Our previous meetings have repeatedly dealt with this unpublished manuscript, recently published in German, discussing some of its salient aspects and exploring some of the themes it touches upon in a truly illuminating way. The work presented various difficulties, including that of producing a correct Italian translation, based on the French translation produced in recent years by some comrades in Paris. For some important passages, it was necessary to revisit the original text, with the contribution of various French and Italian comrades entrusted with the work.

At the meeting in Florence, it was possible for the first time to carry out an almost complete presentation of all the material covered in the text. The current report contains the summary that was presented almost in its entirety at the meeting.

* * *

We reproduce first of all the prefatory note that immediately follows the title chosen by the author, who was writing with a view to the better working-up of the material, and before he had decided in what final form it would be inserted, or in which of the chapters into which the First Book of his monumental work, which he intended to make ready for the press, was to be divided.

‘Three points need to be considered in this chapter 1) Commodities as the product of capital, of capitalist production; 2) Capitalist production is the production of surplus value; 3) Finally, it is the production and reproduction of the whole relation through which this direct production process is characterised as specifically capitalist’.

‘Of these 3 headings, No. 1 should be placed last, not first, in the final revision before printing, since it forms the transition to the Second Book – the circulation process of capital. But for the sake of convenience we shall begin with it here’.

These words by Marx himself deserve a brief comment, because they are fundamental definitions in Marxism. We will refer to the scholastic formula: ‘Definitio fit per genus proximum et differentiam specificam’. This means that every definition is made by indicating the closest genus, which includes the specific object to be defined, and the difference that characterises it among other objects of the same genus.

With the first point, Marx defines those commodities that are produced in the historical capitalist form. His first heading means that products of other historical forms of production, such as the slave-based and the feudal, are also commodities. Capitalism is a specific type of commodity production. With the second heading, Marx means that it would be false to define capitalism as solely commodity production. Capitalism is also mercantile, but the definition of capitalist production is not that it is the production of commodities, but that it is the production of surplus value, which means the production of capital. The third heading establishes that, moreover, capitalism is the form that produces and reproduces the whole relation, that is, the entire social relation, between people and classes, which characterises the capitalist epoch.

An important conclusion is that many historical processes can be indicated under the general definition of direct production processes in which the product comes directly from the hand of the man who works without any other mediation.

Capitalism is one among many direct production processes, and specifically the one that produces surplus value, i.e., produces more capital, i.e., (until its violent death, known as revolution) more capitalism.

The First Book will deal with the production, not of commodities, but of capital. The Second, circulation, not of commodities, but of capital. The Third, the process of capitalist production as a whole, in its social and historical totality.

Such is the plan of Capital, a work more than human, a product not of a specific individual, but of the species itself, as Karl Marx first knew and understood.

Commodities and money existed historically before we could speak of capital and capitalist society.

However, modern capital appears in its elementary forms of commodities and money; and the modern capitalist assumes the character of a commodity owner and money owner, although both these social types preceded the capitalists. It is a question of seeing what specific conditions transform commodities and money into capital, and thus their owners into capitalists.

Originally, capital is money destined to be transformed into capital: that money is capital only potentially.

The condition for a sum of money to become capital is that of a social relation that allows it to grow, to have an increment, so that the sum of money appears as a fluens and its increase as a fluxio. The specific nature of capitalism manifests itself, compared to other simple forms of commodity production (e.g. an individual or family artisan who first consumes through barter and later through monetary exchange), in the fact that if the initial capital is a sum of values equal to x, this x tends to become and does become capital because it transforms itself into x + Δx.

Arithmetic is calculation with finite numbers. Algebra is a calculation in which a letter represents a finite number. In the calculus of variations or finite differences, small increments, nevertheless finite, are considered which are indicated by the Greek letter Δ. If my age is a years, at our next meeting I will no longer be a years old but a + Δa years old. Marx does not use infinitesimal calculus, even though he was familiar with it, and in the definitive edition of his texts, plagued by a thousand idiots who accused him of being difficult and theoretical (forgetting that his texts are the battle cry with which the class of the ignorant will exterminate that of the learned using its powerful muscles, and only thus will it free its brains), he decides to present only arithmetic and monetary calculations, which, being much longer in their development and exposition, trouble and perhaps frighten the reader.

This manuscript, not intended for public consumption, is not only of enormous interest, but also exceptionally powerful. End of digression.

The phenomenon of x becoming x + Δx exists not only in the historical capitalist form, but also in other previous historical forms such as slavery and serfdom.

However, this remarkable phenomenon could not occur in a society whose members meet only as individuals and as owners of simple commodities, that is, of physical objects that are useful to humans and therefore have a use value, and which, while remaining physical material objects, also have an exchange value.

At the beginning of the process, a sum of money that by itself (as when locked in the usurer’s safe) is constant obviously cannot increase. This entirely practical concept is understandable to anyone, even the uneducated, and is expressed in mathematics by the thesis that the increase of any constant is zero. But if this x ceases to be constant, because it produces a Δx which, no longer zero, must have become a variable quantity; and therefore, in the language of mathematicians, it is expressed as a function of a variable quantity, in the sense that the value of the function is also a variable value dependent on the variation of the independent variable, Marx sets out in search of this function. He discovers that part of the value of x, only a part, not all, must be changed into a specific use value, abandoning its monetary form, because we know, and every faithful fool like us knows, that as long as this form is not abandoned, it produces no increase.

If the initial capital was a sum of values equal to x, its increase Δx can be called surplus value, which precisely means an increase in value. The particular process that this allows is one in which the production of surplus value, which implies the preservation of the originally existing x, appears as the determining purpose of the production process.

Marx used the letter c to refer to that part of capital that does not generate an increment, and the letter v to refer to that part that does generate it: constant capital and variable capital. Therefore, the initial capital is expressed as

x = c + v

Now, the increase in x, by intuitive logic, as in a differential analysis theorem, is the sum of the variations of the two addends into which it has been broken down. It will therefore be

Δx = Δc + Δv
and therefore

x + Δx = c + v + Δc + Δv

But we said that c is constant and its increment is zero. So we have the very simple formula:

Δx = Δ(c + v) = Δc + Δv = Δv
given that Δc = 0.

In other words:

Δx = Δv

The relationship between this increase in the original value x, which we have called surplus value, and variable capital is:

Δv v

That is, surplus value divided by variable capital: this is the formula for the rate of surplus value.

Instead, the proportion by which the advanced and initial capital has increased x = c + v, which can be written as:

Δv c + v

is the rate of profit.

When all the value at the end of the material labour cycle has once again taken the form of the commodity, which will go on the market to be transformed back into money, the formula that best represents the entire cycle is the one we gave in our ABACUS of Marxist Economics, indicating with k the initial capital and k’ the final capital of the cycle, all represented by saleable commodities. The formulas were:

k = c + v

s is the letter we use to indicate the surplus value, i.e. what we have indicated so far Δx = Δv

k’ = k + Δk = k + s = c + v + s

In this case, the rate of surplus value is given by:

The rate of profit of capital in a continuous cycle can be expressed as:

s c + v + s

In the balance sheet of a capitalist company, this is expressed by indicating the net profit as a percentage of the ‘turnover’, i.e. the total gross product of the company itself.

The forms that capital takes throughout the production and circulation process and at the various stages of the process can be twofold depending on the moment: namely, use value and exchange value.

If we consider the production process in the phase preceding the product, which is now the final result, we must say that all the money advanced has been used to purchase on the market the values relevant to production.

But an initial distinction can be made between the means of production that are the object of labour (raw materials) and the means of production that are the means of labour (tools, auxiliary materials, etc.).

Another distinction lies between the objective conditions of production, which may be raw materials and instruments of labour, and the subjective conditions which are identified in labour power as it manifests itself usefully.

Once the process is complete, everything will appear as the use value of the final products, but during its development only certain elements can be use values.

Another element is the faculty of active labour (Marx initially spoke of the capacity or faculty of labour; later on, he spoke of labour power). It is this that transforms the means of production into material elements of one’s own activity, changing them from their primitive form of use values (processed raw materials, worn-out tools) to their new form as products of labour, with their own new use and exchange value. We have a real physico-chemical transformation of the materials introduced into the production process. It is now a question of giving it an economic and social interpretation.

