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Rethinking Capital
Richard Dien Winfield
Rethinking Capital
Richard Dien Winﬁeld
Rethinking Capital
Richard Dien Winfield
University of Georgia
Department of Philosophy
Athens, Georgia, USA
ISBN 978-3-319-39840-2 ISBN 978-3-319-39841-9 (eBook)

DOI 10.1007/978-3-319-39841-9
Library of Congress Control Number: 2016957385
© The Editor(s) (if applicable) and The Author(s) 2016

This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether
the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of
illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and trans-
mission or information storage and retrieval, electronic adaptation, computer software, or by similar or
dissimilar methodology now known or hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication
does not imply, even in the absence of a specific statement, that such names are exempt from the relevant
protective laws and regulations and therefore free for general use.
The publisher, the authors and the editors are safe to assume that the advice and information in this book
are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or
the editors give a warranty, express or implied, with respect to the material contained herein or for any
errors or omissions that may have been made.
Cover image © Glasshouse Images / Alamy Stock Photo
Printed on acid-free paper
This Palgrave Macmillan imprint is published by Springer Nature

The registered company is Springer International Publishing AG
The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland
For David P. Levine, unforgettable teacher and economics theorist
Contents
1 Introduction 1
Part I Capital in General 11
2 The Elementary Interaction of Commodity Exchange 13

With What Must Economic Science Begin? 13
The Starting Point of the A Priori Theory of Capital 21
The Commodity 24
Simple Commodity Exchange 30
The Expanded Form of Exchange Value 36
The General Form of Exchange Value 38
3 From Money to Capital 43

The Commodity Money 43
Commodity–Money–Commodity Exchange 47
Money as Means of Circulation 50
Currency 53
Money as Means of Payment 55
Money–Commodity–Money Exchange 57
M-C-M’ 61
The Concluding Challenge 66
vii
viii Contents
4 The Immediate Production Process of Capital in General 71

The Emergence of Capital in General 71
Capital and Commodity Production 75
Labor Power 80
The Exchange between Worker and Capitalist 85
The Immediate Labor Process under Capital 92
Active Labor—Passive Capital 94
The Object and Instrument of Labor and Laboring Itself 95
The Product 98
5 Value Production 105

Capital as a Simple Sum of Invariable Exchange Value 105
The Active Value Unity of Capital 107
Labor’s Value Positing 109
Constant Capital, Variable Capital, and Surplus Value 114
Relations of Surplus Value 116
The Working Day and Absolute Surplus Value 118
The False Notion of Relative Surplus Value 122
6 Manufacturing and Mechanization 129

Simple Cooperation 130
The Division of Labor within Capital’s Commodity
Production 133
Mechanized Production 140
The False Mutual Resolution of Absolute and Relative
Surplus Value 147
Marx’s False Notion of the Wage 148
7 The Accumulation of Capital in General 155

The Producer-Consumer Opposition 156
Capital’s Realized Monetary Form: Accumulated Capital 159
The False Notion of Simple Reproduction 161
The Transformation of Produced Value and Surplus
Value into Capital 162
The Labor Power Fund and the Worker-Capitalist Exchange 164
Contents ix
The Object and Instrument of Labor and the Completed

Transformation 167
The Outcome of Capital in General’s Accumulation 171
Primitive Accumulation 173
The Conclusion of Capital in General 178
Economic Justice and Capital in General 179
Part II The Circulation of Capital 185
8 Capital Circulation in General 187

The Emergent Domain of Circulating Capital 187
The Self-Ordering Circuit of Capital 193
The Circuit of Money Capital 196
The Circuit of Production Capital 199
The Circuit of Commodity Capital 202
The Total Circuit of Capital 205
Marx’s Further Additions to the Circuit of Capital 207
Production Time 208
Circulation Time and Circulation Costs 210
From the Total Circuit to the Turnover of Capital 216
9 The Turnover Process of Capital 223

Turnover Time: The Immediate Unity of Turnover 224
The Differentiation of Fixed and Circulating Capital 227
The Process of Circulating and Fixed Capital 232
Circulating Capital and Turnover 233
Fixed Capital and Turnover 234
The Particularization of Turnover 242
10 Marx’s Misconception of the Reproduction of

Social Capital 257
The Confusions in Marx’s Concept of Social Capital 257
The Pitfalls of Rosa Luxemburg’s Appropriation of Marx’s
Reproduction Schemas of Social Capital 265
x Contents
11 From Capital Circulation to the Competition of

Individual Capitals 275
The Insufficiencies of Marx’s Introduction of
Individual Capitals 275
From Turnover to the Emergence of Individual
Capitals 281
Part III The System of Interacting Capitals 287
12 The Elementary Dynamic of Competition 289

The Individuality of Capital 289
With What Must the Conception and Reality of
Competition Begin? 293
The Stages in the Conception and Reality of the System
of Individual Capitals 295
The Immediate Confrontation of Capitals and the Rise
of Competition 297
Marx’s Fallacious Conversion of Surplus-Value into Profit 305
13 The Adaptation of Production and Marketing to

Competition 319
Competitive Adaptation in the Production of
Established Goods and Services 321
Competitive Adaptation in the Marketing of
Established Goods and Services 324
Competitive Adaptation in the Production of New Goods
and Services 326
Competitive Adaptation in the Marketing of New Goods
and Services 329
Competition and Rates of Profit 331
The Equalization of Rates of Profit in Competition and
the Average Rate of Profit 334
Contents xi
Competition and the Concentration and Centralization

of Individual Capitals 336
What is wrong with Marx’s Law of the Tendency of the Rate
of Profit to Fall 337
Competition and Marx’s Absolute Universal Law of Capital
Accumulation 340
Competition and the Form of Capital Ownership 343
How Competition Generates Business Cycles and Crises 348
14 Competition and the Types of Individual Capitals 367

The Differentiation of Industrial, Commercial, and
Finance Capital 367
Marx’s Misconception of the Interrelation of the
Types of Capital 370
Finance Capital and Competition 372
Marx’s Misconception of Finance Capital 377
Rental Capital 380
The Circulation of Finance Capital and Business Cycles
and Crises 387
15 Competition and the Division of Classes 407

Marx’s Trinity Formula and Class Division 410
Rethinking the Class Division of Civil Society 412
The Class Division and Economic Opportunity 414
16 Capital’s Challenge to Right 423

The System of Right 423
The System of Capitals as an Institution of Right 429
Capital and the Enabling Natural Conditions of Right 430
Capital and Property Right 433
Capital and Morality 435
Capital and Household Right 435
xii Contents
Capital and Economic Right 438

Capital and Political Right 443
The Abiding Normative Challenge of Capital 444
Works Cited 449
Index 453
1
Introduction
Four decades ago I set out to conceive the social reality of the economy,
so as to shed light on the fate of freedom in society and state. My task
was to critique and build upon the pioneering, but inadequate efforts of
Hegel and Marx to uncover the social dynamic of market relations. Both
had recognized that the economy did not consist in a natural metabolism
between human beings and their biosphere, in a playing field of psycho-
logically determined wants, or in a sphere of technique, where an agent
acts unilaterally upon things. Instead, each saw that the economy was a
historically emergent independent social institution. It formed the basic
association of a civil society, intermediate between household and state,
in which individuals interacted in terms of conventional needs that could
only be satisfied by providing others with what they had independently
chosen to obtain from others in turn.
Hegel had established that normative validity could only consist in self-
determination. Any attempt to conceive what was justified as determined
by something other than itself could not be sustained. So long as what
was justified was held to owe its justification to some other privileged
factor, that foundation of justification could claim validity on its own
terms only by being the source of its own justification. The foundation of
© The Author(s) 2016 1

