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Wednesday, August 04, 2010

Guest Lecture on Capitalism/ Capital and related concepts

Notes by Sneha Sharon Mammen:
Dated: 3rd August, 2010
The following has been Mr. Dhar's fragment of understanding on Capital/ Capitalism/ Aesthetics/ Culture, which triggered our minds to think on his lines which was in turn the product of his toil to understand Marx for the past twenty two years. It certainly reaped its own benefits as students of Literature, Economics and Law participated in a four hour involved interactive session with the professor.
Mr. Dhar storms the session with the mind boggling general question as to what ‘Capital’ essentially meant. A shift from Hegel to Marx ( according to lay man understanding) interprets capital as something that can be used as an investment and from which an individual can expect returns. The term is also in day to day circulation as in ‘ I don’t have any capital’. These are varying plausibilities of using the term.
Today we understand capital as per newspaper/stock exchange/finance reports. However, no study of Economics is complete without the premier study of Das Capital, Karl Marx’s foundation guide in writing. Marx, who intended to write six volumes could only leave behind, unfortunately three volumes and a forty pages of the unfinished fourth number. However, the ground work for Das Capital was Grundrisse, a German text of six hundred and fifteen pages again by Marx.
As mentioned earlier economics and its study is incomplete without a study of the giants in this sphere, essentially Marx and his predecessors Adam Smith and Ricardo. The six major volumes of Das Capital were supposed to discuss in detail each broad point. Interestingly, forty pages into the fourth volume, Marx finds himself perplexed and arrives at the conclusion that he has essentially got some angle wrong. Therefore, he sets himself to read further into analyzing the entire situation all over again. This breeds thirty thousand copious pages of unpublished analysis on economy and its working( now in the Marx Engels Archive, Amsterdam). It was Rosa Luxemberg who completed the fifth volume.
Mr. Dhar had the lovely chance to scroll through the first four hundred pages of the full collection of the unpublished version and says that much of it was also on the Indian village conditions, twenty five hundred pages on medicine, hundreds of pages to prove Calsulus wrong and so on. This could also mean that quite visibly politics and culture and economics is tied together and are not essentially varied, thoroughly different terms.
What Marx actually stood against was for the piece meal, segmented understanding of the reality of the world.
Volume one of Marx’s Das Capital talks of Commodity and Production. Marx basically went into studying the intrinsic aspect and property of a commodity. Volume two on the other hand studied Distribution as a step two of the entrance of commodity into the market. However, there was no concept of demand and supply discussed therein. The third volume studied Land and Rent and ended with the ‘nasty word’ as Mr Dhar puts it, ‘Class’. The last chapter of volume three is an attempt to describe what class actually was but it was all in vain. Also, surprisingly enugh, only the first volume talked of labour!!
‘ A patient thinker cannot give all the answers and those who have all the answers are not thinkers’ courtesy Mr Dhar, and hence Marx attempted in vain to define ‘class’.
So when a Terry Eagleton and a Jameson were referring to ‘Capital’ and ‘capitalism’ they were indeed talking about the volumes that they had read and do not deal with it with respect to our present day newspaper understanding of the concept.
So our understanding of capital now moves on to understand that it is not only investment or does not yield returns alone but is also a vicious cycle and Money, Value and Price are essentially very different concepts. However, Marx in volume one of his book describes and establishes relation between all the above mentioned concepts. For example, hundreds of pages were spent in understanding what the term ‘value’ actually catered to.
A non-economic background student pops up a very ontological question at this juncture. ‘ Is there a common entity from where these things are derived from?’ and this leaves us with the discussion as to what were the origins of capital, money and value. What is capital generally looked upon as now and what was its primordial form? These were basically free in nature. For a long time even cattle was used as monetary exchanges. Meaning to say that nobody really has the capital, it is all there out in nature and nature has all the resources.
Taking up a pluralist, heterogeneous example:
What could you possibly do with a mango?
1) You either consume it. There is a segment in our life which is involved with consumption based on need. Everything need not essentially be revolving around buying and selling.
