Value-form

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General definition

The value-form or form of value is a concept in Karl Marx’s critique of the political economy.[1] It refers to a socially attributed characteristic of a commodity (any product traded in markets) which contrasts with its tangible use-value or utility (its "useful form" or "natural form").

The concept is introduced in the first chapter of Das Kapital[2] where Marx argues economic value becomes manifest in an objectified way only through the form of value established by the exchange of products. In other words, what something is economically "worth" can be expressed only relatively, by relating, weighing, comparing and equating it to amounts of other tradeable objects (or to the labour effort or sum of money which those objects represent).[3]

The "problem" of a form-analysis of value

The question that Marx's value-form analysis intends to answer, is essentially how the value of products is expressed in ways which acquire an objective existence in their own right (ultimately as money), and how these product-values can change, quite independently of the valuers who trade in them.[4] Marx argued that neither the classical political economists nor the vulgar economists who succeeded them were able to explain satisfactorily how that worked, resulting in serious theoretical errors. Marx's idea can be traced back to his 1857 Grundrisse manuscript where he contrasted communal production with production for exchange.[5] Marx notes in Das Kapital that:

"It is one of the chief failings of classical political economy that it has never succeeded, by means of its analysis of commodities, and in particular of their value, in discovering the form of value which in fact turns value into exchange-value."[6]

Similarly, in vulgar (or vulgar Marxist) economics, the commodity is simply a combination of use-value and exchange-value. That is manifestly not Marx's own argument at all.[7] As he explains in Capital, Volume III, business competition among producers centres precisely on the discrepancies between the socially established value of commodities and their particular exchange-value.[8] Marx believed that correctly distinguishing between the form and content of value was essential for the logical coherence of the labour theory of value,[9] and he criticized Adam Smith specifically because Smith:

"...confuses the measure of value as the immanent measure which at the same time forms the substance of value [i.e. labour-time], with the measure of value in the sense that money is called a measure of value. With regard to the latter, the attempt is then made to square the circle — to find a commodity whose value does not change, to serve as a constant measure for others. On the question of the relation of the measure of value as money to the determination of value by labour-time, see the first part of my work. This confusion is also to be found in [David] Ricardo in certain passages."[10]

Althusserian interpretation

The value-form is often regarded as a difficult, obscure or even esoteric idea by scholars, and there has been considerable debate about its real theoretical significance. Mark Blaug stated: "The reader will miss little by skipping over the pedantic third section of chapter 1 on which the hands of Hegel lie all too heavily."[11] In his "Preface to Capital Vol. 1," the French philosopher Louis Althusser asserted:

"The greatest difficulties, theoretical or otherwise, which are obstacles to an easy reading of Capital Volume One are unfortunately (or fortunately) concentrated at the very beginning of Volume One, to be precise, in its first Part, which deals with ‘Commodities and Money’. I therefore give the following advice: put the whole of Part One aside for the time being and begin your reading with Part Two..."[12]

Althusser's suggestions were taken up by many Marxists.[13] However, Marx not only very deliberately and explicitly made an effort to state his interpretation of commodity trade with absolute clarity in his first chapters; it is also essential to understand all the rest, and that is exactly why Marx stated it at the beginning.[14]

Academic difficulties

Probably the difficulty Marxist academics have had with Marx's own text is because, abstractly, economic value refers at the same time to quantitative and qualitative dimensions, which can be stated according to both absolute and relative criteria, and expressed as:

From the use of the expression "value" it may therefore not be immediately obvious what kind of valuation or expression is being referred to, it depends on the theoretical context.[15] Marx himself rarely if ever defended his finished theory of value in scientific debate, and left it to his followers to clarify issues and problems in his unfinished manuscripts. Because he uses the term "value" somewhat differently in different contexts, academic disputes arise about what exactly he meant.[16]

In addition, official economics typically takes it for granted that the exchange processes on which markets are based already exist and will occur, and that prices already exist, or can be imputed. This assumption is overturned only there where markets still have to be brought into being. In modern economics, the "value" of something is defined either as a money-price, or as a personal (subjective) valuation.

According to orthodox economics, money originates as a medium of exchange to minimize the transaction costs of barter among utility-maximizing individuals. Such an approach is very different to Marx's historical interpretation of the formation of value. In Marx's theory, the "value" of a product is something separate and distinct from the "price" it happens to fetch (goods can sell for more than they are worth, or less, i.e. they are not necessarily worth what they happen to sell for).[17]

Value-form and commodity fetishism

The theory of the forms of value is the basis for Marx's concept of commodity fetishism, which concerns how the independent power acquired by the value of tradeable objects is reflected back into human thought, and more specifically into the theories of the political economists about the market economy.

It is a very basic insight of all economics, that human valuations have their origin in people's ability to prioritize and weigh up behavioural responses according to self-chosen options. That is indeed the conceptual basis of the "self-interested, utility-maximizing economic actors" used in economic models.

But things become more complicated, because the "things" endowed with value gain a "life of their own". They begin to act in their own right, compelling people to adjust their behaviour to market trends which they are no longer in control of. Not only does it begin to seem like "the tail wags the dog", but the tail may indeed wag the dog. The way that economic cause and effect observably appear to the individual, may - according to Marx - be the exact inverse of the real economic process, considered in its totality. This has a profound influence on economic theorizing, in its attempt to unravel the true relationship between economic causes and effects.

Basic explanation

Marx initially defines a product of human labour which has become a commodity (in German: Kaufware, i.e. merchandise, ware for sale) as being simultaneously:

The “form of value” (a reference to phenomenology in the classical philosophical sense used by Hegel) then refers to the specific ways of relating through which “what a commodity is worth” happens to be socially expressed in trading processes, when different products and assets are compared with each other. Practically speaking, Marx argues that the product values cannot be directly observed and can become observably manifest only as exchange-values, i.e. as relative expressions, by comparing their worth to other goods they can be traded for. This causes people to think value and exchange-value are the same thing, but Marx argues they are not; the content, magnitude and form of value must be distinguished, and according to the law of value, the exchange value of products being traded is determined and regulated by their value.

Historical change

Marx argues that the form of value is not "static" or "fixed once and for all", but rather, that it develops logically and historically in trading processes from very simple, primitive expressions to very complicated or sophisticated expressions. Subsequently he also examines the various "forms" taken by capital, the "forms" of wages, and so forth. In each case, the "form" denotes how a specific social or economic relationship among people is expressed or symbolized.

Initially, in primitive exchange, the form that economic value takes does not even involve any prices, since what something is "worth" is very simply expressed in (a quantity of) some other good (an occasional barter relationship). In the earliest forms of exchange of goods, Marx says,

"Custom fixes their values at definite magnitudes... At this stage, therefore, the articles exchanged do not acquire a value-form independent of their own use-value, or of the individual needs of the exchangers".[18]

But at the most abstract, developed level, the value form is only a purely monetary relationship between objects, or an abstract earnings potential or credit provision based on some assumptions, which may not even refer to any tangible object of trade anymore at all. At that point, it appears that the value of an asset is simply the amount of income which could be obtained if the asset was traded under certain conditions.

Social relations

By analyzing the value-form, Marx aims to show that when people bring their products into relation with each other in market trade, they are also socially related in specific ways (whether they like it or not, and whether they are aware of it or not), and that this fact very strongly influences the very way in which they think about how they are related.[19] It influences how they will view the whole human interactive process of giving and receiving, taking and procuring, sharing and relinquishing, accepting and rejecting - and how to balance all that. For example, Marx writes a bit theatrically:

"We will discover in the progress of our inquiry, that the economic character masks ["Charaktermasken" in the German original] of persons are only the personifications of economic relationships, where persons face each other as their bearers. Namely, what distinguishes the commodity owner from the commodity is the circumstance that every other commodity counts for each commodity only as the appearance-form of its own value. A born leveller and a cynic, the commodity is constantly ready to exchange not only soul, but body, with each and every other commodity... The owner makes up for this lack in the commodity of a sense of the concrete, physical body of the other commodity, by his own five and more senses (...) commodities must be realized as values before they can be realized as use-values. On the other hand, they must stand the test as use-values before they can be realized as values.(...) In their difficulties, our commodity-owners think like Faust: 'In the beginning was the deed'. Thus they act already before they have thought it out."[20]

Thus, the value-form of products does not merely refer to a “trading valuation of objects”; it refers also to a certain way of relating or interacting, and a mentality, among human subjects who internalize the value-form, so that the manifestations of economic value become regarded as completely normal, natural and self-evident in human interactions (a "market culture" which is also reflected in language use). Marx's slightly surreal description of what goes on in commodity exchanges highlights not only that value relationships appear to exist between commodities quite independently of the valuers, but also that people accept that these relationships exist even although they do not understand exactly what they are, or why they exist at all. They often participate in markets without knowing much at all about how they work.

Objectification

Marx’s argument is that in order to be able to trade, people must objectify (objectively express) the value of goods produced, but it turns out that, in doing so, they are actually also objectifying and comparing the value of their own labour-efforts. Most abstractly, the quantities of money for which products are traded express claims to quantities of society's labour in general, or “abstract labour”. So by equating and comparing the value of their products in exchange, people at the same time equate and compare the value of their labour efforts, even if they are completely unaware of that; and what a product is worth becomes dependent on, and changes according to, what other products are worth, even regardless of subjective evaluations of what the product is worth.

This objectification process has two main effects:

The combination of (1) and (2) mean that regardless of how one happens to think or choose, one must necessarily conform to the structure of value relations which exists in capitalist society, quite independently of one’s will or awareness. It is not that value relations are “only objective” or “only subjective” (value relations obviously could not exist at all, without humans making and accepting valuations, whether explicitly or implicitly) but rather that the objectification of value becomes a tangible, practical reality that one simply cannot get away from. A relationship is established between things which, although it originates in human valuations, escapes from the control of individuals, groups and nations.

Textual sources

Marx’s explanation of the value-form originated in his Grundrisse manuscripts, and in ideas expressed his 1859 book A Contribution to the Critique of Political Economy, which failed to sell many copies. It is already clearly evident in his manuscript of Theories of Surplus Value (1861–63). Marx first explicitly described the concept in an appendix to the first (1867) edition of Das Kapital,[21] but this appendix was dropped in a second edition, where the first chapter was rewritten to include a special section on the value-form at the end.

In a preface to the first edition of Das Kapital, Marx stated

"I have popularised the passages concerning the substance of value and the magnitude of value as much as possible. The value-form, whose fully developed shape is the money-form, is very simple and slight in content. Nevertheless, the human mind has sought in vain for more than 2,000 years to get to the bottom of it…”[22]

Marx gives various reasons for this, but the main obstacle seems to be that trading relations refer to societal relations which are not necessarily observably manifest, and therefore can only be inferred or analyzed with the aid of highly abstract ideas. The quote clarifies that Marx thought that the value-form of commodities is not simply a feature of capitalism, but is associated with the whole history of commodity trade.[23]

According to Marx, the Greek philosopher Aristotle had already described the basics of the value-form when he argued[24]) that an expression such as "5 beds = 1 house" does not differ from "5 beds = such and such an amount of money", but according to Marx, Aristotle's analysis "suffered shipwreck" because he lacked a clear concept of value. By this Marx meant that Aristotle was unable to clarify the substance of value, i.e. what exactly was being equated in value-comparisons, or what was the common denominator commensurating different goods. Aristotle thought the common factor must simply be the demand for goods, since without demand for goods that could satisfy some need or want, they would not be exchanged. According to Marx, the substance of product-value is human labour-time in general, labour-in-the-abstract or "abstract labour". This value exists quite independently of the particular forms that exchange may take, though obviously value is always expressed in some form or other.

