The Real Movement

Postone’s argument is surprisingly simple:

There is a real material limit to the sum of value that can function as capital, as self-expanding value. That limit is equal to the sum of exchange value paid out to the working class in the form of wages.

Capital is production for profit and it requires for this production the employment of wage labor. It follows from this that the limit on production for profit is given by the limit on employment of labor power for purpose of value self-expansion. Labor power, the quintessential capitalist commodity, thus not only mediates the production of material wealth and its own production, it also mediates the production of capital, i.e., self-expanding value.

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In Capital, (v3, ch15) Marx explains that the extraction of so much surplus value from the worker is not the end of capitalist production. The extracted surplus value must now be converted back into money:

“As soon as all the surplus-labour it was possible to squeeze out has been embodied in commodities, surplus-value has been produced. But this production of surplus-value completes but the first act of the capitalist process of production — the direct production process. Capital has absorbed so and so much unpaid labour. With the development of the process, which expresses itself in a drop in the rate of profit, the mass of surplus-value thus produced swells to immense dimensions. Now comes the second act of the process. The entire mass of commodities, i.e. , the total product, including the portion which replaces the constant and variable capital, and that representing surplus-value, must be sold. If this is not done, or done only in part, or only at prices below the prices of production, the labourer has been indeed exploited, but his exploitation is not realised as such for the capitalist, and this can be bound up with a total or partial failure to realise the surplus-value pressed out of him, indeed even with the partial or total loss of the capital.”

Even if we assume production for profit, the extraction of surplus value from the worker is not necessarily realized in the profits of the capitalist. Production and realization of surplus value are two separate phases in the circulation of capital.

Not just this, however: even if we assume variable capital has gone through both phases successfully, it has not yet been converted back into capital again until it has been exchanged for labor power once again.

To function as capital, a mass of money must be converted into labor power; put to work producing a mass of commodities; that mass of commodities sold; and, the money once again converted into labor power.

Money is not capital. To become capital money must be exchanged for labor power and the labor power put to work producing surplus value. This has to be emphasized because many folks conflate money — especially very large amounts of money — with capital. The massive hoard of cash that Apple is sitting on today, according to reports in the financial press, is not capital. It is money. To become capital it would have to be converted into (exchanged for) labor power and set to work producing surplus value.

Money is capital only to the extent it is exchanged for labor power for purpose of self-expansion of the value of the money. Although this appears to be unproblematic, in fact the employment of labor power for self-expansion of the value of the money is not a straightforward as it appears. Witness, for instance, the massive hoard of corporate cash Apple has — now estimated at nearly a quarter-trillion dollars.

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Apple is sitting on such a large pile of cash precisely because this cash cannot become capital, can not find a way to be exchanged for labor power for purposes of self-expansion of its value.

Interestingly, in volume 3, chapter 15, Marx predicts that this must eventually occur as the rate of profit falls to a level that only the very largest capitals find it possible to profitably employ l;labor power:

“A drop in the rate of profit is attended by a rise in the minimum capital required by an individual capitalist for the productive employment of labour; required both for its exploitation generally, and for making the consumed labour-time suffice as the labour-time necessary for the production of the commodities, so that it does not exceed the average social labour-time required for the production of the commodities. Concentration increases simultaneously, because beyond certain limits a large capital with a small rate of profit accumulates faster than a small capital with a large rate of profit. At a certain high point this increasing concentration in its turn causes a new fall in the rate of profit. The mass of small dispersed capitals is thereby driven along the adventurous road of speculation, credit frauds, stock swindles, and crises. The so-called plethora of capital always applies essentially to a plethora of the capital for which the fall in the rate of profit is not compensated through the mass of profit — this is always true of newly developing fresh offshoots of capital — or to a plethora which places capitals incapable of action on their own at the disposal of the managers of large enterprises in the form of credit. This plethora of capital arises from the same causes as those which call forth relative over-population, and is, therefore, a phenomenon supplementing the latter, although they stand at opposite poles — unemployed capital at one pole, and unemployed worker population at the other.”

As I read Marx, it would seem that Apple’s quarter-trillion dollars worth of dead capital is now below the minimum required by Apple for the productive employment of labor. The very idea is staggering to me. How can this be? In what alternative reality would $250 billion be too little capital to make a decent profit?

