Planning New Depressions

by Karl Korsch, excerpted from the chapter on "The Law of Value" in Karl Marx, 1938, and first published in Living Marxism, Vol. 4, No. 1, February 1938

The social organization of labor which is hidden under the apparent value relations of commodities, is achieved in the bourgeois mode of production without the will and knowledge of the individual commodity producers. Bourgeois commodity production is, therefore, at the same time a private and a social, a regulated and an unregulated (“anarchic”) production. It seems as if by an undisclosed decree of “God” “Providence,” “Fortune” or “Conjunction,” it were laid down beforehand what kinds and what quantities of socially useful things should be produced in every branch of production. But the individual capitalist “producer” learns only subsequently – through the saleable or unsaleable quality of his commodity, through the price vacillations of the market, through bankruptcy and crisis – if and how far he has acted in accordance with that unknown rule, the economic “plan” of capitalistic reason. Bourgeois economists have over and over again referred in poetical metaphors to this inscrutable mystery of their own social existence. Just as Adam Smith[1] spoke of an “invisible hand” which leads the individual trader to promote an end which was no part of his intention so other economists before and after him referred to the “play of free competition,” to the “automatism of the market,” or to a “law of value,” which would apply to the movements of production and circulation of commodities in the same way as the law of gravity applies to the movements of physical bodies. In fact, the concept of an entirely automatic regulation of the whole industrial production brought about by the mere exchange of commodities among entirely isolated commodity producers on a national and a cosmopolitan scale was not more than an “ideal type” even in those earlier periods when it first struck the eyes of the bourgeois classical economists. It was never fully realized in actual capitalistic production.

Nevertheless, there is in bourgeois commodity production an unwritten law which rules the production and exchange of labor products as commodities. But this is by no means an unchangeable law of nature; it is a “social law” which resembles a genuine physical law only in its apparent independence from our conscious volition and purpose. Like any other social rule, it holds good only under definite circumstances and for a definite historical period. Marx in dealing with the “so-called Primitive Accumulation of Capital” showed what enormous effort was needed to give birth to this fundamental law of the modern bourgeois mode of production and the other “eternal” laws connected with it. He exposed the series of more or less forgotten sanguinary and violent acts by which in real history the actual foundations of those so-called natural laws have been brought into existence. (The expropriation of the workers from their material means of production forms the basis of the whole process.) Marx has likewise shown in detail that even in a completely developed commodity production the law of value does not apply in the sure and efficient manner of a genuine natural law or of a generally accepted Providence, but is realized only by a succession of frictions, vacillations, losses, crises, and breakdowns. He says that “in the haphazard and continually fluctuating relations of exchange between the various products of labor, the labor time socially necessary for their production forcibly asserts itself as a regulating natural law just as the law of gravity does when the house collapses over our heads.”[2]

With all these deficiencies, the law of value is the only form of social organization of production which exists today and is, indeed, the only kind of “social planning” which conforms to the principles of modern competitive or commodity-producing society. It belongs to the ironical whims of History that just that self-contradictory belief in a “consciously planned commodity production” which lies at the bottom of the first Utopian schemes of a “National Bank,” at which “any member of the community might lodge any kind of produce and take out of it an equal value of whatever it may contain,”[3] and which was afterwards voiced in various forms by the successive schools of “social reformers,” has been adopted today by the official spokesmen of the bourgeois class. But though this illusion is as old as capitalism itself and obstinately persists in spite of theoretical arguments and in spite of the breakdown of all projects brought forward for its realization, it is unsound both from the orthodox principle of bourgeois economic science and from the materialistic viewpoint of Marxism. It is interesting only as an ideological reflex of the deep-rooted contradictions inherent in the very principle of capitalistic commodity production.

Such difference as there is between the earlier epoch when the progressive Free Traders regarded every “interference” of a State – not yet entirely their own – as an oppressive disturbance, and the present phase when even some of the most “orthodox” economists have turned from self-help to State subvention, does in no way indicate a gradual conquest of the animal-like “struggle for existence,” prevailing among the isolated commodity producers of early bourgeois society, by the growing collective reason of all capitalists grouped together and organized in the “State” and in the more or less authentic institutions of a so-called “Public Opinion.” There is thus only a difference of degree between the more or less numerous “interventions” of the early bourgeois State into the “free play of competition,” and the increasingly rapid succession of ever more intrusive measures, by which today everywhere in the old and in the “new,” in the fascist and in the still democratically governed capitalistic countries, an apparently new attempt is made to “control,” to “correct,” or to “steer” the existing economic system. Such measures serve at the utmost to weaken temporarily or even merely to disguise some of the most obstructive results of capitalistic production. Instead of ousting the planlessness resulting from the fetish-form of commodity-production, they merely stampede the unique form, in which production had been heretofore “planned” within capitalistic society, and utterly destroy the only “organization of labor” possible under capitalism.

