Episode 17: The Value-Form Paradigm vs. Marx’s “Capital,” Part 1


Some years ago, Andrew participated in a published symposium on the “value-form paradigm”—a Marx-inspired and market-focused strand of political economy. Andrew and others criticized the value-form paradigm, and the noted value-form theorist Patrick Murrayresponded to them.

In this episode (and a future one), Andrew replies to Murray’s paper—for the first time anywhere. He and Brendan discuss differences between Marx and value-form theory regarding how commodities’ values are determined and whether capitalism is essentially a monetary system. They also engage in a broader dialogue on the general features of the value-form paradigm and its political implications; some of that discussion focuses on how Marx’s critique of Proudhonism is relevant to the value-form paradigm.

The segment includes references to Marx’s Capital—chapter 1, chapter 2, and chapter 7 of volume 1, and chapter 1 of volume 2—and to Paul A. Samuelson’s famous paper, “Understanding the Marxian Notion of Exploitation.”

The current-events segment focuses again on the COVID-19 pandemic––especially Lysol Don’s latest epidemiological wisdom and Nazis storming Michigan’s Capitol building. Are there really “good people on both sides” of this lunacy?

Radio Free Humanity is a podcast covering news, politics and philosophy from a Marxist-Humanist perspective. It is co-hosted by Brendan Cooney and Andrew Kliman. We intend to release new episodes every two weeks. Radio Free Humanity is sponsored by MHI, but the views expressed by the co-hosts and guests of Radio Free Humanity are their own. They do not necessarily reflect the views and positions of MHI.

We welcome and encourage listeners’ comments, posted on this episode’s page.

Please visit MHI’s online print publication, With Sober Senses, for further news, commentary, and analysis.

Click here for more episodes.


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4 Responses to Episode 17: The Value-Form Paradigm vs. Marx’s “Capital,” Part 1

  1. Karl marx says:

    Not bad but please know that the current advances on Marx happen in the German language. Value form theory is for me a German theory best explained by Backhaus and Reichelt!!!

  2. Marshall Solomon says:

    I completely support Murray’s positions in “Avoiding Bad Abstractions.” Murray has been an extremely influential thinker upon my understanding of Marx. Along with thinkers such as T. Smith, C. Arthur, M. Heinrich, G. Reuten, and many others, Murray has put in the hard work of reading Marx with microscopic precision and care. Kliman’s depiction of value-form theorists in this interview is, for the most part, divorced from reality. Please read them for yourselves.

    In what follows, I try to make points separate from those made by Murray in his essay. Murray’s articulation of the distinction, found in Marx’s writings, between general and determinate abstractions is indispensable for a proper understanding of Marx’s critique of political economy. Kliman’s failure to fully appreciate this distinction leads him to believe the machinations of his own mind are no different than the logic of the concrete. In fact, he gives priority to the former over the latter.

    Abstract labor is a determinate abstraction unique to the social form of production and exchange found in capitalist societies. Concrete labor is a general abstraction found in all social formations, capitalist or not. The former, abstract labor, is what Marx calls the substance of value. It is an economic category that cannot be understood in abstraction from its form, the value-form, exchange-value. This, however, is exactly what Kliman maintains is possible when he claims value is completely determined in production alone (ie, he believes labor-time in production is a direct expression of value). The reason Kliman fails to appreciate the form of value, as it relates to the substance of value, is his understanding of how abstract labor comes to be an actual social reality; or, in his case, an asocial reality.

    For Kliman, abstract value-producing labor gains social validity through the machinations of the theorist’s mind, not through the logic of the concrete. In other words, he makes abstract labor a formal abstraction, not a social process that actually has to occur in order to be valid and, thus, to be known. In this respect, it is rather ironic that Kliman accuses Murray of flirting with the mistakes of neoclassical economics. In reality, he is the one who makes the same mistake as the neoclassical economists, but with a Marxist twist: abstract labor is to Kliman what utility is to neoclassical economists; a distinction made in the mind; a formal abstraction instead of a real social process or real abstraction. (See “A Marxist’s Critique of Neoclassical Economics’ Reliance on Shadows of Capital’s Constitutive Social Form” by Patrick Murray for his criticisms of Neoclassical Economics).

