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Abstract Labour and Social Mediation in Marxian Value Theory

By

Nicola M. Taylor

Bachelor of Economics (Honours)
Murdoch University

This thesis is presented as part of the requirement for the Degree of Bachelor of Economics with Honours in Economics, at Murdoch University.
4th  November, 2000

Acknowledgments

I thank my supervisor, Paul Flatau, for his helpful suggestions and encouragement during the writing of the dissertation, which also benefited from extensive and enjoyable discussions with Chris Arthur, Riccardo Bellofiore, Andrew Brown, Jerry Levy, Fred Moseley, Alfredo Saad Filho, Geert Reuten and Michael Williams.  Special thanks are due to Geert Reuten and Alfredo Saad Filho for their invaluable comments and suggestions on earlier drafts and chapters.  Funding for the research was provided by a Murdoch University “Honours Excellence Scholarship”. 

Abstract

The dissertation inquires into abstract-labour as the source of value in a capitalist economy.  A key question is whether value can exist prior to exchange as a physiological substance embodied in commodities, or whether it is a social dimension brought into existence only as the result of market activity?  A corollary question concerns the measurement of value: is it measured as an amount of labour time expended in production or is it measured only in money, as an exchange ratio between commodities?

A textual analysis of the starting point of Capital shows abstract-labour to be an ambiguous concept.  Criticism centres on Marx’s lack of clarity with respect to method.  First, it is unclear as to whether abstract-labour is a reductive category describing an amount of homogeneous labour embodied in commodities (a labour theory of value), or a dialectical universal describing a ‘real abstraction’ from particular types of labour, established in exchange (a theory of social form).  Second, abstract-labour is conceptualised as a ‘substance’ of value and this implies a logical order where value precedes price and, indeed precedes the existence of capitalism.  

Theoretical and empirical problems associated with a variety of interpretations of Marx’s abstract-labour-embodied value theory are identified and discussed.   The main argument against labour-embodied theories (whether physiological or social) is that they deny any ontological role to money (capital) in determining the character and level of productive activity in a capitalist economy.  As a result of this value-price dichotomy, the imperative of valorisation (the process of increasing value) driving the capitalist system is inadequately captured within these theories.  

I present and defend a dialectical reconstruction of abstract-labour and value as social categories that come into existence only to the extent that markets transform the imperatives driving the production process.  Causality is systemic, determining abstract-labour as the form that social labour takes in capitalism and money as the sole measure of the value of labour, labour-power and commodities.  A further determination of the labour process as a technical process and a valorisation process supports the main conclusion: labour (in the process of valorisation) is the one and only source of value-added.  The result is established without recourse to abstract labour as the value ‘substance’, purging any reliance on autonomous ‘labour-values’ underlying prices and money.

Contents

Statement of Originality	i
Acknowledgements	ii
Abstract	iii
1.  Labour, Value and Money	6
2.  Value Theory: Content and Concepts	12
2.1  Two Types of Abstraction	14
2.2  Hegel’s Logic: Principles and Implications	18
2.3  Abstract Labour: Analytic or Dialectic Abstraction?	22
2.4  Value-Form and Commodity Fetishism	28
Conclusion	32
3.  Two Paradigms, Two Problems	35
3.1  The Technical Paradigm	36
3.2  The Social Paradigm	46
3.3  Abstract Labour: Substance versus Form	56
Conclusion	61
4.  Abstract Labour: A Reconstruction	63
4.1  Critique and Reconstruction	65
4.2  A Systematic Dialectical Starting Point	68
4.3  Concrete Dissociated and Abstract Associated Labour	69
4.4  Reconstructing the Theory of Value-Form	71
4.5  The Concept of Abstract-Labour: a Criticism and a Defence	84
Conclusion	90
5.  Conclusion	92
References	100
1.  Labour, Value and Money

In a Postface to the second edition of Capital 1, Marx (1873) complained that his book had not been well understood and made a number of remarks linking the content of his value theory to Hegel’s method and form theory.  Yet, this Postface was itself notoriously ambivalent, especially concerning Marx’s application of the Hegelian notions of doubling and appearance to his critique of the classical categories of labour, value and labour time (Arthur, 1993; Murray, 1993; Reuten, 1993; Smith, 1993).  Today the question of Marx’s method remains disputed, as does his value theory.  Is it a variation on the classical labour theory of value, arising from a critical transformation of Ricardian concepts; if not, what kind of a theory is it?  

Fischer (1982) suggests that this question constitutes the ‘most comprehensive’ and controversial issue in Marxian political economy.  At stake is the important question of what type of labour is abstract labour, and what is the relation of that labour to the value of capitalist commodities.  Here, Marx’s exposition in the first Chapter of Capital is a notoriously difficult and enigmatic source.  Not only does Marx derive abstract labour differently in the several language editions of Capital that he edited in his lifetime, but he also presents different views on the concept within texts (see Bellofiore, 1999; Rubin, 1928/1972).  At times abstract labour appears as ‘substance of value’: a ‘natural’ or physiological property of particular commodities, or a proposition in the derivation of a general ‘law of value’ pertaining to all forms of economic organisation in which there is a division of labour.  At other times, the concept expresses a relation of equivalence between private labours that can come about only when diverse commodities are brought into a form of social equality in the market.  In the latter sense, abstract labour has a distinctly non-Ricardian flavour: it is a category with economic significance only to the extent that the practice of exchange transforms and defines the imperatives driving the production process.

Marx’s ambivalence regarding the ontological character of abstract labour manifests in contemporary debates as a serious epistemological disagreement over the meaning and measurement of concepts.  Did Marx see value as the objective representation of a natural substance (abstract-labour) embodied in particular commodities prior to exchange, therefore measurable in labour time (e.g. Sweezy, 1946; Mandel, 1990)?  Or did he see value as an historical expression of the social form that productive private labour assumes, as it is abstracted, alienated and mediated by exchange, therefore measurable only in money (e.g. Arthur, 1999; Reuten, 1999; Williams, 1998)?  Did Marx present an original, if somewhat inadequate, synthesis of classical value theory and Hegelian form theory (e.g. Reuten, 1993); or did he present two contradictory value theories, and shift irresolutely between them (e.g. Mirowski, 1990)?  These questions pose critical problems for any evaluation of the theoretical consistency of Marx’s value theory, raising the question of how far the categories of Capital are in fact adequate to its ‘subject matter’ (Bellofiore, 1998a).  

This point – about the need to re-evaluate Marx’s concepts in terms of the cogency of his project – provides the rational for the current inquiry.  The dissertation has two objectives.  The first object is to clarify the ontological meaning and methodological status of a central concept of Marx’s and Marxian value theory: abstract-labour.  Subsidiary to this is a demonstration that the ambiguities arising out of different interpretations of abstract-labour inhere in the text of Capital, and not in the great variety of appropriations of it.  The second objective is to undertake a critical investigation into a key proposition of Marx’s abstract-labour theory of value: that abstract-labour embodied in commodities during production (independently of exchange) is the one and only source of surplus value.  Special emphasis will be given to an alternative view of abstract-labour as a category in a theory of ‘social value’ or ‘value-form’ where money has ontological significance in determining economic outcomes, including the determination of abstract-labour as value.  This leads up to a core research question: must Marx’s abstract-labour (embodied) theory of value be abandoned as inadequate to the theorisation of capitalism, or can Marxian categories be reconstructed to provide a theory of the social constitution of the nexus of value and money?  This heuristic question motivates the analysis throughout the dissertation.  I hope to show that a theory of ‘social value’ is implicit in Marx’s Capital and, moreover, to suggest some ways in which that theory might be explicitly developed.
  
	THESIS OUTLINE
A full inquiry into Marxian value theory would require a detailed analysis of the whole of Capital engaging the contentious issue of Marx’s theory of science - in relation to that of the classical economists as well as Hegel’s logic.  Here, I focus in a more limited way on the opening chapter of the first volume where Marx introduces his central concepts: the commodity, abstract-labour, value, exchange-value, money and value-form.  Although these concepts do not constitute the whole of value theory, the efficacy of the starting point is an important factor in current disputes.  Moreover, in making explicit criteria for evaluating (and reconstructing) Marx’s starting point, I hope to show how the impasse concerning the ontological and methodological status of core concepts – abstract-labour and value – might be circumvented, if not resolved.

The first chapter poses a preliminary question concerning Marx’s (1867a) development of the double character of commodities and labour in relation to their determination by social form.  Marx clearly saw the value/use-value and abstract-labour/concrete-labour dualities as crucial to his value theory, but what are we to make of these oppositions?  Are they analytic or dialectical oppositions and how does the answer given to this question prejudice the way that Marxian value theory is understood?  In the first two sections of his chapter, Marx’s analysis appears to be similar to that of the classical political economists.  He posits economic relations as the causal product of external determination, particularly in nature; the concepts of abstract-labour and value are taken to be natural phenomena.  In the final two sections, however, Marx’s method seems to be more closely associated with Hegel’s (1817) Logic.  He suspends a priori presuppositions and understands economic relations only as a development within a social (systemic) set of interconnected determinations; the concepts of abstract labour and value are social phenomena.  This juxtaposition of competing strands of capitalist thought in Marx’s text suggests that Bellofiore’s (1998a) question concerning the cogency of Marx’s project is not resolvable by reference to the text of Capital, but only by serious discussion of the analytic status of Marxian categories.  

The second chapter reviews the major effect of Marx’s ambivalent derivation of abstract-labour: a paradigmatic splitting of Marx’s value theory into concrete-labour-embodied (technical) and abstract-labour-embodied (social) value theories (cf. de Vroey, 1982).  Contemporary debates arising from the paradigmatic split are considered in relation to the question of the source and measure of value.  I identify theoretical and empirical problems in technical versions of the labour-embodied theory of value, which reduces Marx’s abstract-labour theory to a theory of prices derived from the quantity of labour time embodied in commodities.  I then introduce social value theories, which attempt to integrate technical (natural) and social (historical) elements of Marx’s value theory, and thus establish the necessity of money (and exchange) to the existence of value.  The main question is whether these social theories succeed in resolving the difficulties of a theory of value immanently measured in labour time.  I introduce an argument for money as the only measure of abstract-labour and the only indicator of the actuality of value.     

The third chapter examines recent ‘reconstructions’ of Marx’s concepts, in accordance with systematic dialectical principles of logic (Hegel, 1812, 1817).  The heuristic purpose behind reconstruction is to ‘step outside’ the methodological and substantive inconsistencies of Marxian value theory and articulate the unity of production and exchange within a specifically capitalist totality (Reuten, 1993).  From this point of view, Capital is most fruitfully read as a critical contribution to an ongoing inquiry into the social determination of value and labour, an inquiry concerned with a problematic very different from that of Ricardo.  In these new theories of value-form, Ricardian (labour-embodied) elements of Marxian value theory are abandoned, along with all reference to abstract-labour as the embodied ‘substance’ of value.  

The concluding chapter returns to the economic problem of whether value can exist - either ontologically or conceptually – before (market) exchange; I review the alternative responses to the question within contemporary Marxism.  The main conclusion is that labour-embodied theories of value (whether physiological or social) are inadequate, to the extent that they deny any ontological role to money (capital) in the reproduction of the capitalist economy.  As a result of this value-price dichotomy, the imperative of valorisation (the expansion of value) driving the capitalist system is inadequately captured within these theories.  The analysis supports an argument for systematic dialectical reconstruction of Marx’s concept of abstract-labour as social value, measured only in money.  Current reconstructions verify Marx’s key insight: labour is the one and only source of value-added in the valorisation process.  The result is arrived at without any reliance on labour-value substructures underlying prices and money.

2.  Value Theory: Content and Concepts

The subtitle of the first volume of Marx’s (1867a) Capital identifies Marx’s project as a ‘critique of political economy’.  What is the salient feature, or definitive object, of Marx’s critique?  On this point, Marx is quite clear: the great merit of classical political economy was to have discovered the content of value in labour; its great defect was never to have discovered the determination of value and labour by social form.  This raises a preliminary research question: is Marx’s ‘social’ value theory a clarification and extension of the classical ‘labour-embodied’ theory of value, or is it a refutation of it?  That Me used in dating Backhaus (1969/1980) whose work, originally published in German, influenced the development of contemporary reconstructions of value theory.   .  The methodological debate centres on interpretation of the Marxian dialectic in relation to Hegel’s (1812, 1817) logic, especially the role that dialectical thinking plays in Marx's analysis of social form (therefore his critique of classical value theory).  The first section begins by introducing what is meant by ‘analytic’ and ‘dialectical’ abstraction, identifies possible sources of terminological confusion, and relates alternative conceptions of abstract-labour to two models of essence and appearance (Ricardian and Hegelian).  The second section elaborates the systematic dialectical mode of argument, and sets out some explicit criteria for judging Marx’s presentation.  The third and fourth sections present a textual analysis of the first chapter of Capital, focusing attention on Marx’s problematic derivation of the concept of abstract-labour, in relation to his theory of value-form.  

2.1  Two Types of Abstraction 

Behind debates on Marx’s method in Capital is a generally agreed presumption that this work is somehow distinct from all other works in political economy, a presumption fuelled by Marx’s (1873) own claims about the ‘dialectical’ character of the work.  Marx was, however, never explicit about his understanding of dialectical reality in relation to his theory of capitalism.  Are economic relations the product of historical processes, mirrored directly in the concepts of Capital as Engel’s (1894a, 1894b) believed; or, do concepts appropriate reality at best circuitously, via a purely logical movement from abstract concepts to concrete determinations as Marx suggested in his (1857/1973) draft Introduction? 

Lack of agreement as to the particular meaning of the historical and/or logical dialectic in Marx turns on the fundamental question of what, exactly, Marx learned from Hegel.  As Arthur (1997) points out, Hegel’s work contains examples of both ‘historical’ and ‘systematic’ dialectics; the former ‘exhibiting the inner connection between stages of development in a temporal process’, the latter ‘exhibiting the inner articulation of a given whole’ (p.10).  It appears, from Arthur’s account, that Engels conflates the two dialectics, although Marx makes it clear in his (1857/1973) draft Introduction that his intellectual debt is to Hegel’s theory of logical development.  Arthur goes on to argue that Engels’s ‘misinterpretation’ of the Marxian dialectic as a logical-historical method has resulted in major terminological confusions, such that the meaning of Marx’s concepts and the role that they play in his value theory have been widely misunderstood.

