Karl Marx
Karl Marx; drawing by David Levine

Karl Marx was a man of revelations. What he saw lurking in the shadows of modern society—the “specter of communism,” class struggle, surplus value—he sought to bring to the light of day. His belief that unveiling these secrets would provide the key to history seems reflected in his interpreters who look to hidden truths as the key to his history. That Marx left important works unfinished and unpublished has made revelation a large element in Marx studies. The now famous Paris manuscripts of 1844 disclosed a previously unknown (but not wholly unsuspected) Marx to a generation that found “alienation” closer to its experience than class struggle. “Hegel remarks somewhere that all great world-historical facts and personages occur, as it were, twice” (so Marx launched The Eighteenth Brumaire), and the drama of finding the real Marx in a hidden manuscript now seems about to repeat itself.

The new center of attention is the Grundrisse, the preliminary draft of his economic theory Marx set down in the dark winter hours of 1857-1858. Unpublished until 1939, and almost totally unknown before its second edition in 1953, Marx’s rough draft has now been lovingly translated into English by Martin Nicolaus. The new version supersedes an earlier volume of English selections by David McLellan, but McLellan himself has now published a full-scale biography of Marx, one purpose of which is to establish the Grundrisse as the keystone of Marx’s thought. Hence it is useful to consider the biography and the translation together.

McLellan offers his book as a “reasonably balanced picture” of Marx’s life, and in many ways it is one. For a book about such a complex and controversial man, it is remarkably fairminded and clam. Sympathetic yet critical, McLellan tells us what he admires about Marx, and what he regrets. His account of Marx’s life is learned, up-to-date, and accurate. Some old myths fall. Marx’s famous essay “On the Jewish Question,” although certainly insulting to his fellow Jews, was actually an argument in favor of extending full civic rights to them. The old claim that Marx had no practical experience of revolution dims as we learn of his real and effective participation in workers’ organizations during 1848. Marx’s economic situation during his years in London was often desperate, but his living standard was always fairly high, thanks to Engels’s more than generous contributions. Marx was a man of contradictions, sympathetic and kind at times, hostile and vituperative at others, passionately devoted to his wife and family, yet almost certainly the father of their lifelong housekeeper’s illegitimate son.

McLellan’s account of all this is clear and reliable, yet his book does not provide a really satisfying account of Marx’s life and thought. No over-all view of Marx the man ties it together. Instead of a conclusion making sense of the whole we get only an “epilogue” presenting contrasting assessments of Marx’s character by his contemporaries. McLellan clearly presents his view that the Grundrisse is central to Marx’s thought and that it must be linked with the alienation theory of 1844; Marx’s books and the periods of his life pass by in good order. But the organic connections between the supposedly central moments in Marx’s life and the rest never emerge. Some of McLellan’s judgments make one start. It is astonishing to be told that the last pages of the Paris manuscripts “degenerate into absolute obscurity”—certainly they do not.

McLellan’s image of Marx differs from some earlier ones. In place of the portrait, cherished by Engels and many early socialists, of Marx as the discoverer of scientific “laws of motion” governing modern social development there appears a more philosophic and speculative interpreter of experience, a seer, not a seeker of science. Marx, we are told, was impelled by a “central inspiration or vision.” It was “man’s nature” to create his own world and character by the cooperative shaping of his own environment. But under modern conditions “this nature has become alien to man” through the creation of an industrial world in which money and the cash nexus—not human will and foresight—rule modern life. From this perspective (laid out in the Paris manuscripts) Marx in the Grundrisse created a “vision of utopia,” resting on the notion of a “universal individual” whose many-sided personality reflected the control a unified socialist society would exercise over production. In contrast with Engels’s insistence that Marx brought socialism “from utopia to science,” McLellan puts him in a frankly utopian light.