The economists, our adversaries, tend to make a serious theoretical confusion in concluding that the process of human labour in general, abstracting from all its historical forms, must make use of capital, insofar as all its factors indispensable to physical use have been acquired as exchange values, and thus conclude that capital has something eternal about it, inscribed in the very nature of human labour.

Instead, it is necessary to distinguish all the specific differences that exist between the identical elements of all production processes.

First point. With regard to constant capital, it can be said that it is the property, in the absolute sense, of the capitalist who has purchased it at its market value.

However, its monetary value could never have acted as capital if the other factors in the process had not intervened. Moreover, the other part of the money advanced was used to pay the workers, i.e. to purchase labour power, as shown in other parts of Marx’s work. But this is where the differentia specifica comes in. The way in which this second part of the factors that the capitalist has procured with his money is used consists precisely in the labour process, which is a subjective function of the worker and not of the capitalist. Therefore, the parts of the capital in which the capitalist’s money has been invested have been used in very different ways. The fusion of these two use values is inseparable from the whole process, and it alone ensures that the final result is greater than the advance. So if it is true that there is an equivalence of exchange values in all the use values purchased on the commodity market and in what we see at the end, the same is not true for the part that we call variable. And this is where the whole imbalance arises, considered in its full real form: the money given by the capitalist to the workers represents nothing more than the market value of the means of subsistence that enter into the worker’s individual consumption.

It is therefore a vulgar sophism of bourgeois economists that throughout the process there is only a transformation of identical use values.

Exchange value does not remain the same from beginning to end but increases by the amount known as surplus value. We call this: the valorisation process.

As regards the constant part, there are no difficulties; although it should be noted that the useful activity of the company’s personnel is the only thing that safeguards constant capital from negative variations, with losses in exchange value.

Labour, which is the living factor in the valorisation process, is what introduces into the product an amount of additional value, i.e. a quantity of labour greater than that paid for by wages.

It is a compulsory social relation that compels the worker to accept, in order to guarantee his existence, an exchange value lower than the one he has generated. Hence Marx’s well-known deductions on the division of the working day between socially necessary time and time utilised by the capitalist, or surplus labour time.

A fundamental distinction of Marx is that between living labour, which is expended by workers in the production process, and objectified labour, also known as dead labour, which is contained in the products purchased by the capitalist on the market, and these at their full exchange value.

The means of production, which appear primarily as capital, have only one function: to extract as much living labour as possible. Labour power, which alone valorises capital, i.e., preserves its value and creates new surplus value, becomes a force of capital, expressing the class domination of capitalists over workers.

This is where the process of alienation of the worker’s labour and his very life lies. The entire real process of social labour is aimed solely at the maximum possible production of surplus value, i.e. the objectification process of unpaid labour.

The text considers the labour process and the valorisation process to be inseparable. The theory of the exchange value of each commodity, deduced solely from the amount of labour contained therein, is ambiguous and incomplete among economists, who do not consider labour in its dual form of complete labour as it appears in the commodity, and socially necessary labour, as calculated in the use value.

Bourgeois economists have never been able to solve the problem because they have never pushed their analysis of commodities to the point of considering labour in its dual form, consequently, they are led to define capital through the block of products of the capitalist production process, as when they say: what is capital? It is cotton, because it is in their interest not to distinguish how much of it is dead labour transformed into the power of capitalist society, and how much living labour is sacrificed under the weight of class oppression.

The result of the entire capitalist production process is neither a simple product (use value) nor a simple commodity, i.e. a product that has an exchange value: its specific product is surplus value: these are commodities that have more exchange value than was advanced to produce them. In the capitalist production process, the labour process is merely a means; the valorisation process or production of surplus value is the true purpose.

Sometimes the bourgeois economist remembers this and defines capital as wealth used in production to ‘make profit’.

Marx always distinguishes between two independent and completely different spheres in the overall process.

The first sphere is that of the circulation of commodities that takes place on the market. This sphere of pure exchange includes not only the purchase of everything that constitutes constant capital, but also the final sale of the product.

But in this same first sphere of the market, there is also an aspect concerning variable capital, and that is the purchase and sale of labour power, exchanged for wages in money. Up to this point, labour is treated like any other commodity and is paid for on the market according to the going rate of wages.

The second sphere, entirely independent, concerns the consumption of purchased labour power. Marx distinguishes it as a process of production. In the second issue of our ABACUS, we showed the formulas Marx uses in the first part of the 2nd Volume of Capital and gave an identical presentation, only more uniform in symbols, where Marx adopts the letter P to define not a quantity, but everything he calls the process of production; more precisely, it is the second stage, while the first and third concern phenomena of pure circulation on the market, and Marx’s symbols were not those of orthodox elementary algebra. In this paragraph of the old unpublished draft, Marx returns for a moment to the purely mercantile phase of buying and selling labour power, before any particular employment of this ‘bewitched’ commodity begins. Before that, capitalist and worker face each other like any other pair of market operators.

The transaction complies with the bourgeois code and the bourgeois economic doctrine of exchange between equivalents. Up to this point, only one thing distinguishes the worker from other market sellers, and that is the specific nature of the commodity sold, which appear only in its specific use value.

Up to this point, the worker has acted like any other owner-bearer of commodities. But he is led to offer this original commodity on the market because he owns no other commodity or asset; and therefore all the conditions of his labour confront him as alien property.

Marx makes an interesting distinction here that is useful for our traditional socio-political thesis, namely that the true revolutionary proletarian is the pure pauper, because his labour power is worthless and useless unless the conditions for its employment are sought among a series of capitalists whom Marx ingeniously calls capitalists No. 1, No. 2, and No. 3.

Capitalist No. 1 is the industrialist who, possessing money, buys means of production (materials, machinery) from capitalist No. 2, who owns them; while the worker, with his wage received in money from capitalist No. 1, purchases his subsistence from capitalist No. 3.

The phenomenon may be as complicated as one likes, but the bottom line is that capitalists 1, 2, and 3 together are the exclusive owners (monopolists) of money, means of production, and means of subsistence. This means that even in the first circulation process, before the money of capitalist No. 1, or his commodities, have been transformed into capital, the character of capital has already been impressed upon them, inasmuch as money, commodities, means of production, and subsistence are autonomous powers that confront sole, naked, destitute labour capacity, stripped of all material wealth.

These powers are alien to the worker and it is they, aspects of capital, that present themselves as fetishes, endowed with their own will and soul. In short, in Marx’s brilliant phrase, it is these commodities, animated by a demon, that appear as buyers of human beings and turn the wage-earner into a veritable slave who sells himself.

It is true that the worker freely chooses, buys, and consumes his means of subsistence, but if he did not do so, his capacity for labour would soon be reduced to zero and he would lose his last chance, which is to sell himself.

If the worker did not sell his labour power in order to live, material wealth could not be transformed into capital. It is only in relation to wage labour that all objects representing the objective conditions of labour (means of production and subsistence) become capital. Without wage labour, there is no production of surplus value. If individuals faced each other as free persons, there would be no production of surplus value, nor capitalist production.

We have deduced, with regard to modern Russia, that wherever there is wage labour and money, there is surplus value and capitalism.

Marx defines the direct production process as that which links together the physical relations and material operations in order to move from the means of production to the product, before considering the intermediaries, given by social institutions, and class relations.

We could have a chain of social relations adhering to the material labour process if each worker, in proportion to their capacity or labour power, had made available to society the appropriate quantity of raw materials and tools, without having to negotiate their requisition with anyone.

A direct process could also occur in a society of self-employed workers (artisans), each of whom owned a small unit of workspace and could obtain fractions of raw materials, semi-finished products, and tools from other free artisans. But this union, natural in primitive societies, is abolished and broken in capitalist society. Marx says, paraphrasing a passage that will appear in Book I of Capital: ‘The leather that the worker tans (in the primitive workshop) he does not treat as capital, but as a simple physical object of his productive activity. It is therefore not for the capitalist (unfortunately – Marx means) that he tans the leather!’.

