Marx's Theory of Value -- Two Rival Interpretations

In what follows, I review two contributions to the debate about how to read Marx's central work on value. These two were chosen because they summarise nicely a debate between Althusserian and other ( in this case Hegelian) readings. Both of these were published in a collection edited by Elson. My colleague S Crook ( now Prof S Crook) selected these two for discussion on a course on social theory we were jointly teaching in the 1980s, and I am grateful to him. The summaries are entirely my own, however.

Hussain, A ‘Misreading Marx’s Theory of Value’

This article can be read at a number of levels. It offers an Althusserian reading.  If I begin by summarising the main points as I see them, then mention some details of the argument, maybe that will provide the most convenient way to analyse this piece. Of course, some violence must be done to the text.

Hussain gives detailed accounts of particular ‘problematics’ central to the Althusserian angle on Marx. Thus to begin with ‘problematics’ which are distorted, ideological, non-marxist or just plain wrong, Hussain offers a brief account of an historicist problematic:

This involves seeing history as a process with a subject, that is seeing history as the unfolding of the development of particular humans, particular classes, or ‘Man’ or ‘Geist’ or whatever. (N.B. the first few examples are also guilty of the other main Althusserian sin — ‘humanism’). The effects of using an historicist problematic are:

  1.  Seeing history as governed by a basic organising principle e.g. ‘man’s struggle with nature’

  2. The absence of an account of the distinctiveness of historical forms — ‘historical’ time is seen as equivalent to ‘physical1’ time (i.e. history is seen as simply steady progress from Stone Age to capitalism).

  3. An inevitable empiricism OR idealism, both of which are forms of reductionism e.g. economism or left-wing adventurism. The real complexities of historical change are always reduced to ONE basic central mechanism — e.g. either ‘the economic system’ which simply evolves, or the emergence of political parties, great charismatic leaders, marches towards the liberation of human beings or whatever. ‘Economism’ vs ‘left-wing adventurism’ was a big issue in, say, the German Socialist or Communist Party.  Some believed they should wait for economic forces to produce the inevitable reduction, others believed that the Party should go out, seize the initiative and express the proletariat’s yearning for freedom etc.

Hussain also refers to a ‘Philosophical Anthropology’ problematic, one version of which is the ‘Feuerbachian-humanist’ problematic. For the latter, the central tenets are:

  1.  History is a process with the subject ‘Man’.

  2. ‘Man’, or ‘species being’, has definite natural attributes — he consumes, produces, creates etc. These attributes are seen as the essence of Man (human nature) OR as the ‘predicates of the subject’ (i.e. as the essential way in which ‘Man’ defines himself in his works, as the characteristic hallmarks of human activity). There are variants of this approach accordingly —an idealistic variant which sees attributes as the essence of ‘Man’, and an empiricist variant which claims to have found the truth about ‘Man’ by studying his works, as it were.

  3. The ‘banal notion of alienation’ expresses the ways in which the subject ‘Man’, the essence (human nature), and the object ( the social arrangements in human society) are related. Thus for

Feuerbach, AND for the young Marx (?) Man’s essence (his creativity) becomes embodied in an object e.g. a religious system, or a labour system which becomes alien, an objective thing. This thing in turn comes to be seen as a force which dominates ‘Man’. The contribution of Feuerbach was, then, to discover the truth of this ‘upside down’ way of looking at things — e.g. ‘Spirit’ does NOT control ‘Man’ as in Hegel, but the other way round.

In economics, the effects of this Feuerbachian—humanist problematic are:

  • Consumption becomes consumption by ‘species being’ rather than consumption within a mode of production. Thus consumption is seen as a purely ‘natural’, human thing — capitalism merely provides for the ‘needs of Man’ so consumption in capitalist societies is simply ‘natural’.

  • Production in capitalism merely expresses the relation of ‘Man’ to ‘nature’, rather than being seen as formed by distinct forms of collective labour, of real concrete men interacting with the material world. As these forms of collective labour vary according to specific social arrangements in reality, the distinctive character of capitalist production cannot be grasped within this problematic. Again, capitalist production is seen simply as a more complex form of ‘natural’ human activities. For both consumption and production, then, the specific elements of capitalism are missed within this problematic —not only is capitalism badly misunderstood as a result, but capitalism is seen as ‘natural’, or, at the most, as an inevitable warping of ‘human nature’. So this problematic either simply legitimises capitalism, or at best offers only a moral objection to it.

