Labour and Value from the the Greek Polis to Globalised State-Capitalism
By David Black
The notion of ‘Value’, in relation to labour and exchange of goods, has, from Aristotle onwards, been seen as inseparable from ‘moral’ and ‘social’ issues. The first half of this essay examines the ‘Reformist Anarchist’ analysis of Value: as rooted in the Greeks’ concept of telos; the ‘economic morality’ of the medieval scholastics; the Aristotelian anarchism of William Godwin; and the co-operative schemes of the Ricardian socialists. In the second half I turn to Marx’s critique of the Ricardians and review some recent studies by Andrew Kliman, which seek to draw out the implications of Marx’s writings on Value for possible ‘Alternatives to Capitalism.’
A Leftist Aristotle? Nature, Labour and Telos
In Aristotle’s concept of teleology Nature was characterised by ‘meaning’. Development in Nature involved not just causality and mechanical motion but also the potentiality for form in the material itself. Nature, within its own order and hierarchy, was seen as always striving towards the ‘good’. Just as form and cosmos struggled to overcome boundlessness and chaos, so Aristotle’s City State (the polis) sought to control the ‘unlimited desires’ of those within its walls and subdue the ‘untamed nature’ of the ‘barbarians’ on the ‘outside’. Aristotle advocated a polis in which principles of ‘excellence’ and ‘justice’ would be administered by an elite of educated citizens; for only those able to command the labour of others could be ‘free’ enough to be educated in the required ‘virtues’. Everyone else he excluded from citizenship: slaves, women, artisans, wage workers, merchants and bankers; all of whom, he argued, would in any case be better of in a well-run Greek polis than in a barbarian camp or a tyrannical oligarchy.
Alisdair MacIntyre points out that whereas Plato’s 'Republic' was irreconcilable with the realm of historically existing poleis (his ‘practical’, earthly polis was restricted to the ‘community of philosophers’), in Aristotle’s polis the telos was already implicitly embodied and acknowledged within the actual social practices of the time. Universal Form only had meaning in relation to the particular:
‘Aristotle understood that movement from human potential to its actualisation within the polis as exemplifying the metaphysical and theological character of a perfected universe’. [1]
Murray Bookchin points out that although Aristotle divided society into free men and non-citizens, he recognised a meaningful hierarchy within those he excluded from citizenship. For in taking into account the ‘higher’ level of labour, in which the manual and mental are combined, Aristotle rated the ‘master craftsman’ as superior to the artisan because of his ‘practical intelligence’: his ‘teleological’ understanding of the ‘why’ as well as the ‘how’ of ‘good works’. Aristotle implicitly ‘respected’ the ‘good’ worker, whilst condemning those whose aim in life was simply to accumulate wealth: who were, in his words, ‘intent on living only, and not living well’. [2]
Jose Perez Adan’s 'Reformist Anarchism' examines the influence of Thomas Aquinas’ ‘Catholic Aristotelianism’ on anarchist economics. [3] Aquinas argued that considerations of production and exchange had to be subservient to the concerns of a ‘commutative justice’ which deliberated about ultimate (divine) ends as well as proximate (earthly) ones. Money was seen as simply ‘the translation of fixed and invariable value into an easy measure of exchange’. Usury – ‘generating money out of want without contributing to the creation of value’ – was considered an ‘ontological disorder’, because it suggested that money, rather than the labour and moral order, created value. Regulations were seen as essential to stabilise prices and ensure the compensation of producers for their toil and replacement of materials invested in production. Whereas in neo-classicist political economy wages were seen as determined a posteriori by the fluctuating whims of the market, in Scholastic metaphysics wages represented an ‘objective value’. Aquinas argued that exchange of goods by a trader could be regarded as legitimate activity only ‘for the sake of public utility so that necessary things should not be lacking… and he seeks money, not as an end, but as a wage for labour’. Taking a position which would horrify the liberal pioneers of free-trade and property rights in the 18th century, Aquinas held that in a famine property rights were overridden by social necessity: to prevent starvation, it would be justified to expropriate, if necessary, a supply of grain surplus to the owner’s personal needs.