R. D. Winfield, Rethinking Capital,
DOI 10.1007/978-3-319-39841-9_1
2 Rethinking Capital
validity is then compelled to ground itself, eliminating its own defining

difference from what it justifies. The distinction between what has and
what confers validity ends up being undermined by the very foundation
of justification once that privileged factor is made to be consistent with
itself. Validity turns out to reside in what is self-determined, which means
that truth and right consist in the autonomy of reason and conduct.1
Hegel further understood that self-determined conduct could not be
wielded by an agent in isolation from others. Alone, one can only exercise
the given faculty of choice, whose form of willing is not the product, but
the enabling condition of all one’s voluntary actions. Since that faculty
is operative in each and every choice, it is formal in character, leaving
the content of the options among which it decides something externally
given. In these respects, the single choosing will exercises a volition that
does not determine the form of its own willing, nor what choices it can
make. To be self-determined, Hegel recognized, individuals must will
in relation to one another, since only in conventions of interaction can
individuals have an agency that is determined in and through their own
conduct. This is the case in every exercise of rights, insofar as individuals
therein wield an agency whose universal prerogative can be engaged in
only by participating in the reciprocal interaction where individuals will
so as to facilitate the same sort of willing by their counterparts. So, Hegel
saw, individuals determine themselves as owners by embodying their
wills in different external factors that they mutually recognize to be the
respective exclusive domains of their right as owners. Similarly, individu-
als determine themselves as self-ruling citizens by jointly participating in
institutions of self-government that consist in nothing but the political
self-determinations of their members. The economy, Hegel realized, was
another institution of right, in which market agents exercise the univer-
sal entitlement to satisfy self-selected particular interests in reciprocity
with others. Participants in the economy thereby engage in the basic free-
dom of civil society, whose distinctively social self-determination revolves
around its members pursuing self-determined particular ends that can
only be achieved by enabling others to do the same.
Although Hegel had attempted to conceive how the economy could
consist in an institution of social freedom, his account was undevel-
oped at best. In particular, Hegel failed to determine the role of capital
1 Introduction 3
in the market and the implications of the relation of capital and labor.
Moreover, he allowed pre-modern feudal estate relations to intrude into
his economic conception. Instead of delineating class divisions based
upon forms of earning specific to market freedom, Hegel inserted the
bonds of a peasantry and landed gentry, whose groupings were based
on birthright that simultaneously defined its members’ kinship, occupa-
tion, and relation to power. When Hegel proceeded to consider the social
interest groups that arise from market activity, he conceived them as cor-
porations, advancing the privileges of feudal guilds rather than economic
interests specific to civil society. These oppressive conventions spilled over
into Hegel’s account of the family and the state. Instead of developing
the family as a codetermined joint private domain, Hegel subjected the
household to traditional hierarchies based on natural difference, limit-
ing marriage to a heterosexual union where the husband was the mas-
ter of the home, representing it in society and state. Similarly, instead
of consistently determining free political association as an institution of
self-government, Hegel made the head of state a hereditary monarch and
turned the legislature into an estate assembly, retaining feudal privilege
and subverting the demarcation between civil society and state.
Marx, by contrast, attempted to conceive the economy as the basis
of civil society by focusing upon the dynamic of capital accumulation
and the capital-labor relation, excluding all remnants of feudal, pre-
modern formations. In so doing, Marx aimed to carry through a cri-
tique of political economy that would eliminate the imposition of natural
relations upon market activity such as Smith and Ricardo committed.
Instead, Marx aimed to determine economic relations in strictly social
terms. Although Marx sought to free his economic conception of Smith’s
appeals to natural proclivities to truck and barter2 and Ricardo’s appeal to
the natural fertility of the soil as a basis of wealth accumulation,3 Marx’s
conception of capital remained hobbled by three abiding confusions.
First, Marx’s critique of political economy remained incomplete owing
above all to his retention of a labor theory of value. Although Marx seeks
to conceive how economic relations are determined by the interactions of
commodity owners and, more specifically, of individual capitals with one
another and their other consumers and employees, his labor theory of
value orders the market according to the technical relations that operate
within the immediate labor process, irrespective of the realization of

profit through the sale of what is produced and the dynamics of com-
petition. This reduction of social to technical determination extends to
Marx’s treatment of the circulation process of capital, where he privileges
the stage of production capital over the stages of money and commodity
capital. It finally undermines Marx’s conception of the system of indi-
vidual capitals. Marx’s so-called price-value transformation and appeal to
an average rate of profit end up rendering the determination of price and
profit through competition an epiphenomenon, adding nothing essential
to the underlying sway of the labor theory of value.
Second, Marx fails to conceive capital in its full universality. Due in
no small part to his retention of the labor theory of value, Marx tends to
identify capital with private enterprise employing wage labors, ignoring
the other forms that capital can take. This limits Marx’s ability to address
the full challenge to economic justice that capital presents.
Third, Marx never coherently tackles the universality of the economic
relations he conceives. On the one hand, he recognizes that the disen-
gaged economy in which capital pursues its accumulation has a universal-
ity that makes it susceptible to conceptualization. Further, his argument
unfolds largely as an immanent conceptual development, first address-
ing what is universal to capital, then considering the particular phases of
capital in its life cycle, and finally addressing the individuality of capital
in the process of competition. Instead of modeling empirical observa-
tions, Marx follows out how the determinations of economic interaction
develop themselves in constituting the system of capitals, starting from
the most elementary, minimal interaction that all subsequent relations
presuppose and incorporate. On the other hand, Marx regards capital as
a particular historical economic formation, at times suggesting that his
development of the concept of capital is an empirical, descriptive inves-
tigation of a purely contingent social reality. This historical particulariza-
tion of the capital economy is connected to Marx’s equivocal evaluation
of its normativity. Although he acknowledges that commodity relations
operate in accord with juridical right, he suggests that the workings of
capital impose an unequal domination subverting economic freedom.
What Marx never fully considers is whether this impairment of economic
right is an irremediable failing that deprives capital of normative validity,
1 Introduction 5
or whether it represents market dynamics that can be remedied by the

interventions of social interest groups (such as trade unions and con-
sumer organizations) and by public regulation securing the economic, as
well as household and political opportunity of all. If the latter remedies
are possible, then capital could retain universality and normativity as the
driving principle of an economy properly subject to civil and political
oversight.
In face of the respective limitations of Hegel’s and Marx’s attempts to
conceive the social reality of economic relations, I sought nearly forty
years ago to expose their failings and then rework and supplement their
arguments so as to fulfill what was legitimate in their parallel investi-
gations. I made my way through a rethinking of what Marx addressed
in the first volume of Capital and the corresponding sections of the
Grundrisse, presenting the outcome of my critical reconstruction of the
concept of capital in general in a work entitled, The Social Determination
of Production: The Critique of Hegel’s System of Needs and Marx’ Concept of
Capital.4 The following year I completed a sequel, redoing the concept of
the circulation of capital, which Marx addresses in the second volume
of Capital and associated passages in the Grundrisse. In both installments
my focus was upon developing the social determination of economic
relations, removing the residues of the natural and technical reductions
of political economy that still plagued Marx’s mature writings.
At this juncture, however, I began working on a broader inquiry that
called into question any immediate continuation of my social determi-
nation of the economy. My new task was to legitimate the entire proj-
ect of overcoming the appeal to foundations as sources of justification,
to show how thought could develop autonomously, and to outline the
institutions of self-determination in their totality. This would involve
validating the radical agendas of Hegel’s Science of Logic and Philosophy
of Right, and sketching out how the self-determined family, civil society,
and state should be conceived, liberated from the pre-modern trappings
with which Hegel had marred his accounts of those three spheres of ethi-
cal community. This preliminary work culminated in Reason and Justice.5
At the same time, I published The Just Economy,6 a work that attempted
to detail what economy civil society should have and what private and
public interventions should be made upon that economy to uphold the
economic and non-economic rights of all individuals. This work was

motivated by a crucial insight that I had ignored in tackling the social
determination of economic relations. What I now recognized was the
basic truth that any a priori theory of conduct and institutions was pre-
scriptive rather than descriptive in character. Conventions are inherently
contingent in so far as they consist in the coordinated voluntary activi-
ties of individuals. For this reason, what conventions are or have been
can only be known by empirical observation. Philosophy’s pure thinking
therefore cannot provide any descriptive account of conventional prac-
tices. Insofar, however, as philosophy can develop autonomous reason, it
can conceive how normativity consists in self-determination and proceed
to think what conventions ought to be. This prescriptive, normative con-
ception may have descriptive power when history has happened to gener-
ate institutions that are in accord with right. Philosophy, however, cannot
provide any descriptive account of what must happen in history. Instead,
philosophy can offer a prescriptive, normative history of what would
have to happen in history in order for the institutions of right to come
into being or fall apart. That normative history presupposes two concep-
tions that philosophy can provide: (1) an account of the institutions of
right, which constitute the telos of the genesis of normative conventions,
and (2) an account of the natural and psychological enabling conditions
of free agency, which provide the starting point for the normative his-
tory of right. All the great philosophers have acknowledged the limita-
tion of philosophy to prescriptive, rather than descriptive conceptions of
conventions. Instead of conceiving the family, society, and the state in
general, philosophers worthy of the name have directed their efforts at
conceiving the just family, the just society, and the just state, and on that
basis, they have considered how those normative conventions can arise,
as well as disintegrate.7
What I recognized was that the a priori theory of economic relations
could be none other than the theory of the just economy, which is itself
a part of the philosophy of right. Accordingly, any immanent concep-
tual development of the economy involves more than simply providing
a social, rather than natural, psychological, or technical determination of
economic interaction. Instead, what it entails is a normative investigation
that conceives capital in its complete universality, considering how the
1 Introduction 7
market system involving capital impacts upon justice, and determining

