Seventeenth note on Moseley’s “Money and Totality”

by Jehu

We now have a thorny theoretical problem:

The capitalist has drawn four hours of labor from the circulation of commodities in the form of labor power. But this labor power is itself the source of all value. By working the worker longer than is necessary to reproduce the value of her labor power, the capitalist is able to introduce into the circulation of commodities not four, but eight hours of value. He pays the worker the value of her labor power as contracted, but how does he dispose of the additional four hours of value? How does he convert this surplus value into M’?

The conditions for the realization of the surplus value require more socially necessary labor time than the conditions for the production of the surplus value. The production of the surplus value required four hours of value, but the conditions for realization of the surplus value require four hours of value for the labor power, plus an additional four hours for the surplus value.

Eight hours is greater than four hours. The commodity (a pair of shoes) is purchased in the market at its value: eight hours of socially necessary labor time. But this value incorporates more value than was laid out initially by the capitalist. Four additional hours of value have appeared as if out of nowhere and the conversion of this new value into its corresponding exchange value must be explained.

This has led at least one writer to suggest there is what he calls a realization problem, which he defines this way:

“The realization problem was first considered by classical economists such as Ricardo and Sismondi. Keynes’s theory of effective demand has a bearing on it too. But it was Marx who gave it its most rounded — and controversial — treatment. At its simplest, the realization problem amounts to this: is there sufficient monetary demand for the commodities which have been produced to be sold, and sold at their value?”

The problem with this argument is obvious: the value of an individual commodity — say a pair of shoes — has nothing whatsoever to do with the actual duration of labor required for its production. Rather, the value of any commodity is socially, not individually, determined. As values, the pair of shoes are only an average sample of their class.

Although the capitalist only pays out four hours of labor for the labor power he employed in the production of the shoes, when he gets to the market he finds that the shoes themselves — the product of the labor of the worker — still have a value of eight hours. This value is determined not by the duration of labor he actually employed in production of his shoes, but the “labour time socially necessary is that required to produce an article under the normal conditions of production, and with the average degree of skill and intensity prevalent at the time.” (Marx, Capital, v1)

The capitalist thus charges no more than the actual value of the shoes — eight hours of SNLT — yet, after paying the worker her wages of four hours, he pockets four hours of profit.

And no one — neither his workers nor his customers — is the wiser.