Diane Elson's "The Value Theory of Labour" in Plain Language
Thoughts on Elson’s Paper
Diane Elson’s essay “The Value Theory of Labour” (1979) is perhaps one of the best essays on Marx’s value theory I’ve seen, and an important correction to those who dismiss, or defend, Marx as supporting a “labor theory of value.” The term “value theory of labor” was previously used by Raya Dunayevskaya in her essay “The Logic and Scope of Capital, Volumes II and III”.
There are a few points that I would like to have seen expanded on, especially related to the move from gold money to paper money. Some more direct addresses to the critiques of Bohm-Bawerk might have also been nice, although this essay was published alongside another essay by Geoffrey Kay “Why Labour is the Starting Point of Capital” which Elson directs people to more directly, although also notes a few times she disagrees with Kay as well in how he presents abstract labor.
The full collection of essays can be found in “Value: The Representation of Labour in Capitalism”. The essay itself should be understood in the context of debates in the Conference of Socialist Economists (CSE), as Elson spends much of her time correcting often subtle errors in their interpretation of Marx. In my own summary, I have tried to keep in the substance of these points, but have glossed over the particular authors she is calling out. I have also titled these sections largely in ways in line with Elson, but combined some sections where the point needed was brief, and added in other section titles for parts that were relatively long.
I also recommend checking out Mike Gouldhawke’s essay “The Labour-Power Theory of Capital”.
What is Marx’s Theory of Value a Theory Of?
A proof of exploitation?
Marx's value theory is often misunderstood, often because they misunderstand what the object of his theory is.
The first mistake is to view his value theory as a proof of exploitation. Marx talks a lot about how capitalism is based around the capitalists getting the “surplus-value” that workers produce beyond what they are paid in wages. Some readers therefore take Marx’s theory to be about proving that exploitation is actually taking place, and likewise think that if his theory were disproven then it would also disprove capitalist exploitation.
This is incorrect. Marx was not trying to prove the existence of exploitation by his theory because he believed exploitation existed in pre-capitalist systems. The worker’s product only appears as a value in capitalism, where most workers are focused on mass producing commodities to sell on the market. Slave labor, for example, was obviously exploitative, even if what the slaves made was directly enjoyed by the slave masters instead of being sold.
Marx’s value theory was not about proving that exploitation exists. To prove that, we instead just need to look at who owns and controls the means of production, and therefore fixes the working-day so that laborers need to not only produce to support themselves, but also support the owners.
Capital did not invent surplus labour. Wherever a part of society possess the monopoly of the means of production, the worker, free or unfree, must add to the labour-time necessary for his own maintenance an extra quantity of labour-time in order to produce the means of subsistence for the owner of the means of production. (Marx, Capital, Vol. 1, Ch. 10)
While this view of Marx's value theory is mistaken, it at least keeps the political aspect of Marx's theory. Marx’s value theory is quite useful for examining capitalist exploitation and telling us what we can do about it, but it is not here to prove that the problem exists.
An explanation of prices?
The second mistake is to view Marx’s value theory as an explanation of prices. According to this interpretation, prices at market equilibrium are set according to a thing’s value, which is determined by the amount of labor needed to produce it. The price of a commodity is therefore set by the average amount of time it takes to produce it. This is the common interpretation of Marx as having a “labor theory of value” (LTV), leading Marx’s theory to be compared to similar ideas found in Adam Smith and David Ricardo, and debating its accuracy against other competing economic theories of price.
There are, generally, two major arguments used for the LTV.
The first argument appears to be derived from an example Adam Smith gives of the equalization of advantages in a simple ‘deer and beaver’ economy.1 In this example, we are imagining a simple society where two commodities are exchanged: beaver and deer. If it takes one hour to hunt deer and two hours to hunt beaver, then the price will tend toward two deer trading for one beaver since each would represent two hours. If this were not the case, and only one deer were needed to trade for one beaver, then workers could achieve the same result in half the time by switching from hunting beaver to hunting deer and then trading for what they needed on the market. The supply of beaver will go down as people switch away from making it, while the supply of deer goes up. This continues until the price levels out again. Smith also included other considerations, like for the degree of hardship for each kind of labor or the level of skill needed.
The second argument is more intricate, involving a complex ‘transformation’ from labor-time into prices. Given a certain set of technological and sociological conditions, a certain magnitude of product is produced among which also includes a certain surplus, measured in labor-time, over what is given to the workers. That surplus sets the aggregate level of profits, which is then distributed across various industries until it arrives at a certain average rate of profit and the prices of commodities.2
Both versions of the LTV believe that the labor-time that is socially-necessary to produce these commodities is something entirely distinct from their price. It looks entirely at the process of production, and leaves circulation in the market as a separate matter, even if linked. It follows that we could, in principle, calculate a commodity’s value entirely independently from their prices, and therefore also deduce what the market equilibrium price would be. Actually doing this might be so complex that it is practically impossible, but the theoretical possibility would remain.
This interpretation tends to depoliticize Marx's theory, as it simply becomes a way of mathematically modeling prices in capitalism.
However, these approaches all have serious empirical and theoretical issues. The socially-necessary labor-time embodied in a commodity has been found to be, at best, redundant, if not incapable, of determining equilibrium prices. Elson takes this as being well established by the “Neo-Ricardians” like Ian Steedman. Because of this, she has no interest in defending any “labor theory of value.”
But she also does not think Marx proposed any such theory. This is because he is unconcerned with explaining the ‘origin’ of prices in this system of independent and dependent variables, like what is described above. Instead, Marx utilized dialectical analysis, establishing a continuity and a difference between its elements, as part of the entire system being determined.
Labor as the Object of Marx’s Value Theory
In truth, the object of Marx's theory is not exploitation or prices, but labor itself. Specifically, it is trying to explain why it takes the form that it does in capitalism, and what the political implications of this are.
Political Economy has indeed analysed, however incompletely, value and its magnitude, and has discovered what lies beneath these forms. But it has never once asked the question why labour is represented by the value of its product and labour time by the magnitude of that value. These formulæ, which bear it stamped upon them in unmistakable letters that they belong to a state of society, in which the process of production has the mastery over man, instead of being controlled by him, such formulæ appear to the bourgeois intellect to be as much a self-evident necessity imposed by Nature as productive labour itself. (Marx, Capital, Vol. 1, Ch. 1)
This is also why he begins his analysis with the the wealth of capitalism appearing as an “immense accumulation of commodities.” The commodity is the "simplest social form in which the labour product is represented in contemporary society." This also helps to explain the flaw of Bohm-Bawerk’s critique of Marx, as he argued Marx had ‘rigged’ his explanation of prices by only considering products of labor when other things can have prices too (e.g. the price of untouched land).
