Adam Smith's profoundest reader

Karl Marx built on and developed bourgeois revolutionary consciousness, contends Spencer A Leonard of the US Platypus group

Though certainly Marx is an original thinker, he is also a pre-eminently immanent thinker. No deviser of utopias to oppose to other utopias respecting what ought to be, Marx is rather a dialectical critic of practice obscure to itself. He attempts to grasp capital from within, working through its own highest expressions.

Though the fact is scarcely ever acknowledged, it is no exaggeration to claim that Adam Smith is among Karl Marx’s primary interlocutors. A search of his name on Marxists Internet Archive generates more hits than any other except for Hegel (where many link to works by Engels). Moreover, unlike Engels, Marx ceases to engage explicitly with “that mighty thinker” and his epigones after 1846, whereas Marx writes on Smith from the Paris manuscripts through Capital. Marx also refers explicitly to his other primary interlocutor among the political economists, David Ricardo, less frequently than he does to Smith.

While his ceasing to address him explicitly need not (and does not) signal any actual break in Marx’s engagement with Hegel, the simple philological fact that Smith is the more abiding, explicitly invoked interlocutor is rarely, if ever acknowledged. This is because of radical opposed general perceptions of the two engagements. For, though many disapprove of it and try to explain it away, few Marxists deny Hegel’s centrality for Marx. Indeed, some - most notably Georg Lukács, Herbert Marcuse and Theodor Adorno - have made critical contributions to the 20th century understanding of Hegel.

But Marxists have left no comparable legacy with respect to the interpretation of Adam Smith. Indeed, few would so much as grant that Marx indeed took Smith as an interlocutor, preferring to assume that Marx argued against him as a ‘liberal’. This is because liberalism, and indeed the bourgeois revolution itself in the prevailing late Stalinoid conception, is typically thought by Marxists to be a bourgeois class project that Marx instinctively opposed. Thus Smith is typically regarded on the left in much the same way as the German nationalist economist, Friedrich List, thought of him - as the patron saint of 19th century British free-trade imperialism.

Most left commentators sneer when they intone the word ‘bourgeois’, as in the phrase ‘bourgeois political economy’. In this sneering contempt of even resolutely ‘anti-Stalinist’ Marxists can be detected that constitutive, ubiquitous Stalinism that both occasions and indexes the death of the left in our time. And in their incomprehension of Marx’s critique of political economy, to which the engagement with Smith is central, today’s Marxists reveal more than they guess.

Telling left from right

Everyone is familiar with the conservative Smith and, undoubtedly, the conservatives thought it a triumph to have his image put on the £20 note. But on the left, where it is fashionable to have ‘a critique of the enlightenment’, none object to this cooptation. Indeed, even among Marxists who claim the enlightenment for the left, few would class Smith within its radical strain.

Take, for example, the prominent Marx scholar, David Harvey. Harvey describes Smith as a “liberal utopian” committed to a theology of “perfectly functioning markets and the hidden hand”.[1] A spokesman for the rising capitalist class, Harvey’s Smith promoted capitalism as a “utopianism of process”. On the basis of this liberal utopianism, we are told, Smith “derived a political programme … Give free markets room to flourish, then all will be well with the world.” Having thus caricatured Smith’s thought, Harvey then pulls him into the present, saying, “this, of course, is the ideology that has become so dominant in certain of the advanced capitalist countries … these last 20 years”. Finally, as if to put the matter to rest, Harvey ‘reminds’ his readers that “Marx mounted a devastating attack upon this utopianism of process in Capital.”[2] Here Harvey expresses something like the standard view of Smith: While we might puzzle over Marx’s relationship to, perhaps even his dialectical appropriation of, Hegel’s dialectic, the critique of Smith’s political economy is an attack, a refutation or at the very least a criticism. Hegel is a precursor, Smith an opponent.

Though for the most part Smith is regarded by the existing left as little more than a spokesman for bourgeois class interests in his own time and our own, there has recently emerged at least one purportedly left Smith - that recovered by Italian historical sociologist Giovanni Arrighi in his Adam Smith in Beijing. But this appropriation is as symptomatic as is Harvey’s rejection. For, however improbably, Arrighi argues that Smith harbours an “anti-urban bias”, preferring agricultural labour to urban wage-labour. Maintaining an “utter scepticism concerning the efficiency and usefulness of big business”, Smith’s “overwhelming preoccupation”, Arrighi claims, is with “the establishment and preservation of the central government’s capacity to pursue the national interest”.[3] Here is a Smith serviceable to Arrighi’s anti-bourgeois purpose. Rather than one of the 18th century’s leading and most thoughtful advocates for the extension of freedom, Smith is forced into the ranks of the discontented critics of the ‘unnatural’ development trajectory of Europe.

