What is it all worth? Marx and Value

What is capitalism? It is not neo-liberalism, it is not the Right, it is not imperialism, it is not Howard or Rudd. Or it is all of these things if we grasp them as parts, elements, of its core drive: the accumulation of value

What is value? Well we experience it every day. One only has to walk through the streets of a city, such as Brisbane, with no money in their pocket (nor access to credit) to feel its effects: you are effectively exiled from collective human cooperation and society.  Every day we worry about the money we have or we owe, the cost of almost everything and we fear what the seemingly angry deity of the stock market will do to our lives. This is of course small beer to those who face starvation due to the commodification of the globe.[1] But the question of what value actually is infrequently asked. Or better yet, the reality of the reign of value effaces its questioning. (Here we are reminded of the anecdote of Marx’s father writing to him expressing his desire that his son would stop writing about money and start making some. The reality of the latter often prevents the former.)

Value is one of the most difficult concepts in Marx’s[2] work, but possibly one of the most important: important because it reveals the ground floor logic of capitalism, its motivating rationale. However as Michael Heinrich[3] points out there are ambivalences within Marx own ideas. Heinrich points out that Marx attempts seven different arguments to present his ideas on value (four being different versions, additions and editions of Capital volume 1).  Heinrich argues that we find traces of two different conceptualisations of value: a “‘substantialist-naturalist theory of value’ and a ‘monetary theory of value.’”[i]

The first is the notion that we can determine the value of a single commodity from the labour that it took to create it; the second is the notion that value is a product of the relation of commodities with each other. The first is still part of the conceptual schema of the bourgeois political economy Marx was critiquing; the second is Marx’s radical invention… and a more useful tool to understand the operations of capital. Yet it is the substantialist theory which has been the one that was the most dominant in orthodox Marxism. As Milios writes:

The prevailing Marxist tradition portrays Marx’s value theory as a continuation and completion of the classical labor theory of value, specifically in the version formulated by David Ricardo. The assumption is that Marx’s most important contribution to labor theory is his analysis of the exploitation of the laboring classes by capital (appropriation of surplus labor) through introduction of the notion of labor power and elaboration of what makes it distinct from labor. In the context of this tradition, value is defined as the quantity of (socially necessary) labor contained in a commodity, and surplus value as the quantity of labor appropriated by the ruling classes after the laborer has been remunerated in keeping with the value of his or her labor power. But there is an alternative Marxist tradition that comprehends value and surplus value as historically specific social relations: namely, as the specific form assumed by economic relations, exploitation, and the products of labor in societies based on commodity production (i.e., capitalism). This alternative tradition emphasizes Marx’s analysis of the value form and money, above all in section 1 of volume 1 of Capital, an analysis that seems to have been neglected by all ‘‘classical’’ approaches to Marxian value theory. [ii]

Leaving aside the Pandora’s Box of what Marx really meant, it is the alternative tradition which can add more power to the understanding and critique of capitalism.

What then is value? Most simply the substance of value is labour-time, yet it only appears through exchange and finds its clearest expression in the form of money. It is the vicissitudes of exchange that calculate the magnitude of value, value is a social not a technical question. Marx writes “It is only by being exchanged that the products of labour acquire a socially uniform objectivity as values, which is distinct from their sensuously varied objectivity as articles of utility.”[iii]

In both Capital and A Contribution to the Critique of Political Economy Marx starts his argument with the same point: that in capitalism wealth (the product of the interaction between human creativity and the non-human world) takes on the appearance of the commodity.[iv] Marx’s work on the commodity is essential for understanding the nature of capitalism, including the nature of value. Key to this is Marx’s argument that “the commodity reflects the social characteristics of men’s own labour as objective characteristics of the products of labour themselves…”[v] Value, which seems to appear to be a natural condition of human society, a material property of the commodity and/or a technical result of the labour process, is in fact the result of the social organisation of creativity within capitalism.

The commodity has two aspects, its direct utility or use-value and exchange-value. The utility of a commodity is the product of specific concrete labour and refers to its concrete properties (even when the commodity is immaterial). Marx remarks how if you could grasp the use-value of a commodity outside of the society that produced it you couldn’t tell what kind of society it came from. “From the taste of wheat it is not possible to tell who produced it, a Russian serf, a French peasant or an English capitalist.”[vi] (The sad joke being that increasingly, with the degradation of the quality of food, amongst so much else, due to the imperatives of capitalist society, in a strange way the taste of  a product increasingly does betray its social origins, and tells us much about the society that produced it). The exchange-value of a commodity is due to its existence as a specific social form. For much of human society the creation of wealth has not taken the form of the commodity. Hypothetically it is possible to speculate that the very same practise of a specific labour-process may take place in different societies but one might produce wealth for exchange and thus commodities, whilst the other might produce it for direct use or perhaps tithe and therefore be non-commodified.[4] The commodity is a social relationship.

