Perhaps it borders on narcissism to think that the world is interested in following the successive redrafting of the scripts to my videos. But I suppose there are worse things to clutter the internet with. I do always find feedback quite useful. This is the 2nd half of my Law of Value 8: Subject Object script, totally reworked. I posted the entire script last week but I decided that the second half, which deals with marx’s concept of subject/object inversion needed to be rewritten entirely.
My goals in this revision were:
1. Address the effect of demand on market prices and explain why we don’t need a subjective theory of value to explain this or why this is not a problem for marx’s theory of value.
2. Tie the point about “real abstraction” to the concept of subject/object inversion and fetishism.
3. re-order the flow of concepts to make things as succinct as possible and less academic sounding. This point still needs work.
Here it is:
Subject-Object, draft 4, second half:
In the Real World….
In the real world, outside of the fantasies of bourgeois economics, subjects and objects have no meaning apart from their relations to each other. There is no such thing as a subjective individual floating in a vacuum. We develop our subjectivity through our relation to the objective world we inhabit. And while the objective world can surely exist without subjects, it has no meaning for a social theory like economics except the meaning that people give it. Subjects and objects always exist in a relation, deriving their meaning from this relation.
This relation is not just one of coexistence. It is an active process of by which subjects engage with the objective world, transforming it. People work on nature. We chop trees and make houses. We build cars and dig up oil to power them. In so doing we transform the objective world and also transform ourselves. The manner in which groups of people work on and transform the world around us has changed through history. These different modes of relating to and transforming the world Marx calls “modes of production”. (brief mode of production chart with Feudalism, Slaveocracy, Capitalism, Communism, etc. and some picture depicting S/O relation?) (footnote on materialism)
This productive activity doesn’t just transform and create the objective world around us. it also creates our subjectivity. It determines what sort of things we value, how we go about getting the things we desire and how we relate to other people. Different modes of production produce drastically different types of societies with different value systems, different ways of relating to our desires, and different social relations between people.
Every mode of production is limited in terms of the social results it can achieve. The capitalist mode of production, for instance, though quite good at producing lots of stuff, is unable to solve basic social problems like poverty, exploitation, war, and economic crisis within the parameters of the capitalist mode of production. This is because capitalism has a very interesting quality as a mode of production, a quality Marx calls “subject/object inversion”. We will return to this quality in a moment.
Subjects, Objects and their Prices (image of commodity and person, both with price tags)
Objections to Marx’s theory of value often have to do with the way his theory of value relates to market prices. If value comes from the amount of labor that goes into producing things, then how do we explain the fact that a rise or fall in demand changes market prices? The fact that demand influences price makes it seem like subjective decisions influence value as much as labor time.
The value-price relation is not an easy one to enclose in neat, tidy definitions. The more we look at it the more complex the network of social relations that go into the formation of prices. I will deal with the value-price topic in more detail in a future video (Law of Value 11: Price), but a few remarks are in order here. We’ve actually covered this ground briefly before in Law of Value 3 where we talked about the way private labor becomes social labor. (footnote on price)
Private labor is the amount of labor an individual worker devotes to the production of a commodity. The goal of the worker is for her private labor to become social labor, that is, that her commodity be sold in the market and thus be equated with all the other commodities in the market, making her labor part of the total social labor of society. But this isn’t so easy. Because production is only coordinated through the fluctuation of market signals, it is always uncertain whether commodities will be sold, and whether private labor will become social labor.
As we’ve seen in previous videos, in order for private labor to become social it must produce at the socially necessary labor time. SNLT is a way in which the social level of productivity acts back upon the private labor of the individual, disciplining the individual to work at the social average. Individuals or firms that can’t work at the SNLT go out of business, like when American auto-workers lose their jobs due to competition with plants in other countries. Their labor is then reallocated to other areas where they can be more profitable, or they don’t work at all. As many of us know, losing a job and having to find new work is a long, hard, painful process. But these discomforts don’t matter to the market. The market treats all labor like digits in a calculator, anonymous units to be moved around in the search of profit.