what private and public initiatives should be taken to enable the conven-
tions of economic freedom to operate in accord with all the relations of
right.
The Just Economy tackled these problems in much greater detail than
what was provided in the outline treatment of Reason and Justice. In
following years, I continued to rework the philosophy of right so as to
overcome the shortcomings of Hegel’s account. In Law in Civil Society,8
I conceived how civil legality should be constituted, addressing that part
of civil society which The Just Economy did not tackle. In The Just Family9
I conceived how the family should be reconstructed as an institution of
household self-determination, as well as how family right could be made
compatible with social and political self-determination. Finally, in The
Just State,10 I completed my rethinking of the three spheres of ethical
community, detailing how self-government is determined in accord with
the other conventions of self-determination.
Although these efforts brought to further consummation the briefer
accounts outlined in Reason and Justice, they themselves presupposed the
philosophical labors on which any ethics rests. The determination of the
conventions of self-determination takes for granted the account of how
mind comes to develop the capabilities for responsible conduct. This
contribution of philosophical psychology itself presupposes the determi-
nation of how nature can come to include animal life, from which mind
arises. The philosophy of nature, however, assumes the valid development
of the categories of thought. That logical investigation itself presupposes
that reason can overcome dependence upon presuppositions, such as is
presumed to be the fate of thought by those who make the opposition of
consciousness the principle of knowledge, leaving reason empty unless it
confronts the given.
Over the years I have sought to address these philosophical undertak-
ings on which the reconstruction of the philosophy of right ultimately
rests. In Hegel’s Phenomenology of Spirit: A Critical Rethinking in Seventeen
Lectures11 I have attempted to show that Hegel has succeeded in demon-
strating how reason cannot be held captive by the heteronomous foun-
dationalism that leaves thought in opposition to the given and bound
by presupposed content. In Hegel’s Science of Logic: A Critical Rethinking
in Thirty Lectures12 I have attempted to show that Hegel has provided a

viable account of how reason can develop autonomously and furnish a
systematic account of the categories of determinacy, on which all fur-
ther philosophical investigations depend. I am at work attempting to
determine how nature can give rise to organisms with minds, and in The
Living Mind13 and The Intelligent Mind,14 I have begun working out the
philosophy of mind that provides ethics with its psychological enabling
conditions.
Nonetheless, I now return with some impatience to supplement the
normative economics that I developed in The Just Economy. That treatise
may have delineated the basic workings of economic self-determination,
considered the possible forms that capital can take and how these impact
upon social justice, and specified to what extent economic relations call
for private and public intervention to secure the freedoms that their own
commodity relations make possible. The Just Economy did not, however,
provide a sufficiently detailed account of the general, particular, and indi-
vidual dimensions of capital, nor of how capital accumulation relates to
economic activity as a whole. To remedy these shortcomings, the fol-
lowing work attempts to develop the theory of capital with due atten-
tion to not only its social determination, but the normative dimension
this involves. This requires reworking my earlier attempts at the social
determination of economic relations and extending the investigation to
cover the dynamics of the competitive system of individual capitals in the
market.
What is offered still draws upon Hegel’s Philosophy of Right, Marx’s
Grundrisse, and all three volumes of Capital, but leaves behind the omis-
sions and misconceptions that have barred the way to an adequate under-
standing of the economy as an institution of freedom. As the reader shall
see, an important resource in this rethinking of capital is the work of
David P. Levine, whose two-volume treatise, Economic Theory,15 is per-
haps the most important and most neglected work of twentieth-century
economic thought.
Meanwhile, the market has taken its revenge and let The Just Economy
fall out of print. I offer this work with the hope that the vicissitudes of
capital accumulation will leave room for some abiding presence in the
marketplace to which the propagation of ideas remains beholden.
1 Introduction 9
Notes
1. Similar considerations apply to aesthetic worth. Generally, foundations of
justification can be privileged givens or privileged determiners. Foundational
philosophy accordingly has two fundamental varieties, one represented by
pre-critical metaphysics, which grounds truth in the privileged given of
some first principle of being, and another represented by transcendental
philosophy, which grounds truth in some privileged determiner comprising
some structure of cognition determining what counts as objectively know-
able. Foundational ethics similarly has two fundamental forms, teleological
ethics, which grounds valid conduct in the privileged given of a highest
good, and procedural ethics, which grounds valid conduct in some privi-
leged determiner of valid conduct, such as social contract. Analogously,
foundational aesthetics grounds beauty either in imitation of given reality,
as in classical mimetic aesthetics, or in being determined by a privileged
determiner, as in the aesthetics of reception pioneered by Hume and Kant.
Just as reason overcomes foundations by developing autonomously and
ethics overcomes foundations by locating valid conduct in self-determina-
tion, so aesthetics overcomes foundations by locating beauty in the autono-
mous unification of universal meaning with individual configuration.
I have attempted to reconstruct the non-foundational aesthetics pioneered
by Hegel in two books, Systematic Aesthetics (Gainesville: University Press of
Florida, 1995) and Stylistics: Rethinking the Artforms after Hegel (Albany:
State University Press of New York, 1996), the first of which considers aes-
thetic worth in general and the second of which considers the particular
styles of artistic configuration. My account of the individual arts remains to
be completed.
2. See Adam Smith, The Wealth of Nations (New York: Random House, 1937),
p. 13.
3. Ricardo’s “corn model” of social reproduction makes any increase in wealth
depend upon the extraneous circumstance that land be sufficiently fertile to
allow agricultural workers to produce more corn than they and their fami-
lies need to consume and resume their labor. See David Ricardo, The
Principles of Political Economy and Taxation (London: Dent Everyman’s
Library, 1969).
4. This manuscript was submitted in 1977 as my philosophy Ph.D. disserta-
tion at Yale University. Curious readers will discover that much of its 400-
plus pages were put in an appendix. This was due to my late discovery that
the Yale philosophy department had imposed a 250-page limit on disserta-

tions, allegedly in response to the 800-page tome that a Richard Rorty once
submitted.
5. Richard Dien Winfield, Reason and Justice (Albany: State University of
New York Press, 1988).
6. Richard Dien Winfield, The Just Economy (London: Routledge, 1988).
7. I have addressed this normative history, with special attention to the reli-
gious reformations it involves, in Modernity, Religion, and the War on Terror
(London: Ashgate, 2007).
8. Richard Dien Winfield, Law in Civil Society (Lawrence, Kansas: University
Press of Kansas, 1995).
9. Richard Dien Winfield, The Just Family (Albany: State University Press of
New York, 1998).
10. Richard Dien Winfield, The Just State: Rethinking Self-Government
(Amherst, NY: Humanity Books, 2005).
11. Richard Dien Winfield, Hegel’s Phenomenology of Spirit: A Critical
Rethinking in Seventeen Lectures (Lanham, MD: Rowman & Littlefield,
2013).
12. Richard Dien Winfield, Hegel’s Science of Logic: A Critical Rethinking in
Thirty Lectures (Lanham, MD: Rowman & Littlefield, 2012).
13. Richard Dien Winfield, The Living Mind: From Psyche to Consciousness
(Lanham, MD: Rowman & Littlefield, July 16, 2011).
14. Richard Dien Winfield, The Intelligent Mind: On the Genesis and Constitution
of Discursive Thought (Houndmills, UK: Palgrave Macmillan, 2015).
15. David P. Levine, Economic Theory: Volume One: The Elementary Relations of
Economic Life (London: Routledge & Kegan Paul, 1978); David P. Levine,
Economic Theory: Volume Two: The System of Economic Relations as a Whole
(London: Routledge & Kegan Paul, 1981).
Part I
Capital in General
2
The Elementary Interaction
of Commodity Exchange
With What Must Economic Science Begin?

