Preface
Below are my stylized notes of David P. Levine’s Contributions to the Critique of Economic Theory. It is a highly “abridged” version where I have written down how things have made sense to me, and so might contain spelling errors, or invite the opportunity for better wording and formatting. It does not serve as a wiki or anything, and assumes knowledge of certain facts. Facts such as the background of Levine’s work in this text as constituting “Hegelian” methodology, and respective knowledge of Hegel’s methodology, concept(s), and system. It also assumes a general familiarity with the works of certain political economists, in addition to their relevant contributions to what a science of economics should be constituted by and start with. Aside from that, you can go in blind and read this.
Intro
There are a series of interconnected problems that haunt the origins of economics, currently extorting it for its truth-value. All of them stem from a single, “generative”, in some sense, issue. This is the inability to conceive of economics as an objective science of social relations, distinct from nature, or, as a function of spirit. Levine’s goal in part 1 of Contributions to the Critique of Economic Theory is in addressing this problem through identifying its manifestations and systematically establishing the beginning of this science, and its concepts as logically explicated. The first manifestation is the confusion of social need with natural need (or the need of biological subsistence). Classical political economy began by defining its object as the provision of needs, unable to separate socially determined needs from the biologically given needs of subsistence. The resulting question ensues: is economics about the reproduction of society or the reproduction of biological life? Indeterminacy of this kind dooms economics to a fall from grace, from a scientific look at social life, into a naturalistic science of subsistence, being applicable to even animals. While making for a funny premise, and perhaps an insult, that of the economy of alley cats and dogs, it does not establish economics as a science, nor does it describe the phenomenon of economy. Another manifestation of this problem is the misplacing of the locus of economics to the state, as opposed to the family. An escape from the natural determination of the household (Levine cites physiocrats such as François Quesnay who do this) found itself transferring the site of economic activity to the state, conflating economic relations with political relations. As a result, economy here appears as an arm of state policy, as opposed to a system with its own logic (such as value and capital). This does not preclude the possibility of state direction of the economy of course, only to cite the logical error in establishing economics as a science of sociality and social relations, which itself is downstream from spiritual being/reality. Another manifestation was conceiving of “wealth” as a surplus above natural subsistence. This traps wealth in civilized societies (here meaning bourgeois or capitalist) as being determined by its physicality. Wealth, in reality, is defined by its social property of being value. This manifestation is a retreat into naturalism. What needs addressing, according to classical thought, is “wealth”. Wealth involves some kind of “multiplication” of needs and object, however classical political economy oft understood this only quantitatively (as in more needs, and more goods) rather than qualitatively as the creation of a new system. This system is the system of needs. Needs here are defined socially and abstractly. There is a qualitative transformation found in wealth, where it is a totality governed by the principle of value, as opposed to the aggregate of independent objects and needs. Likewise, we find another manifestation in value. This principle governing the system of needs - value - was discovered, however, following from the previous conception of wealth, value was conceived of as an indifference. In this understanding of wealth, there needed to be a principle, or a common social substance, or protocol, call it whatever you want, to make different commodities comparable and exchangeable. This was defined negatively, as the indifference of needs to other needs. A negative definition cannot give a positive or active determination in a system, and so theories such as David Ricardo’s “invariable measure” hit a dead end. This positive determination can be considered a prerequisite for understanding Capital. Finally, there is a manifestation of this problem where the division of labor fails to find its ground socially. Smith correctly identified the “division of labor” as the source of wealth’s increase, but grounded it in the natural “propensity to truck, barter, and exchange”. Another retreat into naturalism which fails to see economy as a social phenomenon. Particularly, it roots this sociality in a natural and psychological (implied positivistic) cause. The social division of labor appears as an outgrowth of a given “human nature” and not as a historically specific social form created by and for commodity production.
To overcome this confusion, economics has to be re-grounded (or rather, properly grounded). Its proper object needs to recognize itself as not nature, but the specific social forms generated by economic life. These forms develop logically from one another in a necessary sequence:
Wealth -> Value -> Capital
Wealth
Classical economy begins with need, and so do we. Need is the beginning that contains the fatal ambiguity which dooms political economy, and as such, constitutes the critique of political economy. This is, after all, a critical philosophy. At least, Part 1 of the book is in some sense. People have needs and so society must fulfill them. This starting point smuggled in the primary confusion mentioned earlier regarding nature and society.
