1. PRODUCTIVE FORCES AND PRODUCTION RELATIONS. IN THE CENTRAL CAPITALIST FORMATIONS means of controlling society shifts from domination of the natural means of production to

The capitalist mode of production is thus marked by three essential features: (1) the whole of social production takes the form of commodities; (2) labor power itself becomes a commodity, which means that the producer, having been separated from the means of production, becomes a proletarian; and (3) the means of production themselves become commodities, in which is materially embodied a social relationship, that of their exclusive appropri­ation by a particular class — in other words, they become capital.

Whereas in precapitalist societies economic life is in the main not concerned with commodities, under the capitalist mode the entire economy becomes a commodity economy. This situation is reflected in conventional economic theory, whichjakes_as its point of departure “supply and demand.” ⅛^us presupposing the exist­ence of commodities and the market. This theory is suppδsed^To^ constitute a universal economic science, not limited to any par­ticular phas^e'of'history, whereas in fact jt treats as commorΓ to aIΓ civiIizatiδhΓ^fhe characteristics of the capitalist mode, which is what it actually observes. By so doing it is prevented from under­standing how the capitalist system originated and its laws of development. It loses its scientific character, becoming an ideology.

Exten di ngthe domain of value to the whole of economic life changes the very form in which the. law of value is expressed. Within the precapitalist formations, in the sectors where com­modity exchange prevails, the law of value is expressed in simple form: exchange relations (relative prices) correspond to the aver­age quantities of social labor embodied in the products exchanged. The means of production, which are themselves products of social labor, are not very substantial and belong, in effect, to the pro­ducers themselves.

importance of the latter, itself measured by the amount of their capital — the share of social capital that they control. The law of value thus finds expression at one remove, in a complex form, prices being deduced from values in a way that makes possible this redistribution of surplus social labor.

The system of relative prices that operates under capitalism can, indeed, be described without recourse to the “intermediary” of value, and this has been done by Piero Sraffa. Such a descrip­tion takes the form of a system of equations reflecting the rela­tions between different industries. The cost of each product is the sum of the cost of the constituent elements of constant capital (material inputs —that is, the physical quantities of each of the inputs consumed — multiplied by their respective prices); wages (quantities of labor multiplied by wage rates); and profits (pro­portional to the values of the inputs, which are the form in which “capital” is crystalized). Solution of this system of equations gives the vector of relative prices without the need to go through the intermediary stage of value. However, this system remains merely descriptive, since its composition assumes, on the one hand, that products and labor power are commodities — in other words, that surplus labor exists and its volume is determined — and, on the other, that this surplus labor is distributed in proportion to cap­ital invested. The composition of the system of equations thus assumes the CxistericeiHfJEe capitalist mode of production.

This description shows that capital is not a thing but a social relation, since the vector of relative prices depends on both the Capital, can be criticized, it is only in so far as it constitutes merely a first sketch. The system of transformation is analyzed incompletely: the elements of constant capital are reckoned at their value instead of at their price (Volume.∙IΠ, which was published after Marx's death, was, in this respect, only a rough draft).

The rate of profit is actually determined by the relation be­tween the value of certain products (products A) and that of others (products B) in a system of prices that differs from one in which the rate of surplus value is defined as the relation between the value of products A (in physical quantities) and that of products B. This nonidentity constitutes the reason why the capi­talist system conceals the origin of profit and causes capital to appear as a thing that itself possesses productivity. It is by be­coming aware of this economistic alienation that we are able to grasp the essential laws of development of the capitalistic mode. Such awareness means taking into account the logic of the distribu­tion of surplus labor in proportion to the fractions of social labor controlled by the various social groups making up the dominant class; and also of the rule of competition and mobility of capitals, which is the prerequisite for equalization of the rate of profit. This compe­tition entails in its turn a distinctive feature of the capitalist mode, namely, the “endogenous” nature of the progress of the productive forces, in relation to the way the system works, so that when an entrepreneur introduces a more advanced technique, the other en­trepreneurs are obliged to follow his example. This “endogeneity” of progress under capitalism makes it seem an “external datum,” and so deprives society of control over its own process of develop­ment.

If we decline to analyze the transformation of value into price, we decline to undertake the recovery of this control by society over itself, which means declining to advance beyond capitalism and giving up the prospect of socialism. Already in the nineteenth century German social-democracy supposed that socialism would be similar to capitalism in its “rational” economic choices, once the initial expropriation of the capitalists had been carried out.

