Wednesday, March 02, 2016

A misplaced concrete perspective of value

Index for a series of articles about Value
1) Marx and the domains of ignorance
2) Unpacking the value suitcase
3) The commodity perspective on value
4) The labour process and different categories of labour
5) The social form perspective of value
6) The equivalent form and the evolution of value into money
7) A misplaced concrete perspective of value
8) Fetishism and alienation
9) Metamorphosis of Value

In a previous section, the commodity perspective on value, I said:
Value is measured by the quantity of human labour added to the commodity. If productivity increases due to improved technology then the value or cost of the product should decline proportionately. eg. Power looms in England in Marx's time doubled productivity and so the cost of cloth produced by yarn should have halved.

Marx talks about materialized or crystallized or embedded or congealed or abstract human labour adding value to a commodity.
From this presentation strategy by Marx in the first part of Capital Chapter one it can too easily and incorrectly be interpreted that Value is defined as embedded abstract human labour and that the whole point of value theory is mathematical quantification.

Nevertheless, there are qualifiers that ought to warn us that the above interpretation is far too tidy:
  • if a thing is made with labour but useless then it has no value, the labour does not count
  • a thing can be a use value without having value (eg. air, virgin soil)
  • private labour creates use values but not commodities
  • value is only real if the product goes to market and is sold. That is what distinguishes a commodity from a product.
In Diane Elson's words there is a misplaced concreteness in the way that many interpret Marx.

Embedded or congealed labour time as value is not helpful, it makes it sound as though it is like a physical property

Elson argues that since Marx uses metaphors that are chemical and biological (crystallisation, incarnation, embodiment, metabolism, metamorphosis) and not mathematical that he is trying to convey the idea that value represents a change of form (eg. use value created by concrete labour changes form into exchange value represented by abstract, social labour) rather than something that can be calculated precisely in a logical / mathematical sense. One stream of thought since Marx has tried to pin down value as a precise magnitude or has emphasised the quantitative aspect (embedded or congealed labour) rather then the qualitative aspect, that value changes its form continually through the whole process of capitalist production and circulation.

There is a natural human tendency to settle on a tidy, neat, tangible definition of value. Unfortunately, this doesn't work. Value is an essential concept to understand the inner workings of capitalism but also a complex concept.

Why is value complicated? It is a deeply embedded although historically contingent, multifaceted (it has a form, a substance and a magnitude) social concept. Moreover, it takes on the much desired (lusted after) physical form of money. Hence it possesses both very real and phantom like (historically contingent) properties.

Reference and Further Reading:
Elson, Diane. The Value Theory of Labour. In: Value: The Representation of Labour in Capitalism. Verso (September 1, 2015)

the equivalent form and the evolution of value into money

Index for a series of articles about Value
1) Marx and the domains of ignorance
2) Unpacking the value suitcase
3) The commodity perspective on value
4) The labour process and different categories of labour
5) The social form perspective of value
6) The equivalent form and the evolution of value into money
7) (to be continued)

Equivalent form           Relative form

one 32GB USB stick = 12 packets of Dilmah tea, or,
one 32GB USB stick is worth 12 packets of Dilmah tea

one 32GB USB stick = 20 litres of Pura full cream milk, or,
one 32GB USB stick is worth 20 litres of Pura full cream milk

On the right hand side it's called the relative form because the value of USB sticks can only be expressed relatively by comparing it with some other commodity. On the LHS it's called the equivalent form. Only the value is equivalent, nothing else.

A whole series of equivalence relationships like the above can be written. But what is the underlying rationale behind comparing unlike things in the above “equations”? USB sticks, tea and milk have few or no natural or physical properties in common. Initially Aristotle had pointed out the difficulty or impossibility of comparing things with unlike properties. Normally, the properties of things are not the result of its relations with other things!

The ability to compare comes about (evolves) through a social process of millions of commodity exchanges. The above equations can be reversed and updated to include money.

12 packets of Dilmah tea = $60 (5*12)
20 litres of Pura full cream milk = $60 (3*20)
one 32GB USB stick = $60

Marx argues that money (he refers to gold or silver as money) evolves from the commodity. Money eventually evolves as a universal equivalent. Gold has the ideal properties required for money (divisibility, durability etc.)

Hence Value arises through the social process of commodity exchange. Its origin and evolution is through this social process and has nothing to do with any identifiable physical or material properties of commodities. Although value eventually takes a physical form in the shape of money its origin is social.
“No scientist to date has yet discovered what natural qualities make definite proportions of snuff, tobacco and paintings 'equivalents' of one another”
- Marx, Theories of Surplus Value, Ch. 20, p. 130
In time the social forms become more than the expression but the bearers, the motivators, the dominant consideration in the decisions people make in their lives. This is fairly obvious, in the case of money, for instance.

Note that the above equations are not a real equations!! It is useful to also look at the equation as ABSURD! One 32GB USB stick does not equal 12 lots of Dilmah tea. USB sticks and Dilmah tea have nothing in common!

We are now so used to money exchange of equivalents that it is an effort to see this inequality. But the natural properties of USB sticks and tea are different, they are not equal! Value is not a natural but a social attribute of the exchange of products, at which point we can call them commodities.

Seeing the equations as absurd helps us to understand that Value and money are social constructs. There is a quote from the 1st German edition of Capital (inexplicably chopped out of subsequent editions) which highlights the absurdity.
“... is as if alongside and external to lions, tigers, rabbits and all other actual animals, which form grouped together the various kinds, species, subspecies, families etc. of the animal kingdom, there existed also in addition the animal, the individual incarnation of the entire animal kingdom”
Money is real enough. But at the same time as being real it is an absurd social construct.

evolution of value into money

How does abstract labour become objectified as a value of a commodity?
  • one commodity becomes the bearer of value or value form
  • the bearer of value called the equivalent form by Marx
  • it must be directly exchangeable, it does not depend on its own use value
  • in this sense it must differ from all other commodities
  • the nature of equivalence is social
  • this social position arises from the joint contribution of the whole world of commodities
  • exchangeability remains embryonic until the equivalent is a universal equivalent
  • this further evolves into a unique universal equivalent
  • empirical check: such a commodity exists – gold money
  • gold money as universal equivalent is a necessary prerequisite to paper money
  • money crystallises out of the process of exchange
“A social relation of production appears as something existing apart from individual human beings, and the distinctive relations into which they enter in the course of production in society appear as the specific properties of a thing – it is this perverted appearance, this prosaically real, and by no means imaginary, mystification that is characteristic of all social forms of labour positing exchange value. This perverted appearance manifests itself merely in a more striking manner in money than it does in commodities”
- Contribution, p. 49

Monday, February 29, 2016

The social form perspective of value

Index for a series of articles about Value
1) Marx and the domains of ignorance
2) Unpacking the value suitcase
3) The commodity perspective on value
4) The labour process and different categories of labour
5) The social form perspective of value
6) The equivalent form and the evolution of value into money
7) (to be continued)

What is a social form?

Unknown unknowns: All the things you don't know you don't know

I thought I had understood capitalism, that the bosses owned the means of production and the workers had no option but to sell their labour to the boss. There were rich people, poor people and class struggle.

But I didn't know about Value as a social form and so my real understanding of capitalism was deficient.

Despite my involvement in radical anti-imperialist / communist politics going back to the late 1960s I totally missed that a variety of social forms (formations) that we swim in daily have evolved and materialised from non material things, namely social relations. For example, some people worship money and virtually everyone can't help but adopt a strong interest in money, since it is essential to both survival and a good life. But most people haven't thought through that money originates in a social relation, that is, the need to standardise commodity exchange.

Such social forms are historically contingent, not an inevitable aspects of society. In the late 60s I had looked below the surface of capitalism and understood some of its workings but had missed that there was a lot more happening down there than I had imagined. Sadly, I now realise, my ignorance was and is shared by most other 60s radicals. This ignorance originated in a failure to understand Marx's most important work, “Capital”.

social forms

Social forms are things that emerge (materialise) as social artefacts as society evolves. Their origin is social not material. They become part of that society and are often perceived as part of the air we breathe. But it is social function that has brought them about and not the form which has created the social function. They don’t have any necessary permanence beyond that. Social forms in capitalist society include things of major importance such as value, abstract labour, money, capital, the commodity, commodity exchange, the market, rent and interest. These things emerge from a social process and are not set in stone for all time.

What Marx meant by Value as a social form was the capacity of a commodity to be exchanged as an equal. In terms of social or class consciousness some people have a strong sense of boss – worker relations as a social construct, something that can change, but usually do not have the same sense that Value has arisen socially and will not be around forever. You can imagine a society (socialism, communism) where things are produced for people's needs or wants, that people will receive food, medicine and white goods irrespective of their financial status. In such a society Value as a measure of commodities to be exchanged would whither away.

