The Reception of the Second Volume of Capital (1885)

The second volume of Capital was published in 1885 and reviewed by Kautsky in Die Neue Zeit, together with the first German edition of The Poverty ofPhilo- sophy. Kautsky remarked that readers of Capital usually assumed that Marx was unique in ascribing value to the activity of labour.

What is peculiar in Marx’s theory of value is not the reduction of value to labour but the presentation of value as an historical category, on the one hand, and as a social relation, on the other, which can only be derived from the social functions and not from the natural properties of the commodity. That is what nobody before Marx had done, and that is what we regard as the distinguishing trait peculiar to Marx.1⁵

Kautsky clarified by offering the following description of Marx's ‘character­istic method':

We clearly see in Capital his conception of economic categories as histor­ical, on the one hand, and as purely social relations, on the other, sharply distinguishing them from their underlying natural forms and deducing their peculiarities from the observation of their movement, their func­tions, not from their respective outward manifestations: in a word, his development of economic categories from the development and move­ment of social relations. As against the fetishism peculiar to bourgeois economics, which turns the social, economic character that things get stamped with in the social production process into a natural character springing from the material nature of those things, Marx declares: ‘What is at issue here is not a set of definitions under which things are to be sub­sumed. They are rather definite functions that are expressed in specific categories'.^{[16] [17] [18]}

Recapitulating Marx's arguments in the first volume of Capital, Kautsky traced this twofold character of commodities to the twofold nature of the labour expended in producing them:

After Marx rigorously distinguished the social character of the commod­ity from the natural form of the good, he sets about to make an equally important distinction in labour itself: on the one hand the [concrete] labour that determines the natural form of the substance, and on the other hand [abstract] labour as a social element in its social context.

While the first volume of Capital dealt with the creation of surplus value in the production process, and therefore with the division between variable and fixed capital, the second volume investigated its realisation in the circulation process and the consequent division between fixed and circulating capital?⁸ Kautsky highlighted the following passage from the second volume as particu­larly revealing of Marx's method:

Capital, as self-valorizing value, does not just comprise class relations, a definite social character that depends on the existence of labour as wage­labour. It is a movement; a circulatory process through different stages, which itself in turn includes three different forms of the circulatory pro­cess [namely, the circuit of money, productive capital and commodity capital]. Hence it can only be grasped as a movement, and not as a static thing.^[19]

One of the most important contributions of Volume ii of Capital, as Kautsky explains in his review, was Marx’s novel account of the reproduction and circulation of the total social capital. While analysis of the reproduction of individual capitals could set aside the natural form of products, reproduction of the total capital is affected not only by the value determinations of the products but also by their material content. A macroeconomic model of the production of exchange-values necessarily presupposes, as Marx demonstrated, that use­values are produced in objectively determined proportions.

The second volume of Capital had a strange fortune. In a letter to Friedrich Sorge, dated 3 June 1885, Engels worried that its complex subject matter would attract few readers:

The second volume will cause great disappointment, being a purely sci­entific work with little in the way of agitation. By contrast the third volume will again have the effect of a thunderbolt, since the whole of cap­italist production is dealt with in context for the first time and all official bourgeois economics rejected out of hand.^{[20] [21] [22]}

In fact, however, the second volume of Capital did become the subject of much critical scrutiny for two main reasons: first, because its analysis of the circula­tion process of the total social capital provided essential tools for investigat­ing cyclical crises;21 and secondly because its reproduction schemes played a central part both in Lenin’s dispute with Russian Narodniks (who denied that capitalism could create its own domestic market in a predominantly agrarian country)22 and also in Rosa Luxemburg’s theory of imperialism, which likewise claimed that capitalism could not experience continuous expanded reproduc­tion without conquering external markets.^{[23] [24] [25] [26] [27] [28]}