Marx argues that only when market production is highly developed, that it becomes possible to understand what economic value actually means in a comprehensive and theoretically consistent way, separate from other sorts of value (like aesthetic value or moral value). He states:

"The secret of the expression of value, namely the equality and equivalence of all kinds of labour because and insofar as they are human labour in general, could not be deciphered until the concept of human equality had already acquired the permanence of a fixed popular opinion. This however becomes possible only in a society where the commodity-form is the universal form of the product of labour, hence the dominant relation is the relation between men as possessors of commodities”.[25]

He discusses the notion of the formal equality of market actors more in the Grundrisse.[26] Marx admitted that the value-form was a somewhat difficult notion but he assumed “a reader who is willing to learn something new and therefore to think for himself.”[27] In a preface to the second edition of Das Kapital, Marx said that he had “completely revised” his treatment, because his friend Dr. Louis Kugelmann had convinced him that a “more didactic exposition of the form of value” was needed.[28]

The development of the value-form in the history of trading relations

Marx distinguishes between four successive steps in the process of trading products, i.e. in the circulation of commodities, through which fairly stable and objective value proportionalities (Wertverthaltnisse in German) are formed which express "what products are worth". These steps are:

These forms are different ways of symbolizing and representing what goods are worth, to facilitate trade and cost/benefit calculations. The simple value-form does not (or not necessarily) involve a money-referent at all, and the expanded and general forms are intermediary expressions between a non-monetary and a monetary expression of economic value. The four steps are an abstract summary of what essentially happens to the trading relationship when the trade in products grows and develops. The four steps are not necessarily an adequate literal description of what historically happens (see below).

Simple value-form

The simplest value-form expression can be stated as the following equation:

X quantity of commodity A is worth Y quantity of commodity B

where the value of X(A) is expressed relatively, as being equal to a certain quantity of B, meaning that A is the relative form of value and B the equivalent form of value, so that B is effectively the value-form of (expresses the value of) A. If we ask "how much is X quantity of commodity A worth?" the answer is "Y quantity of commodity B". This simple equation, expressing a simple value proportion between products, however permits of several variations, mutations, or possibilities of differences in valuation emerging within the circulation of products:

These possible changes in valuation enable us to understand already that what any particular product will trade for is delimited by what other products will trade for, quite independently of how much the buyer would like to pay, or how much the seller would like to get in return. Value should not be confused with price here, however, because products can be traded at prices above or below what they are worth (implying value-price deviations; this complicates the picture and is elaborated only in the third volume of Das Kapital). For simplicity's sake, Marx assumes initially that the money-price of a commodity will be equal to its value; but in Capital Vol 3 it becomes clear that the sale of goods above or below their value has a crucial effect on profits.

The main implications of the simple relative form of value are that:

But, Marx also argues that, at the same time, such an economic equation accomplishes two other things:

Effectively, a social nexus (a societal connection or bond) is established and affirmed via the value-comparisons in the marketplace, which makes relative labour costs (the expenditures of human work energy) the real substance of value. Obviously, some assets are not produced by human labour at all, but how they are valued commercially will nevertheless refer, explicitly or implicitly, directly or indirectly, to the comparative cost structure of related assets which are labour-products. A tree in the middle of the Amazon Rain Forest has no commercial value where it stands. We can estimate its value only by estimating what it would cost to cut it down, what it would sell for in markets, or what income we could currently get from it - or how much we could charge people to look at it. Imputing an "acceptable price" to the tree assumes that there already exists a market in timber or in forests which tells us what the tree would normally be worth.

Expanded value-form

In the expanded value-form, the equation process between quantities of different commodities is simply continued serially, so that their values relative to each other are established, and they can all be expressed in some or other commodity-equivalent. However, Marx argues that, as such, the expanded value-form is practically inadequate, because to express what any commodity is worth might now require the calculation of a whole “chain” of comparisons, i.e.

X amount of commodity A is worth Y commodity B, is worth Z commodity C … etc.

What this means is, that if A is normally traded for B, and B is normally traded for C, then to find out how much A is worth in terms of C, we first have to convert the amounts into B (and maybe many more intermediate steps). This is obviously inefficient if many goods are traded at the same time.

General value-form

The practical solution in trade is therefore the emergence of a general value-form, in which the values of all kinds of bundles of commodities can be expressed in amounts of one standard commodity (or just a few standards) which function as a general equivalent. The general equivalent has itself no relative form of value in common with other commodities; instead its value is expressed only in a myriad of other commodities.

\begin{bmatrix} either&A&amount&of&commodity&B\\ or,&C&amount&of&commodity&D\\ or,&E&amount&of&commodity&F\\ or,&G&amount&of&commodity&H\\ or,&J&amount&of&commodity&K\\ \end{bmatrix} = \begin{bmatrix} X&amount&of&commodity&Y\end{bmatrix}

In ancient civilizations where considerable market trade occurred, there were usually a few types of goods which could function as a general standard of value. This standard was used for value comparisons; it did not necessarily mean that goods were actually traded for the standard commodity.[32] In this sense, the "general value-form" fails to solve the practical problem that if trader A wants to trade X for Y, and trader B wants to trade Y for Z, no trade can occur at all unless e.g. a trader C can act as intermediary, and can trade Y for X, and Z for Y. In other words, people have to ensure that they have the right things to offer in exchange for what they want, because otherwise there is no deal; and they might have to receive back something in exchange that they don't want, but which they can later trade for something they do want. This rather cumbersome problem is solved with the introduction of money - the owner of a product can sell it for money, and buy another product he wants with money, without worrying anymore about whether the thing offered in exchange for his own product is indeed the product that he wants himself. Now, the only limit to trade is the development of the market, i.e. the extent to which products, services and assets are offered for sale as marketable things, rather than being things which according to law, custom and religion may not be traded.

Money-form of value

Just because quantities of goods can be expressed in amounts of a general equivalent, which acts as a reference, this does not mean that they can necessarily all be traded for that equivalent. The general equivalent may only be a sort of yardstick used to compare what goods are worth. Hence, the general equivalent form in practice gives way to the money-commodity which is a universal equivalent, meaning that (provided people are willing to trade) it possesses the characteristic of direct and universal exchangeability in precisely measured quantities.

\begin{bmatrix} either&A&amount&of&commodity&B\\ or,&C&amount&of&commodity&D\\ or,&E&amount&of&commodity&F\\ or,&G&amount&of&commodity&H\\ or,&J&amount&of&commodity&K\\ \end{bmatrix} = \begin{bmatrix} X&amount&of&money\end{bmatrix}

But for most of the history of human civilization, money was not actually universally used, partly because the prevailing systems of property rights and cultural custom did not allow many goods to be sold for money, and partly because many products were distributed and traded without using money. Also, several different "currencies" were often used side by side. Marx himself believed that nomadic peoples were the very first to develop the money-form of value (in the sense of a universal equivalent in trade) because all their possessions were mobile, and because they were regularly in contact with different communities, which encouraged the exchange of products.[33] When money is generally used in trade, money becomes the general expression of the value-form of goods being traded; usually this is associated with the emergence of a state authority issuing legal currency. At that point the value-form appears to have acquired a fully independent, separate existence from any particular traded object (behind this autonomy, however, is the power of state authorities or private agencies to enforce financial claims).

Commenting on the riddle of the money-fetish, Marx notes that:

"What appears to happen is not that a particular commodity becomes money because all other commodities universally express their values in it, but, on the contrary, that all other commodities universally express their values in a particular commodity because it is money. The movement through which this process has been mediated vanishes in its own result, leaving no trace behind. Without any initiative on their part, the commodities find their own value-configuration ready to hand, in the form of a physical commodity existing outside but also alongside them. This physical object, gold or silver in its crude state, becomes, immediately on its emergence from the bowels of the earth, the direct incarnation of all human labour. Hence the magic of money."[34]

According to Marx's theory of money,[35] the money-form of value (whether bullion, coinage, paper or money of account) fulfills a number of social functions at the same time:

  • It is a universal equivalent, which can in principle exchange for any product offered for sale.
  • It is a means of exchange, facilitating the circulation of commodities.
  • It provides a standard measure of value; a means of accounting for value; and it is the measuring unit of prices.
  • It is a universally accepted means of payment for goods & services rendered, and for debt obligations.
  • It is a means to store value owned, accumulate value, or form hoards of wealth.

Fiat money

Once the money-commodity (e.g. gold, silver, bronze) is securely established as a stable medium of exchange, symbolic money-tokens (e.g. bank notes and debt claims) which are issued by the state, trading houses or corporations can in principle substitute for the “real thing”, and this also usually happens, because it is cheaper and more efficient. At first, these "paper claims" (legal tender) are by law convertible on demand into quantities of gold, silver etc., and the circulate alongside precious metals. But gradually currencies are brought into use which are not so convertible, i.e. "fiduciary money" or fiat money which relies on social trust that people will honor their transactional obligations, and that this money will be able to claim goods, assets and services. These kinds of money rely not on the value of money-tokens themselves (as in commodity money), but on the ability to enforce financial claims and contracts, principally by means of the power and laws of the state, but also by other institutional methods. Eventually, as Marx anticipated in 1844, precious metals play very little role anymore in the monetary system.[36]

World money

The ultimate universal equivalent according to Marx is "world money", i.e. financial claims which are accepted and usable for trading purposes everywhere, such as bullion.[37] In the world market, the value of commodities is expressed by a universal standard, so that their "independent value-form" appears to traders as "universal money".[38] Nowadays the US dollar,[39] the Euro, and the Japanese Yen, the currencies of the world's richest and most powerful economies, are widely used as "world currencies" providing a near-universal standard and measure of value. They are used as a means of exchange worldwide, and consequently most governments have significant reserves or claims to these currencies. Nowadays the International Monetary Fund also operates a special fund of world reserve currency, which can be used internationally to augment liquidity, but this isn't used on any very large scale.

In summary

It is important to note that Marx's four steps in the development of the value-form are mainly an analytical or logical progression, which may not always conform to the actual historical processes by which objects begin to acquire a relatively stable value and are traded as commodities.[40] Three reasons are:

It is just that, typically, what the socially accepted value of a wholly new kind of object will be, requires the practical "test" of a regular trading process, assuming a regular supply by producers and a regular demand for it, which establishes a trading "norm" consistent with production costs. A new object that wasn't traded previously may be traded far above or below its real value, until the supply and demand for it stabilizes, and its exchange-value fluctuates only within relatively narrow margins (in official economics, this process is acknowledged as a form of price discovery).[41]

General implications of the value-form analysis

To summarize, the development of the value-form through the growth of trading processes involves a continuous dual equalization & relativization process:

Six main effects

Six main effects of this are:

Generalized commodity production

Capital existed in the form of trading capital already thousands of years before capitalist factories emerged in the towns; its owners (whether rentiers, merchants or state functionaries) often functioned as intermediaries between commodity producers. They facilitated exchange, for a price. Marx defines the capitalist mode of production as “generalized commodity production”, meaning that most goods and services are produced primarily for commercial purposes, for profitable market sale. This has the consequence, that both the input and the output of production become tradeable objects with prices, and that the whole of production is reorganized according to commercial principles. Whereas originally commercial trade occurred episodically at the boundaries of different communities, Marx argues,[42] eventually commerce engulfs and reshapes the whole production process of those communities.

In turn, this means what whether or not a product will be produced, and how it will be produced, depends not simply on whether it is physically possible to produce it or on whether people need it, but on its financial cost of production, whether a sufficient amount can be sold, and whether its production yields sufficient profit income. That is why Marx regarded the individual commodity, which simultaneously represents value and use-value as the "cell" (or the "cell-form") in the "body" of capitalism. The seller primarily wants money for his product and is not really concerned with its consumption or use (other than from the point of view of making sales); the buyer wants to use or consume the product, and money is the means to acquire it. Thus the seller does not aim directly to satisfy the need of the buyer, nor does the buyer aim to enrich the seller. Rather, the buyer and the seller are the means for each other to acquire money or goods. As a corollary, production becomes less and less a creative activity to satisfy human needs, but simply a means to make money or acquire access to goods and services.

