Marx’s Capital – Philosophy and Political Economy. Geoff Pilling 1980
Chapter 2. Marx’s Critique of Classical Economics

Marx’s treatment of labour

Having looked at some aspects of Marx’s criticisms of the philosophical foundations of classical economics, we can take this discussion forward in a specific direction: by examining Marx’s treatment of labour. There is no doubt that it was his quite new treatment of labour as against anything found before in political economy that gave his work an entirely new and revolutionary content. ‘I was the first to point out and to examine critically this two-fold nature of labour contained in commodities. As this point is the point on which a clear comprehension of Political Economy turns we must go into more detail’ (I, author’s italics). Writing later to Engels he says:

The best points in my book are 1) the two-fold character of labour, according to whether it is expressed in use-value or exchange value (all comprehension of the facts depends upon this). It is emphasised immediately in the first chapter; 2) the treatment of surplus value independently of its particular forms as profits, interest, ground rent, etc. (Marx and Engels)

These points made here by Marx are particularly important in view of the fact that it is almost a commonplace amongst those sympathetic to, as well as those hostile to, Marx to assume that he shared a basically similar value theory with that of his classical forerunners, namely a labour theory of value. I believe, however, this notion – of a ‘labour theory of value’ in Marx – is at best confusing and at worst quite wrong. Let us look at this matter by recalling Ricardo’s formulation of the law of value, which Marx recognised as a big advance on Smith: ‘The value of a commodity, or the quantity of any other commodity for which it will exchange, depends upon the relative quantity of labour which is necessary for its production, and not on the greater or lesser compensation which is paid for that labour’ (Ricardo). But to imply that this was the theory of value, or even the basis for it in Capital would be quite wrong. For on one question the whole of political economy remained silent: it made no analysis of the nature of this labour that determined the magnitude of value, a point to which Marx many times drew attention:

As regards value in general, it is the weak point of the classical school of Political Economy, that it nowhere and expressly and with full consciousness distinguishes between labour as it appears in the value of products and the same labour as it appears in the use-value of that product. (I, footnote)

For Marx, labour was the basis of all social life, in all epochs, independent of any particular mode of production. In all periods of history man created wealth only through a continual struggle against the forces of nature, of which forces he was of course an integral part. The question, however, remained: to discover the particular social form which this universal process (the labour process) assumed in each epoch of history. Replying to those who thought it necessary (or indeed possible) to ‘prove’ the law of value, Marx wrote:

The nonsense about the necessity of proving the concept of value arises from complete ignorance both of the subject dealt with and of the method of science. Every child knows that a country which ceased to work, I will not say for a year but for a few months, would die. Every child knows too that the mass of products corresponding to different needs require different and qualitatively determined measures of the total labour of society. That this necessity of distributing social labour in definite proportions cannot be done away with by the particular form of social production but can only change the form it assumes, is self evident. What can change in changing historical circumstances, is the form in which these laws operate. And the form which this proportional division of labour operates, in a state of society where the interconnection of social labour is manifested in the private exchange of the individual products of labour, is precisely the exchange value of these products. The science consists precisely in working out how the law of value operates. So that if one wanted at the very beginning to ‘explain’ all the phenomena which apparently contradict this law [this was of course aimed at the method of political economy], one would have to give the science before the science. (Marx, Letters to Kugelmann,)

What is the meaning of this passage? Marx here points out to his friend Kugelmann that in every society social labour is distributed in definite proportions. No society can alter this basic law. But the law takes different forms in different societies. Under conditions of commodity production this universal law takes the particular form of the ‘value’ of the products of labour. Simply to say that ‘labour is the measure of value’ (and to call this a ‘labour theory of value’) leaves open what is the crucial question: by what social and historical forces are the activities of men expressed in the values of the products of their labour? Now if bourgeois economy is viewed naturalistically (in the sense that its laws are universalised, identified immediately with the laws of nature) as in the case of political economy, then it is equally ‘natural’ to identify labour in its peculiarly capitalist form with labour in general. It was one of Marx’s great merits that he investigated the specific characteristics of labour under commodity production, a problem not even considered by political economy.