The starting point in thought and reality of independent economic activ-
ity is the elementary interrelation of commodity owners. This primary
interaction is not itself a form of capital. It rather provides the most basic
and minimal economic relationship with which the market operates,
enabling its development into the system of capital accumulation build-
ing the foundation of civil society.
Whereas all further aspects of market activity show themselves to
incorporate or presuppose the elementary interrelation of commodity
owners, that interrelation does not itself directly encompass any other
economic relationships. All it presupposes is that individuals recognize
one another as property owners and prospective market participants who
stand in complementary need of goods that others own but are willing to
exchange so as to obtain some property of others that they need in return.
How these goods have been obtained is not itself specified by this interac-
tion. Nor is the identity of the needs in question limited in any particu-
lar manner. They may be directed at goods that are needed for survival,
but they may just as well address items that satisfy purely conventional
© The Author(s) 2016 13

R. D. Winfield, Rethinking Capital,
DOI 10.1007/978-3-319-39841-9_2
needs, with no connection to the biological requirements of the individu-

als involved. What makes such commodity interaction both possible and
necessary is that individuals have needs that they cannot satisfy either
with objects they already own or with things that are freely available from
nature. Instead, they have needs that are for commodities, that is, needs
whose object of satisfaction is owned by someone else who also has needs
whose object of satisfaction is owned by others in a similar predicament.
In and through this non-natural, historically contingent nexus of mutual
interdependency, individuals confront one another as bearers of a specifi-
cally socially determined need, a need for commodities, which can only
be fulfilled by participating in market exchange, in recognition of the
property right and economic welfare of those with whom they trade.
Although individuals may always violate right and welfare by unilaterally
appropriating goods that satisfy their needs, market exchange is a mutual
voluntary transaction whose participants acknowledge that their respec-
tive needs and ownerships are to be honored as conditions for satisfying
any needs of their own for the commodities of others.
This situation, wherein individuals interact as market participants,
relating to one another in terms of self-selected needs for the commodi-
ties of one another, itself presupposes the emergence of the economy
as a separate form of community, distinct from the kinship relations of
the household and the universal ends of political association. How the
economy emerges as a discrete object, giving economics an actual proper
subject matter, is an historical process, fraught with all the contingencies
to which conventions are subject. Whatever form this process takes, it
must eventually demarcate family from society and society from state.
Unless these dual disengagements occur, individuals cannot exercise the
economic freedom of engaging in market relations. Instead, they find
themselves bound to occupations and consumptions tied to their kinship
relations and their relation to rule. Due to this entanglement, individu-
als simply have no opportunity to engage in activity that is solely eco-
nomic in character. Only when a civil society has emerged, intermediary
between household and state, do individuals occupy a social space within
which they can relate in terms of nothing but their pursuit of self-selected
particular ends whose achievement depends upon facilitating the same
pursuit by others. Due to this voluntary reciprocity, the engagement in
economic activity is an exercise of right, involving a universal form of

willing that individuals can only perform in mutuality with one another.
This does not mean that market relations can themselves secure every-
one’s equal access to the freedoms in which they consist. It does, however,
signify that the economy is not a normatively neutral domain of tech-
nique or biological metabolism. The social necessity of satisfying one’s
needs for commodities is not indifferent to freedom. It is instead a fun-
damental aspect of civil self-determination, for which economic justice
is a basic concern.
Although Marx may not fully appreciate the normative dimension of
the disengaged economy, he follows Hegel in appropriately taking the
elementary interrelationship of commodity owners as that with which
the a priori science of economic relations must begin. Marx may never
acknowledge that an a priori economics is a normative theory, build-
ing part of the conception of ethics. Nonetheless, he is aware that the
demands of conceptual rigor require starting economic inquiry with the
most minimal economic relationship on which all others are predicated.
An empirical economic theory models the given totality of economic
appearances, constructing corrigible schemes that can never claim any
genuine universality or necessity. Since empirical economics generalizes
from particular observations, its results are always relative to that data,
which is incapable of certifying that similar results must apply to all eco-
nomic phenomena everywhere and at all times. Moreover, because eco-
nomic activity is a matter of convention, issuing from the coordinated
decisions of individuals, it is never susceptible to the descriptive lawful-
ness that can apply to natural processes. The very being of an economy
is a conditional development of history, which need never arise and can
always be eliminated by revolution or natural catastrophe.
These limitations do not apply to the systematic philosophical theory
of economic relations, which arrives at the totality of economic asso-
ciation only at the end of an immanent conceptual development, whose
necessity lies in thinking through the autonomous unfolding of its sub-
ject matter. Despite the fact that Marx portrays his work as a theory of
the historically given reality of capitalism, the path of his investigation of
capital shows that it follows not the route of empirical generalization, but
the a priori self-constitution of economic interaction. The economy, as a
domain of conduct, is a normative institution, which, as such, is subject

to prescriptive a priori determination. Empirical observation can never
establish what the economy should be, but insofar as the disengaged
economy is a structure of economic freedom, what it is can be deter-
mined by reason. Once that rational determination has been completed,
one can then observe to what extent the logic of economic relations has
been exhibited in the contingent developments of history. The concept of
capital may then reclaim descriptive value, even though it has an a priori
logic.
However much Marx’s account may remain tainted by unsystematic
residues of political economy and empirical observation, he provides a
basic conceptual trajectory for a priori economics. That he refrains from
acknowledging the normativity of capital is due in part to his failure to
extend his systematic theorizing beyond the economy to the other insti-
tutions of civil society and to the state. The normative significance of the
theory of capital accordingly appears ambiguous because of how market
relations, left to themselves, prove unable to guarantee equal economic
opportunity or the property, family, and political rights of individuals,
not to mention the environmental wellbeing on which the exercise of
every freedom depends. The valid role of economic interaction in the
reality of freedom can only be made manifest through the supplement of
civil legality, the private market intervention of social interest groups, and
the public regulation of the economy in behalf of household, social, and
political welfare. For this reason, the theory of capital, taken in isolation,
unveils the problems of economic injustice that afflict the unregulated
economy, while leaving unresolved to what extent these problems can be
remedied by further institutional initiatives. The theory of capital does so
by conceiving how the economy consists of a system of economic right
that cannot by itself ensure that all its participants enjoy the economic
freedom its own market relations make possible and for which they are
indispensable.
The philosophical science of the economy will think through how the
elementary structures of commodity relations give rise to the interaction
of capital in general, from which the particular phases of capital follow,
providing the constituents every individual capital will incorporate in
the process of competition. Whereas what is universal to capital leaves
undetermined the particularity and individuality of capital, the partic-

ular phases of capital all involve what is general to capital, just as the
competition of individual capitals involves both what all units of capital
share in common, as well as the particular phases every capital must pass
through in its turnover. Only with these universal and particular aspects
in play, can enterprises individuate themselves in the competitive process
to which capital accumulation ultimately subjects them all.
Marx’s and our point of departure is the same basic social relation-
ship with which Hegel opened his conception of civil society’s system of
needs: the interrelationship of individuals through a self-seeking that is
inherently a relation to other. This is not the naturally defined situation
of individuals who satisfy their survival needs by acting upon nature.
It instead comprises the interaction where individuals pursue some self-
selected need that can only be satisfied by something belonging to another
individual, something that can be obtained only in exchange for another
object of satisfaction of a correlatively self-selected need for what others
have to offer. As Marx notes, the self-selected need of these interacting
individuals comprises a private interest that owes its form and content
to social relations entirely independent of any Robinson Caruso scheme
where a single individual acts directly upon nature to satisfy physiologi-
cally and psychologically given wants.1 For persons to relate to themselves
as bourgeois, that is, as members of civil society participating in com-
modity relations, they must interact as bourgeois, facing one another as
owners of the means for realizing their respective private interests.2 In this
social network of mutual interdependence, Marx duly observes, one acts
by being at once means and end, asserting oneself as a being-for-others
insofar as one is a being-for-self, just as these others are themselves beings-
for-others insofar as they are beings-for-themselves.3 In other words, one
makes oneself a means for others in simply striving to satisfy one’s own
interest, whereas all others equally become means for one’s satisfaction by
pursuing their own private needs. This is because one’s interest consists in
a need for the commodities of others, whose own interests have the same
socially interdependent character.
Since what here brings private individuals together is nothing but
their own particular interest,4 the reciprocity of their complementary
self-seeking realizes a universal social interrelatedness which is not an end
in itself, but an external necessity to which every private pursuit must