Marx explains that is can only be caused by a massive superfluity, superabundance, of capital, such that additional investment results in general devaluation of the total capital:

“As soon as capital would, therefore, have grown in such a ratio to the labouring population that neither the absolute working-time supplied by this population, nor the relative surplus working-time, could be expanded any further (this last would not be feasible at any rate in the case when the demand for labour were so strong that there were a tendency for wages to rise); at a point, therefore, when the increased capital produced just as much, or even less, surplus-value than it did before its increase, there would be absolute over-production of capital; i.e., the increased capital C + ΔC would produce no more, or even less, profit than capital C before its expansion by ΔC. In both cases there would be a steep and sudden fall in the general rate of profit, but this time due to a change in the composition of capital not caused by the development of the productive forces, but rather by a rise in the money-value of the variable capital (because of increased wages) and the corresponding reduction in the proportion of surplus-labour to necessary labour.”

We are all familiar with what is called simple capitalist overproduction. It is when capitalist firms produce too many shoes or houses. When a firm produces too many shoes or too many houses to sell them profitably in the market because the sudden glut of shoes and houses collapse prices.

Marx went one step further. He predicted that eventually capitalism would not just produce too many shoes and houses, but too much capital to be invested at a profit. At that point new investment would halt. He called this form of overproduction the absolute overproduction of capital.

Does Apple’s quarter-trillion dollars of dead capital signal we have reached absolute overproduction of capital? How would we know if this was the case? Even Postone claims Marx’s theory can’t be verified empirically. The question is pertinent because, as of March 2017, the dead capital of the Fortune 500 now amounts to almost 3 trillion dollars. Basically, three trillion dollars is now an insufficient mass of capital to invest profitably.

Just to be clear what that means, only four countries have a GDP greater than three trillion dollars: the United States, China, Japan and Germany.

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Although converting money into capital may seem like a pretty straightforward proposition — you buy a bunch of labor powers and set them to work producing widgets — the minimum mass of capital sufficient to engage in this sort of behavior now exceeds three trillion dollars.

The question this massive hoard of dead capital should raise to everyone is whether it is a practical expression of what Postone means when he says value has become anachronistic? Is this hoard of dead capital now entirely superfluous to the production of material wealth and (thus) incapable of further self-expansion?

And even if it is superfluous as capital can it still be employed for purpose of addressing problems like poverty, environmental degradation, inequality and so on?

The first question addresses the implications of dead capital as capital — as a mass of value seeking its own self-expansion. The second question, however, asks if value itself, aside from its purpose as capital, has any other usefulness to society.

Even if we assume, based on the behavior of the Fortune 500, that the hoard has no usefulness as capital, Postone has argued that it is not just useless as capital, but anachronistic as value as well. For any social real purpose, the hoard of dead capital might as well not exist at all.

Many people might concede Apple’s hoard is far in excess of what can be employed by Apple to produce surplus value. But no one I know of suggests Apple’s hoard can’t be employed as (for instance) state revenue — that is for a purpose other than capitalistic self-expansion; for ‘investment’ in infrastructure, basic income, national healthcare, etc.

However, Postone’s argument is that, even for these purposes, Apple’s hoard of dead capital is completely superfluous.

In a previous post I wrote this:

“In the capitalist mode of production, what labor power produces first of all is itself: the absolute dependence of the worker on the sale of her capacity to labor.”

In the capitalist mode of production, the worker is obliged to sell her labor power as a commodity. Labor power, however, is not a thing, like shoes or houses; but a social relation of absolute dependence of the worker on capital for the means of life.

In the course of her labor the worker replaces the value of her labor power and adds some additional increment of surplus value. The portion of the labor day devoted to replacing the value of her labor power is nothing more than the labor time necessary to reproduce her absolute dependence on the sale of her labor power.

According to Postone, it is the value of labor power, i.e., the labor time required to reproduce the absolute dependence of the worker on sale of her labor power, that mediates the production of material wealth.

Despite the great increase in the society’s technical capacity to produce material wealth — fueled by incredible increases in scientific knowledge and automation — the labor time devoted to the production of labor power can never exceed the labor time necessary to reproduce the worker’s absolute dependence on the sale of her labor power.

