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Rudolph Hiferding Biography

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“Every commodity has value in so far as it incorporates socially necessary labour time, and is the outcome of a social process of production. It enters the process of exchange as a bearer of value. This is the sense of Marx's remark that, `the act of exchange gives to the commodity converted into money, not its value, but its specific value form'. /Capital, /vol. I, p. 103. [MECW 35, p101]”

MoneyValueCommoditySocially Necessary Labour TimeValue Form
Book:Finance Capital: A study in the latest phase of capitalist development
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“Exchange converts a good into a commodity, an object no longer intended for the satisfaction of an individual need or brought into existence and vanishing with that need. On the contrary, it is intended for society, and its fate, now dependent on the laws which govern the social circulation of goods, can be far more capricious than that of Odysseus; for what is one-eyed Polyphemus compared with the argus-eyed customs officials of Newport, or the fair Circe compared with the German meat inspectors? It has become a commodity because its producers participate in a specific social relationship in which they have to confront each other as independent producers. Originally a natural, quite unproblematic thing, a good comes to express a social relation, acquires a social aspect. It is a product of labour, no longer merely a natural quality but a social phenomenon. We must therefore discover the law which governs this society as a producing and working community. Individual labour now appears in a new aspect, as part of the total labour force over which society disposes, and only from this point of view does it appear as value-creating labour.”

SocietySatisfactionGoodLabourNeedCommodityExchangeIndependent ProducerSocial Circulation Of GoodsValue Creating Labour
Book:Finance Capital: A study in the latest phase of capitalist development
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“Exchange is thus accessible to analysis because it not only satisfies individual needs, but is also a social necessity which makes individual need its instrument while at the same time limiting its satisfaction. For a need can be satisfied only to the extent that social necessity will permit. It is of course a presupposition, for human society is inconceivable without the satisfaction of individual needs. This does not mean, however, that exchange is simply a function of individual need, as indeed it would be in a collectivist economy, but that individual needs are satisfied only to the extent that exchange allows them to participate in the product of society. It is this participation which determines exchange. The latter appears to be simply a quantitative ratio between two things,[4] which is determined when this quantity is determined. The quantity which is turned over in exchange, however, counts only as a part of social production, which itself is quantitatively determined by the labour time that society assigns to it. Society is here conceived as an entity which employs its collective labour power to produce the total output, while the individual and his labour power count only as organs of that society. In that role, the individual shares in the product to the extent that his own labour power participates, on average, in the total labour power (assuming the intensity and productivity of labour to be fixed). If he works too slowly or if his work produces something useless (an otherwise useful article would be considered useless if it constituted an excess of goods in circulation), his labour power is scaled down to average labour time, i.e. socially necessary labour time. The aggregate labour time for the total product, once given, must therefore find expression in exchange. In its simplest form, this happens when the quantitative ratios between goods exchanged correspond to the quantitative ratios of the socially necessary labour time expended in their production. Commodities would in that case exchange at their values.”

NeedCommodityExchangeSocially Necessary Labour TimeCollectivist EconomyIndividual Need
Book:Finance Capital: A study in the latest phase of capitalist development
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“If the exchange act may thus be regarded as a creation of society, it is no less true to say that both society and the individual become aware of this only after exchanges have been completed. The work of an individual is, first and foremost, his own individual endeavour, motivated by his own self-interest. It is his personal labour, not the labour of society. But whether or not it conforms with the requirements of the total circulation of goods, of which his labour is necessarily a component part, can be determined only when all the component elements have been compared and the aggregate requirements of that circulation have been completely satisfied.”