A strong proponent of “the natural progress of opulence” he thought China to exemplify, “Smith upheld China rather than Europe,” Arrighi maintains, “as a model of the kind of market-based economic development that was most advisable for governments to pursue.” Thus reduced to the status of an 18th century Sinophile, Arrighi’s Smith advocates “benevolent absolutism, meritocracy and an agriculturally based national economy”, such as can be found, we are told, even today in China. A kind of precursor of mid-20th century welfare statist Karl Polanyi, this Adam Smith favours “economic development as a process embedded in, and limited by, a particular physical, institutional and social environment”.[4]

Just such social, institutionally embedded development as Arrighi’s Smith favours has, according to him, been taking place in China since before the publication of Smith’s An inquiry into the nature and causes of the wealth of nations. For the Chinese path, according to Arrighi, exemplifies a “natural” pattern of socio-historical development, as opposed to the “unnatural” foreign commerce- and manufacturing-based form of development, a form Arrighi terms “capitalist”. Capitalism on this view is what the west first pursued to overcome feudalism and what it has continued to pursue ever since. The result is the subjection of society and tradition to relentless transformation (not only in Europe, but also in those places forced to supply Europe with raw materials). Chinese development, by contrast, has taken a more “natural” course, occurring as it does in and through traditional social norms and values.[5]

Thus Arrighi’s Smith is, however improbably, anti-capitalist. At the same time, he is symptomatic of the cultural catastrophe of the west. For, though he supposedly would have approved of it, the Chinese form of development that Arrighi celebrates does not require the services of philosophers like Smith. It has no need of self-reflection or the exercise of public reason to achieve its purpose. “No 18th century Chinese thinker theorised the contribution of self-interested enterprise to the national economy,” Arrighi notes, because such theorisation was unnecessary.[6]China unwittingly pursued Smith’s non-capitalist, market-based course to a non-capitalist modernity. The Chinese path that Arrighi so admires itself derives from the wisdom of Chinese culture to which the Chinese revolution presumably accommodated itself. Arrighi places Adam Smith in Beijing only as an approving observer. Rather than the restless churning of societies dominated by capital, Giovanni Arrighi prefers unconscious development pursued in the national interest by a tradition-embedded state bureaucracy. This in a work published not by some academic press, but by Verso, the leading left publisher in our time.

Since the Marxist, Harvey, is hostile to Smith and Arrighi invokes him only to strip him of his philosophical project, we must ask ourselves the question, who on the left today speaks of Smith as a leading 18th century philosopher of freedom or even, as did an older generation of Marxists, as a significant pre-Marxian exponent of the labour theory of value? But to raise this question is to answer it. While the left generally disdains the category of ‘freedom’ as reactionary, the right, which claims to value Smith as a founder of free market economics, dismisses his labour theory of value as pre-scientific.

Marx’s Smith, by stark contrast, attends closely to him as a dialectician and theorist of bourgeois society. More particularly, Marx pays close attention to Smith’s radical overturning of past political economy in his struggle against the Physiocrats and mercantilism. Nor does he reduce Smith to simply his place in history. But who on the left today can say what Smith’s significance is for Marx? How many reflect upon why, rather than prognosticating crises of the system or giving speeches to the working men, Marx spent nearly three years in the early 1860s working through his history of political economy - in which Smith, like Ricardo, is given pride of place - before undertaking the final drafting of Capital volume 1?

Though Adam Smith is chiefly associated with the demand for freedom of property, and the translation of this into the project of unfettered national markets and international free trade (the whole being lumped under the rubric of the ‘invisible hand’), none of this is in fact peculiar to Smith. Rather, integral to the project of the revolutionary third estate broadly conceived, these were mainstream concerns of political economy from at least the time of John Locke and Sir Dudley North in the 17th century. Similarly, the character and productive potential of the division of labour, so closely associated with Smith’s name, forms a subject for intense reflection and analysis nearly three-quarters of a century before Wealth of nations in the writings of Sir William Petty, the man Marx credits with the founding of political economy. The neglect of what is novel in Smith goes hand in hand with the neglect of Marx’s immanent relation to liberalism and to bourgeois revolution itself.