The reason this has to be true in theory is obvious: if the worker were not obligated to offer her labor power for sale, production for profit would not continue. The sale of her labor power for wages has to appear to be a natural condition for her existence.

The labor time devoted to the production of material wealth in the capitalist mode of production is fundamentally determined by labor time required to reproduce the worker’s absolute dependence on the sale of her labor power for wages.

With the great increase in the power of the forces of production bound up with capital, the labor time required to reproduce the worker’s absolute dependence on the sale of her labor power for wages diminishes.

According to Postone, labor power actually reconstitutes itself as necessary, although we normally think about this process from the point of view of the capitalist, as Postone explains:

“[Because] the dialectic of transformation and reconstitution not only drives productivity forward, but also reconstitutes value, it thereby also structurally reconstitutes the necessity of value-creating labor, that is, proletarian labor.”

The idea that evil capital reconstitutes wage labor as necessary may be psychologically satisfying, since it posit an alien power over us, but the fact is that value — wages — reconstitutes itself as necessary. It mediates both the production of material wealth and self-mediates its own production.

We know Postone has to be right about this, because we know capitalism doesn’t even require a capitalist. The only class necessary for capitalism is the working class. All the evils we ascribe to the capitalists must in fact be reproduced by the working class itself.

Like God, if the capitalists did not exist, the working class would have to invent them. According to Postone, Marxism of the 20th century consisted of,

“[A] general interpretive framework in which capitalism is analyzed essentially in terms of class relations that are rooted in private property and mediated by the market,and social domination is understood primarily in terms of class domination and exploitation.”

He argues this approach is fundamentally anachronistic. We should replace it with a new conception of capitalism that does not rely on archetypal personifications of 20th century Marxism:

“This historically new form of social domination is one that subjects people to impersonal, increasingly rationalized, structural imperatives and constraints that cannot fully be grasped in terms of class domination, or, more generally, in terms of the concrete domination of social groupings or of institutional agencies of the state and/or the economy. It has no determinate locus and, although constituted by determinate forms of social practice, appears not to be social at all.”

In other words, if you cannot explain how capitalism works without reference to the “evil capitalists” personification typical of the 20th century, your strategy will not work. Just try to explain how the worker ends up living in abject poverty without making use of the iconic capitalist.

The problem with the “evil capitalist” approach is that no worker sees anything like an evil capitalist driving them into poverty. What they see instead are “the blacks” or “racist whites”, immigrants, women, government taxes and regulations, foreign competition etc. They are beset on all sides by forces that drive them into poverty.

So when you show up trying to convince them that the “evil capitalists” are the problem, there is no way your explanation fits their practical experience.

The same 20th century Marxist approach that has proven inadequate at explaining racism, nativism and misogyny also is inadequate for addressing racism, nativism and misogyny because it relies on personifications (caricatures) that become increasingly irrelevant to the actual operation of the mode of production over time.

The more irrelevant and unnecessary the capitalist becomes to the actual operation of the mode of production, the more this personification loses the power to explains the pervasiveness of social ills.

The inadequacy of 20th century Marxism informs all aspect of political life, says Postone:

“And, indeed, I would suggest that a sense of the inadequacy of the traditional Marxist framework has –at least tacitly –informed critical progressive politics for decades. The notion of postcapitalism, of socialism, as a society based on industrial labor, public ownership of the means of production and central planning, began to lose its hold on the imaginaries of many progressive intellectuals, students and workers during the crisis of Fordist capitalism in the late 1960s and early 1970s.”

If we ended the discussion at this point, I think Postone’s argument would not be sufficient to require a rereading of Marx’s theory, however. All Postone has told us is the 20th century Marxism no longer explains anything. In this sense, 20th century Marxism is no better or worse than a host of other approaches.

Take a number and stand in line.

Postone’s argument for a rereading of Marx’s theory has another, more powerful application that I have so far neglected. I will turn to that next.

I like Postone. I like him a lot. I find him very illuminating. But let me bitch just a bit about Postone. In the lecture below Postone makes what I think is an unforgivable mistake. (Okay, perhaps not unforgivable, but stupid anyways.)

