holism in Marx's theory

jones-bhandari djones at uclink.berkeley.edu
Wed Oct 26 11:49:26 MDT 1994

This was posted by Tom Smith, in response to Fred Moseley:

>It may really be naive of me to say this, but have you read Paul Mattick's
>book, Marx and Keynes?  He presents precisely the interpretation you are
>discussing.  Indeed it is surprising to me that this neo-Ricardian sophism
>is prevalent today, as you say.  I thought Mattick's interpretation was
>generally accepted
. Not only does Mattick provide a  critique of neo-Ricardianism, his
reconstruction of the Marxian theory of accumulation and crisis enables a
defence of (and different understanding of) what Cullenberg has dismissed
as hegelian totalism and essentialism.

In my humble opinion, two of Mattick's great strengths were (1) his ability
to theorize the capitalist system as a whole and (2)his dialectical
facility to  bring out always the contradictions between use and exchange
value, between concrete and abstract labor--which after all is, as Marx
wrote, the pivot upon which the whole critical conception rests. These
strengths, which are essential to any response to Cullenberg, come out
brilliantly in his last book Marxism: The Last Refuge of the Bourgeoisie?
Below I quote  passages which indicates Mattick's understanding of (a)
totality and (b)the contradictions of accumulation--which do not result so
much from any arbitrarily posited essence of capital as technological
dynamism(as Cullenberg puts the orthodox position)but (more fundamentally)
from the duality of labor historically specific to capitalism.

First, it should be noted that Mattick was not alone in his strengths.  For
example, the same strengths can be found in the quite impressive (and
super- accessible) Political Economy of the Working Class by Geoffrey Kay
(1979) or William J Blake's Marxian Economic Theory and Its Criticism
(1939) or Geoffrey Pilling's Marx's Capital (1980). I should also note that
it is strange that Cullenberg has written a critique of the falling profit
rate without any engagement (in the text) with the person who has most
extensively defended Marx's theory of value and its most important

OK, I shall quote a few passages from Mattick that are relevant in the
context of Cullenberg's critique of holistic social theory. I quoted
earlier C's conception of holistic social theory.  That his conception of
it is different than Mattick's comes out in this passage:

"The system as a whole to repeat is nothing other than the combined
production of all capitalist enterprises: a mass of value and surplus
value, representing socially necessary labor-time quantitaties embodied in
commodities.  This mass of value and surplus value is at any moment of a
definite size, alterable only by either the destruction or the expansion of
capital.  This mass sets the limits within which each capital can move and
therefore to the enlargement of any particular capital.  The viability of
the system rests then upon the distribution of the total social surplus
value that assures the expansion of the total capital in physical and value
terms. This distribution can only be exacted by way of capital competition
which, without concerning itself with the distribution of surplus value,
effects its distribution nonethless through the averaging of profit rates
via the profit needs of the individual capitals."

Now it is true, as Cullenberg puts it, that parts are considered here in
and through their function or place in the totality.  But Mattick does not
reduce all firms to identical representatives of the essence of capital.
There is much room here for diverse firms and differential profit rates.
That the law of value, as regulator of capital production, sets definite
social boundaries to the movements of prices and profits though which the
system operates does not mean that all firms experience those boundaries

But while Mattick's theory can accomodate the diversity of firms, it can
also explain their interconnections. For example, his theory is crucial to
understanding both the pressures for and results of many forms of
technological change, which can provide a (temporary) way out crisis for
firms but at the expense of a transfer of value (so to speak) from
elsewhere. The process by which value can be so redistributed at the level
of the firm has been rigorously developed by Carchedi, as I note below.
But it is Mattick's theory that allows us to understand the limits within
which this redistribution obtains.   Such a holistic theory makes it
possible to understand the exploitation of the collective working class and
the revolutionary necessity to find ways out of crisis that do not put any
one section of the working class above the interests of the class as a

There are so many interesting political questions here.  Marx explains why
at the level of appearances--because of differential organic compositions,
turnover times and the extra  surplus value of innovators--prices seem to
and must diverge from values, thereby apparently decoupling the earning
power of capital from the abstract labor that alone is surplus value.  But
this insight seems to be itself result and cause of the movement beyond
trade-union consciousness.  That is, workers can only understand their
exploitation from a collective point of view, as members of an exploited
class that together sustains an exploiting  class.   It seems to me that
the critique of holistic social theory is an example of intellectuals
attempting to bring trade union consciousness into the proletarian
movement.   I hope the more advanced among us can bring out  some of the
politics at stake here.

