Episode 18: The Value-Form Paradigm vs. Marx’s “Capital,” Part 2
MHI · The Value-Form Paradigm vs. Marx’s “Capital,” Part 2 — Ep. 18
The second half of a two-part interview on the “value-form paradigm”—a Marx-inspired and market-focused strand of political economy. Some years ago, the noted value-form theorist Patrick Murray responded to criticisms of the paradigm, leveled by Andrew and others in a published symposium. In this episode––guided by Brendan’s questioning, and for the first time anywhere––Andrew continues his reply to Murray.
The co-hosts discuss the source of profits, the quantity theory of money, and intra-firm trade. The discussion focuses on Andrew’s argument that the implications of the value-form paradigm contradict what Marx wrote about these issues, and on Murray’s attempts to explain away the apparent contradictions. Andrew explains why he finds Murray’s rebuttals to be unsuccessful.
The segment includes references to chapter 3 and chapter 5 of Capital, volume 1, and to Marx’s draft chapter, “Results of the Direct Production Process.”
In the current-events segment, the co-hosts respond to a recent “anti-neoliberal left” piece in Salon, in which Varsha Gandikota-Nellutla once again puts the political interests of “the left” ahead of the life-and-death struggle against Trumpist reaction.
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.
On Estranged Labor.
The amount of confusion and number false accusations during the discussion of embodied labor was truly astounding. A central claim of all value-form theorists is that labor takes a historically specific social form in capitalist society (and in all societies). Our issue with Kliman is his asocial, ahistorical approach. He acknowledges the historical specificity of value in capitalism, that is, in the abstract. When Kliman actually lays out his theory, he ignores – or pays insufficient attention to – the historically determined capitalist social form, the value-form, exchange-value: money as the necessary and autonomous value-form of commodities.
Listening to Kliman’s and Cooney’s conversation of embodied labor was frustrating, to say the least. I believe both of them are highly intelligent individuals. So, on the one hand, it is a bit baffling for them to get the section on Estranged Labor so incredibly wrong. But, on the other hand, it is not surprising at all. Kliman lacks the conceptual framework to understand Marx. This leaves him grasping in the dark. And it causes him to misinterpret Marxists who get Marx right.
To understanding Marx’s point in the section on Estrange Labor (1844), we must understand the difference between first-order and second-order mediations. Chris Arthur brilliantly unfolds this distinction in his book on Marx and Hegel (link below). Arthur’s articulation of first- and second-order mediations roughly corresponds to Murray’s distinction between general and determinate abstractions.
Embodied Labor = first-order mediation = general abstraction = productive activity no matter the social form.
Alienated Labor = second-order mediation = determinate abstraction = productive activity under the capitalist social form.
Since Kliman is operating without this distinction, he collapses the two abstractions into one. This is the exact same mistake he makes with concrete and abstract labor. That is, he treats concrete labor (general abstraction) as if it were abstract labor (determinate abstraction) when he claims the value of a labor product is completely determined in production alone. After production, and before exchange, the product of individual concrete labor has not been socially validated as universal abstract social labor (see my comment to Part One of the podcast and below).
For Marx, productive activity is a universal feature of all societies no matter the social form. The objectification of labor in use-values is a “nature imposed condition.” In order to survive, we must actively produced and reproduce our existence. We do this by making plans (in the mind) and executing them (in the world). Marx views this procedure as a uniquely human capacity. It separates us from the rest of the animal kingdom, which has an immediate unity with nature. This capacity of self- and social determination is our species being. That is, human productive activity is not purely instinctual. Our labor does not follow perennial patterns, such as birds building nests or bees making hives. We determine who we are by what we make. In other words, we objectify our hopes, plans, dreams, wants, wishes, purposes, and needs in things. In doing so, we become who we are.
The objectification of human purposes through productive activity is a first-order mediation. This means that productive activity, the embodiment of human purposes in objects, is transhistorical. The productive activity of slaves was objectified in use-values (ie, material objects). The productive activity of serfs was objectified in use-values. Accordingly, the embodiment of labor in objects is not unique to capitalism, as Kliman claims.