At about 25 minutes into this talk Postone says:

“There is no way you can prove it going down. That isn’t the way value theory works.” –Moishe Postone

What possible good is a theory that cannot be verified or falsified? Marxists are such complete idiots that it is painful to watch them sometimes.

I love reading Postone, but he spends far too much time hanging out with useless German value theorists. It is beginning to rot his judgment. If he had any goddamned sense, he would have entitled his paper, “The Anachronism of Labor”, not “Value” — or, better yet, “The Anachronism of Wages”.

What makes Postone’s view so frustrating is he makes a number of rather startling assertions regarding capital that he then states cannot be proven. These assertions include his assertion that there are patterns to events we have witnessed that can only be explained only when we adopt his reading of Marx. A reading that includes the assumption that Marx does not employ the categories of political-economy transhistorically but only as they appear within the capitalist mode of production.

This means, among other things, that the commodity Marx refers to in Capital is solely labor power; that value Marx refers to is the value of this labor power; and, that labor Marx refers to is wage labor. Thus Marx:

1. is not talking about commodities in general, but only about labor power;
2. is not talking about value transhistorically, but only the value of labor power, which is expressed in the price of labor power, i.e., wages;
3. that labor power is  social relation that mediates the production of material wealth and all other social relations in capitalist society;
4. that labor power reconstitutes itself as necessary even as it renders itself anachronistic;
5. that this self-reconstitution explains both the lack of vision of the future and has enormous destructive consequences presently;
6. that wage labor is specific to capital and cannot be the basis for a future communist society;
7. that wage labor has rendered itself anachronistic — a statement that was not true in Marx’s day;
8. that labor power may be the only commodity whose value is equal to the socially necessary labor time required for its production;
9. that labor within the specific historical conditions of capital specifically produces the value and use value of labor power itself;
10. that socially necessary labor time refers to the labor time required for production of labor power alone;
11. finally, that the wage labor of the worker reproduces her absolute dependence on the sale of her labor power.

These are some pretty extravagant claims in any case, but they become quite incredible when Postone expects us to take them on face value without offering any proof or evidence of their validity save the rather nebulous, and moreover specious, argument of a bourgeois simpleton economist like Piketty, who once argued the Marx’s “Das Kapital, I think, is very difficult to read and for me it was not very influential.”

Postone can to do better than this. He has to spend more time linking his ideas to the empirical evidence or at least explain how his ideas might be expressed concretely. Without this, the idea that wage labor is now anachronistic will never get standing among communists. Most communists will continue to rely on bourgeois neoclassical theory.

I now want to apply Postone’s argument on time to the notion of the commodity in Marx’s Capital. According to Postone, in Marx’s critique of political economy every category he discusses is historically specific to the capitalist mode of production and “are valid in their abstract generality only for capitalist society”

Applying Postone’s argument to the category of the commodity, I have argued that Marx’s category of the commodity is only valid in its abstract generality for labor power. Postone’s discussion of time only applies to the socially necessary labor time required for the production of labor power. Thus, the value or socially necessary labor-time required for production of labor power delineates a socially general compelling norm to which capitals must conform.

Postone states it this way:

“Production must conform to this temporal norm if it is to generate the full value of its products.”

But let me restate it this way:

“[Capitalist] production must conform to [the socially necessary labor time required for production of labor power] if it is to generate the full value of its products[, labor power.]”

As I have stated Postone’s argument, the socially necessary labor time required for production of labor power operates as the ultimate constraint on capital. The constraint on capitalist production is not the socially necessary labor time required for the production of ordinary commodities in general, but the socially necessary labor time specifically required for production of the peculiar capitalist commodity alone, labor power.

In this way, value in the capitalist mode of production operates as a self-mediating form of wealth. This mediation, says Postone,

“is essentially temporal. It is constituted solely by the expenditure of socially necessary labor-time.”

The distinction between the value of labor power at the start of the process and the value of labor power at the end of the process is essentially two different magnitudes of socially necessary labor time. Since labor power is both the means and the product of capitalist production, the difference is not to be found in the use value of labor power, but in its value. Here, the values of ordinary commodities count for nothing.

