Rethinking Asian Capitalism with Marx

Alex Taek-Gwang Lee

The Survival of Capitalism

Since the financial crisis of 2008, we have witnessed astounding proclamations indicating that capitalism is dead or at least dying. The similar scene repeats in this COVID-19 pandemic situation. Some experts quickly anticipate the end of global capitalism and the return of the new cold war. Rhetorical expressions such as these emerging from the left were not surprising; however, in this case, the subjects of these utterances were interesting enough. They were not the left, but preferably those who had stood in opposition to the leftist demand to end capitalism. Politicians, policymakers, people in business as well as liberal economists, even comedians, seemed to be waiting for the last breath of capitalism. However, capitalism did not die. It has survived, and so we still live in a world of ridiculous “transformers.”

Why is this happening? How does capitalism sustain itself? There are lots of arguments to support the life of capitalism. Still, I think this is the point where we should return to Marx’s analysis of capitalism, his approach to the secret of capital, so to speak, the problem of a commodity. We need to reconsider the enigmatic relationship between commodities and capitalism. The material foundation of global capitalism resides in the multi-national divisions of labour and the worldwide distribution of commodities. In this capitalist logistics, Asian countries have played a crucial role after the Second World War. The Cold War was the geopolitical strategy to invent so-called Asia. For most of the people in Asia, the Cold War was not so much “cold” as “the hottest” warfare.

After the collapse of the socialist bloc, Asian countries seemed turned to be “Factory Asia” based on regional supply chain and the cheap labour-power in the global economy. One day, Asia was the revolutionary countries of a red flag, but now turned the land of promise for global capitalism. Global task allocation allowed China to be the central hub of Global Value Chain (GVC), at the same time, accelerated the integrated trade and disintegrated production. This global transformation ended up with the separation between consumption and production, which seemed to undermine the role of the nation-states in the international relations. As Zygmunt Bauman argues, this retreat of a nation-state means that the state power is increasingly seen as only administration and less and less often as the governance of national passion (Bauman 1998, 55–56).

It is undeniable that the survival of capitalism after the crisis of 2008 lies with the Asian supply chain, which remained undiminished from the financial collapse. However, the analysis seems to lack a deserved consideration of the fact that Asia is not only the factory but also a market based on telecommunication technology such as the Internet. This technology-based market forges the unconscious level of global capitalism and the cultural logic of commodities. The commodities are not simple objects but always represented as specific values which have the hidden layer of their existence. The values of any commodity depend on the accidental relations of exchange and come to erase their origins. As Slavoj Žižek points out, the secret of commodities lies in its form like the Freudian sense of “dream-work.” By analyzing Marx’s brilliant concept of commodity fetishism, Žižek states that “in the commodity-form, there is definitely more at stake than the commodity-form itself, and it was precisely this ‘more’ which exerted such a fascinating power of attraction” (Žižek 1989, 9–10). Here, Žižek clarifies the latent link between Marx and psychoanalysis, which reveals the unconscious level of commodification, the fetishism of the commodity-form. However, his analysis must be pushed forward to the ontological level of a commodity, if we want to understand the full mechanism of commodification.

Commodification as Natural Law

I would like to introduce my personal experience regarding this matter. It happened when I visited Chinatown in Kuala Lumpur, the capital of Malaysia. I elbowed my way through the crowds. Some vendors were soliciting me with their counterfeit luxury watches. I ignored them, but one of the sellers clasped my sleeve and insisted, “this is a fake, but the same as the original one.” An idea occurred to me at that moment: If there is no difference between the imitation and the original, how could we demarcate luxury goods from the non-luxury ones? What is the meaning of luxury without the distinction? Furthermore, what makes the luxury commodity a luxury commodity in itself? This could be called a question about the ontology of the commodity.

Another episode I witnessed in my country, South Korea, would clarify these issues. In 2010, according to a newspaper, South Korean police arrested a man who produced and sold knock-off luxury bags such as Chanel, Louis Vuitton, Gucci, Prada, etc. More interestingly, the report said that he once worked as an original equipment manufacturer for such luxury companies, and then made luxury imitations for 22 years after quitting his job. Thus, it seemed not at all strange when the suspect insisted that he must be called a craftsman and not merely a criminal.

