MARXISM - WHO'S AFRAID OF VOLUME TWO?
afraid of Volume Two?
Many a Marxist who embarks on Capital sticks with volume I because it deals with the class struggle. Few proceed through the other three volumes, doing little more than dip into volume III for the chapters on the origins of crises around the tendential law of the rate of profit to fall and, more recently, hunting the Snark of fictitious capital across Part V. (see my ‘Fictitious Capital’ on this site) Almost no one reads volume II, disparaged as arid. This lopsided acquaintance with Marx’s project spawns misunderstandings from a failure to see aggregate capital as the object of his critique. Those who know only volumes I and III will never know capital. The central span of the bridge between appearance and reality is missing.
In the opening paragraph of volume III, Marx spells out why, by itself, volume I is a trap for young players:
In the quest for guidance about crises, volume II is more germane than any of the other three, although A Contribution to the Critique of Political Economy on money is also invaluable. Volume II explores the interlocked circuits of money capital, production capital and commodity capital; their turnover times; and the flows between production goods (Department I) and consumption goods (Department II). Marx demonstrates how the normal functioning of these three processes, let alone disruptions within and between them is capable of stalling the whole system.
Studying the relations between bankers and industrialists in the first decade of last century convinced the Austrian Marxist Rudolf Hilferding that ignorance of volume II was disabling since its
Hilferding emphasised the disproportionalities that arose as each circuit moved at its own pace, thereby compounding the imbalances between all the values from production and those realisable as profit through consumption.
Marx instanced how the on-selling of invoices which conceals that a collapse is underway while everything seems rosy:
As soon as that happens, capitalists of every stamp compete to swindle their way out of bankruptcy. They stampede to unload invoices at a discount in the hope of getting enough cash to hang on until the cycle picks up. As the fox-hunting Engels would have it, once the crisis erupts ‘a steeplechase breaks out … for banknotes’, which is where we are again.
Neo-Classicals read volume III because it picks up their pet topic,
market prices. In the words of a winner of the faux
Nobel Prize in Economic (soi-disant)
Science, William J Baumol:
Notwithstanding this prejudice, prominent bourgeois economists recognise the brilliance of volume II. Wassily Leontief acknowledges the debt that his own input-output tables owe to Marx, while Paul Samuelson accepts that Marx’s ‘finest analytical work came in this area of circular interdependence’.
If it is wrong to get stuck at volume I, or to cherry pick through volume III, it is equally misguided to confine an explication of crises to volume-II materials. Introducing volume III, Marx laid out why we
In carrying his critique from the concept of the value to market price, Marx never abandoned the quest for the reality of the latter. They were on the surface but were not just an appearance, just as fictitious capital can service the expansion of individual capitals, and even of aggregate capital.
What has become ever more superficial are the explanations about every element in that synthesis proffered by the academic type who, in Marx’s words,
neo-Richardians and shame-faced Marxians do not escape this interment.
Erik Olin Wright promised in 1978 that the second chapter of his Class, Crisis and the State would
Predictably, this diversity did not extend to volume II which is not even in the ‘Bibliography’.
Chris Harman draws on only volumes I and III for his five-page explication in Zombie Capital and the Relevance of Marx. His acolyte Tom Bramble did not think beyond his master’s voice for his 2011 JAPE article which also marginalises volume II, omitting it from his ‘References’ and from his analysis, despite passing mentions of the circuits of capital and turn-over times. Mike Beggs’s sideswipe at Harman also lists only volumes I and III.
When David Harvey discusses turnover times in The Limits to Capital he quotes the Grundrisse, rather than Marx’s revised account in volume II. Nowadays, he downplays the significance of volumes II and III by emphasising that Marx did not complete them, thereby overlooking the claims advanced for their importance by Hilferding and by Marx himself. Harvey’s video lectures and his 2010 Companion to Capital are confined to volume I so that those who rely on this truncated view of capital need to be reminded that its expansion operates across a broader canvas.