In order to highlight this point we can refer to a work which in general derives from the Althusserian school and which manages completely to misinterpret this extract from the above letter to Kugelmann. This work argues that Marx seeks ‘to explain the form of value (value-in-exchange) as a consequence of certain social relations (those of commodity production) but in the context of a general law of value which applies to all forms of production’ (Cutler et al.). And again: ‘In Capital the forms of value (value-in-exchange) is the particular type of solution to a universal economic problem, the allocation of social labour in proportions necessary for a certain composition of the product.’ The argument is that (a) ‘value’ is a universal category and (b) exchange-value is the form taken by this universal category under definite conditions (commodity production). But this argument can find no support whatsoever in Capital. Marx there demonstrates that the category value arises only when the products of labour take the form of commodities and that exchange value is a manifestation of this category value, its form of appearance, a manifestation which leads eventually to money. The category value does not exist on Robinson Crusoe’s island. Of course the objects which Robinson needs to satisfy his wants each cost him a definite quantity of his labour-time. But that does not give these objects a value.

Value only arises when such objects are exchanged and then the labour of the producers becomes realised in the value of the commodities. We should also add that while ‘value’ as a social relation expresses relations between commodity production ‘Only where wage-labour is its basis does commodity production impose itself upon society as a whole’ (I). Only then can the law of value emerge from its embryonic form, which it possessed under pre-capitalist conditions, to become one of the major moving forces in the law of motion of society. Although this particular work will not detain us here, it is noteworthy that one of its chief aims is to deny the historical nature of the categories which Marx discovers in Capital, categories which are, in any case, all rejected as having no pertinence to the investigation of modern capitalism.

Thus it is above all necessary to be clear about the specific features of labour under capitalist conditions. For, as one writer has correctly noted, ‘All Marxists agree that labour is the content of value. But the problem is, what kind of labour is under consideration. It is known to us that the most different forms may be hidden under the word “labour”. Precisely what kind of labour makes up the content of value?’ (Rubin, Theories of Surplus Value). And it was precisely an adequate investigation of the specific kind of labour which created value which Marx found missing in political economy. Instead there was a mere ‘bald’ analysis of labour:

without exception the economists have missed the simple point that if a commodity has a double character- use-value and exchange-value – then the labour represented in the commodity must also have a double character, while the mere bald analysis of labour as in Smith, Ricardo etc is bound to come up everywhere against the inexplicable. This in fact is the whole secret of the critical conception. (Marx, letter to Engels, 8 January 1868, in Marx and Engels, author’s italics)

It is surprising that this aspect of Marx’s work has been so little commented upon, particularly in a period which has seen increasingly strenuous efforts to reconcile Marx’s work with that of political economy. In the Gotha Programme, it will be recalled, in commenting on the draft programme for the United Workers Party of Germany, Marx took strong exception to a phrase in Article One of the Draft: ‘Labour is the source of all wealth and all culture’. He comments:

Labour is not the source of all wealth. Nature is just as much the source of use-values (and it is surely of such that material wealth consists!) as labour, which itself is only the manifestation of a force of nature, human labour power. The above phrase is to be found in all children’s primers and is correct in so far as it is implied that labour is performed with the appurtenant subjects and instruments. But a socialist programme cannot allow such bourgeois phrases to pass over in silence the conditions that alone give them meaning. (Marx, Critique of Gotha Program)

To treat labour independently of the social conditions under which it was performed at each historical period, social conditions which had their basis in the ownership of the appurtenant means of production, was to treat this economic category ahistorically. Marx insisted that labour is an entirely social category (‘having a purely social reality’ I) and containing not a single atom of matter. That is why, when Marx deals with the relationship of ‘labour’ to ‘value’ he always has in mind abstract labour. It was this labour, abstract labour, which ‘creates’ value, that is to say creates and recreates a set of social relations which are attached to things. Under capitalism the private labour of each individual is transformed into its opposite, social labour, only through the transformation of concrete labour into abstract labour.

Abstract labour

Now by ‘abstract labour’ Marx does not mean, as is commonly thought, some mental generalisation, some mere product of the mind. If this were so – if abstract labour is conceived of as merely a category arrived at by picking some common element found in all labour – then one would be forced inexorably to the conclusion that if abstract labour is a mental image, then so too must be its product, ‘value’. Only concrete labour, producing empirically available use-values would have the status of ‘real’ labour.

Let us, therefore, try to explore in more detail Marx’s notion of abstract labour. The products of labour take the form of commodities when these products are made for exchange on the market. As such, they are the products of autonomous private labour, carried out independently of each other. Each person carries out one determinate form of labour as part of a social division of labour. Of course we must remember that if this social division of labour were a planned one, the products of individual labour would not take the form of commodities. While the production of commodities is impossible without a division of labour, a division of labour is perfectly possible in the absence of commodity production – as in the case cited by Marx of a patriarchal peasant society. Further, under commodity production labour is not immediately social; it becomes social labour only through the mediation of exchange relations on the market.