accommodate itself if personal satisfaction is to be won.5 What arises
out of the all-sided self-assertions of independent bourgeois (commod-
ity owners) is therefore both the chain of their unavoidable interdepen-
dence and the objectivity of their characteristic private autonomy. Since
their other-directed private autonomy only functions within the web of
commodity interdependence, it is not an unrealized, merely subjective
striving, but an actual self-seeking that can only be engaged in within an
existing market framework consisting in the very exercise of such free-
dom. Although such external connection is a social necessity for all mar-
ket participants, it is so only in a purely instrumental manner, serving the
fulfillment of self-selected interests.6 Accordingly, Marx duly observes, in
this civil society of the disengaged economy, the various social relations of
individuals have come to appear for the first time as mere means for real-
izing individual private interest.7 All other traditional concerns have been
stripped away, leaving individuals confronting purely economic impera-
tives, facing one another merely as commodity owners. Correlatively,
nature here figures as a pure factor of utility,8 subsumed under the social
network of commodity ownership, whose system of private interest, of
economic neediness, now provides the historically emergent domain
in which capital can arise. Although natural factors that elude private
appropriation may be available apart from market interaction, all other
bounties of nature can now only be legitimately obtained through the
exchange of property.
This social predicament, given not by nature but by contingent his-
torical development, provides the minimal threshold on which economic
activity per se can unfold, constituting a discrete purely economic order,
demarcated from both household and state. Systematic economics must
now begin its task of following out the realization of economic autonomy
by which commodity owners independently pursue the satisfaction of
needs for the commodities of one another. How this pursuit turns into a
system of capital accumulation is something that will reveal itself thanks
to a critical reconstruction of the incomplete economic theory outlined
in Marx’s Grundrisse and Capital.
The general itinerary that Marx follows in these works broadly paral-
lels the route that Hegel drew in his largely undeveloped sketch of the
“System of Needs” in the Philosophy of Right. Marx frames the basic stages
of his account as capital in general, the circulation of capital, and the
realization process of capital as a whole.
Under the initial heading of capital in general, Marx develops virtu-
ally the same interdependent market activity sketched by Hegel in “The
Kind of Need and Satisfaction” and “The Kind of Labor” sections of
the “System of Needs.”9 Just as Hegel there presented how the interac-
tion of commodity owners first builds a sphere of commodity circula-
tion operating through the mutual recognition of the exchange value of
goods, so Marx begins his inquiry with the development of commodity
exchange into a process circulating commodities by means of money.
On the basis of this commodity circulation, Marx conceives how capital
in general undertakes a wage-labor production of commodities for sale,
detailing what Hegel barely outlined in the opening section of “The Kind
of Labor.” Marx then follows Hegel’s sketch of how the labor process
develops into mass production and automation, delineating that trans-
formation of commodity production under the rubric of the “production
of relative surplus value.” This involves a universalization of commodity
production, first through the cooperation and division of labor constitu-
tive of manufacturing, and then through the mechanization of produc-
tion that manufacturing makes possible. Beyond these developments in
the sphere of production, all that remains in Marx’s concluding discus-
sions of capital in general are the consideration of, on the one hand, how
the sale of the product makes possible further engagement in produc-
tion and capital accumulation, and on the other hand, how commodity
circulation becomes integrated with capital’s production process. These
culminating sections of the first volume of Capital thereby provide the
bridge from capital in general to the circulation process of capital, in
which capital traverses its particular phases as it turns over and renews its
accumulation. Once the circuit of capital accumulation joins the sphere
of exchange with capital’s commodity fabrication, the purchase and con-
sumption of commodities becomes united with commodity production,
so that all such transactions become absorbed as so many metamorphoses
of capital.
This emergence of the circulation process of capital thus fills out the
basic move indicated in Hegel’s transition from “The Kind of Labor”
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See (in this volume)
SOUTH AFRICA (THE TRANSVAAL): A. D. 1896 (JANUARY).
JAMESON, Dr. Leander S.:

Investigation of the Raid by the Cape Colony Assembly.

SOUTH AFRICA (CAPE COLONY): A. D. 1896 (JULY).

Indemnity for the Raid claimed by South African Republic.

SOUTH AFRICA (THE TRANSVAAL): A. D.1897 (FEBRUARY).

British Parliamentary investigation of the Raid.

SOUTH AFRICA (THE TRANSVAAL): A. D. 1897 (FEBRUARY-
JULY).
----------JAMESON, Dr. Leander S.: End--------
----------JAPAN: Start--------
JAPAN: A. D. 1890-1898.
Rise of Parliamentary parties.
Working of Constitutional Government.
"When the Emperor's nominal authority was converted into a

reality by the overthrow of the Shogun in 1868, the work was
largely due to the four clans of Satsuma, Choshu, Hizen, and
Tosa. Their aim was to destroy the Shogunate and to create an
Imperial Government, and though many other motives actuated
them, these were the two main ideas of the revolution which
grew in importance and left political results. No sooner,
however, was the Imperial Government established than it was
found that the Satsuma clan was strongly divided. There were
within it a party in favour of reform, and another party, led
by Shimazu Saburo and Saigo Takamori, who clung to old
traditions. The sword had not yet given place to the
ballot-box, and the result of a bloody contest was the
annihilation of the reactionaries. There remained, therefore,
the Satsuma men loyal to the Emperor and to the absolute
government of 1868, and with them the Choshu, Hizen, Tosa, and
other clans. Some of these clans had not always been friendly
in the past. They found it difficult to work together now.
Marquis Ito has observed that Japanese politicians are more
prone to destroy than to construct, and an opportunity to
indulge this proclivity soon presented itself.
{278}
Although the four clans were equally pledged to secure
representative government eventually, jealousy of one another
drove two of them to take up this cry as a pretext for
dissolving the alliance. The Tosa clan, now represented by
Count Itagaki, seceded accordingly in 1873, and the Hizen
clan, represented by Count Okuma, followed its example eight
years afterwards. The former organised a party called the
Fuyu-to, or Liberals, and the latter the Kaishin-to, or
Progressives. The two remaining clans of Satsuma and Choshu
were called for shortness the Sat-Cho. Such was the origin of
parliamentary parties in Japan. There was no political issue
at stake; the moving cause was simply clan jealousy, and hence
it was that Hizen and Tosa did not join hands, though both
strenuously opposed the Sat-Cho Government and each posed as
the friend of the people. Consequently, when the first Diet
met, in November, 1890, the Sat-Cho Ministry, with Marquis
Yamagata as Premier, found itself face to face with a bitter
and, it must be added, an unscrupulous opposition."
H. N. G. Bushby,
Parliamentary Government in Japan
(Nineteenth Century, July, 1899).
"The history of the Japanese Parliament [see CONSTITUTION OF
JAPAN, in volume 1], briefly told, is as follows: The first
Diet was opened in November, 1890, and the twelfth session in
May, 1898. In this brief space of time there have been four
dissolutions and five Parliaments. From the very first the
collision between the Government and the Diet has been short
and violent. In the case of the first dissolution, in
December, 1891, the question turned on the Budget estimate,
the Diet insisting on the bold curtailment of items of
expenditure. In the second dissolution, in December, 1893, the
question turned on the memorial to be presented to the Throne,
the Opposition insisting in very strong terms on the necessity
of strictly enforcing the terms of treaties with Western
Powers, the Diet regarding the Cabinet as too weak-handed in
foreign politics. The third dissolution, in June, 1894, was
also on the same question. The Cabinet, in these two latter
cases, was under the presidency of Marquis Ito (then Count),
and was vigorously pushing forward negotiations for treaty
revision, through the brilliant diplomacy of Count Mutsu, the
Foreign Minister. This strict-enforcement agitation was looked
upon by the Government as a piece of anti-foreign agitation—a
Jingo movement—and as endangering the success of the
treaty-revision negotiations. In fact, the revised treaty with
Great Britain was on the latter date well-nigh completed, it
being signed in July following by Lord Kimberley and Viscount
Aoki. It was at this stage that the scepticism of foreign
observers as to the final success of representative
institutions in Japan seemed to reach its height. … Marquis
Ito and some of the most tried statesmen of the time were out
of office, forming a sort of reserve force, to be called out
at any grave emergency. But great was the disappointment when
it was seen that after Marquis Ito, with some of the most
trusted statesmen as his colleagues, had been in office but
little over a year, dissolution followed dissolution, and it
seemed that even the Father of the Constitution was unable to
manage its successful working. … There is no question that the
Constitutional situation was at that time exceedingly critical.
"But when the war broke out the situation was "But when the
war broke out the situation was completely changed. In the
August following the whole nation spoke and acted as if they
were one man and had but one mind. In the two sessions of the
Diet held during the war the Government was most ably
supported by the Diet, and everybody hoped that after the war
was over the same good-feeling would continue to rule the
Diet. On the other hand, it was well known that the Opposition
members in the Diet had clearly intimated that their support
of the Government was merely temporary, and that after the
emergency was over they might be expected to continue their
opposition policy. Sure enough, many months before the opening
of the ninth session, mutterings of deep discontent,
especially with reference to the retrocession of the Liaotung
peninsula, began to be widely heard, and it was much feared
that the former scenes of fierce opposition and blind
obstruction would be renewed. However, as the session
approached (December, 1896), rumours were heard of a certain
'entente' between the Government and the Liberal party, at
that time the largest and the best organised in the country.
And in the coming session the Government secured a majority,
through the support of the Liberals, for most of its important
Bills.
"Now this 'entente' between Marquis Ito and the Liberals was a
great step in advance in the constitutional history of the
country, and a very bold departure in a new direction on the
part of the Marquis. He was known to be an admirer of the
German system, and a chief upholder of the policy of Chozen
Naikaku, or the Transcendental Cabinet policy, which meant a
Ministry responsible to the Emperor alone. Marquis Ito saw
evidently at this stage the impossibility of carrying on the
Government without a secure parliamentary support, and Count
Itagaki, the Liberal leader, saw in the Marquis a faithful
ally, whose character as a great constructive statesman, and
whose history as the author of the Constitution, both forbade
his ever proving disloyal to the Constitution. The 'entente'
was cemented in May following by the entrance of Count Itagaki
into the Cabinet as the Home Minister. On the other hand, this
entente' led to the formation of the Progressist party by the
union of the six Opposition parties, as well as to the union
of Count Okuma, the Progressist leader, and Count Matsugata,
leader of the Kagoshima statesmen. Their united opposition was
now quite effective in harassing the administration. At this
stage certain neutral men, particularly Count Inouye,
suggested compromise, offering a scheme of a Coalition
Cabinet. … But Count Itagaki was firm in opposing such a
compromise, saying it was tantamount to the ignoring of party
distinction, and as such was a retrogression instead of being
a forward step in the constitutional history of the country.
He finally tendered his resignation. When Marquis Ito saw that
the Count was firm in his determination, he, too, resigned,
saying that he felt so deeply obliged to the Liberals for
their late parliamentary support that he would not let the
Count go out of office alone. Thus fell the Ito Ministry after
five years' brilliant service.
{279}
"The new Cabinet, formed in September, 1896, had Count

