Etienne Balibar: Towards a New Critique of Political Economy: From Generalized Surplus Value to Total Subsumption
In the theoretical framework of a "New Critique of Political Economy," every issue must be revisited. This theoretical framework is visibly connected to Marx, coinciding with the title or subtitle of his revolutionary theoretical works on the capitalist mode of production. However, it is understandable that some critical theories within it diverge from Marx, or are even based on opposing hypotheses. Today, the term "political economy" has been endowed with a more specialized connotation. Does this concept point toward a critical discernment? We know that Marx distinguished and discerned between "classical political economy" and "vulgar economics." The former became the theoretical source for his own theory of capitalism, while the latter was in fact his anticipation of the mainstream economic theories of the 20th century. If it is not a discernment, then does the concept here refer to a general political economy? In that case, Marxism itself might simultaneously become both the subject and the object of critique. This question can also be approached from different perspectives.
Although "vulgar economics" was rejected by Marx, it has survived to this day. This is not only due to power relations within academia, but also because Marxism failed to prioritize the study of the concentrated regulation mechanisms of the capitalist economy in real society. By observing the failed economic policies of Marxist socialists, capitalism absorbed the lessons therein. But here, once again, we should remember that the situation is far more complex than making a biased choice. This is because certain "heterodox" schools of Marxism actually studied the questions and categories proposed by post-classical economists. From this, it can be shown that mainstream economists responded to Marx in many respects, thereby utilizing Marxist theory in a dialectical manner. Consequently, the use of the adjective "new" hides several problems. Is the "new" critique of political economy a critique of some kind of new "political economy" that even Marx did not understand? Or, because of the internal ambiguities in Marx’s discourse, has it been difficult for Marxists to precisely articulate certain capitalist structures and tendencies? Is such a new or updated critique—as a continuation of economic theoretical discourse—a continuation of Marxist critique? Finally, at the theoretical core of this "new" critique, where is the pivotal point for critiquing various discourses? What are the dimensions for critiquing various institutions, social structures, and historical trends?
These dilemmas are abstract and not exhaustive. I will keep them in mind as I present some of the content involved in the debates and conditions. I acknowledge that Marx’s theory of the critique of political economy, as a critique of capitalism, has its own weaknesses or difficulties; moreover, these weaknesses always reside alongside its brilliant points—or the strengths we might call "truth"—like the shadows of these truths, rendering everything obscure and blurred in many instances.
This explains why I first want to discuss the core category proposed by Marx in Capital, namely the category of surplus value, which is precisely what links the analysis of exploitation with the analysis of accumulation. I will propose a generalized concept of surplus value, removing the limitations set by Marx—which originated from the theoretical foundations of Adam Smith and David Ricardo—to address the issue of "total subsumption." Through this issue, I hope to better understand how financial capital dominates daily life in the era of "neoliberal" globalization.
01 Capital as a Social Relation
As we know, there was a "consensus" among the various critical readings of Marx’s Capital in the 20th century: the core of Marx’s critique lies in the introduction of the "structural" category of social relations, rather than the fetishistic analysis of commodities and people. "Capital" is not a "thing," nor is it even something that capitalists and other agents handle and process. Nor is it a "thing" that is "symbolic" on the surface but essentially social; it is itself a "social relation," and therefore, it is a relation between social subjects, individuals, and all classes. In this relation, capital plays specific roles that are both interdependent and antagonistic. This directly indicates that the category of "social relations" is inseparable from process. Social relations are formed within a process and are composed of several intertwined processes, in which exchange processes alternate with processes of consumption and production. This process should be perpetual, or more strictly speaking, it corresponds to the continuous reproduction of material, financial, and institutional social relations and all their conditions. However, as Marx revealed, reproduction—especially "expanded reproduction"—must also be a transformation. Capital is such a process that it can only realize itself socially and historically through its own transformation.
In order to study this "process" of capital along with its goal-orientation and driving forces, we must clarify the kind of relation and the "social effect" we are talking about, so that everything can become clear. The goal of this process is accumulation, and this result is always set as a precondition when the whole process begins again, manifesting in the form of money capital seeking investment locations and methods. At the same time, the specific nature of capital relations is characterized by the fact that, although they may appear extensively at multiple levels of society, the relations of social dependence controlled by the rules of accumulation are ultimately naturalized into or reduced to an antagonistic relation of exploitation. Although this relation of exploitation produces more or less dynamic conflicts, without it, the reproduction of life and society cannot be maintained. We also need to explain how we describe the "direct" forms of social relations. In these social relations, the opposite of the wage laborer is the direct or indirect owner and manager of capital—a social stratum that possesses global connections. The "direct" form of these social relations manifests as relations between classes, forms of the distribution of total property and income, and forms of the distribution of power. In these manifestations, many social functions and distinctions exist: it no longer appears as an "intersubjective" relation of exploitation and domination, but rather as an "objective" relation of an evolving "society" with itself.
