Re: [OPE-L] marx on invisible hand

From: Jerry Levy (Gerald_A_Levy@MSN.COM)
Date: Sun Dec 03 2006 - 09:39:37 EST

> I came accross a passage in the Grundrisse, that may be seen as a critique of the notion of the 'invisible hand'. As A. O. Hirschman has shown this notion was broadly used by almost all philosophers since the 16th century in Europe. I think that this notion can even be traced back to Aristotle's conception of 'unmoved mover" and followed up to Hegel. Christopher Hill argued that this notion played at one point in history a progressive role and  not only in the interests of ruling classes but also in the interests of subordinated classes.   I have only the Greman version of the Grundrisse. So I tried to translate the passage into English. I hope it is up to your standards! <


Thanks for the reference in the _Grundrisse_ and the situation of an
invisible hand-type belief in intellectual history.  I was thinking of 
something a bit more specific in Marx so maybe it might help if I
explained more.

"The Law" (the law of the tendency for the general rate of profit to decline, 
LTGRPD), as presented in Volume 3 is, in part - as the author makes clear -
a critique of Ricardo.  Consider the famous line from Ch. XV,  "The *real 
barrier* of capitalist production is *capital itself*".   What Marx wants to 
stress is that  "the Law" is a manifestation of an "internal contradiction" 
of  capital.  This contrasts to the Ricardian perspective where the decline
in profitability is a consequence of  rising rents and wages and hence
--  *others*  -- landlords and wage-workers.

The LTGRPD is one of many notable attempts to show the contradictory 
and ironic character of capitalism.  Other examples include:  centralization 
is a consequence of competition (i.e. competition tends to undermine
itself); the general rate of profit falls as a consequence of the primary form
thru which capital seeks to increase surplus value;  there is a periodic 
tendency by which wage-labor is "freed" to join the industrial reserve army,
etc.  These are all deductions rather than literary flourishes but I think he
was very well aware of the potential impact of highlighting these ironies on his 

So now we return to the "invisible hand" doctrine in Smith.  In the Smithian 
doctrine,   the competition among capitalists is the mechanism through which
the wealth of the nation increases.  It is the vehicle through which there is
economic growth and development.  Like Ricardian doctrine,  entrepreneurs
have heroic status: they are the personifications of increased wealth and 
well-being.  Quite a contrast to both the physiocratic conception and Marx's 
Volume I  metaphor in _Capital_ of how capitalists are vampiric!   The historical 
mission of  capitalists in Smithian doctrine is to usher in a new period of 
prosperity and well-being. In Marx's  perspective,  capitalists seek to increase  
their _individual_ rates of profit  and this manifests itself in the tendency for the 
_general_ rate of profit to decline [NB: and it is the historical mission of workers 
to become the  "gravediggers" of capital].   The pursuit of self-interest -- where 
capital simply acts in accord with its inner nature, as capital personified -- leads 
not to an increase in the wealth of the nation, but rather to a contradictory 
process whereby capitalist expansion is marked by periods of declining general 
profitability.    Can this not be  seen as an implicit critique of the invisible hand 

In Volume 3, Ch. 15, the quote I cited earlier was from Section 2: "Conflict 
between expansion of production and expansion of surplus value". Note
how that paragraph continues:

"It is that capital and its self-expansion appear as the starting 
and the closing point, the motive and the purpose of production; that
production is only production for *capital* and not vice versa, the
means of production are not mere means of constant expansion of the
living process of the *society* of producers.  The limits within which
the preservation and self-expansion of the value of capital resting on
the expropriation and pauperization of the great mass of producers 
can alone move -- these  limits come continually into conflict with the
methods of production employed by capital for its purposes, which 
drive towards unlimited expansion of production, towards production 
as an end in itself, towards unconditional development of the social
productivity of labour.  This means -- unconditional development of 
the productive forces of society -- comes continually into conflict 
with the limited purpose, the self-expansion of the existing capital.
The capitalist mode of production is, for this reason, a historical 
means of developing the material forces of production and
creating an appropriate world-market and is, at the same time, a 
continual conflict between this its historical task and its own
corresponding relations of social production." (International ed., 
p. 250).    Can't this be seen as a critique of Smithian doctrine?
Does he have to say "Smith" for us to make that connection?
I hope not. The critical reader should be able to read not only
what is explicitly stated but also what is suggested and implied.
Sometimes -- as Mike L has noted -- it is the 'omissions' that speak 
louder than the inclusions.

In solidarity, Jerry

This archive was generated by hypermail 2.1.5 : Sun Dec 31 2006 - 00:00:04 EST