Human Labor as Indeterminate
We also need to establish how Marx intended to analyze labor if we are going to avoid misinterpreting him.
Marx was not trying to simply explain why labor is distributed the way it is, as if within a pre-given structure of society. Theories like this tend to reduce back to a kind of LTV.
Marx rejected this kind of ‘pre-given structure’ analysis because labor is, by its nature, a dynamic and living force.
Labour is the living, form-giving fire; it is the transitoriness of things, their temporality, as their formation by living time. (Marx, Grundrisse)
Labor is marked by this fluidity, which any society must socially 'fix' in the production of particular goods, by particular people, in particular ways. This is true of all societies, but is immediately apparent in industrialized societies where the jobs people do are not fixed into certain jobs by tradition, family, religion, etc., and where people can and do frequently change jobs.
The fundamental question around labor then is 'how is it determined?' This is not determination in a mechanistic sense, as if we were denying individual choice, but showing how this choice is limited and shaped by its context.
The social structure and the State are continually evolving out of the life-process of definite individuals, but of individuals, not as they may appear in their own or other people’s imagination, but as they really are; i.e. as they operate, produce materially, and hence as they work under definite material limits, presuppositions and conditions independent of their will. (Marx, The German Ideology)
Marx's attempt to answer this question in Capital is somewhat unique, and has led to these many misreadings.
Misplaced Concreteness and Marx’s Method of Abstraction
Rationalist Determination vs Determination in Marx’s Value Theory
Labor-Time and Value
We need to distinguish Marx’s method from what we might call the “rationalist” method of determination. By the rationalist method, we mean the approach aligning with how we approach mathematics or formal logic, where an independent variable determines dependent ones. By getting the information about one, we can precisely calculate the other.
Marx does talk about determination, but in a more fluid sense precisely because the thing determining and the thing being determined aren’t discretely distinct. The thing doing the determining is also part of what is being determined.
Consider Marx discussing how value is determined by socially-necessary labor-time:
We see then that that which determines the magnitude of the value of any article is the amount of labour socially necessary, or the labour time socially necessary for its production. (Marx, Capital, Vol. 1, Ch. 1)
When Marx says “determine” here he does not mean logically determine, as if he were giving a definition of value. We know this because socially-necessary labor-time is something that would exist in all societies, whereas this idea of “value” only exists in capitalism.
Rather, Marx sees value as an “objectification” or “materialization” of a certain aspect of socially-necessary labor-time, namely when it is considered as "simply an expenditure of human labor power in general," i.e. abstract labor.
Value is not the same thing as abstract labor, but is a particular form it is taking within this social context.
Contrast this to how the commodity, as a physical object, is a physical objectification of someone’s concrete labor, like a carpenter making a chair. The objectification of abstract labor, as an expenditure of labor-power in general without regard to the regard to the specific type of labor (e.g. carpentry), is less substantial. Marx describes this objectification as value a kind of “unsubstantial reality” or "phantomlike objectivity."
Let us now consider the residue of each of these products; it consists of the same unsubstantial reality in each, a mere congelation of homogeneous human labour, of labour power expended without regard to the mode of its expenditure. All that these things now tell us is, that human labour power has been expended in their production, that human labour is embodied in them. When looked at as crystals of this social substance, common to them all, they are – Values. (Marx, Capital, Vol. 1, Ch. 1)
In the same passage, Marx describes this value as "congealed quantities of homogenous human labour" and as "crystals of this social substance." These chemical metaphors are useful to keep in mind, and are revealing of how exactly this determination is working.
This is not a mathematical determination, with an independent variable determining a discretely distinct dependent variable. Rather, it is like we have a quantity of a fluid chemical substance, which then determines the magnitude of that same substance in its crystal or jellied form. There is a continuity and a difference between what is determining and what is determined.
Value and Exchange-Value
If that is the relation between labor-time and value, then what is the relation between value and exchange-value?
At first glance, these seem even more like entirely separate variables. Value is, as we established, a quantity of socially-necessary abstract labor-time. Exchange-value on the other hand is the ratio at which one quantity of a commodity exchanges for another commodity. If there is any relation between these at all, it seems at first like it must be one of independent and dependent variables, following the LTV.
However, Marx notes that if value were divorced from exchange-value, it would be a mere abstraction without a practical reality.
If we say that, as values, commodities are mere congelations of human labour, we reduce them by our analysis, it is true, to the abstraction, value; but we ascribe to this value no form apart from their bodily form. (Marx, Capital Vol. 1, Ch. 1)
Just like labor-time and value then, there is a continuity and a difference between value and exchange-value. Exchange-value is manifesting value in a bodily form.
For a product of labor to count as a value, this aspect must be reflected in some immediately apparent attribute (although we need not immediately recognize that attribute as a reflection of value). The simplest form of reflection is when another commodity stands in a relation of equivalence to the first commodity, serving as material to express their equal value. That commodity doing the reflection becomes the physical embodiment of abstract labor, of value.
This simple form is rather inadequate though, comparing only two commodities. We can say that so many yards of linen are an equal value to so many coats, but that does not tell us much. To adequately express value between all commodities, we need something to stand in as a universal equivalent, against which everything is directly exchangeable. This would be a commodity whose use-value is its interchangeability with everything else.
As the process of exchange develops, one commodity is set apart to play this role, becoming the money commodity. Historically, this commodity has been gold. This allows all other commodities to express their value in terms of the same commodity, as its price, as the “value-form.”
We can see then that there is still a continuity and a difference between value and exchange-value.
This does not imply that money must always be commodity money (i.e. gold), nor that price and value are identical. Money might be replaced with "mere symbols of itself."
In its form of existence as coin, gold becomes completely divorced from the substance of its value. Relatively valueless objects, therefore, such as paper notes, can serve as coins in place of gold. This purely symbolic character of the currency is still somewhat disguised in the case of metal tokens. In paper money it stands out plainly. (Marx, Capital, Vol. 1, Ch. 3)
The major point being established here is that money cannot be a completely autonomous product of convention. It is something that must develop out of this ‘blind’ social process. Value and price cannot be made two completely separate variables.
Labor-time, value, and exchange-value are therefore all, in Marx's theory, not entirely independent of one another, nor are they identical. There is a continuity and a difference between all three.
Measures of Value: Labor-Time and Money
Value Cannot Be Measured Apart from Price
Since labor-time, value, and exchange-value are all connected, it also follows that Marx's analysis is not dependent on our ability to calculate a commodity’s value independently from its price. But as we saw, our ability to do that was a fundamental part of the LTV.