Capital is the production of labor power and labor power alone. Labor power is the only commodity capable of making real capital (real self-expanding value) out of money capital. Although capital produces a bewildering variety of commodities, labor power is the sole essential commodity of the capitalist mode of production. Self-expanding value requires a commodity capable of augmenting its own value.

Only labor power does this.

Since capital is self-expanding value, and since living labor is the only source of new value, the production and reproduction of labor power is the sole commodity of concern to capital. However, the production and reproduction of labor power is not the production and reproduction of a thing. It is the production and reproduction of a social relation specific to the capitalist mode of production, wage labor. It is the production and reproduction of situation where,

“[The] labourer instead of being in the position to sell commodities in which his labour is incorporated, must be obliged to offer for sale as a commodity that very labour-power, which exists only in his living self.”

The temporal norm to which production must conform is not that required for production of shoes or cars; rather, it is a norm that ensures the worker is compelled to offer herself (her capacity to labor) for sale as a commodity. Reproduction of labor power is immediately the reproduction of the worker’s dependence on the sale of her labor power for wages.

The self-mediating character of value within the capitalist mode of production means that wage labor reproduces the worker’s own absolute dependence on the sale of her labor power. Value as a self-mediating form of wealth does not refer to the values of widgets, but the reproduction of the worker’s absolute subordination to capital constituted through her own labor.

To paraphrase Postone:

Wage labor appears to be natural rather than social and conditions the conceptions of social as well as natural reality, because it reproduces the worker’s dependence on the sale of her labor power.

In the capitalist mode of production, what labor power produces first of all is itself: the absolute dependence of the worker on the sale of her capacity to labor.

One of the most important, and most neglected categories of capital is time. This category is the central focus of Postone’s essay, “The Current Crisis and the Anachronism of Value”. Value, says Postone, “is constituted solely by the expenditure of socially necessary labor-time.”

He writes:

“Let me briefly elaborate by considering Marx’s determination of the magnitude of value in terms of socially necessary labor-time. This term is not simply descriptive, but delineates a socially general compelling norm. Production must conform to this temporal norm if it is to generate the full value of its products. In the process, the time frame (e.g. an hour) becomes constituted as an independent variable.”

Socially necessary labor time, like labor power, wages and social labor, is not a transhistorical category, but a peculiar category of the capitalist mode of production. Socially necessary labor time states that the labor time that can produce value is subject to definite material limits that have nothing to do with the production of material wealth as such. Beyond this definite material limit the expenditure of labor power (social labor) is superfluous to the production of value.

To understand what this means, the social producers may labor eight or ten hours, but produce no more value than is contained in three or four hours of social labor. Postone illustrates his argument using what he calls the analogy of a treadmill. This analogy doesn’t completely work for me, but nevertheless I will state it.

According to Postone,

“The amount of value produced per unit time is a function of the time unit alone; it remains the same regardless of individual variations or the level of productivity. It follows – as a peculiarity of value as a temporal form of wealth – that, although increased productivity increases the amount of use-values produced per unit time, it results only in short term increases in the magnitude of value created per unit time.”

To restate Postone’s argument as I have in previous posts, the value of an hour of labor remains an hour of labor regardless of the productivity of the labor or the skill of the worker. Although increased productivity increases the production of material wealth in a given unit of time, in the long-run it has no impact on the amount of value created.

Postone continues:

“The result is a sort of a treadmill. Higher levels of productivity result in great increases in material wealth, but not in proportional long-term increases in value per unit time. This, in turn, leads to still further increases in productivity. “

In other words, in the long-run, improvements in the productivity of labor produce more material wealth (use-values), but cannot increase the quantity of value produced in a given period of time.

On the other hand, in the short-run, additional value can be created by improvements in the productivity of labor:

“…a peculiarity of value as a temporal form of wealth – that, although increased productivity increases the amount of use-values produced per unit time, it results only in short term increases in the magnitude of value created per unit time.”

To restate this argument by Postone: although the capitalist cannot increase the quantity of value produced in a given period of time, he has an incentive to improve the productivity of labor in order to gain short-term super-profits. In other words, although we assume that the value created by an hour of labor is constant, in fact it can and will vary in the short-run owing to improvements in the productivity of labor.

