Schrödinger’s Capital: Concrete labor, abstract labor, values and prices

by Jehu

NOTE 2: Concrete labor and abstract labor, values and prices

The whole problem of the value-form school in a nutshell can be found in its response to this statement by Marx from Capital, volume one, chapter 1, section 4: Why, Marx asked, is labour represented by the value of its product?

“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.”

In his 1927 essay, Abstract Labour and Value in Marx’s System, I.I. Rubin offered his own response:

“Following Marx, we must solve our problem in this way. Our task does not only consist in showing that the value of a product can be attributed to labour. We must also show the converse. We must reveal how people’s productive relations find their expression in value.

“This is the basic statement of the problem, which must be considered the most methodologically correct from the Marxian standpoint.

“If we put the question in this way, we take not the concept of value as the starting point of the investigation, but the concept of labour. We define the concept of labour in such a way that the concept of value also follows from it.”

I could be wrong, but I don’t think Rubin was asking the same question Marx was asking: Why is labor represented by the values of commodities?

I base that on the statement Marx makes immediately after his question:

“These formulae, 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 formulae appear to the bourgeois intellect to be as much a self-evident necessity imposed by Nature as productive labour itself.”

Rubin’s answer to Marx’s question seems to focus on the process by which productive relations find their expression in value. While Marx seems to draw our attention to the lack of control society has over its own productive activity.

Let me add this context: Just before the passage I quoted, Marx was hypothesizing how a community of freely associated producers would manage production. He follows this hypothesizing up with his question: Why does labor in a commodity producing society take the form of the value of its product? And he makes the point this happens because the producers are controlled by their product.

It seems to me, Marx isn’t asking how concrete labor becomes abstract labor value, which is Rubin and the value-form school’s question, but why value itself exists.

In any case, let’s take up the question Rubin chose to address.

How does concrete labor become abstract?

The value-form school argues Marx did not provide an adequate explanation for how labor that must always involve some definite, particular, useful and concrete expenditure of human capacities, acquires the character of abstract homogenous labor having none of these qualities. This reduction, they argue, must involve some process where the products of labor are stripped of their incommensurable qualities in such a way that allows the abstract labor contained in them to then be compared.

I.I. Rubin states the problem this way:

“In commodity production, the labour of an individual, a single commodity producer, is not directly regulated by the society, and in itself, in its concrete form, it does not yet belong to social production. Labour only becomes social in commodity production when it assumes the characteristic of socially equated labour; the labour of every commodity producer only becomes social by virtue of the fact that his product is assimilated with the products of all the other commodity producers, and the labour of a specific individual is thus assimilated with the labour of all the other members of the society and all the others kinds of labour.”

The problem for Rubin is that production is carried on separately by the members of the community. The labor of these individuals is not social labor until their products have been exchanged. For Rubin, in a commodity producing society no product of labor contains social labor until that characteristic is conferred on it through exchange.

However, this presents a thorny theoretical problem for labor theory: how can the labor contained in the commodities be equated through exchange of the use values, when the use values themselves cannot be compared. How does a community of individual producers exchange apples for pitchforks when each use value is qualitatively different and thus incommensurable.

Prices and Values

Which brings me to an even more important question the value-form school doesn’t address: If no one has control of the forces of production, which seems to be Marx’s point in the above passage, how can prices ever reflect the values of commodities?

In Marx’s theory, the lack of control over production goes far deeper than just the problem of anarchic, unregulated economic activity. There is a huge problem of a vast information void. No one in the community knows the value of their own commodity or the value of anyone else’s commodity and no commodity carries any information as to its own absolute value or to its relative value.

If the above is true, how can prices ever reflect the values of commodities as Marx argues? There is no obvious mechanism for the labor values of any commodity to be passed to the producers or their products in Marx’s system.

So far as prices are concerned, values don’t exist.

You can’t answer the question of how prices approximate values by claiming prices approximate values over some period of time, because the people setting the prices of commodities will have no way of approximating the values of the commodities whose prices they are setting. The prices at which commodities are bought and sold in the market have no possible way to reflect their values, because the values of the commodities are never known.

We are left with one of two alternatives:

  1. Either prices of commodities are totally random, or
  2. the values of commodities are nothing more than the average prices of a commodities.

Marx rejected both of these theories, so his own explanation had to involve a third alternative. That alternative had to begin with the assumption no one or no object had any information about the value of anything being sold and bought in the market. No one had this information because that information was not held in the objects or by the producers, but was (somehow) embedded in the system as a whole.

This is a quantum theory argument, not a Newtonian theory argument. In a quantum theory argument the objects of the system behave in a way that suggests they carry information they cannot possibly have. This information is thought to be transmitted between objects instantaneously at a distance through some sort of “nonlocal” connection.

To give an example.

How does the sun hold the earth in its orbit when even light takes eight minutes to pass between the two? Based on Einstein’s law of relativity nothing can move faster than light and it takes light about eight minutes for light to reach earth from the sun. If the sun was exerting a force on the earth that required it to cover the distance between the two, it would always be eight minutes late. The earth would have moved on in the interim. For gravity to work, the sun always has to “know” where the earth is in real time, but this is not possible in an Einstinian system.

Likewise, for commodities to exchange approximately at their value, each commodity must “know” its value relative to the other commodity. This too we know is not possible. This suggests both commodities are located together in some force field that carries that information: a force field like gravity in which they are embedded like the sun and the earth.

Marx called this force field “the total labor power of society”.