IndividualSocietySelf InterestExchangeAggregate
Book:Finance Capital: A study in the latest phase of capitalist development
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“In principle the human productive community may be constituted in either of two ways. First, it may be consciously regulated. Whether its scale is that of a self-sufficient patriarchal family, a communistic tribe, or a socialist society, it creates the organs which, acting as the agents of social consciousness, fix the extent and methods of production and distribute the social product thus obtained among the members. Given the material and man-made conditions of production, all decisions as to method, place, quantity and available tools involved in the production of new goods are made by the /pater familias, /or by the local regional or national commissars of the socialist society. The personal experience of the former gives him a knowledge of the needs and productive resources of his family; the latter can acquire a like knowledge of the requirements of their society by means of comprehensively organized statistics of production and consumption. They can thus shape, with conscious foresight, the whole economic life of the communities of which they are the appointed representatives and leaders in accordance with the needs of the members. The individual members of such a community consciously regulate their productive activity as members of a productive community. Their labour process and the distribution of their products are subject to central control. Their relations of production are directly manifest as social relations, and the economic relations between individuals can be seen as being determined by the social order, by social arrangements rather than by private inclination. Relations of production are accepted as those which are established and desired by the whole community. Matters are different in a society which lacks this conscious organization. Such a society is dissolved into a large number of mutually independent individuals for whom production is a private matter rather than a social concern. In other words, its members are individual proprietors who are compelled by the development of the division of labour to do business with one another. The act by which this is accomplished is the exchange of commodities. It is only this act which establishes connections in a society otherwise dismembered into disparate units by private property and the division of labour. Exchange is the subject matter of theoretical economics only because, and to the extent that, it performs this mediating function in the social structure. It is of course true that exchange may also take place in a socialist society, but that would be a type of exchange occurring only after the product had already been distributed according to a socially desired norm. It would therefore be merely an individual adaptation of the distributive norm of society, a personal transaction influenced by subjective moods and considerations. It would not be an object for economic analysis. It would have no more importance for theoretical analysis than does the exchange of toys between two children in the nursery, an exchange which is fundamentally different in character from the purchases made by their fathers at the toy shop. For the latter is only one element in the sum of exchanges by which society realizes itself as the productive community which it really is. A productive community must express itself in such acts of exchange because only in this way can the unity of society, dissolved by private property and the division of labour, be restored.”

Private PropertyDivision Of LabourSocialist SocietyExchange Of Commodities
Book:Finance Capital: A study in the latest phase of capitalist development
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“The socializing function of finance capital facilitates enormously the task of overcoming capitalism. Once finance capital has brought the most importance branches of production under its control, it is enough for society, through its conscious executive organ - the state conquered by the working class - to seize finance capital in order to gain immediate control of these branches of production. Since all other branches of production depend upon these, control of large-scale industry already provides the most effective form of social control even without any further socialization. A society which has control over coal mining, the iron and steel industry, the machine tool, electricity, and chemical industries, and runs the transport system, is able, by virtue of its control of these most important spheres of production, to determine the distribution of raw materials to other industries and the transport of their products. Even today, taking possession of six large Berlin banks would mean taking possession of the most important spheres of large-scale industry, and would greatly facilitate the initial phases of socialist policy during the transition period, when capitalist accounting might still prove useful. There is no need at all to extend the process of expropriation to the great bulk of peasant farms and small businesses, because as a result of the seizure of large-scale industry, upon which they have long been dependent, they would be indirectly socialized just as industry is directly socialized. It is therefore possible to allow the process of expropriation to mature slowly, precisely in those spheres of decentralized production where it would be a long drawn out and politically dangerous process. In other words, since finance capital has already achieved expropriation to the extent required by socialism, it is possible to dispense with a sudden act of expropriation by the state, and to substitute a gradual process of socialization through the economic benefits which society will confer. [pp. 367-368]”

SocializationFinance Capital
Book:Finance Capital: A study in the latest phase of capitalist development
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“Commodities are the embodiment of socially necessary labour time. But labour time as such is not expressed directly, as it is in the society envisaged by Rodbertus, in which the central authority establishes the unit of labour time which it will accept as valid for each commodity. Labour time is expressed only in the exchange commensurability of two articles. Thus the value of an article, i.e., its average time of production, is not expressed directly as eight, ten or twelve hours, but as a specific quantity of another article. In other words, a natural object with all its material attributes expresses the equivalent value of another thing. For example, in the equation, one coat equals twenty metres of linen, the twenty metres of linen are the equivalent of one coat simply because both are embodiments of socially necessary labour time. It is in this sense that all commodities are commensurable.”