The social form of value

Commodities have a physical, bodily form (use values) and a value form (a social form). Value does not contain a single atom of matter. Value is a social reality. It comes into being through the social exchange of equivalents. Value hides behind exchange value, what we perceive on the surface.

After establishing that value is materialized or crystallized or embedded or congealed or abstract human labour Marx then starts to discuss the social form of value. By this he means that value is not a natural property of a commodity but arises socially due to the exchange of one commodity for another.

He doesn't emphasise that he is throwing a hand grenade into what he has previously established. Congealed, abstract labour has a concrete, measurable, cut and dried feel to it as a “definition” of value. He now introduces the idea that value is also social, that it exists in the space between the exchange of commodities, that it doesn't belong to a commodity but in the relationship of one commodity to another. This undermines the concrete feel of value.

This was confusing. How could value be BOTH a fluid social thing and a definite, even measurable, concrete thing at the same time?

I think I was vaguely aware that my thinking was being too literal, too linear and this intellectual demand that I hold two contradictory aspects in continual tension in my mind at the same time did require a different way of thinking. This is the Marxist way, his dialectical legacy from Hegel.

Note, however: In nature, the transformation of energy from one form to another (when a stone falls to the ground gravitational potential becomes kinetic energy becomes sound energy etc.) while at the same time the amounts of energy involved can be precisely measured. So the concept of change of form accompanying quantitative measurement, even precise measurement, is not a conceptual game changer in this case. But, of course, in the case of value, the origin of the form is social not natural and that adds another level of conceptual difficulty.

Rubin's definition of value

My confusion about value led me to search for a more complete definition. I thought I had found this in Isaak Rubin's writings and this felt like another AHA moment
“Marx analyses value in terms of its form, substance and magnitude. “The decisive, crucial point consists of revealing the necessary internal connection between the form, substance and magnitude of value” (Capital Volume one, first edition). The connection between these three aspects was hidden from the eyes of the analyst because Marx analysed them separately from each other. In the first German edition of Capital, Marx pointed out several times that the subject was the analysis of various aspects of one and the same object: value. “Now we know the substance of value. It is labour. We know the measure of its magnitude. It is labour time. What still remains is its form, which transforms value into exchange-value.” … In the second edition of Volume one of Capital these sentences were excluded, but the first chapter is divided into sections with separate headings: the heading of the first section say, “Substance of Value and Magnitude of Value”; the third section is titled: “Form of Value or Exchange-value.” As for the second section, which is devoted to the two fold character of labour, it is only a supplement to the first section, ie. To the theory of the substance of value”
- Ch 12, Content and Form of Value p. 112, in Essays on Marx's Theory of Value by Isaak Rubin
So, according to Rubin, the value of a commodity is:
  • a social form or social relation (the capacity for a commodity to be exchanged as an equal)
  • AND a substance or content which is embedded abstract, social labour
  • AND a magnitude (labour time)
Value is BOTH a dynamic social relation and embedded abstract labour. To see only the embedded labour part is to not understand value in motion. Embedded labour implies a static notion of value. But abstract labour and labour time are derived from a social process involving both the production and circulation of commodities. If there is a glut of commodities that are not sold they contain no value, the “embedded labour” counts for nothing.

Socially necessary labour time perspective on value

At some stage I became aware that David Harvey (in his online lectures) was explaining value with the phrase (from Marx) socially necessary labour time.

This is shorthand but, in a way, reasonable shorthand since it contains both the quantitative aspect (labour time) and the social qualitative aspect (socially necessary) in the one expression.

Socially necessary is when you think about it unpredictable. Who can say in advance how much labour is socially necessary? We don't know in advance whether the products will sell (if they don't their labour doesn't count) or whether new technology will be introduced which will reduce the necessary labour time or whether workers will agitate for a wage increase, etc.


Marx, Karl
- Chapter 1.3 The Form of Value or Exchange-value of Capital Vol 1
- Ch. 1 as per First German Edition
- The Value Form. Appendix to the 1st German edition of Capital, Volume 1, 1867

Rubin, Isaak. Essays on Marx's Theory of Value

Friday, February 26, 2016

The labour process and different categories of labour

Index for a series of articles about Value
1) Marx and the domains of ignorance
2) Unpacking the value suitcase
3) The commodity perspective on value
4) The labour process and different categories of labour
(to be continued)

Marx loves labour, as human essence, but hates the restriction or confinement or degradation of human labour under capitalism.

In my words from an earlier article about Marx's moral theory:
“Although we originate as part of nature, with our social labour we oppose nature. Our productivity is also imaginative. We imaginatively and self consciously transform nature and in that process also transform ourselves. This is a teleological process. Humans imagine new forms of the material and self and then through social labour bring that imagination into reality”
Or in Marx's words:
“Labour is, in the first place, a process in which both man and Nature participate, and in which man of his own accord starts, regulates, and controls the material re-actions between himself and Nature. He opposes himself to Nature as one of her own forces, setting in motion arms and legs, head and hands, the natural forces of his body, in order to appropriate Nature’s productions in a form adapted to his own wants. By thus acting on the external world and changing it, he at the same time changes his own nature. He develops his slumbering powers and compels them to act in obedience to his sway. We are not now dealing with those primitive instinctive forms of labour that remind us of the mere animal. An immeasurable interval of time separates the state of things in which a man brings his labour-power to market for sale as a commodity, from that state in which human labour was still in its first instinctive stage. We pre-suppose labour in a form that stamps it as exclusively human. A spider conducts operations that resemble those of a weaver, and a bee puts to shame many an architect in the construction of her cells. But what distinguishes the worst architect from the best of bees is this, that the architect raises his structure in imagination before he erects it in reality. At the end of every labour-process, we get a result that already existed in the imagination of the labourer at its commencement. He not only effects a change of form in the material on which he works, but he also realises a purpose of his own that gives the law to his modus operandi, and to which he must subordinate his will. And this subordination is no mere momentary act. Besides the exertion of the bodily organs, the process demands that, during the whole operation, the workman’s will be steadily in consonance with his purpose. This means close attention. The less he is attracted by the nature of the work, and the mode in which it is carried on, and the less, therefore, he enjoys it as something which gives play to his bodily and mental powers, the more close his attention is forced to be.”
- Capital, vol 1, Ch 7
Labour is fluidity which in any society has to be socially 'fixed' or objectified in the production of particular goods. Human labour, unlike animals instinct, is indeterminate. With industrialisation the fluidity of labour is more apparent – jobs are not completely determined by tradition, religion, family ties etc. - individuals do frequently change jobs, etc.

How is human labour determined? Under capitalism there is individual choice within social limits. This evolves out of the life of definite individuals

Marx's Capital is an attempt to describe the conceptualisation of this social determination, from the indeterminate to the determinant, from the potential to the actual, from the formless to the formed.

Marx says (agreeing in this respect with his predecessors Adam Smith and David Ricardo – but in conflict with the marginal economists who came after Marx) that since use values can be exchanged as equivalents there must be a common denominator. Remember, when we talk of commodity exchange, we are dealing with the capitalist system here and not something set in place for all of time. This common denominator is materialized or crystallized or embedded or congealed or abstract human labour. However, note that these adjectives may give the wrong impression that labour enters a commodity as a physical property of the commodity. This is not a good way to look at it. Commodities exchange as equivalents in the marketplace, this is a social process, not a property of an individual commodity that can be be measured like the taste of tea or the amount of memory on a USB stick.

Labour has both a qualitative aspect and a quantitative aspect. With respect to use value the labour is qualitative (How and What). With respect to value the labour is quantitative (How much? How long a time?)

As capitalism develops labour saving technology also develops, which increases the productivity of labour. An increase in productivity leads to an increase in use values which means an increase in the total wealth of society. But an increase in productivity does not alter the value of labour, since that depends on how much and how long. As industry becomes more high tech and more productive the same amount of labour produces more. The ratio, c/v, between constant capital (c), which includes machinery, and variable capital (wages) increases. The dead labour incorporated in machines comes to predominate over living labour. Marx called this ratio, c/v, the organic composition of capital.

Put simply, the reason a 32GB USB stick cost $60 in 2010 but reduced to $16 by 2015 is that the amount of human labour required to make it is declining due mainly to progressive technological improvements. Despite all the objections to Marx's labour theory this much is fairly obvious.

Under capitalism labour power is just another commodity which is sold in the marketplace. Like other commodities it has a use value and an exchange-value. Use value is represented by the particular skills of the labourer, for example, computer programmer or school teacher. This is categorised by Marx as concrete and / or individual labour. Exchange value is reflected in the fact that all workers sells themselves in the labour market, their value works itself out as part of a social process. This aspect is categorised by Marx as abstract and / or social labour.