It is when Marx shows us him entering the life sentence of the capitalist factory that he will exclaim: He has nothing else to expect but to be tanned.

If the production process were nothing more than a labour process, the worker would consume the means of production simply as mere sustenance for labour. But everything changes when the production process also becomes a valorisation process; then – says Marx – the capitalist consumes the worker’s labour power, appropriating living labour as the lifeblood of capital. Raw materials serve only to pump out the labour of others; the tool of labour is nothing more than the conductor of this process of sucking, and here we have the other great phrase that capital has become an animated monster and begins to act ‘as though its body were by love possessed’.

At this point, the text begins to consider the actual production process, which takes place between the preceding and following periods of circulation, in which everything takes place on the market, including, we repeat once again, the relation between capitalist and worker as a sale and purchase of labour power. Once these negotiations are over and the actual production process begins, no longer considered as direct, i.e. as a simple chain of physical transformative activities, but as a specifically capitalist production process situated in the historical period of capitalism, Marx notes that labour has become: 1. – objectified labour, i.e. capital, in that the labour of previous historical actors now exists only as such; 2. – as a result of the same absorption of the appropriation of labour as human activity, the advanced value (wage – variable capital) becomes value in process, i.e. value that creates surplus value distinct from itself. It is only because labour transforms into capital during the production process that the sum of advanced values (as money or as commodities, and for the same constant capital), which was previously only potential capital, is realised as real capital.

The production of commodities (which was the purpose of the direct labour process) is no longer the purpose of capitalist production, and appears only as a means to achieve this purpose of valorising capital, i.en. of forming surplus value.

When the exchange (also between equivalents) between variable capital and labour power took place, the only premise that could lead to the valorisation of capital was established. Therefore, there is no self-valorisation of total capital (money, commodities), but valorisation is the effect of labour alone, that is, of the actual process of consumption of the labour power that capital has purchased.

We therefore had two stages: 1st – the exchange of labour power for variable capital; 2nd – the actual production process in which living labour is incorporated as an agent into capital.

The means of production (raw materials, tools, etc.) take the form here not only of means of carrying out labour (which is always true), but also of exploiting the labour of others.

Since, as has been shown, the physical labour process has become the means of the process of the valorisation of capital – of the production of surplus value – this labour process is subsumed to capital, and the capitalist also enters this process as manager and boss. Marx states that this is what he calls the formal subsumption of labour under capital, the general form of every capitalist production process, but capitalism historically develops into a specifically capitalist mode of production.

When the peasant, once independent and producing for himself, becomes a day labourer working for a tenant farmer, or when the ruling hierarchy in the guild mode of production disappears, giving way to the simple antagonism of a capitalist who employs the craftsman, now a wage-earner, to work for him; when the former slave owner begins to employ his former slaves as wage-earners, etc., these different social modes of production are transformed into the process of production of capital.

The capitalist takes the place of the old hierarchical leaders of labour, concerned with its quality, intensity, and continuity.

The mystification immanent to the capitalist relation has emerged. Labour power, which alone preserves values, appears as a force for capital’s self-preservation: in short, it seems as though objectified labour were using living labour for a faculty inherent in the former.

In an early historical period, capital subsumes the labour processes it finds without changing them: the actual labour process does not change yet, but the domination of capital, and the replacement of the simple aim of producing many commodities by the aim of the production of large profits, have already been introduced. For Marx, the specifically capitalist mode of production (large-scale labour, concentration of companies, etc.) develops when capitalist production has progressed and revolutionises not only the social relations between the various agents of production, but also the very form of labour and the real and physical mode of its entire process. The expression formal subsumption indicates the phase in which capitalism has merely subsumed the labour processes it has found, without yet radically innovating them.

In this phase, which is the initial phase of capitalism, there is only one means of increasing the production of surplus value, and that is by extending the duration of labour. This is absolute surplus value, and this theoretical distinction of Marx has served us to establish the doctrine of the most rapid productive growth in the youngest and most exploitative forms of capitalism.

Marx refers here to Part IV of Book I of Capital, in which he discussed the production of relative surplus value, meaning that only with this could a specifically capitalist mode of production (including technologically) arise. Marx also refers to the introduction of the steam engine into industry, especially in the textile industry in England, although this is not mentioned here. Today, we can add that we remain in the specifically capitalist mode and epoch even with the technologies of electricity, nuclear energy, and automation.

The historical transition indicated by Marx is of the utmost significance because the productive forces of labour in developed capitalism, thanks to cooperation (which for Marx means the labour of large masses of workers in the same company), the division of labour within the workshop, the use of machinery and, in general, the transformation of the production process through the conscious application of the natural sciences, mechanics, and chemistry, form everything that allows us to say that capitalism, in addition to taking possession of individual types of labour, or small groups, has had, by the ineluctable force of determinism, to socialise the great forces of production.

This result, which already contains the victory of communism, is already a century behind us.

The great mystification is that all this presents itself as the productive force of capital and not of labour. This has not changed since the existence of the Republics Founded on Labour, and thus Marx says that it would be inaccurate to speak of the productive force of either isolated or combined workers, or even of the productive force of labour, because this (so long as the bourgeois regime stands) is identical to capital.

Marx’s concept of bourgeois ‘progress’ can be derived from this thesis: ‘The mystification which lies in the capital-relation in general is now much more developed than it was, or could be, in the case of the merely formal subsumption of labour under capital’. Marx recalls having demonstrated that in reality what is social in his labour stands before the worker as an alien force, and worse still, as a hostile and antagonistic force, because this social element is objectified and personified in capital.

Before continuing his analysis of real subsumption of labour, which is the most comprehensive and modern, Marx devotes this chapter to some observations on formal subsumption, in which he reiterates the points made in the previous pages. These are comparisons we have already referred to with the artisan, the peasant, the serf, and the slave, forms that can already be defined in principle even when one considers the first phase in which capital subsumes the ancient forms of labour that it would later revolutionise.

Marx cites the Manifesto of 1848, which already stated that with the complete and real subsumption of labour to capital, a revolution had occurred in the mode of production, in labour productivity, and in the relations between capitalist and worker. This development confirms that the more capitalism evolves, the more we fight it. The ironmaster in literature was, for his few workers, a good teacher and even a friend and father who had shared with them the first benefits of a more modern system of labour. In the later phase, the huge corporation, and even the capitalist State, personify the monster that has dehumanised the worker and society as a whole.

With real subsumption, capitalist production subsumes all branches of production that it could not control with formal subsumption alone (agriculture, mining, textile manufacturing, etc.). Certainly, formal subsumption had already led to the triumph of ‘production for production’ over ‘production for vital consumption’. But the phenomenon is complete with real subsumption, relative surplus value, and the specifically capitalist mode of production.

At this point, Marx points out the contradictory nature of capitalist production, its anarchy, its negative character, whereby production opposes the producers and takes no care of them.

It would be very interesting to develop this effective chapter by Marx, applying the same principles to the present day, in which Marx’s critiques of bourgeois criteria for determining which labour is unproductive or productive would remain largely valid.

The first point to note is that in a direct labour process, any labour that results in a product and also in a commodity, if we consider mercantile, though pre-capitalist, forms, is productive; in an even broader sense, anyone who manufactures an object, and therefore endows it with a use value, even if they will never exchange it, has performed productive labour.

Coming to the capitalist mode, since we define it as the production of surplus value, and essentially as the production of capital, we should call unproductive any labour that does not increase the mass of surplus value. We will call a worker productive according to the labour they perform, and any labour that creates surplus value, that is, that valorises capital, will truly be productive.

But the limited bourgeois spirit does not recognise this principle, even though classical economists have come close to it, and since it considers the capitalist form and wage labour to be natural and eternal, it considers all paid labour to be productive. Marx reckons that in his time all activities tend to become waged or salaried, and all those previously called services are transformed into waged activities. In this sense, it can no longer be said that the labour of domestic servants is unproductive, etc.

In the final stage, even the present society confirms what old Aristotle knew, namely, that anyone who exerts themselves and struggles has the goal of making money.

