30.10.2025

Dialectic of transition

A Marxist political economy that assumes endless capital accumulation and crisis, until at some point the system breaks down in a final crisis, makes the mistake of conflating capital with capitalism, argues Peter Kennedy

Marxists usually take as read that the value form of labour continues to be the axis on which capitalism turns.¹ Yet what strikes you most about capitalism today is that labour, although it remains the dominant value form, is not the only form of surplus-labour extraction.²

Previous and relatively more recent forms of extracting surplus labour continue or have more recently become integral to capitalism. And nor has the value form of surplus labour extraction remained timelessly unchanged despite transformative developments in capital. This short intervention explains why we need to take account of such forms to understand the nature of capital today, and its place in capitalism as a basis for understanding an era where the value form is in transition.

Today roughly 40% of the global working age population are not employed by capital. Most of those in this category are labour for ‘own use’, north and south of the globe. According to the International Labour Organisation in 2019

Participation in this form of work … remains widespread in countries at all levels of development and continues to be central to survival in impoverished and remote areas, particularly through subsistence agriculture and fishing, and through self-provisioning of water, firewood and other fuels in areas with limited infrastructure. It is also central to the wellbeing of households and families through the unpaid provision of services, such as cooking, cleaning, care and instruction of family members, and maintenance and repair of their dwelling and other premises.³

Leaving aside labour for own use, it is also estimated that modern forms of slave labour and serfdom - including debt bondage, domestic servitude, forced labour and prostitution - account for 45.8 million people in 167 of the world’s 195 countries.⁴ And millions of people have been forced into state-sponsored slave labour of one type or another, including the ‘prison industrial complex’, which is most developed in the USA. These forms of labour exploitation co-exist with the value form.⁵ For example, G20 countries alone imported around $0.5 trillion per year worth of commodities produced using modern slavery, ranging from electronics and solar panels to textiles and garments.⁶

In addition to slavery, other non-capital forms of surplus labour extraction have developed alongside the value form, and they too are on the increase and are of long duration. For example, OECD economies engage an average of 8% of economically active workers in producing surplus labour in non-profit sectors. In the EU 28 plus Norway, “The non-profit sector has reached a total of 29.1 million full-time employees.”⁷ In addition, the surplus labour of seven percent of the workforce is in the public sector.⁸ In non-profit and public sectors, the labour they put in and the wages they receive are of a different magnitude - meaning the combined surplus labour from 15% of workers in developed capitalism is extracted in other than the value form.

Drawing together labour for own use and the above non-capital forms, we can see that there is a sizeable portion of the world’s labour operating outside of the value form, making the idea that capital dominates the globe fanciful. However, there are holes in the value-creating sector itself, once we add the changing nature of surplus labour within capitalist enterprises, corrupting the value form from within and motored by the concentrated political and economic power of global capital.

Political power

Back in 2011 quantitative analysis identified a core of 1,318 global corporations linked by an average of 20 interlocking directorates, through which the most powerful 147 super-corporations exert effective control of the rest of the core by virtue of their 40% ownership of their combined share values.⁹ More recently, and from another angle, the profits and assets of the global top 2,000 companies (across all sectors - banking, construction, transport, utilities, services, energy) have grown dramatically between 2000 and 2025 - from $1.3 trillion in profit and $80.7 trillion in assets to $4.9 trillion in profit and $242.2 trillion in assets respectively.¹⁰

Moreover, longer-term evidence in relation to the USA points to a significant rise in average profit and price markups since the 1950s. They have been accelerating since the 1970s, causing several secular trends in a number of economic variables, including the polarisation of income from labour to capital and a slowdown in aggregate output - echoing Lenin’s argument on the parasitic impact of imperialism and finance capital. With respect to profit markup, it is estimated that today 6,000 of the world’s most profitable transnational companies capture 65% of global profits - the top 10% accounting for 80% of these profits and the top 1% capturing 36%. Over the past 20 years the gap in profits between the top 10 and the rest has widened by 160%.¹¹

The crucial point of the above is that such enormous concentrations of capital create enterprises on a scale necessitating direct social administration of surplus labour, which has become an increasingly fundamental factor in the global economy - specifically through the medium of global corporations that work increasingly at arm’s length from the market and produce increasingly more use-values for internal consumption. This internality represents a large global chunk of world production and trade that is not determined directly by the market and is not transformed directly into value; where value does not determine price, which arises from a politically contrived mark-up.

For example, it is estimated that around 30% of goods are internally traded¹², and one mechanism for achieving this is the global spread and interpenetration of corporate affiliations. Indeed, the “combined output of US foreign affiliates in Europe and European foreign affiliates in the US was $1.35 trillion in 2021”.¹³ Affiliates perform use-value functions for the corporation as a whole, such as procurements, accounting and production, while the core of the global corporation can obtain parts to be assembled by affiliates.¹⁴

Moreover, the cost of internally traded products is set by transfer pricing - by mimicking a competitive market price, economists claim, which in Marxist terms is like saying price is set according to value. But the reality is that it is global corporate power that dictates the transfer price and the final price for the total finished commodity. Indeed, at the very top of the tree, where ultimate power coalesces, sits rentier capital, which controls the largest global commodity-producing companies, and has little direct concern with the theoretical niceties of competitive markets, value and surplus value. It’s all about speculative power.