One pervasive effect of different understandings of Marx’s method is that different Marxian writers use the same terms and concepts to mean different things.  The term ‘abstract-labour’ may be used for example to refer to a physiological substance embodied in commodities during production, or to a social form that labour assumes when commodities are exchanged.  In order to clarify these semantic confusions, I propose to use the term abstract-labour-embodied whenever I refer to interpretations in which abstract-labour is seen to be a ‘substance of value’, a property of commodities with a natural existence independent of the social institution of exchange.  I reserve the term abstract-labour for interpretations of value as a ‘social’ dimension that acquires actuality only as a relation between commodities, establishing the equivalence of private labours through practical abstraction in the market.  This terminological decision should not be taken to imply a judgement on Marx’s own use of the term ‘abstract-labour’.  As I will demonstrate, any attempt to establish whether Marx held a social (abstract-labour) theory of value or a physiological (abstract-labour-embodied) theory of value founders on textual evidence for both interpretations.
 
Although the terminological difficulties associated with the meaning of the concept of abstract-labour may be over-come by this simple expedient of renaming the terms in a debate, the question of the analytic status of the concept remains.  The solution adopted in this dissertation is to relate alternative interpretations of value theory to the two models of essence and appearance, distinguished by Murray (1993).  In ‘Ricardian’ models, a dichotomy of essence and appearance operates such that value (essence) is ‘given’ as an axiom at the start of a linear derivation, or as something ‘real’ that is embodied in commodities as the result of productive activity.  Money (appearance) is then theorised as a phenomenal form, external to the essential character of value.  In Hegelian models, essence and appearance coexist as a ‘unity in difference’ such that value and its monetary expression are mutually constituted by the essential character of the capitalist mode of production for exchange.  The relation between these models and interpretations of abstract-labour can be explicated as follows:

In the Ricardian essence-appearance model, value exists a priori and is ‘conserved’ across analytic levels of abstraction.  In axiomatic models, the value-price relationship is conceptualised in terms of hypotheses about embodied-labour-values and the cause-effect relationships that result once market relations are introduced into the basic labour-value models (e.g. Sweezy, 1946).  In logical-historical models, capitalist relations impinge upon earlier forms of productive activity, affecting modifications in a general ‘law’ of value (e.g. Mandel, 1990).  These analytic and logical-historical approaches posit an independence of ‘value’ from its external expression in the ‘value-form’ (money); in this respect, they are associated with abstract-labour-embodied interpretations of Marxian value theory.

In contrast with ‘Ricardian’ models, ‘Hegelian’ models apply a ‘conceptual’ – rather than an ontological – dialectic; what Arthur (1979b) calls the logic of the concrete.  Within the conceptual dialectic, all axioms are eschewed, and concepts such as value and abstract-labour have a provisional existence, yet to be determined within the analysis: ‘the actual existent is first of all possibility, but without further determination it is only that’ (Reuten and Williams, 1989, p.10).  What this means is that concepts are given provisionally as universal/particular oppositions that require further grounding in more concrete determinations (I elaborate more fully this Hegelian mode of argument in section 2.2, below).  Fundamentally, a view of value and value-form as internally interconnected and mutually determined by an existent (capitalism) identifies Hegelian models as theories of social form, associated with an abstract-labour theory of value.

At this point, it might well be asked how any evaluation of Capital is possible?  Given profound epistemological and methodological disagreements about the meaning and status of value concepts, to what sort of test might Marx’s theory be subjected?  Is it an analytic or logical-historical theory concerned with theorising the implications of a natural trans-historical law of value, or a systematic dialectical theory concerned with theorising the internal connection between concepts applicable only to a particular social form?  

In arriving at a decision, we have only Marx’s cursory and ambivalent remarks on method to go by.  At the time of writing the 1857 draft Introduction Marx seems to have agreed with Hegel’s ‘conceptual dialectic’, arguing that the object of a scientific inquiry is to grasp the essence of the phenomenon of interest as a ‘concentration of many determinations, hence unity of the diverse’ (1857/1973, p.102).  Hence, he concluded, ‘the scientifically correct method’ is one in which ‘abstract determinations lead towards a reproduction of the concrete by way of thought’ (p.101).  Is it possible, then, to read the opening chapter as an attempt to ground abstract universal dualities (the first movement, contained in sections 1-2) in the more concrete structures of commodity exchange (the second movement, contained in sections 3-4)?  With this question in mind, the next section sets out criteria for evaluating Capital as a systematic dialectical theory.  These criteria are derived from Hegel’s (1812) Science of Logic.  

2.2  Hegel’s Logic: Principles and Implications

Williams (1998) identifies two ‘moments’ in Hegel’s logical system of conceptual development.  The first is a moment of inquiry into empirical perceptions of reality and existing theories of it: or, as Marx put it, ‘the working-up of observation and conception into concepts’ (Marx, 1857/1973, p.101).  Through this process of ‘working-up’ the researcher arrives at an all-embracing abstraction determined by ‘the interconnection of all the necessary moments of the totality’ (Reuten and Williams, 1989, p.20).  The second moment is one of presentation, proceeding in the reverse direction to grasp the abstract-universal starting point in its internal (logical) interconnectedness, its concrete conditions of existence.  The moment of presentation is not concerned with analysis, but with ‘systematic interconnection, specification, synthesis, reconstruction and concretisation… from the most abstract starting point (Williams, 1998, p.189). 

The first thing to note about the starting point of a systematic dialectical presentation is that it is a universal abstraction, yet determinate in that it presupposes the totality of an empirical reality that has been interrogated in the moment of inquiry.  The second point is that thinking can make nothing of the abstract universal notion except by opposing to it: (1) an abstract universal negation (what it is not), and (2) its concrete particularity.  To take Hegel’s example: the abstract universal ‘animal’ is further determined only by thinking through its abstract negation as plant or mineral and its concrete particularity as dog and cat.  Third, negation and particularity are brought into existence by applying opposing concepts to the empty abstraction, and in this very specific sense the ‘doubling’ of concepts creates contradiction.  Fourth, contradiction motivates transcendence of the abstract universal concept by demanding concrete grounds, or conditions of existence.  The grounding moment – a movement of force, or tendency – provides for the actual coming into being of the abstract ‘identity of opposites’ (Reuten and Williams, 1989).  Thus, the universal ‘animal’ is grounded in the concrete determination of how precisely particular animals are different and how they are connected.  It is this ‘unity in difference’ that the systematic dialectic seeks. 

At the start of the presentation, ‘difference is still sunk in the unity, not yet set forth as different’ (Hegel, 1833, p.83).  Opposed concepts are brought into being and united by the ‘gradual transcendence of abstract determination towards concrete determination’ until ‘the stage of a self-reproducing actual existence is reached’ (Reuten and Williams, 1989, p.24).  The systematic dialectic is thus best apprehended as ‘within itself a circle in which the first is also the last and the last is also the first’ (Hegel, 1812, p.71).  Indeed, the whole object of the presentation is to confirm what is first posited provisionally as possibility and to determine this possibility as ‘indeed actual, concrete, self-reproducing, or endogenous existence, which requires no external or exogenous determinants for its systematic reproduction’ (Reuten, 1993, p.93).  If the method is applied to value theory, three crucial implications follow.
 
First, the relation of causality to determination is complex and given systemically rather than externally.  Determinations given externally are contingent rather than necessary to the existent.  Moreover, the totality and its determinations are mutually constituted such that: ‘theory culminates in a stage that is true “for itself”, i.e., concretely and actually, then this shows that an earlier stage leading up to it must have been true “in itself”, i.e. abstractly and potentially’ (Smith, 1990, p.49).  Causality is therefore established retrogressively: ‘the beginning is, as such, already something derived…and there is no need to deprecate the fact that it may only be accepted provisionally and hypothetically’ (Hegel 1812, p.841).  The provisional character of the starting point – as an abstraction that results from a process of empirical inquiry  - will be confirmed by the capacity of logic to ground all related elements in the system of mutual determinations that cause the existent to be what it essentially is.  Ultimately, value ‘in its complete, finished form must make good the promise of a law of value’ (Arthur, 1997, p.33).  
 
The second implication of Hegel’s system is that science alone determines its object, and comprehends it.  In social science, the object of theory is to establish the mutable logic of social practices in a systematic form.  Hegel’s logic is a method enabling this reconstruction in thought of a ‘real subject’ that ‘retains its autonomous existence outside the head just as before’, but is knowable only as ‘a product of a thinking head, which appropriates the world in the only way it can’ (Marx, 1857/1973, p.101).  As a method, the systematic dialectic need make no claim to perfect correspondence with ‘reality’, or to perfectly reflect ‘real’ entities.  The systematic dialectical project is, in fact, far more modest in this respect than most Marxist theories with their ontological presuppositions and claims to directly represent capitalist reality.  Claims to success are based, rather, on the theory’s capacity to comprehend the relevant concrete phenomena (prices, profits, labour-time) of the reality to be explained, as mediated and reconstituted by the theory.  Since theory approaches reality at best circuitously, the systematic dialectical project is explicitly open-ended and can never be considered complete (Reuten, 1993).

The third implication of Hegel’s ‘unity’ of ground and existence is that it does not allow for the isolation of essence and appearance within the analysis; in this it differs fundamentally from the linear (Ricardian) models introduced in the last section (2.2).  In the Hegelian model, value is not comprehensible as an ‘essence’ behind the phenomenal ‘appearance’ of price, as most Marxists would have it.  On the contrary, the concept of value first appears only as the abstract negation of an opposite abstract universal, use-value.  The exchange relation then constitutes the ground, or first condition for the existence of value, by showing value that it cannot exist for itself but only as it appears in the concrete body of an equivalent commodity or - more concretely still - the form of a universal equivalent (money).  Price, as the most concrete determination of money, cannot exist apart from value but necessarily contains within it the antecedent abstract moment: ‘appearance shows nothing that is not in the essence, and in the essence there is nothing but what is manifested’ (Hegel, 1817; cited, Reuten and Williams, 1989, p.23).  

It is clear, then, that relative prices cannot be derived from value (or from ‘labour-values’) as propositions are derived in an axiomatic or in a logical-historical analysis.  Indeed, both Hegel and Marx explicitly reject the empiricist/materialist conflation of knowledge and reality constituted by an axiomatic identification of laws with constant conjunctions of events.  The ‘proof’ of the theory rests solely on the adequacy of the theoretical (systemic) grounding of the abstract starting point; that is, on the ‘intrinsic merits’ of the presentation itself Reuten (1993).  With these criteria in mind, the next section turns to Marx’s (1867a) starting point: his exposition of the double character of commodities and labour, which takes place over the first two sections of his opening chapter in Capital 1.

2.3  Abstract Labour: Analytic or Dialectic Abstraction?

The opening sentences of the first chapter of Capital set the stage for Marx’s (1867a) analysis of the double character of the commodity, upon which so much depends:

The wealth of societies in which the capitalist mode of production prevails appears as an “immense collection of commodities”; the individual commodity appears as its elementary form.  Our investigation therefore begins with the analysis of the commodity (Marx, 1867a, p.125).

From a Hegelian perspective, this paragraph suggests both the object of inquiry - capitalist wealth - and its most abstract universal manifestation – the commodity.  Yet, having suggested the determinate character of the commodity as a starting point for his inquiry into the universal form of wealth in a particular type of society, Marx immediately suspends the presupposition and moves towards to a generalisation of commodities as ‘use-values for others, social use-values’ (Marx, 1867a, p.131).  By the end of the first section, what is established is that the commodity is a useful object produced specifically for exchange - such that its useful property (its use-value) is verified only when it is exchanged for use-values of a different type.  Thus, the commodity is constituted in a very broad sense as an entity of double character: use-value (quality) and exchange-value (quantity).

What has this duality to do with the commodity form as an appearance of capitalist wealth?  Marx does not address this important question, but embarks upon a digression into the exchange relation and the question of what it is that enables diverse use-values to exchange in predictable proportions.  It is in this context, that he first introduces value as a term for the relation of equivalence between commodities – the ‘common factor in the exchange relation’ (1867a, p.128).  Here, the ‘substance of value’ is what is common in diverse commodities after the particular useful property (use-value) of the commodity is discarded.  Since nothing is left but the property of being products of labour, Marx concludes that ‘congealed quantities of homogenous human labour’ give the exchange relation its ‘phantom-like objectivity’ (p.128).  In order that particular types of labour should be considered ‘equal human labour’, however, a similar abstraction must be made from the heterogeneous characteristics of particular ‘concrete’ types of labour.  

Thus, abstract labour makes a first appearance in Capital as a term used to describe ‘homogenous’ labour, constituted as an abstraction from ‘concrete’ particularity.  What is common to labour once its heterogeneous characteristics are discarded is ‘human labour-power expended without regard to the form of its expenditure’, and in aggregate this constitutes the total capacity to labour, or ‘total labour power of society’ (Marx, 1867a, p.128-129).  Although, in particular instances, diverse labours are performed with different levels of intensity and skill, each unit of abstract labour-power is the ‘same as any other, to the extent that it has the character of a socially average unit of labour-power and acts as such’ (p.129).  Given this simplification, the value of any commodity is measured by the average amount of labour time required to produce that particular commodity with a socially given level of skill and technology.  ‘What exclusively determines the magnitude of value of any article is therefore the amount of labour socially necessary, or the labour time socially necessary for its production’ (p.129).

The first point to note about this derivation of the double character of labour is that Marx arrives at the concept of abstract labour by way of a reductive abstraction from the heterogenous characteristics of material use-values and the useful labour that produces them:

If then we disregard the use-value of commodities, only one property remains, that of being products of labour.  But even the product of labour has already been transformed in our hands.  If we make abstraction from its use-value, we abstract also from the material constituents and forms which make it a use-value….The useful character of the kinds of labour embodied in them also disappears; this in turn entails the disappearance of the different concrete forms of labour.  They can no longer be distinguished, but are altogether reduced to the same kind of labour, human labour in the abstract (Marx, 1867a, p.128).