This increasing destruction of its own foundations is forced upon present-day capitalism by an objective development of its inherent tendencies. It is produced by the ever-increasing accumulation and concentration of capital; by the growing monopolist tendencies of the big industrial and financial combines; by the increasing appeal to the State to rescue “the community at large” from the dangers brought about by the impending collapses of hitherto proud and tax-evading private enterprises; and by hyper-ultra-super-dreadnought demands for subsidy raised by the various direct and indirect producers of armaments encroaching ever more on the field formerly occupied by the activities of the less directly war-producing industries. In trying to escape from the periodical crises which threaten more and more the existence of bourgeois society, and in a desperate attempt to overcome the existing acute crisis of the whole capitalist system, the bourgeoisie is compelled, by continually fresh and deeper “interferences” with the inner laws of its own mode of production, and continually greater changes in its own social and political organization, to prepare more violent and more universal crises and at the same time, to diminish the means of overcoming future crises. In organizing peace it prepares for war.

The futility of any attempt to deal with “competition’s waste” within the existing forms of production and distribution becomes even more evident when we proceed from the elementary form of the “commodity” to the further developed form of “the worker transformed into a commodity,” or from the general historical character of bourgeois production to its inherent class character.

Just as the Utopian Exchange-Banks, Labor Certificates, and other endeavours to organize commodity production are repeated in the half-hearted “planning schemes” of the frightened economists and “socially minded” big capitalists today, so the first unwieldy attempts of the insurrectionary workers of Paris to wrest from the “revolutionary” government of 1848 some form of realization of the workers’ “right to work” are echoed in the various measures by which the democratic and fascist countries try to dispose of the increasing menace of Unemployment by a more or less compulsory organization of the labor market. And just as in the first case Marxism answered the capitalist “planners” that the only organization conformable to commodity production is the law of value, so sober materialistic criticism of the schemes to supplant the glaring insufficiency of the free “labor market” by some form of public regulation must start from the premise that the transformation of the workers into a saleable commodity is but a necessary complement of that other “transformation” on which all modern capitalistic production rests both historically and in its actual existence – the transformation of the workers’ tools and products into the non-workers’ “capital.” In fact, the most “benevolent” attempts to deal with the modern plague of mass unemployment have hitherto invariably led to an utter failure. There is more an apparent than a real progress in the new deals offered to the growing numbers of the unemployed by their capitalistic rulers today, as against those now almost forgotten times when the only cure foreseen by the most “philanthropic” spokesmen of the bourgeoisie was the Workhouse. Now as then, the final result of the endeavours to exterminate both the old form in which unemployment periodically recurred in the industrial cycle, and the new “structural,” “technological,” “chronic” form in which it has come to stay, is one or another disguised form of that compulsory service whose real character is revealed in the Labor Camps and Concentration Camps of National Socialist Germany.[4] Behind these “normal” remedies offered in times of peace there stands, as ultima ratio, the mass-employment offered by a new war, and already partially anticipated by a hitherto unheard-of extension of the direct and indirect armament industries both in the fascist countries and in democratic Britain and pacifistic U.S.A. The best form of “Public Works” under capitalistic conditions, as was most aptly remarked by a critic of Roosevelt’s New Deal, is always War itself which over all other measures to “create work” has the incomparable advantage that it will never cause an undesirable glut of the market because it destroys the commodities it produces simultaneously with their production and, incidentally, destroys a considerable portion of the “excessive” workers themselves.

The positive importance of all attempts made on the basis of the existing capitalistic conditions to create a so-called (lucus a non lucendo!) “organized capitalism” lies in another field entirely from that presumed by its ideological promoters – the “planning school” of modern capitalistic economics. The feverish endeavours to supplement the defects of “free” capitalistic commodity production confirm the gravity of those defects and thus inadvertently reveal the fettering character of the existing capitalistic production-relations. They put into sharper relief the incongruence between an ever more efficient organization of production within the single workshop or private capitalistic trust and the “organic disorganization” prevailing throughout capitalistic production. The futile schemes to keep in “normal” proportions the increasing mass of unemployment and pauperism illustrate once more the capitalistic “law of population” first enunciated by Fourier and later scientifically demonstrated by Marx that within the capitalistic system all methods for raising the social productivity of labor coincide with an extension of the relative surplus population, or the industrial reserve army kept at the disposal of capitalistic industry as a potential supply of labor power for the rapid increases of population in times of prosperity and for the full utilization of the existing capacities of production in war.