Now in exchanging products men equalise them – that is, the market, as an objective process, abstracts from the physical-natural aspects in which one use-value differs from another; and in so doing the market abstracts from that which serves to differentiate this labour. Thus:

Along with the useful qualities of the products themselves, we put out of sight both the useful character of the various kinds of labour embodied in them and the concrete forms of that labour; there is nothing left but what is common to them all . . . human labour in the abstract (I)


The labour . . . that forms the substance of value is homogeneous labour, expenditure of one uniform labour-power. The total labour-power of society, which is embodied in the sum total of the values of all commodities produced by that society, counts here as one homogeneous mass of human labour-power, composed though it be of innumerable individual units. Each of these units is the same as any other, so far as it has the character of the average labour-power of society, and takes effect as such.(I)

From these quotations alone, it should be clear that in the formation of abstract labour we are not dealing with a mental process, but something that takes place in the actual process of exchange itself.

When we bring the products of our labour into relation with each other as values, it is not because we see in these articles the material receptacles of homogeneous human labour. Quite the contrary: whenever by an exchange we equate as values our different products, by that very act we also equate, as human labour, the different kinds of labour expanded upon them. We are not aware of this, nevertheless we do it. (I)

What is the real significance of this category abstract labour? Let us, in answering this question, return to classical political economy. Ricardo and his predecessors confused the universal character of labour (as the source, along with nature, of wealth in all societies) with its particular characteristic under capitalism, as the creator of value. It necessarily followed that when Smith and Ricardo wrote about primitive societies, the hunter and the fisherman should already own commodities and exchange fish and game in the proportion in which labour-time is embodied in these commodities. As Marx says of Ricardo in this respect, ‘He commits the anachronism of making these men apply to the calculations, so far as their implements have to be taken into account, the annuity tables in current use on the London Stock Exchange in the year 1817’ (I).

This absence of any consideration of the historical character of the labour embodied in commodities had its immediate source in the lack of a thorough analysis of the commodity itself. Smith, in this case followed uncritically by Ricardo, had distinguished the ‘value in use’ and ‘value in exchange’ of commodities. But the historical implications of this distinction remained unexplored, namely the fact that only in ‘modern society’ (capitalism) does the production of use-values take the predominant form of the creation of exchange-values. This lack of a proper investigation of the commodity was, for Marx, connected with another weakness on the part of political economy – its tendency to ignore the value-form in favour of an almost exclusive concern with the content of value.

It is one of the chief failings of classical economy that it has never succeeded by means of its analysis of commodities, and in particular, of their value, in discovering that form under which value becomes exchange-value. Even Adam Smith and Ricardo, the best representatives treat the form of value as a thing of no importance, as having no connection with the inherent nature of commodities. The reason for this is not solely because their attention is absorbed in the analysis of the magnitude of value. It lies deeper. The value-form of the product of labour is not only the most abstract, but also the most universal form, taken by the product in bourgeois production. If then we treat this mode of production as one eternally fixed for every state of society, we necessarily overlook that which is the differentia specifica of the value-form, and consequently of the commodity form, and its full developments, money-form, capital-form etc. (I, footnote, author’s italics)

This exclusive concern for the content of value and the neglect of the value-form would be tantamount, said Marx, to the method of a physiologist who held that ‘the different forms of life are a matter of complete indifference, that they are all only forms of organic matter’ adding ‘It is precisely these forms that are alone of importance when the question is the specific character of a mode of social production’ (Marx, Theories of Surplus Value). All the implications of this method cannot be examined, but it is clear that Ricardo’s basic errors involved a false identification of the ‘social’ and the ‘natural’; for example, he saw money not as an abstract and universal expression of the value relationship which had developed historically out of commodity production (Marx’s conception) but merely as a means of overcoming the deficiencies inherent in barter; nor could Ricardo ever grasp the real character of capital, which he saw only in its immediate shape as stored-up labour rather than as a social form assumed by these means of labour.

