Go

On

the Three Problems of

Abstraction, Reduction and Transformation

In

Marx's Labour Theory of Value

by

Chai-on LEE

for the degree of

Doctor of Philosophy

in Economics

Birkbeck College

University of London ^

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ABSTRACT

We examine the nature of value in a triad context of the substance

of value, the magnitude of value and the form of value. Using

Marx's own methodological rhetoric, we call the three issues,

respectively, abstraction problem, reduction problem and transformation problem.

1 Abstraction problem concerns in what concrete way Marx actually

uses the `power of abstraction' in analysing commodity value. Neither a capitalist production nor a direct exchange is

presupposed, and non-labour products are not excluded from the

category of commodity. It is shown that even in such cases

abstract labour is still the only identical substance, the creator

of commodity value. Once this is admitted, we can explain why heterogeneous and diachronous labours are reducible to homogeneous

and synchronous labours.

2 Reduction problem concerns in what quantitative proportions the

heterogeneous and diachronous labours can be reduced to

homogeneous and synchronous labours. In measuring and determining

labour-values as well as in the operation of the law of value, we distinguish between simple commodity production and capitalist

commodity production, and show that, only in the capitalist

production case, the labour-values are empirically measurable.

3 Transformation problem concerns the quantitative and the

qualitative relationship between value and price of production. We show the two equalities between the sum of values and the sum

of prices and the sum of surplus-values and the sum of profits

obtain even if the input values are retransformed into price of

production terms.

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ACKNOWLEDGEMENT

The exposition of this thesis has been heavily indebted to Dr

Simon Mohun and Dr Chris Arthur. The idea of this thesis has

been originally indebted to my friend, Prof. M. H. KIM, who taught

me the significance of the category of labour when he was a junior, and to my former teacher, Prof. S. H. LEE, who helped me to

realise why Marxian economists were dogmatic and unscientific

when I was doing Msc. I am also personally indebted to Mr A.

Greeman and Mr D. Yaffe for beneficial discussions, and to Prof.

M. Desai for his written comments on my transformation problem. Dr Ben Fine has been doing a supervision on my work. More thanks

to him.

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To My Father

who departed last year February in my absence

and

to many friends of mine in Korea

who rightly have been reproaching my stupidity

for doing a PhD abroad.

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TABLE OF CONTENTS

1. INTRODUCTION page 7

1.1 Marx's Method of Abstraction 10

1.2 Marx's Method in `Capital' 16

1.3 Marx's Method in Labour-Value 23

2. ABSTRACTION PROBLEM 31

2.1 Three Premises in Marx's Abstraction 41

Appendix to 2.1: The Definition of the Commodity 55

2.2 Marx's Process of Abstraction 63

2.2.1 Formal Abstraction 64

2.2.2 Concrete Abstraction 69

2.2.3 Marx's Abstraction 74

2.2.4 Identical Substance 84

2.3 Reality of Abstraction 88

3. REDUCTION PROBLEM 101

3.1 Marxian Approaches to the Reduction Problem ill

3.1.1 Reduction by Money Wages 111

3.1.2 Reduction by Indirect Labours 118

3.1.3 Reduction by Exchange-value 124

3.1.4 Reduction by Social Norms 130

3.1.5 No Reduction with a Heterogeneous Labour

Theory of Value 135

Appendix to 3.1: Rubin' s Labour Theory of Value 140

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3.2 The Determination of the Magnitude of Value page 150

3.2.1 Simple Commodity Production Case 151

3.2.2 Capitalist Commodity Production Case 157

3.2.3 Indirect Labour and Direct Labour 161

3.3 The Value of Labour-Power 170

4. TRANSFORMATION PROBLEM 175

4.1 Problems to he Raised 182

4.2 Propositions for a Proper Value Concept 190

4.3 Critiques of the `Rectifications' 207

5. SUMMARY AND CONCLUSION 224

* REFERENCES * 230

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1. INTRODUCTION

The intent of this thesis is a critique of the existing Marxian labour-

theories of value as well as an anti-critique of the existing anti-

Marxian criticisms. The `critique', however, is not simply a negation

or a rejection of others but is establishing positive theses.

The word `critique', here, is to be taken in the Marxian sense.