Bourgeois revolution

Though he falsely attributes the view to Platypus, Mike Macnair is nonetheless right to deny that the bourgeois revolution began with the French Revolution. Rather, as Marx knew, it began much earlier, though not so early as Macnair imagines, in the time of the Italian city-states. And, again, though comrade Macnair is correct to point out that “Marx’s Capital cannot be read without reference to the broader claims … about the history before fully developed capitalism”, the fact that he opposes this to a Hegelian reading shows not only that he does not understand Hegel, but that he does not understand the significance of Marx’s treatment of “the history before fully developed capital” either.

Macnair’s confusion demonstrates the extent to which he is complicit in the very “new leftism” of which he accuses Platypus on the basis of his non-attendance at a panel it sponsored on the bourgeois revolution back in April. For Macnair believes that to pose the question of “the need for an emancipatory movement to start from the conquests of capitalism … in terms of the conquests of liberalism” is, as he puts it, “pathological” and lands one up a defender of what calls itself liberalism today. Thus he claims to know where such an understanding leads: ie, down “the path followed by the Schachtmanites, by Adorno and Horkheimer, and more recently by the British Revolutionary Communist Party/Spiked and the Eustonites”.[7] Leaving his understanding of Adorno and Horkheimer to one side, it is clear why Macnair would wish to avoid the question of building on the project of freedom in favour of building on capitalist productivity’s conquest of scarcity, as his faith in the communist future rests on what he terms “elaborated theoretical reasons for supposing a proletarian will to collectivism”, as if collectivism were a negation of what exists.[8]

But there are more fundamental reasons for Macnair’s hostility to Hegelian Marxism and thus his incomprehension of Marx’s critique of political economy. These derive from his ‘pre-critical’ conception of philosophy, a field he takes to be one divided up into various sub-domains - epistemology, ontology, logic, etc - matters about which all humans in all times and places are presumed to speculate to one degree of clarity or another.

However, as a bourgeois thinker, Marx rejects such a view of philosophy. He represents an attempt at fulfilling what he took to be a distinctly bourgeois philosophical project. This project he conceived - following Rousseau, Smith, Kant, Hegel and others - in distinctly post-traditional terms. Indeed, for Marx the question of the extent to which modern philosophy specified itself in terms of its modernity was crucial to its own advance, and it was on this ground that he criticised his closest precursors. Thus, ultimately, for Marx the question of the immanence of the thinker to the object thought posed a distinct, indeed the crucial, theoretical problem. It bore directly on how the adequacy of our understanding of what it is we are doing politically ‘here’ relates (or fails to relate) to how we reach ‘there’. For Marx the question of capitalist society as freedom in self-contradiction turned on how we can be successful in changing the circumstances that we find ourselves in, so as to render those very circumstances more tractable, more susceptible to further transformation. This theory-practice problem cannot be assimilated to a pragmatic learning by trial and error, steadily inching one’s concepts toward reality in a way and to a degree that one hopes they will grow asymptotically more accurate.

Marx’s relation to Smith hinges on precisely his further specification of modern freedom, since for Marx Smith has, so to speak, advanced the object to such a point that his own approach to it is no longer adequate. That is, Smith’s dialectic reaches towards, even provokes, Marx’s, albeit by way of Ricardo and the Ricardian theorists of the labour movement. Thus Marx undertook no anachronistic critique of Smith, but only of the unconscious repetition of Smith’s emancipatory project.

Georg Lukács commented on Marx’s approach to the enlightenment tradition and to political economy more specifically when he writes in History and class-consciousness:

The survival of the bourgeoisie rests on the assumption that it never obtains a clear insight into the social preconditions of its own existence. A glance at the history of the 19th century reveals a profound and continuous parallel between the gradual growth of this self-knowledge and the decline of the bourgeoisie. At the end of the 18th century the bourgeoisie was ideologically strong and unbroken. The same thing was still true at the beginning of the 19th century, when its ideology, the idea of bourgeois freedom and democracy, had not yet been undermined … and when the bourgeoisie could still hope, and moreover hope in good faith, that this democratic, bourgeois freedom and the supremacy of economics would one day lead to the salvation of all mankind … It is this, too, which confers upon the great scientific pronouncements of the bourgeois class (eg, the economics of Adam Smith and Ricardo) their forthrightness and the strength to strive for the truth and to reveal what they have without cloaking it.[9]

