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From: carnes@gargoyle.UChicago.UUCP (Richard Carnes)
Newsgroups: net.politics.theory
Subject: Re: What is "capitalism"? (capital)
Message-ID: <448@gargoyle.UChicago.UUCP>
Date: Sat, 4-May-85 17:35:54 EDT
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Posted: Sat May  4 17:35:54 1985
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From JoSH (I have not seen JoSH's complete response to my article,
just this excerpt quoted by J. Myers):

> Capital, especially if we include "intellectual capital" or knowlege,
> is necessary to material progress.  Capital does not merely represent
> stored or frozen labor (the Marxian view) as if one had put it into a
> bag; capital is a labor *amplifier*, such that the the labor required
> to build the capital, plus the labor to use it, sum to less labor than
> that necessary to build the same ultimate product "from scratch".

"Capital" is another term that we have to define carefully.  JoSH is
using the term in the broad sense of any asset that can generate an
income stream for its owner.  Marxists use the term in a more
restricted sense, namely, exchange-value which is exchanged for the
purpose of increasing the exchange-value possessed by its owner.  To
illustrate the difference, consider the tools used by a gardener to
produce vegetables for his own consumption.  They would be capital in
JoSH's sense, but not in the Marxian sense.  But the money an
agribusiness lays out on farm machinery for the purpose of making a
profit, and the machinery itself, would be capital in both senses.

The fact that machines and knowledge increase the productivity of
labor is not disputed by anybody so far as I know.  

What is disputed is the sense in which capital may be said to be
"productive."  There are two senses in which properties may be
predicated of things.  "Ronnie is 6' tall" is an example of the
first.  Ronnie's height is a property he possesses independently of
anything else.  But the statement "Ronnie is the President" would be
meaningless in the absence of a political system containing the
office of President.  "Being President" does not refer to a property
that one possesses independently; rather it is a relational
predicate:  it means that one stands in a certain relation to other
people in a particular political system.  

It is characteristic of capitalist economists to neglect the implicit
relational structure of economic predicates, i.e., to overlook the
fact that some important economic predicates are of the second type.
Hence "capital is productive," to the capitalist way of thinking,
means that capital's power to produce is a faculty inherent in it, a
power it possesses autonomously.  When a capitalist brings many
workers together and their productivity increases more than
proportionately to the number of workers, it appears to them as if
the extra productive power is due to the *inherent* productivity of
capital.  Marxists, however, point out that capital is productive
solely in virtue of being embodied in a material labor process; its
productivity *means* that it stands in a certain relation to other
things in a process of physical production; it cannot be reduced to
a property which capital possesses independently.  

An example of the "fetishistic" way of thinking criticized by
Marxists is the idea that "money makes money," the idea that
interest-bearing capital is autonomously productive.  But if all
capitalists merely lent their money at interest instead of investing
it in production, capitalist production would cease and the source of
interest payments would eventually dry up.  

Richard Carnes