Political economy, in the person of Ricardo, saw labour as the measure of the magnitude of value, and was concerned almost entirely with the quantitative aspect of value – that is the particular quantitative exchange relations between commodities. It failed to see that when it treated the difference between various types of labour in a quantitative sense, their qualitative unity was implied – that is their reduction to abstract labour. Here were involved differences between Marx and Ricardo which cannot be grasped if they are seen merely as disputes about economic theory. Marx rejected the social philosophy underlying political economy, which saw society as an aggregation of individuals, each engaged in his individual labours, each tied together by market forces. Marx once more sees Locke’s philosophy as the source of this view, ‘because it was the classical expression of bourgeois society’s idea of right as against feudal society’ (Theories of Surplus Value). Locke conceived labour entirely in its concreteness; for Locke, labour constituted the limit to private property, hence the appeal of the notion of a ‘labour theory of value’ to the bourgeoisie in the period of its ascendancy. It was this view of labour as a personal subjective activity (Smith’s ‘toil and trouble’), rather than a nature-imposed necessity taking on definite social forms, which dominated political economy. (It should be pointed out in passing that Locke’s position was very advanced for his time. And this was true not only from a philosophical viewpoint here his materialist empiricism was employed as a weapon against scholastic speculation – but also from the standpoint of political economy. At a time when the bourgeois form of property was far from being the sole form, Locke chose it as the sole and authentic one. In so doing he laid a solid foundation for the struggle which continued through Smith to Ricardo against the historically outdated feudal property forms.)

Despite his considerable admiration for Benjamin Franklin, Marx also notes his confusion of labour in its bourgeois form with labour in general. He speaks significantly of Franklin’s ‘restricted economic standpoint’, which took the transformation of the products of labour into exchange values for granted (Marx, Critique of Political Economy). In connection with William Petty, Marx says his case ‘Is a striking proof that recognition of labour as the source of material wealth by no means precludes misapprehension of the specific social form in which labour constitutes the source of exchange-value’ (Critique of Political Economy).

Adam Smith also reveals his lack of any historical appreciation of labour. He too tended to treat it subjectively. He tries to accomplish the transition from concrete to abstract labour by means of the division of labour. This division of labour, from which arises commodity production, for him has its basis in the famous ‘propensity to truck, barter and exchange’. Not only is this position idealist but it also inverts the real relationship between commodity production and the social division of labour.

Stressing that at the centre of a scientific political economy must be a concern with labour as a social process Marx says of Ricardo:

Ricardo’s mistake is that he is concerned only with the magnitude of value. Consequently his attention is concentrated on the relative quantities of labour which different commodities represent, or which commodities as values embody. But the labour in them must be represented as social labour, as alienated, individual labour. (Marx, Theories of Surplus Value)

And again stressing political economy’s limited concern with the measure of value, Marx says:

Commodities as values constitute one substance, they are mere representatives of the same substance, social labour. The measure of value (money) presupposes them as value and refers solely to the expression and size of their value. The measure of value of commodities always refers to the transformation of value into price and already presumes the value. (Marx, Theories of Surplus Value)

And in an earlier work, Wage Labour and Capital, Marx says: ‘What is the common social substance of all commodities? It is labour. To produce a commodity a certain amount of labour must be bestowed upon it, worked up in it. And I say not only labour, but social labour.’

It should be clearer from the above discussion why Marx gives such importance to the category abstract labour. By abstract labour we mean labour which is cut off, separated, alienated from its particular goal. Under capitalism the labour of society is no mere summation of the labour of every individual (as political economy, following Locke’s lead, implied). The labour process in capitalist society has an independent existence which stands against the labour of each individual; the labour of each individual has any (capitalist) validity only if it obeys the objective laws of this social labour process. An individual may labour for (say) ten hours, but his labour, viewed socially, may only be counted as five hours, as in Marx’s illustration of the hand-loom weaver, given early in the first chapter of Capital. And when we use the word ‘count’ we do not wish to imply that anybody does the ‘counting’ – it is done in and through the process itself. The acquisition of this independence on the part of the process of labour from the concrete labour of the subjects who take part in it reaches its high point with modern labour, that is wage-labour. The worker owns his labour-power. On the basis of the separation of the vast majority from the means of production this labour-power becomes separated from its owner, taking on its own independent existence, becoming a commodity. And not only does it assume an alien form (as a value), but when realised on the market it becomes part of capital, namely variable capital.

