distory of Political Economy r4:3

0 1982 by Duke University Press

Marx on the use of history in the analysis of

capitalism

Richard Nordahl

Everyone knows that Marx has an ‘historical approach’. But there is con-
fusion regarding the nature of that approach. How does Marx use ‘history’
to help understand capitalism? In order to understand the capitalist mode
of production, how important is historical knowledge, knowledge of pre-
capitalist systems, and knowledge of how the capitalist system came to
be? How does Marx use and present historical facts to help make his theo-
retical points regarding the capitalist mode of production? The purpose of
this article is to explore such questions.

The ‘logical-historical’ approach

Marx’s presentation in Capital’ is a step-by-step logical development of
the concepts and theories necessary in order to understand the capitalist
mode of production. Marx begins (ch. I of Capital I) with the most simple
and basic form, the commodity. He examines its form, e.g., its twofold
nature as a use value and an exchange value, and then proceeds to examine
the exchange relationships between commodities; his labour theory of
value is presented in the course of this examination and it leads to a dis-
cussion of the nature of money, in particular how money is necessary in a
system of regularized commodity exchange. Marx proceeds (chs. 2-3) to
discuss the circuit of commodity exchange, in terms of what he calls ‘simple
commodity production’ (“selling in order to buy”). He then (chs. 4-5)
contrasts this simple commodity production with the more advanced, cap-
italist commodity production (“buying in order to sell”). In order to an-
swer the question of the source of the capitalist’s profit, Marx leaves the
sphere of circulation and examines the sphere of production. He discusses
the social relationship between the capitalist and the wage labourers and
shows how this relationship allows the capitalist to expropriate surplus
value from the producers (chs. 6-8). There then follows a long discussion
(chs. 9-16) of the ways by which capitalists can increase the rate of sur-
plus value. Absolute surplus value is increased by extending the working
Correspondence for the author may be sent to Professor Richard Nordahl, Dept. of Econom-
ics and Political Science, University of Saskatchewan, Saskatoon, CANADA S7N OWO.
I. References are to Capital, vol. I, Penguin ed. (Harmondsworth, 1976).

342
 Nordahl Marx on the use of history 343

day; relative surplus value by raising the productivity of labour, e.g. by

developing the division of labour and by introducing machinery. This dis-
cussion of the production of surplus value contains within it a description
of the class struggle between capitalists and wage labourers. In chapters
23 to 25 of Capital I (Part VII) Marx discusses the process of capital
accumulation and the effect that this has on the working class. This is
followed by a discussion in Part VIII (chs. 26-33) of primitive accumu-
lation, in particular the creation of the propertyless proletariat. Volume I1
(Capital 11) is mainly an analysis of the process of the circulation of capi-
tal, including discussion of circulation time and its effect on production
and discussion of the famous reproduction schemes. Volume I11 is princi-
pally an examination of the distribution of the surplus amongst the indus-
trial capitalists, commercial capitalists, banking capitalists, and landlords.
Rent, commercial capital, and banking capital are dealt with in some de-
tail. There are also sections on economic crises.
In a review of one of Marx’s economic works Engels notes that Marx’s
presentation of economic theory is logical and historical at the same time.
The order in which Marx presents his categories and develops his theory
of capitalism (i.e., the logical presentation) corresponds, in general, to the
real history of capitalist economic forms. In Capital Marx is writing eco-
nomic history at the same time that he is constructing his theory of the
capitalist mode of production. Influential Marxist interpreters in the twen-
tieth century like Ernest Mandel have adopted a similar approach.*
From the standpoint of this ‘logical-historical’ interpretation, let us con-
struct a reasonably plausible Marxist description of the history of capital
so as to see the supposed parallels in Capital between the logical and the
historical. Commodity exchange begins with communities exchanging
their surplus products, e.g., copper bracelets for salt. In time, as trade
expands and becomes more regularised, the ratios at which the products
are exchanged come to correspond roughly to the amount of labour taken

2. Frederick Engels, Review of Marx’s A contribution to the critique of political econ-

omy, appearing in Das Volk, no. 16, 20 Aug. 1859, appended to a recent edition of Marx’s
book (London, I97I), pp. 222-27. See also Engels’ Supplement to Capital I11 (New York,
1967)~pp. 891-907. For contemporary Marxist examples of a ‘logical-historical’ interpre-
tation, see Ernest Mandel, Introduction to the Penguin edition of Capital I; Mandel, Marxist
economic theory, 2 vols. (New York, 1970);Ronald Meek, Studies in the labour theory of
value (London, 1958), chs. 4 and 5 ; Meek, “Some notes on the ‘transformation problem’”
and “Karl Marx’s economic method,” both in his Economics and ideology (London, 1967);
Meek, Smith, Marx, and after (London, 1977), ch. 7; and Roman Rosdolsky, The making
of Marx’s “Capital” (London, 1977). Rosdolsky and Meek (especially in his Smith, Marx,
and after) qualify their acceptance of Engels’ ‘logical-historical’ interpretation. The logical
presentation in Capital, they say, does not correspond in all respects to the general course
of historical development, and Marx knew this. Meek, e.g., argues that the ‘logical’ and
the ‘historical’ correspond in Marx’s analysis of the commodity form and money and in his
analysis of the transformation of values into prices; but o n certain other topics the ‘logical’
and the ‘historical’ do not correspond.
3. For an example of such a description, see Mandel, Marxist economic theory, vol. I .
344 History of Political Economy I 4 : 3 (1982)

to produce them. There develops the need for a universal equivalent of

exchange, and thus money comes into being. With the decline of the feu-
dal economic order, simple commodity production (“selling in order to
buy”) becomes a dominant form of production in much of western Europe.
Free peasant households and urban artisans produce commodities to be
exchanged on the market for money to buy their necessities. There are
also in the society large internationally oriented merchants and usurious
moneylenders who engage in economic activity in order to make money
out of money. Some of these large merchants who are interested in money-
making for its own sake (“buying in order to sell”) gradually come to
dominate economically some of the petty commodity producers. Eventu-
ally, formerly independent craftsmen come to be grouped together in large
manufactories operated by the merchants who are turning into capitalists;
the craftsmen become wage labourers. Concomitantly with this develop-
ment of ‘merchant capitalism’, a number of the petty commodity peasants
are able to enlarge and improve their farming operations to the extent that
they are able to employ agricultural wage labourers. But at the same time,
many independent peasants lose their land and are forced to join the grow-
ing ranks of the proletariat. A constant goal of capitalists is to increase the
rate of surplus value. In the early stages of capitalism an increased rate is,
generally speaking, achieved by extending the workday. In later stages of
capitalism increase in the rate of surplus value is mainly brought about
through improvement in labour productivity. Capitalist competition forces
individual capitalists continually to modernize and expand in size their
enterprises. The division of labour within the factory is perfected, and at
a certain stage machinery is introduced and then improved upon. The class
struggle between workers and capitalists which is built into the very struc-
ture of the system becomes intensified in the later stages of capitalism,
partly in response to recurring economic crises. The workers organize
politically and at some point in the future will seize state power and begin
to construct a socialist society. The parallels between this historical sketch
and the logical presentation of concepts in Capital (briefly sketched
above) are obvious.
In his brief discussion of Marx’s so-called logical-historical approach
Engels makes the point that “history moves often in leaps and bounds and
in a zigzag line,” and thus not in a linear, step-by-step progressive fashion
(as described in the preceding ~ a r a g r a p h )For
. ~ example, commodity pro-
duction was fairly well developed in parts of ancient Greece and Italy, but
underwent a dramatic decline in the early Middle Ages.5 The historical
presentation in Capital is, then, according to Engels, a ‘corrected’ version