Marx actually seemed explicitly critical of attempts to do so, such as John Gray’s labor-money scheme. Gray had proposed a national bank could determine the labor-time necessary to produce each commodity, and that in exchange for this commodity producers would receive receipts indicating how much labor-time the commodity contained. Marx was deeply critical of this plan in his Critique of Political Economy:
Why is the value of all commodities computed in terms of an exclusive commodity, which thus becomes the adequate expression of exchange-value, i.e., money? This was the problem which Gray had to solve. But instead of solving it, he assumed that commodities could be directly compared with one another as products of social labour. But they are only comparable as the things they are. 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. But as Gray 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. (Marx, Critique of Political Economy, Ch. 2 Part 1.B)
In other words, the main problem with Gray’s plan is that he assumed the labor-time needed for each commodity were directly comparable. But the only labor-time we can directly observe is the “isolated independent individual kinds of labor.” We only see the private and concrete aspects of labor, whereas value is concerned with its social and abstract aspect.
This social aspect is latent in commodities until it is proven in exchange. As Marx put it earlier in his Critique:
Social labour-time exists in these commodities in a latent state, so to speak, and becomes evident only in the course of their exchange. The point of departure is not the labour of individuals considered as social labour, but on the contrary the particular kinds of labour of private individuals, i.e., labour which proves that it is universal social labour only by the supersession of its original character in the exchange process. Universal social labour is consequently not a ready-made prerequisite but an emerging result. (Marx, Critique of Political Economy)
Since the social-necessity of labor cannot be established except in exchange, it follows that value cannot be calculated or observed independently from prices.
Immanent and External Measures
If values cannot be calculated except by price, how should we make sense of Marx’s repeated claim that labor-time is a measure of value?
The answer lies in Marx’s distinction between immanent and external measures. It is not surprising that this point is frequently misunderstood as Marx barely touches on it in Capital. It is only found implicitly, or briefly touched on without elaboration.
Money as a measure of value, is the phenomenal form that must of necessity be assumed by that measure of value which is immanent in commodities, labour-time. (Marx, Capital, Vol. 1, Ch. 3)
Marx’s full elaboration on the distinction between immanent and external measures is found fully only later in Marx's critique of Bailey in his Theories of Surplus Value.
An 'immanent' measure is the characteristic which allows something to be measured in terms of pure quantity.
An 'external' measure is the medium in which the measurements of the immanent measure are actually made.
For example, the external measure of weight on a scale is, by convention, iron, which may be presented in various units (ounces, grams, etc.). But unless both iron and whatever is being measured have the immanent measure of weight itself, then the iron cannot measure anything. The external measure presupposes the immanent measure.
(Note: Fiat currency seems to do this only in a strange way. Its value as paper is almost entirely valueless. It seems to me like it would need to have value attributed to it according to past data on how it exchanges. Elson sadly does not dive too deeply into fiat currency in her analysis.)
Labor-Time as an Immanent Measure
Labor-time does work as a measure of value, but as an immanent measure. It is the thing that allows the commodity to be cardinally measured as a pure quantity of “indifferent” labor-time, the hours of which can be added and subtracted. This would not be the case if we used concrete labor-time, since an hour of weaving is not equal to an hour of tailoring.
It follows that, if labor-time is the immanent measure of value, then it cannot be the external measure of value. Labor-time is incapable serving that role precisely because we cannot separate the abstract and concrete labor in the actual labor-time we observe. The only way to make labor-time the medium of measurement would be to arbitrarily assume that there is no qualitative difference between different kinds of labor, and Marx refused to make this assumption.
It is notable that when Marx uses examples of value-magnitude in Capital, he gives his specific examples in terms of money, and never in terms of hours of labor-time.
When the process of production is finished, we get a commodity whose value = (c + v) + s, where s is the surplus-value; or taking our former figures, the value of this commodity may be (£410 const. + £90 var.) + £90 surpl. The original capital has now changed from C to C', from £500 to £590. The difference is s or a surplus-value of £90. (Marx, Capital, Vol. 1, Ch. 9)
This is not Marx identifying value with price. Rather, this is an external measure being used to express the inner value-character of these commodities. Marx does not simply work at the level of money though because he wants to uncover the social relations beneath it, such as the rate of surplus-value which does not appear as money.
In a capitalist economy, time is money in more than a metaphorical sense. Labor-time and money are not discretely distinct variables, but again have a continuity and a difference. This is emphasized by Marx using, not mechanical or mathematical metaphors, but chemical or biological ones which indicate this changing of form.
The Method of Historical Materialism
The Logic of Historical Materialism
What should we make of Marx’s method? Some might feel that, if Marx is not proposing a strict relation between independent determinant variables and dependent variables, then his theory is simply circular, where he explains a thing simply by referring back to the thing.
This would be true if Marx were trying to explain the external origins of a phenomena. But that is not his project. Instead, Marx’s method saw the determination of social forms as a historical process. Through this process, these forms dissolve, change, and develop into new forms through its own internal dynamics, rather than being entirely dependent on some external cause. We call this method “historical materialism.”
Marx sadly did not provide a methodological preface to Capital, although there are certainly some hints about his method. Engels provides a more systematic description of this in his book Anti-Duhring.
Historical materialism is not merely pointing out that our current social form has not always existed, finding different ‘epochs’ in the past. Rather, it is a method of analyzing them as both determinate yet transient. We are not merely seeing a series of ‘stills’, frozen in a certain shape, until we switch to the next ‘still’. Each moment of being is also a moment of becoming.
The rationalist method we saw before, utilizing independent and dependent variables, may be appropriate for things which do involve static structures, like math and logic. A qualitative change there would count as a kind of leap between structures.
But this is not the appropriate method when we are examining a qualitatively changing continuum. That requires a different kind of logic. We cannot be content with a mere historical series of form, telling us what came after what. Instead, we need to see how these shifting forms crystallize and might redissolve.
We also need to be careful where we begin this analysis, especially so that we can avoid posing the starting point of our analysis as some ‘origin’ point itself outside of history.
Do not let us go back to a fictitious primordial condition as the political economist does, when he tries to explain. Such a primordial condition explains nothing; it merely pushes the question away into a grey nebulous distance. (Marx, Economic and Philosophical Manuscripts of 1844)
Likewise, this sequential approach is also in danger of presenting its analysis as if one form followed inevitably from the other.
It would therefore be infeasible and wrong to let the economic categories follow one another in the same sequence as that in which they were historically decisive. Their sequence is determined, rather, by their relation to one another in modern bourgeois society, which is precisely the opposite of that which seems to be their natural order or which corresponds to historical development. The point is not the historic position of the economic relations in the succession of different forms of society. … Rather, their order within modern bourgeois society. (Marx, Grundrisse)
Instead of going outside the form we are looking to describe, Marx wants us to go inside it, examining its own internal dynamics.