(long footnote on self-employment)
In addition to producing at the average level of productivity, there also must be a demand for the products of labor if private labor is to become social. If too much private labor goes into the production of elevator music than there is demand for elevator music then some of this music will remain unsold and some of this private labor will not become social. Producers will be forced to move their labor elsewhere. But rather than this being an example of demand creating value, it is an example of how changes in demand effect the distribution of social labor. This is part of the phenomenon Marx is explaining in his theory of value: the labor of society is coordinated through the fluctuations of prices, a phenomenon only possible because there is a relation between prices and labor time.
Furthermore, demand itself can only be understood if we abandon the concept of the isolated individual and see demand as part of a huge social process whereby capitalist production reproduces itself. The only type of demand that counts in the market is “effective demand”, that is demand backed up by money. Consumer demand comes from wages paid to workers. The products which consumers buy with this money are not just the random result of psychological preferences. In fact, most of our money goes to the purchase of very basic things we need in order to keep us alive as workers so that we can produce more value for capitalism each day: rent, food, clothes. (footnote on consumption) These are needs and desires dictated to us by capitalism, for the purpose of perpetuating capitalism, not the abstract psychological preferences of isolated individuals.
The bulk of the demand in society comes not from consumers but from capitalists. You and I buy toothbrushes and pay rent. Capitalists buy factories, assembly lines, natural resources, and private armies. This demand has nothing to do with the personal preferences of capitalists. (corporate greed footnote) It has to do with the technical requirements of production, the amount of inputs it takes to make a widget at the SNLT. Some people think that capitalists enter production only in order to meet the demands of consumers. This is a myth. The advertising industry is the best refutation of this myth. Capitalists produce in order to make a profit. Then they go looking for markets. Most of the time they have to create the market by convincing people there is a need for their product. But capitalist firms also sell to each other, totally bypassing the need to find consumer markets. (footnote on undercon)
This all gives us a very different picture of the subject-object relation than we get in bourgeois economics. Rather than a free society of empowered individuals who are free to act upon their abstract desires and take full-responsibility for their lot in life, Marx’s critique of the capitalist mode of production reveals a world in which individuals are at the mercy of the coercive laws of the market. The sorts of superficial freedoms they have to choose between coke and pepsi pale in comparison disciplining of our lives to SNLT and the pursuit of profit. (images of clocks)
Subject/Object inversion
[Mitt Romney quote about corporations being people]
There is a lot of talk in the Occupy Wall Street movement about ending “corporate personhood”. The problem with this demand is that the legal status of corporate personhood is just the icing on the cake. In a capitalist society corporations are much more like people than people are. Capital is the active subject and people its object. This is what Marx means by “subject/object inversion.” Rather than people being the active agents of the social order it is the “objective” logic of the market that dominates the subjects. Blind economic laws rule and people obey. Money becomes more powerful than people. Corporations become people and exert more power in society than individuals or even social movements. While people run around in the street with signs begging the system to take notice of them, the cold-logic of capital becomes the active agent in society, using the body of the worker like a passive expendable commodity, subordinating societies, governments and even nature itself to the impersonal motives of profit.
The crazy thing is that this “objective” world is still just the product of our own creation. We actively reproduce it everyday. This is the core of what makes Marx’s critique of capitalism so powerful: The world we live in, despite the incredibly disempowering structure of our current situation, is always only the result of our own actions and we do have the ability to collectively change it. But in order to exercise such collective power we must break with the capitalist mode of production.
Now…. do you get any of that heavy stuff with marginalism?
conclusion:
In case you were wondering Subjectivist Island and Barter Island don’t exist. They are abstractions. Now every theory needs abstractions- we must sift through a world of data and identify the broad contours and important categories that define reality. Subjectivist and Barter Islands are “ideal abstractions”, that is, abstractions that exist only in the minds of philosophers. [footnote on praxeology] Marx makes a different kind of abstraction, a “real abstraction”. A real abstraction is not made by philosophers arbitrarily leaving out parts of social reality. A real abstractions is made by reality itself.
