The Real Movement

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Tag: i.i. Rubin

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”: 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.

Schrodinger’s Capital: The fatal defect of the value-form

NOTE 3: The concrete is always concrete

I pointed out in my last note that the value-form school places great stock in Marx’s question:

“why [is] labour … represented by the value of its product and labour time by the magnitude of that value”?

Marx’s argument seems to be this occurs because the productive activity of the total labor power of society is not regulated by the producers. The value-form school, however, provides another reading of Marx’s question:

“how [do] people’s productive relations find their expression in value.”

reificationWith Marx, it appears the nub of the problem lies with the lack of conscious organization of social production. But with the value-form school, the problem lies elsewhere: the process by which unregulated private productive activity becomes social. In either case we begin with a common social fact: the existing organization of the total labor power of society in which producers carry on their productive activity through exchange of commodities.

Marx asks WHY the total labor power of society manifests itself as the value of its product. The value-form school asks HOW the total labor power of society manifests itself as the value of its product.

We already have Marx’s answer: the total labor power of society manifests itself as the value of its product, because the productive activity of the total labor power of society is not regulated by the producers whose powers they are.

The necessary form of appearance…

This answer is inadequate for the value-form school, because they think Marx does not explain the process by which concrete, particular, useful labors are reduced to identical units of abstract homogenous labors. This, they argue, requires an appreciation for the role of the value-form, of money. According to Rubin, use values are reduced to abstract labor values by being universally compared to one and the same use value by the producers of a commodity producing community.

If this is true, we have a real theoretical problem. Since neither the individuals nor their products carry any information about the values of their commodities, this information cannot be transferred between them through an exchange of the commodity for a money commodity.

I have no information regarding the socially necessary labor time required to produce my commodity and neither does anyone else. Moreover, this information is not contained in my commodity nor in the commodity of any other producer. Even commodities like gold or silver have no information on their socially necessary labor times. They, like all commodities, are simply concrete, particular, use values and the product of concrete, particular useful labor.

In a commodity producing society, the critical information regarding the productive activity of individual producers is carried only in their actual living material relations of production. The information is not carried by individuals, nor does it appear in their products in a manner the information can be gleaned by the individuals. This suggests the productive activity of the individual producers always remains concrete, particular and useful; and the products of their labors always remain concrete, particular use values.

All of the above is true not just at the dawn of the epoch of commodity production and exchange, but remains so today. None of the labor expended today is inherently ‘value producing labor’; nor are any of the products of labor intrinsically ‘values’.

Commodities are the product of concrete, particular, useful labor and are themselves concrete, particular use-values. They can never be anything but concrete, particular use values and have no capacity to become abstract, homogenous and identical values. Nor is there any technology, application of scientific knowledge or material process by which human beings can turn use values into values. (If the above were not true, alchemy would be a branch of industry, not a mediaeval superstition. No one can turn a base metal like lead into gold and no one can turn a pair of shoes or an apple into values.)

The value-form is itself concrete

The exchange of an ordinary commodity for the money commodity, however, has the same defect that is found in the exchange of use values in general: Each use value is incommensurable with others. It does not matter that, in place of the exchange of many separate use values with many other use values — e.g., apples for pitchforks, shoes for hats, cars for houses — all use values are exchanged for one money commodity. Either in the case where many commodities are being exchanged for many other commodities or all commodities are exchanged for a money commodity, the problem is the same: Each use value — the apple, the pitchfork, the shoes, the hats or the gold coin — is a concrete, particular, useful object that is qualitatively unique and satisfies a qualitatively unique need. None of the concrete labor going into each can be compared to the concrete labors of the others.

In labor theory, no use value can be compared to another qualitatively different use value, because they are not commensurable — and this must be true even if one of the commodities in the exchange serves as the universally recognized money in the community.

Even if we concede to the value-form school that abstract labor requires a money, they still must explain how money, a concrete, particular use-value, accomplishes this. How does replacing all of the use-values on one side of the exchange equation with a single use-value solve the problem that concrete labor times of none of the use-values can be compared.

Information is embedded in relations, not commodities

Marx’s theory suggests the productive activities of commodity producers are being coordinated by information they do not themselves possess and which is not contained in the products of their activities. While this might seem bizarre, it is not. It is actually a principle found in quantum theory.

According to The Complete Idiot’s Guide to String Theory:

“Objects can become coordinated and only then acquire specific properties. … relationships between objects can embody information that the individual objects do not.”

While various prequantum theories assumed the state of a particle was determined by its specific properties, quantum theory shows this is not true. In quantum theory, the behavior of a particle is coordinated with the behavior of other particles first and only later does the particle acquire the specific property.

This is exactly the process labor theory proposes for the emergence of value: Producers enter into material relations of cooperation first, and the products of their labor only later comes to express those relations of dependence. Contrary to the argument of the value-form school, it is not money that makes value possible, but the pre-existing productive cooperation of producers of commodities that makes money necessary.

Since the problem identified by Marx at the outset is the lack of conscious organization of social production, this cannot be fixed by money. Money itself is only the visible expression of the lack of conscious organization of social production.

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

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?

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Abstract Labor and the Puzzle of Unproductive Labor

Value-form theorists love to repeat a statement of Marx that seems to have been first marked by Rubin in the 1920s.

“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.”

Says Rubin,

“The concept of labour must be defined in such a way that it comprises all the characteristics of the social organisation of labour, characteristics which give rise to the form of value, which is appropriate to the products of labour.”

As the name implies, the value-form school places great emphasis not simply on the value of commodities and the magnitude of value, but also on the appearance value takes in a commodity producing society. Rubin argues “that value arises not only from the substance of value (i.e. labour) but also from the ‘form of value’”

This argument resonates with a very large body of labor theorists today because of one simple fact: What we today call money is a valueless token issued by the fascist state and controlled by it through its laws and central banks.

This fact suggests Marx fundamentally misunderstood a critical category of the capitalist mode of production. Since the movement of capital begins and ends with money, you cannot misunderstand money without misunderstanding both the beginning and end of the movement of capital itself.

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