Need has in itself a kind of contradiction. It appears as natural, via thirst, hunger, shelter, etc. But in “civilized” society, needs become abstract, socially determined, and multiplied, and so there are needs for status, culture, variety, etc. Classical economy cannot have it both ways, being both the natural determination and social determination, so we begin with the most immediate category of need as it relates to the object of economy. This would be the concept which is the most immediate, pre-theoretical conception as it corresponds with social need. However, even a momentary glance at “need” sees it as already socially determined within a system of need. A given hunger is not a natural hunger, but a hunger in civilized, or capitalist/bourgeois society. Natural need is in a sense excluded from economic science at the outset by the very concept we begin with.
Once one recognizes that needs in wealthy or civilized society are social as opposed to natural (as in the case of subsistence economies), one must ask what object it is that fulfills them. The answer isn’t any particular thing, such as this loaf of bread, or that Funko Pop, since social needs are by definition abstract. Meaning needs in society are of comfort, trend, status, culture, and so on and so forth. A given individual example is not essentially what the need is. The only object which corresponds here to what we are looking for, or an abstract social need, is that which itself is abstracted from particularly. In other words, a single isolated social need does not cut it. There is a multiplication of need, or the emergence of a system of needs, which defines civilized society.
One abstract need implies others. “Professional attire” implies a “job” which implies “commuting” which implies xyz, and so on and so forth. Abstract needs refer to a relationality which the need itself finds itself in. Another way to look at it is to realize that the abstraction itself generates this multiplication of need. For example, the need for comfort generates the need for furniture, which generates air conditioning, which generates entertainment, etc. In being an abstract need, it already implies an existence of a system of needs.
The system of needs (culture, to comfort, to status, and so on) requires a totality, or a total world of objects which mirrors its own diversity and interconnection. This total world of objects is wealth. Levine defines wealth as “the multiplicity of objects capable of fulfilling such social Needs”. He then clarifies that wealth can be considered an aggregate of “use-values”, but what you find is that the “use-value” is itself a component of wealth. The reason for this is that it is not the particular need whose fulfillment was made possible by wealth (the totality of objects which mirrors the system of needs), but the generativity of need which made wealth intelligible and gives wealth meaning in the first place.
Value
Wealth is defined as a multiplicity of use-values. We began with “need”, which is in reality abstract need, which has revealed itself to be the system of needs of which needs an object to correlate itself with. Wealth are these aggregate use-values. As mentioned in the introduction, there is a principle of commensurability required. How can these use-values, this world of objects including food, clothing, trinkets, and such, be compared, exchanged, and ultimately integrated into a singular system of wealth? What we know is that the answer does not lie in the use-values themselves. And we know this new principle, or category, does not stay at the level of use-value because use-values are qualitatively different and so cannot translate to different needs. For example, you cannot measure nourishment in units of warmth. The use-values of the needs of satiation and warmth are not translatable.
Classical political economy considers the mode by which needs are fulfilled internal to “wealth” in searching for an answer. The logic which makes implicit what is in wealth explicit is the division of labor. The division of labor is what solves our problem of commensurability, by explaining the material basis of wealth, or in other words, by actually being the thing producing the multiplicity of use-values. There is a connection between the multiplication of needs (the process of needs generating), and the way these needs are produced in society, therefore allowing for a bridging of commensurability. This bridging is recognized by us, and by society, as what the wealth of nations consists of; the social substance found in, or containing (depending on how you look at it, either is valid) the division of labor creates a system of interdependence wherein the principle is indifferent to the particularity of need and use-value. Levin’s words which sum up the development so far work better than mine: “Thus value, as this social substance, can begin to emerge in a really determinate form, as more than the negation of use-value, only to the degree that it appears as endowed with a positive conception, which is distinguished from its relation to use-value”. We have avoided the issue of the new immanent principle - identified as value - being an immediate non-being of use-value, but containing the indifference of use-value, and also demonstrating a positive principle (which is to be explained subsequently).
Something which Levine notes, is that classical thinking, as referring to classical political economy, does not actually correctly identify the division of labor as social, instead locating the principle of sociality in the interchange or exchange of products, as opposed to the laboring activity itself. The only exception to this is a brief mention in the beginning of the Wealth of Nations, which still nonetheless is just an exception to the rule established in that work, or as Levine cites, “a prelude to the treatment of the division of labor as the opposition of independent commodity producers constituted in such a way as to establish the laboring activity as purely individual and as possessed of no intrinsic social character”.
