Grundrisse

1. Labor, Not Money, is the True Source of Value

Never has anyone written about “money in general” amidst such total lack of money in particular.

Challenging conventional wisdom. Marx argues against the prevailing economic theories of his time, which often attributed value to money or capital itself. Instead, he posits that all value ultimately derives from human labor. Money, in this view, is merely a representation of that labor, a tool for facilitating exchange, but not the origin of wealth itself.

Labor as the foundation. This perspective emphasizes the fundamental role of workers in creating economic value. Whether it's the extraction of raw materials, the manufacturing of goods, or the provision of services, it is human effort that transforms resources into commodities with exchange value. Money only facilitates the exchange of these commodities.

Implications for understanding capitalism. By recognizing labor as the source of value, Marx lays the groundwork for his critique of capitalism. He argues that the capitalist system inherently obscures and distorts the true source of wealth, leading to exploitation and inequality. The quote above highlights the irony of Marx writing about money while living in poverty, underscoring the disconnect between the creation of wealth and its distribution under capitalism.

2. Capital Exploits Labor by Appropriating Surplus Value

The capitalist must obtain more value than he has given.

The core of exploitation. Marx identifies the extraction of surplus value as the defining characteristic of capitalist exploitation. Capitalists, by virtue of their ownership of the means of production, are able to purchase labor power at its exchange value (wages) but extract more value from it in the production process than they pay for.

Surplus labor. This difference between the value of labor power and the value it creates is surplus value, which the capitalist appropriates as profit. The worker is compelled to work beyond the time necessary to reproduce their own labor power, creating surplus labor that benefits the capitalist.

The "essentially different category." This process is "qualitatively different from exchange," because the use value of labor for the capitalist is precisely to create exchange values, commodities, products to be sold. This exploitation is not a matter of individual greed or unfairness, but a systemic feature of capitalism.

3. Capitalism's Contradictions Lead to Inevitable Crises

These contradictions lead to explosions, cataclysms, crises, in which by momentaneous suspension of labour and annihilation of a great portion of capital the latter is violently reduced to the point where it can go on … Yet, these regularly recurring catastrophes lead to their repetition on a higher scale, and finally to its violent overthrow.

Inherent instability. Marx argues that capitalism is not a stable or harmonious system, but one riddled with internal contradictions that inevitably lead to crises. These crises are not accidental or external shocks, but rather the logical outcome of the system's inherent dynamics.

Overproduction. One key contradiction is the tendency towards overproduction. Capitalists are driven to accumulate capital and expand production without limit, but the market's capacity to absorb these goods is finite. This leads to a glut of commodities, falling prices, and economic recession.

The cycle of boom and bust. These crises, while destructive, also serve a function within capitalism. They "violently reduce" capital to a point where it can resume accumulation, but only on a higher scale, setting the stage for the next crisis. This cyclical pattern of boom and bust is a recurring feature of capitalist development.

4. Circulation Obscures the Underlying Exploitation in Production

In present bourgeois society as a whole, this positing of prices and their circulation etc., appears as the surface process, beneath which, in the depths, entirely different processes go on, in which this apparent individual equality and liberty disappear.

The market as illusion. The sphere of circulation, where commodities are exchanged, presents an image of freedom and equality. Buyers and sellers meet as equals, exchanging equivalents in a seemingly fair transaction. However, this is merely a "surface process" that obscures the "entirely different processes" taking place in the depths of production.

Exploitation hidden. The exploitation of labor, the extraction of surplus value, occurs at the point of production, not in the marketplace. The worker sells their labor power to the capitalist, seemingly freely, but in doing so, they surrender control over the creative power of their labor.

The "essentially different category." This "essentially different category" is the process of exploitation, or the extraction of surplus product from the worker’s labor time. This process is the source of capitalist accumulation.

5. Fixed Capital Drives Productivity but Also Devaluation

Hence the highest development of productive power together with the greatest expansion of existing wealth will coincide with depreciation of capital, degradation of the labourer, and a most straitened exhaustion of his vital powers.

The double-edged sword. Fixed capital, such as machinery, is a key driver of productivity in capitalism. It allows for the production of more goods with less labor, leading to increased wealth. However, this development also has a dark side.

Devaluation of labor. As machines replace human workers, the value of labor power decreases. Workers are deskilled, wages are depressed, and unemployment rises. This leads to the "degradation of the laborer" and the "exhaustion of his vital powers."

Depreciation of capital. The relentless pursuit of technological advancement also leads to the "depreciation of capital." New, more efficient machines render older ones obsolete, devaluing the capital invested in them. This creates a constant pressure for capitalists to innovate and accumulate, perpetuating the cycle of creative destruction.