Even in modern America, we do not ask ourselves whether a person contributes to the production of certain socially useful goods, but whether they have found a job. As long as they manage to bring money into their personal account, no one asks whether their activity or their working time contributes to producing anything.

Marx jokingly remarks that if everyone is a wage-earner, according to the bourgeois mind, then everyone does productive labour: from the prostitute to the king.

He deals with the famous examples from Milton’s ‘Paradise Lost’ and of the prima donna who is a songbird. But even she, if she earns money for the impresario, directly produces capital, etc.

According to Malthus, a productive worker was one who directly increased his master’s wealth. Marx fiercely mocks bourgeois theorists who consider capitalists, since they consume surplus value created by others, to be the productive class par excellence. In conclusion, for us, the definition of productive labour is labour that produces surplus value, so long as we are in a capitalist society.

Since the purpose of capitalist production (and therefore of productive labour) is not the existence of producers, but the production of surplus value, any necessary labour that does not produce surplus labour is superfluous and worthless for capitalist production.

The same applies to a capitalist nation. Any gross product that merely reproduces the worker, i.e. does not create net product (surplus product), is as superfluous as the worker himself. In other words, only the number of people in the nation who are profitable for capital are needed.

Marx demonstrates this apparent paradox with quotations from Ricardo and Young and points out that even philanthropy itself finds nothing to object to in Ricardo’s thesis that it is better if five million men suffice to produce the means of subsistence rather than seven million.

Therefore, the purpose of capitalist production is net product, whose concrete form is surplus product, which becomes surplus value.

Capitalism, therefore, rejects the economic policies of ancient forms, which concerned themselves with safeguarding bread for the workers, as well as protectionist policies for national capital that struggles against foreign competition. The conclusion of these historical comparisons is as follows:

‘[T]he law of capitalist production is to increase constant capital as against variable capital and surplus value, the net product; and secondly to increase the net product in proportion to the part of the product which replaces variable capital, i.e. wages. At present these 2 things are confused. If the total product is called the gross product, it increases in capitalist production as against the net product; if the part of the product which can be reduced to wages + net product is called the gross product, the net product increases as against the gross product. Only in agriculture (through the conversion of tilled fields into pastureland, etc.) does the net product often grow at the expense of the gross product (the total amount of product) as a result of certain characteristics peculiar to rent, which do not belong here.

‘Otherwise, the doctrine that the net product is the final and highest goal of production is only a brutal, but correct expression of the fact that the valorisation of capital, and therefore the creation of surplus value, without any concern for the worker, is the driving force and the essence of capitalist production. The highest ideal of capitalist production – corresponding to the relative growth of the net product – is the greatest possible reduction in the number of people living on wages, and the greatest possible increase in the number of people living off the net product’.

To clarify this fundamental passage, we need to clearly define the quantities used, noting how Marx, a century ago, had already intuited the most modern falsifications introduced by official economists, even exploiting what they had managed to grasp of our Marxist terminology. Indeed, Marx points out that the misunderstanding arises in defining the net product. There is no doubt that by gross product one refers to the entire total of either a company or an entire nation. When sorting the gross product, the bourgeoisie distinguishes only two parts: one is the total capital advanced in production, the other is the profit realised in it, which in each enterprise is usually called net income. We would then have: gross product = advanced capital + net income. The expression net product, meaning the net part of the product, would be identical to the expression net income.

Since we Marxists have existed, we have fundamentally made the binary division ternary, in that we have divided the advance into constant capital and variable capital. We therefore consider that gross product is given by constant capital, variable capital, and net profit (in our language, surplus value).

The double game consists in this. If the net product is, as in the traditional explanation, net income, then in the course of capitalist production its ratio to gross product decreases (our law of the falling rate of profit). When Stalin did not believe in this law, we replied that historically the capitalist gross product increases greatly in its mass, but the total mass of net profit also increases, albeit at a slower rate, and that there was no need for the self-styled pontiff of the ‘communists’, merely to spite the capitalists, to go back on Marx’s law on the falling rate, which is sancrosanct.

But today, in order to ensure the success of democracy, demagogy, and hypocrisy, which are in the West and the East alike, there is a pretence of taking note of Marx’s ternary division and it is said: net product is not net income, it is the entire product minus not all of the advance but only the constant capital, since this always remains equal within national capital.

In this specious form, crushed here by Marx’s prophetic genius, national income is defined as the sum of net income + variable capital. This is what each company defines as the value added by labour in the course of production. This achievement is considered the common heritage of the entrepreneurial class and the working class, and indeed the per capita income is calculated with reference to the inhabitants as such, without asking what portion of the population belongs to the ruling class and what portion to the exploited class.

In this second interpretation, this false net product, resolvable, as the text says, into wages and net profits, increases much more than pure profit and can even increase at a higher rate than the gross product.

The cornerstone of the development curve of capitalism is the organic composition of capital, i.e. the ratio of its constant part to its variable part. With the much-vaunted technological progress, labour productivity increases and this ratio grows. Capitalist mystification, which is the subject of the next chapter, tends to obscure the fact that the famous mass of labour objectified in constant capital forms the basis of the power of the capitalist class against the living labour of wage-earners, already undermined by the fearsome decimation of surplus value, whose rate does not historically decrease like that of profit, and only the boorish ignorance of the contemporary world can inscribe it in the balance sheet as part of the common heritage of the entire national and global society.

It is evident even to simple common sense that all productive forces belong to labour and therefore to the working class, but the mechanism of present society and the weight of traditional ideas that plague it lead us to believe, groundlessly, that productive forces are properties inherent to capital. Consequently, the modern social character of large-scale production, with its fabulous yield that has eclipsed that of the poorest past forms, is attributed to a power of capital rather than to the collective power of human labour. Capitalism attempts to take credit for the historical decrease in the prices of manufactured articles resulting from associated labour, in order to claim ownership of what has been saved and to wave its great myth of reduced production costs. Through this and other deceptions, it wants us to forget that, compared to the old regimes, it has produced a harsh rise in the cost of the most primordial means of subsistence and transformed the vast majority of humanity into a starving mass. Meanwhile, the small minority of privileged peoples and their own upper classes live under the fearful threat of wars, catastrophic crises, inflation, and general scarcity.

Marx closes this chapter on the gigantic mystification perpetrated by the apologists of capital with some classic bourgeois quotations which, while showing that labour is the source of all wealth, attribute the credit for progress to industrial capitalists who live off profits because they alone give useful direction to current labour, making the best use of accumulated labour; and thus open paradise to those who contribute nothing to the labour of the living nor of the dead.

The part of this report given in our previous issue no.5, according to the indications in the preface that Marx gives on page 441 of his original manuscript, is precisely the one concerning the first heading that Marx announced would become the Third in the draft intended for publication. We have given it the ordinal number I and entitled it ‘Capitalist Production as the Production of Surplus Value’, a title given by Marx himself, while the exposition occupies the pages with the original numbers from 459 to 469, noting that 469 consists of many sheets with the letters of the alphabet up to h, as well as including an insert that is in the manuscript at no. 263, while no. 262 seems to have been lost. This first part, according to our order, included the following chapters: A) Definition of simple commodity production and specifically capitalist production; B) Use value and exchange value in the capitalist production process; C) Process of circulation and production of capital; D) History: The two phases of the social development of capitalist production; E) Productive and unproductive labour; F) Gross product and net product; G) Mystification of capital by its apologists.

At the meeting, to illustrate the fundamental concepts of gross product and net product by way of example, a short interim report was presented, which we present here next. Then, we will discuss Part II of Marx’s text, which deals with: Capitalist production as the production and reproduction of the specifically capitalist relations of production. We will give a brief overview of this, as well as Part III, entitled: Commodities as products of capital.

In order to better clarify the fundamental concepts of gross product and net product, and the radical contrast between the views of the bourgeoisie and those of us Marxists, two comrades, one from Marseille and one from Naples, were tasked with illustrating a practical example.

Among the data from the American magazine Fortune, used in another study by the same comrades previously referred to in the report of this same meeting regarding the course of Western economies, the most important company was chosen, namely the colossal General Motors, a union of the largest American car manufacturers with branches all over the world.

