The Real Movement

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Tag: David Harvey

Schrödinger’s Capital: How Marxists missed the biggest story of the last 45 years

NOTE 11: What the fuck happened to wages?

This is what US price inflation looks like from 1913 to 2012 according to Bureau of Labor Statistics (BLS).

Consumer Price Index 1913-2012 (BLS Series Id: CUUR0000SA0)

Consumer Price Index 1913-2012 (BLS Series Id: CUUR0000SA0)


This is what the change in the standard of prices (gold) look like over the same period:

Gold price standard - 1913-2012 (

Gold price standard – 1913-2012 (

I would like to you to see what happens when I set these two measures of depreciating dollar purchasing power side-by-side

CPI versus Gold measure of dollar purchasing power depreciation - 1913-2012

CPI versus Gold measure of dollar purchasing power depreciation – 1913-2012

One of these measures of dollar purchasing power depreciation is lying. Can you guess which one it is?

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Schrödinger’s Capital: Why the value-form school never publishes supporting empirical data on money

NOTE 10: What is the value of empirical evidence?

According to Arthur (2003):

“The primary function of gold money is to ‘posit the presupposition’ that commodities count as values.   This it does in virtue of the price-form, not because as a material body it has any such magical powers.   So a substitute material may be found in paper, if this is granted forced circulation by the State,   and hence acquires the key determination of immediate exchangeability.”

Money, according to Arthur, plays a purely symbolic role in that it introduces the assumption use values in a commodity producing   community are values. The use values become values because they are exchanged for the value-form, money, not because they contain any intrinsic value. What the prices (exchange values) of commodities tell us is that the object has been exchanged for a money, nothing more.

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“Schrödinger’s Capital”: The neoclassical core of the value-form argument

NOTE 9: Value equals price?

Marx makes a pretty simple argument in Capital: In any exchange, the only property a commodity has in common with any other commodity is that it is a product of labor. The values of the commodities consists of an expenditure of homogenous human labor power.

Later (in chapter six), Marx defines labor power this way:

“By labour-power or capacity for labour is to be understood the aggregate of those mental and physical capabilities existing in a human being, which he exercises whenever he produces a use-value of any description.”

For some odd reason, Marx only actually says what he means by the term, human labor power, in chapter six. But, okay. What he means by the term “labor power” is the “capacity for labor”. And this must be emphasized: labor power, or labor capacity is not actual labor, which latter is always concrete. So far as I can tell, human beings do not labor in the abstract any more than any other animal.

The total capacity for labor of a commodity producing community, or its total labor power, however, is the aggregate mental and physical capabilities they possess.

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Schrödinger’s Capital: Chris Arthur explains why inconvertible fiat is as ‘good as gold’

NOTE 7: Why the value-form school carefully avoids empirical proof of its claims

In his 2003 paper, Money as Measure of Value, Arthur seems to recognize the obvious fact that, taken in isolation, commodities do not possess a value property in the same way they possess physical properties like weight, mass, chemical composition and spatial dimensions.

schroedingers_catOf course, this was the whole point of the first few paragraphs of chapter 1 of Capital. There, Marx argues, try as we might, no amount of physical decomposition of a use value will find even an atom of value. The value of commodities is not a property they individually possess, as they might possess weight, mass, chemical properties or spatial dimensions; rather, the property of value arises solely from the social context within which the use value is produced.

Thus, the reason why we can’t see the values of commodities is because these values are the manifestation of social relations of production, not a physical property of the objects. In this sense, Arthur’s argument is a welcome advance over the vulgar reading of Marx where it is sometimes assumed each commodity actually contains a substance called value. Again, following Marx, Arthur explains that money is the only adequate form of exchange value: it is the only way the value (i.e., social properties) of commodities can appear to us.

And then, inexplicably, Arthur goes weird on us.

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“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.

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“Schrödinger’s Capital”: How is concrete labor actually reduced to abstract labor?

NOTE 4: What accounts for the value attribute of the commodity?