This thought leads to a system of “simple commodity exchange”, featuring a fixed system of natural needs, with a corresponding distribution of production. Exchange in this system is essentially a direct barter, where value has no independent existence. The true division of labor, one that defines capitalist society, is one that again is not tied to the system of natural needs, but sees needs as they are truly. Likewise, mutual dependence (or commensurability) is afforded only to the production of wealth in the system of objects. The substance of this mutual dependence, where it is not the particular need but wealth, is value.
Value cannot remain an abstract substance. It must realize itself (socially). This happens in exchange. In the system of wealth, individuals relate to each other as abstract commodity owners in order to exchange commodities. Exchange is the moment where value becomes real as a social event, or where the abstract equality of value becomes concrete. In exchange, the private, concrete labor hidden in a commodity is recognized as socially necessary labor, or as value. As such, value is not merely in the commodity as a thing that is valuable. Value is the social relation between commodity owners.
This being of value creates a social equality where everyone is equal as a potential owner of wealth. The particular needs don’t really matter, all that matters is one’s capacity to own and exchange property. Value is the substance of this equality. The “value” of one’s property is the measure of one’s place in this system of social equality.
The commodity has a double being, one as it relates to a particular need (this bread as commodity for hunger), and another as a value, where it relates to its owner as defining the owner as commodity owner. Its value here is entry into the system of universal exchange, comparable to value being an ID where the system of universal exchange is a club or bar.
The individual (as commodity owner) is a particular person, who has specific needs, and a unique life of their own. But as abstract commodity owner, they are defined by the freedom from any particular need. In other words, it matters not what you own, but that you own and can exchange.
Wealth is realized to be the system of commodity owners, where each is equated with the other. To be wealthy to mean one that is positioned within this social network of abstract equality, having the universal capacity to command the labor of others in the form of commodities. Economics studies this specific form. It studies the relations between these self-seeking property-owning individuals, whose mutual dependence is mediated by value.
As relating to the individual, although worth noting that this is not the abstract individual of bourgeois thought, need’s fulfillment is only through the interaction of the system of individual commodity owners. The privacy here is in distinction to the aforementioned bourgeois individual because it is not privacy in the sense that the need itself is tailored to this individual, nor is it referring to any positivistic notion of sourcing the need from the individual. It is private because the individual is forced into privacy by the structure of the economy insofar as the relation can only be grasped as a relation to an individual, or as Levine puts it, to “individuality, to the private, self-seeking, commodity owner”. Social determination in this system is “privacy” and “self-seeking”. These are the prerequisite traits for participating in the value system.
Value being a social relation creates a unique world. In establishing this social equality, it redefines freedom as freedom from determination by particular need. You are not free in civilized society by being self-sufficient, you are only free if you have general purchasing power which frees oneself from the needs of trend, hunger, comfort, and so on. Wealth, likewise, is a system of persons as opposed to a collection of objects. The system of commodity owners equates one with the other, and to be wealthy is to be positioned within this social network of abstract equality, such that you are free (implied, from things. Freedom is a topic better suited for another blog post).
Levine ends this section by concluding that classical economists got it half right. They discovered that economy is a social system of interdependent individuals as opposed to the natural household, but then mistakenly treated this system as a political project (the nation-state’s wealth). This blurred the line between the logic of economy and the logic of state. This ambiguity is why their science was called political economy, and not pure economic science. Levine’s project sets out to complete what they started, isolating and distilling their project in order to systematize the logic of that social system without the political framing.
Capital
The social totality whose components (commodities) are intrinsically interdependent is known as wealth. Interdependence stems from the division of labor, and so the social division of labor is synonymous with civilized society. Levine states: “The division of labor produces wealth; societies are wealthy and therefore civilized to the degree that they are marked by the development of a division of labor. Labor, as division of labor, is labor accountable to the development of a many-sided interdependence of the members of society, an interdependence which appears as peculiar to society and therefore both a social interdependence and an interdependence which constitutes the relations among the participants as social in character”. Insofar as the division of labor produces wealth by multiplying needs and the commodities to satisfy them, wealth is a social quality of a society organized by the division of labor. This is what provides the basis for classical political economy to ground value in labor time in order to see how the wealth of society is produced by society.