Under capitalism the historical tendency is for labour, including skilled labour, to become more general or universal. Capitalism needs technically skilled workers who are delivered through education but capitalism does not like irreplaceable or indispensable workers. Hence, all teachers, for example, are expected to know basic computer applications but creative computing is not encouraged, for most, since such teachers are difficult to replace. So the skilling of workers is at the same time accompanied by an opposing tendency of dumbing down or leveling of those skills. The abstract and social labour categories are not only abstractions arrived at through analysis but also a historical tendency (Harvey quoting Desai, p. 60 FN 16, “the category of abstract, undifferentiated labour is not an abstraction but a historical tendency”)

Capitalism levels labour. Work becomes impersonal. Shopping becomes self expression. These generalisations are a valid description of the direction capitalism takes us even though individual workers may find their jobs rewarding for now those jobs are continually being transformed into more mechanised forms of work. eg. Capitalism would love to replace teachers, who display some creativity, with computerised teaching machines. This process is beginning to happen through MOOCs and online courses (eg, the Salman Khan academy) but in general human to human teaching skills are incredibly complex and can't be emulated by computer interaction, yet.

The contradictions that Marx observes in human labour are between the labour which produces use values and the labour which produces exchange values.

In various places Marx uses the following terms to describe abstract labour which creates exchange values: simple, average, unskilled, homogenous, abstract, general, social (in the sense of producing social use values), universal.

My corresponding list of labour which creates use values is: useful, specific, skilled, heterogeneous, concrete, individual, social in a general sense (meaning sociable workers assisting each other and having some fun at work), creative.

The sense in which Marx uses the word social in creating exchange values needs to be explained and contrasted with the more general use of the word social, as in being sociable, on the second list in the creation of use values. See below.

There is only one labour process but it has these different aspects:

Individual or private labour

Individual or private labour means people working as individuals. Within capitalism individuals appear to have some choice as to their work. They may work in a group or on their own but their work has an individual or private aspect to it as well as a social – group like aspect.

Concrete labour

Concrete labour means that people can perform many different types of work, the diversity and qualitative differences in work. Some workers are engineers, some are teachers etc. In Marx's day he talked about tailors and weavers. Under capitalism there is a division of labour. This division of labour may take an extreme form (Taylorism in factories) or less extreme forms for skilled workers but our education system is geared to create specialists not polymaths.

Social labour

In section Chapter 1.4 of Capital on commodity fetishism Marx starts off by saying that there are things about the commodity that are non mysterious and other things that are mysterious

The non mysterious things are that use values are properties that satisfy human wants and that value is a product of human labour.

The mysterious things are that the social character of labour takes the form of social relations between products and that the social relations between men assume the form of a relation between things

social exchange between things”
By this Marx means that commodities appear as exchange-values, in a mutual relation with other commodities.

The problem here is the lack of clarity by Marx of his use of the word “social”. He is using social to refer to particular aspects that arise or flourish under capitalism and NOT social in the more general sense of any sort of social interaction.

I can discern two aspects of Marx's use of the word social. Value as a social form means that commodities are exchangeable on the market as equivalents. An exchange is a social interaction. Exchanges in the marketplace are a huge and important part of our lives. Products are transformed into the social form of a commodity, a product which is taken to the marketplace. The commodity becomes part of a complex social process, unlike products that are made by individuals for private use and which never enter the market.

The second aspect is that the labour that appears in exchange is also general labour or universal labour. Although the labour is performed by individuals it is irrelevant which individuals perform the labour. Universal labour time produces a universal product. Universal means any labourer, any product. It happens independent of individuals. Hence it is social. The universal is individual, the individual is universal. (Contribution, p. 32)

So social in this sense means both exchangeable and universal (interchangeable) . Universal means that labourers and products are interchangeable.

One way to understand the meaning of social labour is to see it as people working to produce social use values, irrespective of whether they work alone or in a social group, ie. people working to produce things not for their individual use but for the use of others.

Abstract labour

Abstract labour is the opposite of concrete in that different types of labour can still be compared. All work has something in common. This is not an assumption that all work is physiologically identical but that differences in work can be measured and quantified in some way. Abstract labour measures the quantity or duration of work. Abstract labour forms the substance of value

Although individual / social labour and concrete / abstract labour represent two pairs of dialectical opposites there are other helpful ways in which these aspects can be viewed. Individual labour and concrete labour both involve an element of subjective choice. Social labour and abstract labour both involve an element of detachment from the individual.

As capitalism progresses there is a historical process whereby capitalism levels and detaches labour from the individual. Abstract and social labour become dominant over their dialectical opposites of concrete and individual labour. Work becomes more impersonal and shopping becomes self expression. Labour becomes more like an interchangeable part. No one is indispensable. This is because the skilled artisan is anathema to capitalism. ( Harvey, p.59, “they must be subdued or eliminated by transformation of the labour process”) The domination of abstract labour signifies that “the process of production has mastery over man” (Marx,

Labour power, the capacity to labour, has the ability to create a surplus beyond the cost of its purchase by the capitalist. eg. The worker spends 6 hours a day working for himself (variable capital, v) and 2 hours a day working for the capitalist (surplus value, s). The rate of exploitation is s/v, in this case 2/6 or 33%.


Elson, Diane. The Value Theory of Labour. In Value: The Representation of Labour in Capitalism (Radical Thinkers). Verso (republished September 1, 2015)

Harvey, David. The Limits to Capital. Verso (2006), amazon

Marx, Karl.
- A Contribution to the Critique of Political Economy (1859)
- Capital Vol 1, Chapter 1 (1867)

Saturday, February 13, 2016

head injury

Recently, I decided to leave Melbourne and head north to work in indigenous schools.

My first choice was Northern Territory since there is now a whole swathe of remote schools there that have introduced the Zig Engelmann Direct Instruction approach, imported into Australia by Noel Pearson and first implemented in a handful of Cape York schools. I wrote a report about this method in 2012: Direct Instruction observations at Djarragun College

Fate and luck intervened. I was offered a great job at Djarragun College, near Cairns, and decided to accept.

In the meantime I had booked a flight to Adelaide and went ahead with it.

The unusual headaches started on Monday 1st February and although not severe they weren't going away. So eventually I visited a doctor and he suggested a CT scan.

This revealed a chronic subdural haematoma which requires an operation. The problem is that blood has leaked into the brain cavity which puts pressure on the brain. The surgeon drilled some small holes in my head and then I had to lie flat on my back for 48 hours to drain out the old (motor oil) blood. I'm an active person so lying flat for 48 hours was the hardest thing for me about the whole procedure. I had the operation at the Royal Adelaide on Monday 8th and was discharged on Thursday 11th.

I'm still going to Djarragun but my start has been delayed to March 7th

The surgeon and nurses at the Royal Adelaide were brilliant. I'm reminded that we have a great medical system in Australia for urgent cases, even though waiting times could be improved for non urgent cases. Many thanks for the support I've received from friends and family during my brief hospital stay.

The first pic shows me still smiling straight after the operation.

The two other pics show the stapled wounds on the day of my discharge.

Reference: Chronic subdural haematoma in the elderly

Some points from this article which relate to my situation:
  • Presenting features in my case: headaches, drowsiness
  • Risk factors cerebral atrophy in the elderly, increasing space between the brain and the skull by 6-11% of total intracranial space. This stretches and can rupture the bridging veins and they haemorrhage into the subdural space. A history of head injury is absent in 30-50% of cases
  • Complications - recurrence can occur within 4 days to 4 weeks but this appears to be associated with inadequate expansion of the brain back into the void where the dead blood was. My surgeon says in my case this is unlikely since my brain has moved back to where is should be. But I won't know for sure until my next CT scan on Thursday 25th February.
  • Update, March 2nd: I had the CT scan on the 29th February and received clearance to fly to Cairns by the neurosurgeons on Tuesday 1st March. My flight is on Thursday 3rd March.

Friday, January 22, 2016

Oxfam report: AN ECONOMY FOR THE 1%

This is my summary of Oxfam's summary. I haven't included their "solutions" since they depend on the collective good will of the wealthy, which is unrealistic. I have read their summary (12pp) but not their full report.
  • 62 individuals have the same wealth as the poorest 3.6 billion people of the world (This figure is reduced from 388 individuals as recently as 2010.)
  • $542 billion – the increase in wealth of the richest 62 individuals since 2010
  • 50% the amount of the global wealth increase since 2000 received by the top 1%
  • $1 trillion – the fall in wealth of the poorest 3.6 billion people since 2010 (a drop of 41%)
  • Since 2000, the poorest half of the global population received only 1% of the increase in global wealth
  • $3 rise in the average annual income of the poorest 10% of people in the world

1) Apologists for the status quo claim that concern about inequality is driven by ‘politics of envy’. They often cite the reduction in the number of people living in extreme poverty as proof that inequality is not a major problem. But this is to miss the point. As an organization that exists to tackle poverty, Oxfam is unequivocal in welcoming the fantastic progress that has helped to halve the number of people living below the extreme poverty line between 1990 and 2010. Yet had inequality within countries not grown during that period, an extra 200 million people would have escaped poverty. That could have risen to 700 million had poor people benefited more than the rich from economic growth.