Productive activity, as a first-order mediation, is the condition for the possibility of social existence. However, as a second-order mediation, productivity activity always takes an actual, historically determined social form. These are not separate processes. The first-order mediation is universal and is itself mediated by a second-order mediation, which is both particular and historically determined. This might sound more philosophically complicated than it really is.
In Chapter Seven of Capital Vol. 1, the labor process is a first-order mediation that is itself mediated by a second-order mediation, the valorization process. The first-order mediation, the labor process, is conceptually transhistorical. But it actually exists nowhere because its being is ontologically determined at an abstract level of generality. Every labor process is necessarily a labor process of a historically determined kind. In other words, at no place and at no time in history has there ever been a labor process as such. The concept of a labor process is a distinction we are able to make in our minds by selecting out common activities of historically diverse societies. It is a formal and general abstraction, a mental construct that helps us organize our thoughts about the world. The valorization process is an actual labor process that takes place in history through a determinate social form of production, the value-form.
Kliman and Cooney fail to understand that alienated labor is the historically determined second-order mediation of embodied labor, which is a transhistorical first-order mediation. This leads to confused statements, such as:
Cooney at 18:00: “That is an important distinction to make about this claim that embodied labor is an ahistorical thing to talk about. In some senses, the value-form paradigm treats capitalist production ahistorically…as purely technical.”
No: The value-form claim is that embodied labor never actually exists as such transhistorically. It literally cannot. Embodied labor as such is merely a mental construct. Kliman’s mistake is treating embodied labor as if it were forever and always alienated labor, as if objectification = alienation. If this were true, then there goes the possibility of communism!
Kliman at ~16:20: After quoting Marx about labor confronting the worker as an autonomous alien power, he says, “and it’s only because of that that labor can be embodied, so to speak, in an object.”
No. The product of labor does not confront the worker in an alienated form “because…that labor can be embodied…in an object.” All social forms of labor can be embodied in objects. In capitalist societies, embodied labor takes the alienated social form of value. If production were socially determined by associated producers collectively determining the production process, then labor would still be embodied in objects. However, the labor embodied in objects would take a different social form. And the products of labor would no longer be experienced as an alien power standing over estranged workers.
I’ll let Chris Arthur have the last line on this subject. I encourage Kliman, Cooney, and everyone else to read this entire chapter and book. Arthur’s makes more points and with greater precision than I am able to do here:
“ In order to overcome estrangement, the alienating mediations must be overcome. But this does not mean that Marx rejects all mediation, for the ‘first-order mediation’ – productive activity as such – is an absolute ontological dimension of social life; Marx opposes only its specific alienated form, imposed through second-order mediations which are historically surpassable. If this distinction is not drawn, and social philosophy collapses the two levels into one, such that private property and exchange are taken to be as absolute as productive activity itself, then it is not possible for such a philosophy to grasp the conditions of a positive supersession of estrangement; it must descend to apologetics and pseudo-solutions.”
On Chapter 5 of Vol. 1
The point of Ch. 5 is to demonstrate the “Contradictions in the General Formula,” the most glaring contradiction being: surplus value “has its origin both in and not in circulation.” The bulk of the chapter undermines the notion that value and surplus value is created in circulation. This was necessary because value has to be realized in circulation and the ‘free trader vulgaris’ exploited this fact for apologetic purposes. Moreover, setting apologetics aside, there is also an objective illusion of value being created in circulation, especially at the more concrete level of analysis where different turnover times of capital with the same organic compositions and rates of surplus value produce different annual rates of profit.
Here, though, in ch. 5, Marx is demonstrating that circulation actualizes a pre-existing potential, value. This creates confusion. Once commodities make it onto the scene, onto the market, it is possible for them to fetch more money than the value-equivalent latently preexisting within them. But this creates neither value nor surplus value. It simply redistributes a pre-existing potential, value, unequally. One man’s loss is another’s gain, such as when a merchant buys cheap at point A and sells dear at point B. Marx summarizes this point succinctly in Part One of TSV:
“This profit upon alienation therefore arises from the price of the goods being greater than their real value, or from the goods being sold above their value. Gain on the one side therefore always involves loss on the other. No addition to the general stock is created. Profit, that is, surplus-value, is relative and resolves itself into “a vibration of the balance of wealth between parties [James Steuart]” (Marx, Theories of Surplus Value Part 1, pg. 42).
