Marx played many roles in his life: activist, journalist, historian, philosopher and also an economist. The crowning achievement of his efforts in economics was the three volumes of Capital. They laid bare for the first time a coherent theory of capital—the stuff that capitalists strive to accumulate.
What Capital offers, above all, is a solid science of capital accumulation—one intended as a weapon to be wielded in the working class’s struggle for liberation. Its potential as such a weapon was recognised from the start. As Marxist historian David Riazanov recounts, after the first volume of Capital was published in 1867, a resolution passed by the International Workingmen’s Association (the First International) “urged the workers of the different countries to study Capital. The resolution pointed out that to Marx belonged the honour of being ‘the first economist who subjected capital to a scientific analysis and who reduced it to its basic elements’”.
The usefulness of Capital for revolutionaries remains undiminished today. Consider two of the main tasks Marx undertook in writing the book. One was to lay out the economic system underlying capitalist society. The other was to describe the turbulent dynamics of accumulation over time. The insights Marx won in these areas continue to provide a guide to revolutionaries seeking to understand the political and economic situation they’re operating in, to assess the social forces shaping that situation and to anticipate future developments.
Capitalist society, Marx contended, must be understood as a totality—a world system, the driving force of which is competition between big businesses and corporations (capitals) and between the capitalist states in which they’re situated. Within this totality we can make sense of why different parts act as they do. Capital and the states that “serve and protect” it are thoroughly interrelated, because they both arise on the “ruling” side of the underlying class-divided structure of society.
Marx describes how this system came to be. Before the rise of capitalism, Europe was a feudal society. The state was the executive agent of the landowning class—the feudal lords, the church, the monarchy. Together they ruled over other classes, like merchants, artisans and peasant farmers. From about the fourteenth century in parts of Western Europe, different fractions of the capitalist class began to rise in wealth and power: first merchants and bankers, and then industrialists from the seventeenth century onwards.
The emergence of capitalism in this period was far from peaceful and happy. As Marx writes in volume one of Capital: “The discovery of gold and silver in America, the extirpation, enslavement and entombment in mines of the aboriginal population, the beginning of the conquest and looting of the East Indies, the turning of Africa into a warren for the commercial hunting of black-skins, signalised the rosy dawn of the era of capitalist production”.
In this “rosy dawn” of violent conquest and slavery, vast piles of money accumulated in the hands of merchants. What to do with it all? They lent it to states to fund wars for territory, ports and trade routes. The power of the state—“the concentrated and organised force of society”, as Marx put it—was used “to hasten, hot-house fashion, the process of transformation of the feudal mode of production into the capitalist mode, and to shorten the transition”. The merchants also lent large sums to industrialists who began to out-compete the craft guilds that structured industry in feudal society, by rearranging and bringing under stricter top-down control the labour process in the factories.
States, in turn, helped their industrialists to take over markets and hobble competitors. The British industrial revolution in the eighteenth century, for instance, was tied up with textiles. British textiles faced export competition from India, which was then the leading textile-producing nation. British rule in India broke up the textile industry there to clear the path for British manufacturers. Those manufacturers in turn got their cotton from the slave-worked plantations organised by capitalists in the US south. A world economy was created by capitals and states of the great European powers.
As industrialists began to reshape production processes from the eighteenth century, they hit upon a way to systematically turn a given sum of money into more money—all by how they treated their workers during the work week the wages they distributed paid for. A simple example to explain this: you and some rival firm have both hired a worker for a week. If you can get your worker to produce far more commodities in that time than your rival can, then you can undercut your rival’s prices on the market and, over time, take over their market share. This competitive zeal drove industrialists to increase both the length and intensity of the working week, so they could produce more commodities in the same time.
Another tool for increasing productivity was to introduce an ever greater division of labour in the production process, so that instead of one worker undertaking a number of tasks, each worker was given only one. Finally, by the first half of the nineteenth century, they competed increasingly by introducing more machinery into the process, to expand the volume of raw material being worked into finished products by each worker in a day. That brings us to the mature system of industrial capitalism, theorised by Marx and still with us today.