These are not just joked on luxury production and consumption, but instead reveal a truth about capitalism, in particular, the structure of commodities. The incidents I described above explain what justifies a commodity as a commodity. In light of the occasions in question, not every commodity is permitted to exist as an authentic commodity, although a fake commodity has its own value in the market. The criterion that distinguishes which one is an authentic commodity and which one is not is significant to register the logic of commodity fetishism. What is the measure that registers a commodity as authentic? The value of a commodity is defined by something else, which is not itself included in that commodity. A commodity is not autonomous, but always already related to another dimension, i.e. the relation of exchange. In this sense, Marx’s definition of commodification can reveal the problem of commoditization in general.

For Marx, a commodity is the secret of capitalist dynamics. To understand the dynamic system of capitalism, he analyzes the movement of capital as “a process of value expansion or wealth augmentation” (Nicholas 2011, 7). There is a circulation of commodities at the core of the vigorous enlargement of capitalist fortune. This is the reason Marx begins his famous enquiry of capital with the dissection of commodities. The dissemination of commodities means the formation of prices, i.e., the exchange of a commodity for money and money for another commodity. The general formula of this mechanism is depicted C-M-C, the way commodities transformed into money which is transformed back into commodities; this explains how the accumulation of capital happens. The exchange process produces the values of commodities; thus, the form of a commodity is open to the relations between sellers and buyers. The circulation of commodities subsisting under such relations could be called a market.

A commodity is in this respect the product of social relations. No individual could produce a commodity. He or she can make a product through his or her labour, but not commodities. A commodity requires social production and exchange while interceding the division of labour and expediting the reproduction of another commodity. In this way, the sale of commodities is partly used for more commodity production, in a cycle that replenishes such production. However, as Marx points out, the capitalist diffusion of commodities is not merely the exchange of products as in bartering, but rather the exchange is always mediated by money. The notion of monetized prices is the crucial hub for the wheel of commodities. As Marx argues:

Even if an individual article, or a definite quantity of one kind of commodity, may contain simply the social labour required to produce it, and as far as this aspect is concerned the market value of this commodity represents no more than the necessary labour, yet, if the commodity in question is produced on a scale that exceeds the social need at the time, a part of the society’s labour-time is wasted, and the mass of commodities in question then represents on the market a much smaller quantity of social labour than it actually contains … These commodities must therefore be got rid of at less than their market value, and a portion of them may even be completely unsalable … But if the volume of social labor spent on the production of a certain article corresponds in scale to the social need to be satisfied, so that the amount produced corresponds to the customary measure of reproduction, given an unchanged demand, then the commodity will be sold at its market value. The exchange or sale of commodities at their value is the rational, natural law of the equilibrium between them; not the converse, i.e. the law of equilibrium should not be derived from contemplating the divergence. (1981, 288)

Marx suggests that reproduction prices are relative. The assessment of commodities depends on their relationship to another commodity. In this sense, the truth of the prices lies in the actual exchange of commodities rather than the natural law of the equilibrium. The prices could be changed by a transformation in the reproduction of commodities or the magnitudes of values. For Marx, values are the complicated determinant to the reproduction price. The reproduction price is not related to labour productivity but revolves around the values. How are the values determined? A theologian like Saint Thomas Aquinas would argue that only God could define the values. What about today? Is Aquinas’ presupposition still reliable to understand the relationship between prices and values in capitalism? What Aquinas meant by God was the norm of natural law. With the advent of capitalism, the heavenly rule is changed, replaced with the more secular version, i.e. the market of homo economicus. However, the category of natural law is still working. What is considered the natural law for values now?