Total sales, i.e., revenue, or in Italian technical terms, turnover, amounted to 17 billion dollars in 1964, a unit of which we will use hereafter. This figure, In the Marxist sense, measures capital, which we denote by the letter k. In the data we use, the company’s capital has two other forms: assets, i.e. the value recorded in the balance sheet for the property and facilities of a company, and is smaller, i.e. only 11.2 billion. There is also invested capital, i.e. share capital, even smaller, amounting to 7.6 billion, and considered by the bourgeois to be the company’s debt to its shareholders, expressing the amount possessed by the ‘owners’ of all of General Motors. We have information that the net profits, i.e. after taxes, amounted to 1.78 billion in 1964. The amount distributed to shareholders as dividends is not given, but it must have been around 1.3 billion, according to 1965 figures found elsewhere. The difference represents capital carried forward for new investment drawn from the profits of the previous fiscal year, and becomes much greater when new shares are issued and debts are contracted with banks.

The table does not give us the tax figure and therefore the gross profit, but from the 1965 data cited above, we can estimate it at 1.78 billion, and the gross profit becomes 3.515 billion. At this point, if we ask ourselves what the profit rate is on the turnover figure, it turns out to be 10.2% if we consider the net and 20.7% if we consider the gross. The exceptional height of this rate expresses a particularly favourable moment for American capitalism and for its most prosperous company. If we call p the profit and t the taxes, then p + t will be the gross profit. Should the portion of capital which in our Marxist language is called surplus value be considered p or p + t? We touch on this difficult question by recalling that Marx, in his critique of the ‘Gotha Programme’, clarifies that even if all unpaid labour were recovered, a collective economy should always set aside a certain portion for general public expenditure. These are today covered by state taxes, and any conformist economist will immediately say that they are also spent for the benefit of the proletariat. But for us, the State is not interclassist but classist, and what goes into its clutches serves the dirty politics of capital, such as the war in Vietnam. For us, therefore, the total surplus value and class profit will be 3.515 billion.

Now, looking at variable capital, i.e. the wage sphere, what we have in the table only shows the figure for employees, which was 661,000. The American statistics we have been digging through for years never distinguish between wage-earners and other salaried employees, i.e. between victims and those hired retainers of capital. At the meeting, we assumed that each earned 100 dollars per week and 5,200 dollars per year. But the 1965 figures lead us to raise this figure to 6,500 dollars, for now foregoing any distinction between wages and salaries.

This results in personnel costs of 4.3 billion, which we assume for our v, i.e. variable capital.

From the total capital, we have deducted the surplus value (gross profit) of 3.515 billion, we further deduct the variable of 4.3 billion, leaving the figure for constant capital, which amounts to 9.185 billion.

c + v + s = 9.185 + 4.3 + 3.515 = 17 = total capital.

The rate of surplus value, considering gross profit rather than the net, is 82.6%. If we had excluded taxes, assuming them to be a gift to the proletariat as any good communist of the big party [PCI, ed.] would do, it would drop to only 40%.

The organic composition, i.e. the ratio between constant and variable capital, is quite modest, at 2.2. It would certainly be higher if we could separate the value of high salaries from variable capital. We can now turn to the issue that was the focus of the meeting.

General Motors’ gross product in 1964 was 17 billion dollars. What was the net product? From a class perspective, it is what remained for the capitalists after recovering all their advanced expenses, namely 1.78 billion, and adding taxes (as is only fair), 3.515 billion dollars.

The trick of the bourgeois is to call net product not the capitalists’ profit, but everything that social productive activity has realised, moving from a constant capital (raw materials, wear and tear on machinery, etc.) of 9.185 billion to a gross value of 17 billion, and therefore the sum s + v of 7.815 billion, which is naturally much more considerable. In the hypocrisy of modern planners, this sum is called ‘value added in production’ and is considered a common good of the high profiteers and the starving workers, and on such a magnitude is built the lie of national income and, worse still, that of per capita income.

Saint Bernard, or some other saint, met the devil disguised as a good traveller, who suggested they journey together and form a partnership. The saint opened his purse full of gold coins, the devil had only a few loose change in his and immediately poured them into the saint’s purse, shouting: ‘Let’s pool our resources!’. The saint, thinking of the salvation of his soul and knowing the devil well, smiled and continued on his way. Contemporary opportunists are sanctifying the proletariat, and that is why the leftists are flirting with the Vatican!

Let us add a small codicil for the recently obtained 1965 figures.

Turnover 20.7 billion, taxes 1.974; net profits 2.126, gross profits 4.1 (surplus value); variable capital 5.4 (therefore 7,350 dollars for each of the 735,000 employees worldwide, including those who travel by private jet!); remaining constant capital 11.2.

Let us briefly say that net profit was 10.25% (however, shareholders received dividends of only 1.5 billion, or 7.2%). Gross profit was 19.8%. The rate of surplus value was 76.0% (while considering net profit, it would be the erroneous 40.0%). The organic composition of capital was given by the ratio 2.09, subject to all the reservations about the real variable capital, which here is only apparent. The doctored net product, i.e. the hypocritical value added of up-to-date economists, was 9.5 billion, or 46.0% of the gross product.

Two years so close together and so triumphant for the monstrous American company prevent us from treating historical variations according to Marx’s forecast. We will be able to do so at the next meeting, using historical data from the largest Italian company, Fiat, which has been compiled by our movement in Turin.

From an immediate point of view, it appears that in capitalist companies articles are produced for the market, i.e. commodities, whose exchange value realised on the market is entirely the full property of the company, i.e. of its owner. In his investigation into the specific characteristics of the capitalist form, Marx established that its purpose is not the exchange value of the products sold, and even less their use value, but rather the premium that capital benefits from, which we have called surplus value. Therefore, capital is much more than a mass of commodities and money; it is value that valorises itself, value that generates value.

The sum of money and value, transformed into factors of the production process (constant capital and labour capacity, into which variable capital is changed), is capital only in the potential sense. It is only in the first labour process, when living labour is truly incorporated into the objective forms of capital, that the total of the advanced values is transformed into real and active capital.

We have therefore spoken of the process of production not of commodities, but of surplus value. It is merely a change of words to speak of the process of production of capital.

But Marx goes further. We could stop here if capitalists, as physical persons, consumed the entire surplus value in use values. We would remain at what Marx calls the simple reproduction of capital.

But the most significant social phenomenon occurs when surplus value is consumed in small part by the capitalist class and is largely destined for the investment of new capital. The process of accumulation is an immanent moment of the capitalist production process. It entails the creation of new wage labourers (women, children, sections of the population engaged in family farming, and so on). Marx concludes that capital continuously produces productive wage labourers on an ever-expanding scale.

Not only, therefore, is capitalist production a reproduction of the entire social relation, but it is so in an incessantly expanding manner, growing before the worker’s eyes the world of wealth that is alien to him and dominates him.

Once again, the text reminds us that the act of buying and selling contained in the wage relation no longer has anything in common with the exchange between two free and autonomous owners of commodities, equal in rights, in confronting one another in a wholly spontaneous act. The wage relation, continually reproduced by the capitalist relation of production itself, does not cover a free contract, but the absolute dependence of the living worker on dominant capital.

(This text occupies page 444 in Marx’s manuscript).

Capitalism can arise from historical levels of social production in which certain quantities of means of production and circulation have been formed, and from new needs that tend to overcome old relations. At first, there is the formal subsumption of labour under capital, but immediately afterwards, the expanded development of the new, specific capitalist type of production gains full momentum.

Even when we consider fully developed capitalism, the surplus value produced is only a part of the value of the finished products, that is, of the commodities. Capital is characterised by the production of surplus value, and therefore reproduces itself only as a producer of commodities. If we have in our hands a commodity that has come out of a capitalist company, we can say that it is the immediate product of capital; nevertheless, we analyse it as capital has produced it, even though we know that other market processes await it to complete its cycle, in which it will assume the money-form, and then that of use value or means of labour for further production cycles.

Our treatment therefore begins with the commodity, because it is the basis and presupposition of capitalist production. Before capitalism, most products were not manufactured as commodities, nor were they intended to become such. The transformation of products into commodities was an exception limited to the manufacturing sectors. Many products of labour went to direct natural consumption without entering or leaving the production process as articles of commerce (in France in 1752, grain was the only agricultural product considered an article of commerce).