    The crux of the Kliman/value-form disagreement is over the nature of value, specifically– where and how value it is constituted. Kliman is adamant that value is constituted in production alone. Our position, value-form theory, Marx’s theory, is that value is the result of a social process, a unity of production and circulation. Murray rightfully calls this position a co-constitutive theory of value. Why, exactly, is value necessarily co-constituted in capitalist societies? Value is co-constituted because it is the result of a historically determined social form of production based on the universal alienation of labor and its product in the commodity-form, which, oddly, Kliman both acknowledges and ignores.

    Let’s examine what Marx had to say about this social form.

    The most distinctive feature of capitalist society, as it immediately appears, is that wealth takes the form of “an immense collection of commodities.” For wealth to take this social form, the commodity-form, certain social conditions must be in place. I discuss some of them below (see links). For the present discussion, what is important about the commodity-form, as it relates to the abstract determination of value at the beginning of Capital, is its dual character. Kliman pays insufficient attention to the different characteristics of the commodity and the role that each characteristic plays in the constitution of value.

    A commodity is a unitary object with a dual form. It has a material form (use-value) and a social form (value). A commodity’s material form is its natural characteristic, what makes it a use-value. Such material features are the result of concrete labor no matter the social formation from which they emerge. As Marx reminds us, the taste of porridge tells us nothing about the conditions under which it was produced. Slaves, serf, and wage-labor porridge taste (roughly) the same. What historically determines concrete labor in capitalist societies is that its results take the commodity-form. Concrete labor is not undertaken for the purpose of producing use-values in capitalist societies. It is undertaken for the purpose of producing use-values for others, exchange-values. Thus the value-form, exchange-value, is the historically determined social form of concrete labor in societies with a capitalist mode of production.

    Kliman’s position requires concrete labor, as it immediately appears in production, to be the sole source of a commodity’s value (and price). This, however, ignores the historical specificity of societies where generalized commodity production and exchange – the value-form of the commodity – is the dominant social form of wealth. Concrete labor in capitalist societies is undertaken in isolation. Private firms produce their commodities in separation from other private firms with the intention of selling their products to other firms or directly to consumers. But, at the point of production, their privately produced goods are incapable disclosing whether they are bearers of values or not. Why?

    Let’s use the example of linen. If we posit a production alone value theory, then, at the point of production, linen only has a natural form. It is a material object that might fulfill a need or desire. Or, it might not. Whether or not it fulfills a need or desire is still to be determined by a social process related to but outside of production, namely –circulation. For now, at least, let’s bracket circulation and examine Kliman’s claim that commodities have their value constituted solely in production and before circulation.

    Our linen producer has just finished producing her linen. How does she know it is a bearer of value? Well, she doesn’t. According to Marx, she can’t. It is literally impossible. At the point of production, the only other material object the linen can compare itself with is other linen produced by the same private labor. 20 yards of this linen, and the labor time it took to produce it, is identical to 20 yards of that linen, and the labor time it took to produce it. 20 yds of linen = 20 yds of linen is not a value-relation. It is a mere tautology. As Marx clearly states,

    “A commodity is a use-value or object of utility, and a ‘value.’ It appears as a two-fold thing it really is as soon as its value possesses its own particular form of manifestation, which is distinct from its natural form. This form of manifestation is exchange-value [ie, the value-form –MS], and the commodity never has this form when looked at in isolation, but only when it is in a value-relation or in an exchange relation with a second commodity of a different kind.” (Marx, Capital Vol. 1, pg. 152)

    This alone should be enough to give up the “production alone” position, but I will continue to demonstrate the absurdity of thinking value is solely constituted in production.

    Kliman’s misunderstanding of Marx stems from three sources. He fails to grasp:

    1) The meaning of socially necessary.

    2) The difference between ‘ideal’ prices and ‘real’ prices.

    3) The absolute necessity of money for production to take the social form of value.

    I will take up each of these issues in turn.

    Socially Necessary Labor Time

    Kliman’s trump card, in his own mind, is this line from Capital:

    “What exclusively determines the magnitude of the value of any article is therefore the amount of labor that is socially necessary, or the labour-time socially necessary for its production.” (Marx, Capital Vol. 1, pg. 129).

