Marx’s Approaches to Value - Socio-Historical, Dialectical, Classical

The theory of labour value: basic concepts

Marx begins his study of capitalistic production with an analysis of commodities, because, “for bourgeois society, the commodity-form of the product of labour, or the value-form of the commodity, is the economic cell-form” (1867 [1976]: 90).

This common element cannot be a geometrical, physical, chemical or other natural property of commodities. Such properties come into consideration only to the extent that they make the commodity useful, i.e. turn them into use-values.... As use-values, commodities differ above all in quality, while as exchange-values they can only differ in quantity, and therefore do not contain an atom of use-value. If then we disregard the use-value of commodities, only one prop­erty remains, that of being products of labour. (Marx 1867 [1976]: 127-8)

The relative values of commodities are thus taken to be governed by the relative amounts of embodied labour.

These are the first basic concepts on which Marx’s reasoning is built. Their under­standing, however, is not self-evident, and Marx himself published several versions of his presentation of his theory of value, for example, first in the 1859 Contribution to the Critique of Political Economy, then in 1867 in the first section of the first edition of Capital - to which he added an appendix, “Die Werthform” (the value-form), placed as an afterthought at the end of the book - a section modified for the 1872-75 French edition and again in the fourth German edition (posthumously published in 1890). Marx was not only facing misunderstandings from his readers, as he wrote, he was also struggling with important analytical difficulties. One problem is the way in which he “derived” the statement that the only thing that commodities have in common is labour, leaving “out of consideration the use-value of commodities”. Eugen von Bohm-Bawerk (1884 [1890]), Philip Henry Wicksteed (1884) and Vilfredo Pareto (1902), for example, pointed out that this mode of reasoning is not conclusive: eliminating some items in a list of qualities to retain the remaining one cannot be a proof because the substance of value could well originate in an item omitted from the list; moreover, Marx’s approach could also be turned in favour of utility because, just as “abstract labour”, as distinct from “concrete labour”, is alleged to be the substance of value, “abstract utility”, as distinct from “concrete utility”, could well form the substance of value.

This aspect is only a symptom of deeper difficulties in Marx’s approach. In particular, the meaning of the central concept of “abstract labour”, “labour in general”, is not clear. Several definitions can be found, which are not compatible with one another. These definitions express different strands of Marx’s thought concerning value, money and capital - socio-historical, dialectical and classical (see Faccarello 1983a, 1997, 2000a).

The socio-historical approach to value

A first definition of “abstract labour” is purely socio-historical - or “sociological” - and is tightly connected to the phenomenon of fetishism (see, for example, “The fetishism of the commodity and its secret”, Marx 1867 [1976]: 163-77). We encounter it in passages in which Marx stresses the “phantom-like objectivity” (ibid.: 128) and the “mystical char­acter” (ibid.: 164) of the products of labour in a market society and speaks of “labour in general” as the “common social substance” of these products, and of the commodity as a “social hieroglyph”. “Not an atom of matter enters into the objectivity of commodities as values”, Marx stresses, and adds:

Commodities possess an objective character as values only in so far as they are expressions of an identical social substance, human labour,... their objective character as values is therefore purely social. From this it follows self-evidently that it can only appear in the social relation between commodity and commodity. (1867 [1976]: 138-9)

Marx’s purpose here is to define the “specific difference” presented by the capitalist mode of production as compared with other forms of society. This is an important task, which he deduced from his youthful criticism of Hegel’s philosophy along Feuerbachian lines. In this perspective, “value” is supposed to express this differentia specifica. What matters is the qualitative side of the analysis. However, the sociological or qualitative characterization of value inevitably involves a quantitative determination, which proves to be at variance with the traditional “labour incorporated” analysis (below).

To single out the specificity of a market-based economy, Marx refers, in Contribution and Capital, to four other forms of society: “Robinson on his island”, the “dark European Middle-Ages”, the rural and patriarchal family, and a “society of free and equal men”. In these non-capitalist societies, Marx writes, (1) only “concrete labour” matters, (2) the products of labour are not commodities and (3) social relations of production are transparent. In a market society, on the contrary, (1) concrete labour does not matter as such, (2) products are commodities and (3) the social relations of production are hidden behind the apparent equality in exchange relations. Why do such differences arise?

First, Marx argues, in a non-capitalist society there is an immediate correspondence between (1) the different kinds of concrete labour, (2) the produced use values and (3) the needs of the members of society. There is no place for a break between a “private” and a “social” side of activities: it is “the distinct labour of the individual in its original form, the particular features of his labour and not its universal aspect that formed the social tie” (Marx 1859 [1987]: 275). Second, the cause of this state of things lies in the existence of a community that acts prior to production and coordinates it. All the societies he men­tions are, in some way, planned: “the individual labour powers, by their very nature, act only as instruments of the joint labour-power” (Marx 1867 [1976]: 171).