Reification

The concept of the value-form as an aspect of the commodity form is intended to show how, with the development of commodity trade, anything which has a utility for people (a use-value) can be transformed into a quantity of abstract value, objectively expressible as a sum of money; but, also, how this transformation changes the organization of labour to maximize its value-creating capacity, how it changes social interactions and the very way in which people are aware of their interactions.

However, the quantification of objects and the manipulation of quantities ineluctably leads to distortions (reifications) of their qualitative properties. Albert Einstein is supposed to have remarked[43] that "Not everything that can be counted counts, and not everything that counts can be counted." For the sake of obtaining a measure of magnitude, it is frequently assumed that objects are quantifiable, but in the process of quantification, various qualitative aspects are conveniently ignored or abstracted away from. Obviously the expression of everything in money prices is not the only valuation that can, or should, be made.

Essentially, Marx argues that if the values of things are to express social relations, then, in trading activity, people necessarily have to "act" symbolically in a way which inverts the relations among objects and subjects, whether they are aware of that or not. They have to treat a relationship as if it is a thing in its own right. In an advertisement, a financial institution might for example say "with us, your money works for you", but money does not "work", people do. A relationship gets treated as a thing, and a relationship between people is expressed as a relationship between things.

In Postmodernist culture, this inversion is acknowledged, but an explicit attempt is made to recognize the social relationship involved and its meaning for Self and Other; the idea is that, in so doing, an otherwise impersonal, estranged or superficial trading contact can be "humanized". The question remains how one can know that this attempt is authentic and what its real motivation is.

Commodification

The total implications of the development of the value-form are much more farreaching than can be described in this article, since (1) the processes by which the things people use are transformed into objects of trade (often called commodification, commercialization or marketization) and (2) the social effects of these processes, are both extremely diverse. A very large literature exists about the growth of business relationships in all sorts of areas. For capitalism to exist, markets must grow, but market growth requires changes in the way people relate socially, and changes in property rights. This is often a problem-fraught and conflict-ridden process, as Marx describes in his story about primitive accumulation.

Value-form and price-form

In his story, Marx defines "value" simply as the ratio of a physical quantity of product to a quantity of average labour-time, which is equal to a quantity of gold-money (in other words, a scalar):

X quantity of product = Y quantity of average labour hours = Z quantity of gold-money

He admits early on, that the assumption of gold-money is a theoretical simplification,[44] since the buying power of money units can vary due to causes which have nothing to do with the production system (within certain limits, X, Y and Z can vary independently of each other); but he thought it was useful to reveal the structure of economic relationships involved in the capitalist mode of production, as a prologue to analyzing the motion of the system as a whole; and, he believed that variations in the buying power of money did not alter that structure at all, insofar as the working population was forced to produce in order to survive, and in so doing entered into societal relations of production independent of their will; the basic system of property rights remained the same.

As any banker or speculator knows, however, the expression of the value of something as a quantity of money-units is by no means the “final and ultimate expression of value”.[45]

In Capital Volume 3, which he drafted before Volume I, Marx shows he was well aware of this. He distinguished not only between "real capital" (physical, tangible capital assets) and "money capital", but also noted the existences of "fictitious capital" and "pseudo-commodities" which have exclusively symbolic value (which, however, can be converted into real product value through trade). Marx believed that a failure to theorize the value-form correctly led to "the strangest and most contradictory ideas about money" which "emerges sharply... in [the theory of] banking, where the commonplace definitions of money no longer hold water".[46]

The price-form

Consistent with this, Marx explicitly introduced a distinction between the value-form and the price-form early on in Capital, Volume I. Simply put, the price-form is a mediator of trade which is separate and distinct from the value-form.

What are prices?

If we want to trade goods for money, or money for goods, or if we want to trade a financial asset, we need to know how much we have to pay or what something will sell for. Prices tell us how much in money-quantities; they express exchange-value in money terms. Prices are not money themselves, but they indicate money-quantities. They symbolize how much money is required in exchange, to trade and acquire something.[47] Thus, prices are ways to express and inform about how much money is involved in any kind of (potential) transaction, or what it takes (financially speaking) to make the transaction (of course, price information can itself also be sold for money, and people might deliberately buy or sell things, with the aim to push up or lower a particular price-level).

Essentially, therefore, a price is a "sign" which conveys information about either a possible or a realized transaction (or both at the same time). The information may be true or false; it may refer to observables or unobservables; it may be estimated, assumed or probable. However, because prices are also numbers, it is easy to treat them as manipulable "things" in their own right, in abstraction from their appropriate context. This can inspire all kinds of price calculations which are rather dodgy, because they express a valuation or interpretation which, in reality, is conditional on many assumptions, including the reality of many other prices.

The price resulting from a calculation may be regarded as symbolizing (representing) one transaction, or many transactions at once, but the validity of this "price abstraction" all depends on whether the computational procedure is accepted. The use of price idealizations for the purpose of accounting, estimation and theorizing has become so habitual and ingrained in modern society, that they are frequently confused with the real prices actually realized in trade.

Price and value concepts

According to Marx, the price-form is not a “further development” of the value-form, for three reasons:

Value relationships among physical products and assets - as proportions of current labour effort involved in making them - exist according to Marx quite independently from price information, and prices can oscillate in all sorts of ways around economic values, or indeed quite independently of them. That is why Marx felt quite comfortable about mostly ignoring price fluctuations in the first stages of his value theory. In his pamphlet Wages, Price and Profit, he notes:

"Supply and demand regulate nothing but the temporary fluctuations of market prices. They will explain to you why the market price of a commodity rises above or sinks below its value, but they can never account for that value itself. Suppose supply and demand to equilibrate, or, as the economists call it, to cover each other. Why, the very moment these opposite forces become equal they paralyze each other, and cease to work in the one or the other direction. At the moment when supply and demand equilibrate each other, and therefore cease to act, the market price of a commodity coincides with its real value, with the standard price round which its market prices oscillate. In inquiring into the nature of that value, we have, therefore, nothing at all to do with the temporary effects on market prices of supply and demand."[48]

Mutual influence of values and prices

If prices for products rise, hours worked may rise, and if prices fall, hours worked may fall (sometimes the reverse may also occur, to the extent that extra hours are worked, to compensate for lower income resulting from lower prices, or if more sales occur because prices are lowered). In that sense, it is certainly true that prices and values mutually influence each other. It is just that, according to Marx, product-values are not determined by the labor-efforts of any particular enterprise, but by the combined result of all of them. That social valuation exists as a given social fact, quite independently of any price fluctuations. For example, the price of a particular brand of a new car might vary between $15,000 and $20,000, but it will normally never sell for "$2" or "$200,000", regardless of consumer appetites. Quite simply, the new car is considered to be worth around $17,500 on average, and that valuation (a standard supply price) normally does not change much, no matter what people do. The car will neither be supplied at a cost of $2 nor at a cost of $200,000.

Real prices and ideal prices

In discussing the form of prices in the Grundrisse and Das Kapital, Marx drew an essential distinction between actual prices charged and paid, i.e. prices which express how much money really changed hands, and various “ideal prices" (imaginary or notional prices).

Complexity of prices

Because prices are symbols or indicators in more or less the same way as traffic lights are, they can symbolize something that really exists (e.g. hard cash) but they can also symbolize something which doesn’t exist, or symbolize other symbols. That can make the forms of prices highly variegated, flexible and complex to understand, but also potentially very deceptive, disguising the real relationships involved. Consequently, as Marx notes in the Grundrisse, the knowledge of prices itself became a specialized science.[49]

Modern economics is largely a "price science" (a science of "price behaviour"), in which economists attempt to analyze, explain and predict the relationships between different kinds of prices - using the laws of supply and demand as a guiding principle. This however was not Marx's primary concern; he focused rather on the structure and dynamics of the capitalist system as a whole. His concern was with the overall results to which market activity would lead.

Vulgar economics

In what Marx called “vulgar economics”, the complexity of the concept of prices is ignored however, because, Marx claimed, the vulgar economists assumed that:

  • all prices belong to the same object class (they are qualitatively the same, and differ only quantitatively, irrespective of the type of transaction with which they are associated, or the valuation principles used).
  • “price” is just another word for “value”, i.e. value and price are identical expressions.
  • prices are always exact, in the same way that numbers are exact.
  • price information is always objective (it is never influenced by how people regard that information).
  • people always have equal access to information about prices, in which case swindles are merely an aberration from the normal functioning of markets (rather than an integral feature of them, which requires continual policing).
  • the price for any particular type of good is always determined everywhere in exactly the same way, according to the same economic laws, regardless of the given social set-up.

In his critique of political economy, Marx denied that any of these assumptions were scientifically true. He distinguished carefully between the values, exchange values, market values, market prices and prices of production of commodities. However he did not analyze all the different forms that prices can take (for example, market-driven prices, administered prices, accounting prices, negotiated and fixed prices, estimated prices, nominal prices, or inflation-adjusted prices) focusing mainly on the value proportions he thought to be central to the functioning of the capitalist mode of production as a social system.

The effect of this omission was that debates about the relevance of Marx's value theory became confused, and that Marxists repeated the same ideas which Marx himself had rejected as "vulgar economics". In other words, they accepted a vulgar concept of price.[50] Prices can exist in all kinds of different economic systems which operate some kind of currency or credit system, but that does not mean that prices always function in the same way. In different economic systems and during different economic periods in history, price-accounting systems have had quite different effects. It is certainly possible to draw an analogy between prices in one sort of economic system and prices in another economic system, but the analogy well may be false. It cannot be assumed that all price-accounting systems always work in the same way, because the specific social processes and social relations involved may create quite different relationships of cause and effect.

The world of price abstractions

The main analytical point here is that, precisely because of the tricky characteristics of the price-form which Marx already mentions, the world of prices can be a very false world, which disguises the real economic relationships, instead of making them transparent. Fluctuating price signals serve to adjust product-values and labour efforts to each other, in an approximate way; prices are mediators in this sense. But that which mediates should not be confused with what is mediated. Thus, if the observable price-relationships are simply taken at face value, they might at best create a distorted picture, and at worst a totally false picture of the economic activity to which they refer.

At the surface, prices might quantitatively express an economic relationship in the simplest way, but in the process they might abstract away from other features of the economic relationship which are also very essential to know. Indeed, that is another important reason why Marx's analysis of economic value largely disregards the intricacies of price fluctuations; it seeks to discover the real economic movement behind the price fluctuations.