For Aquinas, natural law is the rational capacity to participate in the eternal law and the guidance and measure for human acts. Conversely, natural law could be a rationale to justify the determinants of values. It is not difficult to see this reversed phenomenon in capitalist society. Marx’s analysis of commodity fetishism is firmly grounded in the circumstance of commodification. Money is used as the norm for prices in the commodifying effect. Different from values, the determinants of prices rest on the exchange of commodities, not the values produced by labour. Abiding by this criterion, producers calculate prices to sustain the reproduction of commodities. To reproduce commodities, material resources and labour time are necessarily required. In this way, “assessing the quantity of resources required to produce a commodity in economies characterized by a division of labor is in effect assessing the amount of direct and indirect labor time required to produce it”. This proves the correctness of Marx’s presumption that reproduction prices must be set on the basis of values.

Here, I don’t wish to discuss further Marx’s analysis of the connection between prices and values and his preoccupation to transform the value of inputs into prices of production. Suffice it to say that the prices of commodities cannot help reflecting values. This difference is the important point from which I would like to develop my argument. According to Marx’s discovery, there is a discrepancy between prices and values, and the confusion of these categories resides in commodity fetishism. This is the reason why such an effect gyrates around all commodities. As is well known, Marx’s conceptualization of fetishism is an attempt to understand the effect of commodity form producing a formal equality. The problem of commodity form is the fetishism of the equal exchanges by which everything is simply transformed into an equalized value in abstract whatsoever its substantive differences in use value.

Marx Returns

It is György Lukács who formulated the theory of reification from Marx’s discussion of commodity fetishism and defined its essential aspect as the ghostly objectivity of commodity form. For Lukács, it is reification that obstructs epistemological totalization in capitalist society, specifically the rationalization of a world operated by commodity-structure. This process of rational objectification subsequently conceals the immediate qualitative and material character of things as things. This is the very process of reification through capitalist rationalization; rationalization transforms any quality of natural materials into the symbolically quantitative dimension. Marx also analyzes this symbolizing mechanism of rationalization in explaining the relation between time and the clock – “the clock was the first automatic device applied to practical purpose; the whole theory of the production of regular motion was developed through it” (2010, 448).

As Charlie Chaplin’s film, Modern Times, clearly manifests, the clock is, so to speak, an ideological apparatus, whereby the rationalization of capitalism comes to occupy human consciousness as well as the unconscious. When Lukács conceptualizes the meaning of reification, it refers to not only the rationalization of human relationships in a capitalist society but also the individual and collective psychological effect generated by the process of the symbolic mechanism. It is in this sense that reification can be seen as a matrix in which the chemistry of ideological production is closely linked to individual fantasy. This is where a question as to how such a psychological effect is verified by commodity-structure arises. Commodities in and of themselves cannot control and influence our minds. Commodities have no power in this regard. Marx clearly points this out when he writes:

Commodities cannot themselves go to market and perform exchanges in their own right. We must, therefore, have recourse to their guardians, who are the possessors of commodities. Commodities are things, and therefore lack the power to resist man. If they are unwilling, he can use force; in other words, he can take possession of them. In order that these objects may enter into relation with each other as commodities, their guardians must place themselves in relation to one another as persons whose will resides in those objects, and must behave in such a way that each does not appropriate the commodity of the other, and alienate his own, except through an act to which both parties consent. The guardians must therefore recognize each other as owners of private property. This juridical relation, whose form is the contract, whether as part of a developed legal system or not, is a relation between two wills which mirrors the economic relation. The content of this juridical relation (or relation of two wills) is itself determined by the economic relation. Here the persons exist for one another merely as representatives and hence owners, of commodities. (1976, 178)

What should be stressed in Marx’s argument is that the juridical relation is nothing less than the economic relationship embedded in a private property. In this respect, the economic association cannot be separated from the juridical relation. That is to say, commodities are always embodied in a legal system protecting their owners’ interests. The natural ontology of commodities, in other words, the naturalizing structure of commodification, goes hand in hand with legalization. Evgeny Pashukanis, one of the leading authorities on Soviet legal science, seems to give us a useful analysis for understanding the naturalization of capitalism through commodity-structure. He argues, “property becomes the basis of the legal form only when it becomes something which can be freely disposed of in the market” (Pashukanis 1989, 110). The circulation of commodities is the condition on which the juridical relation comes to exist, because only a freeman, i.e. the proletarian, not a slave, can own and sell his or her commodities such as labour power. As Pashukanis says, the freeman is trapped in the legal system, treated as an object and subject to “the same prohibitions and quota allocations under the immigration laws as are other commodities imported across national boundaries” (113).