However, within certain limits, the circulation of commodities and money – and therefore a certain degree of development of trade – is the starting point of capital and the capitalist mode of production. Therefore, we begin the treatment of the commodity as the simplest element of that production. But the commodity is also the result, the end point, of it. Thus, we begin our study of commodities by considering them as the result of a fully developed capitalist mode of production.

Commodities may have been the product of forms that preceded the bourgeois form, but at that time they were not yet the generalised form of the product. Even money, which is nothing more than a certain form of commodity, does not become capital until after a long period of time, and essentially when the worker’s labour power has been transformed into a commodity.

Since in agriculture a large part of the product is used as a means of subsistence, and part of the working population is not yet salaried, capital does not completely dominate, even when it has conquered the manufacturing sphere. At this point in agricultural production, neither the division of labour within society nor the technical division of labour as it appears in the industrial workshop has yet developed.

The text can be summarised in three points. 1. Only capitalist production makes commodities the general form of all products. 2. Commodity production necessarily leads to capitalism since the worker has ceased to be part of the conditions of production (slavery, serfdom), i.e. the social basis is no longer the natural community (India), since labour power itself generally becomes a commodity. 3. Capitalist production abolishes the basis of commodity production, autonomous and small-scale production, with the exchange of equivalents. The exchange of capital and labour power becomes the rule.

Returning to agriculture, it can become a capitalist industry when its products are all sold on the market rather than consumed immediately, and when the costs of the items that need to be purchased as commodities are calculated in monetary terms.

This also applies if part of the farm’s produce (such as seeds) is returned to nature as production, calculating it as if the farm had purchased it from itself.

When commodities are produced on a large scale and in fixed types, the product becomes one-sided and mass-produced.

In these cases, it is closely linked to the social relations of full capitalism, and the immediate link between its use value and the satisfaction of the capitalist producer’s need for profit remains entirely contingent, indifferent and inessential. The commodity that flows from full capitalism is determined in a very different way from the simple commodity that was the starting point and prerequisite of early capitalism. Nowadays, the commodity has two other determinations. 1. Apart from its use value, it contains a specific amount of necessary social labour. But while for any commodity it is irrelevant to know where the objectified labour comes from, the commodity, as a product of capital, contains a part of paid labour and a part of unpaid labour. 2. Every commodity appears not only materially as part of the total product, but as a proportionate part of the batch produced. It is no longer a specific commodity, an individual product. The result of the process is a mass of commodities, each element of which contributes to the product the value of the capital advanced plus the surplus value.

As a support for the total value of capital, the commodity now manifests itself in the volume and dimensions that allow for the sale and realisation of the original value of the advanced capital, plus the surplus value created. Now, this is in no way linked to the obligation that a commodity or part of it be sold at a market price that matches its value. The text briefly mentions the problem of expressing in prices, i.e. in monetary values, certain commodities included in a unitary system produced by capitalist industry, such as a railway, for example, and the like. Not all commodities can be defined according to the price of practical units of measurement, such as kilograms of coffee, metres of cloth, etc., etc.

However, we have isolated a specific block of commodities. The problem is to indicate how much value has been transferred to it as an element of constant capital (raw materials, wear and tear on machinery, etc.), and then to distinguish the difference in value with the finished product, the remaining part, given by variable capital, or the cost of purchasing labour power, and by the profit or surplus value that has been created by the production process.

The numerical table we include here is intended to facilitate the presentation of the contents of the last two chapters we have to deal with, which contain some tables in which Marx has used, as he will do extensively in Capital, the units of the English system and their fractions, which are usually so difficult to read. We have converted the units into more or less plausible decimal numbers, but left the ratios adopted by Marx intact so that his demonstration can be followed.

In this chapter B of part III, Marx comes to a numerical example that we have transferred to the first column of our table. Marx assumed that with £80 of constant capital, £20 of variable capital and £20 of surplus value (i.e. assuming that the worker works half his time for himself and half for the boss, i.e. with a rate of surplus value of 1, or 100%), 1,200 metres of linen are produced, the total cost of which will be £120. Marx seeks the unit price of the commodity, i.e. its value and also its price of production. It is clear that this will be one tenth of a pound, and since the pound is divided into 20 shillings, 2 shillings per metre. Marx now assumes that productivity in this industry increases sharply, i.e. quadruples, so that at the same time and with the same workers and the same expenses, totalling £360 (320 + 20 + 20), 4,800 metres are produced. The unit price is 1/15 of a pound, or 1½ shillings. It is therefore reduced by half a shilling. Marx wanted to show that as technical productivity grows, while wages, surplus value, and their ratio remain unchanged, the price of the commodity is significantly reduced. In this example, there are no further details and the British units proved easily understandable.

Immediately afterwards, Marx gives another example, namely agriculture, where in order to see a decrease in price, it is not necessary to consider increased technical productivity, but it suffices to assume a more abundant harvest and also more fertile land. The author assumes that a given wheat field absorbs £3 of constant capital, £2 of wages, and £2 of surplus labour, maintaining the same rate with a total product of £7. If the field produces 2 quarters of wheat (i.e. 2.9 hectolitres), each quarter can be sold for £3.50, or 70 shillings. But if more is produced, i.e. 2.5, the price will fall to 56 shillings. Continuing and remembering that the total outlay of £7 is worth 140 shillings, the price for a harvest of 3 quarters will be 46 shillings and 8 pence (... for those who remember that each shilling is divided into 12 pence); if the harvest is 3.5 quarters, the price becomes 40 shillings. If it is 4 quarters, 35 shillings; if it is 4.5, 31 shillings; and if, then, it is 5, 28 shillings.

Marx wants to demonstrate that, having advanced the same capital and obtained the same surplus value, the value of production or market price (he always assumes that price and value are identical, because he refers to other parts of the work for the causes of fluctuations of price around the average social value) can vary greatly in industry and especially in agriculture, without necessarily assuming a change in the rate of surplus value.

Since in the further examples the fractions in shillings and pence and even thirds of a penny become very complicated, we have reduced everything to decimal numbers. The two examples of linen fabric manufacturing appear in columns I and II. In I (B.I), the advances are 1000 in constant capital and 250 in variable, and the surplus value is also 250. Marx introduces here the famous value added, which we denote by the symbol w and which in this case is 500. The total capital is 1500. The rate of surplus value is 1, the organic composition or rate of productivity is 4. With these expenses, suppose that the linen produced is a 30-metre piece, the price of 1 metre will be 50. Marx wants to divide this 30-metre quantity of product according to the various parts of the total capital. Constant capital represents 20 metres, variable 5 metres, surplus value 5 metres, and the value added sums the two previous ones, 10 metres. The total sum is 30.

In column II (B.II), we developed the assumption of a significant increase in productivity. Quadrupling it exactly, its rate would become 16, but we have chosen to adopt the figure 17.2, i.e. to assume a 4.3-fold increase in productivity. We have 4300 constant capital, variable, and surplus value still 250 as before, total 4800, linen produced, imagining it to be exactly 4 times that of the first case, 120 metres, price 40, greatly reduced from the previous 50 per metre. The division of the product is as follows: constant capital 107.5; variable and surplus value 6.25; value added in manufacturing 12.5.

The first numerical case reported by Marx is the same as the one that opened the previous chapter under letter B), therefore it corresponds to the first column of the table we have created, which has already been demonstrated.

The second example in this chapter, which we denote as C.II, appears in the third column of the table. Marx wanted to create an example in which the price remains the same as in the first case, but a greater surplus value is obtained without any change in variable capital as wages paid. He assumed that in this case the same workers, with the same daily pay are made to work for a longer time, i.e. 12 hours instead of 10. This is the same example we have repeatedly studied in relation to Chapter XV of Book I, which examines the various effects of increased productivity.