Quote by Marx on the relationship between the value-form and the price-form

"Every trader knows, that he is far from having turned his goods into money, when he has expressed their value in a price or in imaginary money, and that it does not require the least bit of real gold, to estimate in that metal millions of pounds’ worth of goods. When, therefore, money serves as a measure of value, it is employed only as imaginary or ideal money. This circumstance has given rise to the wildest theories. But, although the money that performs the functions of a measure of value is only ideal money, price depends entirely upon the actual substance that is money. (...) The possibility... of quantitative incongruity between price and magnitude of value, or the deviation of the former from the latter, is inherent in the price-form itself. This is no defect, but, on the contrary, admirably adapts the price-form to a mode of production whose inherent laws impose themselves only as the mean of apparently lawless irregularities that compensate one another. The price-form, however, is not only compatible with the possibility of a quantitative incongruity between magnitude of value and price, i.e., between the former and its expression in money, but it may also conceal a qualitative inconsistency, so much so, that, although money is nothing but the value-form of commodities, price ceases altogether to express value."[51]

Engels on the value-form

Friedrich Engels comments on the value-form concept in Part 3 chapter 4 of his 1876-1878 book Anti-Dühring which was written with Marx's approval, emphasizing how the growth of commodity trade breaks up the social fabric of traditional societies:

"Commodity production... is by no means the only form of social production. In the ancient Indian communities and in the family communities of the southern Slavs, products are not transformed into commodities. The members of the community are directly associated for production; the work is distributed according to tradition and requirements, and likewise the products to the extent that they are destined for consumption. Direct social production and direct distribution preclude all exchange of commodities, therefore also the transformation of the products into commodities (at any rate within the community) and consequently also their transformation into values. (...) The concept of value is the most general and therefore the most comprehensive expression of the economic conditions of commodity production. Consequently, this concept contains the germ, not only of money, but also of all the more developed forms of the production and exchange of commodities. (...) The value form of products... already contains in embryo the whole capitalist form of production, the antagonism between capitalists and wage-workers, the industrial reserve army, crises. (...) Once the commodity-producing society has further developed the value form, which is inherent in commodities as such, to the money form, various germs still hidden in value break through to the light of day. The first and most essential effect is the generalisation of the commodity form. Money forces the commodity form even on the objects which have hitherto been produced directly for self-consumption; it drags them into exchange. Thereby the commodity form and money penetrate the internal husbandry of the communities directly associated for production; they break one tie of communion after another, and dissolve the community into a mass of private producers.[52]

Scientific criticism

There are five main lines of scholarly criticism of Marx's idea of the value-form:

Obscurantism

The criticism most often heard from the critics of Marx, such as Karl Popper, Friedrich von Hayek, Ian Steedman and Francis Wheen is that, even if Marx himself meant well, Marx’s value-form idea is simply an esoteric obscurantism, “dialectical hocus pocus” or “mumbo jumbo”.[53] The Marxist Rosa Luxemburg likewise complained about the “horror” of Marx’s unnecessary “Hegelian rococo” in Das Kapital.[54]

Spurious rigour

Marx's argument does not really make coherent scientific sense, it is argued – quite possibly because Marx tried to do too much at once. That is, at one and the same time, one finds Marx

The result, some critics feel, is a series of devastating ambivalences and ambiguities, which cover up all kinds of illogical moves - moves which, they claim, are fatal to Marx’s argument. This is a criticism along the lines that one ought not to take Marx’s story seriously, as a scientific argument about economics (modern economists will nowadays often agree that the theory of economic value raises difficult problems, but they consider that such supremely abstract theoretical difficulties have no real bearing on practical economics).

Gerald Cohen

Often, Marxists have replied to this type of criticism by restating Marx’s arguments in clearer language, or by showing that Marx’s theory of economic value at the very least fares no worse than the subjective theory of value (the theory of the util as the measuring unit of utility). Even so, when he published his very clear restatement Karl Marx's Theory of History: A Defence,[55]the Marxist philosopher Gerald Cohen explicitly dissociated himself from Marx’s value theory. Cohen argued that it is possible to have an historical materialism without a labour theory of value, because the one does not logically entail the other as well. This interpretation contrasts with Lenin's opinion - repeated by Johann Witt-Hansen[56] - that with the appearance of Das Kapital, "the materialist conception of history is no longer a hypothesis, but a scientifically proven proposition".[57]

The substance of value

Whereas many economists and philosophers have been inspired by Marx's analysis of the value-form, they have usually rejected the thrust of Marx's argument, namely that the substance of product-value is the expenditure of human labor effort in general, i.e. abstract labour.

Commensurability

Marx insists that:

"It is not money that renders the commodities commensurable. Quite the contrary. Because all commodities, as values, are objectified human labour, and therefore in themselves commensurable, their values can be communally measured in one and the same specific commodity, and this commodity can be converted into the common measure of their values, that is into money. Money as a measure of value is the necessary form of appearance of the measure of value which is immanent in commodities, namely labour-time."[58]

Marx's argument is that the exchangeability of commodities according to their value is based on the common factor that all of them are products of social labour (co-operative human labour producing things for others).

Price alternative

Critics however argue that Marx's argument is simply not logically compelling.

Unoist approach

For this reason, the Japanese Marxist scholar Kozo Uno argued in his classic Principles of Political Economy that Marx's original argument had to be revised.[62] In the revised version, the theory of the value-form is integrated in the theory of commodity circulation, and does not refer to the substance (content) of value at all. The substance of value as labour then becomes apparent and is theoretically demonstrated only in the analysis of the production of commodities "by means of commodities".

Some Western Marxists do not find this Unoist approach very satisfactory however, because of Marx's basic insistence that the formation of product values is an outcome of both the "economy of labour-time" and "the economy of trade", i.e. commodity values are originally formed through mutual adjustments of the processes of producing commodities and circulating (trading) commodities. Since exchanging products itself takes work, however - "circulation costs" - human labour and trade are in reality inseparable at any time. A product cannot be traded, unless it is produced, regardless of how specifically it is produced.

The results of accumulation

An additional complication is that, as the accumulation of capital grows, more and more durable assets exist external to the sphere of production. Marx was primarily concerned with the value of newly produced commodities, but it is unclear from his theory about the capitalist mode of production what determines the value of the growing stock of durable assets which is neither an input nor an output of current production.

In developed capitalist countries, nowadays only around a quarter or or a fifth of the stock of physical capital assets consists of privately owned means of production.[63] The rest of the physical assets consists of all kinds of real estate (e.g. non-productive land and parks, buildings and structures), infrastructural works & installations (e.g. transport and communication systems, water & land management systems) and consumer durables (personal belongings, furnishings, vehicles, equipment etc.). To the physical capital assets must be added a large stock of financial assets (mainly savings and deposits, stocks, and all kinds of securities).

So, in developed capitalist societies, the capital directly tied up in means of production is perhaps only about one-sixth or one-seventh of the total social capital. As a result, the vast majority of workers in developed capitalist societies are no longer directly employed anymore to produce new products in farming, forestry, fishing & hunting, mining, construction or manufacturing; instead, they are mainly employed in maintaining, distributing and managing already existing products, property and assets. It is certainly true, that many of such "service industries" really also produce products, or are a technically indispensable indirect input to producing products (services previously supplied inside the factory are outsourced to other locations, and therefore are no longer classified as "manufacturing"). Nevertheless, in the modern division of labour of developed capitalist countries, the workers in private enterprise involved directly in producing new tangible goods for sale are in the minority. Ultimately, that fact reflects the enormous increase in the physical productivity of mechanized production.

This issue was seriously studied by Michael Hudson (economist). Particularly since the economic slump of 2008/2009, there are more and more attempts to develop new social accounts providing detailed estimates for household wealth and household transactions. The economic reason for that is, that if assets owned by households suddenly lose a lot of value, for example because a bubble economy pops, this drop in value can have very large consequences for household incomes and buying power - which, in turn, has a very large effect on the economy as a whole.

The usefulness of value theory

This criticism is basically that all the problems which Marx tries to solve with his theory of the forms of value can be solved much better and more plausibly with modern price theory.

Meek and Steedman

In a 1975 paper subtitled "Was Marx's Journey Really Necessary?", the influential Marxist economist Ronald L. Meek argued that Marx's value theory had become redundant. Its problems could be resolved using the insights of Piero Sraffa, so that the old value theory was unnecessary:

"With the specification where necessary of the appropriate institutional datum, and with remarkably little modification and elaboration, a sequence of Sraffian models can be made to do essentially the same job which Marx's labour theory of value was employed to do. We can start, as Marx did, with the postulation of a prior concrete magnitude which limits the levels of profit and rent. We can adopt the same kind of view about the order and direction of determination of the variables in the system as Marx did. Up to a point, the same kind of quantitative predictions about the relation between price ratios and embodied labour ratios can (if we wish) be made; and the analysis based on the models can readily be framed (again if we wish) in logical-historical terms. The same kind of scope can be left for the influence of social and institutional factors in the distribution of income; and the transformation problem (or its analogue) can be solved in passing, as it were, without any fuss whatever. In the light of all this, the fact that we do not need to tell our Sraffian equations anything at all about Marxian values seems superbly irrelevant."[64]

The argument (similar arguments are presented by Ian Steedman)[65] is that value theory is unnecessary, because all economic relationships can be described and explained in terms of prices. The Marxist response to this criticism[66] was extremely weak; most Marxists had accepted the conventional price-theories of economics as largely correct and unproblematic,[67] and just kept insisting that value-theory was a necessary "add-on" to make sense of the economy.[68]

Value-form School

From the 1970s, the so-called "value-form theorists" ("value-form school") have emphasized - influenced by Theodor W. Adorno and the rediscovery of the writings of Isaak Illich Rubin[69] - the importance of Marx's value theory as a qualitative critique - a cultural, sociological or philosophical critique of the reifications involved in capitalist commercialism. The value-form school has become very popular especially among Western Marxists who are not economists.

Examples in the English language literature are Christopher J. Arthur [46], Tony Smith [47], Alfred Sohn-Rethel,[70] Moishe Postone[71] and Geert Reuten & Michael Williams.[72] Noted German-language value-form theorists are the Marx-scholars Hans-Georg Backhaus,[73] Helmut Reichelt[74] Michael Heinrich[75] (Neue Marx-Lektüre[76]) and Nadja Rakowitz[77] (de:Wertkritik), as well as the Sydney-Constance Project (Michael Eldred,[78] Marnie Hanlon, Lucia Kleiber, Mike Roth).

Supporters of the "value-form school", especially in Germany and Britain, think that it is deeply meaningful, profound and super-radical - especially because it depicts Marx's theory as completely different and disconnected from any other economic theory. On the other hand, the critics of the value-form school see this tradition simply as an "evasive tactic", staged by Marxist scholastics who are usually not well-trained in economic science, and who are therefore not able to rebut effectively the attacks made against Marx by economists.

Autonomism and Negri

Value-form theory has also been popular among intellectual supporters of Autonomism[79] and Anarchism,[80] although Antonio Negri thinks the theory is outdated now:

"The definition of the form of value which we find in Karl Marx's Capital is completely internal to what we have called the first phase of the second industrial revolution (the period 1848-1914). But the theory of value, formulated by Ricardo and developed by Marx, is in effect formed in the previous period, the period of "manufacture," during the first industrial revolution. This is the source of the theory's great shortcomings, its ambiguities, its phenomenological holes, and the limited plasticity of its concepts. Actually, the historical limits of this theory are also the limits of its validity, notwithstanding Marx's efforts, at times extreme, to give the theory of value the vigor of a tendency."[81]

Negri's interpretation is difficult to reconcile with the view of Marx and Engels, who regarded the value-form as an emergent characteristic of human dealings in thousands of years of commodity trade. As Marx - himself a philosophy graduate - mentions, Aristotle already talked about the value-form circa 360-370 BC; and most of the great political economists, starting with William Petty in the mid-17th century were quite aware of that, because they had read the classics. Indeed, Marx's discussion of the value-form was actually inspired by Aristotle's discussion. All this is made perfectly clear in the Preface to the first edition of Capital, Volume I where Marx states:

"The value-form, whose fully developed shape is the money-form, is very simple and slight in content. Nevertheless, the human mind has sought in vain for more than 2,000 years to get to the bottom of it, while on the other hand there has been at least an approximation to a successful analysis of forms which are much richer in content and more complex."[82]

Reuten and Williams

The suggestion of some authors (such as Reuten/Williams) is that although Marx's labour theory of value is theoretically wrong as stated, his theory can be modified such that, rather than value being created by co-operative human labour, value and abstract labour can be regarded as effects ("social forms") created by the exchange-process itself. Simply put, the value of goods is nothing more than the money they will exchange for, from which it seems to follow that if there is no money, value does not exist either. This interpretation is often called the "monetary theory of value".[83]

Marx himself denied this interpretation when he said explicitly in chapter 2 of Capital, Volume I that "The act of exchange gives to the commodity converted into money, not its value, but its specific value-form";[84] in other words, the source of value is not the exchange process itself. In Marx's theory, product-value pre-exists its circulation, since it has to be produced at a certain value before it is circulated. That is why Marx sharply distinguished between the formation of value, and its distribution as incomes.