In Chapter 5 of Vol. 1, the “real values” used in the various examples are determined by fiat. Marx gives commodities their real values before they go to market to make a theoretical point. Per assumption, real values can be bestowed upon commodities before exchange. No value-form theorist would argue otherwise. However, in the real movement, per the logic of the concrete, an actual social process must take place, private labor must prove itself social for commodities to actualize their potential value.
Accordingly, to make sure the reader does not get confused on this point – unfortunately to no avail – Marx gives us a warning at the end of Ch. 5. Since he had spent the entire chapter demonstrating the impossibility of creating surplus value in circulation. Here, at the end of chapter, he attempts to forestall bad, one-sided abstractions. In effect, he says, “don’t take all these points too far” or “don’t be a one-sided Ricardian who thinks value can be completely determined in production.”
“Capital [just defined as “self-expanding value” in the previous chapter – MS] cannot therefore arise from circulation, and it is equally impossible for it to arise apart from circulation. It must have its origin both in and not in circulation.” (Marx, Cap. Vol, 1, pg. 268)
In Patrick Murray’s words, value is co-constituted: “both in circulation and not in circulation.”
Capital, as self-expanding value, is a process of unity-in-difference. Both production and circulation are essential moments. If labor conducted at (what was believed to be the) SNLT arrives at circulation and fails to find a buyer, it has no value. It never actually had value. It never will have value. A theoretician can give the damned commodities, on the road to perdition, ideal prices before they reach circulation. But she cannot give them value. She does not have that social power; more accurately, she only has that social power in her pocketbook, not in her mind. Thinking she can determine value in abstraction from exchange is a bad abstraction and contradicts everything Marx has to say about the form of value
On the Value-Form.
Thinking value can be represented directly by private labor-time is a category mistake. Such thinking misapprehends the nature of value, treats it as a ‘thing’ instead of social relation mediated through things. Hegelian logic offers the proper conceptual framework for understanding the ontology of value. Essence must appear. Money is the necessary form of appearance of value. As Murray nicely puts it, “value and money are inseparable yet not identical: without money there can be no value, yet money is not value.” (see https://www.mtholyoke.edu/courses/fmoseley/conference/murray1.pdf)
The actuality of value is not given to immediacy or immediately discernible. A commodity has a two-fold nature. As it immediately appears in capitalist society, a commodity is nothing but a material object with a potential use-value. However, being two-fold, a commodity is more than material thing. It is also a bearer of value. Here’s the important and all-too-often overlooked point: as a bearer of value (ie, as an exchange value) ‘not one atom of matter’ enters into its objectivity.
In other words, value’s identity is not material; it is invisible or abstract. Its being is soul-like and requires material representation. Marx draws our attention to the fact that no scientist has ever cracked a commodity open and discovered (exchange) value within it. This is because, to be known, the invisible substance of value (ie, abstract human labor) must be reflected in the use-value of another commodity. That is, the concept of a single commodity (with value) must double itself into another commodity of a different kind (to disclose its value). Otherwise, its value could not be known. Value, as essence, must appear in a form other than itself. The “other” commodity that discloses value is, of course, money.
Without money, a commodity’s value substance – human labor in the abstract – would live a shadowy, purgatorial existence; actually, it’d be damned to the hell of non-existence because money is absolutely necessary for value to exist as a social reality. Make no mistake about it: the commodity-form is full of “theological niceties,” as the ‘poet of commodities’ warned us (see Cap. Vol 1, pg. 163).
Marx holds our hand and walks us through the value-relation, which is necessary to disclose the value of an isolated commodity, lest we get confuse.