CommodityExchangeSocially Necessary Labour TimeCommensurability
Book:Finance Capital: A study in the latest phase of capitalist development
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“One thing is clear; namely, that since the periodic recurrence of crises is a product of capitalist society, the causes must lie in the nature of capital. It must be a matter of a disturbance arising from the specific character of society. The narrow basis provided by the consumption relations of capitalist production constitutes, from that point of view, the general condition of crises, since the impossibility of enlarging this basis is the precondition for the stagnation of the market. If consumption could be readily expanded, overproduction would not be possible. But under capitalist conditions expansion of consumption means a reduction in the rate of profit. For an increase in consumption by the broad masses of the population depends upon a rise in wages, which would reduce the rate of surplus value and hence the rate of profit. Consequently, if the demand for labour, as a result of the accumulation of capital, increases so greatly that the rate of profit is reduced, to a point (at the extreme) where an increased quantity of capital would not produce a larger profit than did the original capital, then accumulation must come to an end, since its essential purpose - the increase of profit - would not be achieved. This is the point at which one necessary precondition of accumulation, the expansion of consumption, enters into contradiction with another precondition, namely the realization of profit. The conditions of realization cannot be reconciled with the expansion of consumption, and since the former are decisive, the contradiction develops into a crisis. That is why the narrow basis of consumption is only a general condition of crises, which cannot be explained simply by 'underconsumption'. Least of all can the periodic character of crises be explained in this way, since no periodic phenomenon can be explained by constant conditions. [pp. 241-242]”

OverproductionCapitalist CrisisUnderconsumption
Book:Finance Capital: A study in the latest phase of capitalist development
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“Finance capital, in its maturity, is the highest stage of the concentration of economic and political power in the hands of the capitalist oligarchy. It is the climax of the dictatorship of the magnates of capital. At the same time it makes the dictatorship of the capitalist lords of one country increasingly incompatible with the capitalist interests of other countries, and the internal domination of capital increasingly irreconcilable with the interests of the mass of the people, exploited by finance capital but also summoned into battle against it. In the violent clash of these hostile interests the dictatorship of the magnates of capital will finally be transformed into the dictatorship of the proletariat. [p. 370]”

Dictatorship Of The ProletariatFinance Capital
Book:Finance Capital: A study in the latest phase of capitalist development
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“In fact, this can happen only when the conditions for commodity production and exchange are equal for all members of society; that is to say, when they are all independent owners of their means of production who use these means to fabricate the product and exchange it on the market. This is the most elementary relationship, and constitutes the starting point for a theoretical analysis. Only on this basis can later modifications be understood; but they must always satisfy the condition that, whatever the nature of an individual exchange may be, the sum of exchange acts must clear the market of the total product. Any modification can be induced only by a change in the position of the members of society within production. In fact, the modification must take place in this manner because production and the producers can only be integrated as a social unit through the operation of the exchange process. Thus the expropriation of one section of society and the monopolization of the means of production by another modify the exchange process, because only there can the fact of social inequality appear. However, since the exchange relationship is one of equality, social inequality must assume the form of a parity of prices of production rather than an equality of value. In other words, the inequality in the expenditure of labour (which is a matter of indifference to capitalists since it is the labour expenditure of others) is concealed behind an equalization of the rate of profit. This kind of equality simply underlines the fact that capital is the decisive factor in a capitalist society. The individual act of exchange no longer has to satisfy the requirement that units of labour in exchange shall be equal, and instead the principle now prevails that equal profits shall accrue to equal capitals. The equalization of labour is replaced by the equalization of profit, and products are sold not at their values, but at their prices of production.”

EqualityMarketExchangeSocial InequalityExpropriationCommodity ProductionEqualization Of LabourPrice Of Production
Book:Finance Capital: A study in the latest phase of capitalist development
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