    Kliman, to the best of my knowledge, never explains this passage. He can’t explain it without getting twisted into knots or smuggling in circulation as a determinative factor of socially necessary labor time. I find this interesting about Kliman. He talks a good game about providing evidence and the lack of evidence by value-form theorists. In reality, the opposite is the truth. Value form theorists are the ones sticking closest to Marx’s texts. Kliman has to ignore so much of what Marx says in order maintain his production alone position. Don’t let his high-minded bluster fool you.

    If we are going to do more than dogmatically state a line from Marx, and prematurely claim victory, we have to explain what he means. Marx clearly thinks that what “exclusively determines the magnitude of the value of any article is…the amount of labor that is socially necessary.” But what determines if labor is socially necessary at all? Kliman points to this passage to bolster the previous one:

    “Socially necessary labour-time is the labour-time required to produce any use-value under the conditions of production normal for a given society and with the average degree of skill and intensity of labor prevalent in that society.” (pg. 129)

    Okay, we are getting closer to an explanation. Socially necessary labor time represents the average time, because it is the result of labor conducted at the average skill and intensity, necessary to produce a particular use-value within a specific society. This is a definition of SNLT, what it is. The million-dollar question: How is SNLT determined? We know SNLT determines the magnitude of value and we know SNLT is the average labor time of a certain skill and intensity within a given society. What we don’t know is how the average skill and intensity is itself determined. That is, we still do not and cannot know how SNLT is determined by appealing to the two statements mentioned by Kliman. We are still lacking an explanation.

    Let’s return to our isolated linen producer in production and see if we can determine if her firm’s private was conducted at the SNLT required to produce linen at its value by limiting ourselves to her capitalist firm’s private labor in production alone. We will posit that it takes her firm 5 hours to produce 20 yds of linen. Is her firm’s labor operating at, above, or below the SNLT, which is defined as “the average degree of skill and intensity of labor prevalent in [her] society”? How could we possibly know? At the point of production, her firm’s labor is concrete private labor in isolation from other concrete private labor. Her firm’s labor must come into confrontation with the labor of other linen producers (and money) for her to know if 5 hours is at, above, or below the social average. This does not happen in production. She does not walk her commodity over to the next factory and compare labor-times with her competitors. That is, she does not find out while still in the sphere of production how her commodity relates to the SNLT required to produce linen in her society. She must take her commodity into circulation, where other private producers bring their commodities. That is where labor-times are compared (through their price tags) and where SNLT, which determines the magnitude of value, is itself determined.

    Moreover, for a commodity to be socially necessary it has to meet a demand. In capitalist society demand is not a function of need or desire. It is a function of need or desire backed by money (“The commodity is not simply demand, but demand backed by money” Grundrisse, pg. 198). Only the privately produced linen that socially validates itself by being exchanged for money is part of the total social product. All of the labor that produced linen that fails to socially validate itself through monetary exchange is wasted labor. It is socially unnecessary. There is no way to know (exactly) how much labor is socially necessary at the point of production. Prior experience can give capitalists clues as to how much labor time they should spend on producing linen. But this prior experience relates to the amount of their private labor that typically becomes socially validated in circulation through purchase. Production alone is insufficient to explain the concept of social necessity and social necessary labor time.

    Exchange-Value as Ideal Price

    What seems to confuse Kliman is the fact that commodities can be given ideal prices before they enter circulation. But the ideal price of the commodity is not its real price. Nor is it proof that the commodity actually has a value, that is, that the individual labor-time expended on producing the commodity is universal (abstract) social labor. Any capitalist can slap any price he wants onto the commodities his firm produces. Once those commodities get slapped on the shelf in circulation and fail to find buyers, their prices will be lowered to better reflect (or gravitate towards) the labor-time socially necessary to produce a commodity of similar kind within the society. Here is Marx in the Grundrisse,

    It has further been seen that, in circulation, money only realizes prices. The price appears at first as an ideal aspect of the commodity; but the sum of money exchanged for a commodity is its realized priced, its real price. The price appears therefore as external to and independent of the commodity, as well as existing in it ideally. If the commodity cannot be realized in money, it ceases to be capable of circulating and its price becomes merely imaginary;” (Marx, Grundrisse, pg. 198; bold mine)