Contradiction and the Phase of Analysis
Beneath its immediate appearance, we treat the historical form we are analyzing as being temporarily made up of opposed “potentia”. These are co-existent possibilities which function, not as building blocks, but as opposed aspects on a continuum of functions in process.
This is generally what Marx means by forms being embodiments of ‘contradiction.’ He illustrates this with the example of elliptical motion, which itself embodies two opposed tendencies, moving both away and toward a body.
We saw in a former chapter that the exchange of commodities implies contradictory and mutually exclusive conditions. The differentiation of commodities into commodities and money does not sweep away these inconsistencies, but develops a modus vivendi, a form in which they can exist side by side. This is generally the way in which real contradictions are reconciled. For instance, it is a contradiction to depict one body as constantly falling towards another, and as, at the same time, constantly flying away from it. The ellipse is a form of motion which, while allowing this contradiction to go on, at the same time reconciles it. (Marx, Capital, Vol. 1, Ch. 3)
Marx usually refers to these counter-posed aspects as his ‘determinants.’ But this does not mean they act autonomously, as if their mere presence is enough to decide things. The same determinants might exist in some systems without having the same effect. For example, Marx claims Robinson Crusoe would have all the determinants of value.
All the relations between Robinson and the objects that form this wealth of his own creation, are here so simple and clear as to be intelligible without exertion, even to Mr. Sedley Taylor. And yet those relations contain all that is essential to the determination of value. (Marx, Capital, Vol. 1, Ch. 1)
By this, Marx clearly did not mean that Crusoe’s labor was actually objectified as value. Rather, he is pointing out that all the things that act as determinants of value in capitalism are present here too.
The point here is that the way Marx’s “determinants” determine things is not like how an independent variable determines a dependent one. Rather, they are aspects, one-sided abstractions, singled out from the form being analyzed.
The Phase of Synthesis
This ‘phase of analysis’ is only the first part of Marx’s investigation. After this is the ‘phase of synthesis’, reconstructing the appearance of the form, but now with a deeper understanding. This suggests new abstractions, allowing us to repeat the process.
This method cannot give us Cartesian ‘absolute’ knowledge, which it would reject as idealist. This method instead takes for granted that the world has a material existence outside our attempt to understand it, and that these attempts can only give us a partial understanding, capturing a particular aspect from a particular vantage point.
The phase of synthesis helps this one-sidedness inherent to the phase of analysis. By following this procedure, we build a more and more complete understanding of the world.
Even so, the world is more than just our understanding of it. Fully appropriating it requires practical action.
The totality as it appears in the head, as a totality of thoughts, is a product of a thinking head, which appropriates the world in the only way it can, a way different from the artistic, religious, practical and mental appropriation of this world. The real subject retains its autonomous existence outside the head just as before… (Marx, Grundrisse)
The major danger to this method is that “the movement of the categories appears as a real act of production.” This process can make it seem like the one-sided abstraction we are analyzing is really some self-developing entity, and the historical process becoming some expression of that entity. This is seen in the “capital-logic” view where capital itself (or self-expanding value) becomes the dominant subject of history. But the categories we use produce our knowledge of the world, but not the world itself.
This was Marx’s major critique of Hegel, although we should still be on the lookout if Marx fell for this error himself.
Marx’s Value Theory of Labor
Aspects of Labor
The Four Abstractions of Labor
To analyze capitalism, Marx uses four categories of labor, divided into two opposing pairs:
Abstract Labor and Concrete Labor
Social Labor and Private Labor
Firstly, we should note that these are not different types of labor, as if only some labor were abstract while others are concrete. Rather, these are aspects of all labor. Labor, as Marx describes it, has a ‘two-fold nature’ or a ‘dual character.’ All of these are mere one-sided abstractions taken from the whole of living labor.
Secondly, these categories are also universal to all epochs of history. While they are represented or appear in different ways, the categories themselves are inherent to human labor itself. Marx describes this particular form it takes in a society as its ‘practical truth,’ determined by the unique social process of that epoch. We need to be careful about not being confused with the same element taking on different appearances.
Finally, we need to be careful to not collapse these categories into one another. It is common to conflate private labor with concrete labor, and social labor with abstract labor. While these concepts often overlap, they are still distinct.
This last two points are a bit more controversial for Elson, and which she needs to spend more time defending, since it is commonly believed that abstract labor is a category unique to capitalism. The claim that abstract labor exists in all epochs is sometimes read as claiming value must exist in all epochs, making it ‘eternal.’ Elson disagrees, arguing value is only one form of appearance abstract labor takes in capitalism.
Private and Social Labor
People work independently from each other to some degree. In a “society of free competition,” they appear to be especially detached. But nevertheless, they are working for each other giving their labor a “social form.”
[F]rom the moment that men in any way work for one another, their labour assumes a social form. (Marx, Capital Vol. 1, Ch. 1)
In capitalism, this social form can be hidden. Workers appear as individual producers, freed from social forms except as they result from private individual decisions. Cash aggregates and reconciles these choices.
This accidental kind of socialization stands in heavy contrast to pre-capitalist societies, where the social form dominated labor, with people being relegated to certain jobs according to tradition, family, feudal rights, etc.
Abstracting away from how workers socialize within production itself, their only point of contact comes from them exchanging the products of their labor. The social character of their private labor was hidden before, but is fully revealed in exchange.
Since the producers do not come into social contact with each other until they exchange their products, the specific social character of each producer’s labour does not show itself except in the act of exchange. (Marx, Capital Vol. 1, Ch. 1)
In capitalist production, the social relation of each producing unit (e.g. the firm) is latent, not non-existent, prior to exchange. Exchange brings out this social character, even if it is in the fetishized form as a ‘social relation between things.’
Concrete and Abstract Labor
We have a sense here of private and social labor. But what is the difference between private and concrete labor? Both appear to be focused on the individual, subjective aspects of human labor. But concrete labor adds onto this a ‘process between man and nature’ to take on specific forms (e.g. tailoring, weaving, spinning, etc.). Concrete labor is about the diversity of different kinds of labor.
In capitalism, private and concrete labor almost perfectly overlap, as each type of concrete labor taken also seems to be the choice of the private individual. But we can more easily distinguish these forms in pre-capitalist societies, where individuals had relatively little choice about the kind of labor they do (e.g. slavery).
Concrete labor, despite its name, is still a one-sided abstraction. Instead of looking at living labor as a whole, it is focused specifically on those characteristics which make its product as a use-value. Concrete labor isn’t ‘real’ labor upon which the other social aspects are imposed. Rather, it is just an aspect of this whole labor process.