A ‘measure’ of value

These comments by Marx about the nature of social labour raise another directly related topic. For in these statements Marx is by implication rejecting what for political economy was one of its main tasks – the search for some ‘measure’ of value, or what amounted to the same thing, the attempt to arrive at a true definition or concept of value. (We shall deal later in more detail with this question of Capital’s concepts.) We have seen that in a commodity-producing economy the equalisation of labour is achieved through the equalisation of the products of labour. This is but another way of saying that all varieties of concrete labour are reduced to abstract labour through the market and thus become social labour. But nobody can or does ‘measure’ these many forms of labour empirically. To imagine that this is so would be to ignore an essential feature of commodity production – its spontaneous, anarchic nature. Considerable misunderstandings will arise (as Rubin, Theories of Surplus Value, has rightly pointed out) if the law of value is seen as an ‘instrument’ which makes possible the comparison and measurement of the various products in the act of exchange. It has been widely (and wrongly) believed by many economists and others that Marx emphasised labour precisely as this ‘practical’ standard of value. As opponents of Marx, such writers have directed their efforts to showing that labour could not be accorded this privileged status; they have argued along these lines because of the absence of precisely established units with which to measure the various forms of labour which are different from each other with regard to intensity, skill etc.

Such a line of attack utterly misconceives the nature of Marx’s value theory. It is both impossible and unnecessary to discover a measure of value which will make possible the equalisation of labour or the products of labour. It may be a simple point, but none the less profound, to insist that this equalisation of labour takes place objectively, spontaneously and indirectly – that is, independently of any participants within the capitalist system. It is in this real, objective process that value is measured. Out of the process of the production and circulation of commodities money (gold) arises. Gold is not some ‘external’ measure, standing outside the world of commodities. Nor was it ‘selected’ by conscious planning on the part of economists or politicians. This measure (gold) was historically selected, after long trial and error, in the sense that it was its physical-material properties which enabled gold to select itself as the most suitable money-commodity. The matter can be reformulated thus: it is not money that renders commodities commensurable; on the contrary, it is because all commodities as values are realised human labour, and therefore commensurable, that their values find their measure in one and the same commodity. By a social and historical process this commodity is converted into money. Unless the objective nature of these processes is grasped, then the significance of all Marx’s categories of political economy is lost. We have already spoken of the social character of the labour which creates value, summed up in Marx’s concept of abstract labour. Marx insists that the measure of value is not labour-time, but socially-necessary labour-time, that is labour-time required to produce a commodity at a definite stage in the development of the productive forces. And it is only when the producer of a product tries to sell this product on the market that he discovers its real, objective value (if any). During periods of capitalist slump the piles of unsold goods signify that the concrete labour embodied in them was socially unnecessary. Such labour cannot, through the market, be transformed into abstract labour and therefore creates no value. But the owner of capital can never discover this beforehand, even though he may be armed with the latest ‘market research’ techniques and may even have read Capital. The essence of capitalist production here is that he can only discover whether the labour incorporated into his products was socially necessary at the end of the process.

Our task is not, therefore, to seek some measuring rod for the processes of capitalist production. The very process is its own measure. Value does not measure commodities; commodities discover their own measure of value. The task of Marxism is to discover how this is done, to discover the laws and tendencies of this process, laws and tendencies which do not appear empirically on the surface of society but appear always in the form of crises:

in the midst of the accidental and ever-fluctuating exchange relations between the products, the labour-time socially necessary to produce them asserts itself as a regulative law of nature. In the same way, the law of gravity asserts itself when a person’s house collapses on top of him. The determination of the magnitude of value by labour-time is therefore a secret hidden under the apparent movements in the relative values of commodities. (I)

In short, instead of the vain search for some formal standard by I which to measure the magnitude of value, Marx set out to abstract the laws of the development of capitalism (‘law of motion’), that is to uncover the (highly contradictory) processes whereby this problem was actually resolved in practice.

Now political economy ran into insurmountable difficulties in the course of its futile search for a measure of value. Smith sometimes saw this abstract standard in ‘commandable labour’ (wages), sometimes in corn. Others discovered it in labour or in money. Marx’s comment underlines his distance from all those who continue to look for such a standard: ‘The problem of an “invariable measure of value” was simply a spurious name for the quest for the concept, the nature of value itself, the definition of which could not be another value’ (Marx, Theories of Surplus Value). And Marx points out that Bailey had rendered at least one service during the course of his attack on classical political economy in that ‘he revealed the confusion of the “standard of value” (as it is represented in money, a commodity which exists together with other commodities) with the immanent standard and substance of value’ (Theories of Surplus Value). Nor was Ricardo exempt from the criticism levelled here by Marx.