I agree with Louis Althusser’s view that this is the philosophical core of Marx’s epistemological break. This "break" is a ruptural negation of previous ideological representations of capital. In Marx’s dialectical theory, this negation explains why these ideological representations are necessary and even useful under certain conditions. In other words, they are part of social relations themselves. This "break" is even more of a breakthrough; the problems it points toward cannot be solved merely by developing its premises. This set of theories expresses the same innovation. However, in the antagonistic process of the actual historical transformation of capitalism, the obstacles contained within this set of theories have gradually become apparent. This is where the necessity of a deconstructive strategy manifests. Since the deconstructive strategy traces the origins of "basic concepts" by deconstructing their definitions, it identifies the obstacles and difficulties contained within the core content of theoretical innovation.
02 Research on Marx’s Epistemological Interference Factors
Marx defined the concept of "capital" through two great methods. From our contemporary perspective, the primary epistemological interference factor regarding Marx is precisely the intersection of these two methods. Marx believed that the two were complementary and were actually two aspects of the same model: capital is a process of exploitation, a process that usually relies on the hiring of labor power. Marx sometimes borrowed Hegel’s phrasing, calling this relation an "essential relation." On the other hand, capital is an accumulation process—an infinite cycle manifested through the form of money—in which profit must be maximized by reconstructing its own primary parts. In a sense, they refer to different "social relations" or different aspects of the social mechanism, but in Marx’s view, they are strictly related. Why do problems arise at the intersection of the two? The sources of the problems are as follows: first, Marx believed that "capital" is ultimately nothing but capitalized labor, therefore, "labor" is not merely one of many factors of production as described by mainstream economic theory; second, the manner through which Marx linked labor with the money form; third, the manner through which Marx attributed "productive forces" to labor.
In Capital, Marx’s discourse on capital exploitation and accumulation relies entirely on the core concept of "valorization" (Verwertung). However, if we return to the German text, we see that the term corresponds to two concepts with different connotations. Of course, they are intertwined, but the question is the nature of their combination. One connotation literally means the "formation of value." The underlying concept is that in a society where all products take the form of commodities, the exchange value of these products must be determined by some common "substance," which finds expression through the exchange value of the products. Marx continued the theory of classical economists, believing this substance to be labor power, but he further qualified that labor power here is "abstract social labor": its quantity cannot be directly observed but is rather a result of exchange itself, implicit in or "internalized" within the "equilibrium" formed behind or in the interstices of the market. Thus, a circularity exists: abstract labor exists because the proportions of commodity exchange depend directly on the quantity of abstract labor they embody. However, the primary difficulty arises in how to elucidate "valorization" from the perspective of value formation while simultaneously elucidating "valorization" from the capitalist perspective. Exploitation represents the "increase in value" (Verwertung). Capitalists invest and measure value or calculate prices only because they want to maximize "surplus," thereby obtaining surplus value. On the surface, it appears value is "formed" in the market. In reality, the correct process is exactly the opposite. In the sense of the first layer of value formation, valorization already exists because, in the sense of the second meaning—producing surplus value—valorization likewise exists. It is precisely wage labor, which is to say capitalism, that homogenizes and "equalizes" labor.
Other difficulties are related to this axiomatic circle. To explain how "surplus" is generated, Marx had to explain that the value of the means of production already exists. The "secret" of labor productivity has two conditions: first, as "concrete" labor, it preserves or recreates the value of the machines and raw materials used in the labor process; second, as "abstract" labor, it creates measurable new value. But in fact, none of this is certain: everything only makes sense once the anticipation of value is "realized" in the market—that is, when the product is sold and converted into money in a completely random manner. Therefore, a considerable problem is encountered here: Marx asserted that value is expressed only through the form of money, while he simultaneously tended to neutralize the function of money and return to a "real" representation of the economic cycle. Contrary to capitalist logic, in the economic cycle, it is not money that controls the circulation of commodities; rather, commodities link and express the relations between themselves in the fetishistic form of money operations. This ultimately led to the fact that Marx, in the unfinished Chapter 25 of Volume III of Capital, referred to the operations of credit and the entire financial process as "fictitious capital."
When discussing the development of contemporary financialized capitalism, this triggers a huge difficulty that could potentially lead us into an opposite discourse: namely, viewing capitalism as a purely financial process or, more broadly, completely detached from the social relations that facilitate the orderly transformation of value from the money form into the commodity form. Without this orderly transformation and metamorphosis, valorization in its dual sense cannot be achieved. To achieve the valorization of value, value must achieve a transformation of form.