Abstract labor on the other hand is often described in negative terms, as simply disregarding the particular useful aspects of labor highlighted by concrete labor. If we take away from each individual type of labor (weaving, tailoring, etc.), what we are left with is abstract labor. But Marx also describes it in more positive descriptions “quantities of homogenous human labour” and “human labour pure and simple, the expenditure of human labour in general.”
Abstract labor presents this idea of a unity of all human labor, differentiated only quantitatively by its duration.
This is not assuming that all labor is physiologically identical. Rather, it is calling our attention to the fact that all labor takes time and effort, regardless of what kind of work it is.
Like concrete labor overlaps with private labor, abstract labor overlaps with social labor to a degree. Both look at labor ‘objectively’ detached from individuals. Each individual expenditure of labor-power is not happening in isolation, but is part of the collective effort of all. But abstract labor adds to social labor this idea of quantity, viewing this labor as some fraction of the that total.
The Dominance of Abstract Labor
While all four aspects of labor are therefore four potentia, which can never exist on their own. They are common to all epochs of society, the relation between these aspects changes and how they are represented by that society.
For capitalism, abstract labor is dominant. All the other aspects of labor (concrete, private, and social) are made subject to it.
The social character of labor is established only through the representation of abstract labor in exchange, i.e. money. The concrete and private aspects are mediated by it.
The fact, that in the particular form of production with which we are dealing, viz., the production of commodities, the specific social character of private labour carried on independently, consists in the equality of every kind of that labour, by virtue of its being human labour, which character, therefore, assumes in the product the form of value… (Marx, Capital Vol. 1, Ch. 1)
The individual worker can only satisfy their needs in so far as their private labor can be exchanged with, and counted as the equivalent to, every other kind of private labor.
On the other hand, it [the labor of the individual producer] can satisfy the manifold wants of the individual producer himself, only in so far as the mutual exchangeability of all kinds of useful private labour is an established social fact, and therefore the private useful labour of each producer ranks on an equality with that of all others. The equalisation of the most different kinds of labour can be the result only of an abstraction from their inequalities, or of reducing them to their common denominator, viz. expenditure of human labour power or human labour in the abstract. (Marx, Capital Vol. 1, Ch. 1)
Capitalism looks at labor, not as a productive activity with a specific utility, but as a value-creating substance, as social labor in general in the act of objectifying itself. Its sole feature of interest is its quantity.
This is not to say the other aspects do not matter at all, but that to they extent they do matter, they do so only as subordinate to abstract labor. They matter insofar as they affect the amount of human labor spent in production.
This is why Marx describes capitalism as “a state of society, in which the process of production has the mastery over man, instead of being controlled by him”. For Marx, money and capital are forms of this domination of abstract labor.
Marx did not argue that abstract labor is the product of capitalism, but he does say capitalism is marked by the dominance of abstract labor. In capitalism, abstract labor becomes a ‘practical truth’ because the unity of labor is not merely mentally recognized, but recognized in a social process independently from how we think.
While the objectification of concrete labor is universal, the objectification of abstract labor is not. This is specific to capitalism.
This objectification can also take a few forms (e.g. standardization of labor motion patterns, the mobility of labor, etc.), but its most basic form is the objectification of abstract labor reflected in exchange value. Hence the reason why Marx begins with the commodity.
I do not proceed from “concepts,” hence neither from the “concept of value,” and am therefore in no way concerned to “divide” it. What I proceed from is the simplest social form in which the product of labour presents itself in contemporary society, and this is the “commodity.” (Marx, Marginal Notes on Wagner)
The Phase of Analysis: From the Commodity to Value
Marx deduces the existence of value from the nature of the commodity.
He begins by analyzing the commodity dialectically, examining two opposed aspects: use-value and exchange-value. Exchange-value is the aspect specific to capitalism, and therefore gets more scrutiny.
The move from exchange-value to value is the tricky step. First Marx argues that, in exchange, commodities are made equivalent to one another, which requires a common element between them. Second, he argues this common element must be abstract labor.
Most defenders of the LTV actually ignore the structure of Marx’s argument here, oddly enough. Instead they seem to focus on pre-given quantities of labor and try to deduce prices from this. Note that neither of the two arguments for the LTV we noted before, appealing to a simple ‘beaver and deer’ economy or calculating things off of some given surplus, really match the structure of Marx’s argument.
Equivalence and Exchange
The argument of Capital is better understood when supplemented by other places he made this case, like in Theories of Surplus Value. The way Marx presented things, it makes it seem as if it is exchange per se that equates different commodities, as if two people trading corn and iron together alone made them equal.
Let us take two commodities, e.g., corn and iron. The proportions in which they are exchangeable, whatever those proportions may be, can always be represented by an equation in which a given quantity of corn is equated to some quantity of iron: e.g., 1 quarter corn = x cwt. iron. What does this equation tell us? It tells us that in two different things – in 1 quarter of corn and x cwt. of iron, there exists in equal quantities something common to both. The two things must therefore be equal to a third, which in itself is neither the one nor the other. Each of them, so far as it is exchange value, must therefore be reducible to this third. (Marx, Capital Vol. 1, Ch. 1)
Marx’s argument here is underdeveloped at the start of Capital. Clearly the mere act of exchange is not enough to establish this though, or it would apply to other cases of exchange too, like exchanging Christmas gifts.
We are not dealing with just any exchange though. This is an exchange of commodities, in an act of buying and selling. And it is also not merely two people exchanging these things either. They are acting in the context of a much broader system of exchange in the market, making these goods generally exchangeable, and with exchange-ratios determined socially by the market.
But although the commodity has a thousand different kinds of value, or a thousand different prices, as many kinds of value as there are commodities in existence, all these thousand expressions always express the same value. The best proof of this is that all these different expressions are equivalents which not only can replace one another in this expression, but do replace one another in exchange itself. (Marx, Theories of Surplus Value)
It is this general exchangeability on the market, not any individual act of exchange, that makes them exchange values.
A commodity functions as an exchange-value if it can freely take the place of a definite quantity of any other commodity, irrespective of whether or not it constitutes a use-value for the owner of the other commodity. (Marx, Critique of Political Economy, Ch. 1)
This presumption that we are dealing not only with a single act of exchange, but in the context of many commodities and many exchanges, is implied by the first lines of Capital.
The wealth of those societies in which the capitalist mode of production prevails, presents itself as “an immense accumulation of commodities,” its unit being a single commodity. (Marx, Capital, Vol. 1, Ch. 1)
Marx’s claim of the exchange of commodities implies their equivalence then is not derived from an ahistoric concept of exchange, but from an analysis of capitalist exchange where goods are socially equated.