Attractive as it may be, there are many problems with this conception. Can it be true that the “real” Marx resides in the works he did not try to publish—the Paris manuscripts and the Grundrisse—rather than in the ones he sought hard to bring out—The German Ideology and Capital? To place the Grundrisse at the center of Marx’s thought is to forget that Marx never intended his manuscript to be read as a separate book. He gave it no title; the one it goes under merely quotes a letter telling that he was at work on the “basic lines” of his economics. Seeking Marx where he did not wish to be found illuminates some features of his evolution that were once hidden, but it leaves us in the dark about what he considered most important in his work, the replacement of a utopian and “idealist” standpoint with a realistic and “materialist” one.


In discussing the Grundrisse McLellan concentrates on the visionary and humanistic parts, because “the Grundrisse is more interesting for the discussions that were not taken up again” in Capital. But he thereby omits all reference to what Marx considered his most significant theoretical achievement at the time, the law of the falling rate of profit. Given what Marx said about this law, it is difficult to see how one can attempt to discuss the Grundrisse without it. “This is in every respect the most important law of modern political economy,” he wrote, “and the most essential for understanding the most difficult relations. It is the most important law from the historical standpoint. It is a law which, despite its simplicity, has never before been grasped and, even less, consciously articulated.”

Marx’s discovery of this economic law provided one of his greatest moments of intellectual elation. Understanding the structure of Marx’s thinking in the Grundrisse depends on grasping the way the profit law was related to the basic analysis of commodities and value on the one hand, and to Marx’s vision of post-capitalist production on the other. Because he ignores these issues McLellan is unable to see that Marx responded to them differently in the Grundrisse and in Capital. Hence he misses one of the main opportunities the Grundrisse offers for casting new light on the drama of Marx’s life.

Marx’s economic theory depended on the observation that, under capitalism, labor was both a commodity exchanged in the market place and the source of the values of all commodities. This “labor theory of value” did not originate with Marx. On the contrary, so closely was the notion linked to classical economics as represented by Adam Smith and Ricardo that Marx in 1844 had identified it with his capitalist opponents and rejected it. Its emphasis on values as a constant element underlying capitalist exchange relations took attention away from the destructive anarchy Marx then saw as dominant in the capitalist system.

What allowed Marx to put the labor theory of value at the center of his own economics in 1857-1858 was an important refinement he added, the distinction between “abstract” and “concrete” labor. According to this principle, what created the value of commodities in the market place was not the “concrete” labor of the specific workers who produced them—carpenters, factory laborers, or critics—but the common quality that remained once all the specific attributes of particular workers were eliminated—human labor in the abstract. All commodities that were to be exchanged had in common only their being products of this “abstract” labor. The amount of such labor any product contained would determine the quantity of other items, similarly reckoned, for which it could be exchanged.

Individual workers created exchange value, but only in their capacity as participants in the overarching system of market relations, through which individual differences in the nature and quality of work were cancelled out. Value was “a purely social reality,” representing a certain part of the total productive potential of a given society. Any commodity could command an amount of value equal to the labor power required to replace it under existing technological and social conditions. (The “surface” expression of value, price, was not equivalent to value, but values were the source of prices, and at this point Marx chose to ignore the differences.)

It followed that labor itself had a value, equal to its replacement cost. This covered the necessities that kept the worker alive and able to reproduce himself, and might also reflect traditional living standards or the growing share claimed by workers in an expanding product (i.e., wages were not limited to bare subsistence). But the value of the labor the worker sold, calculated on this basis, was not the same as the value of the labor power the capitalist bought. Human labor could produce more than the cost of replacing itself (increasingly so as industry developed), and the employer lucky enough to buy it received the full value of its productive potential while paying only for its replacement cost. The labor of men in society, which Marx called “abstract labor,” had a greater value than “concrete labor,” the labor of particular workers. Under capitalism the entire difference went to the capitalist. Workers might be able to produce enough to sustain themselves in six hours, in which case the market value of their labor was six units; but if the normal working day was twelve hours then the capitalist received twice as much value-creating labor as he paid for. The extra six hours work Marx called “surplus labor,” and the value it produced was “surplus value.”