The remarkable thing about this passage, from a Hegelian point of view, is that the double character of labour as abstract and concrete is not constituted as a ‘unity in difference’, presupposing a specific totality (capitalist commodity production).  First, concrete-labour is not posited as an abstract universal opposed to abstract-labour, but as particular labour ‘transformed’ into abstract labour, apparently in the mind of the researcher.  Second, there is no reference to the market - thus, no reference to the exchange relation as constituting the first condition of existence of abstract-labour.  If a concept of social abstraction is implicit in the derivation (in our hands?) it is only because an exchange relation is already inherent in Marx’s description of commodities as ‘use-values for others’.  Given the social nature of the commodity, it is curious that Marx delays any explicit discussion of the activity of exchange as a universal ground for his abstract-labour/concrete-labour opposition.  When he does so, however, the difference with the previous passage is striking: 

But the act of equating tailoring with weaving reduces the former to what is really equal in the two kinds of labour, to the characteristic they have in common of being human labour.  This is a roundabout way of saying that weaving too, in so far as it weaves value, has nothing to distinguish it from tailoring, and, consequently, is abstract human labour.  It is only the expression of equivalence between different sorts of commodities which brings to view the specific character of value-creating labour, by actually reducing the different kinds of commodity to their common quality of being human labour in general (Marx, 1867a, p.142; my italics).

Here the concept of abstract-labour is clearly given not as a property of commodities, but as a relation between commodities arising as the result of a real social practice - the act of exchanging commodities.  The different types of physiological energy expended on weaving and tailoring are abstract only ‘in so far as they create value’, and value is a universal ‘expression of equivalence’ or relation between commodities.  How are we to understand this passage in relation to the last?  Is abstract-labour intended to be a genus in a hierarchy, a reductive (mental) generalisation from particular types of physiological energy expended in productive activity?  Or, is it intended to refer to the result of a social practice that requires for its existence and perpetuation an actual disregard for use-values affected by a practice of bringing products of labour (and labour itself) into a form of equivalence on the market – as values?  The point is that abstract labour cannot be both of these things: it cannot be at the same time an indeterminate category of productive activity in general and a determinate category of a particular system of production for exchange.  As early as 1928, Isaak Rubin made this important observation:

One of two things is possible: if abstract labour is an expenditure of human energy in physiological form, then value also has a reified-material character.  Or value is a social phenomenon, and then abstract labour must also be understood as a social phenomenon connected with a determined social form of production.  It is not possible to reconcile a physiological concept of abstract labour with the historical character of the value that it creates.  The physiological expenditure of energy as such is the same for all epochs and, one might say, this energy created value in all epochs.  We arrive at the crudest interpretation of the theory of value, one that sharply contradicts Marx’s theory (Rubin, 1928/1972, p.135).

Rubin (1928/1972) was certainly correct to point out that the existence of value has a ‘purely social reality’ for Marx, in that it makes an objective appearance only in the relation of commodity to commodity and does not therefore include a single atom of matter.  His statement that a physiological reading ‘contradicts’ Marx is much more doubtful however.  Marx (1867a) not only derives value as ‘merely congealed quantities of human labour-power expended without regard to the form of its expenditure’ (p.128), but he goes on to introduce labour-power (the capacity to perform labour) as a simplifying assumption.  Further, he justifies this purely by analytic convenience: ‘we shall henceforth view every form of labour-power directly as simple labour-power; by this we shall simply be saving ourselves the trouble of making the reduction’ (Marx, 1867a, p.135).  Thus, the magnitude of value comes to depend only on the average quantity of abstract labour ‘socially necessary’ to produce a commodity, given some average level of skill and technology.

The extent to which this is important depends not only on the theoretical issue of whether value can exist prior to exchange (as labour embodied in particular commodities), but also on the empirical issue of how the theory can be usefully applied to a competitive money economy (Reuten, 1993).  In Reuten’s view, any attempt to add up concrete (pre-market) labour hours must confront the actual discounting to simple labour that Marx sought to avoid.  Even if socially necessary labour time is taken as an immanent measure of embodied abstract-labour and the simplification avoided, there is still a requirement to explain why it is that socially necessary labour must itself appear in money form.  The latter question constitutes Marx’s critical challenge to the classics; the issue, then, is how well he answers it (Backhaus, 1969/1980).

2.4  Value-Form and Commodity Fetishism

Marx’s answer to the ‘riddle’ of money is presented in the third section of his opening chapter.  For the first German edition of Capital, Marx wrote a special Appendix (1867b) on the ‘ The Value-Form’, for – he explains to Engels – ‘the matter is too decisive for the whole book’ (cited Arthur, 1979b, p.69).  In my view, the decisive character of the value-form lies in the conceptual movement it inaugurates - from the double character of commodities and labour to their determination by social form.  In a crucial passage at the start of the third section Marx sets out to make the transition, positing the commodity as a duality of ‘natural form and value form’ (Marx, 1867a, p.138).  Introducing the argument, Marx declares enigmatically:

Not an atom of matter enters into the objectivity of commodities as values; in this it is the direct opposite of the coarsely sensuous objectivity of commodities as physical objects.  We may twist and turn a single commodity as we wish; it remains impossible to grasp it as a thing possessing value.  However, let us remember that commodities possess an objective character as values only insofar as they are all expressions of an identical social substance, human labour, that their objective character as values is therefore purely social.  From this it follows self-evidently that it can only appear in the social relation between commodity and commodity (Marx, 1867a, p.138-9).

What does this passage mean?  Firstly, Marx further elucidates the double character of the commodity: (1) it has a material ‘natural’ existence (objectively, it is a useful object) and (2) it has a non-material ‘social’ existence (objectively it is a value).  This is clearly an elaboration of the conceptual use-value/value distinction; the material properties of the commodity are embodied in it and constitute its useful quality, yet it cannot be grasped in itself as a thing possessing value.  Secondly, diverse commodities are objectively commensurable – have value – only in so far as they express a social phenomenon – namely, the equalisation of human labour.  Moreover, the equalisation is affected not in production but exchange, when the diverse labours of private dissociated producers are verified as a relation between commodities.  It follows ‘self-evidently’ that value is not a physiological substance but a ‘purely social’ concept, referring to the historically specific form that social labour takes when its products are exchanged against one another.

At first sight, this passage appears to verify Rubin’s (1928/1972) ‘social’ interpretation of the concept of abstract labour as the social form that private labour assumes when commodities are exchanged.  On this reading, Marx explicates the necessity that the value of a commodity be represented in the bodily form of an equivalent commodity: ‘human labour creates value, but is not itself value.  It becomes value only in its coagulated state, in objective form’ (Marx, 1867a, p.142, also p.149).  The notion that human labour is value only when it takes on an objective (equivalent) form underwrites Marx’s derivation of money as the universal equivalent commodity against which all other commodities exchange.  This leads to an important argument, introduced in the fourth section: namely that in a system of generalised production for exchange, a ‘reification’ takes place such that the social character of the relationship between private producers appears inverted as a monetary relationship between the objects they independently produce.  This inversion is a ‘social’ phenomenon specific to the ‘bourgeois mode of production’, as Marx argues:

The value-form of the product of labour is the most abstract, but also the most universal form of the bourgeois mode of production; by that fact it stamps the bourgeois mode of production as a particular kind of social production of a historical and transitory character.  If then we make the mistake of treating it as the eternal natural form of social production we necessarily overlook the specificity of the value-form, and consequently of the commodity form together with its further developments, the money form, the capital form, etc (Marx, 1867a, fn.34, p.174).
  
In this footnote, and elsewhere in this section on commodity fetishism, Marx denounces the classical political economists for their failure to comprehend the ‘specificity of the value form’ as a historically unique form of social domination over value content.  Where value and its measurement (in labour time) appear in classical value theory with ‘self-evident and nature-imposed necessity’ as economic ‘laws’ or external determinations relevant to any form of productive activity, these ‘formulas’ are, for Marx, but ideological manifestations of the social form itself (Marx, 1967a, p.175).  The secret of the structure and development of the capitalist economy is therefore to be found in the material abstraction of commodity exchange, and the inverted reality of value-forms that it creates.  In other words, ‘the entire system has to be grasped (within limits yet to be specified) as form-determined’ (Arthur, 1993, p.66).      

Is this ‘social’ interpretation of Marx’s value-form theory convincing?  One difficulty is that Marx retains a reference to value as labour in its ‘coagulated state’ thereby creating a link to the classical theories that he explicitly criticises.  The ‘objective form’ into which socially equalised ‘human labour’ necessarily ‘coagulates’ might then be interpreted as a physiological labour embodiment (in the body of a particular commodity, or universally in the money commodity) that takes place independently of any monetary abstraction from concrete-labour in exchange.  A physiological interpretation of ‘social equalisation’ implies a Ricardian model of reification, in which the ‘relation of things’ is constituted as a form of ‘appearance’ autonomous of the ‘real’ social relations hidden behind it.  In other words, labour as ‘essence is defined, in contrast to the form of appearance, in a formal, logical way as the universal, typical and principal’ (Backhaus, 1969/1980, p.101).  

Given Marx’s retention of physiological references, Backhaus concludes that the social mediation implied by Marx’s theory of value-form ‘can only be construed as a pseudo-dialectical movement of pseudo-dialectical contradiction’ (p.101).  The main point is that Marx fails to explicate the double character of labour as the essential opposition of capitalist production, grounded in the internal social structures that constitute labour in this double form.  Thus, the value-form appears not as an abstract-universal ‘mode of association’ determining the social form of private productive activity in capitalism, but more ambiguously as a theory of ‘commodity money’ derived from the exchange relation.  

Conclusion

Returning to the preliminary question posed in this chapter: is Marx’s abstract-labour theory of value a clarification and extension of the classical ‘labour-embodied’ theory of value, or is it a refutation of it?  The textual analysis presented here confirms that Marx is nowhere explicit as to the nature and extent of his break with the classics.  Especially problematic is Marx’s (1867a) retention of abstract labour as the ‘substance’ of value, viewed ontologically as a real property of commodities, motivating the exposition towards a ‘natural’ trans-historical theory of value.  Indeed, the whole of the opening chapter is replete with naturalistic references to value as ‘congealed quantities of [abstract] labour’ or labour in a ‘coagulated state’, suggesting that ‘abstract-labour’ and ‘embodied-labour’ are not intended to be opposites in Marx’s value theory.  The status of the ‘commodity’ as an all-embracing concept for capitalist production is therefore ambiguous and the theory of commodity fetishism obscure, based apparently on a separation of the form of appearance of things from its genesis in the social relations that give rise to it.  In this regard, Marx’s first chapter seems to accord better with the Ricardian model of essence existing autonomously of its appearance than it accords with Hegel’s conceptual unity of essence and ground; the latter requiring that abstract universals are validated by the more concrete determinations that give rise to them.   
 
On the other hand, Marx claimed in his 1873 Postface to the second German edition of Capital, to have utilised a variation of Hegel’s method to distinguish between the social (value) and material (use-value) characteristics of the commodity-form, so introducing into political economy a unique critique of classical value theory.  In this sense, I think that it is justifiable to ask how well the conceptual development of concepts in Capital accords with criteria derived from Hegel’s (1812) Science of Logic.  Indeed, good reasons for judging the whole of Capital a systematic dialectical work have been summarised by Smith (1993, 1998) and by Arthur (1998b, 2000).  Here, I have not set out to dispute their conclusions, but only to establish some of the difficulties involved in the interpretation of Marx’s value concepts as universal abstractions at the start of a systematic dialectical exposition.  

The main difficulty in the conceptual development of the opening chapter lies in the reductive character of Marx’s core concepts.  Most crucially, abstract-labour is first derived as a generalisation from concrete particularity.  This accords better with an analytic derivation of concepts than it does with the contradictory (abstract universal) oppositions that motivate the Hegelian mode of argument.  Nevertheless, Marx’s theory of value-form does set out a rudimentary theory of the social (form) determination of the twofold character of entities and processes in capitalism.  It also suggests the methodological direction required for a systematic dialectical development of that theory (see chapter 4, below).  Before turning to this development, the next chapter explores the lasting effects of Marx’s attempt to synthesise classical value theory and Hegelian form theory: a paradigmatic splitting of the Marxian abstract-labour-embodied theory of value into a ‘technical’ and a ‘social’ paradigm.

3.  Two Paradigms, Two Problems

The first two sections of this chapter examine two distinct Marxian paradigms derived from abstract-labour-embodied interpretations of Capital: the ‘technical’ and the ‘social’ paradigm (cf. de Vroey, 1982).  The value theories arising from this splitting of Marxian theory are discussed with reference to two core problems.  Firstly, what type of labour is socially equal abstract labour: is it a substance embodied in commodities prior to exchange, or is it a form that social labour assumes when human activity takes the value-form and is brought under the aspect of time?  Secondly, what is the appropriate measure of abstract labour: is it labour time, or money?  These questions ultimately return to the core question of whether – in a capitalist economy - value can be said to have any meaningful existence prior to exchange.  The third section answers the question in the negative.

Throughout the chapter, I aim to show that paradigmatic splits within Marxism are explicitly related to the way in which the interconnection of value and money is theorised within the two models of essence and appearance described in the last chapter (section 2.1).  Both ‘technical’ and ‘social’ interpretations tend to adopt an ontological (Ricardian) approach to value and its measurement, so that paradigmatic differences turn primarily on alternative conceptions of the relation of production to exchange in the circuit of capital (Clarke, 1980).  Conceptual dialectical (Hegelian) approaches occupy a minority position within the social paradigm and are distinguished from all other positions by their rejection of labour-embodied value theory and by an explicit attempt to develop Marxian categories to accord with Hegel’s logical principles.  Since the current chapter is concerned with interpretations of Marx’s (1867a) value theory rather than reconstructions of it, conceptual dialectical approaches are not discussed here but in the next chapter. 

3.1  The Technical Paradigm

Rubin’s (1928/1972) insight into the social character of abstract labour lay dormant in the literature for almost fifty years.  During this time, physiological interpretations of the concept dominated studies of Marx’s Capital.  Sweezy (1946) proposes, for example, that abstract labour is ‘equivalent to “labour in general”; it is what is common to all productive human activity’ (p.30).  Although this conflation of physiological labour and abstract labour can be traced to Marx’s first chapter, it eliminates by assumption any determining role for the value-form in the constitution of value; hence, money doesn’t matter, but is only a veil over the exploitation of labour.  This section examines the implications of this reading of Marxian value theory in two influential views of the economy seen as a system of technical production: the ‘orthodox’ view (e.g. Dobb, 1940; Meek, 1956; Sweezy, 1946) and the ‘Sraffian’ view (e.g. Lippi, 1980; Steedman, 1977). 

	THE ORTHODOX VIEW
Arthur (1997) traces the origins of the ‘orthodox’ view to an epistemological standpoint linking conceptual development to historical development, in such a way that the former is taken to be a ‘corrected reflection’ of the latter.  What results is a logical-historical methodology, according to which Marx begins the first volume of Capital by describing a stage of ‘simple commodity production’ in which value attains its ‘classical form’, then goes on to describe capitalist production as a ‘secondary’ derivative form of value production.  Hence, Marx’s ‘law of value’ is a ‘natural law’ which ‘applies universally’ - up until the time when it is modified ‘by the onset of the capitalist form of production’ (Engels, 1894a, p.103; 1894b, p.1037).  Given this linear view of historical processes, the role of Marxian value theory is taken to be an investigation of the general law of value, and of its capitalist modifications.  