Hussain claims to detect the key characteristics of the Marxian problematic which is a decisive departure from historicist and humanistic problematics. Hussain says that hints of this ‘scientific’ problematic are found for the first time in the Introduction to Grundrisse,in Capital, but best of all in the Marginal Notes on Wagner ( not the composer but another economist -- this was one the last things Marx wrote). Wagner tries to reinterpret Marx’s economics in terms of a Feuerbachian—humanist problematic, a critical variant of which sees capitalism as ‘unnatural’, as ‘robbery’. This is what Wagner thinks Marxism is! Marx’s comments on this attempt reveal both what he thought of such a problematic and what his alternative was. In general, without getting too embroiled in the detailed technical discussions about economics, in which the argument is actually couched, it is possible to pick out the thrust of the arguments in a simplified way.

Marx's critical comments include and reveal

  1.  An anti-historicist problematic. Marx does not see history as a process with a subject, but as a process without a subject. Hussain says this is the idea that Marx got from Hegel. Briefly, history is the succession of specific modes of production, for Marx. There is no purpose behind it, especially no hidden goal of history — e.g. one that leads inevitably to socialism, no ‘iron laws’ which prove the necessity of proletarian revolution. This is expressed in the note on Wagner about Marx’s denial that he has a ‘socialist system’ (Hussain, p.83).

  2. An anti-Feuerbachian/humanist problematic. Marx denies that ‘Man’ and ‘Man’s needs’ can explain patterns of consumption, revealed in the Marginal Notes when he says ‘Man in general has no needs’ (Hussain, p.91). What this means is — we can not explain actual patterns and types of consumption of goods in capitalism simply by seeing these as meeting the natural needs of Man. Consumption takes specific forms in capitalism. As in the Grundrisse, Marx wants to argue that levels of demand for goods, the markets for goods, the distribution of wealth to permit levels of consumption (i.e. the class system, which lies behind ‘patterns of consumption’) are specific in capitalism and are ultimately limited, shaped, or, if you must, ‘determined’ by a capitalist mode of production. Natural it is NOT.

 The main thrust of the critical rejection of humanist problematics is found where Marx discusses production, however, Wagner wants to see production in terms of a natural tendency for ‘Man’ to express himself via labour to alter nature by producing goods. Marx wants to argue that labour in capitalism reflects a specific form of this ‘labour in general’. There is a need to remember, when, discussing labour/production in capitalism, that:

  • production is always the production of a specific good

  • production occurs under ‘determinate historical conditions’ (Hussain, p.90).

As in the Grundrisse Introduction: labour in capitalism is a specific form of labour, it is possible only when labour itself becomes a commodity, when it is at its most abstract and most highly developed level, when social organisation has developed to such a level that there are labour markets, efficient ways to organise labour impersonally, as it were — we are far, far way from simple ‘natural’ labour when we analyse capitalism.

Marx’s Alternative

We have to develop precise and specific concepts to analyse the particular forms of capitalism. These are the specific Marxist concepts of ‘value’, ‘exchange value’, ‘commodity’, ‘labour power’, ‘surplus value’, and above all ‘mode of production’. There are doubtless others too — but these are the ones Hussain selects as vital to understanding Marx’s Theory of Value.

We have to see Marx’s analysis as a structured discourse (roughly, a scientific vocabulary of terms to describe the states or ‘levels’ of a capitalist social formation, and the processes that link or change these states) [link to Mepham?] Specifically, Hussain refers to this discourse as offering a transformation of the Ricardian discourse on economics (Generality I in Althusser's terms) via Marx’s bit from Hegel about history as a process without a subject (Generality II), leading to Marx’s own scientific account (Generality III) (Hussain p 87

We must not collapse the separate concepts in the discourse because then we run into error as Wagner does. Wagner sees Marx as a (very clever) political economist like Ricardo, but Hussain says Marx transforms Ricardo. By collapsing the concepts, of ‘value’ and ‘exchange value’ above all, major misreadings of Marx occur. To put this at its simplest, for Marx ‘value’ represents the expenditure of social labour power in general. This expenditure has to be expressed in order for all the branches of production and consumption in complex social formations to be articulated, related together efficiently. ‘Value’ signals how social labour in general is to be organised as specific production. Think of this in conventional terms for a moment - the ways in which scarce resources are allocated to particular productions is regulated by the value placed on particular goods — if, say, weapons are valued more highly than ploughs, economic activity will be directed towards weapons. The ‘value’ of products signals to investors, producers, workers etc what the priorities are, and how resources should be allocated. 

