Marx's Fundamental Insight into Capitalism

I have been thinking about the way MacIntyre uses Marx in Ethics in the Conflicts of Modernity. He says a couple of times that Marx’s key insight into capitalism is the theory of surplus value. But it seems to me that what MacIntyre’s argument actually shows is that it is Marx’s insight into the way use value is subordinated to exchange value that is really the key insight. The two are closely related, but I think they are distinguishable.

The account of the subordination of use value to exchange value is something that Marx develops out of his reading of Aristotle (as I have discussed before). He contrasts the case where one exchanges good (C) for money (M) in order to buy other goods that one needs (C-M-C) with the case where one exchanges money for goods in order to exchange them for even more money (M-C-M’).

Capitalism is set up to get you M-C-M’. That is it is set up to increase exchange value and use value is produced for the sake of exchange value. So that equation is an expression of the subordination of use to exchange. According to Meikle, whom MacIntyre cites, this is the true essence of capitalism:

In order to capture the difference between capitalist economy and pre-capitalist ‘economy’ the distinction required is that between use-value and exchange-value. The most fundamental question to be asked about a society is which of these predominates in it. A capitalist society is predominantly a system or exchange-value; economics is the study of the developed forms of exchange-value and of the regularities in its movement, or ‘actual market mechanisms,’ and it can come into being only with the appearance of full-blown market economy, that is, with markets in labour and capital, Antiquity was predominantly a system of use-value, partially administered, and if it had regularities, these were nothing like the cycles, laws, and trends which characterize a system of exchange-value.

I think he is correct.

Of course, the theory of surplus value is meant to explain where the increase in value comes from that gives you M’ in the equation. Marx thinks it comes from exploitation, and this is the essence of capitalism.

Doubtless, there is a lot of exploitation going on in capitalist economies, and this is a great injustice. But it seems to me that Marx’s account of exploitation is too simplistic. Moreover it is hard to reconcile with the teachings of Rerum novarum and Quadragesimo anno on the cooperation of productive property and labor:

Hence it follows that unless a man is expending labor on his own property, the labor of one person and the property of another must be associated, for neither can produce anything without the other. Leo XIII certainly had this in mind when he wrote: “Neither capital can do without labor, nor labor without capital.”[Rerum novarum] Wherefore it is wholly false to ascribe to property alone or to labor alone whatever has been obtained through the combined effort of both, and it is wholly unjust for either, denying the efficacy of the other, to arrogate to itself whatever has been produced. (Quadragesimo anno §53)

So the most fundamental insight into capitalism is not the theory of surplus value, but rather the theory of the relation between exchange value and use value on which that theory is based. It is this relation that supports the lust for money through social pressure. And then in order to satisfy that lust for money it has to create fake needs in consumers, propagating a false image of the good life. As MacIntyre puts it:

[W]hat agents learn from both success and failure in market transactions is the importance of increasing whatever money they have, by selling for as much as possible, by buying as cheaply as possible, by saving, and by investing, and this no matter how much money they may have already. So they learn to want more and then more and then more and become consumed by their own desires. Moreover, it is by how good they are at increasing their stock of money that others measure their success or failure, admire them or withhold their admiration. So the trait that the Greeks called pleonexia, acquisitiveness, a trait that both Aristotle and Aquinas took to be a vice, comes for the first time to be treated as a virtue by large numbers of people and money becomes an object of desire, not only for what it can buy, but also for its own sake. Yet this is not all.
Every economic order is an order of producers who are also consumers and what distinguishes one such order from another is in part how those who inhabit it understand the relationship between their activities as producers and their activities as consumers. The paradox of capitalism is that, while it requires that consumption should serve the ends of expanding production, it imposes on many a way of life in which their work, their productive activity, is thought of as valuable only because it serves the ends of consumption. It creates consumer societies in which its products can be successfully marketed only if the desires of consumers are directed toward whatever consumable objects the economy needs them to want. So the seductive rhetoric of advertising and the deceptions of marketing become necessary means for capitalist expansion, means that shape and elicit desires for objects that agents qua rational agents, directed toward the ends of human flourishing, have no good reason to desire. (Ethics in the Conflicts of Modernity, p. 109).

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