The idea that values might play a determining role in the elucidation of the general laws governing historical development has permitted a great variety of labour-embodied interpretations holding to some variant of logical-historical methodology.  In extreme ‘historicist’ versions, labour is simply collapsed into value, as in Mandel’s (1990) bald statement that ‘labour is value’; indeed, Mandel posits several historical modes of production in which the allocation of labour is determined by value.  Sweezy (1946), in contrast, favours logical aspects of the method and foists on Marx a procedure of ‘successive approximation’, where the structure of Capital is seen to provide a series of analytic models, each a more complex approximation to capitalist reality than the last.  In these models, value is reduced to an axiom in ‘a theory of general equilibrium developed in the first instance with reference to simple commodity production and later on adapted to capitalism’ (Sweezy, 1946, p.53).  Labour embodied in commodities is ‘conserved’ within these modifications, irrespective of whether they are proposed to capture historical processes, or to be a stage in logical approximation to reality.

Locating value in the natural/physical dimension constitutes Marx’s central problem as one of labour allocation in any society where there is a division of labour and a high ‘degree of labour mobility’ (Sweezy, 1946, pp.31-34).  A reductive abstraction from heterogeneous concrete labour is seen to be necessitated by the existence of an ‘aggregate social labour force which is capable of transference from one use to another in accordance with social needs’ (p.32).  In this vein, Sweezy argues that the value of a particular commodity is a share of ‘materialised abstract labour’ expended by societies total labour force: ‘a part of the total wealth-producing activity of society’ (p.33).  As a proportion of social labour, the abstract labour embodied in a commodity is ‘inevitably implied in the very notion of a total labour force available to society’ (p.31).  From a different perspective, Steedman (1977, p.38) provides a similar argument for abstract labour as a ‘social average’ derived from adding up and averaging out the labour productivity of different sectors of the economy to arrive at the vector of ‘labour-values’ for different commodities.

The immediate implication of conflating physiological labour and abstract-labour is that the ‘substance of value’ must be theorised at the concrete-physical dimension as a pre-market phenomenon where concrete heterogeneous types of labour are reduced to homogenous quantities of abstract-labour embodied in commodities in the form of labour-time.  That is, quantities and qualities of time - such as the intensity and duration of work - are taken to be the common elements in diverse expenditures of energy, constituting commodities as values.  If a measure of duration is used, particular labours (for simplification, i and j) might be considered in terms of respective concrete hours of labour expended in production (Li and Lj) and summed: Li + Lj = L, where (L) is the total labour expended in an economy, ‘materialised abstract labour’.  Whether values are realised in money-form in actual exchange is irrelevant to the actual creation of value since value clearly pre-exists the market as a proportion of expended labour.  

Given that physiological abstract-labour is susceptible to measurement in time units, which I dispute, it is a short step to say that the labour values derived in volume one of Capital are intended as an approximation to the prices and profits discussed in volume three (Sweezy, 1946, p.33).  Value theory then becomes the ‘unifying quantitative principle’ enabling economists to make ‘postulates in terms of the general equilibrium of the economic system’ (Dobb, 1940, p.5), with the rate of profit also interpreted as a ratio among labour embodied magnitudes (Meek, 1956).  Simple though this is, the concrete-labour embodied theory has inherent difficulties concerning the actuality of value, both at the empirical level, and theoretically.  Firstly, an argument that value magnitudes exist before the determination of exchange ratios is obliged to trace the relationship between “labour-values’ and ‘prices of production’ once competition (and a general rate of profit) is introduced into the model.  Secondly, it must answer to the question of how the ‘labour-values’ presupposed axiomatically at the start of the analysis can be operationalised and measured independently of the market. 

The first problem – concerning the divergence of ‘labour-values’ and ‘prices of production’ given a general rate of profit - has received a great deal of attention in the economics literature under the rubric of the ‘transformation problem’.  This problem concerns the structural relationship between Marx’s value analysis in the first volume of Capital and his derivation of ‘prices of production’ in the third volume, and is therefore outside the scope of this dissertation.  Here, I focus on the second problem, which has to do with Marx’
	ISAAK RUBIN: PRIVATE AND SOCIAL LABOUR
In a series of scholarly essays and analyses of Marx’s published texts and unpublished drafts, Rubin (1928/1972) undertook an extensive refutation of physiological interpretations of abstract labour and the associated interpretation of Marxian value theory as a ‘natural’ law of labour distribution, or price determination.  In the process, he introduced into the literature a critical and subsequently influential distinction, that between private and social labour. 

Rubin’s (1928/1978) main argument was based on the insight that private labour cannot be immediately social labour in an economy where production and consumption are separated and organised into independent individual units.  In such an economy, the problem of social cohesion is such that one cannot conceive of the labour embodied in commodities as socially necessary in isolation from the exchange process.  Private labour is validated as socially necessary only if: (1) it produces the average number of commodities typically produced in an hour in a particular industry (a ‘technical’ production criterion), and (2) the labour expended must produce a quantity of commodities exactly equal to social needs (an exchange criterion).  If either condition fails, then the ‘ideal’ labour-value of a commodity will not be equal to its ‘actual’ value, reflected in price.  Rubin (1927/1978) explored this dialectic of production and exchange (of value and its money form) as the essence of Marx’s double characterisation of labour:

The labour of a commodity producer is directly private and concrete labour, but together with this it acquires an additional ‘ideal’ or ‘latent’ characteristic as abstract universal and social labour.  Marx was always amused by the Utopians who dreamed of the disappearance of money and believed in the dogma that “the private labour of a private individual contained in (a commodity) is immediately social labour” (Rubin, 1927/1978, pp.124-2).

Rubin (1927/1978) concluded that: ‘Abstract labour and value are created or “come about”, “become” in the process of direct production…and are only realised in the process of exchange’ when commodities are traded for money (p.125).  The important point is that private labour is validated as social labour only when the commodity is sold.  From this perspective, the Marxian theory of value cannot be a production theory since, in the absence of sale, no value is realised.  On the other hand, it is not a circulation theory, since the magnitude of value realised depends upon the average technical conditions of production (and the average level of skill) prevailing in an industry at the time of exchange.  

The immediate impact of Rubin’s focus on the role of money in value theory was to enlarge the scope of the debate on Marxian value theory, raising the crucial question of the order of determination in a capitalist economy.  De Vroey (1982) argues, for example, that ‘exchange creates value, but production determines its magnitude’ (p.40).  Elson (1979) on the other hand holds onto a production theory – a value theory of labour allocation – in which value has both an ‘immanent’ measure in labour hours and an ‘external’ measure in money.  Himmelweit and Mohun (1981/1994) hold to an intermediate position in that the market ‘carries on as a real process the commensuration of the products of labour under commodity production’ (p.158).  What is common to all of these theories, is an argument that the mutual interdependence of production and exchange within the circuit of capital denies the validity of any axiomatic derivation of price from concrete hours of labour expended in producing a commodity.  Given a dynamic process in which each firm competes to capture extra profits through revolutions in production there is, in fact, no reason why the labour embodied ‘ideally’ in any particular commodity should be realised ‘actually’ in its price (Fine, 1988).  Equilibrium theorising must therefore be eschewed; the nature of capitalism is such that the ‘object of the value-founded theory of price is permanently impeded by the working of a diachronic logic which irreversibly modifies these norms’ (de Vroey, 1982, p.41).  

Rubin’s (1928/1972) distinction between private-concrete labour and abstract-social labour has been seen by some writers as a conflation of Marx’s categories of abstract and social labour (Likitkijsomboon, 1995).  This is incorrect; abstract-labour is not, for Rubin, immediately social labour (measured in money), but embodied labour (measured in labour time, but realised in exchange).  What Rubin’s distinction does imply is a theorisation of circulation not as a mere stage in the analysis of production, but as integral both to the realisation of value and to reproduction, itself the result of two exchanges (of money capital for labour power and of commodity capital for money).  In the circuit of capital, value and price exist in ‘a co-constitutive relationship’ such that ‘socially necessary labour time is the immanent measure of value, but price is its necessary and only objective expression (Murray, 1993, p.50).  In short, the necessity that abstract labour is validated as social labour precludes the adding up of concrete pre-market labour times - the aggregation suggested by Sweezy (1946, p.33) - or the adding up of vectors – the aggregation in Sraffian-Marxist theories (eg Steedman, 1977).  

In sum, where the technological paradigm sees abstract-labour as a reduction from concrete particularity and related to the problem of aggregation or commensurability, the social paradigm sees abstract-labour as a ‘real abstraction’ or an ‘abstraction in practice’ brought about only through the process of exchanging commodities in the market.  Although this allows a role for money in the realisation of value it does not imply – as some writers have argued - that money is ‘the sole measure of abstract labour: that labour only becomes abstract in the act of exchange between the commodity and money’ (Gleicher, 1983/1994, p.175).  Most of the writers identified by Gleicher as belonging to the ‘Rubin school’ are, in fact, unequivocal defenders of Marx’s abstract-labour-embodied theory of value, and Rubin maintains that quantities of abstract-labour, measured in time, causally determines the exchange ratios of commodities (Eldred, 1984).  The shift to a social paradigm does not, therefore, entail an abandonment of production as the moment of value-creation, so much as it entails an attempt to integrate this moment more effectively within the circuit of capital as a whole.

	THE ITALIAN DEBATE
A second development within the social paradigm also holds to an abstract-labour embodied interpretation of value while attempting to develop the monetary side of Marx’s value theory (see Bellofiore, 1989; Bellofiore and Finelli, 1998).  This ‘monetary’ interpretation derives from Colletti’s (1972) view of the abstraction affected in the market - not as an abstraction from the concrete objectivity of labour, but as an alienation of the subjectivity of individuals: ‘abstract labour is alienated labour, labour separated or estranged with respect to man himself’ (p.86).  From this perspective, the essential feature of commodity exchange is that it transforms human capacities into ‘a congealation of labour which is value, turning it into a distinct entity, an entity which is not only independent of man, but also dominates him’ (p.87).  

The complexities of Colletti’s argument, explored in Bellofiore’s (1999) review of the Italian debate, are beyond the scope of this analysis.  Here it is sufficient to point out that Colletti’s interpretation of Marx’s value theory as a theory of fetishism retains the Ricardian essence and appearance model, to the extent that value is assumed to have an autonomous existence determining the (alienated) character of productive activity in capitalism.  In this respect, it is subject to the critique advanced by Backhaus (1969/1980): namely, that severing the essential interconnectedness of form and essence renders the ‘phenomenon of reification unfathomable’ (pp.101-4).  Colletti certainly recognises the problematic character of a value theory of alienation: ‘I cannot yet state whether the idea of an inverted reality is compatible with a social science’ (cited Bellofiore, 1999, p.40).  In the 1970s Napoleoni sought to resolve this difficulty by suggesting that abstract-labour-embodied is value ‘first regarded as activity, and afterwards as its product or result’ (Napoleoni, 1975; cited Bellofiore, 1999, p.48).  

Napoleoni’s argument is traced out by Bellofiore (1999): (1) commodities are ‘ideal’ money before exchange; (2) ‘actual’ money is the necessary phenomenal form of an immanent measure of value as embodied labour time; (3) the transition from ‘ideal’ money in production to ‘actual’ money in exchange cannot be assumed; (4) labour-power systematically produces money only when it takes the wage-form, and this entails the separation of workers from means of production; (5) when the technical labour process is fully subsumed under the valorisation process (the process of increasing value), objectified abstract-labour embodied in technical inputs (Marx’s constant capital) dominates the living labour of the worker (Marx’s variable capital) and extracts surplus value from it; (6) the centre of the valorisation process is this real and immediate process of production, and it is here that living labour is alienated as value.  This real hypostatisation (process of substantive creativity) is behind the reification of human relations in the capitalist system of production for exchange.

The modern ‘monetary’ theory emerging from the Italian debate is an extremely rich and sophisticated attempt to retain Marx’s abstract-labour-embodied value theory while, at the same time, emphasising the crucial role played by money (and the exchange relation) in constituting value as ‘actual’ in a capitalist economy.  The interconnectedness of exchange and production is conceptualised, within this theory, as a relationship between ‘potential’ value/abstract-labour created in production and measurable (in principle) in labour time, and ‘actual’ value/abstract labour that comes into existence only when commodities are exchanged for money (Bellofiore, 1989; 1999).  Through this distinction between potential and actual abstract-labour/value, the privileging of production is maintained since the ‘alienation-abstraction of objectified labour arising from exchange is posited by the more fundamental abstraction-alienation of living labour in the production process’ (Bellofiore and Finelli, 1998, p.53).  In other words, money and capital are theorised in terms of two relationships with labour: (1) the (quantitative) market driven exchange of labour-power for wages, and (2) the (qualitative) production driven subordination of living labour to its quantitative aspect, the expansion of value. 

At the centre of these twin relationships is the domination of capital over labour.  The crucial point is that abstract-labour, although ‘actual’ only in exchange, is derived not from the exchange relation, but as a ‘consequence…of the subjection to capital of wage workers’ living labour’ (Bellofiori and Finelli, 1998, p.54).  Hence, the human capacity to labour (labour-power) is sold on the market for a quantity of money (wages), but this exchange of labour-power for wages itself presupposes the existence of an exploitative production process subordinating living labour under its quantitative aspect (the production of value).  This constitutes value as more than a regulator of circulation or labour allocation; it is the autonomous determinant of ‘the form of the production process and grounds the intrinsic dynamic of capitalist society’ (Postone, 1993, p.278).

In his contribution to the critique of Napoleoni, Arthur (1999) suggests that the Italian conflation of the abstract character of the exchange relation with the abstract character of the labour that constitutes value is a ‘tempting conceptual mistake’ since both are, in fact, determined by the value-form (Arthur, 1999).  That is, value creation is enabled not by the abstraction from heterogeneous particularity (in money/exchange), nor by the existence of productive activity under the aspect of time, but specifically by the subordination of productive activity to the imperatives of profit.  In other words, the exchange of labour-power for money and the subjugation of living labour under the aspect of time presupposes a form of productive activity dominated by the requirement for valorisation, and it is this domination of form over content that demands the representation of abstract-labour in money.  Marx (1867a) says as much:

…the labour objectified in the means of production can only be increased…to the extent to which it sucks in living labour and objectifies it as money, as general social labour.  It is therefore, pre-eminently in this sense – which pertains to the valorisation process as the authentic aim of capitalist production – that capital as objectified labour (accumulated labour, pre-existent labour and so forth) may be said to confront living labour (immediate labour, etc)…(Marx, 1867a, pp.993-994).

