CAPITAL - Valorisation

Limits to Harvey : II

In David Harvey’s address to the American Sociological Association in Atlanta in August 2010, he acknowledges that capitalist production is ‘fundamentally about putting money into circulation to make more money.’ Moreover, he accepts that the primary form of capital circulation in Marx’s view was that of production capital.

This capital begins with money which is used to buy labour power and means of production which are then brought together in a labour process … that results in a new commodity to be sold on the market for the initial money plus a profit.

This summary is close to Marx’s version. However, its focus on the labour process leaves out the valorisation through which the wage-slaves add the surplus value that makes expansion possible. Without that step, profits must be won by swindling.

Hence, Harvey compounds the flaws in his definition of capital as a process and not a thing by misrepresenting the ‘production process’. For Marx, the production process consists of a ‘labour process’ and a ‘valorisation process’. Harvey disables Marx’s analysis by neglecting the latter, and with it the incorporation of surplus value into the new commodity. To submerge the valorisation-process into the labour-process was, Marx writes, one of the ‘gross errors’ of Ricardo. (Marx, Theories of Surplus Value, I, Foreign Languages Publishing House, 1956: 102; TS-V, II, Progress Press, 1968: 415)

Harvey’s notion that value is added in the labour-process lags far behind Marx’s penetration of reality. The equivalent of the existing means of production are reproduced in that strand: ‘The value advanced has not been valorised, no surplus-value has been created, and consequently, money has not been transformed into capital.’ (Marx, Capital, I, Penguin, 1976: 297-8) Marx draws a second sharp yet subtle distinction between production and circulation:

This whole course of events, the transformation of money into capital, both takes place and does not take place in the sphere of circulation. It takes places through the mediation of circulation because it is conditioned by the purchase of the labour-power in the market; it does not take place in circulation because what happens there is only an introduction to the valorisation-process, which is entirely confined to the sphere of production. (emphasis added) (Marx, Capital, I, 302, cf. 267)

To imply that profit originates in the labour process is to leap over two elements in the expansion of capital, elements which Marx took pains to delineate while keeping each as a part of the other:

The process of production, considered on the one hand as the unity of the labour-process and the process of creating value, is production of commodities; considered on the other hand as the unity of the labour-process and the process of producing surplus-value, it is the capitalist process of production, or capitalist production of commodities.  (Marx, Capital, I: 304)

The expansion of capital depends on both a valorisation-process and a labour-process. Out of their totality as a production process, commodities emerge ‘pregnant’ with the surplus value from which profit and then accumulation derive. (Marx, Capital, II, Penguin, 1978: 121)

See also: Massiness of Capital