Ricardo often gives the impression, and sometimes indeed writes, as if the quantity of labour is the solution to the false, or falsely conceived problem of an ‘invariable measure of value’ in the same way as corn, money, wages, etc. were previously considered as panaceas of this kind. In Ricardo’s work this false impression arises because for him the decisive task is the definition of the magnitude of value. Because of this he does not understand the specific form in which labour is an element of value, and fails in particular to grasp that the labour of the individual must present itself as abstract general labour and in this form, as social labour. Therefore he has not understood that the development of money is connected with the nature of value and with the determination of this value by labour-time. (Theories of Surplus Value)

On this matter of the ‘measure of value’ Marx is in fact making a point of even wider significance which will occupy us later, namely the fact that in this false search for a ‘measure’ of value was involved an equally wrong procedure which believes that science must start with a series of concepts, which can then be tested to see whether they correspond to their empirical manifestation. In his critical comments on Adolph Wagner (Wagner had accused Marx of ‘illogicality’ in splitting the concept of value into exchange-value and use-value) Marx says, inter alia, ‘Above all I do not proceed on the basis of “concepts” and thus not from the “value-concept”.... What I proceed from is the simplest social form in which the product of labour in contemporary society manifests itself; and this is the “commodity”’ (Marx, Value, Studies by Marx).

It is clear that many Marxists have quite failed to grasp the true implications of this and similar statements which Marx made about his method. It has been widely assumed that Marx, like his predecessors in the classical school, was interested in finding a standard of value, a ‘constant’ on which the science of political economy could be based. Many such writers often hold that Marx ‘chose’ labour because it presented fewer difficulties than those associated with other possible standards. Maurice Dobb, for a long period looked upon in some circles as perhaps the leading writer on Marx’s Capital, takes exactly this position:

In the case of land or capital there were serious practical objections to taking them as a basis: difficulties which would have exceeded any of those which are charged against the labour theory. Classical Political Economy was already focusing attention on the non-homogeneous character of land and was using the differences in the quality of land, along with its scarcity, as the basis of the classical theory of rent. Acres are more dissimilar than man-hours of labour. In the case of capital there was the more crucial objection that it is itself a value, depending upon other values, in particular on the profit to be earned. (Dobb)

Dobb’s ‘defence’ of Marx here is entirely misconceived. It simply is not true that ‘acres (of land) are more dissimilar than man-hours of labour’ as Dobb will have it. Every use-value is not only the product of different individuals, but the result of individually different kinds of labour. When we consider labour as the creator of use-values (that is, labour as a process common to all societies) it is impossible to compare not only labour of different skills but even labour in the same trades, occupations, etc. ‘Different use-values are, moreover, products of the activity of different individuals and therefore the result of individually different kinds of labour’ (Marx, Contribution, ...). What is entirely missing in Dobb and others who share his position is any analysis of labour. They implicitly consider labour only from its material, not its social side, notwithstanding their insistence in other places that Marx’s political economy is concerned with social phenomena. Such insistence is purely formal if it is not connected with the whole of Marx’s work.

Let us, in ending this part of the discussion, recall that Ricardo begins his work with an attempt to define value precisely. He implicitly assumes that the category already exists and attempts to explain the production and exchange of commodities on this basis. Having started with value, Ricardo then sought for some commodity with which it (value) could be measured. Here was a vicious circle. Ricardo failed to see that this ‘value’ was an expression of social relations which emerged only with commodity production. To start from a concept of value and to try from this to explain the production and exchange of commodities was precisely the opposite of a correct scientific procedure. The value relation had to be deduced from the commodity. This is why Marx protested against the spurious charge that he started from an arbitrary conception of value. To have done so would have been to fall into the same trap as the political economists who took the concepts of modern society uncritically, ‘as they were handed down’.

Political Economy has generally been content to take just as they were, the terms of commercial and industrial life, and to operate with them, entirely failing to see that by so doing, it confined itself within the narrow circle of ideas expressed by those terms. (Engels, Preface to the English edition of II)

Marx saw his task as providing a critique of categories of political economy, of demonstrating that they were expressions, in fetishistic form, of definite social conditions. His critique of political economy was therefore the theoretical form of his revolutionary critique of those same social conditions.

Capital and surplus value

Apart from the distinction between ‘concrete’ and ‘abstract’ labour, Marx regarded the second revolutionary element of his work as lying in the treatment of surplus value. This was in no sense a separate element in Marx’s work, in so far as his ability to arrive at what he regarded as the first correct understanding of the nature and source of surplus value derived primarily from his analysis and rejection of Ricardo’s false understanding of value.