The universalizing of the commodity form of profit and the transition from a simple to a complex expression of value reduce commercial profit to the common denominator of profit on capital. Commercial profit is, of course, a category older than capitalism, since it presupposes merely the existence of commodity production. Precapitalist commercial profit is an income derived from monopoly, and as such does not obey precise rules. When societies brought into contact by monopolist merchants are ignorant of each other, and in particular are unaware of the real social costs of production of the products they exchange, the profit derived from a trading monopoly can be very high. It corresponds to a transfer of surplus from one class (and sometimes from one society) to another class, a class of alien merchants — this original surplus being ground rent or, in more general terms, tribute. When the capitalist mode becomes predominant, the predominant form taken by the surplus is profit on capital. Commercial activity is no longer a monopoly but a capitalistic activity like others, its domain extending to all products. The capitalist producers know the social costs of production of these products. Competition thus causes capital invested in commerce to share in the general equalization of profit. Commercial profit becomes profit on commercial capital, which is rewarded like other capitals, with the average rate of profit. To be sure, the reward of commercial capital is still a transfer, having its source in surplus value created elsewhere: in production. But this transfer is henceforth limited by the average rate of profit, which depends, in the last analysis, on the rate of surplus value.

Similarly, the universalizing of the commodity form alters the field in which the other precapitalist activities function.

Is absolute rent, which Rey calls “the way in which the dominated feudal mode is linked with the dominating capitalist mode,” subject to determination? In Volume III of Capital, Marx puts forward the idea that transfer of surplus value to landlords can take place because the organic composition of capital is higher in industry than in agriculture, so that with the same rate of surplus value the surplus value produced in agriculture is greater, for a given amount of capital invested, than it is in industry, agriculture being a “light” activity.

Rent, which continues to exist as long as private property in land continues, nevertheless assumes, owing to the predominance of capitalist relations, the form of a profit on capital — on the capital “invested” in the purchase of land. In the precapitalist formations, the land was a monopoly held by one class to the exclusion of another. In the capitalist formations it becomes subject to buying and selling. Its price — a new category — is the rent that it can yield, capitalized. Thenceforth, this rent appears as the reward of the capital sunk in purchasing the given piece of land.

In the advanced capitalist formations, agricultural production no longer occupies more than a restricted place in the social product. Agricultural land is thus subject to frequent and easy commercial transactions that are no longer hindered by the presence of a peasant class, for whom agriculture was not merely a field of production but also a way of life. Agricultural ground rent dis­appears, since the profit of the capitalist entrepreneurs in agriculture — the share of social surplus value to which they are entitled — has to reward all the capital they have invested, including that which was devoted to purchasing land. Land continues to command a price because it is subject to monopoly.

Whenever access to the natural (or social) conditions of production is restricted by a monopoly, a problem of the transference of value arises. This is why it is not possible to grasp the problem directly on the basis of an analysis of prices..

While in the advanced capitalist systems the problem of agri­cultural rent has lost its acuteness in quantitative terms, at least, if not in terms of theory, urban ground rent becomes day by day of greater quantitative importance. The ideologists of the system claim that ground rent is the “rational” way to stop people from planting potatoes in the Champs-Elysees. In reality, it is quite clear that access to plots of land in the Champs-Elysees is not controlled by society but is a monopoly held by a certain social group, that of the owners of these plots. The volume of the transfer of value that takes place to their advantage as a result of this fact thus depends exclusively on their social power.

The same is true of “natural resources” in the form of minerals, forests, rivers, lakes, and seas, in so far as access to them is restricted by a social monopoly. In his Critique of the Gotha Pro­gramme Marx shows that social labor is the sole source of value, but not of wealth. The latter means the quantity of useful objects (useful from the social, not the individual standpoint) obtained with a given amount of social labor. This social labor is carried out not in a nonmaterial, abstract setting but under given natural conditions. The distinction between nature and society determines what is meant by social science, defining as it does mankind in contrast to the animal kingdom. If society controlled access to all natural conditions, it would be able to plan the use of them in a rational way: in other words, it would choose the ways and means to obtain, by exploiting these natural resources in accordance with a definite social time-prospect, the maximum of utilities in return for a given amount of social labor. In the capitalist system, this access to natural wealth is subject to extreme disorder. Some forms of natural wealth are freely accessible, and on this account are wasted, to the detriment of society’s interests, as problems of the environment reveal (pollution of the atmosphere, of rivers, etc.). Freedom of access excludes the way these resources are used from the field of economic calculation: for the capitalist enterprise this constitutes an “external saving,” whereas on the social scale the using-up of these resources signifies a real cost, namely, that of the “fight against pollution” (the expenses of cleaning work undertaken by the public authorities, extra expenditure on health services, forced movement of persons, etc.). Other natural resources are subject to ownership, and the price paid by the capitalist entrepreneur will depend on the social relations between the capital­ist class and the group that monopolizes access to these resources. Where resources of the subsoil are concerned, for example, this price will vary widely, depending on whether the laws in force separate ownership of the surface from that of the subsoil, whether the land is privately or publicly owned, and so on — that is, depending on the social conditions that define the framework of economic activity.’