Labor presents the same difficulties. The "dual character of labor" explains the duality of "valorization." From the perspective of the "dual character of labor," two ways of identifying "labor" persist in Marx’s argumentation. This sense of constraint becomes evident through the polysemous use of the category of "productive forces." On the one hand, "productive labor" describes all activities transformed into the field of capital investment: as seen in my previous discussion, by changing monetary value into its opposite—the material or immaterial expression of the use-value of commodities—surplus value will be generated. On the other hand, "productive labor" refers to concrete activities carried out in the fields of material production such as industry and agriculture. As Marx mentioned in Volume II of Capital when discussing the interpenetration of the cycles of production and circulation in the process of capital "turnover," we can certainly include transportation, communication, etc., in the sphere of production. However, this does not change the fact that "productive labor" here is used in a narrow sense, "formally" linked to various fields of money-capital investment.
Here, I will discuss some examples experimentally rather than deriving anything from purely conceptual arguments. I will examine two such processes which, of course, may rely on the exploitation of labor-power, but more importantly, "endow value" upon other aspects of human life and consumption, which also generate surplus value in a "broad sense." In discussing these examples, we must remember that if money does not transform into a "productive" commodity in the capitalist sense, then capital cannot exist, and money has no value.
03. Surplus Health and the Accumulation of Biocapital
The first example proposed here is "surplus health." I believe this term was coined by Joseph Dumit in a series of studies and summarized in his book Drugs for Life. Modeled after "surplus value" and "surplus labor," this concept shifts the analytical perspective from production to a certain sphere of consumption—a sphere that is vital because it determines an individual’s ability to survive and the ability to enjoy an "acceptable" life in a given environment, an ability that is currently in jeopardy. Therefore, it is necessary to introduce a capacity for "survival" analogous to the Marxist labor-power—a capacity to access medicine and medical services.
In the first aspect, the definition of "illness" is gradually changing. Illness, as a lived experience, can also become an object of exploitation. In the second aspect, the illnesses people face have moved from a discontinuous state to a continuous state. Most illnesses today are chronic. Furthermore, statistics show an inherent trend where, with increasing age, individuals tend to consume the maximum quantity of various drugs as frequently and for as long as possible. The third aspect is that, according to the "free" laws of the market, supply precedes demand and, in fact, creates demand.
Marx believed that profit comes from the process of valorization within the production process, but profit here is essentially not just from the production process. Profit also comes from a different kind of valorization—namely, the direct linkage of innovation with increased consumption. This is precisely "surplus health," which we can also call a generalized form of surplus value. Kaushik Sunder Rajan added another dimension, elucidating a new law of population at the level of the global economy, which is thus very important for understanding the nexus between globalization and financialization. Through this series of important new analyses, we learn that generalized surplus value is a social relation that simultaneously acts on local market functions and the conditions of the global system.
04. The Concept of Human Capital as an Inversion of the "Labor Theory of Value"
The second example I raise is the concept of "human capital," which functions differently. Gary Becker established interconnected models to study, on the one hand, which key individual capacities allow a person to realize the maximum degree of profitability for an employer after being hired, and on the other hand, how the cost formula for producing these key capacities—by amortizing costs within society and the worker's family—allows the employer to maximize income while minimizing costs. The research assesses the economic correlation between investment and return, proving that economic strategies can achieve "rational expectations." Through this research, an optimal strategy can be designated by considering the following three variables: the time spent forming labor capacity; the costs incurred by the individual or collective; and the returns reflected through the individual’s lifetime earnings. I am not discussing here whether these models are truly "effective" or "predictive." However, I wish to insist on three aspects that I believe should be elucidated.
First, it must be emphasized that the category of "human capital" did not arise from an individualistic perspective. In fact, it appeared in the 1950s, accompanying discussions and plans on how newly independent colonies should develop.
Second, a major goal of Becker's theory was to provide theoretical tools for quantitative evaluation of various merits when calculating costs and benefits for "elite" individuals, as well as to provide alternative educational strategies for achieving "equality." In reality, his so-called "elites" are predicted to be more outstanding because more investment has been made in them; his so-called "equality" involves large-scale investment in educational institutions so they can provide different services to everyone, allowing individuals to obtain varying degrees of "valorization" according to their individual abilities, ambitions, or determination. This is clearly a political confrontation, and the result on a global scale—that meritocratic systems are more effective than egalitarian systems—is not surprising.