Wealth making itself determinate (as previously mentioned, for it to produce itself in society, or concretize itself in the world) has to involve some sort of process. The issue is that the process was never fully developed by classical political economy. Wealth developed a materialist bent, and as a result, value ceased in becoming the substance of wealth, and instead also becomes a materiality which has its origin in the material world, rendering wealth’s concrete existence unintelligible. For example, we find Quesnay (a physiocrat) seeing land as the source of wealth, as value being the materiality of land. This creates a problem in that wealth is connected to the social substance of value, which is on the right track, but that it reduces value to materiality, or its production being sourced in a natural process such as the fertilization of the land. A science of economics as a social phenomenon cannot resort to this kind of naturalism. However, Quesnay saw that land only produces wealth when wealth is invested in it, and so this revealed a new idea. Wealth produces wealth. Wealth begins to appear in a circular movement. This is the embryo of capital, where wealth is brought into concrete being by its own act, or by a self-movement. There is an ‘endless cycle through which wealth preserves and expands itself’.
Wealth has acquired a new proof of distinction from static aggregate, into self-moving value in circulation. Viewing wealth as a material product ties it to a fixed natural condition, which would limit its expansion. Economic theory as a true development implies a movement away from such an external limit. In the world, the idea emerges that conditions of production are themselves produces, such as land that is improved by investment. This is the only move possible which frees the production of wealth from natural determination. Production becomes a universal and limitless process, where all commodities embody the principle of wealth (and value).
However, a new problem emerges. Classical thought’s highest point, found in Ricardo, correctly seizes labor as the principle of production, but it relapses by fixing labor’s cost as a natural subsistence wage. Subsistence then becomes a new external limit on the circulation of wealth, making wealth another surplus over a naturally given cost. This contradicts our goal of wealth as a self-determined (freely) self-expanding process. The true concept of capital emerges only when this limit is overcome, or, when wealth is seen as produced by the advance of itself.
Capital is wealth investing in its own expansion. In this process, labor is unified with the objective means of itself as a component of capital (self-expanding wealth, the form of value). Labor is then the process where capital produces itself.
Fernand Léger, The City.
Adam Smith and David Ricardo
Above is the provided pure logical development of what an objective science of economics must deal with. Given that these are the concepts, the next two chapters I interpret as Levine demonstrating their emergence, or struggle thereof, in the world. In a sense, it is a way of giving immanent critique to positions of political economy in the past, which positions their work as legitimate within the system/science of economics, if not as precursors, then as failed attempts of thought to reconstitute the capitalist economy as a coherent totality of social relations. Likewise, I will only briefly summarize key points from the following two chapters of Levine’s book.
Adam Smith’s achievement in the Wealth of Nations is the positing of the social totality as the necessary starting point. He identifies the division of labor as the “differential specifica” (or the key differentiating feature of one species from another species. Note: species here is not referring to the concept of biological species, it is referring to a unique relationship of universal-particular in the form of genus-species) of civilized, or capitalist, society. In doing so, he makes the system of mutual interdependence, rather than the isolated individual, or the household, the primary economic reality. Wealth is thereby redefined from an aggregate or a nation’s physical stock of items, into a relational product of social interconnectivity. Unfortunately, smith re-absorbs this social discovery back into a naturalistic and individualistic ontology. This is his ambiguity, and the flaw that Levine outlines. Smith provides two contradictory accounts of the division of labor’s origin. On the one hand he accounts it as the effect of a pre-social natural or psychological propensity, and on the other as dependent on the prior accumulation of stock, which itself logically morphs into capital (stock expecting a profit). This position is the expression of the bourgeois standpoint. It necessarily must presuppose the social result (in this case it would be market society as constituted by interdependent proprietors) as the natural ground (Grund, referring to the Hegelian concept) of its own possibility. Smith’s insight and his limitation are ironically one and the same. Technically, as are all insights. This would be that the system he articulates is an articulation of the self-misunderstanding of capitalist society. It is capitalist society blindly using its own tools to understand itself. Capitalist society understands its historically specific social forms (such as exchange and abstract labor) as eternal, natural facts of man qua man. This core ambiguity dooms the fate of his value-theory. The labor-embodied theory points toward the social substance (labor is the common element of a divided social production), while the labor-commanded theory is his attempt to make this substance immediately visible in the sphere of circulation, or to find a tangible object (labor-power) that incarnates value. In this attempt, there is a conflation between value-creating activity (labor) with the commodity that bears the capacity for that activity (labor-power). This is a very dire conflation since it masks the capital-labor relation, making profit appear as a deduction after the fact. It is also what allows him, or one, to imagine a simple commodity economy prior to capital, or a theoretical ghost that severs the necessary logical link between value-form and capital-form. Smith thus grasps the system as social, but can only conceive of its logic as an outgrowth of nature, and subsequently its categories (such as value and capital) as contingent additions.