As Marx wrote by way of criticising that supposed working class political economist, Proudhon, “Economic categories are only the theoretical expression, the abstraction of the social relations of production … Thus these ideas, these categories, are as little eternal as the relations they express.”[10]

Marx’s critique of Smith hinges on the respecification under changed circumstances of the theory and practice question. It is no simple matter of correcting Smith’s theoretical errors. For this reason, the divide that extends between the epoch of bourgeois society and ‘capital’, between the ‘age of enlightenment’ and the thus far unrealised ‘second enlightenment’ of Marx and Engels, can be illuminated through Marx’s relation to Adam Smith. Contra Macnair, I would argue that, rather than sidestepping or criticising liberalism, in The poverty of philosophy, Capital and other major works published in Marx’s own lifetime, he critiques liberalism precisely in order to achieve its aspirations under the new conditions that liberalism itself has produced. Industrial capitalism was, by the very fulfilment of its own logic, bound to overcome itself and issue into socialism, but, by the operation of that same logic in the absence of historical consciousness, it tended to regression and disintegration, even to the point of falling below the threshold of bourgeois freedom.

In failing to fulfil the liberal project, Marxists do not substitute another, proletarian or ‘collectivist’, project in its place. Rather, they conspire with the hollowing out or disintegration of liberalism, its transformation into its opposite: Bonapartist imperialism, mass democracy, the liquidation of the individual and authoritarianism.

As Marx writes in 1871:

The empire, with the coup d’etat for its birth certificate, universal [manhood] suffrage for its sanction and the sword for its sceptre, professed to rest upon the peasantry, the large mass of producers not directly involved in the struggle of capital and labour. It professed to save the working class by breaking down parliamentarism, and, with it, the undisguised subservience of government to the propertied classes. It professed to save the propertied classes by upholding their economic supremacy over the working class; and, finally, it professed to unite all classes by reviving for all the chimera of national glory. In reality, it was the only form of government possible at a time when the bourgeoisie had already lost, and the working class had not yet acquired, the faculty of ruling … Under its sway, bourgeois society, [is] freed from political cares … the state power, apparently soaring high above society, was at the same time itself the greatest scandal of that society, and the very hotbed of all its corruptions … Imperialism [post-1848] is, at the same time, the most prostitute and the ultimate form of the state power … in it full-grown state bourgeois society had finally transformed into a means for the enslavement of labour by capital.[11]

Intellectual regression

Bourgeois political economy is not simply the political economy written by or for the bourgeoisie. As Marx never tired of demonstrating, not only did the vulgar thinkers of his own day fail to advance beyond their predecessors: they regressed behind the level they had attained. Far from having the benefit of hindsight and certainly no ruling class masterminds, Marx considered so-called liberal political economists in the age of imperialism beneath critique. He wrote of the foremost among them:

John Stuart Mill, with his usual eclectic logic, understands how to hold at the same time the view of his father, James Mill, and the opposite view. When … he announces himself as the Adam Smith of his day, we do not know what we should be astonished at: the naivety of the man or that of the public which accepted him in good faith …, for he bears as much resemblance to Adam Smith as General Williams of Kars does to the Duke of Wellington.[12]

And again on John Stuart Mill and the regression characteristic of late political economy:

Ricardo never concerns himself about the origin of surplus value. He treats it as a thing inherent in the capitalist mode of production, which mode, in his eyes, is the natural form of social production. Whenever he discusses the productiveness of labour, he seeks in it not the cause of surplus value, but the cause that determines the magnitude of that value. On the other hand, his school has openly proclaimed the productiveness of labour to be the originating cause of profit ... Nevertheless, Ricardo’s school simply shirked the problem; they did not solve it. In fact these bourgeois economists instinctively saw, and rightly so, that it is very dangerous to stir too deeply the burning question of the origin of surplus value. But what are we to think of John Stuart Mill, who, half a century after Ricardo, solemnly claims superiority over the mercantilists, by clumsily repeating the wretched evasions of Ricardo’s earliest vulgarisers?

