Guilford Press

Value Theory and Dialectics

Author(s): Tony Smith
Source: Science & Society, Vol. 62, No. 3, Dialectics: The New Frontier (Fall, 1998), pp. 460-
470
Published by: Guilford Press
Stable URL: https://www.jstor.org/stable/40403736
Accessed: 10-12-2018 15:20 UTC

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide
range of content in a trusted digital archive. We use information technology and tools to increase productivity and
facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at
https://about.jstor.org/terms

Guilford Press is collaborating with JSTOR to digitize, preserve and extend access to Science
& Society

This content downloaded from 197.91.135.130 on Mon, 10 Dec 2018 15:20:11 UTC
All use subject to https://about.jstor.org/terms
 Science & Society, Vol. 62, No. 3, Fall 1998, 460-470

Value Theory and Dialectics

TONY SMITH

ABSTRACT: If Capital is read as a work in systematic dialectics,

early and later stages of the work do not relate externally as model
and concrete reality. Both are instead different conceptualiza-
tions of the same totality. On this reading standard objections to
the so-called "transformation problem'* dissipate. An apprecia-
tion of dialectics also enables a deeper comprehension of Marx's
key notions of "value" and "abstract labor."

PAPER BEGINS WITH A BRIEF SKETCH of the "received

view" of the methodology and logical structure of Marx'
theory of value. This interpretation rests on a number of
sumptions that prove doubtful if we take seriously Marx's own adm
sion of an intellectual debt to Hegel. If Capital is read as a system
dialectical theory, the main criticisms of Marx's value theory lose t
force, and our understanding of such key terms as "value" and
stract labor" is enriched.

The "Received View" of Marx's Value Theory

Most critics and defenders of Marx have interpreted his theory

of value as follows. The law of value formulated at the beginning of
Capital holds that commodities exchanging in the market in equilib-
rium contain the same quantity of socially necessary abstract labor.
Marx himself, however, admitted in Volume HI that commodities
produced by capitalist firms with different organic compositions of
capital {i.e., different ratios of investment in means of production and
labor power) and different turnover times will tend to have relative

460

This content downloaded from 197.91.135.130 on Mon, 10 Dec 2018 15:20:11 UTC
All use subject to https://about.jstor.org/terms
 VALUE THEORY 461

prices that are not proportio

commodities, due to competi
rates of profit to equalize acro
ning of Capital is not intend
plexity and concreteness.
At this point most interpret
hold that the beginning of Ca
period immediately prior to
commodity production." In t
edly owned their own means
put to market, exchanging
embodied labor times. Later
tions of later historical period
forms the process of produ
This reading has a long trad
to Engels. Nonetheless, it must
historical" approach is not con
cept that "it would be unfeas
egories follow one another is t
were historically decisive" (M
Marx's own account of the rise
in which enclosures forced ser
ing through a stage of indep
A second strategy, which I s
terpret simple commodity pro
as a historical epoch. On this r
the specifically capitalist aspect
a simplified model of exchan
ducers. From this perspective
corollary" (LTC) are tendency

Marx's LV really says, "All else

rium have equal value." The LTC
change in equilibrium contain e
(Arnold, 1990, 79.)

These tendencies are asserte

that they are necessary condit
economic regime over time.

This content downloaded from 197.91.135.130 on Mon, 10 Dec 2018 15:20:11 UTC
All use subject to https://about.jstor.org/terms
462 SCIENCE àf SOCIETY

In this interpretation the capital

abstracted in the construction of t
model are brought into play in Vo
ducers bringing commodities to m
and are capable of shifting investm
Rates of profit now tend to equalize
if commodities exchange accordin
ied labor time. Values thus must be
asserted nonetheless that values ultim
ings of capitalism in that the sum to
of prices, and the sum total of sur
profits.
The defenders of Marx who accept the received view hold that
his arguments for the above theses are compelling. The critics of Marx
deny this for a variety of reasons, two of which will be mentioned here
and discussed briefly below: First, the quantitative identities Marx
attempted to prove between values/surplus values and prices/prof-
its do not generally hold. And second, even if these identities could
be established, the LTV would still be redundant; a fully adequate
theory of prices and profits can be developed without going through
the detour of a consideration of value magnitudes (Steedman, 1977).
This debate is known as "the transformation problem."