4. Review of A contribution to the critique, p. 225.

5 . My example, not Engels’s.
 Nordahl Marx on the use of history 345

of the actual historical development of economic forms; the zigzags are

eliminated. The history of the economic forms is presented as a step-by-
step progression from the more simple and primitive forms to the more
complex and developed. This ‘corrected’ presentation is still in accord,
Engels would stress, with the general course of historical development.
If the ‘logical-historical’ interpretation is correct, then knowledge of the
historical process is obviously beneficial in helping understand the mature
capitalist system. A tracing of the historical development of economic
forms would give one-assuming the ‘zigzags’ were avoided-theoretical
understanding of the capitalist system. Ernest Mandel in his two-volume
descriptive study of Marxist economic theory, accepts this view. In fact,
he says an historical approach is absolutely necessary: “The secret of no
‘category’ [e.g., commodity or money] can be discovered without study
both of its origin and its evolution.”6 True to this belief, Mandel ap-
proaches his subject of economic theory historically. He traces the histor-
ical development of the commodity form and the system of exchange
relations, describes the genesis of the capitalist system, and then follows
the development of this capitalist system through to its present stage. In
the course of this detailed historical survey Marxist economic concepts are
developed and explained. Unfortunately, Mandel does not develop his ar-
guments concerning why such an historical treatment is necessary, or at
least helpful, in order to comprehend the theory necessary for an under-
standing of capitalism. But two examples of possible arguments readily
come to mind.
Take first the case of the commodity form and the universal equivalent,
money. Commodities and money are difficult to understand in the perspec-
tive of the developed capitalist system. Commodity fetishism obscures the
labour theory of value. What are really relationships between the produc-
ers of commodities (expressed as exchange ratios) take on the appearance
of relationships between inanimate things, the commodities themselves .7
The value of a commodity appears to be determined by the natural mate-
rial making it up. And money appears to have magical powers, powers
derived from its ‘goldness’ (i.e., from the natural material making it up).
Such fetishistic illusions vanish once the development of the commodity
form is traced historically. Commodity exchange develops out of the ex-
change of surplus products between primitive communities. These prod-
ucts have a use value in that they are wanted by some party. The relative
value of the products-what they are worth in relation to one another-is

6 . Marxist economic theory, I : 18.

7. For Marx’s discussion of commodity fetishism, see especially Capital I, 163-77; and
A contribution to the critique, pp. 32-36. Marx argues that the very nature of commodity
production-production by independent private enterprises for an ifnpersonal exchange
market-results in fetishism.
346 History of Political Economy I 4 : 3 (1982)

at first fairly arbitrary. But once the exchange becomes regularised be-
tween the communities, the relative values of the exchanged products will
be roughly determined by the quantity of labour time taken to produce
them. At a certain point in the development of exchange relationships
there will arise the need for a universal equivalent of exchange, a desig-
nated commodity in which all other commodities express their values and
which therefore can serve as the medium of exchange.* This universal
equivalent, or money, derives its ‘power’ from its function in exchange.
Its value is determined the same way as any other commodity’s, by the
quantity of labour time taken to produce it. An historical tracing of the
development of the commodity form and money makes these truths read-
ily apparent. It gives us, according to this interpretation, a theoretical
understanding of the nature of the commodity and money in a capitalist
system.
Consider a second case. Mam argues that the key to understanding much
about the capitalist system, including the nature of capitalist exploitation,
is understanding the nature of the social relationship between capitalist
and wage l a b ~ u r e rThe
. ~ wage labourer, having no means of production,
is forced to sell his or her labour power to the capitalist. Ownership of the
means of production allows the capitalist to use the labour power of the
worker to create a value greater than what the capitalist pays the worker.
This exploitative relationship is often obscured in developed capitalism.
In the perspective of the capitalist system it appears to be ‘natural’ that
workers work for capitalists. The system of exchange relationships itself
helps to obscure the nature of the social relationship. The wage labourer
is free (unlike the feudal serf) and agrees voluntarily to work for the cap-
italist. And his wage appears to equal the value of what his labour power
creates. lo Historical study of the genesis of the capitalist system brings
into focus the unique nature of the capitalist-worker social relationship and
thus helps to dispel the illusions which are naturally generated within a
developed capitalist system. Petty commodity producers lose control of
their means of production (often through the direct use of force) and thus
must sell their labour power if they are to survive. Those who have accu-
mulated substantial quantities of money capital (often stolen from abroad)
can buy means of production of such a quantity that they can hire the
impoverished to work for them. The unequal power relationship between

8. For Mam’s discussion of the nature of money, see Capital I, 157-63, 178-244.
9. Capital I, chs. 6 and 7 .
10. In the capitalist system there is no distinction in time and space between necessary
labour, labour which produces the value of the wage, and surplus labour, the labour which
produces the capitalist’s surplus value. Thus, Marx argues, it appears to many that the
labourer receives the full value of what his or her labour creates. See, e . g . , Capifal I,
ch. 19.
 Norduhl ’ Marx on the use of history 347

the two parties allows the capitalists to exploit the wage labourers. To
conclude, according to this interpretation, knowledge of how the proletar-
iat came to be provides us with the theory of the nature of the capitalist-
worker social relationship.
Criticism of the ‘logical-historical’ interpretation
There are some fundamental difficulties with the ‘logical-historical’ in-
terpretation. First of all, Marx is quite explicit on the point that the order
of the presentation of concepts and theory in his theoretical works is de-
termined by the logic of the capitalist system, And this order is not the
same as the historical izppearance and development of the economic forms.
In Capital Marx begins with the simple commodity, not because it ap-
peared first historically (of what came to be capitalist forms), but because
it is the basic element-the ‘cell’-of the capitalist mode of production. I2
Capitalism is commodity production par excellence. One cannot begin to
understand capitalism without comprehending the nature of the commod-
ity. In order to analyse the commodity Marx assumes away non-essential
elements (non-essential for purposes of understanding the commodity),
such as the capitalist-labourer relationship, competition between commod-
ity producers, fluctuations in the market price of c o m m o d i t i e ~ .This
~~
commodity is not the commodity which first emerged historically in the
trade between primitive communities. It is the fully developed commodity
of the capitalist mode of production.14 Only in a capitalist mode of pro-
duction (in which, e.g., there is commodity production of the means of
production, and generally speaking, freedom of entry into all lines of pro-
duction) is the law of value in full effect.I5 (From the first chapter of
Capital Marx assumes that the law of value is fully operative.) The ex-
change ratios of commodities was at first (in the trade between primitive
I I . “It would . . . be unfeasible and wrong to let the economic categories follow one
another in the same sequence as that in which they were historically decisive. Their se-
quence is determined, rather, by their relation to one another in modem bourgeois society.”
Introduction, Grundrisse: Foundations of the critique of political economy (rough draft),
trans. Martin Nicolaus (London, 1973), p. 107. See Maurice Godelier, Rationality and
irrationality in economics (London, 1972), p. 205.
1 2 . ‘‘ . . . for bourgeois society, the commodity-form of the product of labour, or the
value-form of the commodity, is the economic cell-form.’’ Preface to the first edition of
Capital I, p. 90. And Mam makes it quite clear in this preface that what he is examining is
the capitalist mode of production.
13. For Marx’s statement on the need for abstraction, see his Preface to the first edition,
ibid. For a good introductory statement on Mam’s method in Capital, see Paul Sweezy, The
theory of capitalist development (New York, 1942), ch. I .
14. “As the commodity-form is the most general and the most undeveloped form of
bourgeois production, it makes its appearance at an early date, though not in the same
predominant and therefore characteristic manner as nowadays.” Capital I, I 76 (emphasis
added). And see Capital I, 173.
15. “ . . . the full development of the law of value presupposes a society in which large-
scale industrial production and free competition obtain, in other words, modern bourgeois
348 History of Political Economy 14:3 (1982)