The present bourgeoisie no longer produces philosophers. Frederic Bastiat is no latter-day Adam Smith, any more than John Stuart Mill is. For the same reason, no political economy whatsoever was ever written in Germany.

As Marx wrote in his 1873 preface to the German edition of Capital:

[Prior to 1848] political economy, in Germany, [was] a foreign science … [there were] historical circumstances that prevented, in Germany, the development of the capitalist mode of production, and consequently the development, in that country, of modern bourgeois society. Thus the soil whence political economy springs was wanting. This ‘science’ had to be imported from England and France as a ready-made article; its German professors remained schoolboys. The theoretical expression of a foreign reality was turned, in their hands, into a collection of dogmas, interpreted by them in terms of the petty trading world around them, and therefore misinterpreted …

Since 1848 capitalist production has developed rapidly in Germany, and at the present time it is in the full bloom of speculation and swindling. But fate is still unpropitious to our professional economists. At the time when they were able to deal with political economy in a straightforward fashion, modern economic conditions did not actually exist in Germany. And as soon as these conditions did come into existence, they did so under circumstances that no longer allowed of their being really and impartially investigated within the bounds of the bourgeois horizon.[13]

Germany’s modern history began with, and is inextricably bound up with, the age of imperialism, the age of liberalism’s vulgarity.

Macnair in his reply to Chris Cutrone in the pages of the Weekly Worker complains when Cutrone claims “what the Second International radicals meant by ‘imperialism’ was … not core-periphery relations”, retorting that “This claim is a commonplace from somewhere in the historiography … The problem is that it cannot really survive confrontation with the primary sources.”[14] But the text quoted above in which Marx expresses his own conception of imperialism is drawn from one of Marx’s most well-known writings, The civil war in France. This was a text studied by any and all calling themselves Marxist in the Second International, so that when later thinkers developed a theory of imperialism in the late 19th and early 20th century, they did not do so in ignorance. They grasped it as a category referring to historical time, specifically to the post-1848 epoch, no less than to the global space of core-periphery relations.

Since then, with the massive publication of Marx’s New York Herald Tribune articles, with their preoccupation with the hollowing out of liberalism in Britain and its empire, the continuity on the theme of imperialism between The eighteenth Brumaire (in which Marx introduces the category of Bonapartism) and The civil war in France is even more clearly instantiated. Certainly, as has been shown, the intellectual degradation evident in post-1848 political economy is a leading preoccupation of Marx’s in the period of his writing Capital. Both Capital and The civil war in France elaborate Marx’s recognition that, in the absence or self-defeat of proletarian socialism, liberalism does not simply carry on. Rather, capitalism itself disintegrates, and what had been liberalism grows vulgar and authoritarian. These are not matters that the dictionary meaning of the words ‘imperialism’, ‘authoritarianism’ or ‘vulgar’ are going to help us navigate.

So the issue I am trying to sharpen via this discussion of Marx’s Smith is not a matter of ‘philosophy’, as comrade Macnair poses it in his article, ‘Against philosopher kings’, where the divisiveness of philosophy is opposed to the unity to be attained through programmatic consensus. Because, if the question is one of changing the world, the philosophical task remains of grasping as historical the world in which we find ourselves. And this is a world that in the absence of such historical consciousness, as Hillel Ticktin has recently argued, might enter into seemingly interminable crisis. As Ticktin said of the condition in which the self-contradiction of freedom, of history itself, goes unrecognised and unmastered, “the logical solution to a crisis - in which the working class does not take power, that is - is disintegration. We are seeing that very obviously today: whether it is in [the London] riots, in what is happening to the EU, or national states, or economies around the world, disintegration is the logic in the present stage of capitalism.”[15]

Moreover, as Jack Conrad pointed out in discussing Ticktin’s paper, all institutions - political parties, trade unions, etc - through which the working class has asserted itself in the past are today rotten to the core. It is not simply a question of the relative weakness of the labour movement now as compared to times past, just as coming to terms with this situation requires more than simply learning from past mistakes.