    From A Contribution to the Critique of Political Economy,

    A quarter of wheat contains thirty days’ labour, and it therefore does not have to be expressed in terms of labour-time. But gold is a commodity distinct from wheat, and only circulation can show whether the quarter of wheat is actually turned into an ounce of gold as has been anticipated in its price. This depends on whether or not the wheat proves to be a use-value, whether or not the quantity of labour-time contained in it proves to be the quantity of labour-time necessarily required by society for the production of a quarter of wheat. The commodity as such is an exchange-value, the commodity has a price. This difference between exchange-value and price is a reflection of the fact that the particular individual labour contained in the commodity can only through alienation be represented as its opposite, impersonal, abstract, general – and only in this form social – labour, i.e., money. (Marx, Critique of Political Economy, pg. 69; bold mine)

    Does the commodity-form have a strange ontology and temporality? Of course it does. Marx warns us that it is full of “metaphysical subtleties” and “theological niceties.” This strangeness is a result of the commodity’s dual character, which requires a commodity to realize itself as an exchange-value (in circulation) before it can be realized as a use-value (in consumption). If a commodity is unable to realize its exchange-value in circulation, then that commodity does not have a use-value (in capitalist societies) and the labor expended in production was not useful labor. And, “only the act of exchange can prove whether labour is useful for others, and its product consequently capable of satisfying needs of others’ (Marx, Capital Vol. 1, pg. 180). Is this a perverted social arrangement? Indeed, it is “bewitched and distorted.” But, nonetheless, this is the capitalist social form.

    In sum, just as concrete private labor in production is not immediately abstract value producing labor, the ideal prices given to commodities in production are not their real prices. Both concrete labor and ideal prices have to prove themselves worthy before the money god in exchange. Until then, their social objectivity is spectral and ghostly and their existence as bearers of value is latent and potential (all Marx’s words), not actual.

    If Kliman’s position is correct, that is, if value and price is constituted in production alone, absurd conclusions follow. Every commodity, no matter how preposterously useless, bookshelves for Trump or square basketballs, have value when they leave production. They have to for Kliman because he cannot appeal to circulation for proof that square basketballs meet zero social demand and, therefore, the labor that went into producing them was socially unnecessary, wasted labor. No. Kliman’s position has to be that every commodity produced capitalistically is a bearer of value, no exceptions. Thus, his position makes a fetish of labor. It gives labor a power it does not possess, the power to immediately produce value through concrete labor in production. This is a result of Kliman paying insufficient attention to social form of labor and its dual character in capitalist societies. Only universal abstract social labor counts as value-producing labor. However, in production, labor remains individual concrete private labor. It must become social in exchange:

    “Commodities are the direct products of isolated independent individual kinds of labour, and through their alienation in the course of individual exchange they must prove that they are general social labour, in other words, on the basis of commodity production, labour becomes social labour only as a result of the universal alienation of individual kinds of labour. [Both] Gray [and Kliman –MS] presupposes that the labour-time contained in commodities is immediately social labour-time, he presupposes that it is communal labour-time or labour-time of directly associated individuals. In that case, it would indeed be impossible for a specific commodity, such as gold or silver, to confront other commodities as the incarnation of universal labour and exchange-value would not be turned into price; but neither would use-value be turned into exchange-value and the product into a commodity, and thus the very basis of bourgeois production would be abolished.” (Marx Critique of Political Economy, pg. 84-85)

    Is it any wonder Kliman fails to understand the absolute necessity of money in capitalist societies?

    Money as the Necessary Form of Appearance of Value, Comments on Proudhon

    In the podcast, Kliman is at his most condescending (and his most ironically confused) when he discusses money and Marx’s critique of the Proudhonists. His misunderstanding of value seems to haunt him as if it were a ghost clouding his interpretation of everything Marx has to say. The podcast format is not the best for providing clarity, to be fair. So, let’s look at a couple lines from Kliman’s essay:

    “Marx’s development of the form of value in Section 3 of Chapter 1 of Capital, Vol. 1 was in one respect a demonstration aimed against proposals made by Proudhon and his followers to abolish money or reform the monetary system, proposals that Marx battled for decades. By developing the money form of value from out of the duality inherent in each commodity, he showed that the money relations against which Proudhonists railed are manifestations rather than essences, merely the necessary consequence of the inherent contradictions of commodities and commodity production” (pg. 185).