The reasoning in the text fits our figures perfectly. With the same variable capital of 250, having increased labour by 20%, operations were carried out on a constant capital that rose from 1000 to 1200. Evidently, instead of 30 metres of linen, 36 were produced, which at the same price of 50 per metre yielded a total capital of 1800. The value added was 600, and since the workers still received the same 250, the surplus value rose to 350 and its rate from 1 to 1.4. Productivity rose from 4 to 4.8, and the portions of the product appear in the usual rows as 24, 5, 7, 12.

Marx then deals with the third example in chapter C), in which, still referring to the initial example in the first column of our table, he imagined that productivity increases in the sense that the owners manage to reduce the workers’ wages from 250 to 200. Evidently, the surplus value will rise from 250 to 300, with the value added remaining at 500; the total product is 1500 for 30 metres and therefore 50 per metre. The rate of surplus value has risen to 1.5, that of productivity from 4 to 5, and the parts of the product are in the usual order: 20, 4, 6, 10.

The last example in the text is the final column of our table and concerns case III a. Referring to the initial case, the wage was left unchanged, but it was assumed that labour productivity rises by ¼, i.e. from 4 to 5, as in the previous case. In this case, the product will have risen from 30 to 37.5 metres, which at a price of 50 gives a total capital of 1875. The surplus value rises to 37.5 with a rate of 1.5, as in the previous case. The value added is 625 and the divisions of the product of 37.5 are in the last 4 as follows: 25; 5; 7.5; 12.5.

We believe that the figures we have worked out, without changing anything in their proportions in each example and between examples, clearly demonstrate Marx’s procedure, and we can account for his two conclusions (pg. 453 of the original manuscript).

Constituent elements of capital in the examples discussed by Marx

Reference to text		B.I C.I	B.II	C.II	C.III	C.IIIa
Constant Capital	C	1000	4300	1200	1000	1250
Variable Capital	V	250	250	250	200	250
Surplus Value	S	250	250	350	300	375
Value Added	w=S+V	500	500	600	500	625
Total Capital	K’=C+w	1500	4800	1800	1500	1875
Rate of Surplus Value	s=S/V	1	1	1.4	1.5	1.5
Organic Composition or Productivity	o=C/V	4	17.2	4.8	5	5
Quantity of Product	q	30	120	36	30	37.5
Unit Price	P=K′/q	50	40	50	50	50
Unit Constant Capital	C/P	20	107.5	24	20	25
Unit Paid Labour	V/P	5	6.25	5	4	5
Unit Unpaid Labour	S/P	5	6.25	7	6	7.5
Unit Value Added	w/P	10	12.5	12	10	12.5

I – If the price of commodities changes, the rate and mass of surplus value may remain constant. The correctness of this theorem is demonstrated by comparing the two examples in chapter I, i.e. the first two columns of our table. Progressive capitalist technology has caused the price of linen to fall from 50 to 40, but despite this, workers receive the same wages and capitalists earn the same profit. It is indisputable that there has been a social advantage.

II – When the price of commodities remains constant, the rate and mass of surplus value may change. The correctness of this second theorem is demonstrated by the 4 cases in this chapter C), namely columns I, III, IV, and V of our table. In these 4 cases, the unit price is always 50, but in case II (column III), the mass of surplus value rose from 250 to 350 and the rate from 1 to 1.4, while productivity has risen from 4 to 4.8. These advantages for capitalists, without any social benefits, were obtained by extending the working day by 20% (initial historical phase of the capitalist form, i.e. the formal subsumption of labour under capital; England in the early 1800s, Russia in the 1900s). In the third case of chapter C), i.e. IV of the table, which fall under the same heading, instead of extending the working day, workers’ wages were reduced, so that surplus value rose from 250 to 300, its rate from 1 to 1.5. Productivity went from 4 to 5. Here too, there were no social benefits for the working class and it is still the formal subsumption of labour under capital.

In the last case, still keeping the market price constant, productivity was imagined to have risen from 4 to 5 for technical reasons, with workers’ wages remaining unchanged. The mass of surplus value reached the maximum amount of 375, value added also reached a maximum of 625, the rate of surplus value also rose to 1.5, and with the wage-earning class treated the same, surplus value and capitalist accumulation strongly advanced. We can consider ourselves in not only the formal but also real subsumption of labour under capital and in large-scale industrialisation with developed machinery, which could also be represented by much more significant increases in labour productivity, as hypothesised in column II, which had been to the social advantage, being the only case, among the examples discussed here, in which the price of commodities fell significantly, as an immanent effect of fully developed and technologically advanced capitalism.

The comments Marx makes following these significant examples are directed at the criticism of vulgar economists and immediatist socialists like Proudhon, who did not understand how unattainable it was, through wage increases, for workers to regain the entire fruits of their labour. Marx does not develop here case III of the cited Chapter XV of Book I, concerning a general increase in productivity that reduces the cost of living to such an extent that the constancy of wages represents a great advantage for the proletariat, and which, however, as we showed at the time, can be reconciled with a significant increase in both the mass and the rate of surplus value. Leaving aside the critical part of Marx’s last pages, we will quote this decisive passage:

‘[W]ith the development of capitalist production and the cheapening of the commodity corresponding to that development the quantity of commodities grows, the number of commodities that have to be sold grows; hence a constant extension of the market is necessary, is a requirement of the capitalist mode of production. But this point belongs better to the subsequent Book’.

We need not repeat that this is the line of development of the entire work conceived by Marx, which was to reach the stages of the world market and the class politics of the capitalist State, that is, the consideration of modern imperialism, which always prepares the final revolutionary catastrophe.

The importance of this unpublished draft of Marx’s text, as we have tried to highlight, is that he, a century ago, was already developing the theory of value added by labour in production, in a manner consistent with the revolutionary programme and diametrically opposed to the degenerate modern and opportunist form of incomes policy.

Studied centuries apart, Marx is increasingly contemporary.

At the Milan meeting, a draft was given of the ongoing study in France on the connection linking the unpublished 6th Chapter of Capital – which had been discussed at the previous meeting – to the entirety of Marx’s work, and on the light it sheds on our doctrine as a weapon of battle. We reproduce this draft here, at the close of the reports of the general meeting of 1-2 April 1966, as a first essay of the work to be carried out.

To understand the importance of the (unpublished) 6th Chapter of Capital – which we summarised extensively in issues 5 and 6 of this year – it is necessary to establish a chronology of Marx’s economic Work; and this is all the more important given that Marx was, in reality, unable to complete it. It would be important to find the common thread, the central concern around which all his works are organised.

Marx himself indicated the development of these works. In the preface to A Contribution to the Critique of Political Economy, published in 1859, he speaks of Engels’ brilliant sketch on the critique of economic categories, which appeared in the Deutsch-Französische Jahrbücher, as a starting point. It came, so to speak, at just the right moment. In reality, Marx had demonstrated that the different developments of human activity have the same basis: economic production; and that all other manifestations of human activity, in particular thought, depend on the mode of production. Instead of studying human consciousness as an independent product, it was necessary to understand the real life-process of the latter. This reversal appears in an extraordinarily condensed form in the famous Theses on Feuerbach. It is in The German Ideology that the method is elaborated which the preface to A Contribution to the Critique of Political Economy will define so clearly and succinctly: historical materialism. In this work, there is an attempt to provide a demonstration of the new theory: to prove that the determining factors are economic and social. Therefore, we find there both a first draft of what will later become the Introduction to the Critique of Political Economy – an exposition of the method and plan of the complete work – and an outline of the Forms that precede the capitalist mode of production: a periodisation of human history. The consistency with the doctrine is complete: history is the only true science.

As is well known, the work never saw the light of day, abandoned as it was to the ‘gnawing criticism of the mice’. Marx and Engels did not care too much about it, after all. Its elaboration had allowed them, above all, to see clearly into the new conception, to master the new doctrine. Meanwhile, Marx was already actively working on the economic work mentioned by Engels in a letter dated 20 January 1845: ‘Do try and finish your Political Economy book, even if there’s much in it that you yourself are still dissatisfied with’; and to which Marx himself refers in a letter to Leske dated 1 August 1846: ‘[P]ublication of my critique of Economics, etc., had been virtually assured through a friend of these gentlemen’. This book, too, was not to see the light of day during the author’s lifetime. It was published after the death of the two friends under the title Paris Manuscripts of 1844.