communities) quite arbitrary;I6 and even by the Middle Ages no country

had a general rate of profit.I7
Once Marx demonstrates the nature of the commodity form (as it exists
in the capitalist mode of production), he then derives from this the nature
and necessity of money. I 8 His line of reasoning is that if there is general-
ized commodity production, then there has to be a money form. His form
of presentation is logical-analytical , not historical-genetical .
As his analysis in Capital I advances, Marx introduces, step by step,
progressively more complicated elements, and thus fills out the picture of
the capitalist mode of production. After having explained money, Marx
proceeds (chs. 2 and 3) to examine the fundamentals of the circuit of
commodity exchange. In doing this he works with an abstract model of
simple commodity production (“selling in order to buy”). And then after
noting (chs. 4 and 5 ) that capitalist production is essentially concerned
with making money (“buying in order to sell”), he introduces the social
relationship between capitalist and wage labourer and shows how this re-
lationship gives to the capitalist the power to extract surplus value and
thus enables him to make his money (chs. 6 and 7). Note that Marx does
not discuss commodity production before capitalist social relations be-
cause simple commodity production preceded capitalism and evolved into
it. To repeat, the order of his presentation is determined by the logic needed
to explain capitalism. The simple commodity production of Capital is
constructed from the elements of a developed capitalist system which Mam
wants to explain at this stage of his analysis.lg It thus presupposes certain
features only present in such a capitalist system, e.g., the commodity as
the predominant economic form, free entry into and out of production,

society.” A contribution to the critique, p. 60. And in a letter referring to this book Marx
writes that the theory of value developed in it presupposes the dissolution of “all undevel-
oped, pre-bourgeois modes of production not completely dominated by exchange .” “This
determination of value [by labour] is merely the most abstract form of bourgeois wealth.”
Marx to Engels, 2 April 1858, Selected Correspondence, p. 105. Marx’s concept of value
entails the idea of abstract labour. And the existence of abstract labour presupposes a fully
developed bourgeois society. See Grundrisse, pp. 104-5.
16. E.g., Capital 111, 329; and Capital I, 182.
17. Capital 111, 597.
18. “The principal difficulty in the analysis of money is surmounted as soon as it is
understood that the commodity is the origin of money.” A contribution to the critique,
P. 64.
19. Marx frequently refers to the circulation of commodities as the ‘surface phenome-
non’ of a capitalist economic system. This circulation of commodities on the surface of the
capitalist system, he notes, helps obscure the exploitative process of capitalist production.
See Marx to Engels, 2 April 1858, Selected correspondence, pp. 106-7; Theories of sur-
plus-value 111, 377-78; and Grundrisse, p. 509. Marx’s conception of simple commodity
production in Capital is, to repeat, an analytical device used to explain this circulation
process. For a useful discussion of Marx’s conception of simple commodity production, see
Michio Morishima and George Catephores , “Is there an ‘historical transformation prob-
lem’?’ Economic Journal 85 (June 1975): 312-18.
 Nordahl Marx on the use of history 349

and a fully operative law of value.*O The so-called petty commodity pro-
duction of independent peasant producers which emerged in western Eu-
rope following the decline of feudalism is not the same as the simple
commodity production in Marx’s capital. Generally speaking, in that so-
ciety there was not freedom of movement into and out of production. And
a great deal of the peasant’s production was production for his or her own
household’s use (that is, not production of commodities for sale on the
market).
It is not until Volume 111 of Capital that Marx discusses commercial
capital, moneylending capital, and ground rent. For purposes of analysis
he assumes in Volumes I and I1 that the merchant capitalists, moneylend-
ing capitalists, and landlords do not exist. (In actuality, they have always
existed along with the industrial capitalists.) Surplus value has its origin
in the sphere of production. One of the main purposes of Volume I is to
analyze this process of surplus creation and its expropriation from the
productive wage labourers. At this stage in the analysis a discussion of
commercial and moneylending capital and ground rent would unduly
complicate and confuse matters. But by Volume 111 Marx is ready to dis-
cuss the distribution of the surplus amongst the industrial capitalists, the
commercial capitalists, the moneylending capitalists, and’the landlords. It
needs to be stressed that this order of presentation is determined by the
logic of the capitalist mode of production. The production of surplus value
comes before its distribution. Marx himself notes that this logical-geneti-
cal order is the reverse of the historical process of development.22 Inter-
nationally powerful merchants appeared historically long before industrial
capitalists and were in fact instrumental in the development of capital-
ism.23And a form of money capital (usury) existed long before capitalism
and also played a role in preparing the way for capitalist social relation-
ships .24
According to Marx, all modes of production, including the capitalist,
are structured totalities. The most important elements are intercon-
20. Of course, the model of capitalism Marx works with in Capital is itself a simplified
abstraction of the capitalist reality of his time. For example, in a concrete capitalist society
there is never complete capital and labour mobility. For discussion of Marx’s simplified
abstract model, see Sweezy, The theory of capitalist development, ch. I .
21. See, e.g., Marx’s discussion of the peasants in his The Eighteenth Brumaire, in
David Fernbach, ed., Surveys from exile (London, 1973), pp. 238-39.
22. “ . . . nothing seems more natural than to begin with ground rent, with landed prop-
erty, since this is bound up with the earth, the source of all production and of all being, and
with the first form of production of all more or less settled societies-agriculture. But
nothing would be more erroneous. . . . Capital is the all-dominating economic power of
bourgeois society. It must form the starting-point as well as the finishing-point, and must
be dealt with before landed property.” Introduction, Grundrisse, p. 107.
23. See, e.g., the discussion in Capital 111, ch. 2 0 .
24. See, e.g., ibid., ch. 36; and for discussion of pre-capitalist forms of ground rent,
see ch. 47.
350 History of Political Economy 14:3 (1982)

nected-in a sense, presuppose one another. “While in the completed

bourgeois system every economic relation presupposes every other in its
bourgeois economic form, and everything posited is thus also a presup-
position, this is the case with every organic Capitalist owner-
ship presupposes wage labour and commodity exchange. Rent in a capitalist
system is of a particular form, reflecting the specific structural features of
the system. It takes the form of a surplus above the average rate of profit;
the landlord plays a ‘passive role’ who through mere ownership of land is
able to appropriate part of the surplus.26Similarly, moneylending capital
and commercial capital assume forms in the capitalist system peculiar to
the structural features of ~ a p i t a l i s mBoth
. ~ ~ are subordinated to industrial
capital. As elements in different systems, rent, commercial profit, and
money interest would be quite different.28In the very different feudal sys-
tem, for example, rent absorbs, generally speaking, nearly all of the sur-
plus, with the landlord playing an active role as exploiter. And as discussed
above, the commodities exchanged between primitive communities are
not the commodities of a capitalist system. The law of value presupposes
capitalism. This historical ‘structuralist’ perspective means for Marx that
the capitalist system (and any other economic system) can only be under-
stood in terms of concepts and theories that reflect its particular structure
(i.e., the particular nature of its elements and their interrelationships). As
discussed above, the analytical categories of Capital, including the order
of their presentation, reflect this capitalist structure. The categories and
theories do not reflect economic life in and the order of their
presentation does not reflect the history of economic forms. The conclu-
sion one should draw from Marx’s historical ‘structuralist’ approach is that
the ‘logical-historical’ interpretation is strikingly ahistorical; economic
concepts of the present (e.g., the developed commodity) are projected
back onto the past. And then this reconstructed past is used to help inter-
pret the

25. Grundrisse, p. 278. And “to describe bourgeois property is nothing else than to give
an exposition of all the social relations of bourgeois production.” The poverty of philosophy
(New York, 1963), p. 154. In a social system “all relations coexist simultaneously and
support one another.” The poverty of philosophy, p. I I I . The interconnectedness of the
elements of the capitalist economy is clearly described in Capital 111, ch. 5 1 .
26. For Marx’s theory of rent, see Capital 111, Part VI.
27. For discussion of commercial capital, see ibid., Part IV; and for discussion of bank-
ing capital, see Part V.
28. See ibid., chs. 47, 20, and 36, respectively.
29. Marx is critical of the ahistorical tendency in bourgeois political economy of uncrit-
ically applying concepts and theories developed on the basis of the capitalist system in
analyses of pre-capitalist economies. As an example, Marx criticises Ricardo for applying
his conception of rent, which he developed out of his analysis of capitalism, “to the landed
property of all ages and all countries.” Poverty of philosophy, p. 160.
3 0 . In The poverty of philosophy Marx makes a similar criticism of Proudhon’s approach
in his Systtme des contradictions tconomiques.
 Nordahl Marx on the use of history 351

