy). Each mode of production (e.g. feudalism, capitalism) is associated with two opposing classes, an exploiting non-producing class and an exploited class of producers. Marx and Engels: The history of all hitherto existing society is the history of class struggles. The modern bourgois society that had sprouted from the ruins of feudal society, has not done away with class antagonisms. It has but estabished new classes, new conditions of oppression, new forms of struggle in place of the old ones (Manifesto). However, politically organised classes do not emerge spontaneously under capitalism. At first, individuals within the economy see themselves narrowly as isolated agents pursuing interests uniquely their own. Such interests are not, however, isolated and independent. Capitalist economy works in such a way as to set up a commonality of interests within within certain classes of persons. The more individuals become aware of their common condition and purpose, the more they see their narrow material interest in a broader light. This process marks a transition from individual to class interests and ultimately, from material-economic to political interests. Marxists advance the following claims about interests: (a) Interests arise within the structure of production. The wants of the individual depend upon her place in the process of social reproduction. The individual has economic or material interests in satisfying private wants. Within society, the position of the individual in the social division of labor determines her wants, which determine her interests. (b) Private interest can best be understood if we first understand the class to which the individual belongs. Thus, the interests arising within society are implicitly class interests. (c) These interests of classes stand opposed. The degree to which one class achieves its material interest measures the degree to which the other fails.

(d) Class interests arising within production become political interests involved in the struggle over state power. These class-based interests and conflicts arise in the specific historical context of a capitalist society. Marx argues that the market economy is not so much a mechanism for maximizing the private welfare of individuals generally as it is a means of facilitating the capitalists appropriation of surplus-value and accumulation of capital. Assuming that only some persons have capital to advance for the purposes of accumulation, only those will be able to adopt the objective Marx identifies with the capitalist class. Those without capital have nothing to sell but their labor power. In Marxs famous formulation the laborer must be free in the double sense, that as a free man he can dispose of his labour-power as his own commodity, and that on the other hand he has no other commodity for sale, is short of everything necessary for the realization of his labor power [Capital 1: 169]. Marx develops his arguent to suggest that this difference between capitalists and workers will reinforce over time, making capitalists progressively richer and increasing the barriers to workers self-realization. The different social positioning of capitalists and workers means that they have different relationships to the means of production and to the production process as well as to the other classes.

4. MATERIAL INTERESTS, CLASS CONFLICT AND CAPITALISM Focus on material interests as they arise within the capitalist economy raises the following questions: (a) Are those material interests best served, or under certain circumstances served at all, under capitalism? (b) Are the material interests of workers and capitalists in conflict under capitalism, or will both groups benefit and lose together? (cf. liberalisms notion of the harmony of interests) (c) Do the material interests of individuals within the classes of workers and capitalists converge or conflict; do they reinforce or undermine the perception of common class interests? (d) Does the conflict that arises over material interests lead to a challenge to the social order of capitalism, or merely involve a shifting of power and benefit within capitalism? The first two questions direct our attention primarily to the implications of capitalist economic organization for profits, wages and employment. Marx argued that the profit motive drives capitalists to seek ways of increasing their share of output finding ways of making workers work harder, longer, and more efficiently without altering the general levels of subsistence wages. As a result, profit increases, the real wage remains the same, the worker works harder and longer while her share of the product declines.

Marx believes that the class interests are opposed under capitalism. He also believes that there is a causal link between material condition (class interest) on the one side and politics on the other and especially the role of the state under capitalism.

5. STATE THEORY Emphasis (Halliday 1993: 52-2): Marxism recognizes the the importance both of the state as an object of political control And the nation-state as a fundamental organising principle, whether in the struggle of nationalist movements for power, or the consolidation of revolutionary regimes in an otherwise hostile world Marxist state theory poses the following key question: How does the state, considered as government or authority system, relate to the economy under capitalism? The Marxist interpretation of the state consists of a series of variations on a central theme: the necessity that social order (and cohesion) be maintained where the social conditions of persons set themselves into fundamental opposition. This formulation can be summarised as follows: Irreconcilable conflict exists between the economic interests of classes. This conflict arises within society and is based upon its defined social positions. This irreconcilable conflict threatens social order. Social order means a social organization designed to work to satisfy the economic interests of one class and not the other. Given irreconcilable conflict and the oppressive character of the social order, preservation of order is maintained against the interest of one class. Thus, the social order must oppress one of the two classes that compose it. The state, or organ that maintains order, is an organ of class oppression. While this formulation of the relationship between the state and capitalism is relatively undisputed in classical Marxism, there is considerable disagreement over precisely how the state maintains the social order necessary to maintain the conditions of accumulation. There are both instrumental and structural versions of this relationship.

A. Instrumental Versions of State Theory: In this approach, associated with the work of Miliband, the Marxist formulation leads in the following direction. Objective divisions in society define the agenda for, and the reasons for the existence of, the state. The state is an organ that acts forcefully against a part of the society it is not equivalent ot government; it does not calculate, aggregate, or transmit preferences and in favor of the capitalist class. In other words, the bourgeoisie uses the state as an instrument for the exploitation of wage labor. B. Structural Versions of State Theory: 5