2) Mango seed could produce more mangoes in future and the process of consumption can be multiplied. It is therefore a vicious cycle. ( Indian villages are self sustainable and process like this/ also knowledge multiplies in a similar way)
3) You could use the mango as an exchange commodity for an orange.
4) You could also convert the mango into pickle. (Economics gives us a feeling that everything happens in the market but not actually!) The process has to take place to convert the mango into the pickle and the very fact that there is capital in the world is philosophically naïve.
Seed to mango involves labour too.
The initial mango found free in nature plus human/animal labour leads to capital in this case. Without the intervention of nature therefore nothing becomes possible. Marx traps us that way saying that nothing actually happens without labour.
At this juncture can we consider that capitalism did have two bases: the spread of colonialism and the rise of slavery. The British sold the Burmese teak and the skyscrapers of the west is a result of two hundred years of immense plunder, but, the initial mango was found free in nature and it could be sold without having to pay for it. Today, the mad rush that we see is just a run for the free capital that exists be it the Ambani feud or the Iraq war. Thousands of acres of land in Bengal was bought by the Tata’s for a rupee. Does it then become the free mango?!
0 ( free mango) + x ( money from selling) = x( total profit)
Mango + labour = pickle also involves no harm and again you can earn ‘x’ amount. This has been practiced even today by the self employed. The market then comes only at the last juncture.
Now, supposingly you want to employ another person to do the work, here labour in question would be a commodity which is bought and sold and not a capital.
Therefore, 0 + 2 (remuneration to be paid for labour) = 4 ( selling price)
Total gains from transaction would be ( SP- remuneration) = 2.
Essentially we could also say that not everythings begins with capital. We just have natural resources. ( Natural resources + labour= production)
However, capital by itself cannot do anything and nothing can happen without production( Marx refutes this later in volume second). Marx moves on to derive from Adam Smith and Ricardo to say that Capital is impossible without land and labour.
Volume three suggests that capital never pays rent ( Coca Cola/ Tata’s), and therefore it is a critique of Hegel when he says that there is no capital per se. Whatever you have is either free in nature or plunder and that is where the concomitant history of capitalism lies embedded, what went hand in hand with capitalism in Europe was Colonialism. When in 1857, England was undergoing industrialization, India was facing the Sepoy mutiny and nationalism while Africa at this time was in the clutches of slavery where labour was bought for free ( capital may or may not buy labour!) The essential being of the slave was bought as the white master employ his labour on the cotton fields and sell the efforts of bonded labour( what we now understand it as) worldwide.
Ponder: Is it still happening? Consider the fashion industry, the IPL auctions! In India, bonded labour unfortunately goes the caste way
When do we actually buy and sell labour? When you work in an office for a pay, you are actually selling your labour and the employer who recruits you is the buyer of your labour. At this point, Marx needs to be congratulated for a term that he coined, ‘labour power’ and hence it is labour power that is sold by a worker ( the idea of human capital comes here). It is therefore a need based economy. It is the similar case in our domestic households where everything is need based. It is still an economy because there is exchange in the strictest sense.
For Capitalism to work well the game should run fair; there ought to be buying and selling of labour power but it should be necessarily without any coercion which might otherwise be a condition of slavery.
Value and Price are very different from each other. Price could be infinitely cooked up ( palak paneer in a dhaba would cost only Rs 20 while the same thing might cost 500 in Taj chain of hotels). Marx therefore showed that the wage that the labour gets is the value of labour, both intrinsic and generated and sometimes this value is expressed in monetary forms. Slave labour therefore has value but no price. We could say that essentially everything has value but only a few have price tags attached to it.
For example lets say:
Leather ( value 1) + labour ( value 2) + Vx ( x being the work employed by labour on the leather) = shoe (value 3)
There is therefore an exchange,
C’ – C= profits
C’ –C = delta C ( which is capital according to Marx, both static or variable)
Now, C + delta C = C” ; capital can therefore be generated by production. Is capital therefore accumulated labour?
Example, The share market.
Again, production need not always take place, you buy shoes in Lisbon for C, sell it in Singapore for C’.