An Alternative Perspective: Marx's Theory of Value as a Systematic

Dialectical Theory

In this section I will examine three assumptions in the interpre-

tation just presented. They concern the relationship between the start-
ing point of Capital and the remainder of the theory, the nature of
"value," and the status of the category "abstract labor."
1. It is certainly the case that Capital is a work in which abstract
and simple levels of analysis are contrasted with levels that are
concrete and complex. Defenders of the received view sketched
above assume that these levels are related as ideal types to sets of
real phenomena.
2. All theory construction presupposes certain ontological com-
mitments. The world described by the received view consists of indi-
viduals (economic agents, commodities); their properties, both in-
ternal (the capacity to perform labor, the use-value characteristics of

This content downloaded from 197.91.135.130 on Mon, 10 Dec 2018 15:20:11 UTC
All use subject to https://about.jstor.org/terms
 VALUE THEORY 463

commodities) and relational {d

erty owners, the exchange-va
performed by/with/on indiv
ployed in the account, these ter
to refer to sets of individuals,
shorthand way to refer to the
"Value" is a universal term. To what does it refer? In the received
view the term refers to an internal property possessed by individual
commodities, the property of having such-and-such an amount of
socially necessary labor time "embodied" in them.
3. On the received view Marx thought that in societies of gener-
alized commodity exchange the socially necessary labor time embod-
ied in products regulates exchanges. In order to calculate socially
necessary labor time it is necessary to abstract from qualitative differ-
ences among various types of labor, and reduce them all to common
units of simple labor, that is, units of physiological exertion. Through-
out history physiological exertion has been required to produce goods
and services. Marx's concept of "abstract labor" is thus a transhistorical
concept in this reading, although the concept could not be explic-
itly formulated prior to the formal equality of all labors instituted in
commodity society.
What are we to make of these presuppositions? A clue is found
in Marx's comment, "I leafed through Hegel's Logic again and found
much to assist me in the method of analysis" (Marx and Engels, 1983,
50). If Hegel's dialectical logic did indeed play a role in Marx's
method, all three of the crucial assumptions of the received view
must be rejected.

1. The use of ideal types to explain features of the actual world is

legitimate in principle. But Hegel developed an alternative approach
to social theory in which the relationship between simple/abstract
and complex/concrete theoretical levels is quite different.
In the received view the relationship between the abstract model
of simple commodity production and the concrete capitalist economy
is external: there is simply no way to derive capitalist competition in
all its complexity from an ideal model of simple commodity produc-
tion constructed to allow stable reproduction from cycle to cycle. A
theoretical jump must be made from the one to the other that can
only be justified by reasons external to the model itself. In Hegelian

This content downloaded from 197.91.135.130 on Mon, 10 Dec 2018 15:20:11 UTC
All use subject to https://about.jstor.org/terms
464 SCIENCE àf SOCIETY

social theory, in contrast, the relatio

cal stages is internal: in the early sta
is considered abstractly, while on l
sidered concretely.1 Marx confirmed
atic reconstruction in thought of
is concrete because it is a combinat
unity of diverse elements. In our t
process of synthesis, as a result, and
it is the real starting-point and, th
observation and conception" (Marx
There are, I believe, eight main st
of Capital, each of which conceptua
order in a particular manner. On
plored, the most significant of wh
1) M - C - Mf, interpreted as the
tal from the initial money invested
exchange of commodities (C), to m
2) The M - C - P - C - M1 circuit
plus value - that is, how M1 can e
duction process (P) whereby comm
to commodity outputs (C) (wage la
coercion; exploitation; absolute and
real subsumption; accumulation) .
3) The unity-in-difference of cir
beginning and ending with money
P), and with commodity outputs (
tion, turnover time, etc.).

1 "(T)he original abstract concept [of the tota

It merely becomes continually richer in itself.
cept [that is, the dialectical ordering of cate
trary, its final determination coincides with it
2 On this reading the beginning category of t
categorial level. Prior to the introduction of
the constitutive elements of this circuit, "C"
amination, however, the total social capital is
by the role of socially average productivity in
commodities. The crucial transitions from the
and, later, to the money form, also depend u
the logical structure of Capital there is thus
duction, understood either as a historical per

This content downloaded from 197.91.135.130 on Mon, 10 Dec 2018 15:20:11 UTC
All use subject to https://about.jstor.org/terms
 VALUE THEORY 465

4) The disaggregation of th
producing means of product
consumption, and the exchan
stable reproduction of the ca
and expanded reproduction
5) The disaggregation of th
tors (cost prices; prices of p
6) The disaggregation of
units of capital competing f
see Smith, 1998).
7) The unity-in-difference
tal (merchant capital, finan
8) The unity-in-difference
ferential rents).
I believe it could be easily s
above relates to any of the o
type to a concrete reality. Eac
"capitalism as such," underta
relations (between capital an
ing that whole.3 The different
levels abstract from feature
examined in later stages of t
I believe it can be shown th
the received view lose their fo
systematic dialectics. While th
fully, some very compressed r
at the conclusion of the prev
If Capital is read as a dialecti
and abstract categorizations
complex and concrete catego
problem" must be dismisse
"problem" arose due to allege
on different levels of Marx'
sum of values/surplus value
divergences cannot arise, giv

3 An illuminating discussion of the role

ing is found in Oilman, 1993.

