NOTE 4: What accounts for the value attribute of the commodity?
If concrete labor is always concrete, what accounts for the reduction of concrete labor to abstract labor?
There should be no question that the value-form theory approach to the origin of the value attribute of commodities and Marx’s approach are not the same theoretically. This requires an explanation from the advocates of value-form theory.
To be sure, the problem is not that the value-form school disagrees with Marx: so far as I can tell everybody and their mommas disagree with Marx. In fact, these days, you have to explain why you don’t disagree with Marx.
Instead the problem is both practical and theoretical: If the values of commodities is not the manifestation of the total labor power of society as Marx argues, the value-form school must offer a plausible explanation for how the products of concrete, particular, useful labor carried on by individual producers in isolation are reduced to abstract homogenous labor values through money and exchange.
In particular, the value-form school must provide the answers to three big questions avoided by modern economics:
- How is concrete labor reduced to abstract labor?
- Where is this reduction accomplished?
- What is the evidence the reduction has taken place?
To give an analogy drawn from quantum mechanics: In quantum theory we have the difficult scientific problem that the properties (or state) of particles are apparently instantly coordinated across vast distances. How this coordination of the state of particles is accomplished is not known; faster than light communication between widely separated particles cannot occur, so far as we know. This poses a difficult problem for physics because it points to an event occurring at the level of the individual particle that appears to have no known cause. That the a coordinated change in the properties of widely separated particles occurs is without question, yet we presently have no plausible mechanism to explain it.
In a similar vein labor theory as described by the value-form school suffers a defect that the property of the commodity appears to mysteriously undergo a qualitative transformation from a mere concrete particular use value to an abstract homogenous labor value as it exits individual production and enters into intercourse within the larger community. Value-form school theory has offered no explanation (nor even a speculative mechanism) by which an expenditure of concrete particular useful labor is reduced to abstract homogenous labor as the value-form school insists happens.
Concrete useful labor is expended in millions of ways that are incommensurable with one another. These labors result in products of labor, commodities, that have the same qualities as the labor that produced them. Yet, we are told, once exchanged in the world market, value-form theory says each commodity is now identical and indistinguishable from every other commodity as is required by labor theory; the unique and useful qualities of the commodities are somehow reduced to abstract values as they are passed from one individual producer to the next.
If this reduction really is taking place, and is not simply a mental construct, the value-form school must explain the mechanism by which this is accomplished.
It’s okay, we can wait for for you value-form theorists to come up with a plausible explanation. Just don’t expect us to forget you haven’t given us one — yet.
David Harvey: “As if this is actually occurring through world trade.”
Marx proposed that value was not an attribute of the commodity itself, but a manifestation of the total labor power of society. However, according to David Harvey, in his Companion to Capital, Marx was actually tacitly relying on a mechanism he (Marx) did not admit to: “To speak of ‘the total labour-power of society'”, says Harvey, “is tacitly to invoke a world market that has been brought into being under a capitalist mode of production.”
“It is on this dynamic global terrain of exchange relations that value is being determined and perpetually redetermined. Marx was writing in a historical context where the world was opening up very fast to global trade, through the steamship, the railways and the telegraph. And he understood very well that value was not determined in our backyard or even within a national economy, but arose out of the whole world of commodity exchange. But he here again uses the power of abstraction to arrive at the idea of units of homogeneous labor, each of which “is the same as any other, to the extent that it has the character of a socially average unit of labour-power and acts as such;’ as if this reduction to the value form is actually occurring through world trade.”
Indeed, Marx does appear to make just this sort of argument, not in Capital, but in his 1851 work, Reflections on Money. (NOTE: You won’t be able to find this essay at Marxist.org anymore, because the fascists have claimed it as their intellectual property. However, it can be found if you look hard enough.) In that essay, Marx argues, the prices of commodities are determined by world trade.
“[The] trade between dealers and dealers in England, for example, is by no means circumscribed by the trade between dealers and consumers in England, but more or less by that between dealers and consumers on the world market as a whole. For instance, the India Company or East India merchants send indigo to the London market. There it is auctioned. This is a transaction between dealers and dealers. The purchaser of the indigo sells part of it in France, Germany, etc., where it is bought by various dealers and manufacturers. Whether they will in the end recover the price of the indigo, will depend on how the final product is sold to the consumer, who lives perhaps on the Ionian Islands or in Afghanistan or in Adelaide”
Here Marx gives the example of a single commodity and how its price is determined by far-flung transactions within the world market, just as Harvey argues. What Harvey fails to note, however, is the level of the discussion at which Marx engages the role of the world market in labor theory. If the value-form school’s argument is accepted, Marx is only considering the exchange of simple use values and of prices, which are themselves denominated in a simple use value, gold or another commodity.
Where does the reduction of the indigo and the gold to abstract labor values take place? When the indigo was gathered in India for sale? When it was auctioned in England? When it was used in production in Germany? When it was sold to the end user in Afghanistan? Specifically, how did this reduction from a concrete use-value to an abstract labor value take place? What evidence do we have for this reduction?
To be absolutely precise, according to the value-form school, Marx is stating the price of indigo is determined by far-flung transactions within the world market. But the price of any commodity is only the worth of that use value expressed in the form of another, universally recognized, equivalent use value, a money commodity. Taken by themselves, neither the indigo nor the money in the trade have any identifiable material property of value in their composition. Each use value left production and entered into commercial relations as the product of the expenditure of concrete, useful labor.
To be absolutely clear on this point, in value-form theory it does not matter whether we are talking about the exchange of use values between two individual commodity producers or the highly sophisticated trade of the world market where a good produced in India is auctioned in England to be used in production in Germany for sale in Afghanistan. In either case, we are simply talking about the exchange of one inert use value having no abstract labor value attributes for another inert use value having no abstract value attributes.
Even when we introduce the assumption that what is now taking place is a succession of serial exchanges of the commodity before its final consumption, nothing obvious has changed qualitatively. Indeed, in the case of the money commodity in the exchanges — a gold coin, for instance — a succession of exchanges is already a characteristic and unique attribute, since the money commodity is never consumed, but simply changes hands. For all this, the gold coin still remains a use value, an inert piece of metal, serving as universally recognized means of exchange. No matter its function in the world market, the coin contains no detectable quantity of abstract labor value.
Although so highly prized in a community of commodity producers like our own that the gold coin is locked in a safe, in a communist community of the future someone would pick it off the street and toss it into the recycle bin with other metals. It would be nothing more than an object to recycle or, at most, a quaint peculiar totem of a long dead mode of production.
This is the point of Marx’s discussion of the fetish of commodities and the inability of political economy to understand the social nature of the commodity springs not from the characteristics of the use value itself, but from its social context in a community of commodity producers where the historically specific configuration of the total labor power of society (the division of labor) already determines the abstract labor attributes of the product of labor.
Operating at the level of superficial economic relations of the market, political economy never demonstrated precisely what had to be shown: the jump that must take place in a product of labor from use value to abstract labor value, nor when and where this jump occurs. Likewise, no value-form theorist has ever shown an actual process by which concrete labor is reduced to abstract labor. If this reduction or leap is actually taking place in reality and not simply in the minds of Marxist theorists it must be demonstrated.
Next, we will see how Chris Arthur tries to finesse this problem.
The implication of the question is staggering, because, since 1971, the international currency system is not tied to any commodity. The system is a collection of valueless currencies not backed by any commodity that float against each other. All Marxists agree Marx himself held that in the final analysis money had to be a commodity. If this is true, something with huge implications for labor theory of value occurred in 1971 — something so huge no labor theorist can ignore it.
