In an aside that has been distorted innumerable times, Engels claimed that Marx once said “I am not a Marxist”. The point – for anyone who actually bothers to read Engels’ letter to C. Schmidt – was that many self-proclaimed Marxists had departed so radically from the method and spirit of Marx and Engels’ work that Marx disavowed any association with their “Marxism”.
I was reminded of this point when I read a recent article in Nature, Society, and Thought entitled “A New Marxist Neo-classical Modeling of Capitalism” (volume 19, number 4, pages 473-483) by Hiroshi Ohnishi. Ohnishi self-consciously identifies with a Marxist tradition, though one from which I happily dissociate.
That tradition is represented principally in the academy and with scholars who have an acquaintance with the methods of academic social science, philosophy and mathematics. I hesitate to call these methods “bourgeois” because their practitioners deny that their tools carry any class bias. Rather, they believe that their tools are pristinely non-ideological, free of any pre-suppositions. Whether they rely on formal economics, rational choice theory, or language analysis, they believe strongly that they bring a rigor and clarity to Marx that should be welcomed by serious students of the Marxist literature. I must confess, however, that I’ve never found a lack of rigor or clarity in my readings of Marx, Engels, and Lenin.
Nonetheless, new framings of important ideas should be welcome, but with the skepticism that intelligent consumers bring to “new and improved” products.
One should be alert to the fact that many of these “new” reconstructions of Marx’s views never leave the thin air of the academic world. They circulate in dedicated academic journals intimidating the non-specialist with their formalisms and dazzling the initiated with their command of the shared technical language. I am dubious of “clarity and rigor” that fails the test of accessibility to those outside of a closed circle.
Oshnishi makes many bold, audacious claims, including the charge that the demise of European socialism was an example of “a progression from state capitalism to private capitalism (or market capitalism)”. He maintains that examples of state capitalism also include Imperial Japan, Nazi Germany, China before 1978, Indonesia before 1967, and Egypt before 1970. One cannot help but be struck by this bizarre grouping. Indonesia before Suharto’s dictatorship in 1967 was developing in a national democratic, socialist-oriented direction; Egypt was forging an independent, but broadly socialist economic organization; China was engaged in an extremely egalitarian, barracks socialism; Imperial Japan was a unique blend of feudal and capitalist relations held together by a military cult and religious fanaticism; and Third Reich Germany was fascist corporatism imposed on monopoly capitalism. Including the Soviet Union among these apples and oranges makes for an even more outlandish collection of dissimilar examples. Oshnishi anchors this claim on the small fact that all these countries were absorbed by the global market after sweeping political changes occurred.
Oshnishi’s claim is only coherent within the framework of his eccentric and ahistoric definition of capitalism. He does so by contrasting the technology of feudalism with that of capitalism. The use of tools as opposed to machines constitutes the fundamental difference between the two systems, according to Osnishi. For good reason, the classic Marxist view defines capitalism in terms of specific social relations of production and a unique mode of labor exploitation. Unlike Oshnishi’s arbitrary, stipulative definition, the classic definition is historically rooted and theoretically fertile. To locate the introduction of capitalism with the machine-dependent Industrial Revolution – Oshnishi’s defining moment – is to consign the long period of non-feudal production relations preceding the wholesale use of machines to theoretical limbo. Every serious economic history concedes that free labor combined with manufactory and for-profit exploitation centuries before the full utilization of machines in what came to be called “The Industrial Revolution”.
Conversely, every competent economic historian acknowledges that machine use, principally the water mill, was extensive during the feudal era. Carlo Cipolla (Before the Industrial Revolution, 1993) dates the many industrial applications of the mill deeply in the feudal period: beer (861 AD), hemp (990 AD), fulling (820 AD ?, 962 AD), iron (1025 AD ?, 1197 AD), oil (c. 1100 AD), ore-stamping (1135 AD), etc. The distinction between tools and machines that Oshnishi posits is neither relevant nor historically accurate in defining capitalism.
Fundamentally, a technological definition of capitalism is wrongheaded. Indeed, technological change is the force driving the changes from feudalism to capitalism, but hardly constitutive of that change. Capitalism is feasible because of more sophisticated technologies, though it is organizational changes – the method of expropriating a surplus – that are definitive of the capitalist mode of production.
As a result of Oshnishi’s technological definition of capitalism as machine- based industrialization, he makes the following extraordinary claim: “…when capitalism should be introduced, capitalism should be introduced by Marxists. It is entirely [the] same as the fact [that] when socialism should be introduced, socialism should be introduced by Marxists. This must be the only attitude that true Marxists should have on this problem.”