A further step is taken when we consider the stages in the evolution of the productive forces and of production relations in the capitalist system. The mercantilist period, which was that which saw the formation of the system, defined by the establish­ment of the two poles of the capitalist mode (concentration of money-wealth and proletarianization), was a period of transition: on the one hand, the law of value was still expressed in its simple form, in the sector of petty-commodity production, but on the other the concentration of money-wealth was already taking place in a sector that was not governed by the law of value — that of the large-scale Atlantic trade organized in monopolies. The Industrial Revolution, that is, the coming together and merging of the two poles created during the mercantilist period, opened the way to the fully developed capitalist mode of production: money-wealth became capital, setting to work under its control the “released” labor power that became the proletariat. The nineteenth century, until approximately the 1880s, was marked by the industrial form of the central capitalist formations. The predominant form of capital was industrial capital, made up of independent units cor­responding, as a rule, to separate enterprises, which were largely family businesses. Competition offered the law of value in its complex form the widest field of operation. But there were some hindrances to this operation, especially in agriculture, which because of private property in land continued to be subject to the social monopoly of the landlord class. Centralization of capital, progressing as a result of competition, brought about at the end of the century a qualitative change in the predominant character of the system. The generalizing of the monopoly form of capital showed that the level of development of the productive forces had now risen beyond that of the production relations. For monopoly is above all a hindrance to the equalization of profit. Prices there­fore cease to be determined by a general law based on values. The field of operation of the law of value contracts. There is no longer any rationality, even apparent, in the price system. Prices are de­termined by social relations of strength within the dominant class, between the financial groups that dominate the various sectors of economic activity. Down to this time the social relations that played a part in determining relative prices were only those between the dominant capitalist class as a whole and the other classes and social groups. Thenceforth, there was no longer a single rate of profit, but at least two rates: the one governing the monopoly sectors and the one applying in the sectors where, despite domi­nation by the monopoly sectors, competition still prevailed. Politics, that is, resort to intervention of the state in the economic field, acquired a new dimension.

The only way forward for capitalism — faced with the trans­cending of the system by socialism, with the contradiction between productive forces and production relations — is state capitalism. Centralization of all production on the national scale, through the replacement of ownership by social groups by state ownership, brings the production relations up to the level of development of the productive forces. It restores the social character of capital, which had been disguised by the parcelation of the latter into privately owned shares. It imposes social planning as a way of managing the economy. How isrit possible now to define prices otherwise than as purely conventional, since the entire social product appears as a single commodity — with labor power as the only other commodity? It is on this last point that the frontier lies between state capitalism and socialism. It corresponds to a class frontier — that which divides the proletariat, which still sells its labor power, from the bourgeoisie, which has become a state-class, as in the days of the tribute-paying mode. To this renovation of capitalist society there also corresponds the maintenance of domina­tion by the economic instance over the politico-ideological instance; the solution found by state capitalism to the problem, of planning is a capitalist solution — the determination of “prices” that “reward” on an equal basis the “capital” (i.e., the fractions of capital) assigned to the different branches of the economy. When the Russian economists adopt this formula they are returning, in fact, to the “rationality” of the capitalist mode, which had been shaken by the rise of private monopolies.

Let us recapitulate. Capitalist calculation has no rationality in itself. Rationality is in fact always relative to a particular mode of production and never transcends the framework of social relations distinctive of that mode. In the capitalist mode, in its fully developed industrial form, this rationality is limited — on the one hand, by the essential social relation that defines the rate of surplus value, namely, the rate of exploitation of labor, and, on the other, by the secondary social relations that obtain between the bourgeoisie and the landowners who control access to certain natural resources. With the coming of private monopolies a third limitation appears — that which is caused by social relations within the dominant bourgeois class.

The result of economic calculation based on such foundations is irrational from the social point of view, and this irrationality becomes apparent as soon as the level of development of the productive forces requires that they be controlled by society as a whole. It is here that the content of the problem of the “environ­ment” is to be found. The use of this (inaccurate) term testifiesj merely to the fact that the problem is felt by society as a sort of discomfort, without being understood scientifically. It covers two sets of facts, belonging to three planes on which the irrationality of the system is manifested: (1) the waste of “human resources”;; (2) the waste of natural resources; and (3) the inevitably limited time-prospect of “economic calculation.”