Economists generally try to explain market prices in terms of equivalency of something. While they might recognize some differences, such as the difference in total utility gained from some bundle of goods in the owner’s possession, the rate of exchange itself is placed at the point where there is an equivalence, e.g. an equivalence in marginal utility. They find equality at equilibrium.
Marx differs from them by arguing this equivalence implies the existence of some separate substance of “value.”
Since this equivalence was established socially, not arbitrarily, we cannot explain it with similarly arbitrary bases for this equivalence. If we were to simply pick a numeraire, we would be presupposing the equivalence of commodities already. But this would not tell us what is making them equivalent.
Some, like Bohm-Bawerk, argued that commodities were made equivalent as yielders of utility. Marx rejects this view for two apparent reasons. Firstly, it is precisely the different uses of commodities that inspire their exchange, not their equivalence. Secondly, this purely subjective approach cannot capture crucial aspects of this process.
Even if the market is the result of the actions of the many commodity owners, each commodity owner enters the market and sees the exchange ratios as apparently already given. These magnitudes vary independently from their will or foreknowledge. It is happening ‘behind their backs.’
These quantities vary continually, independently of the will, foresight and action of the producers. To them, their own social action takes the form of the action of objects, which rule the producers instead of being ruled by them. (Marx, Capital Vol. 1, Ch. 1)
Marx intends for his theory to capture this in addition to the subjective elements of exchange.
The Idea of Substantial Equivalence
Marx sees the fact that commodities are being treated as equivalents in exchange as a sign that they have substantial equivalence. They are being made equal as something. This substance is, of course, value.
Marx pushes off the major implications of this being a substance until the end of the first chapter of Capital, when he discusses commodity fetishism. Because of this delay, two misreadings of Marx are encouraged.
The first objects that Marx’s method is “formalist,” treating it as if it were a purely logical method of deduction instead of something Marx is rooting in real social relations.
This objection is seen from Bohm-Bawerk. He argued that, following Marx’s logic, any common characteristic between the commodities could have been used to equate them (e.g. that they are both scarce relative to demand, that they are articles of utility, etc.), making the choice of ‘labor’ seem entirely arbitrary. If Marx had used the method Bohm-Bawerk thought he was, this objection would be entirely correct. But this is not Marx’s method, and misses the force of Marx referring to this as a substance.
The second objection argues that Marx’s method is “idealist,” with value being a reification of the equivalence or continuity of commodities, treating this abstraction as if it were a real substantial thing. This objection is better, especially considered the philosophical baggage associated with the term ‘substance.’
To defend Marx from this point, we can argue the appropriateness of analyzing value as a substance by comparing its usage in other places, like in physics or chemistry. Energy and matter are similarly treated as substances, which can be equal in different contexts despite taking on various forms.
By having this concept of ‘energy’ as a substance, we equate different things like light, heat, mechanical motion, and so on. These are interchangeable embodiments of this common substance.
Marx uses ‘matter’ as his own example, showing how the same chemical substance of C4H8O2 can take on different forms, either as butyric acid or as propyl formate. These are both equal in terms of their chemical composition (both are C4H8O2), but are in different arrangements and have different physical properties.
It is only the value of the linen that is expressed. And how? By its reference to the coat as its equivalent, as something that can be exchanged for it. In this relation the coat is the mode of existence of value, is value embodied, for only as such is it the same as the linen. On the other hand, the linen’s own value comes to the front, receives independent expression, for it is only as being value that it is comparable with the coat as a thing of equal value, or exchangeable with the coat. To borrow an illustration from chemistry, butyric acid is a different substance from propyl formate. Yet both are made up of the same chemical substances, carbon (C), hydrogen (H), and oxygen (O), and that, too, in like proportions – namely, C4H8O2. If now we equate butyric acid to propyl formate, then, in the first place, propyl formate would be, in this relation, merely a form of existence of C4H8O2; and in the second place, we should be stating that butyric acid also consists of C4H8O2. Therefore, by thus equating the two substances, expression would be given to their chemical composition, while their different physical forms would be neglected. (Marx, Capital Vol. 1, Ch. 1)
This notion of a substance is an abstraction from these particular forms, but still presents a practical reality as one form of this thing, the substance, is turned into another form.
Crystalized Abstract Labor as the Substance of Value
With this materialist notion of a substance, we can defend against the idealism objection. The transformation of one commodity into another, insofar as it is regulated by rules happening ‘behind the backs’ of the commodity owners themselves, indicates there is this kind of substantial equivalence taking place.
The important difference here, however, is that while matter and energy are physical, value is acting as a kind of social substance. Even though this equivalence appears as a relation between the commodities themselves, this is not the case. It is a relation between people, not objects.
To capture this human essence, the substance of value cannot be any physical property of the commodity. It must be the expenditure of human ability and vitality in these commodities.
[T]hese means of existence are themselves the products of social activity, the result of expended human energy,3 materialized labour. As objectification of social labour, all commodities are crystallisations of the same substance. (Marx, Critique of Political Economy)
This point is only made clear later on as Marx discusses the fetishism of commodities, correcting people who treat value as a relation between objects instead of being between people.
[The equivalence of commodities] is only a representation in objects, an objective expression, of a relation between men, a social relation, the relationship of men to their reciprocal productive activity. (Marx, Theories of Surplus Value)
This is labor viewed as a homogenous and uniform substance, differing only in quantity. It is not dealing with labor as such, but only with its abstract aspect. As values, they are objectifications of abstract labor.
Every product of labour is, in all states of society, a use value; but it is only at a definite historical epoch in a society’s development that such a product becomes a commodity, viz., at the epoch when the labour spent on the production of a useful article becomes expressed as one of the objective qualities of that article, i.e., as its value. (Marx, Capital, Vol. 1, Ch. 1)
In review, we started from the simplest form of the product of labor: the commodity.
We then split the commodity into two aspects: use-value and exchange-value.
By examining exchange-value as a historically specific form of an exchange-relation, a product of some socio-historic process, and therefore must presuppose some things.
This was all in line with the method of historical materialism, with the ‘real’ premises being those of capitalist commodity exchange.
This argument concludes that the equivalence of commodities established in exchange must presuppose the objectification of abstract labor.
How this objectification takes place, Marx hasn’t examined yet. This is the puzzle of its “phantom-like objectivity.” That is left for the phase of synthesis, while we are still in the phase of analysis. There we will see just how abstract labor becomes dominant, as well as the problematic, tenuous, and transient character of that domination. This appearance of equilibrium we find here is itself only a one-sided abstraction, as the market is just as much a process of disequilibrium.