While we are not presumptuous enough to recommend the “true” attitude of Marxists, we feel that introducing capitalism is not, has not, and should not be the responsibility of Marxists. Instead, Marxists should be busy promoting the idea of a world without exploitation—socialism.
Of course, behind Oshnishi’s hollow argument is a back door defense of the various “socialisms” that embrace capitalist development as a necessary condition for the transition to socialism: the best example of which is the ideology of the current leadership of the Communist Party of the Peoples’ Republic of China. This is not the place to address our skepticism about “market”-Leninism, but undoubtedly Oshnishi means his argument to bolster the case for promoting capitalist relations of production as a step towards socialism.
But if we assume, as he does, that capitalism is merely the wholesale use of machines, then there is no reason to associate industrialization with international markets, profit-driven economic organization, or private ownership. That is to say, the kind of capitalism posited by Oshnishi privileges neither “state capitalism” nor “private capitalism (market capitalism” and leaves the demise of the Soviet Union unexplained.
Oshnishi proposes a neo-classical model – a formal representation using the tools of neo-classical economics – of the capitalist economy. Unlike the simple, formal reproduction schemes adopted by Marx in Capital, Oshnishi’s two production functions assign no important role to the concept of surplus. Rather, he explores the interaction of capital and labor in the evolution of capital goods production and production for consumption. Following the thinking of neo-classical economics, the mechanism behind this evolution is utility optimization over time for a “representative” individual. His simple model produces rather modest results. With the passage of time, Oshnishi concludes, the ratio of capital to labor expands. That is, machine use, new technologies, and greater capital investments increase labor productivity resulting in a greater expenditure of capital applied to a diminishing labor force. Secondly, the amount of capital applied to producer goods falls in relation to the capital utilized in production for consumption. In other words, the maturation of the production process necessitates less investment in the means of production compared to actual production for direct consumer use.
There are many questionable assumptions in Oshnishi’s formal argument, but it must be noted that few economic historians would concede that the history of capitalism has demonstrated ironclad conformity to this model. Capital-saving technologies have, on occasion, outpaced the decline of labor in the production process. And more tellingly, there have been many periods in economic history where spikes in capital investment for the producer goods sector have radically outpaced the growth of production for consumption. Examples abound: wars, natural catastrophes, technological revolutions, economic downturns, etc. The long history of military Keynesianism in the US, with massive research and development of weapons, stands as a clear current example.
Oshinshi contends that, in the long run, the necessity of accumulation for and investment in producer goods will disappear with only a need for replacement from wear and tear. At this point, all production will be for consumption. When this far off point is reached, capitalism mechanically comes to an end! We painlessly and effortlessly reach the era of “postcapitalism or (sic) communist.”
How does Oshinshi arrive at such a strange and confounding conclusion?
In the first place, he constructs a model without acknowledging the concept of surplus. There are no primitive terms in his model corresponding to the share of economic value taken by the capitalist in the production process. Thus, his production functions fail to distinguish between a for-profit economic order (capitalism) and a system absent profit such as classical socialism. It is no wonder that he advances such a provocative definition of “capitalism.”
No theory of economic activity can be a theory of capitalist economic activity without respecting the notion of capitalist expropriation of some of the value of production. This surplus or profit is constitutive of capitalism, distinguishing it from any other economic order.
Secondly, Oshinshi’s construction of capitalism locates accumulation only in the production of producer goods – the means of production – and not in the consumer goods sector. This strange notion would, indeed, result in the elimination of capitalism if all production for consumption were distributed to the working class with nothing held out – accumulated – by the capitalist. Of course we know this is nonsense. Capitalists accumulate (expropriate) surplus value from all economic activity: the producer goods sector, the consumer goods sector, private and public enterprises, productive and non-productive activities, etc. In addition, the working class is not always able to obtain all the goods produced in the consumer goods sector, more often than not, because capitalist expropriation of a surplus restrains their purchasing power!
Thirdly, Oshinshi’s incomplete model of capitalism gives rise to a strange, impoverished, and inadequate theory of exploitation. For Oshnishi, “…because this part of national products [the producer goods sector] for this capital accumulation serves capital, and not people directly, this part can be understood as exploitation of workers by capital.” “Strictly speaking, in our model, ‘exploitation’ is understood as… a measure of the labor used for capital accumulation in the sense that this part is not used directly for the people’s living needs.” This is an impoverished notion of exploitation precisely because it fails to account for the capitalist expropriation of a surplus in all sectors of economic activity. It trivializes exploitation by reducing it to the mere retention of capital for development of the means of production. And it fails to capture the meaning of exploitation by refusing to address the expropriation of surplus in economic activity by the missing economic actors – the capitalist class.