In the 18th century, such ‘objective values’ were challenged by the new liberal tradition. Writing on the influence of Aristotelian and Calvinist theology on the Scottish Enlightenment, MacIntyre describes how an ideology had developed in Scotland which saw the basic unit of the ‘good’ society as the household of the small-holding farmer - guided from above by definite social, moral and theological principles. Against this tradition stood the new ‘Anglicising liberalism’ of David Hume and Adam Smith, for whom the basic unit of society was the acquisitive individual. The liberals saw land, like everything else, as just a commodity; and the continued existence of the peasantry was seen as obstacle to economic development. After the Civil Wars of the 17th century and the Jacobite rebellions of the 18th, the English bourgeoisie wanted no more arguments about how ‘higher’ principles should govern the ‘natural’ order of society. The time had come to recognize that society had become a mass of competing passions and needs which functioned ‘naturally’ through transactions and exchanges. What was needed was a political and social structure to facilitate trade, protect private property and quell any ‘lawless’ resistance. This structure, Hume claimed, was essentially what had been established by ‘Dutch William’s’ Glorious Revolution of 1688.
Labour and Value
Hume’s notion of the ‘acquisitive individual’ underpinned Kant’s concept of ‘unsocial sociability’ as well as the political economists’ Labour Theory of Value (LTV). The basis of the LTV was that the price of a commodity, representing its exchange value, was based on the toil of making it or the toil saved by having it. In Adam Smith’s development of the theory, the ‘natural price’ of the commodity was what was sufficient ‘to pay the rent of the land, the wages of the labour, and the profits of the stock employed in raising, preparing, and bringing it to market.’ William Godwin argued that the LTV essentially meant that labour and wealth were the same thing. Like Smith, Godwin counterposed the ‘natural’ individual to the institutions of society, but whereas Smith argued that church and state should be persuaded not to hinder economic freedom progress, Godwin saw these institutions as enemies of morality and freedom to be got rid of as soon as possible. Godwin, the first Aristotelian anarchist, called for social and economic reforms which would be subservient to the ‘final destination’ (telos) of society. He recognised that the ‘proximate ends’ – of material returns and economic stability – might help to bring the end to fruition, but he insisted that they were not ends in themselves.
Malthus led the counter-attack on Godwin’s assertion of the claims of political philosophy against political economy. For Malthus, the most serious obstacle to progress and morality was not institutions but ‘human nature’, which stubbornly refused to accept wage-slavery and destitution as ‘natural’. Whereas Smith and Hume left the question of ‘natural rights’ unclarified, Malthus dismissed it altogether. Malthus predicted that any substantial increase in the population would lead to universal pauperisation, and that Poor Law ‘welfare’ would in time consume all public revenue. He supported the protectionist Corn Laws because he saw prosperous landowners as an ideal market (an ‘effective demand’, in Keynesian terms) for the output of industry (landowners, unlike the workers, being consumers-par-excellence).
Ricardo, whilst accepting Malthus’s theory of population and ‘welfare’, took the opposite view on the Corn Laws. Ricardo predicted that, as more and more land was cultivated to provide food for the ever-growing population, the cost of production on the least productive farms would provide the price-norm for the whole of agriculture. The landlord class would profit more and more from the ever-rising price of food and rent for land; and in the absence of free-trade, this class might monopolise the wealth of society to such an extent that the capitalists would find themselves starved of investment and the system might wind down into a ‘stationary state.’
Ricardo argued that wages should never exceed the level necessary to ‘reproduce’ the ‘class of labourers’. He did however recognise an historical aspect to the concept of ‘subsistence’ i.e. that the provisions for reproducing the ‘class’ might need to be more ‘generous’ for succeeding generations. Ricardo’s major work, On the Principles of Political Economy and Taxation, appeared in 1817, a time of hunger, industrial crisis and revolt. In 1820 he argued (though not publicly) that that workers should be allowed to vote, for that way they might be persuaded to vote for the abolition of the Poor Laws and the Corn Laws by workers’ leaders schooled in the LTV. Ricardo’s views were not welcomed by the ‘law and order’ party in England. According to Marx, in 'Theories of Surplus Value':
‘Closely bound up with [h]is scientific merit is the fact that Ricardo exposes and describes the economic contradiction between the classes—as shown by the intrinsic relations—and that consequently political economy perceives, discovers the root of the historical struggle and development’.