2) Rising economic inequality also compounds existing inequalities. The International Monetary Fund (IMF) recently found that countries with higher income inequality also tend to have larger gaps between women and men in terms of health, education, labour market participation, and representation in institutions like parliaments. The gender pay gap was also found to be higher in more unequal societies. It is worth noting that 53 of the world’s richest 62 people are men.

3) One of the key trends underlying this huge concentration of wealth and incomes is the increasing return to capital versus labour. In almost all rich countries and in most developing countries, the share of national income going to workers has been falling. This means workers are capturing less and less of the gains from growth. In contrast, the owners of capital have seen their capital consistently grow (through interest payments, dividends, or retained profits) faster than the rate the economy has been growing. Tax avoidance by the owners of capital, and governments reducing taxes on capital gains have further added to these returns. As Warren Buffett famously said, he pays a lower rate of tax than anyone in his office – including his cleaner and his secretary.

4) Oxfam’s experience with women workers around the world, from Myanmar to Morocco, is that they are barely scraping by on poverty wages. Women make up the majority of the world’s low-paid workers and are concentrated in the most precarious jobs. Meanwhile, chief executive salaries have rocketed. CEOs at the top US firms have seen their salaries increase by more than half (by 54.3%) since 2009, while ordinary wages have barely moved. The CEO of India’s top information technology firm makes 416 times the salary of a typical employee there. Women hold just 24 of the CEO positions at Fortune 500 companies.

5) A powerful example of an economic system that is rigged to work in the interests of the powerful is the global spider’s web of tax havens and the industry of tax avoidance, which has blossomed over recent decades. It has been given intellectual legitimacy by the dominant market fundamentalist world view that low taxes for rich individuals and companies are necessary to spur economic growth and are somehow good news for us all. The system is maintained by a highly paid, industrious bevy of professionals in the private banking, legal, accounting and investment industries. 6It is the wealthiest individuals and companies – those who should be paying the most tax – who can afford to use these services and this global architecture to avoid paying what they owe. It also indirectly leads to governments outside tax havens lowering taxes on businesses and on the rich themselves in a relentless ‘race to the bottom’.

6) In the garment sector, firms are consistently using their dominant position to insist on poverty wages. Between 2001 and 2011, wages for garment workers in most of the world’s 15 leading apparel-exporting countries fell in real terms. The acceptability of paying women lower wages has been cited as a key factor in increasing profitability. The world turned its attention to the plight of workers in garment factories in Bangladesh in April 2013, when 1,134 workers were killed when the Rana Plaza factory collapsed. People are losing their lives as companies seek to maximize profits by avoiding necessary safety practices. Despite all the attention and rhetoric, buyers’ short-term financial interests still dominate activities in this sector, as reports of inadequate fire and safety standards persist.

7) Inequality is also compounded by the power of companies to use monopoly and intellectual property to skew the market in their favour, forcing out competitors and driving up prices for ordinary people. Pharmaceutical companies spent more than $228m in 2014 on lobbying in Washington. When Thailand decided to issue a compulsory licence on a number of key medicines – a provision that gives governments the flexibility to produce drugs locally at a far lower price without the permission of the international patent holder – pharma successfully lobbied the US government to put Thailand on a list of countries that could be subject to trade sanctions.

Full Oxfam reports here includes full report, summary and methodology

Wednesday, January 20, 2016

The commodity perspective of value

(updated Jan 21, February 24, 25 2016)
The commodity perspective of value: use value, exchange-value and value

Marx begins his mature analysis of capitalism (A Contribution to a Critique of Political Economy, 1859) with the commodity as a simple thing or abstraction which contained the germ of the capitalist contradiction between use value and value on which the whole of his argument could be built. See notes at the end which outlines the timeline of this evolution in Marx's thought.

A commodity is a useful thing (a use value) for others (not the producer, since they produce commodities in bulk), a social use value, which is the product of labour (which creates value) and is transferred to another person by exchange in a marketplace. So commodities have both a use value and an exchange value)

Use value is a natural form. In any society (capitalist or pre capitalist) labour is used to make useful things, starting from natural raw materials. Use values are independent of the amount of labour. They are realised only by consumption. They constitute the source of all wealth.

But value or exchange value is not natural, it is a creature of capitalism. Value is an emergent (historically contingent) social form specific to capitalist commodity exchange. Value is an emergent social form which takes on a universal material form (gold, money).

It is just that we are so used to shopping that exchange value feels natural. But Marx imagined a future society, communism, where there was no scarcity and people simply take what they needed from a public pool. In communist society the needs of people come first. Value and its forms, money, and its measurement (socially necessary labour time) have withered away.

Back to capitalism. Value is measured by the quantity of human labour added to the commodity. If productivity increases due to improved technology then the value or cost of the product should decline proportionately. eg. Power looms in England in Marx's time doubled productivity and so the cost of cloth produced by yarn should have halved.

Marx talks about materialized or crystallized or embedded or congealed or abstract human labour adding value to a commodity. Abstract here means general or simple labour. Contrast abstract with concrete, which means a particular type of labour. For example, teaching or engineering is concrete, particular labour. Abstract labour is reducing all the different types of labour to a common type. Marx assumes this can be done without going into detail of how to do it.

But a commodity cannot be dissected to find the elements that makes it exchangeable. Exchange values do not contain one atom of use value. Value is a social reality. It is a social form. It's very existence depends of the capitalist marketplace where commodities (another social form) are exchanged.

Value and exchange value are more like a mirror. A commodity has to see another commodity (or money) before an exchange can take place. This is a social process. Moreover, socially necessary labour time can't be measured at the point of production. If a commodity is not sold or exchanged then it doesn't have value.

But the mirror metaphor makes the embedded crystals of labour approach seem contradictory or absurd. How can value be added to a commodity, through labour, on the one hand and yet only be discerned through comparison with another commodity on the other? The commodity has a dual nature. We have to adapt our thinking to incorporate this dialectic, to hold contradictory images of a concept in our minds. The source of this is Hegelian dialectics which is used extensively in Marx's method.

Some people have tried to imagine life without money. Can you imagine life without commodities? There is a difference between commodities and products! Products are things made for use in any society. Commodities are made for sale. They are part of capitalist society. It could be said that commodities create capitalism. As such they have both a use value and an exchange-value. To us they are as normal as going shopping. But the contradiction between use value and exchange-value has enormous implications. Marx had the imagination to grasp this.

In primitive society people produce mainly for their own needs and not for others. There is very little exchange. From a historical perspective you could say that a use value slowly struggles to achieve a recognition of value (which is seen as exchange-value in the exchange process and which is theorised to be abstract human labour by Marx). At that point historically, as the market develops, the use value becomes a commodity. Commodity production arrives big time when products are produced in bulk for the purpose of exchange. The producer has no personal need for those products, s/he produces them to sell them.

What a commodity is not

When a peasant produced quit-rent-corn for a feudal lord he is make a product but not a commodity because exchange is not involved. To become a commodity a product must be transferred to another, whom it will serve as a use-value, by means of exchange. This commodity definition was inserted by Engels into the 4th German edition of Capital (at the end of Chapter 1, section 1) due to this misunderstanding: not everything produced by or consumed by another is a commodity.

A thing can be a use value without having value.

This can happens whenever its utility (usefulness) is not due to labour. eg. air, virgin soil. Land is a major capitalist category. Many forms of production require land. From the point of view of the average worker buying a house and the land it sits on is a major purchase. But land is part of nature, it exists without labour inputs, and so strictly speaking is not a commodity.

It also happens when personal, private production produces use values without producing value. eg. the labour involved in building a cubby for your child or mowing the lawn at home produces use values but is not part of the capitalist marketplace.

Stolen goods are intended commodities which are not paid for and if they are not subsequently sold, by the thief, do not have their value realised. This introduces the case of goods that are produced but not sold due to overproduction, which leads to an economic recession. Are they commodities? By my reading they are commodities in waiting but not true commodities until they are sold and their value is realised.

The difference between exchange-value and value

Early on the distinction between exchange-value and value was not clear to me. I later discovered that Marx did not distinguish between them himself in his earlier important introductory work, A Contribution to the Critique of Political Economy. See Simon Clarke's Reading Notes on Capital in his Publications. Finally, I found a place where he did spell it out in an Appendix he added to the first German edition of Capital at the request of Engels.

In Section 4 of that Appendix Marx says that a commodities “existence as value is revealed by the exchangeability of the body of another commodity” and that “exchange-value is the independent form of appearance of commodity-value”

My understanding of this is that exchange is what we see on the surface (“form of appearance” ) and that value is the underlying category. It was another piece of what felt like a jigsaw puzzle, put into place.