The law of the falling rate of profit rested on this definition of surplus value, combined with Marx’s distinction between “constant” and “variable” capital. Variable capital was that portion of the total capital which purchased labor; it was “variable” because the value it contributed to the final product exceeded the value of the labor it purchased by the amount of the surplus value. Constant capital was the portion devoted to machines and raw materials. In the production process these elements simply transferred the value they already contained to the final product, raw materials in proportion to the amount of them the product contained, machines in proportion to the fraction of their productive life devoted to a particular product.

Of course Marx recognized that more productive machines would increase the size of the final product and therefore its value, but this increase was only temporary. Capitalists bought increased efficiency at the cost of eventually cheapening the price of their products. As soon as their competitors adopted the new techniques the selling price of the products would fall, reflecting the smaller quantity of labor they actually embodied. Thus from the point of view of capitalist society as a whole, the capital invested in machines was “constant” in Marx’s sense.

The ceaseless pursuit of surplus value made capitalism run. But it ran blindly, convinced that continued expansion of scale and increasing substitution of machines for men meant ever growing profits. This was a mirage. The more capitalism expanded and replaced human labor with machines, the more its original basis eroded. More and more capital went to purchase the “constant” elements of production, less and less to the “variable” ones: in the process the source of surplus value and hence of profit slipped away. As Marx put it in the Grundrisse,

Presupposing the same surplus value, the same surplus labor in proportion to necessary labor, then, the rate of profit depends on the relation between the part of capital exchanged for living labor and the part existing in the form of raw material and means of production. Hence, the smaller the portion exchanged for living labor becomes, the smaller becomes the rate of profit. Thus, in the same proportion as capital takes up a larger place as capital in the production process relative to immediate labor, i.e., the more the relative surplus value grows—the value-creating power of capital—the more does the rate of profit fall.

Thus the very tendency of capitalism to grow and expand was the source of its demise. “The development of the productive forces brought about by the historical development of capital itself, when it reaches a certain point, suspends the self-realization of capital, instead of positing it. When it has reached this point, capital, i.e., wage labor, enters into the same relation toward the development of social wealth and of the forces of production as the guild system, serfdom, slavery, and is necessarily stripped off.”

McLellan’s claim that Marx’s economics was not intended as a “scientific” theory is therefore false; the search for economic laws was a major aim of the Grundrisse. This was not Marx’s only purpose; chief among the others was to point toward the better world which capitalist industry was creating, but which capitalism itself would be unable to enter. But Marx’s vision of this higher social stage was tied closely to his analysis of capitalist economic development. Capitalism assumed human labor time as the “determining factor in the production of wealth.” But as industry developed it laid the foundation for an economic structure in which this assumption would no longer hold.

With increasing productivity, “the creation of real wealth comes to depend less on labor-time and on the amount of labor employed than on the power of the agencies set in motion during labor time.” The value of these in turn would rest not on the labor time required to produce them, but “rather on the general state of science and on the progress of technology.” Instead of wealth being measured by the labor time embodied in products, “real wealth manifests itself rather—and large industry reveals this—in the monstrous disproportion between the labor time applied and its product, as well as in the qualitative disproportion between labor, reduced to a pure abstraction, and the power of the production process it superintends.”

As man mastered nature, human labor ceased to be the chief agent of production. At this stage, human wealth would no longer depend on labor, but on the social application of acquired knowledge.

The thievery of other people’s labor time, on which wealth presently rests, appears as a miserable basis in comparison with these newly developed ones, created by large-scale industry itself. As soon as labor in its direct form has ceased to be the great well-spring of wealth, labor time ceases and must cease to be its measure and hence exchange-value ceases to be the measure of use-value…. Production on the basis of exchange-value thereby collapses.