Marx stresses that the exchange-value does not and cannot arise for use-value, it doesn’t come from the actual properties of an item of wealth. “So far no chemist has ever discovered exchange value in a pearl or a diamond.”[vii] Indeed if exchange is the exchange of equivalents, then it cannot be done on the characteristics of the actual properties of a commodity: since they would be radically different. The very fact that exchange does involve the exchange of commodities with such radically different qualities means that some other quality must be the determining ‘thing’. Marx writes that “Thus one volume of Propertius and eight ounces of snuff may have the same exchange-value, despite the dissimilar use-values of snuff and elegies.” There has to be another “common denominator”.[viii] This is labour: but that is only the start of it.

Just as we cannot find an equivalency between commodities due to their actual use-values we cannot find an equivalency on the basis of the concrete labour that created them.

With the disappearance of the useful character of the products of labour, the useful character of the kinds of labour embodied in them also disappears; this in turn entails the disappearance of the different concrete forms of labour. They can no longer be distinguished, but are all reduced to the same kind of labour, human labour in the abstract.[ix]

If abstract labour is the substance of value, how can it be measured?  Abstract labour is measured by time, time in relation to the combined labour of a society and the social and material capabilities of that society. He continues saying that:

…the labour that forms the substance of value is equal human labour, the expenditure of identical human labour-power. The total labour-power of society, which is manifest in the values of the world of commodities, counts here as one homogenous mass of human labour-power, although composed of innumerable individual units of labour power.[x]

It is easy to see at this point how a substaintialist reading is possible. It appears that you could identify value, that is abstract labour, through an examination of the labour-process. Marx’s crucial point however is that value of a commodity, even if its substance is socially necessary abstract labour, only really comes into being in relation to another commodity, and more importantly the totally of commodities in a society. In slightly different language he writes in A Contribution to the Critique of Political Economy that “the labour-time of individuals becomes materialised universal labour time only as the result of the exchange process.”[xi]

Part of the ambiguity could be related to this notion of time. It is possible to assume at first that it refers to the actual time of labour-process. After all capitalism is obsessed with the application of the measurement of time at the point of production (the application of Key Performance Indicators in call centres, which measure call duration, toilet breaks, etc of an entire workday in seconds is but the current apex of a long journey). But this has to do with the exploitation of labour rather than the calculation of the magnitude of value. Rather by time Marx means that through the process of exchange we find that the product of certain concrete labour process (whatever its actual duration) is worth a certain proportion of the abstracted labour time of the entire society.[5]

Not only is value determined by exchange, it is impossible to grasp the value of one commodity outside of a relation to another. Michael Heinrich argues that this a point that Marx believed he did not emphasises enough in Capital and thus in a manuscript he prepared as part of his revision of Capital he notes the (referring to his comparison of the value of coats and linen) “Outside their relation to each other – outside the relation, in which they are considered as equal – neither coat nor linen possess value-objectivity or their objectivity as congealed quantity of human labour as such.”[xii] The value of one commodity can only be expressed in relation to another. In a barter economy we when we say x amount of a commodity are worth y amount of b commodity, b commodity functions to express the value of a commodity: how much it embodies socially necessary labour time. This is what Marx calls the “relative form of value”.[xiii] In a very real sense this is how value is measured. You cannot stand next to someone working with a stop-watch and work out the value of their product. It is only through exchange that the value, the socially necessary labour time that a commodity is a bearer of, is measured.

But value only really comes into its own with the development of money. This is when one commodity forsakes its use-value to stand as the representative of value for all commodities. It is at this point that value can throw off the shackles of being tied to specific commodities and dominate in a pure form. This is crucial for capitalism because the capitalist mode of production is one where the accumulation of value is it central rationale. The purpose of production is not simple the generation of more wealth but rather the investment of money to create commodities to sell for an increased amount of value. This is what Marx calls the “general formula of Capital”: M-C-M’.[xiv] When we grasp value as a fetishised form produced through a social relationship we can understand how value can circulate, how it can move from its money forms through production into a commodity form and then back to money and on and on. What is moving is the magnitude of the fetish in relation to the sum totally of social fetishism. But it doesn’t float about the world but is intertwined in its materiality. When Marx describes in detail the processes of circulation in Volume II of Capital, he describes the almost torturous journey of value to valorise itself. It is bound to the material aspects of the commodity, to the drawn out production process, to circulation time, to the entire duration it takes to turn over before it can find its free and more natural state in money again. But of course in money it can only be simple hoarded and thus must be hurled into the world once more.[xv] We can see why the dream of financial capital is capital’s most prized fantasy: money accumulating itself apparently out of nothing but itself.