Here, Marx identifies labour power expended in the technical production process as the fundamental source of value, but labour power expended in the process of valorisation is the fundamental determinant of the ‘authentic transformation’ of labour into capital.  The logical order is therefore exactly the reverse of that advanced by Bellofiore and Finelli (1998).  Labour time (calculated as intensity or duration) acquires ‘practical reality’ only because labour-power has taken the value-form (wages) and is bought by capitalists on the market as an input to production.  As an actual abstraction affected by the subordination of the productive process to the imperatives of valorisation – abstract-labour can have no measure other than money.  Thus, Arthur (1999) concludes:

‘Money is the only measure of success; it is the existent form of abstract wealth (Marx) and this means that the activity producing it is itself posited as abstract, that the living labour employed in the capitalist labour process counts only as an abstraction of itself, as a passage of time’ (Arthur, 1999, p.149).  

Arthur’s concludes that ‘the constitution of labour as abstract in the capital relation is in truth more fundamental than its constitution as abstract in exchange’ (Arthur, 1999, p.146).  If the argument is granted, it seems meaningless to isolate the technical labour process (the source) from the valorisation process (where the measure is constituted), although the conceptual distinction is useful.  That Marx himself sought an independent or ‘immanent measure’ of value constituted in labour time must then be seen as a retreat to the ‘Ricardian vice’ that has subsequently plagued Marxian social science, at least in its technical labour-embodied and abstract-labour-embodied varieties (Reuten, 1999). 

For Bellofiore (1999), of course, it is only ‘potential’ abstract-labour-embodied that is measured in time units in production, and ‘actual’ abstract-labour is indeed measured in money in exchange.  Hence, only ‘potential’ value can be calculated (at least in principle) in time units before exchange.  Since there is no guarantee that commodities will find an outlet, the actual accounting of the labour time expended in production can be interpreted as a measure of abstract-labour/value only on the assumption that the short term expectations of firms are fulfilled (Bellofiore, 1999, fn.14, p.52).  The argument for money as the sole measure of value is, however, quite independent of whether an ‘immanent measure’ of abstract-labour-embodied (in time units) can be defined theoretically.  What is at stake is not the possibility of an empirical inquiry based on a ‘monetary’ version of the abstract-labour-embodied theory of value, but its relevance in an economy where the production and distribution of commodities and labour is determined by the value-form.  In the last and final section I briefly elaborate this criticism as it applies to both ‘technical’ and ‘social’ interpretations of Marx’s abstract-labour-embodied value theory.

3.3  Abstract Labour: Substance versus Form

In the light of the previous discussion, the shift in the 1970s from a ‘technological’ to a ‘social’ paradigm can be interpreted as an attempt by Marxist philosophers and economists to grapple with a core question of Marx’s economic theory: what is value, and how is it determined?  Within the ‘technical’ paradigm, the ontology of value is typically broached as a Ricardian problematic.  If the quantitative connection between commodities is not arbitrary, the price of a commodity must expresses the unifying reality of an externally given set of exchange relations; hence, a quantity of value is intrinsic in a commodity in the same way as weight expresses something intrinsic to mass.  This path leads to the argument that value must be prior to and independent of the exchange relations into which the commodity enters, in the same way that the mass of an object has an autonomous existence, quite independent of its measure.  The quest for value as ‘essence’ hidden beneath ‘phenomenal form’ leads out of the sphere of exchange relations and into the sphere of production, theorised as a technical labour process.  A dichotomy of essence and appearance operates, such that money (value-form) has no ontological or determining influence on economic activity; the value-creating substance is physiological abstract-labour, a generalisation from concrete-labour; abstract-labour is self-evident and trans-historical substance of value, requiring no special determination - social or otherwise. 

I have argued that treating abstract-labour as a physical/natural substance severs the labour process from the social determination of commodities and labour and leads to all sorts of conundrums, the most obvious of which is the ‘immanent’ measure of value in labour-time.  As Rubin (1928/1972) was the first to point out, the notion of ‘socially necessary labour time’ cannot be constituted in production alone but depends on the mediating influence of the market (see pp.155-8). Rubin recognises, for example, that the determinants of the ‘technical’ labour process – duration and intensity of labour, skill levels and output per unit of time – all have ‘social’ determinants to do with the valorisation rather technical processes.  Duration of labour depends upon socially acceptable working conditions, intensity of labour on the socially average technique and organisation of production, qualification on the market and state provision of education and training and output on social determinants of demand, socially and systemically determined. 

A second difficulty in the technical interpretation of abstract labour as a physiological substance of value is posed by skilled labour.  A useful measure of abstract-labour-embodied in units of time must, presumably, take some account of inter- and intra-industry averaging of differing intensities of labour, as well as differing skill levels and production techniques.  Given a lack of discounting coefficients for intensity and skill, the alternative solution is to sum concrete-labour hours expended in production to arrive at the total number of hours of labour expended in an economy.  In this case, abstract-labour is just labour, and the analysis of capitalism turns out to be just a particular instance of a more general analysis of human interchange with nature: labour, reproduction and want satisfaction, in general.  Money and competition have no role in technical labour-embodied value theories other than to move rates of surplus around until rates of profit are equal. 

The empirical question of whether discounting to abstract-labour is possible before exchange has been an important component of contemporary critiques of concrete-labour-embodied (technical) value theories.  It has, however, been seen by several writers as equally a problem for abstract-labour-embodied (social) value theories (Clarke, 1980).  Although Marx posits abstract labour as socially necessary labour - ALi  + ALj = AL, (with ALi and ALj socially necessary amounts of particular labour hours i and j) - the difficulty is that AL is still taken by Marx to be the ‘substance’ of value, a pre-market entity.  In general, social developments of Marxian value theory retain this assumption; although abstract-labour is the social form taken by productive private labour in capitalism – rather than a physiological substance – this form comes about in production and is merely ‘realised’, or validated, in exchange.  Money as the means facilitating circulation is imposed on the analysis as an external measure of value, assumed to be quite independent of the existence of value in itself.  The immanent (albeit unobservable) measure of value is still embodied labour-time.  Given that the reproductive process in capitalism is driven by the imperatives of valorisation (the process of value increase, measured in money) it is difficult to see how this can be the case. 

In my view, the fundamental problem exhibited by much of the writing within the social paradigm is that it recognises the importance of money in the circuit of capital, but at the same time denies any ontological role to the value-form.  In these theories, the ontological foundation is one of ‘conservation’, with abstract-labour/value created in production and carried over untransformed from one level of abstraction to the next (for an expansion on this criticism see Mirowski, 1990 and Reuten, 1993).  Marx, himself, criticised this physiocratic conception as ‘an attempt to portray the whole production process as a process of reproduction, with circulation merely as the form of this reproductive process; and the circulation of money only as a phase in the circulation of capital’ (Marx, 1863, p.344).  The essence of Marx’s criticism of the physiocrats was precisely that capitalist production and circulation cannot be treated as independent spheres - between which relations of dependence or interdependence can be established - but are inseparable elements determined within a totality.  Value as a social relation cannot be determined either in production or exchange but exists only as a process; that is, as a result of the motion of capital through the differentiated moments of the circuit as a whole. 

At this point it might be objected that some versions of the ‘social’ interpretation of abstract labour do involve a shift in the ontological status of the concept of value.  De Vroey (1982), for example, sees concrete-labour as transformed into abstract-labour only in the market, when the products of that labour are homogenised as money: ‘exchange creates value’ (p.40).  In a similar fashion, Himmelweit and Mohun (1978, p.75) identify exchange as the critical moment instituting a ‘real’ disregard of the heterogeneous characteristics of concrete labour and differentiated products, and constituting these as value equivalents (Himmelweit and Mohun, 1978, p.75).  In these theories, the market performs the reduction to (AL) establishing value as a market phenomenon.  The view that ‘exchange creates value’ is, however, unconvincing given Rubin’s technical condition; namely that the quantity of value produced must depend upon the technical conditions (and organisation) of production and the productivity of labour.  What these theories seem to amount to is an alternative privileging of exchange as the ‘critical moment’ in the process of valorisation, rather than an attempt to conceptualise abstract-labour and value as a process brought about by the specificities of a particular form of production for exchange.

In sum, the major achievement of the ‘social paradigm’ is an attempt by theorists to conceptualise the value-creating substance (abstract-labour-embodied) as a historically determinate (social) form of labour determined by the specific character and organisation of capitalist production.  This value dimension is unique to capitalist reality in as much as it typifies a society where the social link between producers is realised only ex post through commodity exchange as a relation between things.  This insight leads to the second achievement of abstract-labour-embodied value theory: an attempt to conceptualise the circuit of capital as an interconnected whole.  Yet, it is precisely at this point that the social paradigm breaks down.  The chief failing is a continued privileging of production as the primary moment within the circuit of capital (Clarke, 1980) coupled with a retention of the Ricardian conservation principle (Mirowski, 1990; Reuten, 1993).  In consequence, the social paradigm does not go far enough to establish money as the ontological link between the value-form and its material foundation, as no Marxist starting from an abstract-labour-embodied theory can. 

Conclusion

This chapter outlines a paradigmatic split arising from Marx’s treatment of the category of abstract labour in the opening chapter of Capital.  The split originates in the fundamental question of whether abstract-labour is a physiological substance embodied in commodities during production (a technical value theory), or a social form assumed by concrete private labour when useful objects are produced for exchange by independent producers (a social value theory).  I have argued that both readings are subject to the same critique, to the extent that they retain an abstract-labour-embodied theory of value.  Firstly, a measure of value in labour time requires a simplification to homogeneous abstract-labour, irrespective of whether the pre-market entities are taken to be hours of concrete-labour (as in the technical theory) or unobservable/potential quantities of abstract-labour (as in the social theory).  Secondly, the ‘paradigm of production’ implicit in all labour embodied theories militates against an adequate theorisation of the circuit of capital as a whole.  

With respect to these two arguments, I agree with Reuten (1993) that the ‘embodied character’ of abstract-labour is more fundamental than the empirical question of whether, in principle, it is possible to arrive at a pre-market measure of homogeneous labour.  In a capitalist economy, where labour, consumption and production are separate activities and subject to the imperatives of valorisation, private labour must assume a social value-form (wages) and concrete-labour can be abstract-labour only to the extent that it does so.  An adequate theory of value must come to terms with this domination of value-form over value-content.  One way to theorise form-determination is to see money as ontologically significant in determining economic activity; in this case, the Ricardian essence and appearance model (where money is but a veil over exploitation) breaks down, and the concept of abstract-labour as labour embodied in production must be abandoned.  This argument is most cogently expressed in current reconstructions of abstract-labour not as a pre-market substance measured in labour time, but as the determinate social form that comes only when the imperatives of valorisation dominate the technical labour process.  The main point of reconstruction is to demonstrate that labour is the source of value, without reference to abstract-labour as an embodied value substance.

4.  Abstract Labour: A Reconstruction

In previous chapters, we have seen that Marxian value theories often posit an autonomous reality - axiomatically or historically – then assume that the economic categories directly mirror that reality.  The project of reconstructing Marxian value theory begins altogether differently, with the hermeneutical question: how is it meaningful to say that value exists beyond its concept?  The theories analysed in this chapter suspend any axiomatic identity of value with the explicit working out of structural tendencies or laws of history.  On the contrary, what is known to be ‘real’ is always socially contingent, always mutable and always open to interpretation (Reuten and Williams, 1989, p.14).  From this perspective, the object of value theory is to prove the actuality of value in capitalism by demonstrating its logical (systemic) necessity - leaving open the ontological status of reality in itself.

This chapter sets out and engages the debates surrounding two attempts to explicate the actuality of value in capitalism.  As a third paradigm, this ‘systematic-dialectical’ approach is emergent in contemporary Marxism through the confluence of ideas generated by the neo-Hegelian critiques of Capital (notably Backhaus 1969/1980; see my chapter 2) and the debates over abstract labour (see my chapter 3).  Crucially, the reconstructions resulting from this intellectual synthesis do not claim to be consistent with Marx, nor are they concerned primarily with interpreting Capital as a systematic dialectical work.  Indeed, they explicitly aim to ‘step outside the inconsistency’ of Marx’s method in order to develop what they see as only implicit in Capital: a dialectical theory of the value-form as the specifically ‘bourgeois form’ of associated abstract-labour (Reuten, 1999, p.92).  From this reconstruction of the value-form, labour is constituted as the sole source of value, measured in money.

The analysis proceeds as follows.  The first chapter presents a brief digression on the meaning of ‘reconstruction’ in Marxian methodology, including a review of current readings of Hegel’s (1817) Logic in relation to Marx’s Capital.  The second section questions Marx’s ‘commodity’ as an abstract-universal starting point for a systematic dialectical inquiry into value.  The third section examines a reconstruction of the commodity that aims explicitly to theorise ‘the peculiar characteristics of the form of value; namely, the commodity form and, most importantly, to develop money as a form of value’ (Eldred and Hanlon, 1981, p.24).  The fourth section explicates the dominance of the value-form over the economic activity in the determination of the labour process as a duality of technical process and valorisation process (Reuten and Williams, 1989).  The fifth section demonstrates the systemic necessity of labour as the only source of value-added in capitalism.  The sixth and final section defends the main conclusions of reconstructed abstract-labour against a current abstract-labour-embodied critique.

4.1  Critique and Reconstruction

In an analysis of reconstruction and deconstruction in Marxian theory, Arnason (1984) argues that the ‘basic intentions’ of a theory must be identified ‘before the more critical work of reconstruction can start’ (p.57).  He identifies two general methodological principles: firstly, a hermeneutical principle locating the theorist in question in relation to a previous body of knowledge; secondly, a principle specifying the theory’s contribution to the developmental logic within that tradition.  