The simple form of value:
X commodity A = Y commodity B
Commodity A is in the Relative Form. Commodity B is in the Equivalent Form
20 yds of linen = 1 coat
The linen’s value is not immediately disclosed in linen or the labor-time it took to produce 20 yds of linen. As an immediate object, linen is merely a material thing and the time it took to produce 20 yds of linen represents private labor-time. Value is invisible (abstract) and the labor time that produces value is social. Linen’s abstract value identity requires a material representation in order for it to be known. That is, its value substance, abstract labor, requires an adequate form (of appearance). Accordingly, the concrete labor that produced the linen, which is labor of a particular kind, must prove itself to be abstract labor or universally valid labor within a given society. This is accomplished through a social process whereby private concrete labor-time is validated as universal abstract social labor-time in exchange. Linen must actually come into a relation with a coat and actually be exchanged with a coat for its value (substance and magnitude) to be disclosed (through its value-form).
20 yds of linen = 1 coat
The concrete private labor-time it took to produce 20 yds of linen = an equivalent amount of universally valid abstract social labor-time, which takes the form of 1 coat in this example.
Is it true that the private labor-time it took to produce 20 yds of linen and the private labor-time it took to produce 1 coat are equal? Yes, of course. With caveats, Marx makes this point. But it is not his main or most salient point. He explicitly cautions us not to assume the relative and equivalent forms are formal equalities.
Obviously, in capitalist societies, linen and coats are not generally exchanged. Linen is exchanged for money. The reason linen can be exchanged for money is the latter’s universal social validity. Private labor-time becomes socially valid by exchanging its material result (a commodity) with another commodity (money). The result of private labor is not immediately socially valid. It must exchange itself with another material object (or its symbolic stand-in) that has immediate social validity.
The commodity that must prove itself takes the relative form. The commodity that does the proving takes the equivalent form. In actual capitalist societies, the commodity in the equivalent form is always money, the universal equivalent. In the simple form of value example used by Marx, the coat is in the equivalent form. It does not have to prove itself or socially validate the private labor-time required for its production. The private labor that produced 1 coat is already valid. The coat is playing the economic role of a commodity with the power to socially validating the private labor-time of another commodity. The reverse, however, is not true. The private labor-time required to produce 20 yds of linen does not prove the socially validity of the private labor-time required to produce 1 coat. For that to happen, the two commodities would have to switch places:
1) 20 yds of linen = 1 coat
2) I coat = 20 yds of linen
In example 1), the coat is the linen’s value-form. Linen is not the value-form of linen. Nor is linen the value-form of 1 coat. For 20 yds of linen to be the value-form of 1 coat, the two commodities have to change positions in the value-relation. Linen has to take the equivalent form and the coat has to take the relative form, as in example 2).
Why is this important? It demonstrates the fact that Marx’s logic is not formal. His logic is the result of a determinate concrete social process. A theorist can make the deduction: if X = Y, then Y = X. But this would do violence to Marx’s point.
In the equation X = Y, the commodity represented by Y has a social power that the commodity represented by X does not. To make them formally equally is to rip them out of their social context by the power of the mind. But, according to the logic of the concrete, X = Y is a form-determined equation. X has a form, the relative form. Y has a form, the equivalent form. This precludes the possibility of simply reversing the order of the equation to Y = X. The commodities represented by Y and X stand in a polar relation to one another. Their respective positions in the value equation matters. Society, not a theorist, gives them their position. Marx is not formally abstracting value as a common property of the two commodities. He is “reproducing the [logic of the] concrete in thought.” Society has already done the abstracting for him. Marx is reconstructing the logic of the concrete, the value-relation, in its theoretically most simple form.
If the value of commodity Y were immediately knowable right after it was produced, then it would not require another commodity (X) to reflect its value. Value would not require a value-relation and form. If Kliman appeals to money or MELT, then he is smuggling in commodity X and the exchange process. During any given round of production, the value of fixed and circulating capital has already been validated in –and is constantly being modified by what happens in –exchange. Newly added private labor preserves the value of fixed and circulating capital while adding new value: if and only if the newly added private labor is socially validated. If climate change all of sudden encouraged global nakedness that made linen undesirable, thus useless, then the already validated value represented by the fixed and circulating capital would no longer have value. And the private (living) labor used to add new value was wasted. It did not actually add value.
