Comments on Value from David Harvey

Some comments that Harvey makes about value in his A Companion to Marx’s Capital, these comments can be found around pages 35-38

• Value is historically specific to the capitalist mode of production

• Value is objective, but immaterial. You can’t directly measure it, it exists in relations between commodities and it needs a means of representation to be expressed. It only only gets expressed in the money form. Measuring value directly in a commodity is like trying to “find gravity in a stone.”

• It isn’t as if value “exists out there” to be finally expressed as money. Instead, both exchange relations and the value structure dialectically depend on each other and create each other.

I am still thinking about Harvey’s comments on the measurability of value. I have some thoughts, which are in no way fleshed out enough to write out about the possibility of measuring value. Essentially, I’m thinking of this along the lines of computation theory and what it may have to say about “computation” occurring in the real world by real systems.

One Last Question About Money and MMT

There’s one last thing I’d like to tie-in with other articles I’ve read, as well as ask readers here. There was a dig at Proudhon in the footnotes and it reminded me of Michael Robert's critique of MMT? The Modern Monetary Trick

Marx mentions that money “crystallizes out of the process of exchange”. Money comes out of commodity exchange and footnote (4) critiques the “craftiness of petit-bourgoise socialism, which wants to perpetuate the production of commodities while simultaneously abolishing the ‘antagonism between money and commodities’.

This reminds me of Michael Robert’s critique of MMT theory, posted above, where he says that MMT “separates money from value, and … fails to recognize the reality of social relations under capitalism…”

A more in-depth quote form the article

MMT differs from Marx’s theory of money in saying that money is not tied to any law of value that drags it into place like “gravity”; instead, it has the freedom to expand and indeed change value itself. Money is the primary causal force on value, not vice versa!

This echoes the ideas of French socialist Pierre Proudhon in the 1840s. He argued that what was wrong with capitalism was the monetary system itself, not the exploitation of labour and the capitalist mode of production. Here is what Marx had to say about Proudhon’s view in his chapter on money in the Grundrisse: “can the existing relations of production and the relations of distribution which correspond to them be revolutionised by a change in the instrument of circulation?” For Marx, “the doctrine that proposes tricks of circulation as a way of, on the one hand, avoiding the violent character of these social changes and on the other, of making these changes appear not to be a presupposition but gradual result of these transformations in circulation” would be a fundamental error and misunderstanding of the reality of capitalism.

In other words, separating money from value, and indeed making money the primary force for change in capitalism, fails to recognise the reality of social relations under capitalism and production for profit. Without a theory of value, MMTers enter a fictitious economic world — one where the state can issue debt and have it converted into credits on the state account by a central bank at will and with no limit or repercussions in the real world of productive capital.

Now I know that MMT is very popular among leftists and our friends in the News Mega. So I may be opening a huge can of worms, but this appeared very interesting and I’d love to hear ideas on Robert’s criticisms if anyone is familiar with them. I am still absorbing it, so I have nothing to add. When reading Marx’s passage about money, I immediately think about how it compares and contrasts to Graeber’s work on debt. So any ideas would help in my understanding.

Money Value, Real Abstraction

More on the thought of money and value, and value being this “real abstraction”. I noted a passage toward the end of the chapter where Marx talks about the requirements a commodity must have in order to function as the universal equivalent. What I thought was interesting is that a money commodity must have similar properties to value in order for money to make the real abstraction. For a commodity to function as the form of appearance of value, it must have a homogenous and uniform quality just like abstract labor.

Only a material whose every sample possesses the same uniform quality can be an adequate form of appearance of value, that is a material embodiment of abstract and therefore equal human labor.

And, just like how the only difference between magnitudes of value is quantitative, not qualitative, money must also be “purely quantitative differentiation… divisible at will, and … possible to assemble it again.” (pg 184)

There is also a discussion where Marx says that the fact that money can be replaced by symbols gives rise to a mistaken notion that money itself is just a symbol.. While at some level, it is true that every commodity is a symbol “since, as value, it is only the material shell of the human labor expended on it”, we must not go too far with this idea else we may err and say that the “social characteristics assumed by material objects” are arbitrary products of human reflection. This, to me, reiterates that money and value represent a real social relation. We can’t say that it is purely a product of human imagination. It has an “objective” reality of sorts by the fact that it is not purely subjective or a product of our thoughts or will. It is a real abstraction, an objective feature of commodity exchange, and is determined by the labor-time required for production of the commodity.

A comment by Shaikh in the article I mentioned above about this abstraction.

It is important to stress here that the abstraction process described above is a real social process. Abstract labor is the property acquired by human labor when it is directed towards the production of commodities, and as such, it exists only in commodity production. The concept of abstract labor is not a mental generalization that we somehow choose to make, but rather the reflection in the thought of a real social property. This in term means that abstract labor, and hence value too, are real.” “Neo-Richardian Economic, A Wealth of Algebra, A Poverty of Theory” pg. 70.

Importance of Money in Making Value Real

Continuing in the vein that @quarrk@hexbear.net was discussing much earlier, it appears there are sections where Marx a points out the importance of money (and hence of exchange) in “making” value. Concrete exchange/money must happen to "complete" the earlier abstraction of abstract value as the source of value. Correct me, here, if I'm misinterpreting what you said earlier.