Marx is quick to point out however that if we assume that exchange is the exchange of equivalences, how can you possible generate more value? (This leaves aside swindling and theft which of course play a very real role in actual existing capitalism) The answer is well known. Capitalism exploits the labour power of those it employs by paying wages that represent a value smaller than the value produced by their labour. Thus when the commodity is sold it realises for the capitalist M’. The variability of value and the nature of capitalist competition and of the struggles and resistances of the exploited in part explain the incredibly dynamism of capitalist society.

What should we take from all this? That value is the product and premise of the social relations of capitalism. That human creativity that takes place within capitalism produces wealth that exists within the fetishised form of the commodity and concrete labour is exploited by its abstraction that also happens through the circulation of the commodity.  It also explains two of the key ways capitalism tries to organise society: through commodities and wage-labour, this is the hard kernel of capitalist life.

Bello, Walden. The Food Wars. London & New York: Verso, 2009.

Heinrich, Michael. 2004. “Ambivalences of Marx’s Critique of Political Economy as Obstacles for the Analysis of Contemporary Capitalism”. oekonomiekritik.de http://www.oekonomiekritik.de/310Ambivalences.htm. (accessed 21st January, 2010).

Marx, Karl. Capital: A Critique of Political Economy. Translated by Ben Fowkes. Vol. 1. London: Penguin Classics, 1990.

———. Capital: A Critique of Political Economy. Translated by David Fernbach. Vol. 2. London: Penguin Classics, 1992.

———. A Contribution to the Critique of Political Economy. Translated by S.W Ryazanskaya. Moscow: Progress Publishers, 1970.

Milios, John. “Rethinking Marx’s Value-Form Analysis from an Althusserian Perspective.” Rethinking Marxism Volume 21, no. Number 2 (2009): 260-74.

[1] For a sobercing account of the condition of food production and starvation see Walden Bello, The Food Wars (London & New York: Verso, 2009), 28.

[2] A ‘return’ to Marx can often be a theological operation, here I wish to marshal the potency of his critique. Marx remains our complain not so much because of his own qualities but rather because the target of his critique continues to immiserated our lives.

[3] Michael Heinrich’s work raises some problems for those of us the read Marx in English as it is based on having access to

[4] Of course the actual history of capitalism leads to the constant transformation of the labour-process in the pursuit of relative surplus value: something Marx explores with his notions of ‘formal’ and ‘real’ subsumption in ‘Results of the Immediate Process of Production’ in Marx, Capital: A Critique of Political Economy, 948-1084. This is just part of capitalism endless transformation of society more generally.

[5] Society does not mean nation-state here, as capitalism is clearly global.


[ii] John Milios, “Rethinking Marx’s Value-Form Analysis from an Althusserian Perspective,” Rethinking Marxism Volume 21, no. Number 2 (2009): 260.

[iii] Karl Marx, Capital: A Critique of Political Economy, trans. Ben Fowkes, vol. 1 (London: Penguin Classics, 1990), 166.

[iv] Ibid., 125, Karl Marx, A Contribution to the Critique of Political Economy, trans. S.W Ryazanskaya (Moscow: Progress Publishers, 1970), 27.

[v] Marx, Capital: A Critique of Political Economy, 164.

[vi] Marx, A Contribution to the Critique of Political Economy, 28.

[vii] Marx, Capital: A Critique of Political Economy, 177.

[viii] Marx, A Contribution to the Critique of Political Economy, 28.

[ix] Marx, Capital: A Critique of Political Economy, 128.

[x]Ibid., 129.

[xi] Marx, A Contribution to the Critique of Political Economy, 45.

[xii] Quoted in Michael Heinrich, Ambivalences of Marx’s Critique of Political Economy as Obstacles for the Analysis of Contemporary Capitalism (2004 [cited 21st January 2010]); available from http://www.oekonomiekritik.de/310Ambivalences.htm.

[xiii] Marx, Capital: A Critique of Political Economy, 140.

[xiv] Ibid., 251.

[xv] Cf.Karl Marx, Capital: A Critique of Political Economy, trans. David Fernbach, vol. 2 (London: Penguin Classics, 1992).


1 Response to “What is it all worth? Marx and Value”

  1. 1 Bill Kerr October 14, 2010 at 11:17 am

    Thanks for the Michael Heinrich reference, I googled for more and his material looks great

    I’ve been wrestling with chapter one for longer than I would like to admit. For value form I found the value form appendix to the first edition was great for its more systematic layout

    I agree with most of your interpretation but think you have made one small error in para 7: “Most simply the substance of value is labour-time …”

    By my reading Value is:
    a) a social form (a capacity for a commodity to be exchanged as an equal)
    b) AND a substance or content which is embedded abstract, social labour
    c) AND a magnitude (labour time)

    Actually I first got onto this from Rubin, ch 12, whose book focuses mainly on the value form.

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