Ricardo and Marx
According to Ricardo, the exchangeable value of a commodity depends on the relative quantity of labour contained in its production process – a theory which is often identified with Marxism minus the socialist ‘conclusions’. This ‘identity’ is however, a myth. Marx argues that although political economy was ‘scientific’ in its ‘analytical’ method - of proceeding from the phenomenal forms of value to their essence (labour) - it had failed to hold the abstracted essence to account for the concrete forms it assumes in the ‘real’ world. Marx says, in criticising Feuerbach’s approach to the history of religion, that it is one thing to discover the ‘earthly kernel of the misty creations of religion’ by analysis of its ‘apotheosized’ forms but something else to develop these forms from the ‘actual given relations of life’. The former method (Feuerbach’s) is ‘easier’, but it is latter (Marx’s method to be developed in ‘Capital’) that is truly ‘scientific’.
In Ricardo’s theory of ‘relative value’ his labour values were expressed quantitively, and therefore, in their role as commodities-in-relation-to other-commodities, fell back to being representations of exchange-values.
For Ricardo, the surplus value obtained in the process of production was too ‘obvious’ to be investigated i.e. it was just a fact of ‘natural productivity’ that the process resulted in a commodity more valuable than the inputted labour-time. Whereas Ricardo assumed that the length of the working day was fixed, Marx argues that the objectivity of struggles by workers to limit the working day and ‘control’ the machinery and conditions of work gave these struggles a scientific content. Against the fight for the Ten-Hour Day, political economy met its limit. Marx thus takes a class position in splitting surplus value into absolute surplus-value (produced by lengthening the working day) and relative surplus-value (produced by making labour an appendage to machinery and thus lessening the labour-time necessary to produce the commodity).
Ali Shamsavari says that Marx’s critique turns on the fact that political economy had ‘never succeeded… in discovering the form of value which in fact turns value into exchange value’.[4] Marx, in discovering the qualitative relation in the value-form, not only refutes Ricardo, as the leading ideologist of the bourgeoisie, but also those who drew socialist conclusions from Ricardo’s premises. Whereas Ricardo saw money as the ‘medium’ of exchange, the Ricardian socialist, John Gray, imagined that it would be easy to replace money with ‘time-chits’ measured by labour-time, which could be used to buy commodities whose values would be likewise measured by the labour-time. The problem with this, in Marx’s view, was that Ricardians assumed there was no conflict between the private labour of the workers and social labour under the rule of capital. Marx says that if it is seen as necessary to transform labours and products into exchange-values then this view has come about because ‘individuals now produce only for society and in society’ and because ‘production is not directly social, is not the “offspring of association”, which distributes labour internally.’ [Grundrisse 158-9]
Whether Ricardian or not, in the notions of honourably-intentioned ‘anti-Globalisation’ campaigners today there is a similar underlying assumption of identity between ‘private’ associated labour and the social labour of the world economy. The scheme to put ‘Fair Trade’ labels on products manufactured by co-operatives or ‘eco-friendly’ companies in the Third World is an example of this. When the goods are put on sale alongside similar ‘unfair’ products, which are made according to socially-necessary labour time and sell for less, the challenge to the law of value is reduced to the subjective ‘generosity’ of the consumers.
Judging by Adan’s account, it seems that post-Godwinian reformist anarchists tend to see in Marx’s Capital an unfortunate ‘deviation’ from the LTV which seems to rule out ‘co-operative enterprise’. Similarly, Bookchin sees in Marx a denigration of the category of use-value, which the Utopian socialists, such as Fourier, counterposed to exchange-value through the ‘force of association’. The reformist anarchists, rather than beginning from the standpoint of the already existing struggle between the enforced co-operation of capital and labour at the point of production, situate the LTV in the struggle ‘to rescue the market from monopolistic intervention’.