Matsukata for Premier and Treasury Minister; Count Okuma for
Foreign Minister; and Admiral Kabayama, the hero of the Yaloo
battle, for Home Minister. There were at this time three
things that the nation desired. It wanted to be saved from the
impending business depression. It wished to see Japanese
Chauvinism installed at the Foreign Office, and the shame of
the retrocession of the Liaotung peninsula wiped off. It
hoped, lastly, to see a Parliamentary Government inaugurated
and all the evils of irresponsible bureaucracy removed. The
statesmen now installed in office aspired to satisfy all these
desires, and they were expected to work wonders. But,
unfortunately, the Cabinet lacked unity. … Early in the fall
[of 1897] Count Okuma resigned office, saying that he felt
like a European physician in consultation over a case with
Chinese doctors. … Count Okuma led away the majority of the
Progressist party, and the Government was left with but an
insignificant number of supporters. As soon as the Diet met,
the spirit of opposition manifested was so strong that the
Ministers asked the Emperor to issue an edict for dissolution.
It was expected that the government would at once appeal to
the country with some strong programme. But to the
astonishment of everybody the Ministry resigned the very next
day. In the midst of the general confusion which followed,
Marquis Ito's name was in the mouth of everybody. He was
unanimously hailed as the only man to bring order into the
political situation. In January following [1898] the new
Cabinet was announced with Ito for Premier, Count Inouye for
the Treasury, and Marquis Saionji, one of the best cultured,
most progressive, and, perhaps, also most daring of the
younger statesmen, for Education Minister."
Tokiwo Yokoi,
New Japan and her Constitutional Outlook
(Contemporary Review, September, 1898).
JAPAN: A. D. 1895.
The war with China.
Treaty of Shimonoseki.
Korean independence secured.
Part of Feng-tien, Formosa and the Pescadores ceded by China.
Relinquishment of Feng-tien by Japan.

CHINA: A. D. 1894-1895.
JAPAN: A. D. 1896.
Affairs in Formosa.
Retirement of Marquis Ito.
Progressists in power.
Destructive sea-wave.
Serious risings of the Chinese in Formosa against the newly

established Japanese rule in that island were said to have
been caused by insolent and atrocious conduct on the part of
the Japanese soldiery. Possibly a decree which prohibited the
importation of opium into Formosa, and which placed the
medicinal sale of the drug under close restrictions, had
something to do with the discontent. In Japan, the able
statesman, Marquis Ito, was made unpopular by his yielding of
the Liao Tung peninsula (in the Fêng-tien province of
China,—see, in this volume, CHINA: A. D. 1894-1895), under
pressure from Russia, Germany and France. He retired from the
government, and Count Matsukata became Premier in September,
with a cabinet of the Progressist (Kaishinto) party, which
advocated resistance to Russia, and opposition generally to
the encouragement of foreign enterprises in Japan. A frightful
calamity was suffered in June, when a prodigious wave, probably
raised by some submarine volcano, overwhelmed a long stretch
of northeastern coast, destroying some 30,000 people, and
sweeping out of existence a number of considerable towns.
Annual Register, 1896.
JAPAN: A. D. 1897.
New tariff.
A new tariff, regulating the customs duties levied in all

cases wherein Japan is not bound by treaty stipulations, was
adopted in March, 1897. The duties imposed range from 5 to 40
per cent., ad valorem, the higher being laid upon liquors and
tobacco. The "Japan Gazette" is quoted as saying in
explanation: "The statutory tariff fixes the duties to be
collected on every article imported into Japan from countries
that have not concluded tariff conventions with her, or that
are not entitled to the most-favored-nation treatment in
regard to the tariff. Spain, Portugal, Greece, and many other
countries have no tariff conventions with Japan and no
favored-nation clause, in regard to tariff, in their new
treaties with this country. The United States, Belgium,
Holland, Russia, and others have the favored-nation clause and
will get the benefit of the lesser duties on items named in
the different mentioned tariffs. There will, therefore, be two
columns of figures in the printed general tariff list, showing in
the first column the duties on the articles named in the
conventional tariffs, and in the second column the duties on
the same articles imported from countries that have no tariff
convention with Japan, and that are not entitled to
favored-nation treatment. For instance, most textile articles
are subject to a duty of 10 per cent in the conventional
tariff column and to a duty of 15 per cent in the statutory
column."
United States Consular Reports,

July and September, 1897,
pages 475 and 91.
JAPAN: A. D. 1897 (October).

Introduction of the gold standard.

MONETARY QUESTIONS: A. D. 1897 (MARCH).
JAPAN: A. D. 1897 (November).

Treaty with the United States and Russia to suspend pelagic
sealing.

BERING SEA QUESTIONS.
JAPAN: A. D. 1897-1898.
Contentions with Russia in Korea.

KOREA: A. D. 1895-1898.
JAPAN: A. D. 1898-1899.
The struggle between clan government and party government.
"When, in January 1898, Marquis Ito made an attempt to win the

country back to non-party government and efficiency by forming
an independent Ministry in defiance of the Liberal demands, he
was acting no doubt from no mere clan instinct, but, as he
conceived, in the highest interests of the realm. His
experiment was not destined to succeed. In the general
election of March 1898, 109 Progressives and 94 Liberals were
returned as Representatives in a House of 300. A common hunger
for office and a common sense of humiliation at their
treatment by the greater statesmen of the clans united the two
parties under one banner as they had not been united since 1873.
At last they took up in earnest the crusade against clan
government, which, logically, they should have commenced
together exactly a quarter of a century before. They called
their coalition the 'Kensei-to,' or Constitutional Party.
Japan is a country of rapid progress, but she is lucky that
for twenty-five years the formation of the Kensei-to was
deferred while she was content to be guided through difficult
times by clansmen more skilled in statecraft than the usurient
nobodies who were kicking at the heels of Counts Okuma and
Itagaki.
{280}
"Meanwhile Marquis Ito had to decide how he would act. He had

tried to govern with the help of a party and had partially
succeeded. He had tried to govern without one, and had
discovered that it was impossible. The two parties could no
longer be played off one against the other. They were united,
and with fifty new recruits formed the Kensei-to, 253 strong.
There remained only nineteen clan government sympathisers,
calling themselves National Unionists, and twenty-eight
Independents. In these difficult circumstances Marquis Ito's
decision was a bold one, and in its consequences far-reaching.
He advised that Count Okuma, the Progressive leader of the
Kensei-to should be summoned to form a Cabinet in conjunction
with his Liberal colleague, Count Itagaki. His advice was
followed by the Emperor, but with the significant condition
that the Ministries of War and the Navy were to be retained by
clansmen. The Emperor was not disposed to allow constitutional
experiments in these departments. On the 28th of June 1898,
Marquis Ito resigned, and on the 30th the Okuma-Itagaki
Cabinet was formed.
"It now seemed to many that the death-blow had been given to
clan government, and that at last the era of government by
party had commenced. … The elements of which the Kensei-to was
composed were the two great ones of the Progressives, led by
Count Okuma, and the Liberals, led by Count Itagaki. These two
parties acted together in a condition of veiled hostility.
There was coalition without any approach to amalgamation. A
common hunger for office, a common dislike for clan
government, obscured for a little while a mutual jealousy and
distrust. Meanwhile the Kensei-to as a whole, and both wings
of it, were divided into endless clubs, cliques, and
associations. Our own Temperance, Colonial, Church, and China
parties are affable and self-effacing in comparison. Thus, to
name only a few of the political divisions of the Kensei-to,
there were the territorial associations of the Kwanto-kai (led
by Mr. Hoshi), the Hokuriku-kai (led by Mr. Sugita), the
Kyushu Kurabu (led by Mr. Matsuda), the Tohoku-dantai, the
Chugoku-kai, and the Shigoku-kai; there were the Satsuma
section, the Tosa section, the Kakushinto, the Young
Constitutionalists, the Senior Politicians (such as Baron
Kusumoto, Mr. Hiraoka, the chief organiser of the coalition,
and others), the Central Constitutionalist Club, and so forth.
Each clique had its private organisation and animosities; each
aspired to dictate to the Cabinet and secure portfolios for
its members in the House. They combined and recombined among
themselves. … Clearly, however loyally the two leaders wished
to work together, each must find it impossible in such
circumstances to preserve discipline among his own followers.
Indeed, the leaders scarcely tried to lead. … It was
impossible to carry on the Government under such conditions.
The Okuma-Itagaki Cabinet fell, and Field Marshal the Marquis
Yamagata, Premier of the first Japanese Ministry, was summoned
by the Emperor. Once more a clan Ministry, independent of
party, was formed; once more it seemed as though party
government was to be indefinitely postponed. … Marquis
Yamagata formed his Ministry in November 1898, on strictly
clan lines. … Being an old soldier, he wisely determined to
profit by experience and seek an ally. No one knew better than
himself the need of passing the Land Tax Bill, on which the
efficiency of the national defence and the future of Japan
depended. … It was natural, therefore, for him to approach the
Liberals, who had shown themselves favourable to an increase
of the Land Tax. … On the 27th of November the support of the
Liberals was assured, an event which prompted the 'Jiji' to
express its joy that Marquis Yamagata had become a party man,
leaving 'the mouldy, effete cause of the non-partisan
Ministry.' The Government party consisted now of the National
Unionists (in favour of clan government' and loyal followers
of Marquis Yamagata), the Liberals, and a few so-called
Independents (who, of course, speedily formed themselves into
a club), giving the Government a majority of about fifteen or
twenty votes in the House. …
"The first session of Marquis Yamagata's second Ministry will