David Ricardo intuits the systematic inconsistency found in Smith. His significance is the relentless, if not admirable, drive to purge political economy of contingencies and fluff in order to establish a single objective law of value. On a rejection of Smith’s labor-commanded measure based on the insistence that embodied labor time is the sole regulator of value, independent of distribution, this made up a giant leap towards conceiving the economy as an internally regulated system with its own laws, as opposed to a concatenation of natural propensities and political logic. Yet Ricardo’s system is built on a materialist foundation. It’s substrate undermines his advance. Ricardo’s put forth the corn model which used corn as the only good to show how fixed land and diminishing returns cause rising rents, squeezing profits and pushing wages to subsistence, leading the economy toward a stationary state. It’s quite famous, at least in economic theory. The source of its infamy unfortunately isn’t recognized as a result of his theoretical commitment in grounding economic law in a physically observable, technical process. In the corn model, inputs and outputs are homogenous physical quantities. The rate of profit appears as a purely technical ratio of corn surplus to corn input, and value seems securely anchored in a tangible, reproductive process of nature. Levine notices this and shows that when Ricardo is forced to abandon this one-commodity world for a multi-sector economy, he doesn’t successfully translate this logic into the social realm of value. Rather, he confronts the crisis of the “invariable measure of value”. This confrontation is initiated by the direct consequence of a negative conception of value as mere indifference. If value is merely the abstract commensurability of different things, one needs a thing (a privileged commodity like gold) to stabilize this abstraction. Ricardo’s search is DOA because it seeks in a particular use-value, the embodiment of a universal social relation, that by definition is indifferent to particularly. His theory hits an impasse. At once, it correctly identifies labor as the substance of value, but it remains trapped in a materialist conception of that labor, and a materialist conception of its measure. He cannot make the final leap to understanding value as a purely immanent social form whose measure is the self-referential expansive movement of the totality, which is otherwise known as capital. Ricardo fixates on a static external measure, which is antithetical to capital’s self-subsuming logic. Additionally, by fixing the wage at a natural subsistence level, he reintroduces an external and biological limit, making capital’s expansion (profit) a residual of nature’s fertility, and not the free expression of itself, or of its own logic.
Capital’s World
Chapter 4 of Levine’s exploration begins with a framing of nature and capital, then continues to explore the capitalist system as a self-sustaining totality in the context of Ricardo and Smith. I will ignore the first section of chapter 4, because the relationship of economics to nature has already been clarified. The second section defines the principles of capital’s self-expansion. Ricardo’s central question about accumulation is whether it reproduces its own conditions or hits barriers. He sees capital’s existence as dependent on a limitless expansion, with the rate of profit as both the foundation and the rate of accumulation. There are two limits for Ricardo. First is the natural limit, with diminishing soil fertility and rising rents/wages. The next is the social limit, where there is a possibility of overpopulation. In polemics with Malthus (the father of eugenics), Ricardo argues that abstracting from nature, capital is self-sustaining and limitless. Its only barriers are natural and not internal to capital’s social forms. This is revealing of a dualism wherein socially, capital is unlimited, but naturally it is limited by external conditions.
This dualism manifests in respectively two conceptions of accumulation’s motive. One is the expansion of value, where profit rate is the goal and accumulation is self-moving. The other is the fulfillment of need, where profit is a means to consumption, or in other words, accumulation is goal oriented. Ricardo ultimately rejects Malthus’s “glut theory” (overpopulation) because he sees production and consumption as an immediate unity, failing to grasp the mediated, potentially crisis-prone totality of capitalist reproduction.