Marx shows, in Capital, how certain economic laws and tendencies emerge in the process of capital accumulation. These laws don’t express themselves in a direct way in the surface phenomena we can observe. Instead, there are mediating forces between the deepest currents and the surface, and we must keep the totality in view to understand specific, concrete surface phenomena. In social science, it was one of Marx’s great achievements to show how the deepest economic tendencies interacted with more mediating currents and surface dynamics to yield social reality. With that in mind, consider three interrelated laws from volumes one and three of Capital.
First, the “law of value”: that the prices of commodities reflect the value that has been embodied in them by the amount of labour time involved in producing them. This doesn’t mean that prices reflect value directly—it happens in a mediated way. There are systemic reasons why prices deviate from labour values, within bounds. Short-term changes in demand or supply can also makes prices fluctuate up or down around the price that corresponds to value.
Second, the “general law of capital accumulation”, which emerges as competition pushes production methods in an increasingly mechanised direction. This process polarises society between a small and shrinking minority of obscenely wealthy capitalists, and a large and growing majority of workers. It does this because the increasing mechanisation of production continually undercuts and displaces independent commodity producers, artisans and peasants and turns them into workers. As the scale and technological sophistication of productive processes grows, only the bigger capitalists, those able to make large up-front investments in machinery, can keep up.
This process also periodically makes sections of the working class redundant, their labour taken over by the machines. In a more rationally ordered society, this would be a good thing—enabling more leisure time for all. In capitalism it merely throws some workers on the scrap heap of unemployment, while those who remain are overworked.
In volume one of Capital Marx summarises the human face of this cold economic process thus: “Within the capitalist system all methods for raising the social productiveness of labour are brought about at the cost of the individual labourer; all means for the development of production transform themselves into means of domination over, and exploitation of, the producers; they mutilate the labourer into a fragment of a man, degrade him to the level of an appendage of a machine, destroy every remnant of charm in his work and turn it into a hated toil”.
Third, because production methods become increasingly mechanised under capitalism, there emerges a tendency for the rate of profit to fall across the whole world economy. This happens as a slow process spanning centuries. It also expresses itself in faster processes of booms and depressions every few decades. Around these recurring economic and imperialist crises workers face unemployment, ruling-class offensives to lower living standards, reactionary nationalist upsurges, and war. We have seen this play out in the past decade in the lacklustre economic recovery from the 2007-08 global financial crisis.
Why do these laws matter? Most importantly, they bolster the case for workers’ revolution. What Marx’s analysis in Capital, shows, above all, is that there is no prosperous end game for the working class—and no peaceful and sustainable future for the world—under capitalism. If it’s left to the tendencies of capital accumulation, the world capitalist class as a whole will keep getting more of the value produced by workers. It will therefore extend its power over workers: more powerful militaries, more policing, more surveillance, more propaganda and marketing, and more wasteful consumption of resources by billionaires on super-yachts, private jets and space flights.
At the same time, the destruction unleashed by the competitive dynamics of capital accumulation will grow ever greater in scale. We’ll see more, and more devastating, wars and environmental destruction, and on a human level more alienation, more crippling of bodies and minds through the daily grind of exploitation, and more violence and degradation of human relationships generally. The bigger and more powerful the system becomes, the more the majority of humanity and the planet we depend on will suffer.
Only if we smash their state and take over society’s means of production, and direct social resources for the interests of the masses, can we make a new path for humanity. Capital’s insights about the capitalist system and its accumulation dynamics continue to provide a trellis to support and orient revolutionary organisations in this task. An army of university professors and social democratic politicians have, of course, consistently tried to bury it—defanging it of its radicalism, or simply dismissing it as disproved, incomplete, outdated, reductionist, or what have you (all based on misinterpretations that have long been refuted). Yet it has proved impossible to shut out this great work from politics once and for all.
Reality keeps making Capital relevant again, both in the mainstream and among radicals. As mainstream economics commentators struggled to explain the global financial crisis of 2007-08, some of them had to start saying that maybe Marx had one or two worthwhile insights about capitalism. Layers of newly radicalised youth have turned to Capital in the wake of the Arab Spring and the rebellions since 2019. Capital remains a spectre haunting the ruling class.