Applying Arnason’s (1984) principles to the present context, the hermeneutical criterion for reconstruction refers to the way in which the theories examined in this section are situated in relation to the paradigmatic split within Marxism.  Location within the social paradigm identifies contemporary value-form theory as a contribution to the critique of concrete-labour-embodied (Ricardian) remnants in Marxian theory.  The main critique is directed against the ontology of conservation and the privileging of production.  The particular relevance of the Ricardian essence-appearance model to the analysis of capitalism is also questioned.  From this critical/hermeneutic perspective, Marx’s reformulation of the classical value problem as a problem of social form is a major step forward from classical theory; the subsequent Marxian retreat to the natural realm of value substance, a major step back.  

With respect to developmental logic, Marx experiments with different strategies and modes of argument throughout his work, but the transition from the (1857/1973) draft Introduction to Capital seems to involve a retreat from Hegel’s (1817) speculative logic to a more reductionist methodology.  As Fraser (1997) points out the Logic/Grundrisse interconnection is therefore vital to current efforts to reunite the Hegelian and Marxian dialectics.  According to Fraser, the systematic dialectical method of the Logic is not subject to Marx’s metaphysical complaint that ‘Hegel fell into the illusion of conceiving the real as the product of thought concentrating itself, probing its own depths, and unfolding itself out of itself, by itself’ (1857/1973, p.101).  Fraser rejects any reading of Hegel as a negative influence to be expunged, and denies that Hegelian logic imports mystical idealism into Marxian political economy.  Marx’s attempt to divorce Hegel’s dialectical method from his ‘idealist’ ontology does seem to be based on a confusion since Hegel himself makes no distinction between epistemology and ontology.  The point is that Marx set the terms of the debate wrongly; if there is no metaphysical idealism in Hegel’s method, there is no need to rescue it from mysticism.

Reconstruction begins, then, with a view of the Hegelian and Marxian dialectics not as opposites but as ‘intrinsically similar, one and the same, two of a kind’ (Fraser, 1997, p.82).  Despite unanimity on this point, there are several contemporary variations on the systematic dialectical approach.  For simplicity, I group these into two broad strands of thought.  The first strand is concerned with reconstituting the ontological foundations of Marxian value theory by reinterpreting Marx’s critique of Hegel in relation to his critique of capital.  For Arthur (2000), the two critiques are inseparable in the sense that Hegel’s ‘false ontology’ may be seen as ‘a philosophical absolutisation of the standpoint of capital’ (p.105).  If Hegel’s world is an inverted reality, so too the reality of capital is ‘an inverted world in which the value abstraction claims priority over its material bearers and the ideal logic of capital imposes itself on human beings’ (p.105).  In this approach, what is there in Hegel is a reconstruction of the logic of reality through the exposition of a categorical system.  Such a reconstructive method is evident in Marx’s systematic progression of socio-economic categories reconstructing the capitalist mode of production in thought, beginning with the simplest abstract category and dialectically advancing towards the concrete whole (Smith, 1990).

A second application of the systematic dialectic eschews ontological adventures altogether in favour of an epistemological project, founded on a concept of reality as determined by a science, where science is a ‘systematic production of knowledge by way of rational and inter-subjective discourse’ (Reuten and Williams, 1989, p.14).  Reconstructing Marxian value theory as ‘scientific’ (in the above sense of the term) invokes a return to transcendental idealism as a philosophical principle: that is, social reality is taken to be all that we – inter-subjectively – know about it.  Conversely, transcendental idealism is reconstructed not as the solution to a thought-reality dualism founded on the Kantian unknowable thing in itself, but as a dialectical exchange between social reality and our thinking about it.  Where, in Hegel (1817) fundamental categories are treated as pure categories independent of contingent empirical instantiation, the rectified systematic dialectic is a method for an ongoing inquiry into empirical perceptions of capitalist reality as well as existing theories of it (Reuten, 1993).  The rest of the dissertation is concerned, primarily, with the methodological principles developed within this second approach, and their application to the reconstruction of Marxian categories. 

4.2  A Systematic Dialectical Starting Point

The systematic dialectical critique of Capital begins with Marx’s commodity as an abstract universal concept for the capitalist mode of production.  As I have demonstrated, the difficulties of Marx’s opening chapter arise out of his inconsistent management of the commodity form, especially the dualities of use-value and value, concrete-labour and abstract-labour.  Might these difficulties be overcome by a different reading of the ‘commodity’ as a preparatory (rather than a universal) notion belonging to the moment of critical inquiry, so preceding the presentation proper?  Banaji (1979) does exactly this; taking Marx’s comment on the commodity as an appearance - ‘a reflected sphere of the total process of capital’ - he argues that the commodity as a concept has ‘still to be posited’ in its particular-universal doubling of use-value/value (p.30).  Arthur (1997) ‘gratefully accepts’ this reading, which implies that Capital has a double starting point: (1) the ‘commodity’ as an analytic category in a preliminary process of inquiry, and  (2) ‘value’ as the synthetic abstract universal starting point for a dialectical presentation.  In a comment written shortly before his death, Marx (1879) appears to confirm these readings of the commodity as a preparatory notion and value as the universal capitalist concept: 

In the first place I do not start out from ‘concepts’, hence I do not start out from ‘the concept of value’…What I start out from is that simplest social form in which the labour-product is presented in contemporary society, and this is the ‘commodity’.  I analyse it, and right from the beginning, in the form in which it appears (Marx, 1879, p.198).

It seems plausible, then, that the first two sections of Capital have to do with perceptions and with the process of working these up into concepts.  On this reading, the presentation proper does not commence until the reconstitution of the commodity as an entity of double (material-social) form, in the third section.  The argument that Marx’s presentation of his ‘social’ value theory begins properly with his determination of the value-form is not particularly new (see Murray, 1993).  What is new in the systematic dialectical critique is an argument for ‘dissociated labour’ (rather than the commodity) as the most abstract universal concept for the ‘bourgeois [private] mode of association’.  As a requirement for social cohesion in a system based on the dissociation of labour, production and consumption, the interplay of the value-form and the exchange relation constitutes the first moment in which abstract-labour and value are determined as actual. 

4.3  Concrete Dissociated and Abstract Associated Labour 

An early attempt to reconstruct Marx’s starting point beginning with the ‘contradictory nature of the value-form’ is represented in the work of the Sydney-Konstanz research group (Eldred and Hanlon, 1981; Eldred, Hanlon, Kleiber and Roth, 1982, 1983).  Here the value-form is posited, at the outset, as the money-form derived by Marx as universal equivalent.  Further elaboration then establishes the money-form as dominant over the social allocation of labour and it is this dominance over the labour process that ‘signifies the transition of the value-form from the sphere of exchange to its domination of bourgeois production’ (Eldred and Hanlon, 1981, p.27).  The essence of the value-form as the ‘mode of association’ is that it enables industrial commodities to be produced by concrete dissociated labour.  The contradictory character of the industrial (capitalist) commodity is thereby established as the universal-particular opposition of abstract associated and concrete dissociated labour:

To emphasise the value character of the commodity, we refer to it as a product of abstract associated labour, as a universal, as a member of the universe of the industrial commodity-products of labour.  By contrast, the commodity as a product of dissociated concrete labour will be referred to as a particularity (Eldred and Hanlon, 1981, p.29).

This constitution of the double character of commodities and labour is a very different formulation from Marx’s analytic derivation of abstract labour and value from the useful qualities of labour and objects respectively.  In place of analytical (reductive) derivation, we now have the internal doubling of a concept into ‘particularity’ and ‘universality’, referred to by Reuten and Williams (1989) as ‘the basic form of internal opposition or contradiction’ in dialectical thinking.  In a system of private independent production (bourgeois production), the basic form of contradiction is ‘that dissociated labouring activities only become associated in the exchange of their result, objectified labour, represents the kernel of the contradiction between production and exchange’ (Eldred and Hanlon, 1981, p.31).  It is important to note that the contradiction inherent in the concept of dissociated labour is not resolved by its negation in exchange; on the contrary, association is a necessary condition enabling the very existence and perpetuation of dissociated activity, given the microeconomic organisation of production and consumption.  

Although the necessity of money seems to be demanded by the value-form (the need for association) rather than the exchange relation (the need for exchange ratios between commodities), Eldred, Hanlon Kleiber and Roth (1982) retain the commodity – albeit reconstituted as a duality of money and use-value - as their starting point.  Later reconstructions abandon this starting point, and begin directly with concepts of dissociated-concrete and associated-abstract labour (Reuten, 1988a; and Reuten and Williams, 1989).  In these later reconstructions, the concept of value-form itself undergoes transformation.  It becomes more than the monetary manifestation of value in the ‘specifically capitalist mode of association’ enabling the dissociation of production, consumption and labour (although it is this also); more, crucially, the value-form comes to define the bourgeois epoch as uniquely form-determined (Reuten, 1988a).  The next section examines this particular development of Marxian theory and elaborates some of its implications.

4.4  Reconstructing the Theory of Value-Form 

The basic elements of the theory of value-form as a theory of form-determination are set out in Reuten (1988a) and in Reuten and Williams (1989).  The movement towards the starting point is introduced through Hegel’s (1817) preparatory universal notions of ‘being’ and ‘nothing’, from which self-production is derived as a universal notion analogous to Hegel’s ‘becoming’.  Self-production is first posited as a contradictory notion in that the individual cannot develop (become) outside of society; sociation (social activity) is therefore a natural (trans-historical) necessity both for the reproduction and development of the human individual, whatever the form of society. 

In bourgeois production (further specified as private, independent production), sociate activity is negated by dissociation; that is, by the separation of production and consumption into distinct activities, and their organisation into independent units.  Dissociation imparts to labour its historically specific form as independent private labour.  In each unit, however, labour is dependent, having no access to means of production.  A concomitant of labour’s independence at the level of macro-organisation and dependence at the level of micro-organisation is that the production of useful objects must conform to an aim external to the usefulness of the objects themselves.  In order to exist, dissociated activity therefore requires a moment of association transcending the sociation-dissociation opposition.  This moment of association is the value-form, constituted as systematically prior to the market, in contradistinction from both Marx (1867a) and Eldred and his associates (1981, 1982, 1983) who begin with commodity exchange.  

	THE VALUE-FORM AS MODE OF ASSOCIATION
The value-form as ‘bourgeois mode of association’ acquires further determination in the exchange relation, which aligns dissociated production and consumption and constitutes the labour expended in microeconomic units as interdependent or social labour.  In this way, the exchange relation constitutes the first condition of existence of dissociated activity.  The exchange relation is the grounding moment, the movement of force that provides for the coming into being of dissociation-association as an ‘identity of opposites’ (Reuten and Williams, 1989).  Association shows the contradiction (dissociation) that it cannot exist for itself, but must exist only in conjunction with a moment of association as a ‘difference in unity’ (dissociation-association).  The exchange relation nevertheless remains at the level of an abstract-universal, and is therefore inadequate as a representation of the totality of determinations and internal relations constitutive of capitalist production for exchange; the ‘object-totality’ has yet to be determined, concretely.  

The immanent dynamic of the presentation is driven on by this persistent inadequacy of concepts to comprehend fully the form and dimensions of their conditions of existence.  The form determination of exchange (as bourgeois form) is first given by the fact that the divergence of physical inputs and outputs to the productive process is not in itself the aim of productive activity (as might be the case if production and consumption were not separated).  Rather, the opposition underlying the form of exchange is a universal-particular opposition of value and use-value.  Essentially, value satisfies a necessary requirement for association; namely, that heterogeneous (incommensurable) objects be made commensurable or conformable ‘to a universal, unitary form or common denominator’ (Reuten, 1988a, p.50).  As such, value is the ‘necessary dimension of labour and of the useful objects produced by it in the bourgeois mode of production’ (p.51).

The argument for the bourgeois mode of association as ‘form-determined’ now proceeds as follows: given dissociated production, consumption and labour, and given the exchange relation as the mode of association, the particular products of labour necessarily have to take on a social-universal form: value.  To be validated as socially necessary (and not wasted), both inputs and outputs to the productive process (including labour power) must take on this social-universal form, in disregard for their particular useful qualities.  More crucially, the production of surplus value (value-added over and above the original value of inputs) replaces the production of use-values as the external driving force of production.  Without the creation of value-added, private productive activity is interrupted and stagnates:

This mode of production further entails the contradiction that the social form is the external determinant of this mode of private production!  Thus the abstract-social-universal form dominates over the private-particular such that the private-particular is determined by the abstract social-universal form.  As such the bourgeois mode of production is form-determined (Reuten, 1988a, p.52).

In a systematic dialectical presentation, the process of arriving at the ever more concrete determinations of the value-form must continue until capitalism ‘the existent’ is apprehended ‘as actuality…which requires no external or exogenous determinants for its systematic reproduction’ (Reuten and Williams, 1989, p.23).  The essential unity of the presentation consists in this continuous movement of existence and ground, further determined as a unity of essence and appearance.  The ‘market’ further grounds this essential unity by constituting the products of dissociated labour as commodities, and associated labour as abstract-labour in the form of money.  The relation between the value-form and the exchange relation now becomes clearer. 

	MONEY AND THE ROLE OF THE MARKET
The relationship is essentially this: the value-form of labour and its products is constituted in the market, a mode of social synthesis centred on the function of money as a ‘universal equivalent’.  In this capacity money is vested with an abstract capacity to equate, symbolically, all products on the market and all types of labour in money terms.  Thus, the salient feature of money is that it has assumed the compelling necessity of an objective social law, aptly described by Sohn-Rethel (1978) as ‘the law of the separation of exchange and use’ (p.25).  The abstraction affected by money is not therefore an abstraction in mind, but a practical abstraction that takes place every time individuals perform the act of exchanging commodities as values, in the market.  Thus:

The abstraction does not spring from labour but from exchange as a particular mode of social interrelationship, and it is through exchange that the abstraction imparts itself to labour, making it ‘abstract human labour’.  The money abstraction can be more properly termed ‘the exchange abstraction’ (Sohn-Rethel, 1978, p.6).

Money grounds, concretely, the distinction between use and exchange as mutually exclusive practices.  The practice of use covers an infinite field of human activities, comprising ‘man’s interchange with nature’.  This material practice must be foregone while the social practice of exchange holds sway.  According to Sohn-Rethel (1978), relative prices – a still more concrete determination of money - are what creates the system of social communication between dissociated producers and consumers, mediating the actions of individuals, performed independently and in complete oblivion of the socialising effect.  The negation of use-value in exchange is therefore a ‘real abstraction’ or an event in time and space that enables an actual disregard for the useful properties of commodities and their sole expression as quantitative differences measured in terms of a uniform common denominator.    