Critics of the Reuten/Williams interpretation think that, beyond rhetorics, it is really not much better than a vulgar accounting theory, according to which "value is created" when goods are sold for more than they were bought for. The objection here is, that value exists not simply because of a trading relationship, but because people actually did some work to produce something of value, and in so doing are socially related also external to the exchange process.[85] If that work did not occur, nothing would be left but a ghost town, trade or no trade.

Moreover, a "form" isn't a form at all without a content, namely it is "the form of something", the form that a content takes - the point being that a content or substance can take various "forms", necessitating a special study of what those forms are. A "form without a content" would make form and content identical, and the distinction between them redundant. We are then left only with a "sociology of trading processes" studying how people socially interact in trade and how they symbolize that.[86] It might be insightful,[87] but that was not Marx's full intention.

John Milios

John Milios also argues for a "monetary theory of value", where "Money is the necessary form of appearance of value (and of capital) in the sense that prices constitute the only form of appearance of the value of commodities."[88] Critics of this interpretation think that it cannot be correct, because - as Marx shows so painstakingly in his discussion of the development of the value-form - the value of commodities can also be expressed simply and directly in terms of a quantity of other commodities, or one referent commodity. To establish a trading ratio, no money or prices are required at all. All that is required is the expression that "x quantity of y is worth p quantity of q".

Milios's argument can be sustained only if, in the trade of one bundle of commodities for another (as in counter-trade), the bundle of commodities traded is itself treated as if it is a "price". But such a "price" is obviously not a quantity of money. The point here is simply that the value-form, in its less developed state, does not require any monetary expression; counter-trade does not necessarily require any monetary referent at all, although in modern times it often does take into account the cash value of a deal. That aside, Milios conflates the money which actually changes hands, with all kinds of possible computable prices for a commodity under various conditions. Effectively, Milios conflates the value-form with the price-form, and real prices with ideal prices.

Michael Eldred

In his Social Ontology (2008), 'Anglophone Justice Theory, the Gainful Game and the Political Power Play' (2009) and elsewhere, the Australian phenomenologist Michael Eldred radicalizes the reading of 'form' in the value-form to a socio-ontological category. According to Eldred, the phenomenon of exchange-value is substantially one of social power: Commodity A has to power to acquire Commodity B in an interplay. Hence, money reveals itself to be the quintessential, rudimentary form of reified social power in capitalist society.

The further value-forms developed during the course of the capital-analysis, starting with the capital-form and the wage-form of value, through the value-forms of ground-rent, interest, profit of enterprise, to the revenue-form of these income-sources on the 'surface' of economic life, unfold the socio-ontological structure and movement of capitalism as a reified power-play. Eldred argues that such a total ontological structure of capitalist power-play can only come into view, if the whole of Marx's capital-analysis is reconstructed, not just the famous, notoriously difficult first chapter of Marx's Capital.

Theorists of value as power

From a different angle, Jonathan Nitzan and Shimshon Bichler [48] also depict the phenomena of economic value as power relationships.[89] While retaining some of the language of Marx, they however reject Marx's theory of value. The power dimension of value relationships is also prominent in Harry Cleaver's commentary Reading Capital Politically.[90]

This interpretation also has its critics, the main criticism being that by reducing all economic phenomena to a matter of power, the concept of power itself becomes a nebulous idea, which explains "everything and nothing". "Power", like economic value, is by no means a straightforward, simple concept. Power is often circumstantial. For example, possession of an thing may provide a certain power, but in a different context, it may also render the possessing individual or organization powerless. It cannot be automatically inferred, from the position taken by participants in market trade, what kind of power they really have. Much may depend simply on popular perceptions and beliefs that they have a certain kind of power. Particularly in economic crises, it is often discovered that those who were thought to have a lot of power, do not really have it (leading to political crises).

Krader and Graeber

There are also anthropologists such as the socialist Lawrence Krader and the anarchist David Graeber who have argued that Marx's value categories should be modified in the light of historical and anthropological research about how human communities value objects.[91] Rather unusually, Krader argued that Marx's theory of value and the theory of utility are compatible, i.e. the one does not exclude the other; and that value has both objective and subjective aspects. Graeber's work is very focused on how value categories shape human lives, and the direct political effects of that.

Utz-Peter Reich

The question still remains, "was Marx's journey really necessary?", i.e. what is the point of value theory, if all economic phenomena can be expressed in price terms? Utz-Peter Reich offers a possible answer to this problem.[92]

The expression of economic goods in price terms is more problematic than it seems at first sight. In any price-accounting, the grouping, calculation and aggregation of prices could not even occur without making valuation assumptions (categorical distinctions) about value equivalence, value comparability, value transferred, conserved value, value used up, depreciated or destroyed - in general, reduction of value - value increase and newly created value. Thus, whereas economists implicitly or explicitly adopt theoretical conventions in order to talk about price movements, those conventions themselves can be shown to depend ultimately on axioms about the nature of economic value itself. The issue is then whether those axioms are actually valid, and where we get them from; as soon as this question is posed, scientific theorizing about value as such is inescapable.

Phlogiston theory

To define the economic value of any object, one must define its function in relation to other objects, settings and events, and this requires theoretical assumptions about the economy. If we talk constantly about economic value without being able to specify in a scientifically rigorous way what it is, we are left with a phlogiston theory.[93]

For the practical purpose of doing business, ordinarily it does not matter much if economics operates with a phlogiston theory of value; all that matters is that there is an agreed and enforcible accounting system for economic resources, and that relative price movements are fairly predictable. The utility of the phlogiston theory can be that it provides a unifying ideology for traders (or for Marxists). But for science it does matter, insofar it genuinely tries to explain economic life in an objective way. It is usually only when very severe economic crises occur, that serious inquiry begins into the foundations of economic theory.

Logical structure of an interminable debate

Most likely, Marx himself would have said that without a theory of value, only "vulgar economics" is left; in that case, we cannot explain capitalist dynamics, only describe them (and use the descriptions to make predictions). That is, the economic explanations depend on whether one accepts certain definitions, but since the definitions themselves are not proved, there is a sense in which one assumes the very thing that one tries to explain.

Any rigorous theory of economic value would have to explain the real origins of the very meaning of "value" in human society, and how it evolves. That is indeed what Marx tried to do. However, as Marx himself implicitly admits, in science it is impossible to provide any absolute logical proof for any particular qualitative concept of what "value" is - its validity depends rather on the explanatory and predictive power of the theories which it enables.[94] In this sense, philosophers of science such as Thomas Kuhn and Imre Lakatos have described scientific activity as building and testing theories on the basis of some foundational, "core" hypotheses which are treated as axiomatic and beyond question, even although they could in principle always be wrong.

The theoretical debate about the nature of economic value is therefore itself interminable; meantime, just as in mathematical theory, quantitative systems are accepted by convention, in advance of any proof of fundamental categorical distinctions, insofar as the systems seem to be useful for economic policy and the explanation/prediction of economic events. Even if economic history is plausibly reconstructed to demonstrate objectively the existence of an operational concept of economic value, this remains an interpretation and not the absolute truth. Quite simply, a concept of value is assumed because without it, we are unable to "make sense" of economic phenomena.

However, the unfortunate corollary is, that this makes theories of economic value highly susceptible to the influence of ideological beliefs and sectional interests (which Marx calls "the furies of private interest").[95] The theories of value which people adopt are intimately linked to the moral life of social classes. Ultimately, the concept of value of the capitalist class and the concept of value of the working class cannot be reconciled with each other. The different social classes each adopt a theory of value which makes sense in their own social position in society, but from a scientific viewpoint they contain, at best, only "relative" truths.

The Chartalist challenge

An implicit technical and historical criticism of Marx’s value-form theory is made by some neo-Keynesian[96] and heterodox Marxian economists[97] as well as anarchists like David Graeber,[98] who are inspired by the chartalist theory of money.[99] These economists interpret Marx’s story about how money originates in the exchange process as a theory of commodity money, or the "commodity theory of money".

The Chartalist idea

The “neo-Chartalist” interpretation of money entails, that the commodity theory of money is false[100]; the latter, it is argued, can neither explain the origin of money and credit, nor provide a credible account of monetary phenomena in the modern world. Randy Wray has stated the basic idea of Chartalism as follows:

"The central idea of the alternative view is that the value of money is based on the power of the issuing authority, and not by any embodied or backing precious metal. Hence, Chartalists give a central role to the state in the evolution and use of money. For the most part, this evolution is not linked to reduction of transactions costs of exchange. Rather, the evolution of money is linked to the needs of the state to increase its power to command resources through monetization of its spending and taxing power. Thus, money and monetary policy are intricately linked to political sovereignty and fiscal authority…[101]

If the Chartalist argument is true, then it cannot also be true that, as Marx argues, money originates as a “special commodity” (a universally exchangeable good) within the exchange process itself. Instead, money is completely “a creature of the state” – it first arises as a unit of account for state debts, credits and taxes, and is then gradually imposed on the whole of the trading process in society.[102]

Ongoing controversy

The controversy about this challenge to Marx’s idea is far from being resolved at this stage,[103] for a number of reasons:

The role of market value in human freedom and progress

A fifth line of criticism, articulated by libertarians such as Friedrich von Hayek, is that Marx and Engels tend to present "value" and "value relations" as negative, alienating and reifying phenomena which cause people to get used by others for ends they can no longer fathom. According to Marxists, value phenomena belong to the prehistory of humanity that closes with the abolition of capitalism. Thus, for example, Iring Fetscher states: "Marx's criticism is directed against value as such, not merely against its consequence, capital."[112]

In other words, the negative, dehumanizing features of markets for workers' lives have had prominence for Marxists, even although Marx also acknowledges here and there that markets have some progressive, developmental and "civilizing" features. Marx and Engels depict the "value form" as an alien, impersonal and corruptive force which gradually subordinates anything and everything to "making money" - and it leads to the reification of human life (and to wars). Five kinds of objections by pro-market critics can be mentioned.

Markets as a force of progress

The first objection is, that such an historical judgement is not objective, because, on balance, the results for human civilization of the valuation of labour by capital have had much more progressive effect than Marx & Engels were willing to acknowledge. The proof is said to be, that workers themselves prefer choosing their own employer, purchasing goods at stable prices, and owning private property; market trade has improved their standard of living faster than any other method.[113]

Persistence of value

A second objection made is that Marxists are wrong to think that value disappears when commercial trade is abolished.[114] Here the argument is that humans would simply continue to make valuations anyway, and that goods continue to have value, except that knowing what exactly the magnitude of that value is, becomes much more problematic because a general, shared standard of valuation (expressed in money quantities) is absent. The proof of this is supposed to be the experience of Soviet-type societies where a very large amount of goods was effectively "bartered" or allocated by government decree.[115]

Discernment and freedom

A third objection is that people can distinguish quite well between the means/ends rationality of commerce, and non-commercial relationships.[116] Therefore, it is simply an inaccurate and false subjective opinion to claim that there exists some kind of "monumental domination" of commercial relationships over people's lives, because that is not true - except perhaps for people who are obsessively focused on trading relationships. What is ignored is that markets can offer a freedom of choice and development to those who value themselves, and believe in their own self-worth.[117]

Value indispensable for economizing resources

A fourth objection made is that without the "discipline" and "incentives" of value relations, it is simply impossible to reconcile self-interest and the common interest in any efficient and fair manner, and achieve sensible cost-economies in the use of resources. Again, this is supposed to be proved by the resource waste and ecological damage suffered by Soviet-type societies.[118]

Abolition of trade impossible

A fifth objection is that it is practically impossible to abolish trade as such in complex societies, and that trade could not be prevented, even if a central state authority allocated resources to individuals through some kind of credit or rationing system. So long as people can privately own belongings, they will trade them, if it is in their interest to do so. In Soviet-type societies, trading continued to occur anyway, even if it was highly regulated or driven underground.

