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
etc.

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

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.

Reference

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

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
5)
(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, https://www.marxists.org/archive/marx/works/1867-c1/ch01.htm#222)

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%.

REFERENCE

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)

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)

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)

social forms and the individual

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, 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.

I am taking a lot of short cuts here. I can explain Value in more detail in another post. 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, Part 3, p. 130, link)

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.

IS THE INDIVIDUAL A SOCIAL FORM?

My friend Peter, is trying to develop a theory of ethical and moral value, based on Marx. One of his ideas here is to include the concept of the individual as a social form. In his words:

“I want to isolate, and show the epistemological weaknesses in notions (widespread in both philosophy and psychology, both in the past and today) of the separate, atomistic, private, individual self, as if it is, as if it could be, the basis of value and meaning in society today.

Such a self, I hope to demonstrate, is a by-product of, an abstraction, from material, universal human interaction. And that that self arises, historically, along with money – as a result, initially, of exchange relations, but only becomes individual autonomy (a very abstract and alienated idea of individual freedom and equality, as described by Marx in Capital) with the rise of wage labour as an important part of exchange in capitalism.

The abstraction that is the separate, atomistic, private individual self today sits over, and obscures (what is regarded as ‘outside’ - both behind the backs, but also in front of the noses, of every individual) – the material, social and universal aspect of everyday human interaction. The creative potential of all our human interactions is depleted in the ubiquitous ‘breaking up’ of those interactions into well intentioned, but very separate, atomistic, private, individual selves (deemed to be both real and ‘universal’).

Life is about, we are told, each of us, giving and taking what we need and we want. And that, the give and take, is a natural and ahistorical fact of life - there is no value greater, there is nothing more real, than the good self who strives to live by what is given to us all, according to what we all have inherited, as good, right and true.

I hope to demonstrate that the religious, superstitious and fetishistic abstraction, that is the autonomous individual, works every day, to erode, deplete and render sterile the creative and social opportunities that arise every day in human interaction. Such individualism, insinuated between every one of us, and between our actions, makes us strangers to the immanent nature of universal social need and injustice. The solitary self is a stumbling block that continues, is actively used, to crush real human creativity."

I have some issues with this interpretation of the individual. I will write about those later. What I wanted to do in this post was to explain the meaning of social forms and at least outline the case, from Peter, that such an interpretation of the individual is at least plausible.