This is not why we must interrogate the history of the left. Men and women much wiser than we are or can be, given our historical condition, have understood the past in its details better than we could ever hope to learn from documents. So that, admirable and necessary as is the project of historical study (I myself am a historian by profession), the issue remains of understanding not simply how to avoid repeating past mistakes, but to grasp the regression/repetition at the core of our wholly unprecedented condition. Not even the recovery of Marx’s ideas - the Marx who recognised capital’s disintegrative, regressive potential; who recognised, that is, that liberal society was rotting from within and could only be fulfilled in and through socialism - is of immediate assistance. This is because, to the extent that we lack all continuity with the project of human emancipation first begun in the bourgeois revolution, it is not clear that we live in what Marx called “capital”. Neither liberalism nor its inheritance by Marx and Marxism is relevant, though Platypus is dedicated to investigating the possibility that they might again (and finally) be made so.

Labour theory of value

To return then: for Marx, Adam Smith’s key contribution to modern thought lies in his recognition that “labour alone … is the ultimate and real standard by which the value of all commodities can at all times and places be estimated and compared”.[16] Here we begin to glimpse what Marx understood as crucial about Smith. It generally passes unremarked because very few Marxists today actually attempt to think through the labour theory of value. Here is how Marx celebrates Smith’s achievement in 1857, in the first draft of Capital,known as the Grundrisse:

It was an immense step forward for Adam Smith to throw out every limiting specification of wealth-creating activity - not only manufacturing, or commercial or agricultural labour, but one as well as the others, labour in general. With the abstract universality of wealth-creating activity we now have the universality of the object defined as wealth, the product as such or again labour as such, but labour as past, objectified labour.”[17]

Not only has Smith significantly deepened the concept of labour, but the very category ‘value’ is altered thereby. That is, value in Smith is not merely a measure, but it is a form of wealth, indeed a form of human freedom. A profound historian of his own time, Smith grasped something essential about the social transformations through which he was living. He penetrated the project of overcoming feudalism to recognise in it nothing short of European labourers’ self-emancipation from slavery. Smith writes:

In the [medieval] state of Europe, the occupiers of land … were all or almost all slaves; but their slavery was of a milder kind than that known among the ancient Greeks and Romans, or even in our West Indian colonies. They were supposed to belong more directly to the land than to their master. They could, therefore, be sold with it, but not separately. They could marry, provided it was with the consent of their master … If he maimed or murdered any of them, he was liable to some penalty, though generally but to a small one. They were not, however, capable of acquiring property. Whatever they acquired was acquired to their master … This species of slavery still subsists in Russia, Poland, Hungary, Bohemia, Moravia and other parts of Germany. It is only in the western and southern provinces of Europe that it has gradually been abolished altogether.[18]

Thus does Adam Smith give expression to a society simultaneously engaged in the completion of its self-emancipation through wage-labour and poised on the very cusp of industrialisation. A development that will ultimately deepen, destabilise and threaten to undermine that very self-emancipation. As history stands poised to develop forces of production adequate to abstract labour, Smith grasps labour’s abstract generality as emancipation from caste-bondage. He thus pushes for the generalisation of wage-labour as the universalisation of freedom from custom and tradition. Anything short of the free sociality that individuals living by labour brings Smith can only regard as a reversion to feudalism. Marx could not but agree, though he demands that the project be pushed further.

Smith’s proclamation of labour’s emancipation from slavery was, as Marx commented in Anti-Dühring, “not [merely] the expression of the conditions and requirements of [his] epoch, but the expression of eternal reason; the laws of production and exchange discovered by [political economy] were not laws of a historically determined form of those activities, but eternal laws of nature; they were deduced from the nature of man”.[19] The western European’s self-emancipation from feudal slavery was a declaration of opposition to all hitherto existing forms of class society. It was, in this sense, “eternal”. In the heat of humanity’s struggle for its own emancipation from feudal unfreedom, political economy (again following Anti-Dühring) developed “the laws of the capitalist mode of production and its corresponding forms of exchange in their positive aspects: that is, the aspects in which they further the general aims of society”.[20]

Smith lived at a time when the generalisation of wage-labour was in prospect and he theoretically grasped this prospect as both necessary and desirable. He thus expressed conceptually what for the first time has achieved “practical truth as an abstraction” in society.