The concept of ‘real abstraction’ is not unique to value-form theory; indeed it is a cornerstone of many contemporary abstract-labour theories of value (see chapter 3).  I consider the term problematic, however, in that it makes – implicitly - an ontological claim that is difficult to sustain; namely that the categories of thought are given directly by historical (social) reality.  Mohun (1984), for example, advances an ontological ‘subordination of the theory to the real world’ as a materialist ‘critieria governing the adequacy of a theory to its object’ (p.396).  Elsewhere, he argues that this materialist position requires ‘a (more or less) adequate reflection in thought of an abstraction process that really occurs independently of thinking about it’ (1994a, p.218).  Hence, Marxian theory can be seen as a correction to the ‘inadequate’ Ricardian reflection of reality.  The correction to the labour theory of value maintains the ‘essentialist ontology in which value is labour time’ (1994a, p.215), but recognises that the real historical abstraction takes place in exchange.  The ‘moment of exchange is thus the critical one’, causally affecting the divergence of commodity prices and values (Mohun, 1984, p.401; also Himmelweit and Mohun, 1978).  Lurking behind this concept of ‘real abstraction’ is the old Ricardian ontology of value, combined with a logical-historical conflation of material reality with hypotheses/theories about it. 

While Reuten and Williams (1989) do not extend their criticism to the concept of ‘real abstraction’ it is interesting that they do not use the term, but refer instead to ‘actual abstraction’ as the social recognition of labour and its products in the market.  In actual social intercourse, the meaning of exchange - as the social nexus for the operation of the value-form as mode of association of private production – is constituted as value and its measure is constituted as money.  Thus, Reuten (1988a) writes: 

In as much as the space of an object is further constituted by the measure of length (for which, e.g. metres or yards are standards), the value of an object is further constituted by the measure of money (for which, e.g., a dollar or a pound sterling are standards).  Both length and money are constituted in social intercourse and as such they are social facts (Reuten, 1988a, p.51). 

The double constitution of value and its measure are only understandable as ‘social facts’ to the extent that they are universally recognised and validated as such through the practice of exchange.  The meaning of value and the meaning of money cannot be given a priori, but must be re-constituted continuously in practice and dialogue, extending to the practice of knowledge production itself.  In Capital, Marx (1867a) seems to come close to a similar concept of ‘actual abstraction’ when he writes in the last pages of his opening chapter:

The production of commodities must be fully developed before the scientific conviction emerges, from experience itself, that all the different kinds of private labour…are continually being reduced to the quantitative proportions in which society requires them.  The categories of bourgeois economics consist precisely of forms of this kind.  They are forms of thought which are socially valid, and therefore objective, for the relations of production belonging to this historically determined mode of social production, i.e. commodity production (Marx, 1867a, pp.168-69).  

Of course, the exchange of commodities for quantities of money is also an exchange between owners of those commodities, so that actual abstraction is insufficient in itself to convey the social meaning of exchange as the transfer of possession under property laws.  Reuten and Williams’s (1989) maintain that the contradiction between the right to property and the right to existence (the contradiction between competition subjects as the holders of property or the capacity to labour) is transcended by the doubling of competitive society into civil society and the state.  As an attempt to theorise the value-form determined economy as the crucial moment of society (and the crucial determinant of economic policy), the project of systematic dialectical reconstruction may be seen as an ambitious attempt to complete a project that defeated both Hegel and Marx.  The current dissertation remains, however, at the level of abstract-universal concepts, and is concerned only with Reuten and William’s (1989) preliminary constitution of the form-determined economy as capitalist production. 

	CAPITALIST PRODUCTION
The movement from the bourgeois form of production (characterised by dissociate activity) to capitalist production (characterised by the capital-labour relation) takes place through the interplay of value-form and the exchange relation in the market and concerns the nexus of value and price.  The first point is that the value of a commodity appears only as a money price, and this price can be anticipated in production as ideal money.  Reuten and Williams (1989) coin the term ideal pre-commensuration to describe the anticipation of the value of labour and products (in production) before any actual commensuration (in the market).  The concept of ideal pre-commensuration establishes the necessary interdependence of production and circulation required by the specifically capitalist form of productive activity based on the production of commodities for sale.  Fundamentally, ideal pre-commensuration implies that the valorisation process (the process of increasing value) dominates the technical process (the process of producing useful objects) forcing a doubling of the labour process into a technical process (of use-value production) and a valorisation process (of value-production).  To the extent that productive activity is determined by the imperatives of valorisation, form dominates content and capitalist production is constituted as form-determined.

The concept of capital can now be introduced as the value-form of means of production and labour-power, given abstract meaning as self-valorisation; that is, money -> production -> more money (Reuten, 1988a, p.54).  The contradictory character of capital as self-valorisation is that form (value) determines content (use-value), yet form requires content for its existence.  With the introduction of capital, the contradiction of the bourgeois epoch - that the social form (value) is the external determinant of the private production of useful objects - ‘is transcended into the sphere of the economy…whence it is termed capitalist production’ (Reuten, 1988a, pp.54-55).  Transcendence of bourgeois (private) production into the sphere of the (social) economy does not resolve this contradiction inherent in dissociate activity, but further determines the use-value/value duality as a contradictory duality of valorisation and technical processes.  This duality is crucial to the main conclusion of Reuten and Williams (1989) systematic dialectical theory: the determination of labour as the sole element adding value in the process of valorisation.  

	MONEY, LABOUR AND LABOUR POWER
The contradictory duality of the labour process is explicated in Reuten (1988a, pp.55-58) and in Reuten and Williams (1989, pp.65-74) as follows.  The technical labour process (the process of use-value production) requires three inputs to production: nature (freely available to capital), means of production (previously produced within the sphere of capitalist production) and labour power (a human capacity, created and socialised within the household and, thus, outside the sphere of value production).  Of the three inputs to production, only labour power is not produced for sale, is not driven by the imperatives of valorisation and is not immediately available for the creation of value (that is, the household is not a firm and human capacities are not produced as commodities).  This leads to an important new insight: labour power cannot be a commodity - as Marx (1867a) would have it – because ‘being produced for sale’ under capitalist relations of production is a necessary aspect of the commodity, and this is not an aspect of labour power.  

Two crucial implications follow: firstly, if labour power is not a commodity, then the price of labour-power cannot be systematically related to its (non-existent) price of production; the supply price of labour power contains no value-added (Reuten and Williams, 1989, pp. 70, 89, 165, 167).  In this respect, labour power differs fundamentally from the technical means of production produced within the capitalist process (the price of which is related to price of production) and from nature (freely available to capital).  Secondly, labour power does not create value unless subject to the valorisation process: it must be brought under the value-form (the wage) and under the aspect of time (the employment contract).  As Williams (1998) points out, this autonomous character of labour power has enormous political and economic ramifications: 

…the compulsion of formal subordination, the struggles over the labour process derived from the inability of employers simply to ‘switch on’ their workers, and the consequent need for ‘real subordination’ (human resource management), together with the characteristics above, add up to a very major difference between labour-power and (other commodities), including those constituting other means of production (Williams, 1998, p.192).  

Given that, in capitalism, the allocation of labour to the production of different commodities is coordinated with respect to the pursuit of money denominated profits, ideal pre-commensuration (in money terms) relates value to labour.  Fundamentally, the decision to employ labour is mediated by the purchase of labour power, and this depends on the price of labour power and the price of the commodities it produces.  Since labour power is not a product of value relations and has no pre-existing price of production the value of labour power is not determined, as Marx (1867a) argued, by the value of the subsistence consumption bundle plus some moral element.  Nor is it determined in neo-Ricardian fashion by a vector of labour times.  On the contrary, the value of labour is determined partly by market forces in commodity and labour markets, partly by distributional and labour struggles and partly by the macroeconomic policy stance of the state (Williams, 1998).  The wage is the only price of labour power.

The wage, as a ‘manifestation of the value-form’ of labour power is pure quantity (expressed in money) and motivates an immediate move to valorisation.  This subordination of the technical labour process under the valorisation process determines the labour expended within the capitalist production process as the one and only factor creating value-added, with one important caveat:

The argument that only labour potentially creates value-added should in no way be read to imply that value-added is in some way proportional to labour (for which at this level an aggregative measure is anyway lacking), as a labour-embodied theory of value would have it.  It is only the validation of labour and its products in the market that determines where and how much value (-added) is actualised (Reuten and Williams, 1989, p.70).

Summarising the argument: there are three factors contributing to the technical production of use-value (nature, means of production and labour) but only one factor contributing to valorisation: labour.  This follows from the systemic determination of labour power as the only factor of valorisation grasped by the value-form (the wage) and produced outside of capitalist commodity production.  The relation between surplus value (-added) and surplus labour cannot, however, be immediately given in production as the orthodox (labour-embodied) argument would have it.  The basic reason for this is systemic: quantitative determination must await the introduction of money, valorisation and capital.  Only at the moment of association is (dissociated) private labour constituted as (associated) social labour and abstract-labour constituted as aggregate value-added: Y = mL, where (Y) is total value-added, (m) is the value productivity of labour and (mL) is abstract-labour (Reuten and Williams, 1989, pp.94-98).  Hence, surplus value (s) is given by: s = (m - w) L, where w is the wage-rate (Reuten and Williams, p.105).  

On the basis of their reconstructions of abstract-labour and surplus value, Reuten and Williams (1989) claim to confirm Marx’s (1867a) most important insight concerning the sole source of surplus value: labour.  The main conclusion is that the privileging of labour as the only source of value-added can be arrived at without recourse to abstract-labour as the ‘substance of value’, and without an immanent measure of value, either in physical or hypothetical units of labour time.  Critics argue to the contrary that, by abandoning Marx’s concept of embodied abstract-labour, reconstructed value-form theory does not (indeed cannot) provide a quantitative theory of prices and profits.  The next section examines this criticism.  Of particular interest is the shift that occurred very early in this particular debate, from disputation about the relation of the reconstruction to Marxian value theory (Likitkijsomboon, 1995), to a much more open-ended and indeterminate discussion of the logical foundations of the value equation (Moseley, 1997).  Aside from the substantive issue, the debate confirms the link established throughout this dissertation between disagreements about method and the indeterminacy of substantive debates.

4.5  The Concept of Abstract-Labour: a Criticism and a Defence

Likitkisomboon (1995) argues that:

… value-form theory ‘from Rubin to Reuten’ conflates concepts of abstract-labour and social labour, resulting in a series of ‘conceptual collapses’ that finally ‘degenerates into the rejection of abstract-labour [embodied], labour-value and labour-exchange ratios, leaving in place only exchange-value, the value-form, price-form and ‘money’, all without quantitative grounds (Likitkijsomboon, 1995, p.93).  

Likitkijsomboon does not, however, articulate the logical foundations for his criticism, and these must be educed from his argument.  More interesting in the current context, is Moseley’s (1997) further development of Likitkijsomboon’s logical objection.  Moseley takes as his main target the Reuten and Williams (1989) equation of aggregate value-added and the monetary expression for abstract labour: Y = mL.

According to Moseley (1997), the equation has three elements: Y, m, and L.  In order for these elements to be constituted into a meaningful theory, two of the three variables must be determined independently of the equation.  These two variables would then mutually determine the third variable.  If Y (value-added) is the dependent variable, then (m) and (L) must be determined exogenously, and taken as ‘given’ in the equation.  This is a ‘logical necessity’ if the equation is not to be a tautology (true by definition) or indeterminant (two unknowns in the one equation).  If this is agreed, then there can be only two logical options for the independent determination of abstract labour, mL:
(1)	mL is determined as a function of some other variable(s), also independent of Y, as expressed in some other equation(s).  Abstract labour is then taken as given in the equation for the determination of value-added;
(2)	mL is an effect, not explained further and simply taken as ‘given’ in the equation.  

Moseley (1997) argues that these logical requirements must be met in order to give an adequate theory of the magnitude of value-added: there are no other options.  The Reuten and Williams (1989) value-form equation clearly does not conform to these requirements of formal logic (since the elements of the right and left sides of the equation appear to be mutually determining).  Moseley confesses that ‘the exact meaning’ of this mutual determination ‘is not entirely clear to me’ (p.4).  Nevertheless, he concludes that ‘the consequence’ of abandoning abstract labour as the substance of value (as determined independently of prices) ‘seems to be that this [value-form] interpretation presents no quantitative theory of the determination of the magnitude of value-added, or of the total price of commodities.  The value-added is simply taken as given, not explained’ (p.4).  If (Y) is taken as given, surplus-value is also unexplained by the Reuten and Williams equation: s = mL – wL							; where surplus-value (s) is the difference between value-added (mL) and wages (wL). 

Moseley (1997) follows up his criticism of the logical foundations of reconstructed value theory with an abstract-labour-embodied interpretation of Marx’s value theory as a ‘plausible hypothesis, the validity of which should be evaluated on the basis of the extent to which it can explain the important phenomena of capitalism’ (p.1).  The reduction coefficients (criticised by Reuten and Williams) can, he says, be assumed – ‘taken as given’ - since ‘a scientific theory may involve the postulation of unobservable entities’ (p.3).  According to Moseley, the ‘main advantage’ of an axiomatic assumption of simplified abstract labour as the ‘substance of value’ is that it ‘provides a quantitative theory of profit, which is the main question of Marx’s theory’ (pp.1-2).  The ‘appropriate way to test such a “metaphysical” theory is to evaluate the explanatory power of the theory on the basis of the range of important phenomena that can be explained on the basis of the postulated unobservable entities’ (p3).  The essential implication is that important conclusions of Marx’s theory – struggles over the duration and intensity of labour, technical change, and the falling rate of profit – cannot be obtained from the value-form theory because value-added is not explained by the quantity of labour hours.
  
The first point to note about Moseley’s (1997) critique is what is implicit or unacknowledged in it.  The core assumption is that Marxism can develop as an explanatory social science only when its central concepts are expressed as theorems and elucidated in formalist models designed to prove derived postulates via testable (‘plausible’) hypotheses.  A corollary to this is an assumption that the methods of analytic philosophy – and therefore a formalist interpretation of the disputed equations - are generally agreed upon, so constituting an appropriate critique; no alternative option is available to consideration.  This is quite extraordinary, given that the entire project of value-form theory is, in essence, a refutation of analytic abstraction!  What is at stake, in fact, is not the equation but the status of abstractions in Marxian and value-form theory, and the different meanings of value that result from these conceptual alternatives.  