6. Competition is Capital's Engine and Self-Destruction

It is not the individuals who are set free by free competition; it is, rather, capital which is set free.

The driving force. Competition is the lifeblood of capitalism, the force that drives innovation, efficiency, and the expansion of markets. Capitalists are constantly compelled to compete with one another, seeking to produce goods more cheaply and efficiently.

Capital's freedom. However, this competition is not about individual freedom, but rather the freedom of capital to accumulate and expand. Capitalists are forced to compete, to exploit labor, and to revolutionize production in order to survive.

The "only rational reply." This relentless competition ultimately undermines the system itself. It leads to overproduction, crises, and the concentration of capital in the hands of a few. Marx argues that "the analysis of what free competition really is, is the only rational reply to the middle-class prophets who laud it to the skies or to the socialists who damn it to hell."

7. Capitalism Creates Both Wealth and its Own Gravediggers

Thus all the progress of civilization, or in other words every increase in the powers of social production, … in the productive powers of labour itself … enriches not the worker, but rather capital; hence it only magnifies again the power dominating over labour; increases only the productive power of capital.

Uneven distribution. While capitalism generates unprecedented levels of wealth, this wealth is not distributed evenly. The benefits of increased productivity accrue primarily to the capitalist class, while the working class experiences relative impoverishment and increasing insecurity.

The rise of the proletariat. However, in the process of concentrating workers in factories and subjecting them to the discipline of capitalist production, capitalism also creates the conditions for the emergence of a revolutionary working class. This class, united by its shared experience of exploitation, becomes the "gravedigger" of capitalism.

Objective preconditions. Marx's theoretical labors were concerned with economics for the sake of economics, philosophy for the sake of philosophy, or criticism for its own sake; but rather that the aim of this work was to prepare, to educate the next generation of leaders of the working class in the objective preconditions, possibility and necessity of the historic task.

8. Understanding Capital Requires Grasping its Historical Context

The fixed presuppositions themselves become fluid in the further course of development. But only by holding them fast at the beginning is their development possible without confounding everything.

Rejecting ahistorical analysis. Marx emphasizes the importance of understanding capitalism as a historically specific mode of production, not as a natural or eternal system. The categories of political economy, such as capital, labor, and value, are not universal concepts, but rather products of a particular historical development.

The "scientifically correct method." The proper method of inquiry, according to Marx, is to begin with the abstract categories and then move towards the concrete reality of a given society. This involves tracing the historical development of these categories and understanding how they are shaped by specific social and economic conditions.

The commodity as a starting point. The commodity, as the basic unit of capitalist production, is a "unity of two aspects": use value and exchange value. Understanding the contradictions inherent in this unity is key to understanding the dynamics of capitalism.

9. Hegelian Dialectics Illuminate Marx's Critique of Political Economy

In the method of working it was of great service to me that by mere accident … I leafed through Hegel’s Logic again.

Hegel's influence. Marx's method of inquiry is deeply influenced by Hegelian dialectics. This involves understanding concepts as processes, as constantly changing and developing through the interplay of opposing forces.

Contradiction as the driving force. For Hegel, negation is the creative force. Here, the harder the worker negates himself, or is negated by capital, the more wealth does he create. (Numerous passages, for instance p. 308.) For Hegel, negation creates its opposite, ‘position’ (to posit); and negation therefore not only gives a thing its specific character in itself (Ansich) but, as position, gives it its character for-others.

Materialist dialectics. However, Marx rejects Hegel's idealism, arguing that the material world is primary and that ideas are merely reflections of material reality. He seeks to "strip off the mystical shell from the rational core" of Hegel's dialectic, applying it to the analysis of concrete economic and social relations.

10. The Goal: A Society Beyond Capital's Inherent Limits

Only when the barriers to human productivity imposed by capitalist relations are broken and cast off do the conditions exist, he says, when one may speak of humanity entering ‘the absolute movement of becoming’.

Capitalism as a transitional stage. Marx views capitalism as a necessary but ultimately unsustainable stage in human history. It creates the material and technological preconditions for a more advanced form of society, but its inherent contradictions prevent it from fully realizing these possibilities.

A new becoming. The goal is to move beyond capitalism to a society where production is organized to meet human needs rather than to generate profit. This would involve the abolition of private property, the elimination of class divisions, and the creation of a truly free and equal society.

The social individual. The place of this type is taken by the social individual, the individual of classless society, a personality type which is not less, but rather more, developed as an individual because of its direct social nature. As opposed to the empty, impoverished, restricted individuality of capitalist society, the new human being displays an all-sided, full, rich development of needs and capacities, and is universal in character and development (pp. 161–2, 172–3, 325, 487–8, 540–42, 611, 652, 706, 708, 712, 749, 831–2).

Last updated: March 15, 2025