Intrinsic Value
The present pace of capitalist globalisation gives a new urgency to assessing the relevance of Marx’s three Volumes of Capital to present-day struggles and the debate on possible alternatives to capitalism. All of the important critiques of Marx’s Capital are based on the supposed errors of Marx’s ‘Value’ theory. In 'Marx’s Concept of Intrinsic Value' [5] Andrew Kliman begins with a section on ‘Common Misconceptions’, which quotes Schumpeter:
‘Marx’s theory of value is the Ricardian view… He was under the same delusion as Aristotle, viz, that value, though a factor in the determination of relative prices, is yet different from, and exists independently of, relative prices or exchange relations. The proposition that the value of a commodity is the amount of labour embodied in it can hardly mean anything else.’
Schumpeter does recognize that Ricardo’s ‘absolute’ values really only functioned as ‘exchange values or relative prices’, whereas for Marx ‘values’ exist independently of exchange values. Schumpeter says that if we could accept Marx’s differentiation, much of his theory would become meaningful and tenable. ‘Of course’, he says, ‘we cannot’. But what if we can?
Marx, in Kliman’s account, is indeed investigating exchange value as ‘the mode of expression, the “form of appearance,” of a content distinguishable from it’. Kliman describes how Marx, in his Notebooks of 1861-3, begins to argue for the first time that since two commodities of differing materiality are qualitatively equal as exchangeable objects, then they must share a common property of substance: a ‘third thing’, which belongs to each commodity as its ‘intrinsic value’. Although, as use-values, commodities appear as independent, their exchange value is the relative expression of the social labour time that is their substance. Kliman contends that in the opening pages of Capital, Marx, rather than offering a theory of exchange ratios based on relative quantities of labour, aims ‘to break from the conception of value as a ratio in exchange’. Rather than a ‘Labour Theory of Value’, Marx’s is a ‘Value Theory of Labour’. Value, Kliman argues, is ‘an intrinsic property of the commodity itself’; whereas exchange-value is, as Marx says, ‘the mere form of appearance’, not its ‘proper content’. Whilst it is true that the common property of commodities is that they are ‘useful’ (at least in some sense) and are ‘products of labour’, this labour, as labour-power, in finding its expression in value, ‘no longer possesses the same characteristics as when it is the creator of use-values’. What remains from the commonality of use-values, is, according to Marx, only a ‘residue’, a mere abstraction.
Values and Prices
Critics of Marx have spent much time on the ‘problem’ of Marx’s controversial ‘transformation’ of values into production prices. The problem is seen as inherited from Ricardo’s theory of profit. Ricardo saw that competition between capitals leads to uniformity of the rate of exploitation of labour; and that prices tend to equal costs of production plus an average profit, rather than surplus labour-time values. Marx argues that, given labour-time measured as exchange ratios, the equilibrium of profitability must be undermined if firms employing the same amounts of wages for labour (the variable capital of living labour, the only source of new value) have to input different amounts of fixed and circulating capital (constant capital: embodied past labour, which produces no new value). In such a state of disequilibrium, firms with smaller profit rates will be starved of investment and forced either to adopt different lines of production or go under. Marx does not however dispute that values and prices diverge; he says that they must diverge in the total process of production, circulation and accumulation – otherwise accumulation would be impossible. Whilst Marx sees no reason to demonstrate the necessity of equilibrium of profit rates amongst different technical compositions of constant and variable capital, he does - employing the ‘power of abstraction’ - show how such an equilibrium might come about. If different enterprises of different organic compositions of capital are owned by the same capitalist, or a like-minded group of capitalists, acting ‘en bloc, as totality… What we have to deal with is the collective capitalist, the total capital appears as the share capital of all the individual capitalists together.’ This insight is concretised by Raya Dunayevskaya’s 1943 critique of the Stalinist claim that Russia had overcome the ‘law of capitalism: the average rate of profit’ because capital was distributed according to the state plan rather than being allowed to flow to the most profitable industries. Dunayevskaya argues that this ‘different’ method of distributing profit is simply another way of extracting surplus-value from the workers through social-capital: the very source, not of equilibrium but of class conflict. [6]
The Temporal Single-System Interpretation
Theorists of the ‘transformation problem’ attempt to ‘make sense’ of Marx’s Capital Vol. III by splitting his formulations into separate - value-based and price-based – ‘systems’. Kliman, arguing against this dualistic approach, claims that Marx’s account of value-price transformation and analysis of surplus-value and profit ‘can be understood in a manner that renders them internally consistent’ in the ‘temporal single-system interpretation’ (TSSI) - which Kliman adheres to along with Carchedi, Freeman, Ernst and others.
