Das Kapital (Capital)

Das Kapital, usually called Capital in English, is Karl Marx’s major work on economics. Its subtitle, “A Critique of Political Economy”, tells us what it tries to do. “Political economy” was the name for the economics of Adam Smith, David Ricardo and their followers. Marx did not simply write a new economics textbook; he tried to show the hidden assumptions and contradictions of that economics and of the capitalist society it described.

Only the first volume was published in Marx’s lifetime, in 1867. After his death in 1883, his friend and collaborator Friedrich Engels edited Marx’s unfinished manuscripts into Volume II (1885) and Volume III (1894). A further body of Marx’s notes on earlier economists, later published as Theories of Surplus Value, is sometimes called the “fourth volume”.

Capital is famous both for its difficulty and for its variety. It contains abstract reasoning in the style of German philosophy, long passages of economic analysis with numbers, sharp satire, and vivid historical reporting based on British government reports about factories, mines and housing. Readers often remark that the first chapters are the hardest; the later chapters on the working day, machinery and primitive accumulation read more like history.

Marx starts with something everyone knows: in a capitalist society, wealth appears as an “immense accumulation of commodities”, things produced to be sold. A commodity has two sides. It is useful (it has a use-value), and it can be exchanged for other things (it has exchange-value). What makes a coat worth, say, the same as twenty metres of linen? Following earlier economists, Marx argues that what they share is human labour: value is measured by the labour time that society, on average, needs to produce them.

Then comes the puzzle. A capitalist starts with money (M), buys commodities (C), and ends with more money (M′). If fair exchange means equal values are traded, how can money grow? Marx’s answer is that there is one special commodity whose use creates more value than it costs: labour-power, the worker’s capacity to work. The capitalist pays wages equal to the value of labour-power, roughly what workers need to live. But in a working day the worker can produce more value than that. The extra is surplus value, the source of profit, interest and rent.

Marx calls this relationship exploitation. He does not mean that individual employers are necessarily cruel or cheating; the point is that the system works this way even when every exchange is legally fair. Workers, who own nothing but their ability to work, must sell it to live, while the owners of the means of production, the factories, land and machines, keep what workers produce beyond their wages.

Volume I, The Process of Production of Capital, is the one most people read. It moves from commodities and money (Part One) to the transformation of money into capital and the buying of labour-power (Part Two), then to how surplus value is produced by lengthening the working day (absolute surplus value) or by making labour more productive through cooperation, the division of labour and machinery (relative surplus value). It ends with wages, the accumulation of capital and a final part on “so-called primitive accumulation”.

Volume II, The Process of Circulation of Capital, looks at how capital moves through its different forms, money, production and goods, and how the whole economy can reproduce itself year after year. It contains Marx’s famous “reproduction schemes”, which divide the economy into a sector producing means of production and a sector producing consumer goods.

Volume III, The Process of Capitalist Production as a Whole, returns to the surface of economic life. It explains how surplus value appears as profit, how competition creates an average rate of profit across industries, why Marx thought the rate of profit tends to fall, and how surplus value is divided into industrial profit, commercial profit, interest and ground rent. It also includes discussions of credit, banking and crises.

Karl Marx was born in Trier in the Rhineland in 1818 and studied law and philosophy in Bonn and Berlin, where he was shaped by the philosophy of Hegel and the Young Hegelians. As a radical journalist he was expelled or driven from Prussia, France and Belgium. After the defeated revolutions of 1848, in which he took part with Engels, author of the Communist Manifesto with him, he moved to London in 1849 and lived there for the rest of his life.

Britain was then the most industrialized country in the world. Its cotton mills, coal mines and railways showed the power of the new economy, and also its human cost. Parliament had passed Factory Acts limiting working hours, and government inspectors published detailed reports, the so-called Blue Books. Marx used these reports extensively, especially in the chapters on the working day and on machinery, to document child labour, long hours, industrial accidents and disease.