In order to understand what surplus value was, Marx had to find out what value was. He had to criticise above all the Ricardian theory of value. Hence he analysed labour’s value-producing property and was the first to ascertain what labour it was that produced value and why and how it did so. He found that value was nothing but congealed labour of this kind.’ (Engels, Preface to II)

Of course, the existence of that portion of value which, since Marx, we know as surplus value had been recognised by political economy; it was further understood that this surplus consisted of the product of labour for which its appropriators had not given an equivalent. The political economists had, however, largely confined their investigations to discovering the proportions in which the product of labour was divided between the classes (this was above all the case with Ricardo); the socialist critics of capitalism on the other hand, had found that this division was unjust and sought utopian means to overcome this injustice. ‘They all,’ said Engels, ‘remained prisoners of the economic categories as they had come down to them’ (Preface to II). Both the political economists and the ‘Ricardian socialists’ alike took the existence of surplus value for granted. But for Marx the problem was to explain the existence of this surplus value and its relation to capital. For Marx this capital was not merely a thing (as it remains for all academic economists) but the dominant social relation of modern society attached to things.

Capital is not a thing, but rather a definite social production relation, belonging to a definite historical formation of society, which is manifested in a thing and lends this thing a specific social character. Capital is not the material and produced means of production . . . it is the means of production monopolised by a certain section of society, confronting labour-power as products and working conditions rendered independent of this very labour-power, which are personified through this antithesis in capital. (III)

Thus when John Eatwell writes, ‘In classical and Marxian theory surplus is defined simply as social product less that share of product which must be paid to the labourers’ (Eatwell), he really only reveals his lack of understanding of Marx’s concept of surplus value. Joan Robinson’s position is almost exactly that of Eatwell in this respect. Rejecting Marx’s ‘primitive labour theory of value’, she admits that Marx none the less grasped the fundamental feature of capitalism, namely,

that the possibility of exploitation depends on the existence of a margin between total net output and the subsistence minimum of the workers: If a worker can produce no more in a day than he is obliged to eat in a day he is no potential object of exploitation. This idea is simple and can be expressed in simple language without any apparatus of specialised terminology. (Robinson)

What both Eatwell and Robinson do here is certainly ‘simple’: they confuse surplus value with surplus labour. Surplus labour is not, however, unique to capitalism – it is as old as human civilisation. If all we need to know about capitalism is that it produces surplus labour we certainly have no need of an ‘apparatus of specialised terminology’! But a proper analysis of capital demands an investigation of the ‘specific economic form in which unpaid surplus labour is pumped out of the direct producers’. For this alone ‘determines the relationship of rulers to ruled’, and also distinguishes the various historical epochs one from another. (III) As Rosdolsky has pointed out, this confusion by Joan Robinson of surplus labour and surplus value goes hand in hand not only with a rejection of Marx’s value theory but also a confusion about capital as a thing. Robinson writes, rebuking Marx for his ‘logic chopping theorising’:

Next Marx uses his analytical apparatus to emphasise the view that only labour is productive. In itself, this is nothing but a verbal point. Land and capital produce no value, for value is the product of labour-time. But fertile land and efficient machines enhance the productivity of labour in terms of real output.... Whether we choose to say that capital is productive, or that capital is necessary to make labour productive, is not a matter of much importance. What is important is to say that owning capital is not a productive activity. (Robinson)

And drawing attention to the increasingly complete separation of ownership from control, she goes on:

it seems simple to say that owning property is not productive, without entering into logic-chopping disputes as to whether land and capital are productive, and without erecting a special analytical apparatus in order to make the point. Indeed a language which compels us to say that capital (as opposed to ownership of capital) is not productive rather obscures the issue. It is more cogent to say that capital, and the application of science to industry, are immensely productive, and that the institutions of private property, developing into monopoly, are deleterious because they prevent us from having as much capital, and the kind of capital that we need.