Aljost as an aside, Oshnishi acknowledges this criticism. He notes that another, apparently secondary, exploitation occurs: “We understand this as exploitation not by ‘capital’ but by ‘capitalists’.” For one sympathetic to the Marxist tradition, one would have thought that this “secondary” exploitation was really the central issue that has occupied working people and their political parties for a century and a half. According to Oshnishi, this exploitation occurs thanks to an income or asset disparity between the rich and the poor: “…this disparity gives the rich a social status enabling them to exploit the poor and others.” Indeed.
But here, like the analytical Marxists to whom he appeals, he gets it theoretically backwards. Analytical Marxists maintain that exploitation exists because of an initial inequality of assets among economic actors. In fact, exploitation creates an inequality of assets. Failure to understand this fundamental feature of exploitation led the analytical Marxists to irrelevancy as it does Oshnishi. Schooled in neo-classical economics (or rational choice theory), they cannot frame a question except in terms of distribution patterns. Thus, all social matters become matters of asset allocation and not of expropriation. One might as well explain stealing in terms of initial assets and a mathematical function that redistributes those assets.
This is not a shortcoming of science or formal techniques, but a failure of imagination in fully appreciating the meaning of a rich social concept. Exploitation, like stealing, involves social relations of possession, ownership, and desert. Both must be placed in socio-historical contexts that capture the full force of what they purport to claim. Anything less falls short of scientifically excavating the meaning of either critically important concept.
Underlying this “new modeling” of capitalism is an arrogance that if exploitation cannot be explained by the tools of a preferred academic discipline – neo-classical economics or rational choice theory – then there must really be nothing there to explain. Amazingly, millions of workers have grasped an intuitive understanding of exploitation without benefit of neo-classical economics. Amazingly, working class movements have reshaped world history based upon this intuitive grasp.
Yet even the analytical Marxists’ exposition of exploitation presents difficulty for Oshnishi: “Analytical Marxists assumed that all of this surplus will be taken by the rich, because they are stronger than the poor, and they defined the acquisition of this surplus as exploitation by the capitalist.” Surely, this is a fair assumption and a serviceable definition of exploitation. To address this modest conclusion of his allies, Oshnishi boldly asserts: “Our basic conclusion… is that in the long run this asset disparity will finally disappear as the result of the asset accumulation by the poor… Therefore, when we reach the stage of the optimal capital-labor ratio, capitalism will end, and at the same time, all of rich-and-poor disparity, wage labor, and exploitation will be terminated.”
This striking conclusion is supported only by Oshnishi’s audacity and a reference to an earlier paper. One can only stand aghast before such a statement. Where does theory measure itself against reality? The simple truth is that “the optimal capital-labor ratio” has nothing – nothing at all – to do with the constant drive on the part of capitalists to extract surplus from the workers laboring under capitalism. Conversely, the relative strength and determination of the working class in opposition has everything to do with the future of the capitalist system. Ohnishi’s technological determinism is both unfounded and a parody of Marxist theory.
At the end of Oshnishi’s confused account, he concedes that the resolute capitalist will “overaccumulate”, thwarting the inevitability of his projected termination of capitalism. He correctly cites Marx’s remedy: “…Marx wanted to terminate exploitation by confiscating the capitalist’s property directly.”
But this will not do. Oshnishi offers an alternative: “In my opinion, confiscation of the capitalist’s property is not realistic today and, therefore, we have to find another way. My proposal is to establish a capital market for the rich to obtain capital. This is the way to satisfy the conditions that lead to the simultaneous approach to the optimal capital-labor ratio by both the rich and the poor. We could find this way by careful research.”
The rich obtain capital by exploiting workers and borrowing from each other. They rarely lack capital except on unusual occasions, like today, when credit markets seize up. Is providing more capital to the rich really a way to hasten the end of exploitation? It is only in the mind of someone completely unfamiliar with the Marxist legacy and a century and a half of working class struggle.
One can only conjecture why a self-professed “Journal of Dialectical and Historical Materialism” would publish such tortured reasoning. But more importantly, it is baffling why a scholar would show such contempt for the Marxist tradition.