Even if the ‘logical-historical’ interpretation were correct, it is difficult

to see how knowledge of the historical development of economic forms
could be used to attain understanding of the present capitalist system with-
out some prior theoretical knowledge of the capitalist system. Otherwise,
the investigator would not know what to look for. There is a vast variety
of economic forms in pre-capitalist systems, most of which are irrelevant
to understanding capitalism (except for purposes of contrast). Knowledge
of the capitalist system is necessary to direct one to the relevant economic
forms, e.g., the commodity, in order to trace their development. And then,
of course, there is the problem of the ‘zigzags’ of history. Knowledge of
capitalism would be necessary to avoid the ‘zigzags’ and to trace history
forward linearly.3 1
The ‘logical-historical’ interpretation has an undercurrent of Hegelian
teleology which is alien to Marx’s historical materialism. History becomes
the development of economic forms progressing to the goal of the free
communist society. There is the suggestion that the present, the developed
capitalist system, is the logical working out of the past, the early com-
modity form. The present is contained in the ‘seed’ of the past. The logi-
cal development of the early commodity results in the historical emergence
of money; the logical development of money results in the historical emer-
gence of capitalism; and the logical development of capitalism results in
the socialist revolution. In the ‘logical-historical’ scheme there is, then, a
certain abstraction from the social process, from the men and women who
produce the material goods and who make history.
The most developed form of a ‘logical’ approach to history is that of
Hegel. Historical development (presented as Spirit’s efforts to know itself)
is viewed as being parallel to the ‘logical’ development of the Concept.32
Marx, of course, was very critical of Hegel’s idealist and abstract ap-
proach to history. From the time he began to work out his historical ma-
terialist approach, he stressed that history should not be interpreted in
terms of some abstract, idealist construct such as Hegel’s Spirit, but in
terms of the productive activities of concrete men and Marx
explicitly rejected the view that history has a goal immanent in it. Com-
munism is not the goal of history, but the concrete historical goal of capi-
talism’s wage labourers, the goal developed in response to the problems
encountered in capitalism. “History does nothing. . . . It is men, real liv-
ing men who do all this, who possess things and fight battles. . . . History
3 I . Mandel himself acknowledges the need for some prior theoretical knowledge of the
capitalist system before one can historically trace the development of economic forms.
Marxist economic theory, I, 18.
32. See, e . g . , Hegel, Lectures on the philosophy of world history. Introduction: reason
in history (Cambridge, 1975).
33. See Marx and Engels, The German ideology, Part I, in Robert C. lhcker, e d . , The
Marx-Engels reader, 2d ed. (New York, 1978).
352 History of Political Economy I4:3 (1982)

is nothing but the activity of men in pursuit of their ends.”34For Marx,

history has had no predetermined course of development. It is ironic that
the later Engels and certain other Marxists incorporate into Marxism, in
the form of their ‘logical-historical’ interpretation, an element of Hege-
lian-like teleology.35
A non-Hegelian mechanistic form of historical determinism is also alien
to Marx’s thought.36 There was, according to Marx, nothing in the struc-
tures of the old primitive communist society which dictated that it had to
evolve into ancient slave society. In fact, in the Grundrisse Marx notes
that there were alternative routes out of primitive communist society, an-
cient slave society being only one of them.37 And the feudal system did
not automatically generate the new bourgeois society out of its own struc-
tures and in accord with so-called underlying economic laws of develop-
ment. The transition to capitalism was a very complex phenomenon,
involving a great many factors (some exogenous to the feudal economic
The formation of a new mode of production is a disjunctive a

34. Marx and Engels, The Holy Family, in T. B. Bottomore and M. Rubel, eds., Se-
lected writings in sociology and social philosophy (New York, 1956), p. 63; also pp. 57-
58. See also The German ideology, in The Marx-Engels reader, pp. 164-65, 172. It is true
that in his earlier works, e.g., The economic and philosophic manuscripts, Mam does have
an Hegelian-like teleological conception of history. In these works the purpose of history is
viewed as the realisation of man’s essence. For the interpretation that Marx does have a
teleological conception of history (the early and late Marx), see Leszek Kolakowski, The
main currents of Marxism: the founders (Oxford, 1978); and Nathan Rotenstreich, Basic
problems of Marx’s philosophy (Indianapolis, 1965).
35. Engels does not have a consistent view regarding historical development. He criti-
cises much in Hegel’s idealist and abstract approach to history. He makes many comments
consistent with Marx’s anti-teleological conception of history. (One must not forget that
Engels, in his early years, co-authored The Holy Family and The German ideology.) What
I am arguing is that to the extent that Engels has a ‘logical-historical’ interpretation he
implicitly takes on elements of a Hegelian-like teleology. This matter is much too complex
to be adequately dealt with here. For discussions by the later Engels on historical develop-
ment, see, e.g., his Socialism: utopian and scientijic in Selected works (Moscow, 1962), 11;
and Supplement to Capital 111. For a good discussion of the idealist, Hegelian-like (and
thus non-Marxist) elements in the thought of the later Engels, see Lucio Colletti, Marxism
and Hegel (London, 1973); and Colletti, From Rouseau to Lenin: studies in ideology and
society (London, I972), Part I.
36. If history did proceed in accord with underlying economic laws and advanced auto-
matically from less primitive forms to more developed forms, then the relevance of histor-
ical knowledge would be obvious. Knowledge of these laws of history, and an understanding
of the underlying process giving rise to them, would enable the social scientist to compre-
hend present developments and predict the future. Karl Popper attributes such an interpre-
tation to Marx. See his The poverty of historicism (Boston, 1957); and The open society
and its enemies (New York, 1 9 6 9 , esp. ch. 15. See also M. M. Bober, Karl Marx’s inter-
pretation of history, 2d ed. (Cambridge, Mass., 1962).
37. In Pre-capitalist economicformations, ed. Eric Hobsbawm (New York, 1964). (This
book contains the relevant sections from the Grundrisse.) And see Hobsbawm’s excellent
introduction. For a general summary of Marx’s views on historical periodisation see Michael
Evans, Karl Marx (London, 1975), pp. 72-79.
38. Marx did not systematically or very clearly deal with the transition. But for relevant
comments, see The German ideology, in The Marx-Engels reader, pp. 176-88. For a col-
 Nordahl Marx on the use of history 353

process. The elements of the old system change, disintegrate and/or come
apart, and there is a new combination of elements (including perhaps in-
puts from outside the old system). The form of the new combination is
dependent upon a number of factors, including the class struggle. The
disintegration of the feudal system left behind a society in which peasant
freeholders predominated. This form of peasant production probably could
not out of the logic of its own structures have led to capitalism. Though
Marx’s discussion of the transition is incomplete and obscure, it is clear
from his discussion of primitive capitalist accumulation that the direct and
brutal use of force played a major role, in his opinion, in creating a prop-
ertyless proletariat. 39 In England, for example, many independent peasant
producers were forcibly evicted from their lands by landlords and then
were forced by their circumstances to become wage labourers. Conceiva-
bly, if the peasants had won their class struggle against the landlords cap-
italism in England might not have developed or might have taken a very
different course of development .40 Anyway, this discussion should make
it clear that, according to Marx, the enterprise of understanding a partic-
ular mode of production (e.g., capitalism) is very different from the enter-
prise of understanding how that particular mode of production came to
be.41As already discussed, the former entails the analysis of the elements
of the system, and how these elements are interrelated; the latter is the
analysis of how the elements, and their combination, came to be. The
‘logical-historical’ interpretation fails to recognise this distinction.
Marx’s conception of a ‘genetical’ approach
Marx does stress the importance of a genetical analysis for understand-
ing the capitalist system. Bourgeois economists are frequently criticised
for not presenting such an analysis and thereby obscuring essential features
of the system. By the term ‘genetical’ Marx does not mean historical-
genetical, as many commentators have assumed, but instead logical-
genetical.
Marx’s logical-genetical approach and his criticism of those who do not
have this approach is well illustrated in his analysis of the money form.
Many, says Marx, have been mistaken in believing that gold money has
the value it has because of its intrinsic qualities, its ‘go1dness’.42Others,
lection of essays by contemporary Marxists on the transition, see Morris Dobbs et al., The
transition from feudalism to capitalism (London, I 978).
39. See especially Capital I, chs. 27-28.
40. See the excellent article by Robert Brenner, “Agrarian class structure and economic
development in pre-industrial Europe,” Past and Present, no. 70 (Feb. 1976): 30-75. See
also Brenner, “The origins of capitalist development: a critique of neo-Smithian Marxism,”
New Left Review, no. 104 (July-Aug. 1977): 25-92.
41. Specifically, see Crundrisse, pp. 459-61. And see the commentary by Etienne Balibar
in Louis Althusser and Balibar, Reading Capital (London, 1970), pp. 276-83.
42. See, e . g . , Capital I, 187.
354 History of Political Economy I 4 : 3 (1982)