Here are innumerable confusions. First, capital is equated with ‘efficient machinery’ and the ‘application of science to industry’. Capital is simply, for Joan Robinson as for all political economists, ‘stored up labour’. On this view, as Marx long ago indicated, the first capital was the first stone picked up by the first savage. Second – and this is a reflection of the first error – capital and land are lumped together. A social relation is joined up with the basic prerequisite for the production of wealth in all societies. Third, the point about the productivity of capital is completely misunderstood. We have already tried to explain the sense in which Marx saw labour as the ‘creator’ of value. Abstract labour creates value: that is a definite social form of labour produces and reproduces definite social relations of production. But this does not mean that the ‘objective factors of production’ are to be denied any form of ‘productivity’. On the contrary, to the extent that these factors raise the level of production they are certainly productive, but productive of use-values (a category which Joan Robinson continually confuses with value). Marx is explicit on this point:

The use-values, coat, linen, etc. i.e. the bodies of commodities, are combinations of two elements – matter and labour. If we take away the useful labour expended upon them, a material substratum is always left, which is furnished by Nature without the help of man. The latter can work only as Nature does, that is by changing the form of matter. Nay more, in the work of changing the form he is constantly helped by natural forces. We see, then, that labour is not the only source of material wealth, of use-values produced by labour. (I, see also Marx, Theories of Surplus Value)

Capital is, however, productive in a quite different sense. It is productive as the dominant social relation of modern society. For Marx capital was productive because it was able to ‘enforce surplus labour’ on a scale far surpassing any previous social relation. It is not, therefore, a question of obliterating the distinction between capital and labour. As Rosdolsky has said in exposing Joan Robinson’s confusion, labour is the horse producing surplus value, capital is the whip across its back. Hence for Marx productive labour is labour which when exchanging against capital produces surplus value. Here ‘productive’ has an entirely social meaning – concerned with man’s relationship to man – and is not to be confused with the material relation of man to nature.

Let us turn for a moment to a work already mentioned (Cutler et al.) which manages completely to misinterpret Marx’s position on the relationship of labour to value. Like so many others, this work labours under the illusion that Marx sought and had a need for some measure of value. In the case of this particular book, it sees this need in terms of the need to uphold the notion of surplus value. ‘For the production of the concept of surplus value wages and the product of labour must be expressed as and composed as values, they must be measurable in a term common to both (labour-time) and shown to represent discrepant quantities of that term’ (Cutler et al). And a little later:

Surplus value arises in the difference between the value of labour power and the value of the product created by the labour actually expended. The analysis of the two quantities cannot work unless value-terms in labour-time are supposed and form the basis of calculation. In order for it to be shown that the two sums are not equal (value of wages-value created by labour) it is necessary that comparable terms be present on both sides (wages and the product can be expressed as quanta of the same measure). When the assumption that labour-time is the ‘substance of value’ is abandoned then the two sides of the equation become incommensurable.... Remove the assumption of the value-creating power of labour and the pertinence of equivalent exchange and the result is that the analysis cannot be done. There is no reason to ascribe profit to ‘unpaid’ labour.

So if we abandon the notion that labour-time is the substance of value, dire results follow for Marx’s analysis of exploitation. The only problem is that Marx has absolutely no need to ‘abandon’ any such notion – for the simple reason that he never held it in the first place.

Cutler et al. are guilty of an old elementary mistake, they manage to confuse completely the substance and measure of value. Marx, we repeat, nowhere says that labour-time is the substance of value. The substance of value is abstract labour; the ‘measure’ of this value is time. Value is a social relation, connected to things (products of labour); the labour which ‘creates’ it is therefore labour of a definite social type, created only in and through certain social relations. Now this social labour is measured through those social relations, that is through a purely objective process which takes place independently of the consciousness of the producers. All labour, considered in its concreteness, differs qualitatively. The labour of one blacksmith must differ qualitatively from that of another, just as the blacksmith’s labour as a particular form of labour differs from all other particular types of labour. Now precisely because labour, considered as a use-value creating process, does and must differ qualitatively it is irreducible; all such labour is not social and not measurable. Concrete labour only becomes social, that is it only acquires value, through its transformation (reduction) into abstract labour. This abstract labour is alone capable of ‘quantification’ that is, reducible to time. But this measurement is an objective process. Measure is the objective category in which quality (concrete labour) and quantity (abstract labour) are resolved in a higher unity.

Cutler et al., like so many others, have singularly failed to understand this. This is clear when in their discussions of measurement (which they see as an essentially subjective category) they say of Ricardo ‘he bases the exchange of equivalents on equal magnitudes of the same objective substance, labour-time’ (Cutler et al). Again this is simply wrong. Nowhere does Ricardo hold that labour-time is the measure of value. For him it was always the quantity of labour. And if anything of the discussion has been understood it will be seen that this was quite different from Marx’s notion. One consequence was that Ricardo embarked on a search for some abstract measure of value, an indication that labour as a basic human activity was continually confused with labour in its specific form as a value-creating process. And this confusion persists with Cutler et al.

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