Rentier capital dominates productive capital and has far less interest in whether its profits come from speculation, monopoly pricing or surplus value extraction. The top 500 asset management companies control global assets worth in excess of $115 trillion¹⁵ - more than double the combined GDPs of the US and the EU. Just three global asset management companies - BlackRock, Vanguard and State Street - are the largest shareholders in 495 of the US global corporations, including the big tech companies - Apple, Google, Amazon, etc (rentier monoliths in their own right). The confidential engagement agreements that global asset management companies have with CEOs and boards of global companies exert influence over their conduct and governance, “aligning business plans to their preferences”,¹⁶ which, in plain English, means to live off existing surplus value, and redirects it away from productive capital.

The key point here is that rentier capital dominates global trade and capital flows, and it exerts the power to override the value form, suspend it and destroy it from within, in the quest to control the global economy and state policies. And one crucial consequence of the concentrated power of rentier capital is its ability to exercise political control over price and profit, which has become a fundamental feature of the present era of capitalism.

To summarise the argument so far: the capitalism we live in today is dominated by rentier/parasitic global capital, in which large swathes of global production are not actually sanctioned by the market, but arise from pricing planned in corporate headquarters, leading to profit markup. Added to which are those areas outside of the value form itself we mentioned earlier. All of this is at odds with a world in which states sing the virtues of free markets and minimalist intervention, as they construct quasi-market instruments to run public services (not creating surplus value, but imposing competition and transforming agents into producers and consumers).

Indeed, the era described as neoliberalism did not so much shrink the state or drive forward the endless logic of surplus value-creating relations. Instead, it restructured state institutions along ‘quasi’ or ‘internal’ market relations, constructed by atomising public-sector institutions into disparate departments, re-engineered to garner artificial competition over politically constrained budgets, and recalibrating public-sector relations in market narratives of ‘investors’, ‘producers’, ‘consumers’, seeking ‘efficiency saving’ and extending ‘freedom of choice’.

Logic of capital?

Capital is often associated with an inner logic of boundless accumulation, in which all that is concrete and solid becomes abstract and evaporates. Even the limits to capital are posed in terms of inner contradictions, as necessary wellsprings for regenerating capital on an ever-larger scale. The above indicates that this era of capitalism is at odds with arguments suggesting a tight relationship between price and value, and profit and surplus value. In other words, at odds with those who argue that the logic of capital dominates and ensures that the value form moves imperially through the circuit of capital - transforming labour-power into varied incarnations of capital, value into price and surplus value into profit, as the necessary consequence of the circulation of capital within and between industries and from enterprises with low rates of profit.

Of course, evidence can no doubt be made to fit this ‘logic’ - just as the evidence highlighted here contradicts it. However, the argument presented here is more in keeping with Marx’s own perspective on how capital would evolve, transition and decline. Committing to an endless logic of capital, with categories intact, waiting for a revolution, would mean ditching what was most crucial to Marx and not, as it is currently sold, a strict adherence to his ‘scientific’ analysis of capitalist political economy as it presents to us today.

In contrast Marx’s science would have understood the increasing importance of other forms of extracting surplus labour as part of capital relations of production in transition within the wider social formation of capitalism, to explain why it becomes more erratic, devoid of a centre of gravity beyond naked power (which makes the revolutionary overthrow of capitalism more, not less, necessary). Following Marx, the evidence in this article indicates the partial failure of one form of surplus extraction, the value form, while older, as well as newer forms, of extracting surplus labour - forms of policing and abusing directly social labour - are gaining traction. The result is a complexity of forms of surplus-labour extraction in an era of transition. The abuse of use-value and declining value form have become grist to the mill of a system marked by the failure of the working class to overthrow the ruling class.

The crucial distinction to grasp in the era we live in is between capital and capitalism. Marx did not equate capital with the capitalist social formation, as do the capital logic perspectives on offer. Capital and capitalism are not identical, although we often come across terms suggesting they are. For example, when terms such as ‘capital reality’ and ‘capitalist reality’ or ‘capital forms’ and ‘capitalist forms’ are used interchangeably, a misconception occurs, epitomised by the following examples: “Capital can be seen as a movement to reconstruct in thought the whole complex of capitalist social relations, beginning from the simplest abstractions - commodity, value and money - and eventually arriving at the most complex and distorted forms: for example, the stock market and crisis”¹⁷ or when it is stated that “Capital reveals itself completely by defining what capitalism in its pure form might be like”.¹⁸

In these examples, the differences between capital and capitalism are glossed over, and embellished with the supporting idea that Marx’s three volumes of Capital involve the movement from abstract essential to more concrete determinations of capitalism. The third volume of Capital is indeed an attempt to reveal the concrete determinations of capital, but that is not a concrete determination of capitalism. For Marx, the concrete of capitalism is a much more inclusive, rich formation, while the concrete of capital (we find in his major volumes of Capital) is still an abstraction. It is capitalism, not capital, that is the concrete of many determinations within the broader social canvass.