The Phase of Synthesis: From Value to Price
The Task of Synthesis
Marx is focused on his phase of synthesis for the rest of Part One of Capital Vol. 1 (i.e. chapters 1.3 through 3).
His main point is to show how this objectification of abstract labor as value leads to its dominance, as well as showing how precarious this dominance is.
Marx writes on law, as with the ‘law of value,’ precisely as it works ‘behind the backs’ of the commodity owners according to its own rules. But this is not a strictly deterministic law.
Under capitalist production, the general law acts as the prevailing tendency only in a very complicated and approximate manner, as a never ascertainable average of ceaseless fluctuations. (Marx, Capital, Vol. 3, Ch. 9)
This is seen as we build on this notion of value back to a notion of price. To understand this, we need to examine the process through which labor becomes objectified in the commodity.
The Objective Expression of Value in Money
To do this, the value of a commodity must be expressed “objectively,” namely as something materially different from the commodity itself yet shared with all other commodities. To do this, one commodity becomes the bearer of value so that it can reflect the value of all other commodities.
[T]he bodily form of commodity B becomes the value form of commodity A, or the body of commodity B acts as a mirror to the value of commodity A. (Marx, Capital Vol. 1, Ch. 1)
This acts as the socially determined “equivalent form” of the commodity against which it is directly exchangeable. As socially determined, this is not being picked arbitrarily, but arose as a byproduct of each commodity owner trying to exchange their commodities.
This is found in money, particularly in gold-money.
Elson argues that this universal equivalent need not always be gold, since Marx notes that it can in some cases be replaced by symbols of itself, namely with paper money. But the implication here is that gold-money, or some other commodity money, is a necessary precursor to paper money, rather than being established merely by convention.
Money is a crystal formed of necessity in the course of the exchanges, whereby different products of labour are practically equated to one another and thus by practice converted into commodities. (Marx, Capital, Vol. 1, Ch. 2)
There is more possibility for confusion here. Money is the equivalent form of value, but money itself is much older than capitalism. It acted as a medium of exchange, but not necessarily as an expression of value.
As we covered before, value isn’t established by exchange per se. Rather, it relies on the general exchangeability of products of labor through sale and purchase. For value to exist, and therefore for money to act as a measure of value, we need generalized commodity production, which only occurs within capitalism.
Gold money takes on a unique role within capitalism then, singled out from all other commodities to stand in as the universal incarnation of abstract human labor.
It is as if alongside and external to lions, tigers, rabbits, and all other actual animals, which form when grouped together the various kinds, species, subspecies, families etc. of the animal kingdom, there existed also in addition the animal, the individual incarnation of the entire animal kingdom. (Marx, Capital, Vol. 1, Ch. 1, First Edition)
External Independence and Fetishism
For abstract labor to be objectified, this must be expressed in the determinant form of money. Value lacks the “internal independence” it needs to be its own entity. It is simply one side of the commodity, and cannot be independent from it.
But value can have “external independence” when brought into relation with another commodity which is reflecting its value. This reflection produces the illusion that value is an independent entity, when really it is only relative.
This is precisely what the fetishism of commodities is. This is not an ideological form of fetishism, but a product of these particular relations of production.
The Dominance of the Universal Equivalent
As the universal equivalent, abstract labor is not only objectified, but made the dominant aspect of labor.
In money itself, the concrete aspect of labor is only there to express that abstract aspect. Likewise, its private aspect is only there to express the social aspect. Individual producers do not decide to make money until it has been picked by this ‘blind’ social process. And the social aspect is to produce a commodity which is functioning as the incarnation of abstract labor.
In money itself, private, concrete, and social labor are not obliterated, but they are subsumed as expressions of abstract labor. As the universal equivalent, money reflects only abstract labor.
The universal equivalent then establishes a dominance over all other commodities in capital, and over the very process of production itself. Labor becomes subsumed as a form of capital.
Prices May Diverge From Value
With the price of a commodity, we get its exchange-value expressed in terms of money. This price objectifies the abstract labor of the commodity, reflecting it back to it.
Marx did not begin with value acting as a regulator of exchange-ratios. This is held off to sections 3 and 4 of chapter 1.
It becomes plain, that it is not the exchange of commodities which regulates the magnitude of their value; but, on the contrary, that it is the magnitude of their value which controls their exchange proportions. (Marx, Capital Vol. 1, Ch. 1)
However, we have also seen that, even as the magnitude of value regulates exchange ratios, regulation for Marx is not a matter of strict independent and dependent variables. Rather it is regulating this form of appearance, like how a molecular structure might regulate the form of a crystal.
Marx is notably not committed the view that exchange ratios directly represent magnitudes of value (i.e. that prices must equal values). While it certainly appears this way at first (and Marx writes about it as if it were that way early in his argument), he signals his intent to challenge that appearance later on too.
Capital Vol. 1 abstracted away from considerations which would imply that prices cannot directly represent magnitudes of value, precisely because he was not considering the distribution of value between capitals. Vol. 1 is demonstrating how superficial the assumption that prices equal values is precisely because they represent not only value, but surplus-value; not only prices, but profit.
Capital Vol. 3 is where Marx takes up the question for reconsidering how value is represented by prices. Elson is setting aside questions for how adequate this answer is, but only needs to say so far that it is not working under different premises than Volume 1.
Marx is showing not only that value regulates price, but that this regulation breaks down. As he points out early on, price not only express the magnitude of value in a commodity, but also the quantity of money it can be sold for in given circumstances.
But this exchange-ratio may express either the real magnitude of that commodity’s value, or the quantity of gold deviating from that value, for which, according to circumstances, it may be parted with. The possibility, therefore, of quantitative incongruity between price and magnitude of value, or the deviation of the former from the latter, is inherent in the price-form itself. This is no defect, but, on the contrary, admirably adapts the price-form to a mode of production whose inherent laws impose themselves only as the mean of apparently lawless irregularities that compensate one another. (Marx, Capital, Vol. 1, Ch. 3)
Prices are not only realizing magnitudes of value, but are also regulated by the circulation of money, which has a certain degree of independence. Just because a commodity owner sold something does not mean they must immediately buy something as well. They can hold onto their money and buy at a time of their own choosing.
The magnitude of money’s value is indeterminate precisely because it has no universal equivalent reflecting it. Rather, it appears merely as a series of commodities that it can purchase.
Prices can therefore be influenced by the timing and sequence of sales and purchases. There is no guarantee of equality between aggregate sales and aggregate purchases.
While this gives the circulation of money a degree of autonomy, it is not entirely independent from the production of commodities either. If prices deviate too much from values, it may reassert itself in a crisis. The purpose of this value theory is not determining prices though, and examination of how much prices can deviate from values should be handled elsewhere.