Its intention is neither to discover fundamental faults in others'

methodology nor to point out the utter fallacy of several theoretical

theses that others have regarded as evident truths. As is known, Marx

gave his Capital the sub-title "A Critique of Political Economy". He

criticised contemporary political economy in such a way that, while

taking over some of its results, he created something new in the place

of the whole. He did not simply reveal the mistakes of others; his aim

was not primarily a negation of foreign theses but a positive, more

correct and complete solution of some problems raised by his

predecessors, and of a number of others that had never been raised

before.

Looking back upon the past value debates, however, Marxian

economists have more or less failed in providing such a criticism,

especially when dealing with anti-Marxian criticisms. Most of them have

usually contented themselves with pointing out that the criticisms had

started from the misconceptions of Marx when dealing with the question

and, therefore, the criticisms could not have been right. But they

themselves failed to present the right conception (or at least generally

agreed conception) of Marx even within the Marxian camp.

In the first place, a criticism telling us that the basic

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concepts of an author are utterly wrong and therefore also his

conclusions must be wrong, is not even logically cogent. After all,

although it was an evidently wrong, upside-down concept of truth to say

that the Sun and the moon rotate daily-around the Earth, such a

misinterpretation of reality did not prevent the best astronomers of

antiquity from computing the exact time of solar and lunar eclipses in

advance on the basis of false appearances which, however, reflected real

relations. This was not a matter of a lucky guess, but genuine

foresight that could be regarded as scientific at contemporary

standards. It was possible because the laws of appearance reflect the

laws of reality: he who knows the former also knows some aspects of the

laws of reality'even if he was mistaken regarding the true contents of

the latter. Of course his logical conclusions may lead to utterly

incorrect end results; but these results must be judged on the basis of

a genuinely scientific examination of the case rather than from the

point of view of an a priori rejection and/or negation. The present

thesis in view of this would not concentrate on negating anti-Marxian

and Marxian criticisms as fundamentally wrong. Instead of negations and

rejections, we concentrate our discussion on presenting positive theses.

We present Marx's value theory in a triad context of the

`substance' of value, the `magnitude' of value and the `form' of value.

Most discussions in value debates have been focussed on these issues

separately. It will be seen in this thesis that without the first issue

resolved, the second issue is never to be settled, and without the

second resolved, the third is never to be settled.

In the first issue, we examine concretely point by point how

Marx actually uses his `power of abstraction' in analysing commodity

values. In such an examination, we show it is for the sake of his

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theoretical consistency that non-labour products should not he excluded

from the category of commodity and neither direct exchange nor

capitalist production should be presupposed. We show even in such

cases, abstract labour is still the only identical substance, the only

creator of commodity values.

In the second issue, we discuss how to measure the socially

necessary labour-tome in determining the magnitude of value. Previous

debates on this question have always remained definitional; the amount

of homogeneous labour is by definition the magnitude of value and yet

the Marxian economists calculate the magnitude of value from the premise

that every labour unit is homogeneous as presented in Morishima (1973, 1975 i' 76ab Iq')?

1974,1978), Brody (1974), Steedman (1Q T5'1 76

etc. ). This

reduces the theoretical problem of the magnitude of value to a simply

arithmetical and technical problem. In our discussion of the magnitude

of value, however, the homogeneity of labour, since its amount is by

definition the magnitude of value, is itself at issue. We question from

the outset why heterogeneous and diachronous labours are reducible to

homogeneous and synchronous labour, and why it is legitimate to term the

heterogeneous labours in terms of the skill and the complexity of

labour. These questions have been missing in the previous discussions

on Marx's reduction problem of skilled, complex to unskilled, simple

labour, except in Tortajada (1977). In measuring and determining the

magnitude of value as well as in explaining the operation of the law of

value, we distinguish between simple commodity production and capitalist

commodity production and show why the labour-values are empirically

measurable only in the capitalist production case.

In the third issue, lastly, we develop further the distinction

between the simple commodity production and the capitalist commodity

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1

production in the distinction between value and price of production. We

agree with the modern criticisms in Samuelson (1982), Steedman (1979),

etc. that there is a certain inconsistency in the Marxian rectifications

of the original transformation procedure, but argue that Marx's original

two equalities between the sum of prices and the sum of values, and the

sum of profits and the sum of surplus-values, may well hold even after

the input values are retransformed into the same price of production

terms as output values. In verifying this argument, we criticise the

conventional misconceptions of the relationship between value and price

of production and suggest a drastic change of the labour-value concept.