Based on a reading of Marxs Eighteenth Brumaire of Louis Napoleon, and the work of Poulantzas, the argument here is that while the state works in the interest of part of society, it does not do so directly but rather indirectly. In doing so, the state acquires a degree of relative autonomy. Instead, the state works to maintain a defined social order that favors one class over another, of capital over labour in the long run. If we follow this line of argument, we cannot treat the state as a mere instrument of class rule for a striking reason. The capitalist class lacks a unified sense of its unified interest because of competition and rivalry to act as a unified single agent capable of using an instrumentalized state. The inability of the capitalist class to find its unified interest means that a state, relatively autonomous from the standpoint of individual capitalists or groups of capitalists, must act for a class that cannot act for itself. Thus while the capitalists exist implicitly as a class within society their social condition defines a common purpose they do not succeed in coalescing into a unified political force. In other words, the capitalist state is relatively autonomous from the capitalist class. The capitalist class does not tell the state how to define its agenda, how to define the order that the state protects. This means that the state defines the political interests of the capitalist class whose interests determine state action and policy [we will see this line of explanation developed later in Marx's Jewish Question, but most especially in the work of Antonio Gramsci] Understood in this way the class interest defended by the state is not, at least in the first instance, a material (or narrowly economic) interest. This means that when the state acts as agent of a class, it represents the political rather than material interests of that class. There are important differences here with the realist view of the autonomy of the state. For Marxism, the state need not necessarily be under the direct control of the bourgeoisie, but the capitalist state managers share with that class a commitment to the long-term maintenance of the capitalist system. Realists, by contrast, believe that the state has genuine independence from the economic interests of any societal group thus the state, in the realist view, is free to take those actions it deems necessary to further the national interest. We can, therefore, summarise a theory of the state under Marxist political economy in the following terms: The political institution or agent (the state) defines and protects the political interests of a class and its does so on its own initiative, not as an instrument. This means, more concretely, that the state defines and defends a social order including a set of rules of the game for the pursuit of private interest. Within these rules, the interests of the dominant class (e.g. private wealth accumulation) are protected in principle, through not necessarily in every case. Conversely, the system of private relations (the economy) perpetuates a definite set of objective social positions (classes) certain of which are favoured by the prevailing rules of the game. 6

The implicit interest of those in such positions is to perpetuate the rules of the game and, in this sense, the political interest defined and defended by the state can also be said to originate in society. Thus, according to Marx, the state is part of the superstructure, the political shell of capitalism that is ultimately responsive to economic forces.

6. POLITICAL STRATEGY AND EMANCIPATION There are two major ways in which politics can be discussed in the Marxist tradition: 1. Revolutionary or transformative politics. 2. The politics of reform, class compromise, or social democratic politics. Each of these foci identifies a distinctive way in which politics and economics come together in Marxist theory of political economy.

(a)Marxism and Revolutionary Politics: In Marxs key texts, he identified the conditions immanent in capitalist that would lead to a revolutionary consciousness among workers and lay the foundations for revolutionary actions that entail seizing and destroying state power. He attempted to explain revolution by reference to the laws of motion of capitalism per se, independent of particular histories, class situations, and political institutions of different countries. Capitalist markets were not self-organizing, and they also contained the forces that would eventually bring about their own demise. If the long-term tendency is for capital to increase, the consequences for labor are important. As capital advances, it displaces more and more workers, creating an industrial reserve army of labor. This reserve army continually bids down the wages of workers, since there are many willing to work for less wages than those employed. And, as capital becomes more concentrated, workers are drawn closer together in large factories and urban areas. This leads to a better collective understanding of their class situation and makes it easier to organize politically. In addition, capitalist development implies the immiseration of the worker and polarization of the material condition of the two classes. In other words, capitalism establishes an accumulation of misery, corresponding with accumulation of capital. Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, agony of toil, slavery, ignorance, mental degradation, at the opposite pole. [Capital I p. 645]. The development of the material conditions of individuals under capitalism implies a political response, i.e. a social revolution. Thus, Marxs theory does not explain the specific politics of revolutionary activity. Instead, Marx tries to show how the conditions for revolution polarized classes, concentration of capital, unemployment and low-paid workers were endogenous to capitalist development. (b)Marxism and Social Democratic Politics: 7

To other Marxists, revolution is not the only possible outcome. Improvement of the workers lot could take place through social democratic methods. This strategy involves worker participation in interest groups, parties, and electorallegislative processes. The goal is to alter the position of labor and capital from within, by using established institutions and practices of political democracy. In this approach, workers accept capitalism as the framework for economic action and confine their struggles to improvements within this system. The emphasis in this reformist strand of social democracy is on class action in the workplace and electoral arenas to garner a larger share of the product consistent with a large economic pie. Benefits pursued could include higher wages, job security, pensions, control of work, and so on. In sum, social democracy avoids many difficult questions association with revolutionary transformation, such as what happens after the revolution. It also avoids problems inherent in radical redistributionist strategies, particularly the accumulation crises that such uses of the surplus foster. Workers may gain in the short run only to see the size of the economic pie dwindle in the long run. Of course, it is increasingly questioned whether such strategies are available to labor in an increasingly open and competitive world economy, where, if workers in one country take a larger share, they will lose out to their rivals.

RE MY DISCUSSION OF POST-FORDIST/TRANSNATIONAL (Late) CAPITALISM- Although states may be involved in the regulation of production, unlike in earlier epochs states are not involved directly in production, in the extraction of surplus value. Capitalist enterprises are now able to operate internationally with much greater autonomy from state control a novel development while states are left with a disciplinary role over their populations [or as Campomanes 2004 puts it, a regulatory one; review section on Governance in that essay]. Anarchy, for Rosenberg, is not a condition of the international system of inter-state relations but rather a condition of capitalist production. All capital exists in a state of competition there prevails what Marx called anarchy in the social division of labour. One of the major empirical applications of this insight has been in the analysis of crises within capitalism and the tendency for capitalist competition to lead to situations of over-production and under-consumption, and thus the need for managers of capital to find new means to restore the conditions of accumulation.