Since there is practically no alternative to trading, it is argued the only dispute there can be, concerns the terms on which goods and services are traded - whether that is efficient or morally justifiable. Any policy which aims to regulate or control how people may trade, it is argued by libertarians, represents an attack on their liberty and presumes wrongly that the regulators know better what trade is beneficial, than the trading individuals do themselves.

Socialist calculation debate

All these five objections resurface in the Socialist calculation debate. The general theme of the responses of Marxian scholars to such criticisms has been that the criticisms are not based on the facts of reality and history; they are based on a false or one-sided perception of market activity, reflecting the self-interest of those who most strongly benefit from market activity. Market activity may look very "progressive" on the surface, but only because we cannot (yet) see the true costs of it. "Market freedom" depends entirely on the ability to own or borrow something which can be traded, but people may be forced to trade something to survive, even although they do not really want to trade it. There is also a big difference between selling a pair of shoes and selling a factory; they are not in the same category of trade. "The market" really doesn't exist, other than as an abstraction; there exist only many different, linked markets, operating according to different economic principles.

The claim made by socialists is that alternatives to market allocation do exist, such as sharing, reciprocation, redistribution, barter, grants, subsidization and direct allocation, and that market trade could as a matter of fact not even exist without them; market activity in reality always remains to a large extent dependent on forms of human cooperation[119] and trust[120]involving non-market activity. If that cooperation is withdrawn, markets collapse. A narrow focus on the pattern of market transactions moreover deflects attention from the enforcible property relations on which they are based. But in fact an enormous variety of different property rights and methods of allocating goods are possible, and some of those, it is argued, demonstrably serve humanity much better than others.

Market socialism

Some socialist theorists such as Włodzimierz Brus, Oskar Lange, Abba Lerner, Branko Horvat, John Roemer, David Schweickart, Erik Olin Wright, Alec Nove and Bertell Ollman argue that markets aren't necessarily a bad thing, but rather that they should combine with other allocative methods within a market socialism.[121] Makoto Itoh and Ha-Joon Chang offer a strong defence of state-directed economic organization.[122] Anthony Giddens, Robert Rowthorn and Geoffrey Hodgson have argued for a "third way" between capitalism and socialism.[123] Others such as János Kornai and Ernest Mandel have argued - for different reasons - that any durable "third way" between capitalism and socialism is impossible.[124]Michael Albert and Robin Hahnel have formulated a theory of participatory economics, otherwise known as parecon.[125]

The leading Chinese economist Jinglian Wu claims that a thorough analysis of planned economy since the 1980s (coinciding with Chinese economic reforms) proves that it is "impossible for such a institutional arrangement to be efficient"[126] His critics however question what he means by "efficiency" - if millions of people become unemployed and destitute, while waterways are diverted to irrigate golfcourses, how efficient is that?

In their more recent research, the American socialists Samuel Bowles and Herbert Gintis look at the whole problem from a different angle: human beings cannot exist without social cooperation, so the dispute between capitalists and socialists really revolves around the methods of cooperation which work best for humanity.[127]

All these arguments[128] remain much in dispute among economists seeking economic reform; the debaters still cannot agree about basic concepts of economics, about the possible ways in which production, trade and democracy can be combined, or about what factual evidence would finally clinch the controversy.[129]