Note on Marx's timeline about starting with the commodity

1857- Marx began Grundrisse (Rough Draft). This wasn't published until 1939-41 in German (limited edition), then 1953 (German fuller version) and 1973 in English (Martin Nicolaus translation)

In Grundrisse the sequence goes like this: money → Capital → Surplus value → Circulation process of Capital → theories of surplus value → profit → Value (this section to be brought forward)

1859 In A Contribution to a Critique of Political Economy (published), Marx does begin with the commodity

1861-5 Capital volume one was written and then published in 1867

(part 3, to be continued)

Monday, January 18, 2016

unpacking the value suitcase

Clarifying the meaning of and distinguishing between the words: value, wealth, quality and money

Suitcase words: Marvin Minsky (The Emotion Machine) has coined this marvellous term to describe words that are not clearly defined and mean different things to different people. For example, Consciousness is a suitcase word. It can mean unifier, self awareness, identity, animator of the mind, provider of meaning, detector of feelings. It refers to many different mental activities that don’t have a single cause or origin. In part Minsky’s book is about the need to create a new vocabulary in order to discuss the workings of the mind.

So, let us discuss the value suitcase. Over the years it has become a very large suitcase with many thousands of words devoted to different interpretations of value theory resulting in a tangled mass of incoherent vocabulary.

I start with the folk perspective because what we pick up as the everyday background noise of the meaning of words does influence our understanding when we get around to analysing those words in more detail. We cannot properly acquire new understandings without first subjecting our old understandings to critical scrutiny. No construction, without destruction.

Here are some popular uses of the word value:
  1. Tom is good value, ask him to do the job
  2. That car is good value for money
  3. Gold increases in value during economic recessions
  4. Steve Jobs adds value to Apple shares
  5. The role of a teacher is to add value to their students
  6. It was a valuable experience to attend that Noel Pearson lecture
So, in folk use, value might be used to describe an attribute of a person, a commodity (two examples, car and gold), a business, a process or an experience. In some cases there is a close connection between value and money (sentences 2 and 4) but in other cases it refers to the ability of certain people to successfully transfer their skill to a job of work or to other people. It can also refer to a learning experience. In all of these cases value is a good thing and the more value there is the better.

In Capital, Marx doesn’t start with value. He starts with the commodity and then splits the commodity into something which possesses both use value and exchange value. It turns out later that exchange-value is the form of appearance of value. Exchange value is “observable” in a transaction. For example, one 32GB USB stick = 16 litres of Pura full cream milk. We can equate these values in real life but more realistically in our imagination and it does not have to involve money. Value is the underlying category, an abstraction, a theoretical underpinning of exchange-value.

In Marx’s terms value has a form, a substance and a magnitude. The form of value is its capacity to be exchanged. The substance of value is embedded abstract labour. The magnitude of value is the amount of embedded labour or socially necessary labour time. This thumbnail needs to be discussed in more detail later.

Marx clearly distinguishes between value and use value. For Marx value is a social product (or in his language, a social form). It only exists in a commodity society, a society where products are produced and sold to others. For Marx value does not exist, or only exists in embryonic form, in primitive society where hunters and gatherers are mainly working for themselves. For Marx value is historically contingent whereas use value is not. Use value refers to the properties of products that make them useful. For example, a car is useful for transportation. This is true irrespective of whether it is bought and sold in the marketplace. Marx makes a radical separation between the usefulness of products (true for all social systems) and their value, which is only true for products which are made to be sold in the marketplace. Such products are defined as commodities.

What is the difference between the folk perspective of value and the Marx perspective of value?

Well, Marx mercilessly dissects or interrogates the commodity and teases out a variety of meanings and distinctions (use value, exchange-value, value). For Marx value becomes a central theoretical concept which is complex in its own right, having social form, substance and magnitude. But for Marx a line is drawn between value and use value.

So, looking again at the starting sentences and adding some annotations about what the folk use of value means in each case:
  1. Tom is good value, ask him to do the job (Tom is useful at work of an unspecified character)
  2. That car is good value for money (I am prepared to exchange my money to buy that car)
  3. Gold increases in value during economic recessions (Gold is special for unstated reasons because it is always valuable, even in economic crises)
  4. Steve Jobs adds value to Apple shares (some individuals excel at their value interventions in the capitalist system because of their creative design and marketing skills)
  5. The role of a teacher is to add value to their students (in the “knowledge economy” value can refer to added knowledge too; the teacher transfers their knowledge to their students)
  6. It was a valuable experience to attend that Noel Pearson lecture (an experience can be valuable or personally enriching in its own right)
The folk usage of the word value does either mean or imply the similar concepts which Marx discovers in the commodity (usefulness, exchangeability), adds on a few more (creativity, knowledge transfer, enrichment) and then fuzzily blurs them all together. In folk usage value is a suitcase word. Folks are using the word value as a suitcase whereas Marx is starting with the commodity and meticulously teasing out various meanings in his analysis.

The folk perspective on value and Marx’s perspective also deviate when it comes to labour saving or productivity increasing technology. With technological progress the value of manufactured products decreases. They become cheaper to buy in the marketplace.

I said above in relation to the six introductory sentences which illustrate a variety of usages of value, that:
In all of these cases value is a good thing and the more value there is the better
But now I am pointing out that as technological productivity increases then the value of the manufactured products decreases. That experience is part of popular consciousness. We all know that we possess more products than our parents generation. We possess them because we can afford them since comparable items are cheaper relative to our wages than they used to be. But does the concept of declining value universally enter the popular consciousness?
7) Commodities are cheaper for my generation than previous generations. We’ve never had it so good!
There may be some awareness of this truth but it is not general folk wisdom. Why not?

Well, often prices don’t go down. Rather you buy a fancier equivalent of the commodity you want for the same price. You are getting more value for money but not getting the feeling that things are cheaper in an absolute sense. Windows 10 replaces Windows 9. It really doesn’t do anything different but has a few extra bells and whistles so you end up paying a similar price. In reality, absolutely free alternative operating systems such as Ubuntu are equivalent and better in some ways (no viruses).

Some prices do go up. For example, land, petrol, electricity, internet access in Australia.

It is cheaper to build a house now than previously, due to technological and organisational development. The house is cheaper but the land is often more expensive due to supply and demand for good location.

Petrol prices are subject to the control of a cartel (OPEC)

The price of electricity goes up due to lack of forward planning by governments who don’t build surplus capacity in good time.

The National Broadband Network (NBN) is potentially a good idea but due to government incompetence it is rolled out in a more expensive fashion than is needed.

Environmental costs contribute to rising prices. Once again, governments are generally incompetent in managing these issues,

It is hard to accurately compare our generation with previous generations. This arises from the nature of capitalist development. We have more things but in the main they are different things to our parents possessions. When I grew up we did not own a flush toilet, an electric frig, a TV, a microwave or a computer. They were either invented or became affordable consumer items later. Even the items that are common to both generations differ substantially. Houses and cars are far more sophisticated today, they possess added gadgets and functionality which was not present previously. This rough comparison makes it obvious that the current generation has far more material possessions than previous generations. The value of producing equivalent and / or better commodities has declined over time mainly due to productivity improvements.

What is the difference between value and wealth?

In folk usage wealth may refer to:
8 ) There are a wealth of ideas in the mind of that intellectual
9) James Packer is wealthy (aka filthy rich)
10) Capitalism increases the wealth of society but that wealth is distributed unevenly
If you substitute wealth for value in my original sentences it doesn’t work out. You wouldn’t say:
1′) Tom is good wealth, ask him to do the job
2′) That car is good wealth for money
5′) The role of a teacher is to add wealth to their students
but you could say:
4′) Steve Jobs adds wealth to Apple shares
This is because value means more than the finished product or money. It also means or implies productive labour. Wealth doesn’t fit in those sentences because it usually refers more to the end product or the market value of the end product than the productive labour required to obtain that product.

Marx and his predecessors also distinguished between value and wealth. Wealth is the sum of all use values irrespective of whether they require labour. Hence unadorned natural products, eg. virgin land, are part of wealth but not part of value. In Marx’s terms nature is not a source of value. Marx approved of his predecessor William Petty in distinguishing between labour and nature as sources of wealth:
“Labour is … not the only source of material wealth, ie of the use-values it produces. As William Petty says, labour is the father of material wealth, the earth is its mother.” (Marx, vol 1)
Wealth is the sum of all use values, which are concrete and particular. Wealth originates in both nature and labour. This applies to any society. Value is a creature of capitalism or a society where commodities are exchanged in the market place and display their exchange-value there.

What is the difference between value and quality?

In Marx’s terms value is not metaphysical. By metaphysical I mean broad trans historical concepts which attempt to define meaning in a permanent or grandiose sense. Marx’s analysis is relevant to capitalism, not all of history. Marx is not writing a theory of everything to last for all time but is doing a specific critique of capitalism and classical political economy, the partly correct then existing theories of his predecessors Adam Smith, David Ricardo and others.