As Marx points out, the “scientific value” of retaining the autonomous existence of capital as it develops within capitalism “lies in the disclosing of the special laws that regulate the origin, existence, development and death of a given social organism and its replacement by another and higher one”.¹⁹ In other words, Marx grounded his analysis of capital as a historically specific social relation on the basis of the view that the categories evolve and develop, reach a peak and disintegrate, as they come into contact with, internalise, synthesise, become fundamentally altered by, older, hybrid and even potentially newer forms of surplus labour extraction.

The above dynamic is neither a history nor a logic of the categories, but the dialectic of transition experienced by social categories in history. In which case, the history of capitalism coexists with other forms of surplus-labour extraction: some were once essential relations, expressing their full powers prior to capitalism, but are now transformed in capitalism and by capital; while others are more recent forms arising in capitalism, as part of their decline, but in perpetual socialised deformity (as is the case with socially administered labour in the corporate and public sectors and social democracy at large). The core message being that, while capital remains the dominant form of surplus extraction in capitalism, it is in transition: capitalism contains various other forms of extracting surplus labour from the direct producers, including slavery, serfdom, state-directed labour and forms of direct social administration within large corporations, as outlined in the previous section.

In contrast, a Marxist political economy that assumes endless capital accumulation and crisis, until at some point the system breaks down in a final crisis, makes the mistake of conflating capital with capitalism, and price with value, and so denies a perspective on transition and decline of capital within the concrete of capitalism. It is from such a perspective that we can begin to see the material basis for, and ideological roles played by, different forms of ‘state socialisms’ that have come and gone over the last century.

1. Usually the consequence of applying Marx’s categorial analysis of capital as a method that imposes itself on capitalism’s every twist and turn.↩︎

2. Of course, fundamental to changes in the value form is class struggle. In this article the focus is on more general changes that result from class struggle, past and present. Moreover, this general level of analysis abstracts from how the transition identified here unfolds unevenly and in terms of the binary of growth and stagnation in capital, reflected in the global geo-politics of US and China.↩︎

3. ‘Persons outside the labour force: how inactive are they really?’: ilostat.ilo.org/persons-outside-the-labour-force-how-inactive-are-they-really.↩︎

4. ‘The global slavery index’: www.walkfree.org/global-slavery-index.↩︎

5. Economic Policy Institute, ‘Forced prison labor in the “land of the free” rooted in racism and economic exploitation: spotlight’: www.epi.org/publication/rooted-racism-prison-labor.↩︎

6. ‘The global slavery index’: www.walkfree.org/global-slavery-index.↩︎

7. dergipark.org.tr/en/pub/iusskd/article/1039701.↩︎

8. ccss.jhu.edu/wp-content/uploads/downloads/2013/02/Comparative-data-Tables_2004_FORMATTED_2.2013.pdf.↩︎

9. A Coghlan and D MacKenzie, ‘Revealed - the capitalist network that runs the world’ New Scientist October 19 2011: www.newscientist.com/article/mg21228354-500-revealed-the-capitalist-network-thatruns-the-world.↩︎

10. www.forbes.com/sites/hanktucker/2025/06/12/inside-the-global-2000-trumps-tariffs-havent-stopped-the-worlds-growth-yet.↩︎

11. J De Loecker, J Eeckhout and G Unger, ‘The rise of market power and the macroeconomic implications’ Quarterly Journal of Economics No135 (2020), pp561-644.↩︎

12. taxjustice.net/2019/04/09/over-a-third-or-more-of-world-trade-happens-inside-multinational-corporations.↩︎

13. DS Hamilton and JP Quinlan The transatlantic economy 2023: transatlanticrelations.org/wp-content/uploads/2023/03/Transatlantic-Economy-Report-2023-Summary.pdf.↩︎

14. B Hasnat, ‘Integrated international production and non-market activity’ Journal of Economic Issues June 1998, pp333-40.↩︎

15. www.thinkingaheadinstitute.org/content/uploads/2023/10/PI-500-2023-1.pdf.↩︎

16. J-P Rodrigue The geography of transport systems New York 2024.↩︎

17. D Foley Understanding capital: Marx’s economic theory London 1986.↩︎

18. TK Sekine, ‘Materialist dialectics’, and C Arthur, ‘The problem of use-value for a dialectic of capital’, in R Albritton and J Simoulidis (eds) New dialectics and political economy Basingstoke 2003.↩︎

19. www.marxists.org/archive/marx/works/download/pdf/Capital-Volume-I.pdf.↩︎