like Hume, have mistakenly viewed money as a mere The true

nature of money is revealed by a step-by-step logical analysis, beginning
with the simple commodity form (x commodity A = y commodity B ) and
proceeding on to the development of the money-form (x commodity A =
2 ounces of gold; y commodity B = 2 ounces of gold).44Such a demon-
stration shows that money is a commodity and that it derives its ‘powers’
from its function in the exchange system as the universal equivalent. Mam’s
analysis is ‘genetical’ in that he explains the nature of money in terms of
its ‘development’ from its ‘origins’ in its most basic analytical form (the
simple commodity form) .45
Ricardo’s lack of a genetical approach is revealed, according to Marx,
in his mistaken view that in a developed capitalist system commodities
(normally) sell at their values. Marx argues that capitalist competition
results in commodities not selling at their values, but instead at their prices
of production. The organic composition of capital is not the same in all
industrial spheres. Through the mechanism of capitalist competition some
of the value produced in spheres where the organic composition of capital
is below the average for the economy as a whole is transferred to those
spheres where the organic composition is above the average. The law of
value is still in effect, but manifests itself in a roundabout fashion.% Ricardo
fails to understand this because he does not have a logical-genetical ap-
proach. He thought that for the law of value to be valid, it has to manifest
itself directly, that is, in the form of commodities selling at their values.47
In contrast, Marx follows his logical-genetical procedure. He traces step
by step the flow of value from its origins in the sphere of production to its
appropriation by individual competing capitalists. As we have already dis-
cussed, in the first stages of his demonstration Marx makes some simpli-
fying assumptions. In order to facilitate understanding the commodity form,
commodity exchange, the valorization process, surplus extraction, and the
process of the circulation of capital, he assumes that commodities sell at
their values. Once these basic subjects are understood (and the necessary
concepts developed), Marx moves on to discuss other topics-capitalist
competition, the formation of a general rate of profit, distribution of sur-

43. A contribution to the critique, 159-71.

44.See Capital I, 138-63.
45. In introducing his logical-genetical demonstration of the nature of money Marx writes:
“we have to show the origin of this money-form, we have to trace the development of the
expression of value contained in the value-relation of commodities from its simplest, almost
imperceptible outline to the dazzling money-form. When this has been done, the mystery
of money will immediately disappear” (ibid., p. 139). Marx’s use of such terms as ‘origins’
and ‘genesis’ has probably contributed to the mistaken belief that Marx has a ‘logical-
historical’ approach.
46. For Marx’s discussion of the transformation of values into prices of production, see
Capital 111, chs. 8-12.
47. See, e . g . , Theories of surplus-value, 11 (Moscow, 1968), 179-203.
 Nurdahl Marx on the use of history 355

plus amongst the different fractions of the capitalist class, etc. In his dis-
cussions of these topics in Volume 111of Capital Marx drops his assumption
that commodities sell at their values. He demonstrates‘that given capitalist
competition, commodities cannot sell at their values.48
Those commentators, like Engels, who argue that Marx is saying that
commodities sell at their values in the economic system historically pre-
ceding capitalism (petty commodity production) and in early capitalism,
but not in the more advanced capitalist system, misinterpret mar^.^^ In
the system of simple commodity production described in the early chap-
ters of Capital commodities do sell at their values (as they do in the capi-
talist system described in the later chapters of Volume I and in Volume
11). But, as discussed above, this simple commodity production is nut the
economic system historically preceding capitalism. It is a simplified ab-
stract model based on certain features of a developed capitalist mode of
production that Marx wants to discuss at this stage in his presentation.
Commodities could not sell at their values in the society of petty producers
which historically preceded capitalism. The law of value comes into full
effect only with a developed capitalist system.50Those commentators also

48. In comparing his own approach to Ricardo’s Marx writes: “Science consists pre-
cisely in demonstrating how the law of value asserts itself. So that if one wanted at the very
beginning to ‘explain’ all the phenomena which seemingly contradict that law, one would
have to present the science before science. It is precisely Ricardo’s mistake that in his first
chapter on value he takes as given all possible and still to be developed categories in order
to prove their conformity with the law of value.” Marx to Kugelmann, I I July 1868, Selected
correspondence, p. 209. For a general comment on the tendency in bourgeois political
economy to leave out the intermediate links in its analysis, see Theories of surplus-value,
I11 (MOSCOW, I971), 500.
49. See Engels, Supplement to Capital 111, 895-900; and Engels to Sombart, I I March
1895, Selected correspondence, pp. 479-81. In his textbook on the history of economic
theory Mark Blaug accepts Engels’ interpretation of Marx’s views on simple commodity
production and criticises Marx for holding such untenable views! Economic theory in ret-
rospect (Homewood, 111. 1962)’ pp. 217-20. Ronald Meek offers a more sophisticated, and
consequently somewhat qualified, variant of the ‘logical-historical’ interpretation. Accord-
ing to Meek, the first part of Marx’s Capital does not refer to an actually existing society
of simple commodity production. (No pre-capitalist society was dominated by commodity
production.) It is an abstraction based on the nature of the commodity relations in pre-
capitalist societies. Marx’s analysis in Capital depicts how these commodity relations be-
come capitalistically modified. Meek also says that Marx probably did not believe that
commodities in pre-capitalist societies (because of various forms of monopoly and low
factor mobility) sold at their values. But in pre-capitalist societies with significant commod-
ity production the prices of commodities nevertheless tended to reflect the labour inputs of
the petty commodity producers. And in early capitalism commodities were exchanged at
their values. See above, n. 2 for the relevant works by Meek. For a critique of Meek, see
Morishima and Catephores, “Is there an ‘historical transformation problem’?,” pp. 309-28.
50. But Marx does say in one place: “it is quite appropriate to regard the values of
commodities as not only theoretically but also historically prim to the prices of production.
This applies to conditions in which the labourer owns his means of production, and this is
the condition of the landowning farmer living off his own labour and the craftsman, in the
ancient as well as in the modern world” (Capital, 111, 177).This passage is frequently used
to show that Marx does have a ‘logical-historical’ interpretation. See Meek’s discussion in
356 History of Political Economy I 4 : 3 (1982)

are mistaken who see a contradiction between Marx’s discussion in Vol-

ume I where commodities are said to sell at their values and his discus-
sions in Volume I11 where commodities are said to sell at their prices of
production. According to this interpretation, Marx did not realise that
commodities could not be sold at their values until after he wrote Volume
I. The discussion in Volume I11 on the prices of production is viewed as a
tortuous attempt to reconcile his previous theoretical discussion in Volume
I with economic reality, and thus a crude attempt to save his labour theory
of value.51The publication of Marx’s ‘rough draft’ for Capital, the Grun-
drisse, shows that Marx did know that commodities could not sell at their
values before he wrote Volume I.52 Anyway, an understanding of Marx’s
logical-genetical approach is enough to refute this interpretation.
Engels’ approach to this ‘transformation problem’ shows his lack of
understanding of Marx’s genetical approach. In his supplement to Volume
I11 of Capital Engels refers to the controversy concerning the so-called
contradiction between Marx’s treatment of value in Volume I and his treat-
ment in Volume 111. Engels briefly summarizes the discussion of two com-
mentators who wrote in support of Marx’s position (and thus who argue
that there is no contradiction). Engels qualifies the approval he gives to
their theoretical justifications of Marx’s position: “Sombart , as well as
Schmidt, . . . does not make sufficient allowance for the fact that we are
dealing here not only with a purely logical process, but with a historical
process and its explanatory reflection in thought, the logical pursuance of
its inner c o n n e c t i o n ~ . ”Engels
~~ then goes on to give a brief historical
sketch of the development of commodity production, from the first ex-
change of commodities between primitive communities to the highly de-

