On the Social Factory


by OTONOM (Istanbul)

“Meanwhile, and incidentally, there opened up for us the prospect, which cannot be sharply defined yet at this point, of a specific relation of capital to the communal, general conditions of social production, as distinct from the conditions of a particular capital and its particular production process.” (Marx, Grundrisse Notebook V, 1973)[1]


This emphasis by Marx which has mostly left unrecognized among the lines of Grundrisse has not been paid sufficient attention and reflected upon by Marxists in general, except Negri. Even if we assume that it may have been reflected upon, it wouldn’t be wrong to say that the implications of such a reflection in political theory and practice have been very limited. However this is not something that is deliberately disregarded. As Marx has already said, this is rather related to the insufficient historical and social development of the specific relation of capital to communal, general conditions of social production, which is a prospect for us that cannot be defined yet at this point.

Without understanding Grundrisse, contemporaneity of Marx cannot be understood. Grundrisse provides an abstraction of the concept of capital, which is beyond the historical-social conditions of capitalism in which it was written and even our present capitalism. The general opinion within Turkish left is that Marx lived in the competitive era of capitalism whereas imperialism corresponds to the stage of monopoly capitalism. Such a view has caused to forget Marx, which also obstructs his actualization at the current moment. Although the current class struggle is recalling Marx, the revolutionary movement seems to have forgotten Marx, moreover it doesn’t seem to have very much concern with remembering him. Considering the genealogy of Marxist tradition, it is seen that at times when class struggle had faced deadlocks and tensions, Marxists used to return to rethinking on Hegel and Marx. Faced with tensions of the current class struggle, Marxists are again trapped in a deadlock and crisis. This is the crisis of Marxists. Overcoming this crisis can only be possible by a new analysis of capitalism with a return to Marx and philosophy. This is not a theoretical or intellectual but a political and revolutionary need. We have been passing through an historical era of capitalism where “a specific relation of capital to the communal, general conditions of social production, as distinct from the conditions of a particular capital and its particular production process” is produced and reproduced. Now it is actually the time for sharply defining and analyzing the so-called prospect for this specific relation of capital to the communal, general conditions of production.


Capital is a social concept 

Capital is a social relation and a social power immanent to this relation. Its social power is historical and universal. Considered in terms of its social aspect, capital is a “relation”, a “process”, a “transition”, a “flow”, a “circle” and a “subject”. Abstractness of relational language is immeasurable. The left has not been familiar with the concept of capital defined in terms of this abstract language. Yet Marx has employed the measurable language of capital only with reference to the immeasurable relationality of its social concept. The concrete definitions based on measurability of capital have been constituted in immanence to abstract and immeasurable definitions of capital. Logic is representation of rationality of relational totality. This is the extension of Marx’s thinking.

For Marx, what is the measurability of capital, or in other words; what is the analytics of capital? Here we need to refer to the dialectical logic of Hegel. For Marx, capital is a dialectics. To make an overstatement for the purpose of clarity, Capital and Grundrisse can be said to be philosophical works. Analytical examination means revealing the dynamic of movement of a being endowed with relational totality. The movement dynamic of “capital” as a relational totality is “contradiction”. It is in contradiction that the dynamism of the concept of capital lies. Conflict based on contradiction is the activity of being, the material relationality of its self-affirmation. Stepping into analytics of capital, the language starts to differentiate with concepts such as “negation”, “metamorphosis”, “devaluation”, “discontinuity”, “limitation” or “measure”. The analytical language of capital is such that analytical concepts continually contradict with each other. Such a language activated by contradicting analytical concepts is constitutive of the language in social definition of capital. It is in contradiction involved in the dynamic of capital that its constitutive power lies. This constitutive power is an ontological power that moves in its own limitations. The notion of social factory refers to both the historical level of the socialization of capital moved by its contradictions, in immanence to class struggle, and to the specific relation of capital to communal, general conditions of social production.

The social language of capital as relational totality is immanent to its analytical language, and in this sense reveals a dialectical totality. The main thing is the circulation of capital. Circulation of capital is established in the analytics of dialectics of production time and circulation time. Although a great part of Grundrisse as well as of the three volumes of Capital is dedicated to the analytics of circulation time, what is mostly remembered is only production time with reference to Capital I. This is why the left reduces Marx to Capital I in terms of political economy. This approach has severely obstructed understanding of the concept of capital. “Production time” is time in factory, which is the form of capital production reduced to space. Capital is devalued as soon as it is reduced to space. For capital, the essential concept of production is social production and reproduction of capital. Production of capital corresponds to circulation of capital. Here we should stop for a short explanation: It is necessary not to confuse “circulation of capital” with “circulation time.” Now we can proceed after this parenthesis. Production time is constitutive of the spatial and analytical language of capital based on factory whereas the analytics of circulation time is constitutive of social and relational language of capital. Circulation of capital refers to an abstraction of the political economy of social production and reproduction of capital, in other words; its social-relational language. This level of abstraction opens up the extensional dimension of capital.