For the capitalist mode of production, people exist as labor power, a “work force,” and not as ends in themselves: its immanent law is therefore to try to reduce the cost of this labor power, to maximize the rate of surplus value, to thrust out of the realm of economics — and into the field of “external savings” for the enterprise — what have been wrongly described as “social costs” or “human costs” (education, health, etc.), the economic alienation involved being reflected in the very choice of the term :“costs” (like the term “human resources,” which underlines the fact that humans are a “resource”... for capital). State capital­ism is driven by the same law: labor power remains a commodity, and the economistic alienation persists. Socialism is defined by [social command over the threefold relation between the social. labor time ass⅞ned to reproducing the production cycle, the social labor time assigned to expanding this, and the time not devoted 1o~labqr. In this way socialism is able to dominate the process of accumulation, which, in the capitalist mode of production, on the contrary, dominates social development.

The capitalist mode of production either takes or fails to take into consideration the using-up of natural resources, depending on accidents of social relations that are not under social control. The “price” of products, which decides their relative use, either contains or does not contain, according to cases, the margin needed if society is to be able to maintain and renew its stock of these resources. Thus, high rates of accumulation, measured in the classical terms of national accounting, for example, and con­sequently rates of growth of the social product measured in these terms, are obtained at the expense of the future, through the exhaustion of natural resources.

A society that wishes to control its future must first and fore­most take a long view — have a lengthy “time-prospect.” This was the case with the precapitalist societies, in which the dominant instance was not the economic but the politico-ideological one. However, these societies had little power over nature, owing to the low level of development of the productive forces (hence their religious alienation). These societies built pyramids or cathedrals, in other words, monuments that were destined to last forever and the purpose of which was to serve not men but the gods. In capitalist society this claim is made no longer: but while capitalism has freed men from the gods, it has not freed them from them­selves. All it can offer them is an alienating ideology, that of the “consumer society,” a short-term prospect of “growth” of con­sumption without any reference to real human needs. This shortening of the time-prospect results from the dominant function of the rate of surplus value. It is this rate that determines the pace of accumulation, and so, ultimately, the “rate of discount” on the basis of which choices are made. It seems to give rationality to what is irrational. But we know that a rate of 7 to 15 percent means that the alternatives between which a choice has to be made become practically identical within a period of ten to fifteen years at the most. In fact, “economic calculation” is nothing more than an ideological justification of the way capitalist enter­prises spontaneously behave. Even when it is transposed to the national or “social” scale and purged of its most harmful consequences by taking into consideration “reference prices,” nothing has been done to alter its short-sighted outlook. The crisis of our civilization is wholly concentrated in this absurd contraction of human time. One of its aspects is the contradiction in which our civilization is trapped, between the “objectives” of education and those of the system of production. In a world that is progressing fast, education cannot content itself with teaching techniques that correspond to particular occupational capacities, which it is hardly possible to know will still be wanted in twenty years’ time. Education ought therefore to form men with a capacity, later on and throughout their lives, for adapting themselves and progressing, and also, contrariwise, for adapting economic evolution to the pace they prefer. But this is not the purpose of “educational planning”: a victim of economistic alienation, it tries to treat the formation of human beings as a cost (one of the capitalist enterprise’s external savings) and therefore tries to adapt its products to the needs of the economy — needs that the system itself does not know for more than ten or twenty years ahead.

The rational economic calculation of a socialist society cannot be based on such principles as these. First, let us recall that, for society as a whole, only calculation in terms of va⅛e is meaningful — that is, in terms of social-labor time. Any accounting in prices that “equalize the rewards of capital” is meaningless. The organi­zation of the social division of labor (between the production of “capital goods” and that of consumer goods) and the time needed for going over from a given structure of this division to a different structure, corresponding to a higher level of development of the. productive forces (a period of time governed in the last resort by the time taken to train and transform men: technical training, reorganization of production, etc.) have to be considered from the standpoint of a single choice to be made — that of the solution capable of reducing to the minimum the necessary social-labor time within a given time-prospect. The latter, has to be deter­mined by society in accordance with its maximum power to know the future. As for the useful objects that have to be produced, these must bear an explicit and continuous relation to the needs expressed by society, without any reference to prices (and so to the market and to the distribution of income, necessarily unequal at that stage): only in this way can society choose between labor­time and nonlabor-time, instead of remaining trapped in the futile choice between different “goods,” with labor-time — kept as long as possible — not a matter for discussion. For capitalism, i indeed, the aim of the system is not to maximize production but ^to maximize surplus value; this is what determines the economistic Alienation. Finally, natural resources must all be taken into con­sideration, and within a defined time-prospect a part of the prod­uct must be assigned to maintaining or reconstituting them. This part, to be kept as small as possible, dictates the choice to be made between alternatives; it will depend, however, on the pros­pects of scientific progress, justifying the exhaustion of a certain resource if there is a possibility in the future of producing goods to satisfy the same needs by drawing upon a different resource. This is what is meant by “reconstituting” natural resources. And this is how we are to understand Marx’s observation that under a socialist regime the individual worker cannot “receive the undi­minished proceeds of his labor,” as naive socialists had supposed.