Again Mattick was not the only one to offer such an understanding of
capital and labor as a whole; to cite one very important example, Guglielmo
Carchedi (1991) has recently  worked out such a theory in his critical
engagement with theorists of unequal exchange, and he has argued that
Mattick, and even more so Sweezy, unnecessarily downplayed the
redistribution of value and the problem of unequal exchange in the sense of
a transfer of value among capitals.  This allows Carchedi to develop a
system-wide theory of technological innovation, in which he argues that "An
increase in productivity does not lead to an increase in general
profitability, but only to the increase of the profitability of the
innovative capitals at the expense of the profitability of the other
capitals and of the general rate of profit." (p.175)

But in case my comments make it sound as the wish for the solidarity of the
workers of the world has been the father of a holistic theory, Mattick also
explained why, in a profit-making system, the general rate of profit must
be established at a system-wide level. In other words, he provides
independent justification for Moseley's argument that aggregate surplus
value must be determined prior to its allocation to individual parts.
Mattick's explanation is subtle (as it Fred's explication of the method of
successive approximations):

"To be sure,the very existence of capitalist society depends on the
production of use values and on their allocation through market relations
in the pursuit of exchange value.  Accomplished in one fashion or another
though capitalist competition , as determined by the accumulation of
capital, the social profit, or surplus value, is distributed in accordance
with the magnitudes of the various capitals, which reflect, in their
existence the social allocation of labor.  To bring this about, the general
rate of profit must be *indepedent of any particular capital and its
specific organic composition*, for it is only in this manner that the
use-value requirements of capitalist production can be met."

As I indicated, Cullenberg not only critiques holism but also the
inevitability of the falling profit rate.  He argues that due to the
tendency for unit values to decline, the general rate of profit may rise as
both constant and variable capital are thereby cheapened.   The following
passage shows that Mattick does not hold to any mechanical theory of
collapse but sees the law of the tendency for the profit rate to fall as
expression of the growing antagonisms between capital and labor in the
course of capital accumulation. In the course of his argument, Cullenberg
draws our attention to the external conditions of the firm; Mattick does
not fear entering into the abode of production:

"But the increasing productivity of labor decreases not only the value of
labor power but also that of the already accumulated capital.  As the
existing capital is  "measured" not by its own historical costs of
production, but by the lower costs that constitute the additional constant
capital, the enlargement of capital as exchange value is constantly held
back by the declining exchange value of the previously accumulated capital.
In order to  enlarge the total constant capital in value terms, the newly
produced surplus value must not only cover the costs of new investments but
also the loss of value of the old capital brought into being under less
productive conditions.  The absolute growth of capital thus requires a rate
of surplus value large enough to cover both the new investments and the
devaluation of the existing capital.  This situation finds its source in
the two-fold character of the commodity as an exchange value and a use

I find no other way of understanding the maniacal fears of a savings
shortfall (and grotesque accusations of a consumption binge)that are
prevalent in economics today. Or as such luminaries as Hatsoupoulus,
Krugman, and Poterba put it: "The greatest single problem of the US economy
in the late 1980s is its extremely low level of national saving.  The
current low national saving rate...lies at the root of both our
unprecedented trade deficits and our inadequate level of domestic
investment, which in turn is a major cause of low US productivity growth."

 I think it would be very useful to compare this bit of wisdom with
Mattick's very important (I believe) analysis above.  But that's another
post. But for Mattick it seems that it's the increased productivity of
labor that explains this savings shortfall, that the forces of production
are outstripping the relations of production. Far from consuming too much,
our creative powers and potential capacities are only being fettered by the
insufficiency of surplus value to keep up with the costs of new investments
as well as the loss of value of the old capital. Hence, the basis for
revolutionary optimism amongst the rise of bourgeois neo-Malthusianism and
increasingly vicious forms of belt-tightening.

All of Mattick's quotes are from Marxism: The Last Refuge of the
Bourgeoisie? (Armonk, NY: ME Sharpe Press, 1983).


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