Circulation time and under-production crisis

Production time is divided into two major temporal elements: necessary labor time and surplus labor time. Surplus labor time is the condition of necessary labor time. Production time is a labor time. For capital, productive labor is waged-labor producing capital. Capital wouldn’t organize a production time without a prospect for a labor process that would not maintain the already existing value but also add to it a surplus value. In this sense, capital needs a necessary labor time that creates surplus labor time. Production time that operates the dialectics of necessary labor time and surplus labor time results in an amount of product more than needed by the productive labor in the production process. Since the essence of production based on capital lies in production based on exchange value, capital always presupposes the demand of someone other than the worker that has produced the product. In this sense, capital production based on exchange value has a social character. A capitalist considers the worker that it exploits in the production process as a consumer in the social relation.

Production time runs through negation of surplus labor time by necessary labor time and vice versa. Capital renders living labor productive by subordinating it to dead labor, and it lengthens surplus labor time by decreasing necessary labor time. Surplus labor time turns into objectified labor time when it is transformed into product. The surplus labor time which is not transformed into objectified labor time in the product cannot transform into surplus value. In this sense, necessary labor time is devalued if it is not transformed into surplus labor time. Valorization of necessary labor time means surplus labor time. And surplus labor time is devalued if it is not transformed into objectified labor time in the product. Valorization of surplus labor time requires its transformation into surplus value through the product. In other words, surplus value represents appropriation of surplus labor time by means of the product. Surplus value is thus characterized by expropriation of necessary labor and appropriation of surplus labor time. The product turns into commodity as an exchange value when it is brought to the market. Transformation of the product into commodity is its realization. When the product isn’t transformed into commodity it is devalued. And the commodity is devalued when it is not turned into money. And finally profit is surplus value in its realized form. Money capital has no value in so far as it is not combined with living labor in the production time again. Hence, as can already be seen, any devaluation is a devaluation and vice versa. The valorization cycle of capital is immanent to its devaluation processes.

To return to our point after this long but necessary parenthesis, a commodity has to be capitalized by turning into money, which requires a consumer mass with purchasing power. However labor which is a consumer, a customer in the circulation time does not have the purchasing power to buy the commodity. The necessary labor in the production time is a limit on consumption in the circulation time. Both the necessity that the labor in the production process must produce more than his needs and the limit posed by necessary labor on consumption in the circulation time poses a surplus of production. Production negates consumption and vice versa. This is an overproduction-underconsumption crisis.

All said above are well known truths for everybody but they are still lacking. If the gap here isn’t considered, the truths may lead to wrong conclusions. Overproduction-underconsumption is a representation of dialectics of use value and exchange value of commodity. The exchange value of commodity limits its use value. It is not a matter of insufficient demand in relation to supply for consumption but insufficient purchasing power. Classical economists explain the crisis of circulation time on the basis of use value whereas Marx explains the crisis of circulation time on the basis of exchange value.

Then, when does production time end and circulation time begin? It is when the product is transformed into commodity that production time ends and circulation time begins. The moment that the product is brought to the market to be sold is the beginning of the circulation time. “Bringing to market is part of the production process itself. The product is a commodity, is in circulation only when it is on the market.” (Grundrisse Notebook VI, 1973) This is the moment of life and death for capital. Circulation time is a matter of life and death for capital. The commodity does not wait for customer but money on the market. The surplus value, objectified labor time and price in the product wait to be turned into profit in the commodity. What is to be exchanged is not the use value but exchange value of the products. For capital, overcoming this moment of life and death requires transformation of surplus value into profit. What is to be exchanged is objectified labor time as price and surplus labor time as profit. For exchange to be possible in circulation time, “the surplus value (distinct, obviously, from the original value) requires a surplus equivalent.” (Grundrisse Notebook IV, 1973) “Hence, as value, it encounters its barrier in alien production, just as, as use value, its barrier is alien consumption; in the latter, its measure is the amount of need for the specific product, in the former, the amount of objectified labor existing in circulation” (Grundrisse Notebook IV, 1973). In circulation time, commodity calls for another commodity for exchange and objectified labor time calls for another objectified labor time. Money is a form of social labor time. Price calls for money in order to be transformed into money. In this sense, circulation time requires that there is another production time to be exchanged with a production time. Here there is something that points beyond an underconsumption crisis: in production and reproduction of social production based on capital, overproduction crisis in fact means an under-production crisis based on exchange value. Surplus labor time is a precondition for necessary labor time. Circulation crisis is a crisis caused by capital’s failure at “classification” of labor as waged labor on the social level and at subsuming social labor under necessary labor time. In this respect, the analytics of circulation points to the social circulation and domination of capital on the basis of circulation time.