This dithyrambic vision was closely linked to the law of falling profit; in a sense it was simply the law’s obverse side. Both reflected the same expansion of industrial scale and productivity, and the profit law was the guarantee that the social transformation promised by expanding productivity would actually take place. The two topics together formed the climax of Marx’s argument in the Grundrisse. (The brief sections separating them deal with details about the development of fixed capital; the hundred final pages only recapitulate the theory of surplus value and add to topics discussed earlier.) Marx’s thought can be represented by a graph. Picture one rising and one falling diagonal line intersecting halfway across a page. The falling line represents the rate of profit, the rising one a measure of productivity. The horizontal level of their intersection represents the point where capitalist industry can no longer make enough profit to survive, which is reached as labor ceases to be the basis of value. The vertical axis at the point of intersection divides capitalism on one side from socialism on the other:

It was a most elegant model. Once the line between socialism and capitalism had been crossed, then the rate of profit would cease to fall, just as every other characteristic of capitalist industry would disappear. By undermining its own basis capitalism was also undermining the labor theory of value which described it. But Marx distinguished between the merely quantitative changes in productivity that were occurring within the capitalist framework and the qualitative jump that marked the transition to socialism. As long as society remained within the boundaries set by capitalist relations, as long as labor remained the source of value and direct exploitation the source of profit, then growth in “constant” capital meant a fall in the rate of profit. Smith and Ricardo had also noted a fall in the profit rate as industry progressed (although they explained it very differently) and this helped to convince Marx that he was right in thinking such a fall was taking place.

This analysis of modern economic life can be linked up with Marx’s 1844 account based on the notion of alienated labor, but the contrasts must not be overlooked. Marx’s method was Hegelian; indeed the distinction between abstract and concrete labor can be found in a form resembling Marx’s in Hegel’s Philosophy of Right. The concept of exchange value as the creation of abstract labor is fully compatible with the idea that capitalist industry is a projection of human powers into an alien realm that dominates and distorts them.

Marx sometimes spoke of this alienation in the Grundrisse, and he specifically used the term. But by contrast with the 1844 manuscripts, Marx no longer made the degraded position of the laborer his starting point. “In order to develop the concept of capital,” he wrote, “it is necessary to start out not from labor but from value.” His description of labor under capitalism no longer presupposed anything essentially dehumanizing about it; on the contrary the chapter on “The Labor Process” in Capital analyzed labor as “exclusively human” because its products correspond to a prior conception in the minds of their makers. Here Marx gave no hint that the labor he had in mind was “alienated.” Workers under capitalism received the market value of their labor; that capitalists got more than they paid for was good luck for the buyer, “but by no means an injury to the seller.”

These contrasts with what Marx had written in 1844 corresponded to changes in the actual conditions of labor in Europe after 1850. The hungry Forties had passed, and with them the widespread sense of impending revolution. Real wages had fluctuated widely and tended to fall in the post-Napoleonic period, but by 1855 they had begun the steady rise they would maintain until the early years of the twentieth century. Marx could write with considerable accuracy in The Communist Manifesto (1847) that “the modern laborer…instead of rising with the progress of industry, sinks deeper and deeper below the conditions of existence of his own class,” but such a claim was no longer true in the time of Capital. For all these reasons Marx’s mature economic theory sought to identify the forces leading capitalism to socialism even under improving conditions of work. In the Grundrisse it was capital, not labor, which Marx described as “permanently revolutionary.”

More important than the question of how the economic theory of the Grundrisse related to Marx’s past was its bearing on his future, and especially on his ultimate failure to complete Capital. Comparing the ideas of the Grundrisse we have examined with corresponding parts of Capital suggests that Marx had become much less confident about his views by the early 1860s (when the surviving manuscripts for volumes two and three of Capital seem to have been written) than he had been a few years before.

The law of the falling rate of profit reappears in Marx’s manuscript for Capital. It was not accompanied with quite the fanfare it received in the Grundrisse, but Marx still spoke of it as “a mystery whose solution has been the goal of all political economy since Adam Smith.” In a letter to Engels outlining the still unpublished parts of his work in 1868, Marx called it “one of the greatest triumphs over the pons asini of all previous economics.” The form of the law remained as before, and it still appeared as “an expression peculiar to the capitalist mode of production of the progressive development of the social productivity of labor.” What had disappeared was the unconditional confidence with which Marx had earlier pronounced it. Its exposition was now covered over with doubt and complexity.