If concrete labor is always concrete, what accounts for the reduction of concrete labor to abstract labor?

There should be no question that the value-form theory approach to the origin of the value attribute of commodities and Marx’s approach are not the same theoretically. This requires an explanation from the advocates of value-form theory.

To be sure, the problem is not that the value-form school disagrees with Marx: so far as I can tell everybody and their mommas disagree with Marx. In fact, these days, you have to explain why you don’t disagree with Marx.

Instead the problem is both practical and theoretical: If the values of commodities is not the manifestation of the total labor power of society as Marx argues, the value-form school must offer a plausible explanation for how the products of concrete, particular, useful labor carried on by individual producers in isolation are reduced to abstract homogenous labor values through money and exchange.

In particular, the value-form school must provide the answers to three big questions avoided by modern economics:

  • How is concrete labor reduced to abstract labor?
  • Where is this reduction accomplished?
  • What is the evidence the reduction has taken place?

To give an analogy drawn from quantum mechanics: In quantum theory we have the difficult scientific problem that the properties (or state) of particles are apparently instantly coordinated across vast distances. How this coordination of the state of particles is accomplished is not known; faster than light communication between widely separated particles cannot occur, so far as we know. This poses a difficult problem for physics because it points to an event occurring at the level of the individual particle that appears to have no known cause. That the a coordinated change in the properties of widely separated particles occurs is without question, yet we presently have no plausible mechanism to explain it.

In a similar vein labor theory as described by the value-form school suffers a defect that the property of the commodity appears to mysteriously undergo a qualitative transformation from a mere concrete particular use value to an abstract homogenous labor value as it exits individual production and enters into intercourse within the larger community. Value-form school theory has offered no explanation (nor even a speculative mechanism) by which an expenditure of concrete particular useful labor is reduced to abstract homogenous labor as the value-form school insists happens.

Concrete useful labor is expended in millions of ways that are incommensurable with one another. These labors result in products of labor, commodities, that have the same qualities as the labor that produced them. Yet, we are told, once exchanged in the world market, value-form theory says each commodity is now identical and indistinguishable from every other commodity as is required by labor theory; the unique and useful qualities of the commodities are somehow reduced to abstract values as they are passed from one individual producer to the next.

If this reduction really is taking place, and is not simply a mental construct, the value-form school must explain the mechanism by which this is accomplished.

It’s okay, we can wait for for you value-form theorists to come up with a plausible explanation. Just don’t expect us to forget you haven’t given us one — yet.

David Harvey: “As if this is actually occurring through world trade.”

Marx proposed that value was not an attribute of the commodity itself, but a manifestation of the total labor power of society. However, according to David Harvey, in his Companion to Capital, Marx was actually tacitly relying on a mechanism he (Marx) did not admit to: “To speak of ‘the total labour-power of society'”, says Harvey, “is tacitly to invoke a world market that has been brought into being under a capitalist mode of production.”

“It is on this dynamic global terrain of exchange relations that value is being determined and perpetually redetermined. Marx was writing in a historical context where the world was opening up very fast to global trade, through the steamship, the railways and the telegraph. And he understood very well that value was not determined in our backyard or even within a national economy, but arose out of the whole world of commodity exchange. But he here again uses the power of abstraction to arrive at the idea of units of homogeneous labor, each of which “is the same as any other, to the extent that it has the character of a socially average unit of labour-power and acts as such;’ as if this reduction to the value form is actually occurring through world trade.”

Indeed, Marx does appear to make just this sort of argument, not in Capital, but in his 1851 work, Reflections on Money. (NOTE: You won’t be able to find this essay at anymore, because the fascists have claimed it as their intellectual property. However, it can be found if you look hard enough.) In that essay, Marx argues, the prices of commodities are determined by world trade.