Marx’s family lived in deep poverty in the 1850s; several of his children died young. His main income came from journalism, including more than a decade as a correspondent for the New-York Daily Tribune, and from Engels, who worked in his family’s cotton business in Manchester and supported Marx financially. Engels also supplied practical knowledge of how a capitalist firm actually worked.

In 1864 Marx helped found the International Workingmen’s Association, the First International, and wrote its founding address. Capital was written at the same time as he was involved in this labour movement, and it was meant to give the movement a scientific understanding of the system it faced.

Commodity fetishism. In a famous section of Chapter One, Marx argues that in a market society the social relations between people who work for one another appear as relations between things, as prices and the movements of goods. Just as religious believers attribute power to objects they themselves have made, people in capitalist society experience the market as a natural force beyond their control. This idea has been especially influential in philosophy and cultural theory.

The working day and machinery. Because surplus value can be increased by making people work longer, Marx describes the history of the working day as a struggle between capital and labour, fought out in strikes and in legislation such as the Ten Hours Act of 1847. Machinery, he argues, could lighten work, but under capitalism it is used to intensify labour, replace skilled workers and draw women and children into the factory.

Accumulation and the reserve army of labour. Capitalists compete, and to survive they must reinvest profits and expand. Marx argues that this accumulation tends to replace workers with machines and to create an “industrial reserve army” of unemployed and underemployed people, who keep wages down. He calls this the general law of capitalist accumulation: wealth accumulates at one pole and misery at the other.

Primitive accumulation. In the final part of Volume I, Marx asks how capitalism began. He rejects the story that some people simply saved while others were lazy. Instead he describes the forcible separation of producers from the means of production: the enclosure of common lands in England, laws against vagabonds, colonial plunder and the Atlantic slave trade. Capital, he writes, comes into the world “dripping from head to foot, from every pore, with blood and dirt”. The chapter ends by predicting that the concentration of capital will eventually be overturned: “The expropriators are expropriated.”

Capital was the result of decades of study. Marx filled notebooks with excerpts from economists and reports, and wrote a series of large drafts: the manuscripts of 1857–1858 now known as the Grundrisse, the book A Contribution to the Critique of Political Economy (1859), a huge manuscript of 1861–1863 in twenty-three notebooks (which contains Theories of Surplus Value), and a manuscript of 1863–1865 which became the main basis of Volume III. His original plan envisaged six books, on capital, landed property, wage labour, the state, foreign trade and the world market; Capital covers only part of it.

Volume I appeared in Hamburg on 14 September 1867, dedicated to Marx’s late friend Wilhelm Wolff. Sales were slow at first. Marx revised it for a second German edition (1872–1873), changing in particular the difficult opening on the form of value, and he closely revised the French translation published in instalments in 1872–1875. The first translation of all was into Russian, in 1872; the tsarist censors let it pass partly because they judged it too difficult to be widely read.

After Marx’s death, Engels prepared the third (1883) and fourth (1890) German editions of Volume I and the English translation by Samuel Moore and Edward Aveling (1887). He then spent years deciphering Marx’s handwriting and organizing unfinished drafts into Volumes II and III. Karl Kautsky later published Theories of Surplus Value in three volumes (1905–1910), rearranging and cutting parts of the manuscript.

Capital is now read in dozens of languages. In Korea it circulated only underground under the military governments; the first complete Korean translation, published in 1987 without the translator’s name, led to the arrest of its publisher in 1989 under the National Security Act, and another complete translation by the economist Kim Soo-haeng appeared the same year.

In his preface to the English edition of 1886, Engels wrote that Capital was often called on the Continent “the Bible of the working class”. Social democratic parties, trade unions and revolutionary movements all drew on it, although few members read it in full; summaries and popularizations spread its ideas far more widely than the book itself.