In a capitalist society human labor becomes abstract. In the caste system of feudalism where people were born into certain types of work and there were strict divisions between castes there was no such thing as labor in general, or a worker in general. But in a capitalist society labor loses all of these specific features. Capital treats us like anonymous digits in a profit-calculator, moving us from place to place in the search for profit. Our labor becomes abstract labor. We become, not peasants, knights, or artisans, but workers in general. Marx’s theory of value is based on this real abstraction that is made by the mode of production itself, not the minds of philosophers.
This doesn’t mean that the perspective of marginalism comes from nowhere. Marginalism comes from a real existing standpoint within capitalism, the standpoint of the atomized individual contemplating commodities. This standpoint is real. We experience it everyday at the grocery store. But it is an incomplete perspective because it leaves out the entire world of social production that puts commodities on the shelves and money in our pockets. This perspective is the perspective of commodity fetishism, in which the social power of our own labor takes the form of inherent properties of objects.
But in times of economic crisis we see cracks in the walls of this reality. Old ways of thinking lose their relevance. Crises are a time when the economic laws of capitalism are exposed not as eternal, universal laws as the bourgeois economists would want us to think, but as the particular laws of this time, laws that we might be able to overthrow. As the law of value breaks down, as people start to question the order of things, the capitalist state must enter the picture, replacing the failing law of value with the brutal law of the state. The charming, freedom-loving world of the market apologists (ron paul picture) is revealed for what it really is, an exploitative order based on violence.
Like a schoolyard bully, a system is always the most violent when its weakness is exposed. When the law of value breaks down the politics begin. Subjects must become active. This can be the politics of the ruling class as it scrambles to reassert the status quo or it can be the politics of radical movements that posit the possibility for new social orders.
Kapitalism101 
Brendan,
This entry seems better balanced between ideas. To me demand is the key of understanding within this debate, so I like that you added some comments on it, like:
“…an example of demand creating value, it is an example of how changes in demand effect the distribution of social labor.”
The idea that demand is what directs social labor, rather than the cause of value, is the basic idea, of course; demand being linked to production via labor time expenditure.
And I think that if you probed a bit further into this idea, it would not hurt the piece at all.
Can’t wait for the final product.
-Zachary
This is very helpful. Lucidly and crisply written. Two small corrections:
an example of how changes in demand effect the distribution of social labor – “effect” should be “affect”
We experience it everyday at the grocery store. – “every day” should be two words.
Hi,
This is a great topic to cover but I thought I would provide a critique – “For the Ruthless Critique of Everything Existing”
“This productive activity doesn’t just transform and create the objective world around us. it also creates our subjectivity. It determines what sort of things we value, how we go about getting the things we desire and how we relate to other people. “
Just going off what I have seen some Austrian/bourgeois write, they tend to focus on things that are outside the realm of immediate human production. For example, Menger critique Marx by giving this example: imagine walking through a virgin forest and coming across timber. No labor was put into it but nonetheless it is valued.
Now you might respond by saying that because we use timber in production that it has value and thus we compare but I think this would nonetheless reduce to a genesis of subjective value – for how did one decide to value timber and use it in production in the first place?
“Furthermore, demand itself can only be understood if we abandon the concept of the isolated individual and see demand as part of a huge social process whereby capitalist production reproduces itself.”
I understand that Methodological Individualism is often a target of the Left but I think they sometimes misinterpret it. Its more of a question of what/who is acting than what type of conditions they are in. It does not deny things like collectives or even the existence of aggregates so much as ultimately it is individuals who are the ones acting. In fact, I have yet to see (but the most vulgar economics books) really anyone say or imply economics is made up of isolated individuals acting.