TSSI represents a counter-attack to the sustained critique of Marx’s law of the tendential fall in the rate of profit (TFRP) from a succession of critics since the end of the 19th century. For neo-Ricardian critics of Marx, the ‘natural productivity’ of labour, working ‘in harmony’ with technology, is enough to stave off the TFRP. Okishio formulates a simple crisis-free economy in which use-values are measured as physical entities with money playing no role in the process: grain is the only commodity, the only means of production, the only wage paid to workers and the only commodity consumed by the capitalists. Proceeding from this very simple model, Okishio argues that even in more complex economies, there is no need to depart from a ‘physicalist’ model. In challenging Marx’s location of the TFRP in mechanisation, Okishio tries to show that capitalists tend not to adopt any techniques that will depress profits; rather, he argues, the TFRP is rooted in wage-levels which undermine the technology-driven ‘productivity’. Significantly, Okishio’s crisis-free models do not allow for the temporal factor of changes in prices. [7]
Kliman sees this ‘simultaneist’ approach to input and output prices as a crucial error, which he attempts to further expose in his critique of Dmitriev, another physicalist. Dmitriev imagines a production process of commodities by machines in which profit comes about without any living labour taking part in the process. Although this might seem to be sci-fi, the point is that even when Dmitriev moves on to more complex ‘models’ of multi-commodity economies in which workers as well as machines are employed, he still sees no need to implicate ‘value’ in a relationship with labour-time; when everything in the production process can be measured ‘physically’, there is no need for the alleged ‘metaphysics’ of Value Theory. Kliman, in 'A Physicalist Approach to, and Critique of, Marx: A Conceptual History' [8], considers Dmitriev’s model of a factory of 10 machines producing 11 replicas of themselves over their one-year ‘life’-span. With no value added by living labour, the profit rate of 10 machines producing 11 of the same is 10 per cent. Kliman points out that whereas Dmitriev values inputs and outputs simultaneously, Marx’s analysis in Capital implies that over the year, the price will fall, and with no living labour to add to value, profit will be zero. Whilst Dmitriev’s ‘simultaneous’ model is justified within its own theoretical terms, Marx’s approach seems to resonate in the ‘real’ world: anyone who owns a car or a personal computer knows that the machine bought today will be worth less tomorrow, as will the plant that produced it.
Kliman allows that although productivity affects profit negatively, it can also have a positive effect on profit: by driving down prices of the means of production and thus promoting potential profit. However, as Dunayevskaya says of the TFRP, because of the constant revolutions in new techniques that reduce the time necessary to reproduce a product, ‘there comes a time when all commodities … have been “overpaid”. The crisis… follows.’[9] Value as ‘self-moving substance’ suffers interruptions due to ‘revolutions in value’: technological development causes the destruction of already existing sums of value advanced by individual capitals, which cannot meet the changing conditions. What is truly independent is not the capitalist, but value – autonomised, circulating and self-expanding.