Circulation of capital

“The total production process of capital includes both the circulation process proper and the actual production process. These form the two great sections of its movement, which appears as the totality of these two processes. On one side, labor time, on the other, circulation time. And the whole of the movement appears as unity of labor time and circulation time, as unity of production and circulation” (Grundrisse Notebook VI, 1973). Having clarified the fact that circulation of capital is the unity of production time and circulation time, we still need an additional clarification: “Circulation is itself a moment of production, since capital becomes capital only through circulation; production is a moment of circulation only in so far as the latter is itself regarded as the totality of the production process” (Grundrisse Notebook V, 1973). It is necessary not to mistaken production of capital with production time and circulation of capital with circulation time. Production time and circulation time are moments of circulation and production of capital.

In the section “Circulation time and under-production crisis” above, we have examined circulation time in relation to exchange of value. Now we are to examine circulation of capital by considering circulation time in its relation to production time. As a well known fact, production time is founded on the division between necessary and surplus labor time. Capital’s major concern is to shorten necessary labor time as to lengthen surplus labor time. Within production time, surplus labor time is increased by increasing productivity of labor. This is distinctive of relative surplus value as different from absolute surplus value. However there is another factor determining surplus labor time regardless of production time. “Circulation time in itself is a barrier to realization (necessary labor time is of course also a barrier; but at the same time an element, since value and capital would vanish without it); [it is a] deduction from surplus labor time or an increase in necessary labor time in relation to surplus labor time. The circulation of capital realizes value, while living labor creates value. Circulation time is only a barrier to this realization of value, and, to that extent, to value creation; a barrier arising not from production generally but specific to production of capital…” (Grundrisse Notebook V, 1973). In this sense, production time does not determine circulation time, but it is circulation time that determines production time. This determination is not directly a barrier to value creation. It is a barrier to value creation only in so far it is a barrier to value realization. As circulation time is prolonged, the surplus labor time in production decreases and necessary labor time increases. Therefore, transformation of surplus value quantity into profit is determined not by production time but by circulation time. Profit is the surplus value that is dependent upon surplus labor time determined by circulation time. In this sense, as capital sees it necessary to shorten necessary labor time in order to lengthen surplus labor time, it also sees it necessary to nullify circulation time in order to be able to equalize quantity of surplus value extracted with surplus labor time spent. Capital can sustain itself only in so far as it can speed up the circulation cycle. Capital could not tolerate remaining within production or circulation for so long. In order to shorten production time, it could increase the productive power of constant capital. And in order to shorten circulation time, it could transform all social relations into constant capital and hence into social productive power of capital. The tendency is towards both horizontal and vertical expansion of the sphere of circulation:

“The creation by capital of absolute surplus value — more objectified labor — is conditional upon an expansion, specifically a constant expansion, of the sphere of circulation. The surplus value created at one point requires the creation of surplus value at another point, for which it may be exchanged;…A precondition of production based on capital is therefore the production of a constantly widening sphere of circulation, whether the sphere itself is directly expanded or whether more points within it are created as points of production. While circulation appeared at first as a constant magnitude, it here appears as a moving magnitude, being expanded by production itself. Accordingly, it already appears as a moment of production itself. Hence, just as capital has the tendency on one side to create ever more surplus labor, so it has the complementary tendency to create more points of exchange; i.e., here, seen from the standpoint of absolute surplus value or surplus labor, to summon up more surplus labor as complement to itself; i.e. at bottom, to propagate production based on capital, or the mode of production corresponding to it. The tendency to create the world market is directly given in the concept of capital itself… On the other side, the production of relative surplus value, i.e. production of surplus value based on the increase and development of the productive forces, requires the production of new consumption; requires that the consuming circle within circulation expands as did the productive circle previously. Firstly quantitative expansion of existing consumption; secondly: creation of new needs by propagating existing ones in a wide circle; thirdly: production of new needs and discovery and creation of new use values. In other words, so that the surplus labor gained does not remain a merely quantitative surplus, but rather constantly increases the circle of qualitative differences within labor (hence of surplus labor), makes it more diverse, more internally differentiated” (Grundrisse Notebook IV, 1973).

Through this expansion and concentration of capital on a social level, there happens the transition from formal subsumption of capital to real subsumption, from real subsumption of capital to the network form of reproduction of capital’s social production. Through development of productive forces, expansion of needs, sophistication of production and also mobilizing production of a variety of natural and mental forces, capital transforms all these forces into a productive power for production of social surplus value. In this way, the general foundation of material production turns into general exchange itself, into the world market and finally into the totality of activities, relations and needs making up the world market. “The highest development of capital exists when the general conditions of the process of social production are not paid out of deductions from the social revenue, the states taxes…but rather out of capital as capital” (Grundrisse Notebook V, 1973). This is a characterization of the period which we presently live in. The transition from Keynesianism to neoliberalism, from imperialism to empire can be found here. Production in “social factory” refers to bio-political production and reproduction of social relations. Capital is structured as bio-political production.


Otonom (www.otonomyayincilik.com)

First published in Otonom, no. 18, October-December, 2008.

[1] All quoted passages of Marx are taken from: Grundrisse, trans. Martin Nicolaus, Penguin 1973, online at http://www.marxists.org/archive/marx/works/1857/grundrisse/index.htm.




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