This content downloaded from 197.91.135.130 on Mon, 10 Dec 2018 15:20:11 UTC
All use subject to https://about.jstor.org/terms
466 SCIENCE àf SOCIETY

cal structure of Marx's theory. Th

tal the aggregate magnitudes rem
fined in stage one are the same "
and concrete stages.4
Neither is any of the eight stages
succeeding level brings to light fe
explicit on previous levels. For exam
ment in the economy, the "M" in M
First it is defined as investment cap
of commodities needed for the p
duction and labor power. Later we d
total social capital to go through th
crucial importance to the accumu
means of production and labor p
occur alongside investments in th
following stages of the theory th
capital into two divisions, a pluralit
vidual units of capital allow us to
crete and complex ways, as do sub
cover that a certain portion of th
the economy as a whole is devoted t
financial sectors. The elaboration o
increasingly complex, even as it
redundant.
In a similar fashion as the theory progresses we learn more and
more about the aggregate "C" that in the initial formula M - C - M'
was left indeterminate. We discover step-by-step the range of com-
modities that can serve as inputs to or outputs of the production
process, and the roles played by these commodities in the reproduc-
tion of class relations. Likewise, by the conclusion of Volume III we
have come to comprehend the process whereby portions of AM, the
difference between M' and M that defines the total surplus value gen-
erated in the economy, are appropriated by capitals that did not them-
selves play a direct part in its production, a topic that could not arise
when capitalism was conceptualized in a simple and abstract fashion.
Here too no stage is redundant.

4 This assertion is established mathematically for the relation between stage two and stage
six in Moseley (1993), a work that has greatly influenced my thinking about the structure
of Capital.

This content downloaded from 197.91.135.130 on Mon, 10 Dec 2018 15:20:11 UTC
All use subject to https://about.jstor.org/terms
 VALUE THEORY 467

2. We have just seen that there

of dialectical method helps us
Marx's theory of value. Hegelia
ing exactly what Marx meant
For advocates of the received
refers to a special property of
such and such an amount of "embodied" abstract labor. This is all
that value can be if our ontology is limited to individuals and their
properties and relations. For Hegel, however, the world is a more com-
plex place than this. In material reality there are systematic intercon-
nections that unite different elements within complex and dynamic
wholes. Such wholes cannot be adequately understood in terms of
their individual moments taken separately and in external relations
to each other (Oilman, 1971 ) . The unity of complex wholes is as much
an ontological reality as the particular moments unified. And so Hegel
introduced the notion of a "concrete universal" to capture the prin-
ciple of unity underlying the material complexity of dynamic wholes.
There is a sense in which "value" is indeed a property of different
commodities for Marx. But "value" is also a concrete universal that
unites the different moments of the valorization process into the com-
plex totality that is capitalism. The following passage, in which Marx
discusses the relation between "value" and the elements of the first
depiction of capital, M - C - M1, simply cannot be read in terms of the
received view. The echoes of Hegel are clear and unmistakable:

In the circulation M - C - M both the money and commodity function only

as different modes of existence of value itself, the money as its general mode
of existence, the commodity as its particular, so to speak, disguised mode.
It is constantly changing from one form into the other, without becoming
lost in this movement; it thus becomes transformed into an autonomous
subject. . . . Value is here the subject of a process in which, while constantly
assuming the form in turn of money and commodities, it changes its own
magnitude, throws off surplus-value from itself considered as original value,
and thus valorizes itself independently. For the movement in the course of
which it adds surplus-value is its own movement, its valorization is therefore
self-valorization. As the dominant subject of this process, in which it alter-
nately assumes and loses the form of money and the form of commodities,
but preserves and expands itself through all these changes, value requires
above all an independent form by means of which its identity with itself may
be asserted. (Marx, 1976, 255.)

This content downloaded from 197.91.135.130 on Mon, 10 Dec 2018 15:20:11 UTC
All use subject to https://about.jstor.org/terms
468 SCIENCE & SOCIETY

As we move to progressively more c

we move to more comprehensive a
versal, subjecting ever more dimens
For Marx, of course, it was not su
concrete universal in Hegel's sens
an alien power could come to lord o
a crucial role in this explanation;
modity and money is based on th
borers within generalized commo
will be introduced in the course of
is a transhistorical category, as imp
value theory.