“There is a lot of talk in the Occupy Wall Street movement about ending “corporate personhood”. The problem with this demand is that the legal status of corporate personhood is just the icing on the cake.”
I also highly doubt that a repeal of Citizens United would change anything. Business Interests have been influencing politics since the American Revolution (John Hancock – pirates anyone?). Laws are almost always afterthoughts of already changes in civil and social society – Citizens United just put a stamp on what already existed.
I’ll end with this. In a lot of ways, I think the whole objective vs subjective debate is unnecessary and has been borne out of the Marxist Left biting the bait that the Marginalists set. Marx’s value theory describes the epoch of Capital – there is a reason his book is called “Das Kapital” and not “Das Feudalism” or “Das Hunter Gatherer.” What the marginalists tried to do was naturalize their experience as superhistorical and the Marxists responded by trying to do the same.
The fact LTV might be unable to give a straight answer for why someone has a fetish for some random, unique piece of silverware (Von Wieser) is unnecessary. In fact, in Vol 3, Marx specifically says that the price of some piece of rare art comes about accidently – and I agree. Such a thing is not a commodity! Commodities are historically specific to Capitalism – a combination of necessary and surplus labor imbued into a use value with the purpose of being sold and reinvested in capital accumulation. This is the dominant form of production of use values. Auctions, as I will call them, to determine the value of unique rare goods or gold or jewellery or whatever the fuck, have existed throughout time for always since Hunter Gatherers. But this is not capital!
Anyways that’s my schtick.
“Now you might respond by saying that because we use timber in production that it has value and thus we compare but I think this would nonetheless reduce to a genesis of subjective value – for how did one decide to value timber and use it in production in the first place? ”
Not one soul decided at a particular time or place “to value” timber out of the blue. It has a use value and the average abstract labour to produce it does the rest. Average labour time acts back upon the value of wood all the time.
The concepts of “value”, “use value” really are results of a very long history. That’s why they are “real abstractions”. It’s not that at one day someone decided “to value” a commodity completely disconnected from history. It arises out of a very long history of division of labour, development of trade, technology etc etc etc. It s not that someone decided at one day: hey, let’s buy, sell or produce this “commodity” for this price.
The problem with economics, social science is that they abstracted history out of their discipline and are left with a blind scientific process.
I mean I can agree with you, specifically how the concept of use value is historically developed.
For example, if we transported back into the 15th century with a laptop, its usefulness would drop instantly. Not only would there be no way of recharging it and most people would think you were a witch, but most of what we find beneficial about a laptop is how it interacts with society i.e me writing on my laptop to you via the internet. “Utility” as the bourgeois say, is just as much socially determined as it is individually determined.
Intrinsic value vs. Assigned value….inside the box, outside the box…box-wall stability /structural integrity = exchange rate value or ability, thus we have terms like BTU’s,Newtons,calories etc. that are contingent upon pre-supposed facts, much like Assigned Value. Assigned Value offers almost limitless ability to produce wealth within it’s sphere of influence….
? what is “assigned value”?
Assigned value is a term that I use when I wish to show / explain things like: value add tax, interest rates, exchange rates, risk exposure, profitability.
Assigned value is the differential….an arrangement that allows for the displacement of the intrinsic value of X, with an inflated or deflated proxy value.
The power of Assigned Value is found within the economic structure or niche that allows it’s use, namely, Capitalism.
Assigned value is a simple term that is easy for many to grasp and helps explain profit derivation by showing that Capitalism is not a “closed loop” system; we use assigned value as a way to show the exploitative nature of Capitalism and explain the power structure…generally.
While economic terms exist for most any thought one may have on the subject…..this one just works so well.
I have enjoyed your presentation of Marx. While I have not gone through all of your work…..it has thus far been a delight !
imasocialist@gmail.com
I think Marx simply calls it the “form” or “expression” of value.