Postone:

“Once capitalism is fully developed, its temporal forms generate ongoing increases in productivity. Those increases, as we have seen, do not change the amount of value produced per unit time. However, they do change the determination of what counts as a given unit of time. The unit of (abstract) time remains constant; the same unit of time generates the same amount of value. Yet changes in productivity redetermine that unit; they push it forward, as it were.”

An hour of labor is always an hour of labor, but what constitutes an hour of labor in terms of the quantity of use-values that can be produced in an hour is constantly being redetermined.

In chapter one of Capital, Marx discusses the problem this way:

“The introduction of power-looms into England probably reduced by one-half the labour required to weave a given quantity of yarn into cloth. The hand-loom weavers, as a matter of fact, continued to require the same time as before; but for all that, the product of one hour of their labour represented after the change only half an hour’s social labour, and consequently fell to one-half its former value.”

Within the capitalist mode of production, what we call time is not clock time, not abstract homogeneous time of absolutely invariant units, but a social category, “socially necessary labor time”. This category, like all other categories I have discussed so far, is not transhistorical; it is unique to the capitalist mode of production alone.

Next, I will apply Postone’s argument to the peculiar commodity of the capitalist mode of production, labor power.

Here is an extremely interesting quote from Postone’s talk, The Current Crisis and the Anachronism of Value:

“[Labor] itself constitutes a new form of interdependence, where people do not consume what they produce, but where, nevertheless, their own labor … function as a quasi-objective means of obtaining the products of others. In serving as such a means, labor and it s products in effect preempt that function on the part of manifest social relations; they mediate a new form of social interrelatedness.”

As with the categories, value and commodity, according to Postone, labor itself should be seen as historically specific to the capitalist mode of production, not transhistorical. In the capitalist mode of production, what we mean by “commodity” refers solely to the commodity that is historically specific to the mode of production, labor power. What we refer to as “value” is the value of the historically specific commodity, labor power.

It would seem to follow from this that by “labor” we are not referring to material productive activity as it is understood in many different mode of production and societies, but only to a specific form of material productive activity that is found in the capitalist mode of production. Marx calls this historically specific form of material productive activity, social labor.

Social labor should not be confused with individual labor carried on separately. The labor is directly social and thus involves no exchange between individual producers. Social labor, unlike labor in simple commodity production, is not mediated through exchange. It is a self-mediating activity:

“At the heart of [Marx’s] analysis is the idea that labor in capitalism has a unique socially mediating function that is not intrinsic to laboring activity transhistorically.”

If social labor has a socially mediating function that is unique  to the capitalist mode of production, what is this unique socially mediating function? The answer seems to be that social labor is the means by which labor power produces and reproduces itself. Which is to say that labor within the capitalist mode of production is not concerned with production of use values in general, but is concerned solely with the production of the historically specific use value, labor power.

The sole function of social labor in the capitalist mode of production is the production of labor power. The sole use value of labor power is social labor, i.e., the production of labor power.

It should follow from this that the category, “socially necessary labor time”, in the capitalist mode of production does not refer to the socially necessary labor time required for, (for instance), production of shoes, houses, cars and other ordinary commodities, but is solely concerned with the socially necessary labor time required for the production of labor power, the peculiar, historically specific, capitalist commodity.

In the capitalist mode of production, the term “socially necessary labor time” is that duration of labor, (measured in some unit of time), that is required to produced the total labor power of society. It would seem to be a mistake to think that the socially necessary labor times of individual ordinary commodities is expressed in their individual prices of production.

This is not to say that these individual socially necessary labor times do not exist; rather, it only means that the SNLTs of ordinary commodities are not expressed in the prices of production of the ordinary commodities. What is expressed in their prices of production is the socially necessary labor time of labor power.

This might explain Postone’s observation that,

“Labor in capitalism, then, is both labor as we transhistorically and commonsensically understand it, according to Marx, and a historically specific socially mediating activity.  Hence, what labor produces, its objectifications –  and here I am referring to the commodity and to capital –  are both concrete labor products and objectified forms of social mediation.”

As labor is understood transhistorically, it produces the value and use value of the ordinary commodity. As labor is understood within the specific historical conditions of capital, however, it produces not the value and use value of the ordinary commodity, but the value and use value of labor power itself.