always be remembered in Japan because the Land Tax Bill was
successfully passed through both Houses. … But the most
important episode of the session, from a parliamentary point
of view, was a remarkable act of self-denial on the part of
the Liberals. In March of this year [1899] they agreed not to
demand office from Marquis Yamagata for any of their number,
though they were to be free to accept such offices as he might
of his own bounty from time to time be able to offer them. If
this unprecedented pledge be loyally adhered to, it marks a
very great stride towards effective party government in the
future. … The hope of the Liberals now lies, not in the
immediate enjoyment of the sweets of office, but in winning
over Marquis Ito to their party. If he were to show the way,
it is probable that many more of the leading clan statesmen
would take sides, in which case, to adopt Mr. Bodley's phrase,
political society would be divided vertically as in England, not
horizontally as in France, and either party on obtaining a
majority in the House would be able to find material in its
own ranks for an efficient Cabinet. At present neither is in
that happy position."
H. N. G. Bushby,
Parliamentary Government in Japan
(Nineteenth Century, July, 1899).
JAPAN: A. D. 1899 (May-July).

Representation in the Peace Conference at The Hague.

PEACE CONFERENCE.
JAPAN: A. D. 1899 (July).

Release from the treaties with Western Powers
which gave them exterritorial rights.
Consular jurisdictions abolished.
"Japan has been promoted. The great sign that Europe regards a
Power as only semi-civilised is the demand that all who visit
it, or trade in it, should be exempted from the jurisdiction
of the local Courts, the Consuls acting when necessary as
Judges. This rule is maintained even when the Powers thus
stigmatised send Ambassadors, and is, no doubt, very keenly
resented. It seems specially offensive to the Japanese, who
have a high opinion of their own merits, and they have for
seventeen years demanded the treatment accorded to fully
civilised States. As the alliance of Japan is now earnestly
sought by all Europe this has been conceded, and on Monday,
July 17th, the Consular jurisdiction ceased. (Owing to some
blunder, the powers of the French and Austrian Consuls last a
fortnight longer, but the difference is only formal.) The
Japanese are highly delighted, and the European traders are
not displeased, as with the Consular jurisdictions all
restrictions on trading with the interior disappear."
The Spectator
(London), July 22, 1899.
{281}
The early treaties of Japan with Western Powers, which gave

the latter what are called rights of extra-territoriality, or
exterritoriality, for all their subjects (the right, that is,
to administer their own laws, by their own consular or other
courts, upon their own subjects, within a foreign country),
were modified in 1894. Japan then became free to extinguish
the foreign courts on her soil at the end of five years, upon
giving a year's notice, which she did as stated above. Her
government has thus attained a recognized peerage in
sovereignty with the governments of the Western world. At the
same time, the whole country has been thrown open to foreign
trade—restricted previously to certain ports.
In careful preparation of the Japanese people for this

important change in their relations with the foreign world,
the following imperial rescript was issued at the end of June,
1899: "The revision of the treaties, our long cherished aim,
is to-day on the eve of becoming an accomplished fact; a
result which, while it adds materially to the responsibilities
of our Empire, will greatly strengthen the basis of our
friendship with foreign countries. It is our earnest wish that
our subjects, whose devoted loyalty in the discharge of their
duties is conspicuous, should enter earnestly into our
sentiments in this matter, and, in compliance with the great
policy of opening the country, should all unite with one heart
to associate cordially with the peoples from afar, thus
maintaining the character of the nation and enhancing the
prestige of the Empire. In view of the responsibilities that
devolve upon us in giving effect to the new treaties, it is
our will that our ministers of state, acting on our behalf,
should instruct our officials of all classes to observe the
utmost circumspection in the management of affairs, to the end
that subjects and strangers alike may enjoy equal privileges
and advantages, and that, every source of dissatisfaction
being avoided, relations of peace and amity with all nations
may be strengthened and consolidated in perpetuity."
Obedient to this command, the Minister President of State,

Marquis Yamagata, published the following instruction on the
1st of July: "The work of revising the treaties has caused
deep solicitude to His August Majesty since the centralization
of the Government, and has long been an object of earnest desire
to the people. More than twenty years have elapsed since the
question was opened by the dispatch of a special embassy to
the West in 1871. Throughout the whole of that interval,
numerous negotiations were conducted with foreign countries
and numerous plans discussed, until finally, in 1884, Great
Britain took the lead in concluding a revised treaty, and the
other powers all followed in succession, so that now the
operation of the new treaties is about to take place on the
17th of July and the 4th of August.
"The revision of the treaties in the sense of placing on a

footing of equality the intercourse of this country with
foreign states was the basis of the great liberal policy
adopted at the time of the restoration, and that such a course
conduces to enhance the prestige of the Empire and to promote
the prosperity of the people is a proposition not requiring
demonstration. But if there should be anything defective in
the methods adopted for giving effect to the treaties, not
merely will the object of revision be sacrificed, but also the
country's relations with friendly powers will be impaired and its
prestige may be lowered. It is, of course, beyond question
that any rights and privileges accruing to us as a result of
treaty revision should be duly asserted. But there devolves
upon the Government of this Empire the responsibility, and
upon the people of this Realm the duty, of protecting the
rights and privileges of foreigners, and of sparing no effort
that they may one and all be enabled to reside in the country
confidently and contentedly. It behooves all officials to
clearly apprehend the august intentions and to pay profound
attention to these points."
With still finer care for the honor and good name of Japan,
the following instruction to schools was published on the same
day by Count Kabayma, the Minister of State for Education:
"The schools under the direct control of the Government serve
as models to all the public and private educational
institutions throughout the country. It is therefore my
earnest desire that the behavior of the students at such
schools should be regulated with notably strict regard to the
canons of propriety, so that they may show themselves worthy
of the station they occupy. The date of the operation of the
revised treaties is now imminent, and His Imperial Majesty has
issued a gracious rescript. It may be expected that the coming
and going of foreigners in the interior of the country will
henceforth grow more frequent, and if at such a time students
be left without proper control, and suffered to neglect the
dictates of propriety by cherishing sentiments of petty
arrogance and behaving in a violent, outrageous, or vulgar
manner, not only will the educational systems be brought into
discredit, but also the prestige of the country will be
impaired and its reputation may even be destroyed. For that
reason I have addressed an instruction to the local governors
urging them to guard against any defects in educational
methods, and I am now constrained to appeal to the Government
schools which serve for models. I trust that those upon whom
the functions of direction and teaching devolve, paying
respectful attention to the august intention, will discharge
their duties carefully towards the students, and, by securing
the latter's strict adherence to rules, will contrive that
they shall serve as a worthy example to the schools throughout
the country."
United States Consular Reports,

October, 1899, page 285.
JAPAN: A. D. 1899 (August).

Prohibition of religious instruction in the government schools.
Some important regulations for the national schools were

promulgated in August by the Minister of Education, having the
effect, probably intended, of discouraging attendance at the
Christian mission schools, and stimulating a preference for
the schools of the national system. They forbade religious
exercises or instruction in any schools that adopt the
curriculum of the national schools, while, at the same time,
they allow admission from no others to the higher schools of
the national system without examination. Students in the
middle schools of the national system are exempted from
conscription, while others are not. That the aim in this
policy is to strengthen the national schools, rather than to
interfere with religious freedom, seems probable.
{282}
JAPAN: A. D. 1899 (December).

Adhesion to the arrangement of an "open door" commercial
policy in China.