his Smith, Marx, and a f e r , ch. 7 . But it is obvious from Marx’s general theoretical posi-
tion¶ as well as from many specific comments (see, e.g., nn. 1 5 , 16, and 17 above), that
Marx believed the category of value existed in pre-capitalist societies only in an immature
and embryonic fo.rm. Commodities could not sell at their ‘values.’ Engels, then, is at vari-
ance with Marx when he writes without qualification that the law of value existed in pre-
capitalist societies whenever there was commodity production: “the Marxian law of value
has general economic validity for a period lasting from the beginning of exchange, which
transforms products into commodities, down to the 15th century of the present era. . . .
thus the law of value has prevailed during a period, of from five to seven thousand years.”
Supplement to Capital 111, 900. And much of Mandel’s discussion of pre-capitalist com-
modity economic life assumes that the law of value is in effect to a significant extent in pre-
capitalist societies. See, e.g., Marxist economic theory, 1~82, 83, 100.
51. See, e . g . , E. von Bohm-Bawerk, Karl Marx and the close of his system (Clifton,
N.J., 1973). For a contemporary account of the ‘great contradiction’ between Volume I and
Volume 111, see Blaug, Economic theory in retrospect, pp. 209 ff.
52. See the discussion by Rosdolsky in The making of Marx’s “Capital,” 371-75. And
in a letter to Engels, dated 2 Aug. 1862 (some five years before the publication of Capital
I), Marx states that commodities cannot sell at their values, given an average rate of profit
and spheres of production with different organic compositions of capital. Selected corre-
spondence, pp. 128-33.
53. Supplement to Capital 111, 895.
 Nordahl Marx on the use of history 357

veloped capitalist system where commodities no longer sell at their values,

but at their prices of production. By providing this historical sketch, Engels
obviously believed he was giving a theoretical defense of Marx’s position
in Capital. In fact, he seems to be arguing that such an historical sketch
is needed to prove that Marx was right!54(He implies that if Marx had had
the opportunity to go over the third volume once more, he would have
supplied this historical sketch.)
Many other examples of how Marx used his logical-genetical approach
to refute what he considered to be erroneous theories can be given. Ac-
cording to the ‘abstinence theory’, the capitalist is entitled to his profit
because he invested in his enterprise a part of his own savings (he ab-
stained from spending).55 This justification vanishes, Marx argues, once
the movement of surplus is traced from its origins in the production sphere,
into the hands of the expropriating capitalist, and then back into the enter-
prise as newly invested capital. It now becomes clear that this newly in-
vested capital does not really come from the capitalist, but from his
workers.56 Similarly, a tracing of the circuit of surplus value from its ori-
gins in production refutes the theory that money capital and land are sources
for new value, and thus moneylenders and landlords are entitled to their
interest and rent. The industrial capitalist expropriates the surplus value
produced by workers (not necessarily only from his own workers); he then
pays out parts of this surplus value (the ‘interest’ and the ‘ground rent’) to
the moneylender and the landlord. Money capital and land yield revenue
to their owners because ownership of money capital gives to moneylend-
ers, and ownership of land gives to landlords, the power to expropriate
part of the surplus value.57
Knowledge of the present as an aid in understanding the past
So far we have seen that, according to Marx, theoretical understanding
of capitalism is achieved by means of a ‘structural’ analysis of that system.
The theory reflects the particular socio-historic logic of the capitalist mode
of production. This theory of the capitalist system can, Marx believed, aid
the social scientist in understanding the past. In the Grundrisse Marx notes
that a correct understanding of the laws of the capitalist system “point
towards a past lying behind this system. These indications, together with

54. And note the comments by Engels on some proofs of Capital I (evidently the early
sections on money and the circulation process): “At most the points here established dialec-
tically might be set forth historically at somewhat greater length, the test to be made from
history, so to speak, although what is most necessary in this respect has already been said.”
Engels to Marx, 15 June 1867,Selected correspondence, p. 186(emphasis added).
55. See, e . g . ,Capital I, 744-46.
56. See especially ibid., chs. 23 and 24.
57. See Marx’s discussion in Capital 111, ch. 48, and Theories of surplus-value 111,
453-540.
358 History of Political Economy I4:3 (1982)

a correct grasp of the present, then also offer the key to understanding of
the past-a work in its own right which, it is hoped, we shall be able to
undertake as .well.”58 Take the example of the genesis of the capitalist
system, i.e., the historical process of its formation. Understanding of this
process presupposes some theoretical knowledge of capitalism. The capi-
talist-worker relationship is at the basis of the capitalist system. The wage
labourer does not possess his own means of production. And capitalist
ownership of the means of production presupposes a prior accumulation
of a considerable sum of money capital.59In order to explain the genesis
of capitalism, the historian, then, must focus on this accumulation of
money capital and on the process of the dispossession of the peasants and
artisans. (Of course, many other factors would have to be considered as
well.) In conclusion, the structure of the capitalist system provides the
historian with the knowledge of what has to be investigated and under-
stood in order to explain the formation of the capitalist system.60
Marx also believed that some of the economic concepts and theories
derived from the study of the capitalist system-and thus fully applicable
only to that system-are useful in helping to understand aspects of pre-
capitalist systems. There was, after all, commodity production of a sort
and thus market and money relationships (though in a very restricted form)
in a great number of pre-capitalist societies. Understanding the nature and
function of money (in a capitalist system) aids the historian6* in under-
standing such problems as why certain commodities (especially gold and
silver), and not others, developed as forms of money,62and how coins as
tokens of value came to be.63 And in the Grundrisse Marx states that
theoretical understanding of modem credit provides “the key to the under-
standing of the historical development [of credit institutions] .”64 In Capi-
5 8 . Grundrisse, pp. 460-61.
59. For Marx’s discussion of what he terms ‘primitive accumulation’, see especially
Capital I, ch. 26.
60. See Balibar’s discussion in Althusser and Balibar, Reading Capital, pp. 276-83.
61. Re-capitalist writers, Marx notes, had a very imperfect understanding of the nature
of money. Aristotle could go only part of the way in understanding commodity exchange
and the nature of money, for he had no knowledge of the labour theory of value. This theory
would be discovered only later, with the development of capitalism (Capital I, 151-52).
The monetarist and mercantilist theorists, the predominant theorists in the early years of
bourgeois society, also did not understand the nature of gold money, viewing the value and
function of money in terms of its physical qualities. A contribution to the critique, pp.
157-59 f