It is a different approach to my memory of the sense in which Quality is discussed at length in Pirsig’s Zen and the Art of Motor Cycle Maintenance. I had the sense there that if only the slippery concept of Quality could be grasped then that would be similar to solving the riddle of life itself.

However, folk usage does not always embrace metaphysical texts. In folk usage there is not a clear distinction made between value and quality. If you take the sentences I began with:
1) Tom is good quality, ask him to do the job
2) That car is good quality for money
3) Gold increases in quality during economic recessions
4) Steve Jobs adds quality to Apple shares
5) The role of a teacher is to add quality to their students
6) It was a quality experience to attend that Noel Pearson lecture
For most of them you could substitute the word quality for the word value. It is only in sentence (3) that this substitution does not work. This is because the phenomenon of gold increasing in value during economic recession requires a detailed economic theory to explain it. Even though the sentence is part of folk usage the explanation of that sentence is not.

What is the difference between value and money?

From the original sentences value is measured in money terms in sentences 2 and 4 or at least the connection is clear:
2) That car is good value for money
4) Steve Jobs adds value to Apple shares
In folk terms the value suitcase is much broader than money and encompasses usefulness, creativity and experiences as well.

For Marx value originates from labour and evolves into a universal equivalent, gold money, which further evolves into paper money. But for Marx value is in motion. The capitalist uses money or credit to buy labour and means of production, proceeds to a production process, sells the resultant commodities and finally invests more into the production process in a continual cycle. Value moves through this whole process dynamically.

So value is far more than money in both folk and Marx’s usage but in different ways.

The folk connotation of value is that it is a good thing, that valuable things (people, commodities, experiences) are worth having. This is different from the Marxist understanding, that value is a creature of capitalism an underlying theoretical concept which is the starting point to explain the motion of the whole capitalist system. For Marx, value is the starting point for further analysis and understanding of capitalism.

(part 2, to be continued)

marx and the domains of ignorance

The domains of ignorance:
  • Known unknowns: All the things you know you don't know
  • Unknown unknowns: All the things you don't know you don't know
  • Errors: All the things you think you know but don't
  • Unknown knowns: All the things you don't know you know
  • Taboos: Dangerous, polluting or forbidden knowledge
  • Denials: All the things too painful to know, so you don't
The domains of ignorance are relevant to Marx. Some people don't read him because it is taboo. Some people read him and think they understand but they don't. Some people have a superficial knowledge of Marx and think that is good enough. But none of that really explains the extent of the marginalisation of Marx. I think the main issue is that he is difficult to understand. The thing missing from the domains of ignorance is contradictory knowledge.

Isaac Deutscher provides an anecdote about the knowledge of Marx in that era (the 1930s):
"Capital is a tough nut to crack, opined Ignacy Daszyński, one of the best known socialist "people's tribunes" around the turn of the 20th century, but anyhow he had not read it. But, he said, Karl Kautsky had read it, and written a popular summary of the first volume. He hadn't read this either, but Kazimierz Kelles-Krauz, the party theoretician, had read Kautsky's pamphlet and summarised it. He also had not read Kelles-Krauz's text, but the financial expert of the party, Hermann Diamand, had read it and had told him, i.e. Daszynski, everything about it"
Marx's critique of political economy is old knowledge, forbidden or marginalised knowledge and difficult to understand knowledge. Because it was written 150 years ago many think it is no longer relevant. Because communism is believed to have been tried and found wanting many who want change think it could not provide the answers we want. Because Marxism is an insignificant part of mainstream education and in particular often not taught in the economics faculty then it is only going to be accessed by those who think outside of the mainstream. Finally, the many volumes of Capital are difficult to understand for a variety of reasons.

Conceptually the work is very rich and it is difficult to keep the whole of fit in your head. Marx uses a method of investigation (his adaptation of Hegelian dialectics) that is unfamiliar to moderns. Much of the language he uses is unfamiliar and this issue is exacerbated through a variety of translations. The prose is dense. Marx established a precise, strict terminology, eg. use value, exchange value, value, relative and absolute surplus value and then uses it rigorously for hundreds of pages. Therefore you must pay close attention, otherwise you are lost. He frequently uses French and Latin quotations. He also employs fascinating, tangential footnotes, which must be read.

The economic crisis which began in 2007 created an intellectual crisis, which did already exist, but was not so obvious as before the crisis. For much of time following WW2 economic crisis was absent, the capitalists had appeared to work out how to stabilise an unstable system. That assumption has now been shown to be false.

My contention is that to understand the inner workings of capitalism you have to understand Marx. Although this will not provide any magic solution to the current issues of ongoing economic crisis it will provide a deep appreciation of the inner contradictions of capitalism that make it forever an unstable and unpredictable system.

To understand value theory you have to read the original Marx. My goal here is to describe some of the hurdles I encountered along the way and answers I found to those problems. I called these AHA moments. I'm writing it as a series of confusions or sticking points followed by breakthroughs which were then followed by more confusions, etc.

The Value concept is central to Marx's whole argument. To understand capitalism, how it works from the inside, requires an understanding of Value. It is this broad view that has motivated me to persevere in reading Marx, whose writings are difficult, and various interpretations.

(part one, to be continued)

Friday, January 15, 2016

marx on alienation

What did Marx mean by alienation and is it still relevant?

When using the word alienation, Marx was talking about the fundamental social structures of the capitalist system. He was not talking about psychological alienation. In saying that I would not discount the concept of psychological alienation in connection with Marx's analysis. Rather, it is not the starting point of comprehension of what Marx was on about.

Marx regarded the contradiction between private property (the social class who owns the means of production) and alienated labour (the social class who has no option but to work to earn money to maintain themselves) as the fundamental issue of the capitalist era. Fundamental here means the main underlying contradiction, the one that can't be resolved by capitalism. It is not the same as the principal contradiction. The principal contradiction is the one which manifests itself most sharply in any particular era. I won't attempt to say what the principal contradiction is in the world today but I will say that if the post 2008 economic situation continues to deteriorate then the principal contradiction may become aligned with the fundamental contradiction.

In this essay I'm focusing on Marx's 1844 writings (Economic and Philosophical Manuscripts of 1844, particularly the section on Estranged Labour)

Christopher Arthur summarises Marx's 1844 writings as follows:
“Because the worker has no property in the means of production his labour-power is excluded from the instrument and object of production owned by another; his labour realizes itself therefore only through the wage-contract whereby it is alienated to the master and works in his behalf.”
- dialectics-of-labour/chapter-01
Marx discusses the nature of alienated work under capitalism, from a four fold perspective:(1) alienation from the products of labour; (2) alienation from his own labour; (3) alienation from fellow men and (4) alienation from his own species.

Capitalism has been around for 150 years since Marx wrote and has adapted in that time. Workers have struggled successfully to improve their working conditions through trade union and other struggles. The productive forces have developed tremendously and many of the most difficult jobs are now less difficult because of machines assisting the work. The education system has developed and expanded world wide to keep up with the requirements of the more developed productive forces. Many of the worst jobs have been exported to the developing countries. Knowledge industry and service industry type jobs have replaced many jobs in the industrial and agricultural sectors. A useful book, which I read years ago discussing the shift from industrial to service industry work was Sleepers, Wake! Technology and the Future of Work by Barry Jones, but obviously that analysis needs to be updated and developed.

It seems that Marx didn't anticipate the resilience and longevity of capitalism. I feel that in some places he exaggerates how bad things are for the worker. Capitalism has been adaptable in order to survive. Capitalism is a flexible and adaptable system but within limits. The bottom line is that it must continue to find a way to extract surplus value. Capitalism can't compromise on that issue.

Given these changes I will make some qualifying comments on Christopher Arthur's summary of Marx's 1844 document about the nature of work:
“The labourer treats his labour as a commodity; as a consequence he has no interest in the work itself but only in the wage; labour does not belong to itself but to private property.”
It is true that most people are driven to work to earn money. However, given Marx's general attitude to the central importance of work (aka labour, activity) in human development it is strange that he asserts that the worker has no interest in the work itself

This is too extreme. In another place (Critique of the Gotha Program, 1875) Marx, anticipating communism, describes labour as life's prime want. IMO it is simply not possible for the boss-worker alienated relationship to comprehensively destroy all interest in the work itself. Marx's ironic statement that capitalism creates it own grave diggers (Communist Manifesto, 1848), a proletariat that has learnt to run the system by building it, is far closer to the mark.
“... the worker ... executes plans he does not form; he objectifies himself in his product only to have it taken from him”
This is correct for most factory work and low skill jobs but when it comes to the knowledge industry (eg. engineers, computer programmers, some aspects of teaching) the workers are significantly involved in the planning
“he produces palaces but lives in hovels; his labour creates beauty but deforms himself ...”
Today, many workers live in nice homes. Home ownership is a problematic aspiration of the capitalist system. Nice if you can get it but it is going to take a significant proportion of your working life to attain it.