Now Marx says we must keep this general notion quite separate from the actual form in which value is expressed in capitalism — in the form of exchange value. Expressing value as exchange value means that allocation of resources (‘social labour’) will follow the needs of the accumulation of capital (in conventional terms — the ‘profit motive’). If you ignore this specific consequence of expressing value as exchange value you have missed what is specific to capitalism. Worse than that, by collapsing value and exchange value, you are led to see capitalism as ‘natural’ again, and this is what Wagner, and just about every other bourgeois economist does. For Wagner, value expresses ‘Man’s’ ‘natural’ desire to evaluate things in order to allocate resources, but according to some agreed, universal, natural definition of what human needs are. Value happens to be expressed in market value (exchange value) in capitalism — therefore, for Wagner, capitalist markets etc are simply naturally evolved ways of deciding what ‘Man’ finds useful. For Marx, they are seen as ways of exchanging commodities in order to accumulate capital, which is NOT natural at all, but historically specific, and NOT simply an expression of human nature, but the result of a specific mode of production. 

Other, more technical, errors arise from collapsing value and exchange value —e.g. seeing Marx as merely interested in explaining prices, as good little economists do, or seeing Marx as having bother with explaining prices ( in Volume III Capital) in terms of his model (in Volume I). These need not detain us. Hussain says if we get the order of discourse right (hints of which are found in the Marginal Notes) we can crack these technical problems. Only when we keep the concepts separate, can we avoid humanist readings of Marx (of several varieties — focus on the Wagnerian error as the best example for now, but note Hussain denying that Marx has to use the concept ‘alienation’ to explain the warping effects of capitalism).

Banaji, J  ‘From the Commodity to Capital: Hegel’s Dialectic in Marx’s Capital

This piece is best read, for our purposes, as an attempt to argue that Marx uses Hegel’s method to criticise political economy. This involves Banaji in a number of necessary sub-arguments:

What Hegel’s method actually is (especially what Hegel meant by ‘essence’ and how ‘essence’ and ‘appearance’, or the ‘abstract’ and the ‘concrete’, are linked).

How Marx uses this method, in a number of texts, but in the Grundrisse Intro, and above all, in the opening sections of Capital

To counter and reject a number of alternative readings of the Marx/Hegel relation — principally Althusser’s, but also Colletti’s, Lenin’s, and (by implication anyway) those who see Marx as simply inverting or materialising Hegel (e.g. early Marcuse).

 It’s very clever, scholarly stuff and the most usual reaction to it is to doff hats and stand in wonder for 2 minutes, then pass on. However, let’s have a bash at the salient points at least, shall we? 

The opening discussion on Lenin on Hegel/Marx contains the seeds of the arguments above. Lenin himself said Marx was incomprehensible unless you had read Hegel, but all sorts of marxists have tried to ignore the Hegelian bits -e.g. 2nd International heroes or modern marxian philosophers (like Althusser). They have been forced to find some other basis for Marx  --  a wide range of candidates have been dragged in to fill the gap (from Darwin to positivists). 

Lenin himself misread Hegel, though. This is best seen in the example of the famous ‘real vs phenomenal forms’ stuff in Capital. Lenin sees the connection between this discussion and Hegel’s terms ‘essence’ and ‘appearance’, and sees Hegel as saying we must somehow abstract from the appearances, on the surface, of the social world to get to their underlying form or essence (e.g. go from the mere prices of goods to get to the value of them). Yet Lenin gets misled by Hegel’s insistence that essences are ‘opposite’ to appearances (don’t we all!). ‘Opposition’ is a bit special as a term in Hegel — briefly, as we shall see in a minute, essences are not completely separate from appearances, they ‘posit’ them.

Appearances develop from essences. Appearances and essences are (dare I say it) dialectically linked. This point leads to consequences for methods of analysis —crudely, there is no simple method of abstraction from concrete appearances to essences: it is quite permissible to go the other way round and demonstrate how essences develop into and take the form of various appearances. Marx himself goes in both directions, giving Capital in particular a very complex form, as we’ll see. But this form is a real Hegelian method, quite consistent with Hegel, only understandable as Hegelian — to impose some non-complex, non-dialectical method on Marx means you have to dismiss large parts of Capital (especially the stuff on fetishism) as inconsistent, irrelevant, or muddled (just what Althusser does, just because it doesn’t follow what he says Marx’s real method is!).