Capitalism was also born with a single universal language. Meaning to say that a mango should be a mango everywhere else and this is where the concept of brand comes in and interstingly enough, potato an import from Latin America and idli from Indonesia is doing so well in India!
The capitalists in modern cultures is the bourgeois and the working class therefore becomes the proletariat. India has a mixed economy. However, the term is not thoroughly a transparent term. India is a capitalistic+ slave + feudal +need based economy. That is how it is decentralized and therefore not the whole of India can be either capitalistic or agrarian.
It was therefore a ladder progression, where the bottoms of the ladder was pre capital, rural, agricultural and pre modern and with a shift in time period constituting development we moved on to capital, the west, modern, the urban and industrial and at the end of it Capitalism becomes an ideology and not a fact. “ Ideology is seeing yourself in the mirror and believing that it is you although the image that is formed is laterally inverted” and some people actually live this ideology and they are the capitalists- the bourgeois who lives in this illusion. However, collective hallucinations and illusions are part of everyone’s life! The illusion lived during the feudal periods was that the monarch was Godsent.
This is why culture and economy should go along. It was the proletariat who critiqued the ideology. The present interest in Marx is not because of him along but because of other perspectives too. Even the feminist corners of the woman labour question has generated interest.
Workplace – selling labour- consumer becoming the proletariat. There is no final bourgeois in that sense of the word.
Twenty four hundred pages run in from volume one concerning commodity to volume three where Marx talks of class/proletariat/labour. He saw that the commodity (shoe) in the market was sold for Rs 8 and tried finding out the price of leather for the capitalist and it was found that he paid only Rs 2. Another Rs 2 was used in employing labour and therefore the value increment is ( 8- (2+2) ) =4
Which is delta C , that is profits in mainstream economics. Now Marx’s question was, ( 2+2) has value and the Non Performing Appropriator (NPA) has value. V1 +V2 ----) V3 and in this case 4 is the value increment. Value is added because V2 worked on V1 ( Vx) to generate the final product that is V3.
Value + added value = 8- 2= 6
6 – labour charges( 2)= 4 ( surplus value) and this is called exploitation. Who decides where the surplus value goes? It is the producer, the one who generated value in the first place. Aesthetics in cultural studies has been dominated by NPA’s and that is why we have an Oscar Wilde or a Virginia Woolf or the Bronte sisters!
In the quest of allocation of surplus value, there is a power/ political struggle. The social and the cultural are also deciding factors. The producer may even choose to spend the entire surplus in a casino within a day or might even channelise it as social security, hospitals etc. No true appreciation of aesthetics can happen here.
At home, the mother converts the cauliflower into cauliflower curry. Here no price is attached but value is surely generated. The feminists put forth their need for respect and recognition and a share in labour for the services she renders. However, the final product is not a commodity here. Capitalism is a process which engages in buying of labour and means plus products which yields the final commodity.
Historically, some people have lived on other people’s labour, can we all labour together now?
The ethical aesthetic question therefore is HOW TO LIVE? What is it to be cultured? Living out of someone else’s labour is not shared living at all. No amount of cosmopolitanism marks culture and Terry Eagleton says that an oppressive society is not a condition of culture.
Studying the woman question, the labour of a woman cannot be brought under the realm of capitalism if she is doing it for her family, however the curry that she cooks if generated in the market through catering can make her a capitalist and since she is in no contractual bond to either cook or clean the house as labour is in capitalistic economy, the two spheres are thoroughly different.
Lecture by: Anup Kumar Dhar, 3 August, 2010 at Christ University.


Anonymous said...

"Meaning to say that nobody really has the capital, it is all there out in nature and nature has all the resources."

This particular statement, though only slightly mentioned, is a very wise insight, and means a lot...

If you take Marx's exploitation a little further, about labourers being exploited with regards to the surplus, there is an even greater exploitation which happens here, which is the exploitation of Nature, which we have come to treat as an renewable resource. It is not.

Anil Pinto said...

Agree with you 'neo'. Good extending of the argument.