3. It is certainly not the case that all historically specific theories

are dialectical. Neither is it the case that all dialectical theories avoid
the use of transhistorical concepts.5 Nonetheless, in Hegel's works
of systematic social theory, most notably The Philosophy of Right,
Hegel is quite clear that the goal of this sort of dialectical theory is
to reconstruct the categories defining a specific historical epoch,
as his famous definition of philosophy as "its time apprehended in
thought" illustrates.
If Capital is a work of systematic dialectics, Marx could not have
interpreted the basic categories of his theory of value as transhistorical
terms without contradicting his own theoretical project. The follow-
ing passage is just one of the countless many that suggest Marx did
not make this error:

The value-form of the product of labor is the most abstract, but also the most
universal form of the bourgeois mode of production; by that fact it stamps
the bourgeois mode of production as a particular kind of social production
of a historical and transitory character. If then we make the mistake of treat-
ing it as the eternal natural form of social production, we necessarily over-
look the specificity of the value-form, and consequently of the commodity-
form together with its further developments, the money form, the capital
form, etc. (Marx, 1976, 174.)

5 Hegel attempted to reconstruct a logic of development in world history in his Lectures on

thePhilosophy of History, as did Marx and Engels in The German Ideology and elsewhere. Such
attempts necessarily rely on categories meant to apply across historical epochs.

This content downloaded from 197.91.135.130 on Mon, 10 Dec 2018 15:20:11 UTC
All use subject to https://about.jstor.org/terms
 VALUE THEORY 469

Regarding the notion "abstra

the substance of value and the
is the substance of value, but

Value requires above all an inde

tity with itself may be asserted.
this form. Money therefore form
every valorization process. (Mar

For Marx, "abstract labor" is n

specific features of various ty
notion of "labor in general," m
cal exertion. While Marx did indeed refer to the fact that all labor
can be reduced to commensurable units of physiological exertion,
this ultimately plays a subordinate role in his story.6 "Abstract labor"
in Marx's sense ultimately is abstract because it is labor whose social
worth can only be measured in something that is in itself completely
abstract: money. How can something be explained as bizarre and
perverse as granting money, mere units of counting, such immense
social power? This is the great mystery Marx attempted to unravel at
the beginning of Capital He argued that in a social order in which
labor is undertaken privately and must prove its social necessity in
acts of exchange, the social worth of labor can only be measured in
something external to both labor and its products: money. This is
the defining feature of capitalist market societies alone. Once money
is granted this status, "value" is instituted as an alien universal in

6 "Men do not therefore bring the products of their labor into relation with each other as
values because they see these objects merely as the material integuments of homogeneous
human labor. The reverse is true: by equating their different products to each other in
exchange as values, they equate their different kinds of labor as human labor" ( Capital, I,
166). It must be conceded that Marx's text is unnecessarily confusing here; certain state-
ments, taken out of the overall context of Capital, could be used to support an interpre-
tation in which abstract labor simply is labor considered in terms of commensurable units
of physiological exertion. The root of the problem, I believe, is that Marx initially dis-
cussed the substance of value, and only then turned to the dialectical ordering of the forms
of value. This led him to attempt to deduce labor as the substance of value prior to any
consideration of value forms, a difficult, needless, and misleading endeavor that is much
more likely to result in an abstract understanding of concrete labor than a comprehen-
sion of abstract labor.

This content downloaded from 197.91.135.130 on Mon, 10 Dec 2018 15:20:11 UTC
All use subject to https://about.jstor.org/terms
470 SCIENCE & SOCIETY

Hegel's sense, as every nook and cran

by the imperatives of the self-valo

Department of Philosophy
443 Catt Hall

Iowa State University

Ames, IA 50011

REFERENCES

Arnold, F. Scott. 1990. Marx's Radical Critique of Capitalist Society: A Reconstr

and Critical Evaluation. New York: Oxford University Press.
Hegel, G. W. F. 1969. The Philosophy of Right. New York: Oxford University P
Marx, Karl. 1973. Grundrisse. New York: Vintage Press.

Marx, Karl, and Frederick Engels. 1983. Letters

Moseley, Fred. 1993. "Marx's Logical Method a
Pp. 157-184 in Fred Moseley, ed., Marx's Metho
New Jersey: Humanities Press.
Oilman, Berteli. 1971 . Alienation. Marx's Concept o
Cambridge University Press.

Smith, Tony. 1990. The Logic of Marx's Capital. Albany

Press.

Forthcoming in Readings in Radical Political Philosop

lantic Highlands, New Jersey: Humanities Press.
Steedman, Ian. 1977. Marx After Sraff a. London: New

This content downloaded from 197.91.135.130 on Mon, 10 Dec 2018 15:20:11 UTC
All use subject to https://about.jstor.org/terms