Marx did not for this reason abandon his economic studies, and in 1847, in response to a volume by Proudhon, published The Poverty of Philosophy. This is, in a certain sense, a summary of his entire work, and it concludes the critique of philosophy as it had been conducted in the Critique of Hegel’s Philosophy of Right and On the Jewish Question: the proletariat is the emancipator of human society. On the other hand, it lays out the true movement of this emancipation: the constitution of the class into a Party, which implies an exact characterisation of present society and the delimitation of the future one. But 1847 is also the year of the Manifesto of the Communist Party. The workers’ movement, which is growing ever-larger in size (as described in The Poverty of Philosophy), must be given a programme: the Manifesto condenses the contribution of all past proletarian struggles, both practical and theoretical, and illuminates it with the clear and evident affirmation of Communism, stripped of all utopianism because it is presented as it is – as the real movement of society, the real motion of the proletariat towards its emancipation.

Marx’s economic works are not academic: they are intended for the proletariat as weapons and tools of struggle. Therefore, in 1849, Marx condenses the results of his research in a series of lectures given in Brussels: Wage Labour and Capital. Once the revolutionary wave had subsided, he resumed the great economic work had begun and never appeared – above all, it had not appeared in time before the revolution. It was necessary to give an indestructible basis to the programme launched in 1847. Marx, therefore, continues his work and in 1859 publishes A Contribution to the Critique of Political Economy. This was to be the beginning of a very extensive work that he wanted to publish in a single block; however, Marx was forced to speed up its publication due to the economic distortions circulated by a large number of socialist propagandists, and in particular Lassalle.

The work dealt mainly with value in the stage of the simple circulation of commodities and at the moment of the transformation of money into capital. But it was too dense and concise. Marx wanted to provide both a critique of the base and of the superstructures; an explanation of real phenomena and, at the same time, of the theories they generated (what would later become the History of Economic Doctrines or Theories of Surplus Value): ‘It is at once an exposé and, by the same token, a critique of the system’ (Marx to Lassalle, 22 February 1858). Hence the dual plane of the work: exposition of economic phenomena, and critique of the different conceptions in circulation regarding the phenomenon under study. The overly dialectical nature of this exposition (flirting with Hegel!) perhaps explains why the Contribution had no success.

Capital appears at the height of the labour movement in two of the major centres of the time: Germany and France. The exposition is more didactic, and is in reality the true programme of the proletariat for its emancipation. It can be said that the Work was loudly demanded by the working class. The latter needed a critical and constructive weapon for its daily struggle against capital, and for the much broader struggle that would lead to its destruction. This was the meaning of Marx’s presentation on the subject: Value, Price and Profit, given at around the same time to the International Workingmen’s Association.

As is well known, only Book I of Capital appeared during the author’s lifetime. The other two were published by Engels, who was also unable to complete the work. A large amount of manuscripts remained. Kautsky published only the equivalent of Book IV: The History of Economic Doctrines. The Grundrisse was published in German after the World War: the 6th Chapter, and no doubt many other materials, particularly on the agrarian question, are still waiting to see the light of day.

The study of all these Works shows how Marx approached the critique of political economy in four complementary ways.

The first is that of the 1844 Manuscripts: the foundation of capitalist society is wage labour; capital itself is nothing but objectified labour. Marx explains the alienation Hegel spoke of: all history is the product of human labour, not only theoretical, intellectual labour, but all labour, all real human activity. Alienation resides in practical life, in real life, and derives from the fact that man, in bourgeois society, has become a commodity.

Marx, however, is still too much on the opponent’s ground, in the sense that he approaches the question, in the manner of philosophers and therefore of Hegel, starting from man, from the subject, whereas one must explain how the subject is produced. This is precisely why we first talk about the wage-earner, then about capital and landed property, and finally analyse property in bourgeois society and communist society: in short, we do, in part, the opposite of what Marx will do later: ‘... [M]y analytic method (...) does not proceed from man but from a given economic period of society...’ (‘Notes on Adolph Wagner’s Treatise on Political Economy’). The procedure is therefore still subjective. It is true that man is at the centre of the question (not the individual man, but social man, the human species: here the bourgeois position is already refuted), but we must also explain what the economic conditions are that produce him. Now, man can only be a subject in communist society. In other class societies, he is alienated and therefore an object: he is proletarian or bourgeois, but this means that the subject is capital. ‘He, who before was the money-owner, now strides in front as capitalist; the possessor of labour-power follows as his labourer. The one with an air of importance, smirking, intent on business; the other, timid and holding back, like one who is bringing his own hide to market and has nothing to expect but – a hiding’ (Capital, I, Chap. 6).

The importance of the Manuscripts lies in marking the act of birth of communism. In polemics with the economists, Marx discovers the future form just as he had intuited it in his struggle against Hegel’s philosophy and in On the Jewish Question, but he goes further, because he discovers its economic substratum.

The second way of approaching the question is that of Contribution and Capital. Marx starts from what is observable, that is, the commodity (as Lenin notes), to pose the question of value and its different forms, and then returns to the simple circulation of commodities and the emergence of capital. Wage labour, the producer of surplus value, appears later to explain the genesis of capital, that is, the genesis of the value increment without which no formation of capital is possible; and it appears through the analysis of the direct production process. ‘What I proceed from is the simplest social form in which the product of labour presents itself in contemporary society, and this is the “commodity”. This I analyse, initially in the form in which it appears’ (Notes on Adolph Wagner’s Treatise on Political Economy).

The third approach is provided by a fragment of an early version of A Contribution to the Critique of Political Economy. Marx addresses the problem in the most general way possible: the birth of value; and poses the question: How can value attain autonomy (an observable fact in bourgeois society), that is, cease to be strictly dependent on the conditions that generated it?

The fourth and final mode can be found in the Forms that precede capitalist production (a chapter of the Grundrisse). Capitalism can only develop on the condition that it liberates man and turns him into a commodity. To this end, it is necessary that the various communities which encompassed him and which, in a more or less degraded way, were governed by an economy in which the purpose of production was man, be destroyed. It is, in a certain sense, the study of the obstacles to capitalist development, the study of the social inertia constituted by the various communities, the most tenacious of which is found in the Asiatic mode of production, still persisting, for example, in India, and which makes the economic development of this country so difficult.

The 6th Chapter is at the point of convergence of these different modes of exposition: this is why it allows us to understand the Work as a whole. In some respects, it presents itself as a key not for understanding Capital, which is sufficient in itself, but for understanding the entire Work in which it is situated. It allows us to reconnect works that seemed to have no relationship with each other; it shows the absolute coherence of the whole theory.

The Works we have cited are, in reality, so many fragments of a single Work. Therefore, if it may seem that Marx had different concerns, different ways of approaching one and the same problem, it is because the Work was not able to see the light of day in its entirety. His various ‘plans’ shed light on this point. In A Contribution, Marx gives one that is a simple variation on that of the 1844 Manuscripts, a variation linked to the considerations we have made about this Work. In the Preface to A Contribution, he writes: ‘I examine the system of bourgeois economy in the following order: capital, landed property, wage-labour; the State, foreign trade, world market. The economic conditions of existence of the three great classes into which modern bourgeois society is divided are analysed under the first three headings; the interconnection of the other three headings is self-evident’. This plan is identical to the one sent by Marx to Engels on 2 April 1858. In 1862, in his 18th notebook, he gives a more detailed one, but the essential points (subdivision of the Work) are identical. In point 5 of the study of the production process, Marx writes: ‘Combination of absolute and relative surplus value (...) productive and unproductive labour’. Elsewhere, in a draft plan from 1859, he subdivides the study of the production process as follows: ‘I. Transformation of money into capital. a) Transition, b) Exchange between commodity and labour capacity, c) The labour process, d) The valorisation process’. Points c and d are the first two dealt with in the 6th Chapter.

Therefore, in a further study, we propose to analyse this in connection with all the works cited above. Two major questions emerge from these Works, whether complete or in the form of a plans or draft: 1) The origin of value, its determinations and its forms; 2) The origin of the free worker and the wage worker. They will be analysed in order, with the consequences they entail.