For Reuten and Williams (1989), abstract labour is an actual social abstraction (or, to borrow Sohn-Rethel’s term, an ‘exchange abstraction’), not merely a cognitive abstraction, as it is for Moseley (1997).  This means that the disputed equation is not intended to establish a relationship between independent and dependent variables, but to say something fundamental about capitalist society: what is fundamental is that (m) and (L) are inextricably interconnected and that their ‘unity’ makes capitalism what it essentially is.  In capitalism, value and price are mutually constituted by exchange, the only process whereby the private, concrete-labour of individuals becomes validated as social, abstract-labour.  Hence, there is no sense in which abstract-labour is independent of its monetary expression.  On the contrary, abstract-labour is (mL): labour-time measured in money, where the money productivity of labour (m) is the dominant operator. 

From this perspective, an axiomatic or formalist logic is wholly inappropriate to the development of a theory of social value.  Given the unity of value and price, Moseley’s (1997) question must be rephrased: can any theory predict prices on the basis of labour-time?  By itself labour - as measured in time - is not homogenous (a reductive abstraction), and can be made homogenous only by assuming away a real problem, by definition (as Marx, in fact, did).  Moreover, labour-time is not a constant since labour-productivity changes over time.  Since there is no adequate measure of physical labour productivity, there is also no adequate measure of socially necessary labour time.  How then does an abstract-labour-embodied theory explain prices and profits, as Moseley (1997) demands?  The value-form answer is pre-commensuration.  Firms’ expectations about prices and elasticities of demand for a product influence the allocation of concrete labour between industries, ensuring that causation is two-way: (L) depends on (Y) and (Y) depends on (L). 

The crux of the argument is that essence is not value, but the systemic form-determination that gives (Y = mL) the specific meaning that puzzles Moseley: the value-added (Y) has a value dimension - that is, a monetary form - as does abstract labour (mL).  Concrete labour does not have a value-form, but is brought under the dimension of value, and is form-determined.  The empirical work that logically accompanies this theory of ‘social value’ is not therefore concerned with the verification of hypotheses about labour-values and/or their conservation in prices.  Rather its first concern is with an inquiry into how the value dimension interacts with core (non-contingent) elements of the system, such as a tendency towards the equalisation of profit or a tendency for equal prices in a market.  A second inquiry is concerned with how contingent divisions of surplus into profit, interest and rent between and within industries impacts on the actual profit and rate of profit of firms (e.g. Reuten, 1988b; 1998).  Given the research agendas of prominent writers within the paradigm, it might be legitimately argued that value form theory expands the scope of theoretical and empirical research beyond the unnecessary fixation on the determination of profits by so-called ‘labour-values’, thereby challenging the Ricardian assumption that this is Marx’s ‘main’ objective.  Value-form theorists argue, on the contrary, that the main objective of Marxian theory is to determine labour as the only (single) source of value-added, and to investigate the implications of the model for contemporary capitalism.     

Conclusion

The substantive point established in this chapter is that labour is the sole factor of value-added in the valorisation process, establishing value as a pure quantitative (monetary) relationship between abstract-labour and prices.  In this relationship labour is not the causal element; rather causality is attributed to the systemic essence of capitalism.  Given dissociated labour, production and consumption: (1) the value to labour relationship must be continuously reconstituted as the system reproduces itself and (2) this necessitates the value-form as the ‘mode of association’, constituting labour and value as ‘abstract’ in exchange.  The more concrete grounding of abstract-labour and value in price, the interdependence of essence and ground and the systemic determination of elements implies that the independence requirements of formal logic are not captured in the Reuten and Williams (1989) value equation, and should not be.  Indeed the whole motivation for reconstruction is the inadequacy of the analytic approach, based as it is on the stipulation of causal links from abstract-labour-embodied to value and price.  The key objection to this approach is that it misses the role of the market (price system) in allocating labour to different technical-material labour processes, as it misses the co-constitution of value and price that makes the form-determined economy what it essentially is.

If the object of the value-form reconstruction of abstract-labour has been misunderstood, this is in large part due to a critical failure to understand the rectified systematic dialectical model on which it is based.  Moseley (1997), for example, does not recognise that what is at stake in the reconstruction of abstract-labour is not the absence or presence of an equation, but the interpretation and meaning of the equation.  Moreover, interpretation and meaning are not ‘given’ at this level of abstraction (as they are in the case of an axiomatic exposition) by the requirements of formal logic, but must be socially constructed within a dialogic-dialectical-synthetic framework.  Fundamentally, value is not ‘given’ within the systematic dialectical argument at all – on the contrary, axioms are eschewed and the existence of value must be demanded by the logic of the exposition. 

Ultimately, the ‘methodological imperative’ guiding a systematic presentation remains the determination of the object-totality; that is, to resolve, systematically, the contradiction and inadequacy from which the presentation starts, and so arrive at a ‘comprehension of reality’ (Reuten and Williams, 1989, p.20).  In the case of capitalism, however, the comprehension is never complete since value cannot reproduce itself as a self-sustaining totality.  Fully determined, the value-form can fully grasp neither labour-power (which takes on the value-form, but is not produced within the capitalist economy) nor money (as the sole autonomous existence of the value-form: see Williams, 1992, 1998).  Indeed, the failure of capital to fully determine these conditions of its existence is what enables the necessary privileging of abstract labour to be derived from the value-form as the one and only factor contributing to value-added in the valorisation process. 

Moseley’s (1997) argument against the systematic dialectical determination of the relation of labour to value fails entirely to understand the character of the systemic causation determining this result; as such, he does not engage the value-form argument but instead attacks a ‘straw man’.  This approach to debate within Marxism provides an illuminating demonstration of an argument advanced throughout this dissertation.  That is, without agreed criteria for evaluating arguments - and without arguments to justify those criteria - there is no way to resolve points of controversy, either in discussions of Marx’s value theory, or in discussions of reconstructions of it.  In my view, one of the strong points of systematic dialectical theory – in comparison with most of the other theories examined here - is that it makes explicit the logic only implicit in Capital, and within which the substantive conclusions of Marx’s value theory can be demonstrated with clarity and consistency.  Clearly, if conceptual explicitness and clarity are eschewed, the Marxian inquiry into abstract-labour as value will remain intractable. 

 

5.  Conclusion

The object of this dissertation was to inquire into abstract-labour as the source of value in a capitalist economy.  I began with the proposition that schools of thought within Marxism are distinguishable according to their views on the ontological existence of value and its relation to money.  For Marxists, the core research question is whether value can exist prior to exchange as a physiological substance (abstract-labour) embodied in commodities, or whether it is a social dimension brought into existence only as the result of market activity?  A corollary question concerns the measurement of value: is it measured as an amount of homogenous labour time expended in production, or is it measured only when it is expressed in money as an exchange ratio between commodities?  

A second objective of the dissertation was to engage an old question of Marxian political economy – about the ‘subject matter’ of Marx’s value theory - in a new way by making explicit the methodological (and ontological) commitments of various positions within the value debates.  On this point, I have shown that serious disagreements on Marx’s method underpin paradigmatic splits within Marxian value theory and that these are linked to disputes on the status and character of his value concepts.  Although substantive differences between varieties of Marxian value theory are linked to questions of method, this is seldom made explicit and axiomatic and/or logical-historical methods remain, implicitly, at the core of what counts today as Marxian ‘science’.  The dissertation set out to challenge the dominant view by deriving alternative criteria for judging Marx’s (and Marxian) value theory, and for inquiring into the necessary interconnection between abstract-labour (as the source) and money (as the measure) of value.

To address these twin objectives, the second chapter posed a preliminary question concerning Marx’s development of the ‘abstract-labour/concrete-labour’ and ‘value/use-value’ dualities.  Marx clearly saw these dualities as crucial to his value theory, but what are we to make of them?  Are they analytic or dialectical oppositions and how does the answer given to this question prejudice the way that Marxian value theory is understood?  A textual analysis of the starting point of Capital shows abstract-labour to be an ambiguous concept.  First, it is unclear as to whether abstract-labour is a reductive category describing an amount of homogeneous labour embodied in commodities (a labour theory of value), or a dialectical universal describing a ‘real abstraction’ from particular types of labour, established in exchange (a theory of social form).  Second, the shift in method that accompanies the transition from the double character of commodities and labour (in sections 1-2) to their determination by social form (in sections 3-4) retains an ontological commitment to the Ricardian concept of value ‘conserved’ in the bodily form of commodities.  If value is taken to be a pre-market property of commodities, then the social character of abstraction as the essence behind the reification of commodities produced capitalistically for sale is difficult to interpret, as Backhaus (1969/1980) has pointed out. 

The ambivalence of Marx’s derivation of core concepts in his opening chapter suggests that criteria for judging the ‘subject matter’ of Marxian value theory cannot be derived by reference to the text of Capital alone, since any explicit statement of method is missing from it.  Moreover, there is evidence for the coexistence of two incompatible strands of thought in Marx’s text.  The first strand, associated with classical political economy, posits economic relations as the causal product of external determination, particularly in nature; the concepts of abstract-labour and value are taken to be natural phenomena.  The second strand, associated with Hegel, suspends a priori presuppositions and understands economic relations only as a development within a social (systemic) set of interconnected determinations; the concepts of abstract-labour and value are social phenomena.  The juxtaposition of these opposed ontological (and methodological) positions creates, in my view, an irresolvable tension; today, developments of Marxian value tend to collapse into one strand of Marx’s thought or the other, giving rise to the ‘technical’ and ‘social’ paradigms described by (de Vroey, 1982).

The third chapter employed de Vroey’s (1982) framework to explore a paradigmatic split within Marxism, according to whether value is interpreted as a natural law of labour allocation or social dimension based on the capital-labour relation.  Crucially the technical paradigm conceptualises the economy as a system of production and defines the object of value theory as the quantitative problem of allocating total social labour among alternative productive tasks; money does not matter, it is simply a veil over the exploitation of labour.  In contrast, the social paradigm focuses on the necessity of a connection between the physical-technical dimension and the social dimension of economic activity.  The relationship between production and circulation becomes central; money is the indispensable link between private and social labour in decentralised economy characterised by the absence of any a priori rule of social cohesion.  The integration of production and exchange within the circuit of capital brings the ontological question of value centre stage.  Yet, paradoxically, most abstract-labour-embodied theories within the social paradigm seek to retain an emphasis on value-creation in production, albeit in the shape of ‘ideal value’ that becomes ‘actual value’ only in exchange.

Is it plausible to argue that money is necessary to the objective existence of value and in the same breath to advance a mode of argument where money is an independent concept - introduced by Marx at a more concrete level of abstraction?  I think not.  The essence of Marx’s (1863/1963) criticism of the physiocrats is precisely that capitalist production and circulation are not independent spheres between which relations of dependence or interdependence can be established; on the contrary, they are interdependent and inseparable elements determined within a totality.  A theory of social value seems to require a conceptualisation of this interdependence of value and price; that is, a theory of value as a process that comes about only as a result of the movement of capital through differentiated moments of the circuit as a whole. 

The critique advanced in the final section of the third chapter focused attention on the failure within both ‘technical’ and ‘social’ strands of Marxian thought to recognise the impediments to conceptual understanding that result from a retention of abstract-labour as an embodied value substance (whether physiological or social).  The inherent weakness of both schools is a reliance on the Ricardian model of essence and appearance in which the essential independence of value (essence) and money (form) operates to privilege ‘value’ creation in production and ‘conservation’ in exchange.  Although more sophisticated varieties of the abstract-labour-embodied value theory recognise a co-constitution of value and price, they nevertheless deny that money (the value-form) has any ontological significance with respect to the determination of economic activity. As a result of this value-price dichotomy, the imperative of valorisation (the quantitative expansion of value) driving the capitalist system is inadequately captured within these theories. 
 
Chapter four presented several arguments for a systematic dialectical reconstruction of Marxian value theory without recourse to a concept of abstract-labour as the homogenous property embodied in commodities in production.  In this chapter, I set out to show that what is gained by dropping the concept of abstract-labour as ‘substance’ of value is a coherent integration of capitalist production and exchange as interrelated moments within the object-totality, constituted by the movement of capital, as an interconnected whole.  Two important new insights emerge from current reconstructions of abstract labour.  First, labour power is produced outside value relations; it is not a commodity and its value has no systematic relation to its (non-existent) price of production.  The privileging of labour power as the one and only source of value-added in the valorisation process is derived from its unique status as an input to production produced outside capitalist value relations.  Second, labour power is not purchased unless individual capitalists expect that the labour extracted from labour power will contribute more to the value of output (in money) than it cost (in money).  Reuten’s (1988a) felicitous coining ‘pre-commensuration’ makes this double character of the labour process clear. 

The substantive conclusion of the systematic dialectical value-form theory is that abstract-labour is neither substance nor cause of value; in fact, value has no substantive content.  Thus, for Reuten and Williams (1989), abstract labour is value measured in money (mL).  What this means is that abstract-labour becomes a ‘social fact’ only in money, which is the sole autonomous means determining the production and distribution of use-values and the allocation of labour among alternative uses in a capitalist economy.  The essential point is that causality is systemic: the relation of value to labour is constituted by the subordination of productive activity (the technical labour process) to the pursuit of profit. 

The methodological conclusion is that the interconnections of core elements within the capitalist system can be determined only with logical necessity.  This entails an abandonment of science seen as an exploration of substructural essences (labour-values) beneath phenomenal appearances (prices).  Marx undermined his own use of this kind of metaphor by repeatedly pointing out that no matter how deeply you dig into the commodity, you can find no trace of value in it.  The negation of the metaphor is reinforced by the fact that Capital begins with a micro-level examination of exchange as the basic constituent of a system of social interconnections.  To ignore systemic determination is to take a step back to the substance metaphor in discussing value theory, and this leads inevitably to a Ricardian regress (Reuten, 1993).

Given these substantive and methodological conclusions, the core research question posed at the beginning of the dissertation can now be restated: must Marx’s abstract-labour (embodied) theory of value be abandoned and Marxian categories reconstructed to provide a systemic determination of abstract-labour as social value?  Here, I have answered unequivocally: yes.  Firstly, a systematic dialectical reconstruction of Marx’s categories preserves the main insights of the abstract-labour-embodied theory, especially the demonstration of labour as the only source of value-added in the valorisation process.  Secondly, it facilitates a better grasp of the contradictory character of contemporary capitalism as a system increasingly dominated by the needs of financial and banking capital, systemically determined by an imperative to valorise and a tendency to subsume all that is useful under the value form.  It is this historical character of value as self-valorisation that the abstract-labour-embodied value theory cannot fully grasp, committed as it is to a conception of value created in production and justified, axiomatically or historically, as a principle of movement through history. 

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