“Schrödinger’s Capital”: How Marxist academics use ‘Dialectical’ to turn bullshit into a theory
NOTE 5: The paradox of the value-form
What do you do when you can’t explain how concrete labor is reduced to abstract labor?
You just do what Chris Arthur did in 2012: deny that labor is the source of value.
Chris Arthur realized the argument of the value-form school was falling apart on a critical question. The value-form school could not explain the process by which concrete labor was ‘reduced’ to abstract homogenous labor. Certainly, the value-form school argued, value required the value-form, i.e., money, but how exactly could you explain where money comes from without assuming the prior existence of value and exchange value?
According to Marx’s labor theory, money began as a simple commodity long before it emerged as the money commodity. But even as money the commodity serving as money is a simple use value having no unique value characteristics. Value, on the other hand, is complete abstraction from the useful qualities of the commodity.
This presupposes money must have emerged later in the epoch of commodity production. And it emerges as the expression of the values of other simple commodities. You can’t have it another way. Money itself can’t be explained unless the value characteristic of commodities generally already existed.
Chris Arthur came up with an ingenious solution to the dilemma of the value-form school: The epoch of simple commodity production never happened; it is a fraud invented by Engels after Marx died. To advance this argument, Arthur proposes value is not created by labor, but ‘posited’ as such by capital.
When I say I think this argument is ingenious, I mean it. Arthur really had to water-board labor theory to get a “reading” where labor values are not created by labor — if “reading” is the correct term for this gymnastics.
The thing that is so fascinating about Arthur’s argument is that anyone with any acquaintance with Marxism — even slightly — knows that according to the theory labor power creates surplus value. Since everyone knows this is what Marxism argues, how difficult is it to figure out labor power must also be the source of all value, surplus or otherwise? I mean, really, does this take a degree in rocket science or something?
To be sure, the relevant question is not whether Marxism is correct about this conclusion, but is this conclusion consistent with Marx’s argument or not.
To give an analogy: Almost everyone knows that according to old testament, god created the world in 6 days and rested on the seventh. So if someone asked you who created mosquitoes and when did it happen according to the bible, the correct answer would be it had to be god, and it had to happen sometime before that first Saturday, right?
It is not a matter of whether you believe in creationism or not, but are you familiar with creationist argument?
But somehow folks in the value-form school missed this question on the pop quiz and Arthur is one of those Marxists who failed — but he failed it in a really fascinating way.
One of the ingenious tricks of the value-form presentation of Marx’s argument is what Chris Arthur alleges is Marx’s chain of reasoning:
“In the first chapter of Capital Marx derives the category [abstract labor] from simple circulation through the chain of reasoning: exchange value – value – labour – abstract labour.”
This argument by the value-form school is usually accepted without question among its value-form adherents. Harvey uses a variation of it in his own Companion to Marx’s Capital. The chain of reasoning, we are told, provides a ready jumping off point for deliberate inquiry into the nature of Marx’s ‘cryptic’ category, abstract labor. The value-form school spends a lot of effort wrestling with this category because, they allege, it is the substance of value.
Which is odd, because we all know for a fact no one ever expends a single second of abstract labor in our economy. Every actual act of labor in our economy is practical, concrete, useful labor — no one has ever demonstrated an act of abstract labor. If value is simply the product of abstract labor, it is likely that value doesn’t exist and never existed, except in Marx’s head.
Since Rubin’s essay in 1927, we are told, there has been a controversy among Marxist scholars over the nature of abstract labor. The “controversy” is actually pure bunk, since Marx explains what he means by the term abstract labor almost immediately after introducing it. According to Marx, the values of commodities implies “human labour power has been expended in their production”.
Thus, the very same source Marx provides for surplus value, is introduced in the opening pages of Capital as the source for all value. Marx does not argue, “While labor power is the source of surplus value, abstract labor is the source of value.” The expenditure of labor power is both the source of value and of surplus value in the Marxian labor theory of value.
The argument Marx makes is so obvious, a challenge to it would be forced to show why labor power is not the source of the values of commodities. Well, in his 2012 essay, Arthur makes just this argument: Labor power is not the source of value until it (labor power) becomes a commodity.