    There is some truth to what Kliman is saying here. Marx did not think the Proudhonists’ banking schemes and proposals to modify the form of exchange while leaving the mode of production and its constitutive social relations in place was a wise political strategy. But there is also some irony in what Kliman is saying here. Marx did not think it wise because he did not think it was possible to modify the form of monetary exchange (ie, the value-form or exchange-value), while keeping the mode of production based on value (ie, the commodity-form and its constitutive social relation of capital and wage labor). As Murray points out in this essay, “Gray failed to grasp the social implications of producing wealth in the commodity form because he failed to comprehend the inseparability of value and the value-form” (pg. 232).

    Kliman, once again, demonstrates his belief in the machinations of his own mind over the logic of the concrete. The problem with the Proudhonists, according to Kliman, is that they “railed” against the “manifestations rather than essences.” In his language, they focused on “commerce” instead of “commodity production.” The clear implication is: they should have “railed” against the commodity-form of production and the social conditions that make the commodity-form possible, instead of “railing” against their surface level consequences. In other words, Kliman is claiming the Proudhonists chose the wrong target to attack. Well, yes. Every value-form theorist would agree. But, the question is why did the Proudhonists choose the wrong target to attack? They chose the wrong target because their understanding of value is extremely similar to Kliman’s understanding of value: They believed value can be determined in production prior to exchange.

    Marx’s main point against the Proudhonists was not simply that their emphasis was misplaced, “railing” against the wrong thing. No. Marx’s point was that the very idea of emphasizing and trying to modify money relations while leaving commodity production in place was quixotic, an idealistic impossibility. Acting as if direct labor-times were an adequate or even a possible expression of value demonstrated their complete lack of understanding about value and its necessary form of appearance, money.

    The Proudhonists’ conceptions of value and money were misplaced; thus, their emphasis and political strategies that followed them were misplaced. It was not simply a matter of them focusing on the form of appearance (money) instead of the essence (value), that is, thinking value could be determined by concrete labor time directly and represented by time-chits. No. The Proudhonists’ mistake was thinking such a mental exercise actually determined social reality, mistaking machinations of the mind for the logic of the concrete. In truth, the value of a commodity does not actually come into being as a social reality without monetary exchange, the necessary form of appearance of value. Thinking you can know the former without the latter and, thereby, determine the value of a commodity without it going through the actual social process of monetary exchange is a fool’s errand. It cannot be done.

    ***I will address the essential conditions necessary for capitalist society in a response to Part Two***

  3. I’m puzzled. It seems that both Andrew and value form theorists believe Marx to hold the view that demand, under certain circumstances, can influence value (not just price). I’m not comprehensively read in Marx but I cannot find any evidence of this. A passage in Capital, Vol 1; Ch 3; Section 2 beginning, “Lastly suppose that every piece of linen…” has been pointed out to me to support this view, but try as I might I cannot make it bear this interpretation. There are far too many sentences within it which would deny such a reading.

    It also strikes me that if it were true then it would have bizarre consequences. It would mean that if there were a glut or lack of demand on the market for a particular commodity, then that commodity would sell at or *above* its value. The idea that, as a matter of analysis, a commodity would sell above its value in consequence of an insufficiency of demand seems rather strange.


    • Hi Richard, Andrew Kliman asked me to post this in response your question:

      Hi Richard–the issue is not whether the commodity sells at its value (or price or production, or whatever), but whether demand influences the commodity’s value. Marx holds that it does.

      He discusses the basic issue in chap. 10 of _Capital_, vol. 3. If demand is particularly high (low), then inefficient producers can profitably compete (are forced out). This increases (decreases) the *average* amount of labor socially necessary to produce this kind of commodity, and thus it increases (decreases) its value. Note that Marx’s theory thus says BOTH that demand affects the magnitude of the commodity’s value AND that it remain the case that this value is *exclusively* determined by the *average* amount of labor socially necessary to produce the commodity.

      Later in vol. 3, when Marx discusses ground-rent, the same issue plays a major role–high (low) demand brings less (more) fertile land into cultivation, and similarly for land that’s more poorly (better) situated. This increases (decreases) the average amount of labor socially necessary to produce the commodity, and thus the commodity’s value, and it affects the amount of the surplus-value that the landlords are able to get as rent (all else equal).

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