There is, furthermore, a considerable difference between the same measures when offered by the capitalists in distress and when thrust upon them by the conscious action of the workers themselves. That difference may, at first, not be a difference in the purely economic contents. Yet it is a difference of social significance. “The right to work taken in its bourgeois sense,” said Marx with reference to the struggles of the Paris workers in 1848, “is a contradiction in terms, an impotent pious intention; but behind the right to work there stands the control of capital, and behind the control of capital the appropriation of the means of production by the associated working class, that is, the abolition of wage labor, of capital, and their mutual dependence. Behind the ‘right to work’ stood the insurrection of June.”[5] Finally, a few of the new developments which are today featured as achievements of the “planning idea” may serve to work out within the narrow bounds of the capitalist production-relations some of the formal elements which, after the overthrow of the existing mode of production, will be totally stripped of the residues of their capitalistic origin and thus usefully applied in building up a really cooperative and socialistic commonwealth.

For the time being there remains, along with the imperfect social organization of material production in the structure of the present bourgeois society, also the “reversed” form in which the social relations of men are now reflected as mere relations of things. There remain unchanged, even in the newest “as good as Socialism” models of a planned and steered State-Capitalism, and there will remain so long as the products of labor are produced as commodities, all the fetish-categories of bourgeois economics: commodity, money, capital, wage-labor, increasing and decreasing total value of production and of export, profit-making capacity of industries, credits, etc., in short, all that which Marx in his philosophic phase called “human self-alienation,” and in his scientific phase, “fetishism of commodity production.” In spite of appearances such a system of production is not in the last analysis governed by a collective will of the associated workers but by the blind necessities of a fetishistic “Law of Value.”

The apparent Fetish Character of the Commodity and with it the apparent validity of a fetishistic Law of Value, will not disappear – nor will the economic crises and depressions and the various forms of periodical and chronic mass unemployment, wars and civil wars cease to plague the modern “Civilized World,” till the present mode of commodity production is entirely destroyed and human labor organized in a direct socialistic mode of production.



[1] See The Wealth of Nations, Book IV, Chapter 2.

[2] See Capital Vol. 1, Chapter 1, subsection 4.

[3] See John Gray, The Social System: A Treatise on the Principle of Exchange, 1831, and for a critical refutation: Marx, A Contribution to the Critique of Political Economy, 1859.

[4] See the remarks of Engels in his letter to Bernstein, which are a prophetic anticipation of the ultimate capitalistic realization of the ‘right to work’ in Nazi prisons, and other forms of unpaid compulsory labor: “The ‘right to work’ is a conception invented by Fourier. But in his theory, it can be realized only in the phalanstery. It presupposes, therefore, the acceptance of this form of organization. The Fourierists, peace loving philistines of the Democracie Pacifique, as their paper was called, spread this conception just because of its innocuous sound. As a result of their absolute theoretical unclearness, the Parisian workers took over this slogan. It seemed so practical, so non-utopian, so immediately realizable. The government put it into practice in the only way in which capitalism was able to, in senseless national public works. In the same way, the ‘right to work’ was put into action during the cotton crisis of 1861-4 in Lancashire, England, through municipal public works. And in Germany, it is realized in the hunger-and-cudgel working colonies for which the philistine is now enthusiastic. As a separate demand, the ‘right to work’ cannot possibly be realized any other way. The granting of this demand by capitalist society can be accomplished only within its own conditions of existence. If the right to work is demanded from capitalism, it can only be under these specified conditions and thus what is actually being demanded are national public works, work-houses, and worker colonies. Should however, the slogan be meant as an indirect demand for the overturn of the capitalist mode of production, then, considering the state of the movement today, it represents cowardly regression, a concession to the Anti-Socialist Laws – a phrase which can have no other purpose than to make the workers confused and unclear about the tasks which they must strive for and the conditions under which these tasks can alone be achieved...” [translation of a part of Engels’s letter to Bernstein, May 23, 1884, on the occasion of the slogan Bismark threw into the election fight in those days.]

[5] See Marx: Class Struggles in France 1848-1950.

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