The failure in grasp is essentially treating capitalist production as the absolute mode of production. Capitalist production is abstract and indeterminate, being independent of its concrete social conditions. Ricardo argues there is no limit to demand and that capital can always be reallocated to meet demand. So for example, if foreign trade stops, production simply reorients domestically. This implies that the world market, the national market, and even the individual producer are collapsible into one another. However, this ignores the concrete characteristics of capitalist production! The division of labor, fixed capital, concentration, world market expansion etc. Ricardo basically says capitalist production is individual self-sufficient production, thereby stripping capital of its specific social determination, while implicitly giving individual production a universal character (the mobility of capital). Production for Ricardo is the production of value, but he cannot reconcile this with capital’s necessary fixation into particular use-values and means of production (fixed capital). Therefore, he leaves aside concrete determinations to conceive capitalist production as “immediately universal”. In contrast with Adam Smith, Smith begins with the division of labor and recognizes that production requires social mediation and a market, or that production and exchange are mutually conditioned. Smith thus reduces a world economy as necessary to capital, but treats it as a given condition as opposed to resulting from capital’s own developmental process.
Having finished with where classical political economy goes wrong with capital, Levine goes into the construction of the world economy as an extension of domestic capitalist competition, which is just as misconstrued. Just as individuals compete within a nation, nations compete globally as if they were giant competing capitals, supposedly. Alas, this construction contains the same theoretical problems as the domestic model but at a higher scale of abstraction. For Smith and Ricardo, free international trade follows logically from domestic laissez-faire. Barriers between nations are as irrational as barriers between domestic producers. This assumes that nations are structurally identical to firms, that each specializes according to comparative advantage, maximizing efficiency for all. There is an erasure of the specificity of the nation state which denies that political entities are distinct with class structures, legal systems, and capacities for coercion which firms lack. Although if you’d look at the modern American corporatocracy, you’d think otherwise.
Classical thought reduces the state to three duties, according to Smith. These are defense, the administration of justice, and certain public works, such as providing infrastructure that the market won’t supply. There is no site of political will or social ethics, aside from the market, of course. In effect, the state’s role is to sustain the framework for private accumulation. By this logic, the sovereign state is dissolved, national borders, tariffs, and economic sovereignty become arbitrary aberrations. This conclusion is never drawn explicitly because it contradicts the real historical role of the state in fostering and protecting capital accumulation. Classical political economy lacks a theory of the political because it collapses the political into the economic, reducing the state to a “night-watchman” of the market, and denying the autonomy of the social, seemingly exhausting it by private interest and exchange. Lacking even more so since it does not have the tools to conceptualize the state as a necessary moment (and as such, given true due objectivity) of capitalist reproduction, or as arising from, yet at least partially autonomous from, the economy.
The classical model envisions a global market of competing capitals that produces a “general good” through the “invisible hand” (might have heard of this from the phrase “the invisible hand of the market”). This invisible-hand logic presupposes a pre-established harmony, which ignores things like imperialism and force. Historical capital expanded through colonization and coercion, not only through free exchange, which also brings up national development asymmetries. Some states enforce “free trade” while others are subordinated through various methods. The state’s role in managing and mediating class conflict is also ignored, it cannot be the “administration of justice” because this calls into question the classes responsible for this administration in the first place, among other reasons.
Levine, after showing these problems, then moves onto showing how that once class antagonisms are introduced, the classical model is proven weak in structurally integrity. The state is not, nor can it no longer be, a neutral referee. The state becomes a site of struggle and a partial embodiment of capital’s interest. Classical thought cannot theorize this because it lacks a true concept of social totality.
In a model of “pure competition”, the so-called general interest is the unintended outcome of each capital pursuing its self-interest. It is, in a sense, an unconscious compromise/reconciliation. But once labor-power is commodified, a new opposition emerges in the form of capital vs. labor. Now there are two competing “general” claims: the interest of capital (profit, accumulation), and the interest of labor (wages, reproduction). The state is pulled between these claims. It can’t just be the executive committee of the bourgeoisie, since it must also manage labor’s discontent to ensure social stability. The state claims to represent the general good, but is structurally tilted toward capital. This is its internal incoherence. Its external coherence is that in the world market, each state promotes its national capital’s interest, undermining the classical ethos of harmonious global competition. For Hegel, the state is the actualization of ethical life (if that means anything to the reader at least, this is just to compare it to the following reality, or lack thereof), whereas in classical political economy, no such reconciliation is possible since civil society is the realm of atomized self-seeking. The state is reduced to a functional instrument, and can’t be this sphere of ethical realization. Thus, the social appears as an external, coercive force rather than as the immanent substance of individual life.