A theoretician can always count her chickens before they hatch. With the power of her mind, she can posit: all labor as simple labor. She can posit: all commodities are produced at their SNLTs. She can posit: every commodity produced is purchased at its value. Under these theoretical conditions, the value of commodities can be determined with exquisite precision. But, theoretically, if pigs flapped their ears fast enough, I’m sure they could fly.
On What is Essential in Capitalism.
One of Kliman’s issues with value-form theorists is our, perceived to be, over-emphasis on the necessity of money or treating money as “the essential feature” of capitalism. The notion of a single essential feature of capitalism is somewhat dubious to me. Money, value, wage labor, capital, surplus-value, profit, etc. are all expressions of a social relation, capital exploiting wage labor. The interconnected nature of an organic whole makes singling out a solitary essential feature appear one-sided and encourages fetishism.
Making a social relation “the” essential feature, instead of apparent ‘thing’ such as money, avoids this problem to a certain extent. But, at the same time, social relations in capitalist society are so intertwined with ‘things’ that suggesting it is a one-way causal street seems a bit dubious, too. All of necessary presuppositions of capital become posited by the production process once capital has established itself as the dominant social form. Things do rule people in capitalist society, even if it is people who constitute the things that rule them. Illusions are (or can be) objective. Kliman seems to think value-form theorists are being duped by the glittering money-form….or something like that. In truth, we are not the one’s being duped.
Here is one of my answers from Quora. I discuss the necessary conditions and essential features of capitalism, albeit not exhaustively. I believe it to be completely in-line with value-form theory:
Does capitalism have an agenda or an end goal?
Capitalism is a specific social form of production and exchange that has the singular purpose of turning money into more money. This process is the result of a particular social relation, namely— capital exploiting wage labor. Without the one, there is no “other.” Capital could not emerge as a social reality without confronting wage labor, and vice versa. Capital and wage labor constitute each other. They are opposing social realities united by the inner necessity of the social system to reproduce itself. Thus, for capitalism to persist over time, capital must find wage labor ready-to-hand.
How does capital continually find wage labor ready-to-hand?
Separation of Immediate Producers.
The immediate producers within capitalist society, the people who perform the actual work, must be separated from their means of labor. If the immediate producers (wage laborers) were able to reproduce themselves without alienating their productive capacity to an owner of the means of labor (capitalists), then the social system would lose its inner necessity. That is, capital would not find wage labor ready-to-hand. There would be neither capital nor wage labor. Accordingly, for capitalism to persist over time, there must be an owning class who controls the means of labor. And there must be a non-owning class that is forced to sell their productive capacities to the owning class in order to survive. This is only possible through the systematic separation of the immediate producers from their means of labor.
A consequence of this separation is generalized commodity production. In capitalist societies, wealth necessarily takes the form of commodities, goods produced for the sole purpose of being exchanged for a profit. Because the immediate producers are unable to reproduce themselves, they must acquire their means of subsistence by producing goods in the commodity-form for an owner of the means of labor. Thus, owners contract wage laborers for a certain sum of money, paid at certain intervals of time. In exchange, the wage laborers give up any and all rights to the product of their labor. They are forced, as a class, to purchase the product of their own labor back from the capitalist class with their money-wage. Conveniently, for the capitalist, the money-wage paid to the laborers is just enough to keep the majority of workers alive for a short period of time. This compels the workers to return to the capitalist class for the next round of exploitation, ready-to-hand.
Separation of Capitalist Producers.
It is also necessary for the class of owners to be separated from one another. Decisions about the what, when, where, and how of production cannot be made collectively in a capitalist society. Owners decide. And they decide privately. Thus, all of the capitalists own the means of production and purchase wage labor as private citizens. They produce the sum total of products that will meet the total social demand of a given population in isolation from one another. If the total social demand falls below the total social product for a prolonged period of time, then the social system will fall into crisis. This is always a distinct possibility within capitalist systems because there is no immediate correspondence between what is produced and the total social demand. Capitalists venture to make a profit as private owners. They have the “freedom” to produce whatever they decide. But if they privately produce a good that fails to socially validate itself in exchange, to meet a demand (ie, find a buyer with money in hand) they risk going out business.