Another way to say this is that:

1. the values of ordinary commodities play no role whatsoever in the regulation of the mode of production, and
2. the prices of individual ordinary commodities tell us nothing about their individual values.

This is important because if you are looking for the law of value to explain the prices of ordinary commodities, you naturally begin with the values of the ordinary commodities themselves. Postone says this is wrong. The values of ordinary commodities play no role whatsoever in the market prices.

To be blunt, the charge that value is redundant when it comes to explaining the prices of individual ordinary commodities is both correct and beside the point, if Postone is correct. Value doesn’t explain the prices of ordinary commodities, it explains the price (wages) of the labor power that goes into their production. With conversion of the value of labor power into money-prices (wages), the first step of the conversion of values into prices is concluded.

The second step now begins.

If my reading of Postone on the transformation problem in my last post is correct, the trajectory of the capitalist mode of production becomes a lot clearer. Capital is not concerned with the production of value generally but only with the production of value in the form peculiar to the mode of production, i.e., the value of labor power (wages). In turn, the production of value in the form peculiar to the capitalist mode of production (wages) mediates the production of material wealth generally within the mode of production. What matters is not the production of material wealth as such, but the production of material wealth only insofar as it is required for production of labor power, the peculiar capitalist commodity.

Does capital produce labor power in the sense that it produces shoes or houses? I have previously assumed that labor power, understood transhistorically as the capacity to labor, is not itself the product of capital, but Postone has caused me to reconsider. According to Postone, no category of discussed in Capital should be understood transhistorically, but only in its specific historical context. This holds true for labor power within the capitalist mode of production as well.

Within the capitalist mode of production labor power is not a natural, transhistorical category similar to, for instance, the labor power of a peasant or slave. It is a peculiar social relation unique to and only produced within the capitalist mode of production.

As Postone puts it,

“Marx takes the term [commodity] and uses it to refer to the most basic social relation of capitalist society, its fundamental form of social mediation and structuring principle.”

Labor power is the most basic social relation of capitalist society, its fundamental form of social mediation and its structuring principle. It is not a thing, like houses or shoes, but a social relation that appears in the form of a thing. This is a very different conception of labor power than the one I am use to. I don’t know about you, but I have tended to think about labor power as a thing, owned by the worker, that can be sold by her and purchased by the capitalist.

But if labor power is a social relation, how does one sell one’s social relations? How can a capitalist purchase your social relations? The entire idea seems bizarre.

In Capital, labor power is not the individual labor capacity of a producer, it is directly social. It is this social relation, not the individual socially necessary labor times of ordinary commodities, that mediates the production of material wealth. This social relation, like all social relations is composed of many individuals, but, unlike other social relations, labor power mediates the production of material wealth and determines the structure of society generally.

For all intents and purposes, labor power is the world:

“In a society in which the commodity [labor power] is the basic structuring category of the whole, labor and its products are not socially distributed by traditional norms, or overt relations of power and domination, as is the case in other societies. Instead, labor itself constitutes a new form of interdependence, where people do not consume what they produce, but where, nevertheless, their own labor or labor-products function as a quasi-objective means of obtaining the products of others.”

We saw previously that the value of labor power comes to be expressed as the prices of ordinary commodities and thus to mediate their production. Essentially, within the capitalist mode of production labor power over-writes the individual socially necessary labor times required for production of ordinary commodities with the socially necessary labor time required for its own production.

Postone also argues it likewise comes to preempt previous forms of social mediation — and constitutes, “a new form of social interrelatedness.”

NOTE: What follows is the result of my teasing implications from Postone’s approach. I am not completely sure I am getting it all correct. Most of all, I am not sure Postone would agree with me. Add salt to taste.

It is hard to overstate the significance of what Postone has accomplished in his essay, “The Current Crisis and the Anachronism of Value”.

Not only has he stated that wage labor is anachronistic — an assertion that appears for all the world to be a priori — in the course of setting up his argument to demonstrate why wage labor becomes anachronistic, and with very little fanfare, Postone also adds a interesting twist on a question posed by Marx’s theory almost from the moment volume 3 of Capital was published:

How are labor values transformed into prices?

This, of course, is the infamous “transformation problem”, the bane of Marxist economic theory.

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