As Marx recognised:

Indifference towards any specific kind of labour presupposes a very developed totality of real kinds of labour, of which no single one is any longer predominant … [Smith’s] abstraction of labour as such is not merely the mental product of a concrete totality of labours. Indifference towards specific labours corresponds to a form of society in which individuals can with ease transfer from one labour to another, and where the specific kind is a matter of chance for them, hence of indifference. Not only the category, labour, but labour in reality has here become the means of creating wealth in general, and has ceased to be organically linked with particular individuals in any specific form.[21]

Capitalism is the first emergent totality or mode of production; in a philosophical sense, the first society. This is not simply because it breaks with the long history of human collectivity as an amalgam of castes, ranks or estates, but because at capitalism’s core is freedom, albeit a freedom that, in the very attainment of its concept, comes into contradiction with itself. This is what distinguishes capitalism not only from all hitherto existing (class) societies, but from all human pre-history.

Adam Smith advanced beyond his insight into the philosophical significance of capitalism as a society in which every person is, in some sense, a merchant, drawing a distinction, as he did, between productive and unproductive labour. As Marx remarks in the historical component of Capital in volume 4, “Productive labour [in Wealth of nations] is defined from the standpoint of capitalist production, and Adam Smith here got to the very heart of the matter … [He] defines productive labour as labour which is directly exchanged with capital.”[22] Smith recognises that labour is not just any productive activity, but that “productive labour” (re)constitutes a social relation. Labour here is no mere moral or religious conception of useful or meritorious activity, the opposite of idleness. Nor does the value it produces arise from circulation - as with, for instance, the monetarists’ exports, which can fetch back money to their nation of manufacture. Nor again is productive labour identifiable with one particular type of labour - say, the Physiocrats’ agricultural labour, supposed to be naturally fertile with value. Rather, productive labour takes place in and through labour-power’s ongoing relation to its product, capital. That product exists independently of and consumes the worker’s commodity, labour-power, producing thereby greater value than what inhered in the consumed commodity, the value of the labour-power. Labour is how this society reproduces itself - though, Smith added, not all who work are performing labour. Yet capital on Smith’s conception is not yet ‘capital’, just as labour in Smith, however drudgerous, is not alienated.

Not only the fact of society rooted in proletarian labour, but also, no less certainly, its apprehension, represents for Marx a revolutionary and epochal achievement. In consequence of the 17th century British revolution, feudalism was largely overcome, entailing “the dissolution of all fixed personal (historic) relations of dependence in production”.[23] Already then the question of freedom was posed, and Smith deliberately inherited the 17th century revolution in order to push it forward. Already for Smith, what Marx recognised in his 1843 letter to Arnold Ruge was coming into focus: post-feudal society had become the “philosophical” object and that for this reason philosophy had changed; it had become “worldly”. In 1844, at the beginning of his lifelong engagement with Adam Smith and political economy more generally, Marx knew the old Scotsman to have made a fundamental breakthrough:

The community of men, or the manifestation of the nature of men, their mutual complementing the result of which is species-life, truly human life - this community is conceived by political economy in the form of exchange and trade. Society … is a series of mutual exchanges. It is precisely this process of mutual integration. Society, says Adam Smith, is a commercial society.[24]

If in and through the proletarianising revolution humanity has not emancipated itself, but has instead subjected itself to the domination of capital, Marx and Engels are quick to point out in the Communist manifesto, “Capital … is not a personal, [but] is a social power.” The bourgeoisie are not the fundamental obstacle to workers’ emancipation.

For interpreters for whom Marx’s text represents some form of sociological or economic analysis, his repeated, indeed ongoing, excurses on political economy must seem puzzling - a needless (and seemingly interminable) interruption of the exposition. That is, if Marx were simply elaborating his own theory and categories, lengthy inserts detailing minutiae respecting the history of political economy would be stylistically infelicitous, if not gratuitous. Yet, obvious as this is, most Marxists read such passages, notes and remarks in Marx’s Capital as just that - an interruption - recognising in them at most bravura displays of Marx’s polemical prowess, as though Marx had need of refuting political economists who wrote a half-century or even a century before. Interpreters such as David Harvey, as we have seen, presumably think it comprehensible that he should write three full volumes on past theories of surplus value simply in order to attack them as mistaken, if not deliberately deceitful. Yet they are curious as to why Marx neglected to say more about supply and demand.[25] Presumably, such interpreters imagine that Marx’s preoccupation with the history of political economic thought was somehow dictated by proletarian intellectualism’s struggle against capitalist mystification. But this not only occludes Marx’s oft-manifested generosity towards intellectuals of the stature of Smith. It loses sight of the critical aspect of Marx’s Capital project, the central corpus for the elaboration of the Marxian dialectic. I refer to Marx’s method, by which he intends to critically appropriate the project of universal human emancipation that he finds at the heart of bourgeois political economy.