Does the worker deform himself? In the physical or bodily sense this is another exaggeration, although true in the cases where difficult manual work and industrial accidents still occur. In the mental sense it is true in the sense that workers have to adapt their lives to the needs of their jobs – eg. long hours, division of labour – but there are other aspects of work that are enjoyable and enriching. I think the key issue here in interpreting Marx about division of labour is that even for relatively good jobs the emphasis in training is on technical skills and the education system is not designed to develop critical, broad ranging thinkers.
“ … the more intelligence is embodied in the design of the factory system the more machine-like and stupefying the routine of work, so much so that the labourer faces machinery as a competitor for his place”
It is true that the dead labour in machines (aka fixed capital) progressively replaces living labour. This is part of the evolutionary dynamic of capitalism. Marx anticipated this, see this passage from the Grundrisse (1857-61) [“The development of fixed capital indicates to what degree general social knowledge has become a direct force of production, and to what degree, hence, the conditions of the process of social life itself have come under the control of the general intellect and been transformed in accordance with it” source]. The intelligence also becomes part of the skilled workforce (managers, scientists, engineers, computer programmers). It remains a living thing, not just embodied in the design of the factory system.
“at work he does not feel at home; he feels himself only when he is not working; his work is not voluntary therefore, but is forced labour; in it the worker belongs not to himself but to another”
Many workers will testify that they would rather be at home than at work but nevertheless many workers also feel that being at work broadens and enriches them in significant ways.

If we focus on factory work (not knowledge work) for a minute it is relatively easy to see that in such work the worker is alienated from the product he makes but does not own. Marx goes onto argue that since the product is alien then the labour process which made the product must also be alien. He calls this self-estrangement. Marx sees labour or work or activity, when it is not alienated, as life itself, since productive activity between man and nature is human essence.

So, the factory worker feels external or outside or not at home with this labour process. What would it take for this feeling to be reversed? Well, say the worker is at home doing home improvements or building a cubby for their child or researching a favourite topic on the internet. This is more like life activity being internal to the worker. I would argue that this is an experience that knowledge workers obtain sometimes at work, which leads to the “I like my job” feeling.

The main thing I liked about my teaching job was that ability to research different innovative approaches that helped me teach concepts I felt were useful more effectively to my students. When doing that I felt inside the work. This approach to internalisation of development was expressed through the constructionist learning theory developed by Seymour Papert. He even described the turtle in turtle geometry as an object to think with, conveying the internalisation of the learning process. But this bottom up learning is only happening in a few classrooms controlled by innovative teachers. It hasn't been taken up by the education system as a whole, which favours more structured top down approaches, which have a legitimate place in learning theory and practice, as well.

Capitalism leads to the dominance of things over people. Things develop personalities and workers lose their personalities, become mere wage plugs. Capital and capitalists (Bill Gates, Mark Zuckerberg, Steve Jobs, James Packer, Twiggy Forest) have individuality, their wealth or things enables them to express it (the personification of capital), whilst the worker is always struggling to keep afloat, pay off the mortage. Veblen pointed out the phenomenon of conspicuous consumption. Dead labour dominates living labour. The worker becomes an abstract individual (impoverished, pared down). The world of objects (property) becomes massive and powerful relative to the worker's world. In the face of the massive development of productive forces it is easy for workers to feel powerless. But it is the labour of the working class which has created this massive world of things.

Marx wants to transform the whole work experience so that all workers can become fully alive at work. If the worker feels at one with society, rather then having to compete to earn money to stay alive, then even mundane or banal jobs, jobs which have to be done, would feel useful rather than alienating.

It follows on from product ownership (previous section) that workers will have anxious, insecure, alien and hostile relations with the capitalist and landlord. The capitalist is powerful and alien compared to the worker.

Our self conscious species life is potentially rich. We produce a great range of things including beautiful things and things which can be used later. But the potential to live to the full extent of our species being is destroyed because capitalists appropriate the product of our labour.

Capitalism dissolves the world into competitive atomistic individuals rather than the cooperative, harmonious and joyful species that we could be.

Capitalists are alienated too! They cannot have normal human relations with the worker. They are dominated by the social conditions of the system, including competition. They are driven by the desire to amass profits. They are not directly involved in productive activity themselves. They become greedy (for money because they don't produce themselves), cruel and hypocritical.


Taking a step back we can view work as a mediation between man and nature. Christopher Arthur puts it like this:
“(Marx) ... speaks of nature as 'man's inorganic body' and says that 'he must maintain a continuing dialogue with it if he is not to die ... for man is a part of nature'. On the other hand, he says that 'it is in his fashioning of the objective world that man really proves himself; through such productive activity 'nature appears as his work and his reality . . . and he can therefore contemplate himself in a world he himself created'; this process is characterized as 'objectification' (Vergegenständlichung) ...

(objectification means the making of a product or object)

In truth, man is neither passively dependent upon nature, nor is he able to create his world from nothing. It is rather the case that through industry, productive activity, a dynamic relationship between man and nature is established in which both poles are transformed ...”
The word mediation is used in the sense of an extended process between man and nature which determines the nature of change of man and society. Contrast mediation with immediate. The view that man is in some sort of passive, contemplative relationship with nature or, the opposite view that man can somehow overthrow nature both suggest an immediate, short term connection rather than a mutually transforming mediation. Rather, man transforms nature, a process which requires both struggle and unity, and in the process transforms himself.

This establishes Marx's fundamental ontology, that human essence arises, is created, through the process of productive activity which mediates between man and nature. This provides a thematic starting point for the outlook of historical materialism, that historical development can be understood through the working through of this process of productive activity which mediates between man and nature.

Christopher Arthur refers to Istávan Mészáros's analysis of first order and second order mediations. The mediation of productive activity between man and nature is a fundamental first order mediation which applies historically to all societies. Compare this with capitalist society where:
“... in the present economic conditions we find that productive activity itself is mediated through the division of labour, private property, exchange, wages, in sum a system of estrangement in which productive activity loses itself and falls under the sway of an alien power. Istávan Mészáros has termed this 'a set of second-order mediations . . . i.e. a historically specific mediation of the ontologically fundamental self-mediation of man with nature” (emphasis added)

I have explained what Marx meant by alienation, a fourfold analysis [(1) alienation from the products of labour; (2) alienation from his own labour; (3) alienation from fellow men and (4) alienation from his own species] and contrasted his meaning with the more fashionable interpretation today of psychological alienation. Marx's meaning of alienation needs to be contrasted with his vision of communism where the mediation of productive activity between man and nature (human essence) is not contaminated by the social forms of capitalism (division of labour, private property, exchange, wages).

I have touched on technological change and the changing nature of work and how that requires Marx's class analysis to be updated but by no means negates its fundamental importance.

I'll return to these topics in subsequent blogs.

update (Jan 16):
Marx's solution to the problems of capitalism is for the proletariat to seize political power, through revolution, and to proceed to create communism, through a transitional period of socialism, or dictatorship of the proletariat over the capitalist class.

Now, obviously the proletariat, the 99%, could achieve this against the capitalist class, the 1%, if there was clarity, unity and good leadership to attain such a goal. The reason we don't have socialism is for various reasons the proletariat doesn't strongly desire socialism.

What I will do here is attempt a rough preliminary analysis, in terms of the ideas discussed by Marx, of the push factors from capitalism to communism and contrast them with the pull factors which prevent the proletariat from embracing that change.

In favour of the transition from capitalism to communism: The iniquitous social forms of wage labour, private property, division of labour and exchange would be eliminated and replaced with a not alienated mediation of productive activity between man and nature.

Factors impeding the transition from capitalism to communism: In order to support the Marxist revolution you need to understand what it is. That requires some slow, deep thinking, reading and analysis. Most workers are too busy working long hours to pay off the mortgage, keeping afloat in a competitive system. Our education system trains specialists (a division of labour) and not whole people who reflect on wide ranging social issues. Overall, the education system is designed to reproduce existing class relations rather than overthrow them. Capitalist culture tends to distract or entertain people in a whole range of ways (from David Bowie to Buddhism to Foxtel to drugs). The disenfranchised are given welfare, enough to survive, which keeps them distracted and so that threat to the system has been manageable up until now.

Alternatively, it could be argued that Marx was wrong. I'm interested in those arguments and have at times adopted them myself. But I now suspect it is more the case that Marx has not been understood or only partially understood or that some "Marxist" leaders have been too dogmatic, one sided and have ended up offering bad leadership.


Arthur, Christopher. Dialectics of Labour: Marx and his Relation to Hegel, Ch 1

Jones, Barry. Sleepers, Wake! Technology and the Future of Work

Marx, Karl
Economic and Philosophical Manuscripts of 1844, particularly the section on Estranged Labour,

Communist Manifesto

Critique of the Gotha Programme

Grundrisse (section)

Tuesday, December 15, 2015

marx's moral theory


If there is such as thing as human essence and we can discover what it is then that will go a long way towards developing a moral theory.