The first demonstration of the Hegelianism in Marx is found in the bits on the composition of capital (in Capital and Grundrisse). Marx says there is ‘capital in general’, and also ‘many capitals’. The former is the ‘inner nature of capital’, its ‘essential character’, the latter refers to the ‘concrete’ aspects of this essence, ‘on the surface’, as in specific movements of actual capitals. This familiar distinction leads to Marx’s method of investigation. We have to move from essence to concreteness, paradoxically (dialectically?) by abstraction from the concrete first. We don’t do this ‘empirically’, though, like economists do. (Nor do we just simply explain the concrete as some direct manifestation of some wondrous principle like ‘commodity fetishism’.) Oh no — we have to do something much more rigorous — see the concrete as derived from the abstract, via a logical form of development, through definite stages. 

Others have pointed to the famous bits in the Grundrisse Intro where the concrete totality is composed of complex determinations of ‘simpler’ (abstract) terms, but have gone on to draw Althusserian/Poulantzasian conclusions about these processes ( as in the 'CND badge' model of the social formation). Banaji wants to say that the stuff is actually indicative of an Hegelian method though, that these combinations of determinations are ‘form-determinations of essence’ (not combinations of terms in a structured discourse), and points to the obvious Hegelian language Marx uses in these bits (OK, not so much in Grundrisse Intro maybe). The only point of agreement really with the Althusserians is that these pieces do finally dispel any view that Marx is just providing ‘scientific laws’ which can be turned into specific hypotheses and tested — it’s very different from that kind of connection between abstract and concrete.

It’s an Hegelian method for Banaji, not just applying Hegel directly (not even just upside down), but in accepting that essences are dynamic beasts, that ‘move’ and change into (posit themselves in) specific forms, that the real is a unity of essence and form. So — if you want to understand the real, you’ve got to grasp it as this totality — not just as abstract concept, not just as specific concrete appearances, but as ‘the entire wealth of the developed form’. This is Marx’s method. This is what he uses to attack political economists . ‘Vulgar’ political economists are easy to dismiss — they simply do empirical work, noticing all sorts of interesting relations between things ‘on the surface’. ‘Classical’ ones want to get at underlying principles (‘economic laws’) — but they ‘derive’ these by apparently abstracting them from these empirical appearances (so that ‘laws of supply and demand’ are supposedly based upon actual workings of markets). In fact, (as anyone who has ever suffered trying to study economics will know), these ‘laws’ don’t fit empirical reality at all well — so economists have to introduce all sorts of ‘accidental’, contingent bits to explain how laws are ‘modified’ in practice. This leads to deep embarrassment for them, and to the central Marxist point for Banaji -- all this arises because these methods get the relations between abstract/concrete, principles/appearances wrong. The right way to conceive of these relations is an Hegelian way (so it’s daft to read Marx as simply offering technically better economic laws, ones that merely help us build a better abstract model of price movements or whatever).

 So Marx’s theory of value is NOT a scientific law to be ‘applied’ in the usual sense, nor is it a kind of simplified model of real economic activity. It is used instead as a kind of dynamic essential ‘principle’, which develops into specific forms. What actually happens then — how do Marx’s remarks on value actually ‘turn into’ his specific analyses of concrete capitalist economics? If Marx really is using Hegel’s method, there should be a particularly tight logic to the analysis — remembering that essences are dynamic and thus contain, as it were, a variety of logically possible specific forms. We should expect to find the remarks at the level of ‘principle’ — the abstract discussions of value etc — as somehow containing all the necessary apparatus for the later specific analyses. The specific analyses in Capital should be ‘logical derivations’ of the discussion of the dynamic principles of value. Let’s turn to Capital and see.