Since 2000, the only appearance of volume II in the Journal of Australian Political Economy is in my ‘What happened in globalisation’, which is not surprising given the near absence of Marx from the references to all its contributions. The sole mention of his works in the special issue on Work Choices concerned the production of ideology, not commodities; only two of the contributions to the issue on the post-1992 boom managed to weave in clips from Marx on economics; more amazing is that only two of the authors for the special on the mis-named Global Financial Crisis thought Marx worth noticing, and one of them was the anti-Marxist Steve Keen who drew on ideology. The ‘political economy’ label is no guarantee of radicalism, still less of Marxism. Thomas Malthus was a professor of political economy, against whom Marx gave us his root-and-branch critique.
Today, the reading groups on Capital are not being deterred by Marx’s injunction:
Without scaling the three peaks in volume II, would-be Marxists will attain no more than a slight elevation above ‘the insipid flatness’ of bourgeois apologists.
 Michael Lebowitz, review of David Harvey’s The Limits to Capital, Monthly Review, June 1986, and May 1987.
 Karl Marx, Capital, III, Foreign Languages Publishing House, Moscow, 1959, p. 25: Penguin, London, 1981, p. 117.
 Rudolf Hilferding, Finance capital: a study of the latest phase of capitalist development, Routledge and Kegan Paul, London, 1981, p. 243; John Lonie supplied a keen summary of Finanzkapital, Melbourne Journal of Politics, 9, 1978, pp. 93-99.
 Karl Marx, Capital, II, FLPH, Moscow, 1957, p. 76; Penguin, Harmondsworth, 1978, p. 156.
Marx, Capital, III,
Moscow, p. 527; Penguin, p. 661.
 William J Baumol, ‘The Transformation of Values: What Marx “really” meant (an interpretation)’, Journal of Economic Literature, 12 (1), March 1974, p. 57.
 Wassily Leontief, ‘The Significance of Marxian Economics for Present-Day Economic Theory’, American Economic Review, Supplement, March 1938, pp. 3-4.
 Paul Samuelson, ‘Quesnay’s “Tableau Economique” ’, Ian Bradley an Michael Howard (eds), Classical and Marxian Political Economy, Macmillan, London, 1982, p. 46.
 Marx, Capital, III, Moscow, p. 25; Penguin, p. 117.
 For why Marx had a concept of value and not a ‘theory of value’ see Thomas Sowell, Marxism, Philosophy and Economics, Counterpoint, London, 1985, chapter 7. Sowell is au fait with volume II.
 Karl Marx, Theories of Surplus-Value, (TS-V), III, Moscow, Progress Publishers, 1971, p. 502.
 Erik Olin Wright, Class, Crisis and the State, NLB, London, 1978, jacket blurb.
 Tom Bramble, ‘The Origins of the crash and the Limits on Recovery’, JAPE, 67, 2011, pp. 22-46.
 Mike Beggs, ‘Zombie Marx and modern economics, or how I learned to stop worrying and forget the transformation problem’, paper at the ‘Capital against capitalism’ conference, Sydney, 25 June 2011.
 David Harvey, The Limits to Capital, University of Chicago Press, Chicago, 1982, pp. 83-85, but he does quote volume II on pp. 90-95 and 101-2. On the hazards of relying on The Grundrisse see John Mepham, ‘Method or metaphysics?”, Economy and Society, 7 (4), November 1978, pp. 430-44.
 David Harvey, Companion to Marx’s Capital, Verso, London, 2010.
 JAPE, 51, June 2003, pp. 115-26.
 Despite the presence of some Marxist scholars in the Department of Political Economy, it has always lent towards institutional economics with a progressive flavor, after the manner of Veblen and Galbraith. Like the bulk of its courses, the official account of the Department is institutional and avoids intellectual content. In 2009, the Department escaped from the School of Business into the Faculty of Arts, nearly forty years after its founders had fled from econometrics. Frank Stillwell, et al., Political Economy Now!: the struggle for alternative economics at the University of Sydney, Darlington Press, Sydney, 2009.
 Marx, Theories of Surplus-Value, III, chapter XIX.
 Karl Marx, Capital, I, Foreign Languages Publishing House, Moscow, no date, p. 21; Penguin, London, 1976, p. 105.
 Marx, Capital, I, p. 518; Penguin, p. 654.