In the essay Arthur sets out to show “how and where the category of ‘abstract labour’ becomes ‘true in practice’” only under the capitalist mode of production. Arthur’s argument is very long and dense — unnecessarily so, in my opinion — but it is actually pretty simple: If, as the value-form school insists, value requires the value-form, i.e., money, labor power cannot become the source of value until it is sold as a commodity in the market.
According to Arthur, the exchange of the commodity, labor power, for money (somehow) endows labor with the characteristic of value-forming or value-creating activity.
If I am correct in describing Arthur’s argument, the capitalist relation ‘posits’ (i.e., imposes) on labor its characteristic value creating property.
“The question is frequently raised”, says Arthur, “as to whether abstract labour is predicated on exchange or production. In truth the answer to this presupposes the answer to the question where value is created.”
“It is clear”, insists Arthur, “that it is the form of value [money] which imposes such abstraction thus linking the category of abstract labour inseparably with money.”
Which is to say, only once labor power is sold as a commodity, does value actually come into being. By being sold for money, labor power is itself at once ‘value-formed’ and ‘value-forming’ activity. Value may exist “latently” before it is expressed in market prices, as Rubin argued, but this latent characteristic owes its existence to the fact the labor power expended in production was sold for money.
This is where Arthur breaks with Engels: since in simple commodity exchange labor power is not sold, Engels was wrong to argue the subject could be discussed apart from the capitalist relationship. Engels formulation leads scholars to assume the values of commodities arises from their exchange.
Arthur does not explain why this would be so, since obviously Engels never believed this himself. Indeed, in volume 3 of Capital, Engels insists value is historically prior to exchange value, arising from production, not exchange.
Arthur’s statement, however, only makes sense if it is understood that Arthur is alleging Rubin’s value-form break with Marx’s labor theory was incomplete. Contrary to Marx and Engels, Rubin proposed the values of commodities arises during the process of exchange. But he conceded this implied the values of the commodities must exist latently within them before exchange.
As I have shown in earlier notes, following the premise of the value-form school, the exchange of commodities is nothing more than the exchange incommensurable use values. Rubin rightly knew that with production carried on in isolation the commodities were not yet social products, but only concrete products of concrete labor. If we accept the premise of the value-form school, how could two use values acquire a labor value property simply by changing hands?
Think of it this way: A producer comes to the market with only his peculiar use value. He meets in the market another producer who has his own use value on offer for exchange. The two producers agree to exchange their use values since each product is needed by the other producer. Thus entire transaction takes less than a minute to consummate.
VALUE-FORM THEORY POP QUIZ:
QUESTION: Where in the above market transaction process did the simple use values of each producer acquire the property of values? Can we see it happen? If we later examined the commodities under a microscope would we now see what we could not see before; namely, their values?
ANSWER: The correct answer is, “No change took place in the commodities at all. Just as before, they remain concrete use values, exhibiting no properties of value at all.”
Arthur recognizes the defect in the value-form argument, because the problem does not go away even if we assume the use value offered in the exchange by one of the producers is a money commodity. If value is not already a characteristic property of the commodities coming into the market, we cannot explain exchange value. And if we cannot explain exchange value, we cannot explain the money used to buy the commodity or the prices at which this transaction took place.
The value-form paradox: Labor cannot be abstract without money, but money itself cannot exist without abstract labor.
Harvey tries to solve this paradox by claiming in Capital Marx does not provide a ‘causal’ argument in chapter 1 of Capital, volume 1:
“How has Marx’s dialectical method been working here? Would you say that exchange-values cause value? Would you say exchange-values cause use value, or use-values cause . . . ? This analysis is not causal.”
Harvey’s solution to the value-form paradox is to simply declare there are no causal relationship in the capitalist mode of production. Value does not CAUSE exchange value, and exchange value does not CAUSE value — the shit’s ‘dialectical’.
Whenever a Marxist academic uses the term, ‘dialectical’, you know some utter bullshit is coming next.
Arthur’s argument carries Harvey and Rubin one step further: If it appears value is latent in the commodity before it comes to the market, this is because the labor power expended on its production was bought previously by the capitalist. Properly understood, says Arthur, the value property of the products of labor did not and could not exist prior to capitalism.