The “specific difference” presented by the capitalist mode of production is thus defined as the lack of any community prior to production. Producers are independent and isolated; they work privately and their activities are not coordinated ex ante. This is why the “natural” forms of labour are not immediately social. The social link forces itself upon the system ex post through the market. It is by transforming their products into commodities that independent producers constitute a coherent set of relationships, that is, a society, and that their private labour is - or is not - validated as a social commodity.

If abstract or general labour is not a substance which exists prior to exchange, value cannot be defined other than as the quantity of money for which a commodity is exchanged: this quantity acts both as the determining factor and the measure of value. We can now understand the meaning of such sentences as “universal labour time itself is an abstraction, which, as such, does not exist for commodities” (Marx 1859 [1987]: 286). Money acts as the social link for labours expended independently of each other, without social coordination. It regulates production. It is, in Marx’s own words, the community (an indirect, abstract community) that seems to be lacking in a society based on market exchange and the private ownership of means of production. Producers meet as owners and

exist for each other only as things, something that is merely further developed in the money relation, in which their community itself appears as an external and hence a casual thing with respect to all.... Since... they are not subsumed under any naturally evolved community... this community must... exist as an independent, external, casual thing... with respect to them as independent subjects. That is precisely the condition for their simultaneously being in some social connection as independent private persons. (Marx 1858 [1987]: 468)

This “sociological” approach is thus at variance with the traditional, or classical, inter­pretation of Capital (below).

The dialectical approach

The second definition of “abstract”, “general” labour is purely conceptual. Abstract labour can be seen as an “indeterminate abstraction”, as the category that, in thought, embraces all imaginable kinds of concrete labour: “the mental product of a concrete totality of labours” (Marx 1857-58 [1973]: 104) - just as the concept of “fruit” denotes concrete fruits like apples, pears, mangos, and so on. The concept is here hypostatized, in an idealist way that it is a priori surprising to find in Marx. However, it is in fact in line with Marx’s second line of argument, which can be called the “dialectical approach” and which stems from Marx’s plan to build his theoretical construction on a rigorous chain of deductions of concepts, from the commodity concept to that of money, from money to capital and then to wage-labour and the different kinds of capital - a plan which is visible in Grundrisse, in Contribution and the manuscript of it, and of course in Capital.

In Marx’s eyes the theoretical introduction of money from the sociological approach is no doubt insufficient because all the concepts are given simultaneously and are not deduced from one another. This creates a break in his chain of reasoning: once money and value are given, there seems to be no place left for a rigorous deduction of the con­cepts of capital and wage labour, and a picture emerges eventually of a rather harmoni­ous society of independent producers, whereas in Marx’s opinion a monetary economy is necessarily a capitalist one. This is why, of the preceding considerations, Marx retains only the necessary transformation of products into commodities. He then stresses that a commodity has a twofold character (exchangeable value and use value) and that these two are “contradictory”. Then, from this basic “opposition”, he dialectically deduces money, capital, wage labour and the different kinds of capital.

To use Marx’s Hegelian language, what is this “opposition” stemming from the analysis of the two sides of a commodity and why is there a “contradiction” between them? How and with the help of which logical tools is the concept of money generated as a result of the development of this alleged basic “contradiction”? Marx asserts that, on the one hand, a commodity is not immediately a value, but “has to become so”. On the other hand, it is not immediately a use value, but it has also to become so. Of course the exchange process realizes a commodity as a value (for the seller), just as it simultaneously realizes it as a use value (for the buyer). In Marx’s opinion, this means a “contradiction”: the “realization” of use value presupposes in his eyes the realization of the commodity as value, and conversely the “realization” of value presupposes that of use value. As the solution of each problem implies that of the other, we therefore face an endless theoreti­cal regression from one determination of the concept of commodity to the other. In order to generate this opposition and the endless regression, the classical meanings of value and use value have been modified. Use value is now defined as a direct utility relation­ship between a thing and its owner, and value is defined as the quantity of such and such commodities for which it can be exchanged.