Marx’s critics, who interpret his analysis of the transformation of the product of labour into a commodity as an argument for a labour theory of exchange ratios, thus conflate value with use-value and fail to see the nature of commodity production itself as source of contradiction. As empiricists, they are more concerned with quantitatively determining how things behave rather than (as was Aristotle) with what things are. To know the nature of the ‘commodity itself’, Kliman says, is to know that it is a ‘value in addition to a use-value, an artifact which exists only in a specific kind of society’. In Marx’s words (to Adolph Wagner), ‘neither “value”, or “exchange value” are my subjects, but the “commodity”… the simplest social form in which labour is presented in contemporary society.’ Marx thus approaches ‘value’ not from a concept, but from a ‘concretum’, the commodity. Kliman, in Marx’s Concept of Intrinsic Value, points out that at the same time Marx appropriates Hegel’s concept of the ‘concrete totality’: for both of them, ‘that which is concrete is a unity of diverse elements’. The empiricists and positivists, demanding firm ground for ‘solid’ scientific analysis, fail to see that ‘Marx was thus laying the ground for his subsequent analysis of capitalism’s contradictions’.
In political economy, although value in exchange is clearly a social activity, it is equally an ‘object-object relationship’. Kliman concludes that in ‘getting behind’ this fetishized relationship Marx reveals ‘the relationship of the individual product to its producer. The enquiry into value has thus shifted … to one that refers to a subject-object relation… an alienated one’, in which the labour the worker expends in producing the commodity ‘can take on an autonomous form’. Ricardo, on the other hand, had conceived the labour-value relationship as causal and therefore external to each other:
‘The subject matter remained always the relations among the commodities themselves. Conversely, by clearly distinguishing between value and exchange value, Marx in effect created a category that expressed an internal relation between labour and value, worker to product.’
If capitalist production is, as Marx puts it, ‘the rule of things over man… the inversion of subject into object and vice versa’, then the concept of ‘value, i.e. the past labour that dominates living labour’ does, as Kliman claims, take on ‘a much greater meaning’.
In the 'Critique of the Gotha Programme', Marx conceives of an immediate post-revolutionary change, in which the worker would be paid according to the amount of work s/he does: for the ‘same amount of work… given to society in one form, he receives back in another’. The ‘revolution’ would have to overturn the relationships in the factory, in which, as Marx puts it in the Grundrisse,
‘the association of the workers... is not posited by them but by capital. Their combination is not their being, but rather the being of capital. To the individual worker it appears fortuitous. He relates to his own association with other workers and to his co-operation with them as alien, as to modes of operation of capital.’ [p505]
Any ‘anti-capitalist’ revolution worthy of the name would have to break with the totalising and all-consuming ‘logic’ of capital from day one of any revolutionary transformation. In ‘teleological’ terms, the first stage of a post-value-producing society - proximate aims - would have to contain the higher goal of breaking down the division between mental and manual labour – the ‘final’ destination.
1 Alisdair MacIntyre, Whose Justice? Which Rationality? (1988),
2 Murray Bookchin, The Ecology of Freedom (1982),
3 Jose Perez Adan, Reformist Anarchism 1800-1936 (on William Godwin, Josiah Warren, Stephen P. Andrews, Benjamin Tucker, Eric Gill and Herbert Read), 1992
4 Ali Shamsavari, Dialectics and Social Theory: The Logic of Capital, (1991)
5 Andrew Kliman, Marx’s Concept of Intrinsic Value – On the unity of value, fetishism and the analysis of capitalist production in Capital (2003)
6 ‘The Nature of the Russian Economy’, The Marxist-Humanist Theory of State-Capitalism: selected writings by Raya Dunayevskaya
7 Andrew Kliman, ‘Marx’s law of the falling tate of profit today’, in Explorations in Dialectical and Critical Theory, Ed. News and Letters (2002).
8 Paper presented at the International Working Group on Value Theory symposium at the University of Greenwich, 29 June, 2000
9 "State-Capitalism and Marxism", written in 1947. Available at:
http://www.marxists.org/archive/dunayevskaya/works/1947/decline-profit.htm
THE HOBGOBLIN NO.6 2005