62. See, Capital I, 183-84;and A contribution to the critique p. 49.

63.“Our [logical-genetical] exposition has shown that gold in the shape of coin, that is
tokens of value divorced from gold substance itself, originates in the process of circulation
itself and does not come about by arrangement of state intervention.” Marx then gives an
historical example: “Russia affords a striking example of a spontaneously evolved token of
value.”A contribution to the critique, p. 143;and see Capital I, 221-26.
64.Grundrisse, pp. 672-73.
 Norduhl Marx on the use of history 359

tul he uses his theoretical understanding of credit to “illuminate such facts

as the birth of credit associations in Venice and Genoa in the 12th and 14th
centuries, and the development of banking in Holland in the 17th century
and then, in the 18th century, in England and France.”65
Knowledge of capitalism helps in understanding the past in another way,
according to Marx. The correct approach in understanding a society
(termed by Marx ‘historical materialism’), and the theoretical postulates
connected with this approach, were developed after the rise of the capital-
ist system and in the course of attempting to understand this system. To
illustrate this point of Marx’s, let us first examine the concept of abstract
labour. The concept of labour in general (as opposed to specific forms of
labour) is one of the most fundamental concepts in bourgeois classical
economics and in Marxist economics. According to the labour theory of
value, the value of commodities is determined by the quantity of socially
necessary (abstract) labour embodied in them. In value formation there is
indifference to the particular type of labour, whether weaving, bootmak-
ing, or agricultural labour. All that matters is the quantity of labouring
activity that it takes to make the products. This concept of abstract labour,
Marx argues, could not have been discovered before the advent of a fairly
developed capitalist economy. Labour in general presupposes societal in-
difference to any particular type of labour. All types of labour, not only
agricultural or manufacturing (or particular forms of these), must be
wealth creating:
Indifference towards specific labours corresponds to a form of society
in which individuals can with ease transfer from one labour to an-
other, and where the specific kind is a matter of chance for them,
hence of indifference. Not only the category, labour, but labour in
reality has here become the means of creating wealth in general, and
has ceased to be organically linked with particular individuals in any
specific form. Such a state of affairs is at its most developed in the
most modern form of existence of bourgeois society.66
Marx suggests that the concept of labour in general provides us with
clues in understanding the general nature of p r ~ d u c t i o nOn
. ~ ~reflection it
becomes evident that production is at its basis human labour, and for all
modes of production, not just the capitalist. This opens up the way for
understanding a society’s process of production in terms of the nature that
labour takes in that process. In addition, the way is open for viewing

65. Godelier, Rationality and irrationality in economics, p. 177; and for Marx’s discus-
sion, see Capital 111, ch. 26.
66. Grundrisse, p. 104.
67. See, e.g., Marx’s discussion in the Introduction to the Grundrisse, pp. 103-6.
360 History of Political Economy I 4 : 3 (1982)

history itself as a labouring process, a series of productive activities

through which men and women transform the world.68
The connection in Marx’s mind between capitalism and the develop-
ment of historical materialism can be illustrated with other examples.
There are various aspects of capitalism which, Marx suggests, help engen-
der understanding of the determining effect that the process of material
production has on other spheres of society-in all systems, not just the
capitalist. The importance of economic activity is more obvious in a cap-
italist society than in pre-capitalist societies, especially a new dynamic
capitalism emerging from a ‘restrictive’ feudal society. The sphere of ma-
terial production in capitalist society is, generally speaking, separate from
explicit political structures and thus more ‘naked’, while in the feudal
system the political and the economic structures are intertwined. The dy-
namism of a new and robust capitalism and its effects on all spheres of
society are prominent themes in The Communist
The interconnections between the elements of a society (particularly the
economic elements) become more obvious in a capitalist society. The na-
ture of capitalist economic life underlines the systemic nature of a society,
how the various elements are interconnected. Capitalist enterprises pene-
trate into all areas of the society; generally speaking, there is free move-
ment of capital, labour, and commodities throughout the country. ‘Civil
society’ is tied together by the interpenetration of this free economic activ-
ity. Economic activity in a pre-capitalist society was much less intercon-
nected; the production units were much more self-sufficient. In order to
explain capitalist economic activity (however inadequately) the bourgeois
classical economists had to demonstrate the inner connections between the
key economic phenomena-profit , rent, economic competition, etc. 70 In
doing so, they showed (though unconsciously and esoterically) how all
societies are structured totalities.
To canclude, historical materialism had its genesis, Marx believed, in
the capitalist era. Historical materialism is applicable in the study of pre-
capitalist systems, but could not have been formulated before the advent
of capitalism. Elements that went into the making of historical materialism

68. In The German ideology, Part I, Marx lays the beginnings for such an approach to
history.
69. Part I of The Communist manifesto. Of course, the best source for Marx’s description
of the features of capitalism is Capital. Concerning pre-capitalist societies, see Grundrisse,
esp. pp. 156-59, 163-65, 471-502, 540-42; Economic and philosophic manuscripts, trans.
Martin Milligan (Moscow, 1961),pp. 61-63; Critique of Hegel’s “Philosophy of right,”
trans. and ed. Joseph O’Mallory (Oxford, 1970), p. 32; and “On the Jewish question,” in
Mam-Engels, Collected Works, I11 (New York, 1975), 165-66.
70. For discussions by Marx on classical economics, see e . g . , A contribution to the
critique, pp. 52-63; and Theories of surplus-value, I and 11.
 Nordahl Marx on the use of history 361

appeared in the works of many writers of the bourgeois era. Marx, for
example, credits Hegel with understanding (though in his peculiar eso-
teric, idealist fashion) that history is a labouring process.71And, of course,
it was the classical economists who in their attempts to comprehend theo-
retically the capitalist system developed the concept of labour in
Elements such as these, suggests Marx, were the building blocks used by
himself and Engels in developing the historical materialist approach.
Of course, Marx undoubtedly believed that knowledge of past systems
was also important in helping to develop historical materialism. The theo-
retical perspective and insights provided by a developing capitalist sys-
tem, one would think, were developed in light of what the theorists knew
about the present and past Once formulated, historical materi-
alism was then used to help better understand this past.
The uses of historical knowledge
As discussed above, Marx believed that the capitalist system, like all
socio-economic systems, makes up an historically specific structured totality.
The system can be understood only in terms of the particular socio-historical
nature of its structures. Capitalist exploitation would be incomprehensi-
ble, for example, without focus on the particular socio-historical nature
that labour takes in a capitalist system. In bourgeois economics, Marx
argues, wage labour is conceived as labour in general which when com-
bined with the two other ‘natural’ elements of production, land and capi-
tal, results in the production of goods and services.74Capitalist exploitation
is obscured in this ‘general labour process’. In contrast, sensitivity to the
social nature of wage labour brings to the centre of analysis the social
relationship between capitalist and wage labourer. Control over the labour
power of the producers gives the capitalist the power to extract surplus
value from the producers. 75
To give another example, Marx emphasises that overproduction crises
cannot be understood without focus on features peculiar to the capitalist
mode. Absence of such a focus, Marx argues, may lead to the mistaken

7 1 . See, e . g . , Economic and philosophic manuscripts, in The Marx-Engels reader, pp.

83-103.
72. Sources cited in n. 7 0 above.
73. Both Marx and Engels had an extensive and deep knowledge of history. In the period
before The German ideology (the first systematic presentation of their historical material-
ism) Mam and Engels had been reading in both economics and history. For the relevant
biographical details, see David McLellan, Karl Marx: his life and thought (New York,
1973).
74. From among the many references scattered throughout the works of M a n , see, e . g . ,
A contribution to the critique, p. 60; Theories of surplus-value, 11,400; Grundrisse, p. 331;
and Capital 111, ch. 48.
75. Capital I, ch. 7 .
362 History of Political Economy I 4 : 3 (1982)