If we consider the enormous development of the productive forces of social labor in the last thirty years alone as compared with all previous periods…then the difficulty which has hitherto troubled the economist, namely to explain the falling rate of profit, gives place to its opposite, namely to explain why this fall is not greater and more rapid.

Marx accounted for this on the basis of what he called both “counteracting influences” and “internal contradictions of the law.” In general these had to do with the growth in productivity under capitalism. Marx in the Grundrisse had assumed a constant “rate of surplus value,” that is a constant level of productivity, as a basis for the law. Only if the rate of surplus-value remained the same would a doubling of the ratio of constant to variable capital result in a halving of the rate of profit. But if productivity also doubled, the rate of profit would remain unchanged. To be sure, on Marx’s analysis the rise in the rate of productivity would eventually cheapen the product so that its price reflected the relatively reduced amount of labor it contained: a rise in productivity would therefore not set aside the profit law. But faced with capitalism’s continued existence and profitability, Marx now theorized that increases in productivity could retard the law’s operation or make its effects less pronounced.

Another important “contradiction” of the law was the effect of higher productivity on the value of capital itself. As the products of capitalist industry grew cheaper, so did the machines and other capital goods that manufactured them. Because of this, the size of an industrial plant might grow much faster than its value, with the result that industry could expand enormously without a corresponding growth in the proportion of “constant” to “variable” capital.

The basic assumption of the profit law was thereby set aside. Although Marx wrote as if the law of the falling rate of profit were still valid, its force and effect were not what they had seemed to be in 1857. The law was reduced to the status of a “tendency,” it was “checked, retarded and weakened.” The same factors that brought the law into existence in the first place (the expansion of industry and the growth in its productive power) “also call forth counter-effects, which hamper, retard, and partly paralyze this fall.” In the Grundrisse Marx had spoken of the law and its effects as the way “advice was given” to capital “to be gone and give room to a higher state of social production.” This message was now delayed, for “it is only under certain circumstances and only after long periods that its effects become strikingly pronounced.”

Given the doubts Marx now felt about the profit law, it is noteworthy that Capital omitted what had been its obverse reflection earlier, the vision of society-beyond-the-value-principle. Remnants of this vision still can be found, as in the statement that, under developed conditions, “The actual wealth of society, and the possibility of constantly expanding its reproduction process, do not depend upon the duration of surplus-labor, but upon its productivity and the more or less copious conditions of production under which it is performed.”

But Capital was much more pessimistic than the Grundrisse. Nowhere did Marx speak of a condition under which men became the overseers of a production process that drew on their knowledge instead of their sweat. The “realm of freedom” lay “beyond the sphere of material production. Just as the savage must wrestle with Nature to satisfy his wants, to maintain and reproduce life, so must civilized man, and he must do so in all social formations and under all possible modes of production.” The absence of the vision must be linked to the alteration in the law. To suggest, as he earlier had, that large-scale industry promised to create a product totally disproportionate to the quantity of labor it employed, while projecting the operation of the profit law into the more distant future, would have created the specter of a capitalist society without end. It raised the possibility that “real wealth” might no longer rest principally on labor time, while private property and wage labor continued to be the basis of society.

Marx recognized that capitalist industry contained the potential to overthrow its own conditions of existence. What he could not admit was the possibility that capitalism might transcend its own original basis without transforming itself into a different set of social relationships. Yet this is the process Capital implicitly described: private industry had not ceased to exist, yet its profits did not dissolve as it substituted machines for living labor.

Marx never completed Capital, and for this there were many reasons. He and his friends most often pointed to poverty and illness as the chief barriers. But they were not the only ones. Engels recognized this when he wrote to Marx in January, 1860: “I know very well about all the other disturbances that get in the way, but I also know that the main delay always lies in your own scruples.”