Through the appropriation of the categorical apparatus of the labour theory of value, Marx works out in greatest detail what he terms his theory of fetishism. One way of putting this polemically as regards certain 20th century commentators is that, in completing and rendering scientific the labour theory of value, Marx did not iron out its contradictions, but rather allowed those contradictions to reveal themselves dialectically as they are: ie, as necessary forms of appearance - forms of appearance whose actuality must be practically overcome if capitalism is ever to be confined to the dustbin of prehistory. In Capital Marx undertakes to construct no theory of his own, to generate no categorical apparatus of his own. What he terms “the political economy of the working class” is simply bourgeois political economy fully realised. This Marx indicates by his very point of departure, the commodity form, which he adopts from the first chapter of Ricardo’s half-century old treatise on political economy, a work that Marx understood as simultaneously a lengthy attempt to appropriate Smith and as the political economic basis (whether acknowledged or not) of the socialism that prevailed in his own day.


Karl Korsch argued eight decades ago that Marx’s critique of political economy presupposes that, just as it is constituted politically through liberal-democratic revolution and socially through social revolution, bourgeois society is constituted subjectively through the deliberate striving for comprehension of social (un)freedom (through political economy and, in a different sense, in modern philosophy). What Marx would view as the subjectivity of the commodity form, the highest expression of which is political economy, was won through revolutionary struggle, at the heart of which lay the modern philosophy that is political economy. To grasp the nature of the freedom that has been thus conquered for humanity (and the unfreedom that this freedom creates) this singularly modern philosophy of political economy (and with it this modern revolution) must be subjected to critique. Often enough, subjectivity’s emancipatory activity is acknowledged in the heroic liberal narrative of the rise of modernity through scientific revolution, the weakening and privatisation of religion, etc, but capitalism as freedom could not have come about strictly through reflection upon nature and the divine. It had rather to contemplate freedom in society and it had to do so scientifically.

That Smith’s thought is inadequate to modern capitalism is, so to speak, our problem, not his. And, at this point, the same might be true of Smith’s profoundest reader, Karl Marx.


1. D Harvey A companion to Marx’s Capital New York 2010, p52.

2. D Harvey Spaces of hope Berkeley 2000, p175.

3. G Arrighi Adam Smith in Beijing London 2007, pp60, 55, 64.

4. Ibid pp69, 328, 49.

5. Ibid p65 inter alia.

6. Ibid p328.

7. M Macnair, ‘No need for party?Weekly Worker May 12 2011.

8. M Macnair, ‘Theoretical dead endWeekly Worker May 19 2011.

9. G Lukács History and class-consciousness: studies in Marxist dialectics translated Cambridge MA 1971, p225.

10. K Marx The poverty of philosophy New York 1992, pp80-81.

11. K Marx, ‘The civil war in France’, in K Marx and VI Lenin The civil war in France: the Paris Commune New York 1993, p56.

12. K Marx Capital Vol 1 New York 1976, p221, note 31.

13. Ibid pp95-96.

14. M Macnair, ‘The study of history and the left’s declineWeekly Worker June 2 2011.

15. H Ticktin, ‘The theory of capitalist disintegrationWeekly Worker September 8 2011.

16. A Smith An inquiry into the nature and causes of the wealth of nations Vol 1, Indianapolis 1981, p51.

17. K Marx Grundrisse New York 1973, p104.

18. A Smith Wealth of nations Vol 1, pp386-87.

19. F Engels, ‘Anti-Dühring’, K Marx and F Engels CW Vol 25, p139. Note that this chapter on the history of political economy is generally recognised to have been drafted by Marx.

20. Ibid p138.

21. K Marx, Grundrisse New York 1973, pp104-05.

22. K Marx, ‘Theories of surplus value’ Capital Vol 4, Moscow 1969, p157.

23. K Marx Grundrisse New York 1973, p156.

24. K Marx, ‘Comments on James Mill Éléments d’économie politique’, MECW Vol 3, p217.

25. See, for instance, Harvey’s 2011 Deutscher Memorial Prize Lecture, ‘History versus theory: a commentary on Marx’s method in Capital’, available at www.youtube.com/watch?v=90yDWg6z0Gk&feature=related.