See also

Notes

  1. ^ Costas Lapavitsas, Social foundations of money, markets and credit. London: Routledge, 2003; Simon Mohun, "Value, Value Form and Money", in Simon Mohun (ed.), Debates in Value Theory. Macmillan: London, 1994; Alfredo Saad-Filho, The value of Marx. London: Routledge, 2002, section 2.2.
  2. ^ *Karl Marx, Capital, Volume I, chapter 1, section 3.
  3. ^ "If we say that, as values, commodities are simply congealed quantities of human labour, our analysis reduces them, it is true, to the level of abstract value, but does not give them a form of value distinct from their natural forms. it is otherwise in the value relation of one commodity to another. The first commodity's value character emerges here through its own relation to the second commodity." - Karl Marx, Capital, Volume I, Pelican edition, p. 141-142.
  4. ^ "After making a detailed analysis of the twofold character of the labor incorporated in commodities, Marx goes on to analyze the form of value and money. Here, Marx’s main task is to study the origin of the money form of value, to study the historical process of the development of exchange, beginning with individual and incidental acts of exchange (the “elementary or accidental form of value”, in which a given quantity of one commmodity is exchanged for a given quantity of another), passing on to the universal form of value, in which a number of different commodities are exchanged for one and the same particular commodity, and ending with the money form of value, when gold becomes that particular commodity, the universal equivalent. As the highest product of the development of exchange and commodity production, money masks, conceals, the social character of all individual labor, the social link between individual producers united by the market." - V.I. Lenin, "Karl Marx. A Brief Biographical Sketch With an Exposition of Marxism". In: Lenin Collected Works, Vol. 21, Moscow: Progress Publishers, 1974, chapter 3.[1]
  5. ^ See Karl Marx, Grundrisse, Pelican edition 1973, pp. 171–172.
  6. ^ Karl Marx, Capital, Volume I, Pelican Books, p. 174 note 34.
  7. ^ So much is obvious from the layout of the first part of the first chapter of Capital, Volume I; Marx distinguishes between "use-value" and "value", and then considers successively the substance of value, the magnitude of value and the form of value.
  8. ^ |"The fundamental law of capitalist competition, which political economy had not hitherto grasped, the law which regulates the general rate of profit and the so-called prices of production determined by it, rests... on [the] difference between the value and the cost-price of commodities, and on the resulting possibility of selling a commodity at a profit under its value." Capital, Volume III, chapter 1, emphasis added.
  9. ^ Makoto Itoh, The basic theory of capitalism: the forms and substance of the capitalist economy. London: Macmillan, 1988.
  10. ^ Karl Marx, Theories of Surplus Value, Chapter 3, section 11
  11. ^ Mark Blaug, Economic Theory in Retrospect. New York: Cambridge University Press, 4th edition, 1985, p. 268.
  12. ^ Louis Althusser, "Preface to Capital Vol. 1" (1969), in Lenin and Philosophy and Other Essays. London: New Left Books, 1971.[2]
  13. ^ "In [his autobiography] The Future Lasts A Long Time, Althusser 'confessed' to never having read most of Marx, let alone Hegel, to getting his best ideas by 'eavesdropping' on graduate students in university cafeterias, and to inventing some of the quotes and references in his most famous works." - Scott Hamilton, "Necessity and contingency: the return of Althusser", Labor Tribune July 2006 [3].
  14. ^ Possibly, Althusser's recommendation was inspired by Marx's letter to Louis Kugelmann of July 11, 1868 in which Marx says "even if there were no chapter on 'value' at all in my book, the analysis I give of the real relations would contain the proof and demonstration of the real value relation." But this claim does not mean that Marx thought Part 1 of Capital ought to be skipped by readers. If that was so, he would not have included it. Recently John Milios attempted an Althusserian reading of value-form theory: John Milios, "Rethinking Marx’s Value-Form Analysis from an Althusserian Perspective." Rethinking Marxism, Vol. 21 No. 2 April 2009. [4]
  15. ^ Howard Engelskirchen, Capital as a Social Kind: Definitions and Transformations in the Critique of Political Economy. London: Routledge, 2011.
  16. ^ The most famous academic controversy concerns an alleged conflict between the definition of value in Capital, Volume I (where Marx mostly disregarded differences between prices and values, except for the first part, and the part on wages), and the definition of value in Capital, Volume III where these price-value differences turn out to be a crucial determinant of capitalist development.
  17. ^ "It is possible for agricultural products to be sold above their price of production and below their value, while, on the other hand, many industrial products yield the price of production only because they are sold above their value." - Karl Marx, Capital, Volume III, chapter 45 [5].
  18. ^ Karl Marx, Capital, Volume I, Pelican edition, p. 182, emphasis added. Some scholars, such as Hans-Georg Backhaus, argue that for this reason value simply did not exist in societies where money was not used. In other words, a "pre-monetary theory of value" is false. But that is evidently not what Marx argues - Marx argues that product-values did exist in primitive economies, but that establishing how much products were worth followed customary practices, rather than purely a comparison with other products, or reckoning with money; thus, value was merely expressed in a different way. All the time, that is, people knew quite well that their products had value because it cost work-effort to replace them, and consequently they also valued their products. Many academics however object to this simple insight, because they believe that if commodity production is abolished, value would no longer exist. That was not Marx's stated view: "...after the abolition of the capitalist mode of production, but still retaining social production, the determination of value continues to prevail in the sense that the regulation of labour-time and the distribution of social labour among the various production groups, ultimately the book-keeping encompassing all this, become more essential than ever." Karl Marx, Capital, Volume III[6] In other words, it is not that value itself disappears from human society - obviously humans would continue to attribute value to things - but rather its capitalist expression, i.e. the capitalistic evaluation of resources as if everything is a commercial business. Controversy persists about this issue among scholars, probably because of the different additional distinctions they themselves introduce between the content and form of value.
  19. ^ See Wolfgang Fritz Haug, Critique of Commodity Aesthetics: Appearance, Sexuality and Advertising in Capitalist Society. Introduced by Stuart Hall. Minneapolis: University of Minnesota Press, 1986, chapter 1.
  20. ^ Capital, Volume I, Penguin ed., p. 179-180, translation corrected according to the German edition and emphases added.
  21. ^ http://www.marxists.org/archive/marx/works/1867-c1/appendix.htm#n1
  22. ^ Capital, Volume I, Penguin ed., p. 89-90).
  23. ^ Marx makes it quite clear that, historically, commodity production generally predates capitalist commodity production: "The appearance of products as commodities requires a level of development of the division of labour within society such that the separation of use-value from exchange-value, a separation which first begins with barter, has already been completed. But such a degree of development is common to many economic formations of society, with the most diverse historical characteristics." - Marx, Capital, Volume I, Penguin ed. 1976, p. 273. Marx explains (loc. cit.) that commodity production and circulation can occur on a comparatively modest scale, even although most of society's production is non-commercial subsistence production.
  24. ^ In Nicomachean Ethics, Book V, Ch.5
  25. ^ ibid., p. 152).
  26. ^ Penguin ed., p. 241ff.
  27. ^ Capital, Volume I, Penguin ed., p. 90.
  28. ^ ibid., p. 94).
  29. ^ For example, Ernest Mandel, Karl Marx, Part 4: "For Marx, labour is value."[7] Bertell Ollman writes: "According to Marx, 'Value is labor'... - Ollman, Alienation: Marx's conception of man in capitalist society. Cambridge: Cambridge University Press, 1975, chapter 26, p. 176.
  30. ^ "Nothing could be more foolish than the dogma that because every sale is a purchase, and every purchase a sale, the circulation of commodities necessarily implies an equilibrium between sales and purchases" - Karl Marx, 'Capital, Volume I Penguin edition, 1976, p. 208.
  31. ^ Marx refers to the relations of production people have "towards nature and one another" as the "economic structure". See Capital, Volume III, Penguin edition, 1981, p. 957.
  32. ^ Paul Einzig, Primitive money in its ethnological, historical and economic aspects. Pergamon, 1966.
  33. ^ Karl Marx, Capital, Volume I, Penguin ed., p. 183.
  34. ^ Marx, Capital, Volume I, Penguin ed., p. 187, emphasis added.
  35. ^ Capital, Volume I, chapter 3. For commentaries, see: Samezo Kuruma and E. Michael Schauerte, Marx's Theory of the Genesis of Money: How, Why and Through What Is a Commodity Money? Outskirts Press, 2008; Suzanne de Brunhoff, Marx on Money. New York: Urizen Books, 1976; Anitra Nelson, Marx's concept of Money. London: Routledge, 1999; Fred Moseley (ed.), Marx's Theory of Money: Modern Appraisals. London: Palgrave Macmillan, 2005; Duncan K. Foley, Understanding Capital. Cambridge: Harvard University Press, 1986.
  36. ^ "The nations which are still dazzled by the sensuous glitter of precious metals, and are therefore still fetish-worshippers of metal money, are not yet fully developed money-nations. Contrast of France and England." Karl Marx, Economic and Philosophic Manuscripts of 1844, in Marx-Engels Collected Works, Vol. 3. Moscow: Progress, 1975, p. 312. In Capital, Volume II he comments that "In developed capitalist production, the money-economy appears only as the basis of the credit-economy. The money-economy and credit-economy thus correspond only to different stages in the development of capitalist production..." Capital, Volume II, chapter 4. [8].
  37. ^ "The standard physical bullion accepted in trade is the London Good Delivery Bar, which weighs 400 troy ounces each (12.4 kilograms). At a price of $1,400 per troy ounce, each Good Delivery Bar is worth $560,000. This standard per trade module is too high in price for most individual traders. (...) The day will come when the trading unit of gold is 10 Good Delivery Bars. This high entrance threshold of individual investors is what drives the emergence of gold exchange traded funds (ETFs)." - Henry C. K. Liu, "The London Gold Market", Asia Times, 27 January 2011.
  38. ^ See Karl Marx, Capital, Volume I, chapter 3 section 3C.[9]
  39. ^ "At the start of the twenty-first century, the international financial system is effectively an indirect U.S. Government Bond Standard, in which the U.S. dollar acts as a standard of value for all other currencies, and is held because it is directly convertible into U.S. Government Bonds." - Jan Toporowski, "How the Global Crisis Is Transmitted to Developing Countries", Development Viewpoint, No. 24, February 2009.[10]
  40. ^ There is a long-running academic dispute about whether the development of the value-form presented by Marx describes an historical sequence, whether it is only a logical exposition, or whether it is both.
  41. ^ The causal mechanism of price discovery is however not altogether clear, since it could be that the interaction of traders necessary for price discovery determines prices, or that inversely prices determine the interaction of traders.
  42. ^ Karl Marx, Capital, Volume III, Penguin ed., p. 278. Archeologists nowadays reject the idea that primitive trade occurred initially only in the periphery of economic communities.
  43. ^ Whether Einstein really did coin this quote is in dispute. The quote is also credited to William Bruce Cameron, Informal Sociology, a casual introduction to sociological thinking. New York: Random House, 1963, p. 13.[11]
  44. ^ "Throughout this work I assume that gold is the money commodity, for the sake of simplicity." – Karl Marx, Capital, Volume I, Penguin edition, chapter 3, p. 188.
  45. ^ "Almost all of the money in a contemporary economy consists of the liabilities of financial institutions. In the eurozone, for example, currency in circulation is just 9 per cent of broad money (M3)." - Martin Wolf, "Intolerable choices for the eurozone". Financial Times, 31 May 2011 (in the US, it is about 7%; in 1960 according to Federal Reserve data series, it was about 50%)
  46. ^ Marx, Capital, Volume I, Pelican Books, p. 174, note 34.
  47. ^ Daniel E. Saros, "The price-form as a fractional reflection of the aggregate value of commodities", in Review of Radical Political Economics, Vol. 39, No. 3, 2007, pp. 407–415.
  48. ^ Karl Marx, Value, Price and Profit More or less the same point is made by Marx again in Capital, Volume III, chapter 10 Penguin edition, p. 291: "If two forces act in opposing directions and cancel one another out, they have no external impact whatsoever, and phenomena that appear under these conditions must be explained otherwise than by the operation of these two forces. If demand and supply cancel one another out, they cease to explain anything, have no effect on market value and leave us completely in the dark as to why this market value is expressed in precisely such a sum of money and no other. The real inner laws of capitalist production clearly cannot be explained in terms of the interaction of demand and supply (not to mention the deeper analysis of these two social driving forces which we do not intend to give here), since these laws are realized in their pure form only when demand and supply cease to operate, i.e. when they coincide. In actual fact, demand and supply never coincide... political economy assume[s] that they do coincide... [i]n order to treat the phenomena it deals with in their law-like form..." etc.
  49. ^ "...institutions emerge whereby each individual can acquire information about the activity of all others and attempt to adjust his own accordingly, e.g. lists of current prices, rates of exchange, interconnections between those active in commerce through the mails, telegraphs etc. (the means of communication of course grow at the same time)." - Karl Marx, Grundrisse, "The chapter on Money", part 2, in Notebook 1, October 1857.[12].
  50. ^ See further: Juan Iñigo Carrera, "The reason for being of value or price according to political economy", translation of chapter 1 by Leonardo Kosloff in Carrera, Conocer el capital hoy. Usar crísticamente El Capital. Volumen I. La mercancía, o la conciencia libre como forma de la conciencia enajenada. Buenos Aires: Imago Mundi, 2007.[13]
  51. ^ Marx, Capital, Volume I, ch 3, section 1 [14]
  52. ^ http://www.marxists.org/archive/marx/works/1877/anti-duhring/ch26
  53. ^ E.O. Wright, A. Levine, A., & E. Sober, Reconstructing Marxism: essays on explanation and the theory of history. London: Verso, 1992, p. 107; Francis Wheen, Karl Marx. London: Fourth Estate, 1999, p. 299f; "...for the Sraffians, most of the discussion of the value-form was, in Ian Steedman's description, 'obscurantist'. Ben Fine, The Value Dimension: Marx versus Ricardo and Sraffa. London: Routledge & Kegan Paul, 1986, p. 5.