“[The] trade between dealers and dealers in England, for example, is by no means circumscribed by the trade between dealers and consumers in England, but more or less by that between dealers and consumers on the world market as a whole. For instance, the India Company or East India merchants send indigo to the London market. There it is auctioned. This is a transaction between dealers and dealers. The purchaser of the indigo sells part of it in France, Germany, etc., where it is bought by various dealers and manufacturers. Whether they will in the end recover the price of the indigo, will depend on how the final product is sold to the consumer, who lives perhaps on the Ionian Islands or in Afghanistan or in Adelaide”

Here Marx gives the example of a single commodity and how its price is determined by far-flung transactions within the world market, just as Harvey argues. What Harvey fails to note, however, is the level of the discussion at which Marx engages the role of the world market in labor theory. If the value-form school’s argument is accepted, Marx is only considering the exchange of simple use values and of prices, which are themselves denominated in a simple use value, gold or another commodity.

Where does the reduction of the indigo and the gold to abstract labor values take place? When the indigo was gathered in India for sale? When it was auctioned in England? When it was used in production in Germany? When it was sold to the end user in Afghanistan? Specifically, how did this reduction from a concrete use-value to an abstract labor value take place? What evidence do we have for this reduction?

To be absolutely precise, according to the value-form school, Marx is stating the price of indigo is determined by far-flung transactions within the world market. But the price of any commodity is only the worth of that use value expressed in the form of another, universally recognized, equivalent use value, a money commodity. Taken by themselves, neither the indigo nor the money in the trade have any identifiable material property of value in their composition. Each use value left production and entered into commercial relations as the product of the expenditure of concrete, useful labor.

To be absolutely clear on this point, in value-form theory it does not matter whether we are talking about the exchange of use values between two individual commodity producers or the highly sophisticated trade of the world market where a good produced in India is auctioned in England to be used in production in Germany for sale in Afghanistan. In either case, we are simply talking about the exchange of one inert use value having no abstract labor value attributes for another inert use value having no abstract value attributes.

Even when we introduce the assumption that what is now taking place is a succession of serial exchanges of the commodity before its final consumption, nothing obvious has changed qualitatively. Indeed, in the case of the money commodity in the exchanges — a gold coin, for instance — a succession of exchanges is already a characteristic and unique attribute, since the money commodity is never consumed, but simply changes hands. For all this, the gold coin still remains a use value, an inert piece of metal, serving as universally recognized means of exchange. No matter its function in the world market, the coin contains no detectable quantity of abstract labor value.

Although so highly prized in a community of commodity producers like our own that the gold coin is locked in a safe, in a communist community of the future someone would pick it off the street and toss it into the recycle bin with other metals. It would be nothing more than an object to recycle or, at most, a quaint peculiar totem of a long dead mode of production.

This is the point of Marx’s discussion of the fetish of commodities and the inability of political economy to understand the social nature of the commodity springs not from the characteristics of the use value itself, but from its social context in a community of commodity producers where the historically specific configuration of the total labor power of society (the division of labor) already determines the abstract labor attributes of the product of labor.

Operating at the level of superficial economic relations of the market, political economy never demonstrated precisely what had to be shown: the jump that must take place in a product of labor from use value to abstract labor value, nor when and where this jump occurs. Likewise, no value-form theorist has ever shown an actual process by which concrete labor is reduced to abstract labor. If this reduction or leap is actually taking place in reality and not simply in the minds of Marxist theorists it must be demonstrated.

Next, we will see how Chris Arthur tries to finesse this problem.

Can the state prevent the collapse of capitalism by printing currency?

Tom Cutterham seems to believe to the answer to that question is, Yes. Cutterham’s review of Paul Mason’s book, Postcapitalism — Forget Wikipedia — is a common enough response by some activists to any mention of communism:

“Again and again, those who predicted imminent collapse were proved wrong. There were always new ways for the system to adapt to its inherent contradictions and crises, always new markets to pry open and new forms of labour to exploit.”

Capitalism, this argument goes, is apparently capable of almost infinite adaptation. The response usually does not deny that capitalism is prone to crises, nor that these crises may trigger some political event like a social revolution. However short of a social revolution, (triggered usually by an alteration of consciousness secondary to a crisis), there is nothing inherent in capitalism driving it toward its self-annihilation.