CHINA: A. D. 1899-1000 (SEPTEMBER-FEBRUARY).
JAPAN: A. D. 1900.
Naval strength.

NAVIES OF THE SEA POWERS.
JAPAN: A. D. 1900 (June-December).

Co-operation with the Powers in China.

CHINA.
JAPAN: A. D. 1900 (July)

Failure of attempts to entrust the Japanese government
with the rescue of the foreign Legations at Peking.

CHINA: A. D. 1900 (JUNE-JULY).
JAPAN: A. D. 1900 (August-October).

The new party of Marquis Ito.
The letters of the Tokio correspondent of the London "Times"

describe interestingly the genesis of a new party of which
Marquis Ito has taken the lead, and which took control of the
government in October, 1900. Various parties, the career of
which the writer reviews, had been formed in opposition to the
veteran statesmen who continued to hold the reins of government
after constitutional forms were introduced in 1880. But very
few of the party politicians who constructed these parties,
says the writer, had held high office. "They were without the
prestige of experience. To put such men on the administrative
stage while the gallery was occupied by the greybeards—the
'Meiji statesmen,' as they are called—who had managed the
country's affairs since the Restoration, would have seemed a
strange spectacle in the eyes of the nation. The Meiji
statesmen, however, persistently declined to be drawn into the
ranks of the political parties. They gave the latter plenty of
rope; they even allowed them to administer the State, which
essay ended in a fiasco; and they took them into alliances
which served chiefly to demonstrate the eagerness of these
politicians for office and emoluments. But there was no
amalgamation. The line of demarcation remained indelible. …
"The political parties, discovering the impossibility of

becoming a real power in the State without the coöperation of
the Meiji statesmen, asked Marquis Ito to assume their
leadership. Marquis Ito may be said to possess everything that
his country can give him. He has the unbounded confidence of
his Sovereign and his countrymen; he is loaded with titles and
honours, and a word from him can make or mar a Ministry. It
seems strange that such a man should step down from his
pedestal to become a party leader; to occupy a position which
can bring no honour and must at once create enemies. Yet
Marquis Ito has consented. He issued his manifesto. It is in
two respects a very remarkable document. First, it tells the
politicians that their great fault has been self-seeking; that
they have set party higher than country; office and emolument
above public duty and political responsibility. Secondly, it
informs them in emphatic terms that Parliamentary Cabinets are
unconstitutional in Japan; that "Ministers and officials must
be appointed by the Sovereign without any reference to their
party connexions. The politicians who place themselves under
Marquis Ito's leadership must eschew the former failing and
abandon the latter heresy. It would be impossible to imagine a
more complete reversal of the tables. The men who, ten years
ago, asked the nation to condemn the Meiji statesmen on a
charge of political self-seeking are now publicly censured by
the chief of these statesmen for committing the very same sin
in their own persons; and the men who for ten years have made
Parliamentary Cabinets the text of their agitation now enrol
themselves in a party which openly declares such Cabinets to
be unconstitutional."
The new party calls itself the "Association of Friends of the

Constitution" (Rikken Seiyukai). "In its ranks are found the
whole of the Liberals, and many members of the Diet who had
hitherto maintained an independent attitude, so that it can
count on 152 supporters among the 300 members of the Lower
House. … The Opposition, the Progressists, command only 90
votes, and the remainder of the House is composed mainly of
men upon whose support the Cabinet can always reckon. In fact,
now for the first time since the Diet opened, does the
direction of State affairs come into the hands of Ministers
who may rest assured of Parliamentary cooperation."
Marquis Yamagata, who had conducted the administration for

nearly two years, resigned in October, and Marquis Ito brought
his new party into power. His Cabinet "does not include one of
the elder statesmen—the 'clan statesmen'—except the marquis
himself. Among the seven portfolios that have changed
hands—those of War and of the Navy are still held as before—
three have been given to unequivocal party politicians,
leaders of the Liberals, and four to men who may be regarded
as Marquis Ito's disciples. … The Yamagata Cabinet consisted
entirely of clan statesmen and their followers. The Ito
Cabinet has a clan statesman for leader and his nominees for
members. It may be called essentially a one man Ministry, so
far does the Premier tower above the heads of his colleagues."
JAPAN: A. D. 1900-1901.
Strategic importance of Korea.
Interest in the designs of Russia.

KOREA: A. D. 1900.
JAPAN: A. D. 1901.
Movement to erect a monument to commemorate the
visit of Commodore Perry.
A movement in Japan to erect a monument at Kurihama, the

landing place of the American expedition, commanded by
Commodore Matthew C. Perry, which visited Japan in 1853 and
brought about the opening of that country to intercourse with
the western world (see, in volume 3, JAPAN: A. D. 1852-1888),
was announced to the State Department at Washington by the U.
S. Consul-General at Yokohama, in March, 1901. The undertaking
is directed by the "American Association of Japan," of which
the Japanese Minister of Justice is President, and its purpose
is to commemorate an event which the Association, in a
published circular, declares to be "the most memorable" in the
annals of Japan. The language of the circular, in part, is as
follows: "This visit of Commodore Perry was in a word the
turning of the key which opened the doors of the Japanese
Empire to friendly intercourse with the United States, and
subsequently to the rest of the nations of Europe on similar
terms, and may in truth be regarded as the most memorable
event in our annals—an event which paved the way for and
accelerated the introduction of a new order of things, an
event that enabled the country to enter upon the unprecedented
era of National ascendancy in which we are now living.
{283}
Japan has not forgotten—nor will she ever forget—that next to
her reigning and most beloved sovereign, whose high virtues
and great wisdom are above all praise, she owes, in no small
degree, her present prosperity to the United States of
America, in that the latter rendered her a great and lasting
service already referred to. After the lapse of these
forty-eight years, her people, however, have come to entertain
but an uncertain memory of Kurihama, and yet it was there that
Commodore Perry first trod on the soil of Japan and for the
first time awoke the country from a slumberous seclusion of
three centuries—there it was where first gleamed the light
that has ever since illumined Japan's way in her new career of
progress."
----------JAPAN: End--------

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Rethinking Capital 1st Edition Richard

Dien Winfield (Auth.)

Autonomy and Normativity Investigations of Truth Right

Universal Biology after Aristotle, Kant, and Hegel: The

On Freedom Technology Capital Medium Peter Trawny

Capital Systems and Objects The Foundation and Future

Rethinking Mahler 1st Edition Jeremy Barham

Rethinking Schubert 1st Edition Lorraine Byrne Bodley

Statistical Rethinking A Bayesian Course with Examples

Digital Capital 1st Edition Sora Park (Auth.)

ISBN 978-3-319-39840-2 ISBN 978-3-319-39841-9 (eBook)

Library of Congress Control Number: 2016957385

© The Editor(s) (if applicable) and The Author(s) 2016

Cover image © Glasshouse Images / Alamy Stock Photo

Printed on acid-free paper

This Palgrave Macmillan imprint is published by Springer Nature

Part I Capital in General 11

2 The Elementary Interaction of Commodity Exchange 13

3 From Money to Capital 43

4 The Immediate Production Process of Capital in General 71

5 Value Production 105

6 Manufacturing and Mechanization 129

7 The Accumulation of Capital in General 155

The Object and Instrument of Labor and the Completed

Part II The Circulation of Capital 185

8 Capital Circulation in General 187

9 The Turnover Process of Capital 223

10 Marx’s Misconception of the Reproduction of

11 From Capital Circulation to the Competition of

Part III The System of Interacting Capitals 287

12 The Elementary Dynamic of Competition 289

13 The Adaptation of Production and Marketing to

Competition and the Concentration and Centralization

14 Competition and the Types of Individual Capitals 367

15 Competition and the Division of Classes 407

16 Capital’s Challenge to Right 423

Capital and Economic Right 438

Works Cited 449

© The Author(s) 2016 1

validity is then compelled to ground itself, eliminating its own defining

within the immediate labor process, irrespective of the realization of

or whether it represents market dynamics that can be remedied by the

economic and non-economic rights of all individuals. This work was

market system involving capital impacts upon justice, and determining

in Thirty Lectures12 I have attempted to show that Hegel has provided a

the Yale philosophy department had imposed a 250-page limit on disserta-

With What Must Economic Science Begin?

© The Author(s) 2016 13

needs, with no connection to the biological requirements of the individu-

economic activity is an exercise of right, involving a universal form of

domain of conduct, is a normative institution, which, as such, is subject

undetermined the particularity and individuality of capital, the partic-

in itself, but an external necessity to which every private pursuit must

JAMESON, Dr. Leander S.:

See (in this volume)

JAMESON, Dr. Leander S.:

See (in this volume)

JAMESON, Dr. Leander S.:

See (in this volume)

----------JAMESON, Dr. Leander S.: End--------

"When the Emperor's nominal authority was converted into a

"The new Cabinet, formed in September, 1896, had Count

See (in this volume)