To the owner of a commodity, every other commodity counts as the particular equivalent of his own commodity… there is in fact no commodity acting as universal equivalent, and the commodities possess no general relative form of value under which they can be equated as values… They can only bring their commodities into relation as values, and therefore as commodities, by bringing them into an opposing relation with some other commodity … the universal equivalent. (pg 180)

And later on page 182-183 (of the Penguin edition)

Commercial intercourse… never takes place unless different kinds of commodities… are exchanged for, and equated as values with, one single further kind of commodity.

This further kind of commodity, is the universal or social equivalent. Which is money, or the money-form.

A question for you nerds: What does Marx mean by money vs the money-form, or value vs the value-form?

From Soviet political economy (Kozlov, and other similar textbooks), they provide the following:

“The social labor embodied in a commodity appears as value,” while “the expression of the value of a commodity by equating it to another commodity is called the form of value.”

And this is where Marx’s earlier discussion (in Chapter 1) gets into the various forms of value: (a) The Accidental Form which contains the relative and equivalent form, (b) The Expanded or Total Form, (c) The General Form, and (d) The Money Form.

The Importance of Exchange, and Use-Values, in Realizing Value, and the Contradiction between Private and Social Labor

In exchange, sellers see no direct use-value in their commodity, else they wouldn’t want to sell it. For sellers, it is the exchange-value of the commodity they hold that matters.

All commodities are non-use-values for their owners, and use-values for their non-owners.

I’m not entirely certain if what follows fits for this chapter, but I’d like to mention some thoughts about the importance of exchange in realizing value, and in the contradiction between private labor and social labor.

Exchange “completes” the loop in recognizing, or not recognizing, private labor as social labor. It is only if the commodity is successfully exchanged, and hence if the commodity has use-value that is socially recognized, that it can be realized as value. Only exchange can prove that the private individual labor was social and counts as abstract labor creating value.

For the labor expended on them only counts in so far as it is expended in a form which is useful for others. However, only the act of exchange can prove whether that labor is useful for others…

My Penguin version of Capital has an introduction written by Ernst Mandel. I thought I’d share his words on importance of use-value in realizing value, and exchange in realizing private labor as social labor:

"... in a society based upon private property and private labor (in which economic decision making is fragmented between thousands of independent firms and millions of independent 'economic agents') social labor cannot immediately be recognized as such... If Mr. Jones has his workers produce 100,000 pairs of shoes a year he knows that people need shoes and buy them... But he has no way to knowing whether the specific 100,000 pairs of shoes he owns will find specific customers... Only after selling his shoes and receiving their equivalent can he say... 'my workers have truly spent socially necessary labor in my factory'. If part of the produced shoes remain unsold, or if they are sold at a loss or at a profit significantly less than the average, this means that part of the labor spend on their production has not been recognized by society as socially necessary labor, has in fact been wasted labor from the point of view of society as a whole... its production has created no value. "

A similar description is given in the Soviet political economy textbook Political Economy: Capitalism - Kozlov (Ed) (1977).

In commodity production based on private property there is a deep internal contradiction between private and social labor. Private ownership … gives [commodity producers’] labor a private character. … At the same time, the social division of labor makes all commodity producers closely interdependent, makes the labor of each of them a part of the aggregate social labor…

While the commodity producer is occupied in making a commodity, the social character of his labour remains unobserved and hidden, but it becomes clear as soon as the products come onto the market. There it is discovered whether or not the labor of a given commodity producer is needed by society and whether or not it will receive social recognition. If the commodity does not find a buyer, that means that the given private labor has not been recognized as part of social labour… (pg 71-72)

Anwar Shaikh also gives his interpretation of exchange “exposing and resolving” the contradictions within production in his paper “Neo-Ricardian Economics: A Wealth of Algebra, a Poverty of Theory”. This starts moving beyond the contents of Chapter 2.

... Marx points to the fundamental contradiction which exists here. On the one hand, each labor process is privately undertaken as if it is independent of all others, with exchange for profit as the goal. On the other hand, this undertaking assumes in advance that other similar labor process will also be there at the right time… Buyers of this product, sellers of the means of production … if it is to be repeated (reproduced).

Each apparently private and independent labor must therefore presuppose a social division of labor.

It is in exchange that the apparent independence of each private labor process collides with the true interdependence inherent in a social division of labor. Exchange is the sphere, as Marx puts it, where the contradictions of commodity production are “both exposed and resolved”.... Exchange is the sphere which the contradiction internal to production itself, the contraction between private labor and the social division of labor, is made visible.

Bearers of Economic Relations

As individuals, buyers and sellers become bearers, carriers, Träger of larger economic relations. Harvey, in his A Compansion to Marx’s Capital (pg. 49-50) takes time to point this out, as does Marx himself in his “Preface to the First Edition” of Capital where he states “individuals are dealt with here only insofar as they the personifications of economic categories, the bearers of particular class-relations and interests.” Individuals come into play in Marx’s political economy in terms of the economic roles they play, and the relation between these roles: buyers and sellers, debtors and creditors, capitalists and workers.