A big snag occurs with the beginning of Capital Vol 1 (all the bits about the theory of value, abstract models of circulation, comments on the historical origins of capitalism — and the famous bit on fetishism of commodities). How does all this abstract stuff fit the mere specific analyses of the late volumes? Is it just unnecessary ‘metaphysics’, best ignored (like Althusser says)? Is it some simplified model just to get us in the mood? Is it that Marx actually began with the specific stuff, discovered the concepts, but chose to write the stuff in the reverse order because he realised that concepts and specific observations are of course, inseparable (to vulgarise slightly Colletti’s view)? Banaji says the work begins with abstract discussions of the commodity etc because Marx wants to lead us to the essence/principle which he’s going to unfold for us later. The later analyses (and much of the specific discussions too) will be incomprehensible unless we follow the logic of Marx’s analysis as he has laid it down. Now a real paradox enters in the article - because it seems that an awful lot of very clever reinterpretation and reconstruction is actually needed to make all this work. If there is a clear logical procedure in Marx it certainly isn’t a transparent one. 

The actual arguments in Capital are very mixed and complex. As you will see if you look at it, there are all sorts of odd pieces in Capital Vol 1: a lot of stuff about money, has the money system develops into an advanced capitalist form; the famed analysis of the commodity and how it must be de-fetishised and broken down into use-value and exchange-value; the development of the theory of value (exchange-value and surplus-value etc); bits of social history on the origins of capitalism and its current effects on social life; and (vital for Banaji) bits of Hegelian language about essences and appearances. Different commentators have emphasised different parts of these arguments to ‘read’ Marx as a mere political economist, historian, positivist or epistemological break-maker. In a sense, Banaji is saying these interpretations are too literal, that to understand all of these odd pieces as connected into a continual logical argument, you have to reinterpret the themes of Capital and see the argument as a double one in 2 senses:

  • There are in fact 2 phases of argument, 2 ‘cycles of abstraction’ which. are linked.

  • There are 2 (major) levels of argument — how specific forms develop, apparently ‘on their own’ as it were (eg how a money system develops from a simple to a complex form of credit) AND how each of these specific forms relates to an underlying ‘essential substance’ — social labour. These 2 levels are necessarily, logically linked for Banaji —specific changes only really make sense after continual reminders of the nature and qualities of the essential substance and that’s why Marx keeps pausing and reminding us of Hegelian philosophy.

 Let’s put in a bit of detail about these procedures

 The 2 cycles. The first cycle is involved with the analysis of the commodity — first, money as a commodity then the commodity form as such. We know how this works — commodities turn into frozen, ‘fetishised’ combinations of use -value and exchange-value. Exchange­value is identified as the characteristic form of value in capitalism. We are told about the trick of extracting surplus-value as the secret of real growth in capitalism too. After that we get to the essential principle — that value is ‘abstract and reified social labour’. In classic Hegelian terms, Marx is using the analysis of the commodity to show us that human essence, social labour, is a dynamic and self- developing substance that appears or realises itself in a variety of specific reified forms. The analysis of the commodity happens to be the most direct and immediate way to reveal this. 

The second cycle returns to examine what has been presupposed up to now —the money system, circulation, and capital. These have been presupposed up to now, because as we’ve seen, the commodity only takes the form that it does in capitalism — it is NOT some purely abstract or ‘natural’ form found in all societies (which is what political economists thought). The system which gives it its form is discussed in the second cycle as equally a form of abstract reified social labour — capital is, money is, circulation is. The second cycle uses the analysis of the first cycle to fill in, in a consistent and logical manner, the rest of the system of capitalist production. 

The 2 levels. Concrete, specific forms can be analysed in their own right, as it were — and must be because they do have ‘their own’ specific dynamic (reified forms lead a life of their own) But this specific dynamic is only possible because the essence of which they are concrete forms supplies the dynamic. Thus underneath the growth of, say, money circulation into capital circulation, lies the unfolding of the essence of social labour itself developing more and higher forms of abstraction and reification . We have to keep being reminded of this, lest we stray into positivism, or evolutionism, or functionalism etc.

Only when Capital has been reconstructed like this do all the bits make sense. Close textual analysis in Banaji supports this (he says). Marx’s project is a complex ‘spiral’ between levels and cycles, analysis and synthesis. What makes it all so difficult is that the reader has to be alerted to all this complexity by constant reminders, returns to basics, discussions that flow in opposite directions and so on. A real problem here for Marx then -- how do you convey dialectic analysis in a highly linear medium (no-one knows how to write or speak ‘spirally’ — I think he could have tried harder! Why not sjng one theme and play the other on a piano simultaneously?) This problem accounts for ’the clumsy circularity and general oddity' of the text.

Do read the footnotes if you can— there’s a lovely sarcastic one about Althusser on pp 42, 43.