Classical thought recognizes social classes, of course, such as the classes of capitalist, landowner, worker, etc. But it does so in a contradictory manner. On one hand, classes appear as commodity exchangers (workers sell xyz, capitalist buys it), which fails to capture class as a social totality. On the other, distribution is treated as the physical division of a product, where classes are simply given, natural entities. In Ricardo’s corn model, for example, production appears as a natural unity of corn and labor, obscuring the social antagonism between capital and labor. Class then becomes an external category. It is necessary for describing society, but without a real social determination in the theory, it is rendered unintelligible.
Overall, Levine shows that classical political economy, despite its seeming advances, cannot conceptualize capital correctly as a self-determining (free, at least free to be what it is) social totality. It jumps between naturalizing capital by making its limits external, and abstractly universalizing capital by ignoring its concrete determinations. You can find this in value theory as it looks for a natural measure, accumulation theory as a dual motive of expansion vs consumption, competition and world market where there is a collapse of complexity into individual exchange, and finally the state and class where an inability to theorize them as necessary social forms of capitals own antagonistic development renders them unintelligible, and pits them against the history and reality of how they function.
The specificity of classical political economy
The next chapter is mostly contending with the problems of classical political economy’s fixation with nature, and its failure to establish economics as an objective science. Ultimately, the last subsection of the first section of chapter 5 ends with praising Ricardo’s move of equating production with the self-realization of capital. Ricardo abstracts from the concrete circulation and competition among the many capitalists, allowing him to ground exchange in the labor process. But this at the same time severs this grounding from concrete determinations of the capitalist system, making exchange unaccountable. In other words, Ricardo fails in grounding exchange-value in value, or in socially necessary labor time. The failure identified in the domain of production and social determination manifests as a theoretical problem in the domain of value theory.
Classical theory then posits labor as the natural substance of value, in exchange for neglecting the value-form itself. Why does labor take the form of value, and how does value become exchange-value? These are questions ignored, and even more, conflating value with exchange-value. Marx criticizes this failure according to Levine, but in his own analysis, in seeking to ground the form in a social substance, sometimes risks being reabsorbed into the classical framework of opposing form (social) to content (natural). The investigation into value culminates in the dead-end of Ricardo’s “invariable measure”, which is a concept presented as a mystical, impossible solution which seeks to measure value by stripping it of its social form (the commodity form). The analysis shows that this approach renders the price system arbitrary and severs distribution from social relations.
Piero Sraffa’s “standard commodity” is presented as a modern counterpart to Ricardo’s invariable measure. It grounds exchange in a “non-human world of technology”, thereby severing distribution and technique from the value-form and the social relations of exchange. This approach neutralizes the commodity form theoretically, but renders the price system arbitrary and fails to explain the necessity of exchange and its social form.
The classical framework is a contradictory totality. It is defined by a tension between Nature as the self-subsistent, grounding process, and Capital, as self-expanding value. Its core project is to ground the social system of capital within a natural process. However, this attempt “naturalizes” capital. The value of classical theory for a science of economics lies precisely in this necessary conceptual movement generated by its internality, as it moves to grasp the real totality of capitalist relations. This opposition in this tension, the one between Nature and Capital, became the seed of modern economics. Neoclassical theory radicalized the tension by severing the individual from both nature as a totalizing system, and from the social process of capital. The individual here no longer is a moment within a determining totality. It becomes an abstract, self-determined entity, standing outside any accountable social process, and in effect, making it unfree.
Neoclassical theory is likewise a retreat from social theory, characteristic of the alienation of this age. Society is reduced to the interaction of pre-social individuals, while the individual is defined by innate desire/preference. The object of this framework is defined by subjective utility. Likewise, all concrete social substances such as class, power, historical relations, etc. are eliminated, leaving only empty abstractions. As a result, this framework cannot provide a true social theory. It cannot explain the necessity of social and economic forms. It can only model the interaction of externally given, undetermined data.
This then leads into part 2 of Levine’s book, where the focus is on contemporary thought.