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The General Formula of Capital

by Adam David Morton on November 12, 2019

Can the general formula of capital be explained in just over 500 words? This was the challenge that Mark Steven set for me in relation to his exciting new book entitled, Understanding Marx, Understanding Modernism, to be published with Bloomsbury in 2020. The book will carry more than thirty chapters with similar entries conceptualising Marx, addressing Marx in Modernism, and providing a glossary of key terms from alienation, to primitive accumulation, to value and utopia. Here is my contribution on the general formula of capital.

Who are the dramatis personae of capital? After exploring the fetishism of the commodity and its secret in Capital, Marx turns his attention to the presuppositions from which capital may arise. These presuppositions commence with the metamorphosis of the world of commodities (C) into money (M) that begins to define the dramatis personae of the general formula, marked by buyer and seller. However, at this stage we are still in the realm of commodities in the sphere of simple circulation, based on use-values and the satisfaction of human needs; we are, in this formula, treading the path from commodity, to money, to commodity (C–M–C). The pupation of commodities into exchange-value creates the possibility for a continuous movement of commodities as capital – of the perpetuum mobile of capital. Here the obvious and trivial “thing” of a fetishised commodity becomes defined by its social relations and the mass of socially necessary labour time needed to produce it, which is then exchanged through the universal equivalent of money.

A “reflux” occurs here so that the process is inverted from C–M–C, with money now the driving and motivating force of commodity production, into M–C–M. There is a deadly leap – or salto mortale – in the commodity’s form in this process, where value presents itself as surplus-value, or the original sum advanced plus an increment, and is converted into the general formula of capital: M–C–M’. For the transformation of money into capital, then, there has to be annexed surplus-value, the valorisation of value. Thus, for the larval form of the money-owner (M) to become the butterfly of the capitalist extracting surplus-value (M’), labour-power becomes the pivotal commodity (C). Value, after all, is a congealed quantity of abstract labour and its crystallisation into surplus-value, which is soaked in the exploitation of labour-time. The general formula of capital as M–C–M’ is thus the purchase (M) of the commodity of labour-power (C) and its metamorphosis into surplus-value (M’) based on the exploitation of labour-time as surplus-labour.

Value thus undergoes a “metempsychosis” or transmigration that deserts the consumed body of the labourer to occupy the newly created one of capital in the form of surplus-value. It is a transmigration between bodies that involves the materialisation of blood into capital, the vampire-like sucking of living labour by capital. Meanwhile, other monsters of the market are left to engage in the horrors of exploitation. Marx considered such acts – from pulmonary disease induced by scrofula in the pottery industry of Stoke-on-Trent to the terrors of the trade in human slaves in the Americas – as tending to surpass the worst excesses of Dante’s Inferno. The crucible of this set of social relations is not the surface appearances of buyer and seller, owner of money and bearer of labour-power, within the sphere of circulation. A change has taken place in the dramatis personae. We have, in apprehending the general formula of capital, moved to the hidden abode of production within which the secret of profit-making is laid bare. It is a world where the money-owner now strides out as the capitalist and the possessor of labour-power is the active agent of the worker. The sycophant of capital is “vulgar” political economy and the defence of private property the first negation of common interests. The struggle-driven process for the re-establishment of property on the basis of cooperation and the possession of land in common is the negation of that negation. It is a process still in motion, an alternative perpetuum mobile of class struggle.

Adam David Morton
Adam David Morton is Professor of Political Economy in the Department of Political Economy at the University of Sydney. He is author of Unravelling Gramsci: Hegemony and Passive Revolution in the Global Political Economy (2007); Revolution and State in Modern Mexico: The Political Economy of Uneven Development (2011), recipient of the 2012 Book Prize of the British International Studies Association (BISA) International Political Economy Group (IPEG); and co-author of Global Capitalism, Global War, Global Crisis (2018) with Andreas Bieler. He co-edits Progress in Political Economy (PPE) with Gareth Bryant that was the recipient of the 2017 International Studies Association (ISA) Online Media Caucus Award for the Best Blog (Group) and the 2018 International Studies Association (ISA) Online Media Caucus Award for Special Achievement in International Studies Online Media.

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