belief held by many classical economists that general overproduction crises

are i m p ~ s s i b l e These
. ~ ~ economists view capitalist production as eco-
nomic production per se. It is not; it is production of exchange value for
profit. The drive of the capitalists to obtain their profits results in a tre-
mendous expansion of the productive capacity of the system. The capacity
of the society to consume what is produced lags behind its productive
capacity. A large proportion of the society are wage labourers. Their abil-
ity to consume is severely restricted by the nature of their social relation-
ship with the capitalist class. Their relatively low wages will not enable
them to consume enough of the commodities coming onto the market. The
result will be general overproduction crises, increasing in severity over
time. 77
Marx believed that historical knowledge can be an aid in understanding
the distinctive features of capitalism. He often gives contrasting examples
from pre-capitalist systems so as to illuminate the particular nature of cap-
italism. As already discussed, in Marx’s opinion many of the features of
capitalism help hide its class and exploitative character. For example, the
voluntary contractual relationship between the wage labourer and the cap-
italist, and the absence of the direct use of political-military power to
extract surplus, help conceal the exploitation. In contrast, it is obvious
that in the feudal system producers work part of the week for themselves
and part of the week for the lords, and are thus exploited.78The serfs are
tied to the land and are compelled through political-military means to work
for the lords.79 Knowledge of this feudal system helps make clearer the
general nature of exploitation and thus helps us to see through the ‘dis-
torting effects’ produced by capitalist commodity forms. The capitalist
economic forms can be seen in terms of the particular way exploitation
takes place in capitalism. Just like the producer-serf, the wage labourer
works part of the time free for the owner of the means of production.
During the part of the day he works for himself he produces the value of
his money wage, which he takes to the market to exchange for economic
76.This idea was known as Say’s Law. For Marx’s discussion and critique of this theory,
see especially Theories of surplus-value, 11, 492-35;but also Grundrisse, pp. 410-23,and
Theories of surplus value, 111, 100-104.
77. Marx summarises his argument thus: “Over-production is specifically conditioned
by the general law of the production of capital: to produce to the limit set by the productive
forces, that is to say, to exploit the maximum amount of labour with the given amount of
capital, without any consideration for the actual limits of the market or the needs backed
by the ability to pay; and this is camed out through continuous expansion of reproduction
and accumulation, and therefore constant reconversion of revenue into capital, while on the
other hand, the mass of the producers remain tied to the average level of needs, and must
remain tied to it according to the nature of capitalist production.” Theories of surplus value,
111, 534-35.
78. See the comparison given by Marx in Wages, price and profit, in Selected works
(MOSCOW, 1962),I, 429-30.
79. Capital 111, 790-91.
 Nordahl Marx on the use of history 363

necessities. The fact that he is paid in the form of the money wage and
does not produce his own means of subsistence does not alter in any way
the essence of class exploitation.80In the capitalist society there is no need
for the use of overt political-military means to extract surplus. Wage la-
bourers do not possess their own means of production and thus are forced
by circumstances to work in the factories of capitalists. Exploitation in the
factory takes place in a natural, ‘impersonal’ manner, i.e., within the nor-
mal course of production. The production process and the process of
extracting surplus value coincide in time and space. At the end of
the production process the capitalist has sole ownership of the commodi-
ties; and the wage labourer has been exploited (see especially Capital I,
Part 111).*
Knowledge of the genesis of the capitalist system is also, Marx be-
lieved, an aid in helping to dispel illusions about capitalism. The example
of the creation of the propertyless proletariat has already been given in the
section on the ‘logical-historical’interpretation. Knowledge of the process
of how the proletariat came to be helps one comprehend the nature of the
social relationship between capitalist and worker.** It becomes clear that
the source of the capitalist’s profit is not his hard work and/or abstinence,
as commonly believed.83 Historical analysis reveals that the capitalist sys-
tem was conceived in force and Much of the original stock of
money capital was stolen by force of arms, e.g., from the Indians of the
New World, or squeezed out of hard-working peasants by usurious mon-
eylenders. And the propertyless proletariat had its origins in force (and
not in laziness); in England the peasant freeholders were forced from their
land and had to become wage labourers. Knowledge of this historical pro-
cess, Marx is arguing, helps dispel the myth of the hard-working person
who becomes capitalist and thus also the myth that today’s capitalist also
‘earns’ his profit. In other words, such historical knowledge helps us see
through the ‘obfuscating mist’ associated with capitalist economic forms.

80. See, e.g., Capital I, 712-14.

81.In the famous section of Capital on commodity fetishism Marx discusses a number
of non-capitalist examples of how societies organise their expenditures of labour power.
These contrasting examples, he says, help reveal the truth lying behind the capitalist com-
modity form. “The whole mystery of commodities, all the magic and necromancy that
surround the products of labour on the basis of commodity production, vanishes therefore
as soon as we come to other forms of production” (p. 169).It becomes obvious that the
value of commodities is determined by the amount of socially necessary labour embodied
in them (and not by the physical attributes of the commodities).
82. Though the ‘logical-historical’ interpretation is not itself valid, knowledge of histor-
ical development, including the genesis of capitalism, can, according to Marx, be an aid in
understanding capitalist forms.
83. For references by Marx to this bourgeois belief that private property has its source
in individual hard work, see Grundrisse, p. 247;and Capital I, 873-74. For references to
the abstinence theory, see above, n. 5 5 .
84. Capital I, chs. 26-28, 31,33.
364 History of Political Economy I4:3 (1982)

In previous sections we emphasised the point that Marx’s analysis of

the commodity form and the development of money should be viewed as
genetical-logical, not genetical-historical; and that Marx’s genetical-logi-
cal analysis helps one understand the actual historical process of the de-
velopment of money. But in his discussions of money in Capital and in A
contribution to the critique of political economy Marx does give historical
examples. These examples are given to illustrate the theoretical point un-
der discussion. Though the theory of money is constructed in terms of the
logic of capitalist exchange relations, knowledge of the pre-capitalist money
form and its development may have helped in the construction of the theory
and surely helps others understand the theory once it has been developed.
The fact that primitive societies developed a form of money after com-
modity exchange became regularised illustrates the connection between
commodity exchange and money. A theoretical point which may be hard
to grasp when examining a developed commodity system (in part because
of the accompanying fetishism) becomes easier to see when tracing the
historical development of the money form.
And, lastly, an historical perspective, Marx believed, opens up the way
for revolutionary change:
. . . from the moment that the bourgeois mode of production and the
conditions of production in distribution which correspond to it are
recognized as historical, the delusion of regarding them as natural
laws of production vanishes and the prospect opens up of a new so-
ciety, [a new] economic social formation, to which capitalism is only
the transition.85
As indicated in preceding pages, according to Marx, in bourgeois eco-
nomics the historically specific economic forms of capitalism-wage la-
bour, private capitalist ownership of the means of production, rent as a
surplus over average profit, etc.-are viewed as ‘natural’. Economic sys-
tems, at least if they are to be rational and thus efficient, must take this
capitalist form. It is unquestioned, for example, that owners of factories
direct the use of the labour power of others as they see fit. This is in the
nature of economic production. The ideological conclusion of this ahistor-
ical perspective is, of course, that the capitalist system is here to stay
forever:
When the economists say that present-day relations-the relations of
bourgeois production-are natural, they imply that these are the re-
lations in which wealth is created and productive forces developed in
conformity with the laws of nature. These relations therefore are

85. Theories of surplus value III, 429.

 Nordahl Marx on the use of history 365

themselves natural laws independent of the influence of time. They

are eternal laws which must always govern society.86
Historical understanding of pre-capitalist systems and the genesis of the
capitalist system would, Marx believed, make it apparent that capitalist
economic forms are anything but natural. As already mentioned, in feu-
dalism the labourers (serfs) possessed their own material and instruments
of production, and they themselves directed the immediate production
process. But they were tied to the land and were forced to give up to their
lords a certain proportion of their economic produce. This form of labour
was most rational in terms of the logic of feudalism, just as wage labour
is most rational in terms of capitalist production for profit and the capitalist
form of exploitation. In such an historical perspective capitalism ceases to
be seen in the ‘technical-economic’ terms of production in general, but in
the socio-political terms of an historically specific form of class exploita-
tion. The way is then open for revolutionary change.
Concluding summary
Marx, first of all, has an ‘historical approach’ in that he believes capi-
talism can be understood only in terms of its historically specific social
structures. He does not believe that an historical tracing of the develop-
ment of economic forms can provide the theory for understanding capital-
ism. That can be obtained only through an analysis of the elements (including
their interrelationships) that make up the capitalist mode of production. A
‘genetical-logical’ approach is basic in that analysis. Knowledge of past
social systems, and knowledge of the genesis of the capitalist system, can
be of help in deciphering the logic of the capitalist mode. Such knowledge
can help in understanding its historically specific forms. As in so many
other aspects of his thought, Marx’s approach to history should be viewed
dialectically. Historical knowledge is an aid in developing our understand-
ing of capitalism. In turn, this understanding of the capitalist mode (and
the historical materialist approach which was developed in the course of
trying to comprehend capitalism) furthers our understanding of pre-capi-
talist systems and the formation of the capitalist system.

86. The poverty of philosophy, p. 121.