Finally, such theories, and the trends accompanying capitalist society, have a perverse yet very understandable relationship with the Marxist discourse on the exploitation of labor-power and capital accumulation. Marx believed that "capital" could ultimately be reduced to productive labor, or labor in another form. In contrast, the theory of human capital refers to labor as "human capital," believing that labor can be transformed into a type of capital and can operate in the manner of capital through credit, investment, and profitability. Of course, the underlying ideology here is to view the individual as a self-employed person or the entrepreneur themselves.
05. Capitalist Reproduction or "Total Subsumption"
As my research unfolds toward an attempt to define "absolute capitalism," a turning point emerges: a process of steady commodification, or the process of creating new "fictitious commodities," which is key to sustaining the accumulation process. It leads to the inclusion of reproduction processes—including biological, intellectual, or symbolic ones—within the valorization process. This valorization process "transforms" human activities into digital figures measurable by money; this process also leads to a significant increase in the credit and debt borne by individuals and society as a whole. Thus, the production process and the valorization process must be included in the definition of capital itself.
I have already discussed the issue of valorization, a process that includes both the formation of value and the addition of new value to existing capital. The process of valorization includes the processes of accumulation, commodification, and financialization. Marx pointed out that this process does not rely purely on the exploitation of labor-power; it further contains the exploitation of a certain capacity for life. I agree with what David Harvey insists: this is not to say that because valorization does not involve exploitation or dispossession, there is no potential or overt confrontation. On the contrary, the trend toward infinite accumulation drives capitalism more than ever: this is why every investment must plan for the realization of value in advance.
This is why I insist on emphasizing the importance of the steady process of commodification. Ultimately, "commodification" is a commodification of life, achieved by commodifying its goals, behaviors, or hobbies. This process began long before capitalism, even before the Industrial Revolution; but it continues within capitalism, overcoming numerous difficulties.
It is precisely this combination of objective and subjective dimensions that prompts me to propose a quasi-Marxian category of "total subsumption." Most importantly, I want to extend a thought pioneered by Marx, though he left behind some obscure, unpublished texts. In English, "subsumption" is an ancient legal and philosophical category. However, what is most striking is when we introduce a third ontological category that is neither "thing" nor "person," nor can it contain both, but is "action" or "agency." This is the manner Marx used when describing the transition from "formal subsumption" to "real subsumption" in Capital. It is precisely the worker's activity that is deformed by capitalist production and the Industrial Revolution into a partial operation within a collective process, while the content and rhythm of this collective process are seen as the machinery itself. Thus, workers can only produce or have "capacity for activity" within the factory environment; they are completely subject to the "laws" of capitalist valorization. When "formal subsumption," which appears legally in the form of wages, is fully "realized" or transformed into "real subsumption," exploitation is not just a means of dominance but is integrated into the human body and mind, or thoroughly individualized.
At the same time, however, another thing occurred, which I call "total subsumption." There are indications that, in Marx's view, capitalism always wants to exploit from two sides: not only exploiting labor-power in the production process but also exploiting in the reproduction process. As I mentioned before, there exists the fact that in such a reproduction process—which concretely links the family with market conditions—an additional form of unpaid domestic labor is generated. But Marx did not ignore the fact that market constraints or market logic will increasingly control the quality and quantity of workers' consumption to make it more profitable for capital.
This clearly means two things: (1) the boundary in an anthropological sense between work and life, and between production and reproduction, has disappeared, because the reproduction process itself is becoming a "productive" field in the capitalist sense; (2) the dimensions of individuality that are not affected by commodification have disappeared—that is, intersubjectivity, vulnerability, or dependence among individuals no longer exist. Any form of life as a participant—whether active or passive, even suffering or moribund—cannot exist outside its commodity form and value form, and this value form is actually just a moment in the process of capital valorization. This is not to reduce an individual's life to what Giorgio Agamben calls "bare life." In a sense, it is exactly the opposite: although every human culture is a kind of "second nature," the denaturation of life, or the resulting "second nature," are purely capitalist forms. This is what I call total subsumption (it appearing after "formal" and "real" subsumption) because it leaves nothing external (leaving no space for "natural" life). Or, anything not included must appear as a residue, a field awaiting further integration. Must it be so? This is the whole question, of course; the moral question is just like the political question: are there limits to commodification? Do internal and external obstacles exist? Lacanians might say: every such totalization contains an impossible element that belongs to the "Real"; it must be "not-all," or incomplete. If so, heterogeneous elements—the internal surplus of total subsumption—might appear in many different forms. Some expressions are clearly individual actions, such as pathological or anarchic resistance activities; some expressions are mass actions, and some even take the form of government actions. Or, they might become a display manifesting in certain difficulties of implementing the neoliberal agenda—for example, once a medical insurance system is legalized, it is difficult to abolish it.