This social arrangement gives the products of labor the value form. Production does not take place for the purpose of meeting all of the human needs of the population. Private capitalist owners are only concerned with profit, turning the initial value they invest into more value. Because the private owners are separated from one another, the products they immediately produce do not immediately possess value or surplus value (profit). All capitalistically produced goods, as they immediately exist at the point of production, are use-values. But they are use-values for others. As mentioned above, they are commodities. This means that they are produced as exchange-values, that is, use-values produced with the intention of being sold for a profit. Commodities, therefore, have a dual character — use-value and exchange value. The two aspects of the commodity stand in a contradictory relation to one another. The commodity’s material form as use-value has a different purpose than its social form as exchange-value. The purpose of the former is consumption, while the purpose of the latter is to realize a profit through exchange for money.
At the point of production, commodities exist, in potentia, as use-values with prices ideally attached to them (exchange-values). The ideality of a commodity’s price is just that, though, ideal (ie, not real). Prices actually have to be realized through the social process of exchange. Private labor must become social. In other words, the private labors of isolated capitalist producers must become an aliquot part of the total social product in order to have value. The proving ground for value is the market. All of the separate private producers come together and compare the labor times of their products on the market. Only the products that get exchanged for money prove themselves to be bearers of value, post festum (of production).
The private labor that validates itself as an aliquot part of the total social product was not wasted. It was value producing labor. Products that go unsold were produced by socially unnecessary labor time. Such products have no value. Labor expended on producing them was wasted labor.
Labor Process as Valorization Process
Value, which is unique to societies with the social relation of capital and wage labor, gives the labor process in capitalist society a determinate form. It is the value form of production and exchange that determines the labor process (general abstraction) as a valorization process (determinate abstraction). Production is structurally oriented towards creating value and surplus value.
Value, however, is an abstract identity. It does not result from concrete private labor in its immediate form. Concrete private labor only produces use-values. Value results from the social form concrete private labor takes inside societies with a capitalist mode of production.
Thus, for concrete private labor to be value producing labor, what Marx called abstract labor, it must socially validate itself on the market. As just described above, money validates private concrete labor through the act of purchase. In doing so, money becomes the mirror of value, its necessary form of appearance. Since value is an abstract identity, it cannot be known directly. Marx calls it a purely social substance containing not an atom of matter. Value requires material representation. When the products of private concrete labor attempt to validate themselves by being purchased on the market, they are reflecting their ideal prices (potential value) in the money of consumers. Only the products that actually realize their ideal prices in money have value.
Thus, value, an abstract identity, comes to dominate actual flesh and blood human beings. When Marx says that individuals in capitalist societies are “ruled by abstractions” this is what he means. Production in the value form, for exchange, revolves around money considerations and nothing else. Only the material goods that can be sold count. The labor process is subsumed under the valorization process: turning value (money) in more value (more money). Products that fulfill a human need, but a human need not backed by money, do not count. Money, the form of appearance of value, is the god of capitalist society. Monetary considerations control everyone’s lives. If weapons of mass destruction fetch a price, then they will be produced, while people without money starve out in the cold.
This is not a moral critique of the actions of capitalists. It is a claim about a contradictory social form. Concrete labor that actually creates the material things human beings need must become abstract labor through a “bewitched and distorted” process, the universal alienation of privately produced commodities. This process causes humans to experience the products of their own labor as an alien power controlling their lives. The organization of capitalist society necessarily applies competitive pressures on the owners of the means of production. Human concerns as such are outside of the logic of the system. Money concerns are everything. Capitalists remain capitalists by turning money into more money (valorization). The capitalists who fail to valorize capital (dead labor) become wage workers (living labor). Workers are forced to run into the exploitative arms of a capitalist in order to acquire money so they can eat. Nobody is holding a gun to either social classes head. The alienated economic forms of capitalist society determine their actions, no matter how “good” or “evil” a person might be as an individual. This means that capitalism is beyond reform. It must end. Its agenda is inhuman.
The end goal of capitalism is money….used to created more money…..without end.
Accumulate, accumulate! That is Moses and the prophets!
Here is the link to the Arthur book. I must’ve failed to grab it when I cut and pasted:
Is there a way to edit my comment? Need to clean up a few typos. Thanks.