Human nature is part biological, part social and not religious. Religion is something to be explained rather than believed. This includes modern religions such as Nature worship (currently popular) and Marx worship (currently marginalised).

Humans have both needs and powers. Obviously, it follows that we are both needy and powerful and both of these aspects of being human need to be explored further.

The biological and social parts are connected or interact dialectically. It would be an error to see them in isolation from each other.

Fundamental biological needs include eating, drinking, habitation, clothing, sexuality ...

Biological and Social. Humans produce their own existence / material life through social labour. Our biology allows this, eg. Opposable thumb, upright posture frees the hand, large brain. This separates us from other animals. Compared to other animals we are self conscious and wilful to a qualitatively different degree. Although we originate as part of nature, with our social labour we oppose nature. Our productivity is also imaginative. We imaginatively and self consciously transform nature and in that process also transform ourselves. This is a teleological process. Humans imagine new forms of the material and self and then through social labour bring that imagination into reality. This is human essence.


The guiding moral principle is to do whatever is required for the human flourishing of rich individuals, to dynamically expand human powers for all humans. Human flourishing is not original to Marx but Marx built on the best available ideas that came before him, those of Aristotle.

Marx and Engels were more aware than Aristotle about the role of social labour in this enrichment process. After all, Aristotle lived in a slave society. Refer Engels, The Part Played by Labour in the Transition from Ape to Man. In communist society there would not be a division of labour based around the supply and demand of the labour market. In a world where production for the needs of all is established then each individual would be free to pursue their own perceived interests.


The philosophical stance here is to investigate what is distinctive about humans (biologically and socially) and from that basis to articulate what a good or rich life is.


Be clear about where our moral principles come from. Being determines consciousness. Matter is philosophically prior to ideas.

The theory is philosophically materialist. It starts from real people and real conditions. It ascends from earth to heaven, not descends from heaven to earth.

But, once we are in heaven how do we get back down to earth again? The only way is to make a detailed study of society in all its aspects. Mode of production, division of labour, social classes, Is there a surplus and who controls it?, the history of knowledge, current issues, individual self knowledge. There is a lot to know! The desirable actions that promote the best human nature at any point in history depends on the depth and perspicacity of such an analysis.


Capitalist limitations. For the capitalist, because they own the means of production, the workers life activity becomes a mere use value. In general, workers have no direct stake in the products they produce. Temporary niche solutions may be possible for individual workers but overall work loses it human character. In class society, the economy operates as a thing more or less outside of human control. If there is no profit to be made then production grinds to a halt. There maybe poorly understood economic laws. But the best that could be said of capitalism is that it is a highly unstable system in which the future well being of the workers who make it is uncertain and problematic.

Capitalism gives labour a bad feel (alienation) and production a bad name. Under capitalism humans are alienated from their essence, their living social labour, since the capitalists own the means of production and determines which products are made and who owns those products.

The capitalist economy is an unstable monster, poorly understood, difficult to manage and continually spinning out of control. Workers are alienated from the products they produce. Creative people who produce things of beauty (some artists, some writers, some teachers etc) are often not seen or appreciated as typical workers, rather they are marginalised workers looking for a niche to survive in a system that systematically undermines them. Or a handful may become megastar celebrities who play a significant role in entertaining the masses. Moreover, many believe today that capitalist production is despoiling the environment at an alarming rate. I think there is some truth to this latter charge, although I also see talk of environmental Armageddon as exaggerated and a distraction from the main wrongs of our society.

These issues in combination (production for profit not human need) give production itself a bad name. Human essence, social labour, life's prime want, is reduced to being a wage plug, without a real say in the overall progression of society.

Rather than saving the planet (the current “left” mainstream zeitgeist) we need to focus more on how to liberate the social productive forces, human essence, in all their real power and beauty. A power and beauty which is obscured by the ugliness of capitalism.


The natural world is the world created by humans, who are part of nature, as well as the world that existed before humans. The natural world is not “green” insofar as that suggests a world not touched by humans. Such a world no longer really exists on Earth. In a post natural world (aka the anthropocene) our needs will be created more by what we make than the natural world that exists independently of what we make.

As society evolves our tastes, including our basic biological tastes, become more sophisticated: “the forming of the 5 senses is a labour of the entire history of the world” (source)


A moral theory has to somehow account for all human moral thinking, good and bad, angelic and evil, noble and perverse, optimistic and pessimistic. But Marx's moral theory is (intentionally?) thin. It does not claim or suggest that humans are any of essentially selfish, altruistic, competitive, fallen, vicious etc. Is this a feature or a bug? In my view Marx is right about the essentials but there is a lot of stuff that is not covered. Marx analyses the deep structure of capitalist society but there are important issues that lie more on the surface (eg. the dark and deep emotions such as love, grief, anger) that strongly motivate individual actions but are left hanging. Hence, many people find that other moral philosophers and novelists address their needs more directly.


Utopians make the error of promoting general moral principles in the abstract, without regard to the current real state of society, without assessing the social forces at play. They are not realistic. Mere moral persuasion in favour of a better society is inadequate / doesn't work.

There are many alternative moral theories. For example Plato (Iris Murdoch provides a modern interpretation), Stoic, Christian (various branches), Kantian, Utilitarian (Bentham and JS Mill provide different interpretations), feminism / women's liberation, Buddhism (meditation and mindfulness are currently popular), existentialism, libertarianism, animal liberation, Sufism (adopted by Doris Lessing after her disillusion with communism), pragmatism (Dewey, Putnam), the liberal Capabilities approach of Amartya Sen and Martha Nussbaum.

All of these need to be critically examined since what is correct only emerges clearly from a critique of such alternatives. At this stage I would say that none of these alternatives share with Marx the view that human essence is the conscious production of our existence / material life through social labour. Moreover, they tend to be indifferent to the analysis that the main current problems are generated by capitalism.


Humans are self conscious, intelligent, purposive, active, self directed. But this doesn't mean we can negate the so called "external world" (only external to humans, who are a part of nature, so not really external to nature in that broader sense of the word) or history.

Human individuality (as distinct from herd or tribal mentality) emerges historically from the bourgeois revolution against feudal relations (when it was “natural” to obey a preordained superior such as a lord or king). Herds are not good at shopping, whereas individuals are. But just as individuality emerges strongly in the capitalist era, you would expect it to also change dramatically in a post capitalist society.

In class society, social class is a more important determiner of who we are than individuality as such. Individuals pick their personalities, interests, work etc. from what is available socially (including the cutting edge, futuristic and off beat, quirky trends) at the time. The idea that we are free, autonomous individuals is more part of capitalist mythology or ideology than reality.


Morality is historically contingent. What is moral in one historical period becomes immoral in another. The central issue is doing whatever is required to maximise the human flourishing of rich individuals in the given time and place.

For example, in the French revolution the rising bourgeois class overthrew feudal relations, got rid of divine rule by the King etc. In that historical period bourgeois right coincided with the needs of the proletariat as well. But at a later date the bourgeois class held things back, became reactionary, used social labour for their own ends, promoted an economic system which went through periodic crises and still does. At that point the revolution to continue human liberation and the liberation of the productive forces must be picked up by the proletariat, sooner or later.

Given the views expressed here about ontology (materialists need to deeply investigate reality) and history (morality is historically contingent) it follows that to work out the best moral - political actions requires some hard work. No one said it would be easy.


The productive forces developing within bourgeois society create the material conditions (preconditions?) for the solution to the problem of the antagonism of the individuals social conditions of existence. Big is beautiful, not small is beautiful (the latter from EF Schumacher). Not because capitalism is beautiful but because big, centralised production prepares the way for socialism.


Marx is grounded, not utopian. In The German Ideology, Marx rejects the idea of communism as "an ideal to which reality will have to adjust itself", rather he sees it as "the real movement which abolishes the present state of things”

This is pretty much the opposite of what most people today believe about communism, that it is idealistic and unrealistic.

From a moral perspective the aim is to bring together social being (human existence as it is) with social essence (human existence as it ought to be). As the contradiction between the individual and the social diminishes then the need for morality to maintain social cohesion would also diminish. All the conditions for rich individuality would be met by society. Eventually, morality might disappear altogether. If everyone's needs were being met through the basic social structure then wouldn't concepts such as selfishness or altruism lose their meaning?


There are many important issues missing from both the theory and practice of Marxism in this account. I have a preliminary list but will leave that to another time. No doubt if you have read this far you are both interested in this topic and will have your own unanswered questions. This will require far more discussion.


I have done a lot of reading on this topic but won't attempt a detailed bibliography at this stage. But I will mention one reference which to me is a stand out, a PhD thesis by Vanessa Wills titled Marx and Morality (pdf 269pp) who has read and understood all of Marx IMHO.