The “inner” contradiction of the commodity, Marx continues, brings about the “equivalent form”, in which a given commodity assumes the “relative” value form, and the received commodity acts as a “particular” equivalent. The commodity is then equated with different quantities of all other commodities, which act as many particular equivalents: it is the “developed” equivalent form. Marx stresses, however, that every attempt to transcend a particular equivalent in order to give value its “general form” is bound to fail: a commodity can be successively equated with every other commodity, but each of them nevertheless remains a particular equivalent. Here we encounter once again a theoretically endless regression from one determination to another. To obtain the “general equivalent”, the “money form”, Marx simply reverses the sequence of the particular equivalents, which, by means of this operation, express their value in a deter­mined amount of one and the same commodity.

The meaning of this analysis of the “value forms”, that is, the development of the original “contradiction” of the two aspects of commodity - stated at the beginning of Contribution and Capital - and the final reversal which generates the concept of money, is problematic. (1) The reversal can be interpreted as a mere subjective reasoning on the part of the dealer who considers his or her commodity as a general equivalent for all other commodities. However, in this case no theoretical derivation of money is accom­plished: if each dealer wants his commodity to be accepted by the other dealers as the general equivalent, no commodity can assume this role (Marx 1867 [1976]: 180). (2) The development of the “value forms” could also be interpreted in an idealist way, implying the progressive realization of a universal element (value) that aims at a manifestation appropriate to its concept (money), as Hegel would have put it. In both cases the dialec­tical deduction of the concept of money is questionable, and the concept of “abstract” labour, “substance” of value, either vanishes, or is at best to be understood as an “inde­terminate abstraction” (the definition noted above).

Marx’s classical approach to value

Two further definitions of “abstract labour” can be found in Marx’s texts, referring to the usual classical understanding of Marx’s economics. The first conveys a “physiologi­cal” conception, which, as for Ricardo at the end of his life, puts stress on the expense of energy that all labour always involves. “Tailoring and weaving, although they are qualitatively different productive activities, are both a productive expenditure of human brains, muscles, nerves, hands etc., and in this sense both human labour” (Marx 1867 [1976]: 134). This is why Marx states that “all labour is an expenditure of human labour­power, in the physiological sense, and it is in this quality of being equal, or abstract, human labour that it forms the value of commodities” (1867 [1976]: 137).

The second definition of “abstract” or “general” labour stresses the growing indiffer­ence of labourers vis-a-vis their tasks and kinds of labour, an indifference that results from the development of the labour market and from a process of deskilling imposed by technological progress (Marx 1863-66 [1976]). “Indifference towards specific labours corresponds to a form of society in which individuals can with ease transfer from one labour to another, and where the specific kind is a matter of chance for them, hence of indifference” (Marx 1857-58 [1973]: 104). This is evident in the United States: “Here, then, for the first time, the point of departure of modern economics, namely the abstrac­tion of the category ‘labour’, ‘labour as such’, labour pure and simple, becomes true in practice” (ibid.: 104-5).

In Marx’s texts, the line of argument expressed by these definitions is closely con­nected to the traditional analysis of Capital and to its stress on the determination of values in terms of incorporated quantities of labour. This approach links the analyses of Capital directly to those of classical political economy and, in systematically develop­ing a quantitative and positive economic analysis, confers a “naturalistic” flavour on the theory of value. From this point of view the so-called “socially necessary labour” that must be spent directly and indirectly to produce a commodity, and which forms its value, is defined with respect to technical factors, that is, to what can be considered as the “normal” or “average” technical conditions in each industry at a given place and time. The “substance” of value, “abstract labour”, is also to be understood in the same perspective. This is why, among the different definitions that can be found in Marx, only the “physical” ones can be coherently accepted: that is, either the one that stresses the “energetical” nature of abstract labour, or the one that, in pointing out the process of development in the labour market, in the end simply identifies “concrete” and “abstract” labour. This kind of “technological” or “naturalistic” approach, of course, does away with a socio-historical specification of value. It is also at odds with the dialectical deduc­tion of concepts: it is impossible to see to what extent its concepts of value and use value (value is supposed to be a quantity of labour, and use value expresses the physical and concrete aspects of the product of labour) are “opposed” to each other.

Finally, it is important to note that the ideas expressed by Marx in his different approaches to value - including the classical approach with the attempt to “prove” that the only thing that commodities have in common is labour - owe a great deal to Hegel’s philosophy: not only to Hegel’s Science of Logic but also, and perhaps to a greater extent, to his Philosophy of Right, and that this source of inspiration is also important for the deductions of the concept of “capital in general”, wage labour and the different forms of capital (see Reichelt 1970; Faccarello 1983a: chs 14-16, 1997, 2000a).

Note that the three conflicting approaches coexist in Marx’s texts in different pro­portions, with the classical definition being dominant in Capital. This coexistence of conflicting conceptualizations is a source of dire controversies and confusions. In the following we focus on the classical concept of value in Marx.