  54. ^ J.P. Nettle, Rosa Luxemburg. Schocken Books, 1989, p. xv.
  55. ^ Gerald Cohen, Karl Marx's Theory of History: A Defence. Princeton University Press, 1978, reprint 2001.
  56. ^ Johann, Witt-Hansen, Historical materialism, the method, the theories. Exposition and critique. 1. The method. Copenhagen : Munksgaard, 1960.
  57. ^ V.I. Lenin, What the “Friends of the People” Are and How They Fight the Social-Democrats (A Reply to Articles in Russkoye Bogatstvo Opposing the Marxists) (1894), Part 1, Lenin Collected Works, Vol. 1. Moscow: Progress Publishers, 1937. [15].
  58. ^ Capital, Volume I, Penguin ed., p. 188
  59. ^ Jonathan Parry & Maurice Bloch (eds.), Money and the morality of exchange. Cambridge University Press, 1989.
  60. ^ The modern term "price" is derived from the Old French "pris" or "prix", which in turn orginated from the Latin pretium, a general term expressing the exchange-value or counter-value of a good or service. Thus, "pretium" could mean the price or trading value of something; the cost of something in money, or the purchasing/selling price; and, in various contexts, also - figuratively - "the money", a bribe, the compensation, a wage, or a fine (in Latin, "merx" = commodity, "mercis" = recompense or income-yield in whatever form, "mercenarius" = a hireling, someone who is paid for his work, or who is "bought", and "mutare" = to trade, (ex-)change or swap). The Latin "pretium" is possibly connected with the Greek protei, the Sanskrit aprata or the Slavonic protivu, abstract expressions for an offer counterposed against or transformed into something else (the Greek seagod Proteus could change his shape at will).
  61. ^ W. Stanley Jevons, The Theory of Political Economy (1871), edited by R.D. Collison Black. Harmondsworth: Pelican Books, 1970.
  62. ^ Kozo Uno, Principles of Political Economy. Theory of a Purely Capitalist Society. Translated from the Japanese by Thomas T. Sekine. Brighton, Atlantic Highlands/New Jersey: Harvester Press, 1980. See also Samezo Kuruma, Theory of the Value-Form & Theory of the Exchange Process. Tokyo: Iwanami Shoten, 1957 [16]
  63. ^ This can be calculated easily e.g. from "national wealth" estimates provided in annexes of the US federal budget (the "Analytical Perspectives" document) and from disaggregated data on fixed capital stocks provided by statistics offices.
  64. ^ Ronald L. Meek, Smith, Marx and After. London: Chapman & Hall, 1977, p. 131.
  65. ^ Ian Steedman, Marx After Sraffa. NLB, London, 1977.
  66. ^ One important reply to the Sraffians was Ernest Mandel & Alan Freeman (ed.), Ricardo, Marx, Sraffa. The Langston Memorial Volume. London: Verso, 1984.[17]
  67. ^ Thus, for example, in his textbook Monetary Theory (New York: McGraw-Hill, 1981) the prominent English Marxist economist Laurence Harris, wellknown for his contributions to Marxian value theory, paid no attention to the price-form itself.
  68. ^ Diane Elson (ed.), Value: the representation of labour in capitalism. London: CSE books, 1979. Paolo Giussani, "La 'value-form school'" (in Italian).[18]
  69. ^ Isaak Illich Rubin, Essays on Marx’s theory of value. Detroit: Black & Red, 1972.
  70. ^ Alfred Sohn-Rethel, Intellectual and Manual Labor: A Critique of Epistemology. Atlantic Highlands, NJ: Humanities Press, 1977. [19]
  71. ^ Moishe Postone, Time, Labor and Social Domination: A Reinterpretation of Marx's Critical Theory. Cambridge: Cambridge University Press, 1993.
  72. ^ Geert Reuten & Michael Williams, Value-form and the State. The Tendencies of Accumulation and the Determination of Economic Policy in Capitalist Society. London, 1989.
  73. ^ Hans-Georg Backhaus, Dialektik der Wertform; Untersuchungen zur marxschen Ökonomiekritik. Freiburg: Verlag Ca Ira, 2nd edition, 2008. See also Dieter Wolf (Soziologe): Auswahl aus: Der dialektische Widerspruch im Kapital Der dialektische Widerspruch im Kapital. Ein Beitrag zur Marxschen Werttheorie. Hamburg, 2002, ISBN 3-87975-889-1
  74. ^ Helmut Reichelt, Zur logischen Struktur des Kapitalbegriffs bei Karl Marx. Dissertation 10 July 1968, Wirtschafts- u. sozialwissenschaftliche Fakultät, Universität Frankfurt am Main. Frankfurt, 1968 (fourth revised edition, with a preface by Iring Fetscher, Frankfurt: Europäische Verlagsanstalt, 1973; reprinted Freiburg im Breisgau: Ça Ira, 2001, ISBN 3-924627-76-2).
  75. ^ Michael Heinrich, Die Wissenschaft vom Wert: Die Marxsche Kritik der politischen Ökonomie zwischen wissenschaftlicher Revolution und klassischer Tradition. Westfälisches Dampfboot, 2005. [20]
  76. ^ Ingo Elbe, Marx Im Westen: Die neue Marx-Lektüre in der Bundesrepublik seit 1965. Berlin: Akademie Verlag 2010. Helmut Reichelt, "From the Frankfurt School to Value-Form Analysis". Thesis Eleven, Vol. 4 February 1982. pp. 166–169; Helmut Reichelt, Neue Marx-Lektüre. Zur Kritik sozialwissenschaftlicher Logik. Hamburg 2008, ISBN 978-3-89965-287-1.
  77. ^ Nadja Rakowitz, Einfache Warenproduktion: Ideal und Ideologie, 2nd edition. ça ira Verlag, 2003.
  78. ^ Michael Eldred, Critique of Competitive Freedom and the Bourgeois-Democratic State: Outline of a Form-analytic Extension of Marx's Uncompleted System. With an Appendix 'Value-form Analytic Reconstruction of the Capital-Analysis' by Michael Eldred, Marnie Hanlon, Lucia Kleiber and Mike Roth, Kurasje, Copenhagen, 1984. Emended, digitized edition 2010 with a new Preface, lxxiii + 466 pp. ISBN 8787437406, ISBN 9788787437400. Social Ontology: Recasting Political Philosophy Through a Phenomenology of Whoness. ontos, Frankfurt 2008 xiv + 688 pp. ISBN 978-3-938793-78-7.[21]
  79. ^ *Axel Kicillof & Guido Starosta, "Value form and class struggle: A critique of the autonomist theory of value". Capital & Class, Summer 2007.
  80. ^ (Anon.), "Communisation and value-form theory". Endnotes No. 2, April 2010 [22]
  81. ^ Antonio Negri, "Thesis 5" in: Theses on Marxism
  82. ^ Karl Marx, Capital, Volume I. Harmondsworth: Penguin, 1976, p. 90.
  83. ^ Kolja Lindner, "The German Debate on the Monetary Theory of Value. Considerations on Jan Hoff’s Kritik der klassischen politischen Ökonomie", Science & Society Vol. 72, No. 4, 2008, pp. 402-414.[23]
  84. ^ Karl Marx, Capital, Volume I, Penguin edition, 1976, pp. 184-185.
  85. ^ Fred Moseley, "Marx's theory of value and money: a critique of Reuten's 'value-form' interpretation of part 1 of volume 1 of Capital". Working paper, Mount Holyoke College, c2005 [24].
  86. ^ Peter P. Ekeh, Social exchange theory: the two traditions. Cambridge, Mass.: Harvard University Press, 1974.
  87. ^ See e.g. Georg Simmel, The philosophy of money. London: Routledge, 2011; Geoffrey K. Ingham, The nature of money. Blackwell Publishers, 2004.
  88. ^ John Milios, "Marx’s Value Theory Revisited. A ‘Value-form’ Approach." Proceedings of the Seventh International Conference in Economics, Economic Research Centre, METY, Ankara, September 6-9, 2003. (Part 5, p. 9)[25]
  89. ^ In their book Capital as power (Routledge, 2009).
  90. ^ Harry Cleaver, Reading Capital Politically. University of Texas Press, 1979. [26]
  91. ^ Lawrence Krader, A Treatise of Social Labour. Assen: Van Gorcum, 1979 and Labor and value, ed. by Cyril Levitt and Rod Hay. New York: Peter Lang, 2003. David Graeber, Towards an Anthropological Theory of Value: The False Coin of our Own Dreams. Palgrave Macmillan, 2001.
  92. ^ In his book National Accounts and Economic Value: A Study in Concepts (London: Palgrave/Macmillan, 2001). See also Utz-Peter Reich, "The Role of Money in the Measurement of Value" [27]
  93. ^ |"In economics of all topics value is most disputed. This is because the theory of exchange which lies at the threshold of our science forms a connecting link between problems of a purely economic nature and the social. Moreover it acts as a point of departure for theoretical inferences affecting the entire domain of human economy. Its abstract nature renders an objective approach quite difficult and for all who have ventured to overcome these impediments it turned to be a stumbling block. Thus by its nature the theory of exchange value is a most ungrateful topic to be dealt with. Yet, being of essential importance to economics and a problem which was not solved, it invites adventurous minds to attempt its solution." Alexander Gersch, On the Theory of Exchange Value. Wurzburg: A. Gersch, 1969, p. v.
  94. ^ "The chatter about the need to prove the concept of value arises only from complete ignorance both of the subject under discussion and of the method of science." - letter of Karl Marx to Ludwig Kugelmann, London, 11 July 1868 (MECW, Volume 43, p. 67).[28].
  95. ^ Karl Marx, Preface to Capital, Volume I, Penguin ed., p. 92.
  96. ^ L. Randall Wray, "Modern Money". The Jerome Levy Economics Institute Working Paper No. 252. 1998 [29]; Stephanie Bell, "The role of the state and the hierarchy of money". Cambridge Journal of Economics, Vol. 25, issue 2, 2001, pp. 149-163 [30]; Matthew Forstater, "Taxation and primitive accumulation: the case of colonial Africa". Research in Political Economy, Vol. 22, 2005, pp. 51-64.[31]
  97. ^ Paul Cockshott and Dave Zachariah, "Credit crunch: origins and orientation". Science & Society, Vol. 74, No. 3, July 2010, pp. 343-361. [32]
  98. ^ David Graeber, Debt: the first 5,000 years. Brooklyn: Melville House, 2010
  99. ^ For more information, see the wiki articles on Modern Monetary Theory (MMT) at MMTWiki.org.[33].
  100. ^ Pavlina R. Tcherneva, "Chartalism and the tax-driven approach". In: Philip Arestis & Malcolm C. Sawyer, A handbook of alternative monetary economics. Cheltenham: Edward Elgar, 2006. [34]. Pavlina Tcherneva, "The Nature, Origins, and Role of Money: Broad and Specific Propositions and Their Implications for Policy." Center for Full Employment and Price Stability, University of Missouri, Working Paper No. 46, July 2005. [35]
  101. ^ L. Randall Wray, "The Neo-Chartalist Approach to Money". Center for Full Employment and Price Stability, University of Missouri-Kansas City, Working Paper No. 10, July 2000. [36]
  102. ^ L. Randall Wray (ed.), Credit and State Theories of Money: The Contributions of A. Mitchell Innes. Cheltenham: Edward Elgar, 2004.
  103. ^ See Costas Lapavitsas, "Money as 'universal equivalent' and its origin in commodity exchange." Working Paper, Department of Economics, SOAS, University of London, May 2003.[37]
  104. ^ Ernest Mandel, "Introduction" to Karl Marx, Capital, Volume I. Harmondsworth: Penguin, 1976. p. 75.
  105. ^ Carlo Panico, "Marx on the Banking Sector and the Interest Rate: Some Notes for a Discussion". Science & Society Vol. 52, No. 3 (Fall, 1988), pp. 310-325; Carlo Panico, Interest and profit in the theories of value and distribution. London: Macmillan, 1988; Makoto Itoh and Costas Lapavitsas, Political Economy of Money and Finance. London: Macmillan, 1999.
  106. ^ Jan Lucassen (ed.), Wages and currency: global comparisons from antiquity to the twentieth century. Bern: Peter Lang, 2007.
  107. ^ Paul Einzig, Primitive money in its ethnological, historical and economic aspects. Pergamon, 1966.
  108. ^ George Dalton, "Primitive money". In: American anthropologist, new Series, Vol. 67, No. 1 February 1965, pp. 44-65. [38]
  109. ^ Social evolution & history: studies in the evolution of human societies (Moscow). Special issue: "Chiefdoms: theories, problems and comparisons". Vol. 10, No. 1, March 2011.
  110. ^ Eladio Febrero, "Three difficulties with Neo-Chartalism". Bilbao: XI Jornadas de Economía Crítica, 2008.[39]
  111. ^ OECD, The future of money. Paris: OECD, 2002 [40]
  112. ^ Iring Fetscher et. al., Social classes, action and historical materialism. Poznań studies in the philosophy of the sciences and the humanities, Vol. 6. Amsterdam: Rodopi, 1982, p. 27.
  113. ^ According to Jim O'Neill of Goldman Sachs, "We estimate that two billion people could join the global middle-class by 2030, mainly from Brics". Gillian Tett, "The story of the Brics", in Financial Times, January 15, 2010.[41]
  114. ^ "In socialist society, not only does value not arise, but also the value-form that is its phenomenal form cannot exist." - Tadayuki Tsushima, "Understanding “Labor Certificates” on the Basis of the Theory of Value", in: Tadayuki Tsushima, Kuremuren no shinwa ("Myths of the Kremlin"), 1956. [42]
  115. ^ Michael Voslensky, Nomenklatura. Anatomy of the Soviet ruling class. London: The Bodley Head, 1984.
  116. ^ Max Weber sociologically distinguished already between an "instrumental rationality" (the efficiency of a means-ends relationship) and a "value rationality" (the reasonableness or valuation of goals in themselves).
  117. ^ This is argued most powerfully by Milton Friedman in his book Free to choose.
  118. ^ Richard Pipes has famously argued, in various writings, that the lack of a clear concept of private property in the communist era was a disaster for the Russian economy.
  119. ^ See the research of Samuel Bowles and his colleagues.[43]
  120. ^ Reinhard Bachmann & Akbar Zaheer (eds.), Handbook of trust research. Cheltenham: Elgar, 2006.
  121. ^ Włodzimierz Brus, The Market in a Socialist Society. London: Routledge, 1972; Oskar Lange, Economic Theory and Market Socialism: Selected Essays of Oskar Lange, ed. Tadeusz Kowalik. Edward Elgar Publishing, 1994; Abba P. Lerner, "Statics and Dynamics in Socialist Economics," Economic Journal, Vol. 47, June 1937; Branko Horvat, Political Economy of Socialism: A Marxist View. M.E. Sharpe, 1983; David Miller (political theorist), Market, state and community: the theoretical foundations of market socialism. Oxford: Clarendon Press, 1989; Erik Olin Wright (ed. & introd.), Equal Shares: making market socialism work. London: Verso, 1996. Bertell Ollman (ed.) Market Socialism: The Debate Among Socialists. Routledge, 1998; Alec Nove, The economics of feasible socialism, 2nd ed. Routledge, 1992.
  122. ^ Makoto Itoh, Political economy of socialism. Macmillan, 1995; Ha-Joon Chang, 23 Things They Don't Tell You About Capitalism. Penguin Books, 2010.
  123. ^ Anthony Giddens, The Third Way. The Renewal of Social Democracy. Cambridge : Polity, 1998; Robert Rowthorn, Democracy and Efficiency in the Economic Enterprise. Taylor & Francis, 2003; Geoffrey Hodgson, Economics and utopia. London: Routledge, 1999.
  124. ^ János Kornai, The socialist system. Oxford University Press, 1992; Ernest Mandel "The myth of market socialism", New Left Review, I/169, May–June 1988.
  125. ^ Michael Albert, Parecon: Life After Capitalism. London: Verso Books, 2003; Robin Hahnel, Economic Justice And Democracy: From Competition To Cooperation. London: Routledge, 2005.
  126. ^ Jinglian Wu, Understanding and interpreting Chinese Economic Reform. Mason, Ohio: Thomson, 2005, p. 17.
  127. ^ See e.g. Samuel Bowles & Herbert Gintis, A cooperative species: human reciprocity and its evolution. Princeton: Princeton University Press, 2011.[44]
  128. ^ Some of the historical Marxist debates in Europe are reviewed in Catherine Samary, Plan, Market and Democracy, IIRE Notebook for study and research 7/8, 1988.[45]
  129. ^ Many of the important technical discussions in socialist or post-socialist societies have unfortunately never been translated into English, and the controversies are often strongly influenced by ideological, political or moral positions or cherished dogma's.