The current iteration of this argument, which among Marxists seems to date back to Tugan-Baranowsky, is now defended by the value-form school and almost all Marxists today. This school includes very influential Marxist writers like Michael Heinrich in Germany, John Milios in Greece and David Harvey in the United States.

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Spinning Marx in His Grave: How David Harvey got rid of labor power in his unfaithful Companion

Part two

In part one of this series I emphasized the highly irregular, even dishonest, methods David Harvey employs in his introduction to Marx’s Capital, A Companion to Marx’s Capital. In particular, I called attention to Harvey’s use of the terms “a priori” and “cryptic” to characterize how Marx handles the fundamental categories of political economy, the critique of which is the project Marx undertook by writing Capital.

jeswal_dylan-minerSince Capital is a critique of the theories of Marx’s contemporaries, it is not surprising that he begins with the categories already in place at the time he wrote his book. Harvey is essentially criticizing Marx for subjecting the categories of political economists like Ricardo, Malthus, Barbon, Mills and others to critical analysis, when this is precisely the project Marx had in mind when he began writing Capital.

When, for instance, Harvey criticizes Marx for making the ‘a priori’ assertion that the labor time required to produce commodities lay behind their exchange values, Harvey knows, or should know, that Marx is actually dismissing the argument of one school of political economists who claimed the values of commodities were expressions of their utility, i.e., of their capacity to satisfy human needs.

It is rather puzzling Harvey would call Marx’s argument that labor, not utility, gives commodities their values an  “a priori leap by way of assertion” unless he has another candidate for the job. In this part I will show that this is just Harvey’s motivation. Harvey does not think either labor or utility gives commodities their values; rather, Harvey is of the school that believes value itself is impossible until money has already emerged.

In Marx’s argument, money is just another commodity, while the value-form school believes value arises from exchange, not production. Thus exchange is necessary to reduce concrete particular use values into commodities. Knowingly or not, Harvey’s “Companion to Marx’s Capital” is a polemic against Marx’s Capital on behalf of the value-form school.

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Cuckolding Marx: David Harvey’s ‘Unfaithful Companion’ to Capital

Part One

People often ask me what current books I recommend to help them understand Marx’s Capital. My answer to this is almost always the same. There is to my understanding no book out there written by anyone I know that accurately presents Marx’s argument except his own book, Capital.

How is it that almost 150 years after the publication of Capital is there not a simple and accurate popularization of his fundamental ideas that I can point to? This can’t be because of the complexity of his ideas. Einstein’s theory is no less complex than Marx’s, but you can find many good and accurate popularizations of his fundamental theories. I don’t know anyone who has ever read Darwin’s Origin of Species, yet there are many good and accurate popularizations of Darwin’s ideas. The same can be said of Freud.

Most of the great scientific discoveries of the 19th century are now widely understood by everyone in society. What is it about Marx’s ideas that make them so resistant to accurate and simple popularization? My answer to this is that I really do not know.

My hesitation in recommending books that might help folks understand Marx’s argument in Capital is probably best exemplified by a close reading of a section of one of the most popular books and lecture series in circulation today: David Harvey’s Companion to Marx’s Capital. As I will show, this “companion” is anything but faithful to Marx’s argument.

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John Milios’s strange explanation of capitalist crises

I have been reading this paper by John Milios, a SYRIZA party economist, “Marxist approaches to economic crises”. The paper is interesting in that Milios is trying to advance an alternative hypothesis of the cause of capitalist crises that avoids both underconsumptionist explanations of crises and the argument that they are produced by the law of the tendency of the rate of profit to fall.

Among Marxists particularly those with only passing familiarity with Capital the underconsumptionist explanation for crises is quite popular. Of late that school has been challenged by folks like Andrew Kliman and others who claim crises are caused by the tendency of the rate of profit to fall. Milios is advancing what he says is a third explanation for capitalist crises in which the crisis may be caused by any number of situations.

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