If the interval in time between the two complementary phases of the complete metamorphosis of a commodity become too great, if the split between the sale and the purchase become too pronounced, the intimate connexion between them, their oneness, asserts itself by producing — a crisis. The antithesis, use-value and value; the contradictions that private labour is bound to manifest itself as direct social labour, that a particularised concrete kind of labour has to pass for abstract human labour; the contradiction between the personification of objects and the representation of persons by things; all these antitheses and contradictions, which are immanent in commodities, assert themselves, and develop their modes of motion, in the antithetical phases of the metamorphosis of a commodity. These modes therefore imply the possibility, and no more than the possibility, of crises. The conversion of this mere possibility into a reality is the result of a long series of relations, that, from our present standpoint of simple circulation, have as yet no existence. (Marx, Capital, Vol. 1, Ch. 3)
Instead, we have seen here how the category of value leads to the dominance of abstract labor, as labor itself is only counted as a “value-creating substance” subsumed into capital.
Marx began with the equilibrium aspect of this process, giving its ‘law,’ while also indicating this is only one-side side. The process of actually determining this involves disequilibrium and crisis just as much as it implies the equilibrium and the law of value.
The Political Implications of Marx’s Value Analysis
Overview of the Political Implications
We saw at the beginning that Marx’s value theory was not a proof of exploitation, but warned against attempts to ‘depoliticize’ his analysis as well.
The political merits of Marx’s value theory is that it gives us a tool for how capitalist exploitation works, changes, and develops (in contrast to proving the existence of exploitation generally).
Because of this, it gives us key insight into what openings there are for materialist political practice, subverting the conditions that give rise to it.
Elson identifies three key points about the political use of Marx’s value theory:
It lets us analyze capitalist exploitation as a whole, allowing us to overcome the fragmentation of personal experience of that exploitation.
It lets us grasp the contradictory, crisis-ridden nature of capitalist exploitation, allowing it to continually change.
It builds our understanding of how this process of exploitation works, and implies the possibility of action to end it.
The Fragmentation of Exploitation
The exploited do not need complex works of theory to tell them that something is wrong with their situation. But their own experience can be disconnected, and make it difficult to tell what exactly is wrong.
In particular, exploitation has been split into issues of money relations and labor process relations. On the one hand, it is seen as an issue with ‘unfair’ wages and prices. On the other hand, it is seen as issues of long working hours or poor working conditions.
This bifurcation leads to a split of:
A politics of circulation: Focused on wages, prices, regulating finance, directing investment, promoting state welfare programs, etc.
A politics of production: Focused on shorter working days, unionizing labor on the shop-floor, building worker co-ops, producing ‘alternative paths’ for companies more beneficial to workers against things like layoffs, etc.
These methods are not wrong per se, but should not be seen as being isolated from one another. With Marx’s value theory, we see that exploitation is a unified process, connecting production and circulation. One side cannot be addressed without the other.
The Contradictory Process of Exploitation
Examining the process of exploitation, we can see how it leads continually into crisis and how, nevertheless, it survives despite its continually changing form.
Although money and labor relations are part of the unity of exploitation, they still have their own degrees of autonomy that lead into this crisis. While the crisis does not itself break down capitalism, it does give us space for political action. We can collectively regulate production and distribution, instead of relying on these ‘blind’ market forces.
This identifies the space for political action.
The Possibility of Political Action
We not only recognize the space for, but the real possibility of political action. This possibility is not only assumed by socialists here, but is worked directly into the theory itself.
Class struggle is not introduced into capitalism from the outside. Rather, it is inherent to capitalism and can be built up. This way we can view the transition from capitalism into socialism as a historical process, consciously brought about by our collective action, rather than us leaping between two pre-given structures.
Marx’s theory is not about pre-given structures in dominance, nor is it a model of political economy, nor is it about some self-developing and all-enveloping entity.
Rather it analyzes, in societies where the capitalist mode of production prevails, the determination of labor as forming what is intrinsically unformed, i.e. the domination of one aspect of labor, i.e. abstract labor, objectified as value.
This domination has limits. Abstract labor is not able to obliterate the other aspects of labor, even as it subsumes them.
Our political problem is to bring these other aspects together without mediation of the value form, and therefore allowing us to take particular, conscious, collective action against exploitation.
Realizing this political project is helped by using the tools of Marx’s value theory to analyze how labor is being determined in capitalist countries today.
From Adam Smith’s Wealth of Nations, Book 1, Ch. 6: “In that early and rude state of society which precedes both the accumulation of stock and the appropriation of land, the proportion between the quantities of labour necessary for acquiring different objects seems to be the only circumstance which can afford any rule for exchanging them for one another. If among a nation of hunters, for example, it usually costs twice the labour to kill a beaver which it does to kill a deer, one beaver should naturally exchange for or be worth two deer. It is natural that what is usually the produce of two days' or two hours' labour, should be worth double of what is usually the produce of one day's or one hour's labour.
“If the one species of labour should be more severe than the other, some allowance will naturally be made for this superior hardship; and the produce of one hour's labour in the one way may frequently exchange for that of two hours' labour in the other.
“Or if the one species of labour requires an uncommon degree of dexterity and ingenuity, the esteem which men have for such talents will naturally give a value to their produce, superior to what would be due to the time employed about it. Such talents can seldom be acquired but in consequence of long application, and the superior value of their produce may frequently be no more than a reasonable compensation for the time and labour which must be spent in acquiring them. In the advanced state of society, allowances of this kind, for superior hardship and superior skill, are commonly made in the wages of labour; and something of the same kind must probably have taken place in its earliest and rudest period.”
Elson quotes the Marxist economist Ronald Meek as saying this: “In their basic models, all three economists (i.e. Ricardo, Marx and Sraffa) in effect envisage a set of technological and sociological conditions in which a net product or surplus is produced (over and above the subsistence of the worker, which is usually conceived to be determined by physiological and social conditions.) The magnitude of this net product or surplus is assumed to be given independently of prices, and to limit and determine the aggregate level of the profits (and other non-wage incomes) which are paid out of it. The main thing which the models are designed to show is that under the postulated conditions of production the process of distribution of the surplus will result in the simultaneous formation of a determinate average rate of profit and a determinate set of prices for all commodities.”
Mike Gouldhawke has noted this as a mistranslation. In the original German, Marx uses the term menschlicher Lebenskraft, which translates more directly to “human vitality” or “life force.” Translating this as “energy” seems to imply what Marx has in mind here is more about the calories spent in exertion. Labor is measured in terms of time though, not joules of energy. See note 4 of the “Tragic Theses”.