Might Marx’s dissatisfaction with the operation of the profit law have been among these scruples? What Marx published of Capital was the early part, devoted to the definition and early elaboration of the basic categories: commodities, value, money, surplus value, capital. What he left incomplete was the latter part, where the analysis reached the concrete description of the forms assumed by capital “on the surface of society”: prices, profit, and rent. Marx issued the first part again and again: in A Contribution to the Critique of Political Economy (1859); in volume one of Capital (1867); in the French translation of volume one, to which he devoted as much time and energy in the early 1870s “as if he had done it himself”; in the second German edition of volume one (1873). The later, “concrete” part remained locked up in his manuscripts, while he searched for confirmation, reading unendingly and waiting for “one more” crisis that would prove him right. His mood vacillated wildly in the years he worked on it. In 1867, as he prepared to carry the manuscript of volume one to the printer, he wrote elatedly to Engels,

You understand, my dear fellow, that there must be many shortcomings in detail in a work like mine. But the composition, the overall structure, is a triumph of German science, something an individual German can avow since it is in no way his merit, but belongs more to the nation. All the more happily, since otherwise it is the silliest nation under the sun.

Yet some years earlier, in the time he actually worked on the surviving manuscript of the later parts of the work, he had written in a different vein.

Re-reading your book [Engels’s The Condition of the Working Class in England, 1844] has made me regretfully aware of our increasing age. How freshly and passionately, with what bold anticipations and no learned and scientific doubts, the thing is still dealt with here! And the very illusion that the result will leap into the daylight of history tomorrow or the day after gives the whole thing a warmth and vivacious humor compared with which the later “gray in gray” makes a damned unpleasant contrast.

In 1868, only months after the “triumph” letter, he wrote to his honeymooning daughter Laura Lafargue about various literary matters with a macabre humor:

You’ll certainly fancy, my dear child, that I am very fond of books, because I trouble you with them at so unseasonable a time. But you would be quite mistaken. I am a machine, condemned to devour them and then, throw them, in a changed form, on the dunghill of history.

By 1871 he told his Russian friend Danielson that, as for Capital, “I have come to regard a complete reworking of the manuscript as necessary. In addition until this moment I was missing some necessary pieces of evidence, which however will be forth-coming from the United States.”

Did they come? Not in Marx’s lifetime. As capitalist society seemingly approaches a new crisis, likely to be as severe as any in the past, one cannot help wondering whether those pieces of evidence may yet come. Marx’s unclouded views of capitalism’s moral failings, its anarchy and uncertainty, and its ability to obscure the social relations on which it rests, still speak to our condition. By contrast, Marx’s economic theory as such seems to require fundamental revision if it is to account for twentieth-century capitalism. Perhaps it would be possible to fashion a neo-Marxian economics which posits abstract labor as the framework of value, while recognizing nonhuman productive forces as independent sources of value in an advanced industrial technology. Such a theory would be free from Marx’s attempt to assign only the negative effects of increasing productivity to the present while reserving the positive ones for a socialist future. It might seek to discover a pattern of fluctuations in the rate of profit rather than a one-sided law of decline. Whether such a theory could retain enough of Marx’s original inspiration to deserve association with his name can only be known if someone tries to formulate it.

With Marx’s predictions unfulfilled, it is understandable that his interpreters focus on his visions. But to play down Marx’s search for what he considered scientific laws of development is to miss the intellectual drama of his life. Marx reached out for something beyond utopian visions, for an intellectual grasp on reality, an Archimedean point from which mind could feel its power to move the world by properly comprehending it. His life was a titanic struggle to make abstract thought and concrete experience coincide, to stretch human thought to its extreme limits—and perhaps beyond them. It was triumph or tragedy. If he failed, his attempt was still one of the great historic dramas of the creative mind. The Grundrisse confirms this, it should not hide it from us.

This Issue

October 31, 1974