In the twentieth century Marx’s ideas were adopted as official doctrine by the Soviet Union after the October Revolution of 1917, by the People’s Republic of China, and by many other states. These regimes claimed Marx’s authority for one-party rule and planned economies, and many carried out mass repression and caused famines in which millions died. Scholars continue to debate how far these outcomes can be traced to Marx’s own thought, which contains little detail about how a post-capitalist society should be organized.

Outside politics, Capital shaped many academic disciplines. Economists, including critics, have engaged with its analysis of accumulation, crises and technological change. Historians have used its questions about the origins of capitalism, labour and class. Sociologists, from Max Weber onward, defined their own ideas partly in dialogue with Marx. Philosophers and cultural theorists of the Frankfurt School and later drew especially on the concept of commodity fetishism.

Critics have been equally important. Economists of the marginalist school, which emerged in the 1870s, replaced the labour theory of value with theories of value based on subjective utility and scarcity, and most mainstream economists today do not accept Marx’s value theory. Others argue that his predictions of growing impoverishment and revolution in the most advanced countries were not borne out, while supporters answer that his account of globalization, inequality and recurring crises remains strikingly relevant.

The transformation problem. In Volume I Marx assumes that goods exchange at their values. In Volume III he admits that competition equalizes profit rates, so that prices of production differ from values, and he proposes a way to transform values into prices. Eugen von Böhm-Bawerk (1896) argued that this contradicted Volume I; Ladislaus von Bortkiewicz (1906–1907) showed that Marx’s procedure was incomplete and proposed a correction. After Piero Sraffa’s Production of Commodities by Means of Commodities (1960), Ian Steedman and others argued that labour values are unnecessary for determining prices and profits. Defenders have offered alternative readings, such as the “New Interpretation” and the Temporal Single System Interpretation, and the debate remains unresolved.

The falling rate of profit. Marx argued that as capitalists replace workers with machines, the rate of profit tends to fall, though with counteracting tendencies. Critics, notably through the Okishio theorem (1961), argued that cost-reducing innovations adopted by rational capitalists cannot lower the rate of profit if real wages are constant. Empirical and theoretical disputes over this law continue.

How to read Capital. Louis Althusser and his students in Reading Capital (1965) argued for a “scientific” Marx who broke with Hegelian humanism. The German “New Reading of Marx” and value-form theorists instead emphasize the Hegelian logic of Capital and read it as a theory of social forms, not of embodied labour quantities. Others read it primarily as history, sociology or moral critique.

Engels’s editing. The complete publication of Marx’s manuscripts in the MEGA2 edition has shown how extensively Engels reorganized and sometimes reformulated the drafts behind Volumes II and III, for example in the chapters on the falling rate of profit and on credit. Scholars such as Michael Heinrich argue that the finished-looking volumes give a misleading impression of a completed system, whereas Marx’s own drafts are more open and provisional.

Marx’s own method combined abstraction and history. In the 1873 afterword to the second edition he distinguished the method of inquiry, which must appropriate the material in detail, from the method of presentation, which proceeds from simple abstract categories, such as the commodity, to more concrete ones, like competition and credit. Understanding this order is essential: many statements in Volume I are simplifications that later volumes modify.

The critical edition is the second Marx-Engels-Gesamtausgabe (MEGA2), begun in 1975 in Moscow and East Berlin and continued since 1990 by an international foundation coordinated by the Berlin-Brandenburg Academy of Sciences. Its second section contains all editions of Capital published in Marx’s and Engels’s lifetimes and all of Marx’s preparatory manuscripts, allowing readers to compare drafts, editions and Engels’s interventions.

Historians of economic thought read Capital against its sources: Smith, Ricardo, the Physiocrats and many lesser-known writers whom Marx criticized. Social historians test Marx’s use of the British factory reports against other evidence, and have noted both the reliability of his quotations and the selectivity with which he chose the worst cases. Recent research also uses Marx’s late notebooks on agriculture, natural science, Russia and non-European societies to ask how his views were changing after 1867.