For this reason, the individual worker in capitalist society becomes a legal subject and a bearer of rights, whereas the product of labour transforms into a commodity and a bearer of value. This simultaneous procedure succeeds in naturalizing capitalism and commodification as normative frameworks. The real subsumption of legalization transforms a worker to a consumer, while the formal subsumption of commodification forges a peasant into a worker. Returning to the episodes, I introduced in the beginning of my text; it is the juridical judgment that declares which one is an authentic commodity or which one is not. Furthermore, there is a legal subject, a bearer of rights, acquiring the capacity to be ‘human capital’ under the so-called new spirit of capitalism.

To account for the interaction between legalization and commodification is critical in revitalizing Marx’s analysis of commodity form concerning fetishism today. According to Dardot and Laval, liberal interventionism since the 1950s has aimed “to restore the conditions for free competition … in order to ensure the ‘victory of the fittest’” by focusing on legal justifications and equal treatment before law (Dardot and Laval 2013, 39). The new tendency of liberal interventionism gives grounds for an “administrative” state, which might be necessary to defend the juridical justice of free competition. It is not an exaggeration that the transmutation of liberalism is related to the incorporation of a legal subject, the abstract will of the commodity owner and with capitalism. The tacit compliance of the subject with such normative legislation could be one of the sustaining factors in the survival of capitalism and its transformation of the human condition. Asia, as a global factory and market, has played a crucial role in building up these new norms of capitalism. Asian capitalism is no longer the margin of globalization, but the very essence of it.

In A Contribution to the Critique of Political Economy, Marx wrote that “in broad lines Asiatic, ancient, feudal, and modern bourgeois modes of production can be designated as progressive epochs in the economic formation of society” (1970, 21). Here, Marx listed the Asiatic mode of production as one of the various modes of production, and his conceptualization of the mode seems to deserve the reconsideration of Marx’s approach to Asia. Even though Edward Said criticized Marx as a European who was not free from Orientalism, Marx’s letter to Vera Zasulich in 1881 proves the fact that Marx himself recognized the alternative social transition to the European mode of production. He wrote that his discussion about the “historical inevitability” of the primitive accumulation movement is expressly limited to the countries of Western Europe (2010, 364). Marx’s view on the multi-lineality of the social transition leads us to rethink Asian capitalism alongside with his early definition of the Asiatic mode of production. Asia would be a perfect locus to revive Marx as the new critique of political economy.

Alex Taek-Gwang LEE is a professor of cultural studies at Kyung Hee University in South Korea and a visiting professor at Jamia Millia Islamia University in India. He is a member of the advisory board for The International Deleuze and Guattari Studies in Asia and one of the founding members of the Asia Theory Network (ATN). He organised The Idea of Communism Conference in Seoul and co-edited the third volume of The Idea of Communism.


Works Cited

Bauman, Zygmunt. 1998. Globalization: The Human Consequences. Oxford: Polity Press.

Dardot, Pierre and Christian Laval. 2013. The New Way of the World: On Neoliberal Society. Translated by Gregory Elliott. London: Verso.

Marx, Karl. 1970. A Contribution to the Critique of Political Economy. New York: International Publishers.

———. 1976. Capital, Volume I: A Critique of Political Economy. Translated by Ben Fawkes. London: Penguin.

———. 1981. Capital, Volume III: A Critique of Political Economy. Translated by David Fernbach. London: Penguin.

Marx, Karl and Friedrich Engels. 1936. Marx-Engels Collected Works. Vol. 41. London: Lawrence and Wishart.

———. 2010. Marx-Engels Collected Works. Vol. 24. London: Lawrence and Wishart.

Nicholas, Howard. 2011. Marx’s Theory of Price and its Modern Rivals. London: Palgrave.

Pashukanis, Evgeny. 1989. Law and Marxism: A General Theory. Translated by Barbara Einhorn. London: Pluto.

Žižek, Slavoj. 1989. The Sublime Object of Ideology. London: Verso.