Using Marx's own methodological rhetoric, we titled the three

chapters which deals with the above three issues, respectively,

abstraction problem, reduction problem and transformation problem. The

logical and the theoretical relationship of the three problems to Marx's

own method needs some explanation before the three issues are discussed,

and yet, in the first place, Marx's method of abstraction in general

needs our explanation before anything else.

This introductory chapter consists of three sections. In the

first section, in 1.1,. we examine Marx's method of abstraction in

general and criticise previous Marxian misconceptions of it. In the

second section, in 1.2, we present our own interpretation of Marx's

abstraction method. In the third section, in 1.3, lastly, we delineate

the relationship of the three problems of abstraction, reduction and

transformation, to Marx's abstraction method.

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1.1 Marx's Method of Abstraction; Marxian interpretations.

It has become a commonplace to repeat that Marx's economic theory was

the outcome of a dialectical process which advanced from the abstract to

the concrete. About what constitutes the abstract, however, there has

been a certain disagreement within the Marxist group. Broadly speaking,

the abstract has been interpreted in two distinct ways, one is a

`selective' abstraction (or a `successive approximation'), the other is

a `universal' abstraction (or a `pure theory' of capitalism). The one

is primarily found in western Marxism and the other in the Japanese

Marxist (Unoist) group1.

To begin with, in the western Marxist group of Sweezy (1970),

a Meek (1973), Mandel (1972), Colletti (1973), Carver (1975,1980), etc.,

Marx's abstraction has been thought of as a `selective' (or a

`successive approximation') method which isolates certain aspects of the

real world for intensive investigation and provisionally assumes others

away, to be reintroduced, one at a time, only at a later stage of the

analysis. This method should start from simple commodity production and

then introduce capitalist commodity production at a later stage. From a

formal point of view, this method (`successive approximation') is by

Sweezy (op cit, p 11) and Meek (op cit, pp 299-304) conceived as being

similar to that of neo-classical modelling. Yet, this method is

denounced as partial and one-sided by the Japanese Marxist group of Uno

(1980), Sekine (1980), Albritton (1984), Itoh (-aSffil 1988), etc. They

1 As will he seen in our later discussions in 1.1, however, even the

difference between the two interpretations is, in our opinion, trivial. It is only the Unoists who have insisted on the difference. We shall see here the Unoist stages-theory is a more outspoken aberration from Marx's own.

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suggest a `universal' abstraction, instead, to comprise all the basic

categories generally associated with any capitalist economy. This

posits a pure capitalist economy at the outset. By pushing the

capitalist nature of all economic forms to their furthest limits and

thereby positing a society `corresponding to the theory', they create an

intellectual milieu where the economies can exist in their purest form,

a pure capitalist society consisting of none but capitalists and

proletarians.

The Unoists presuppose three distinct levels of abstraction

associated with different types and degrees of necessity, i. e. the pure

theory of capitalist economy at the most abstract level, the empirical

analysis of the current state of capitalism at the least abstract level,

and the stages-theory of capitalist development mediating them. When

moving from the most abstract to the more concrete, necessity is

increasingly qualified by contingency whereas, in the case of the pure

theory, for instance, necessity is not qualified by contingency at all

(Uno, op cit, p xxiii, Sekine, op cit, pp 146-150, Albritton, op cit, pp

58-60, etc. ). So, the pure theory is not capable of explaining why and

how a capitalist economy can change from one stage into another; only

the stages-theory can explain this with some contingencies. This

argument implies that the stages of the capitalist development are not

explicable in terms of the inherent nature (or contradictions) of

capitalism but in terms of the contingent, accidental elements mixed

with the basic contradiction between the capitalist and the proletariat.

The same criticism may apply to the western Marxist interpretation. In

their alleged formal similarity between Marx's and the neo-classical

modelling, a crucial difference between the two is ignored. When, in

the neo-classical case, a new category, e. g. `capital', is introduced

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into earlier models, the new category needs to he imported from outside

the existing model not from inside, while, in Marx's case, it must

always generate from the existing model, from inside, from the intrinsic

contradiction of the earlier (preceding) models. The same contingency

as in the Unoist case plays an important role in explaining the

transition from the simple commodity production to capitalist production

in the western Marxist case.

Among the three distinct levels of abstraction in the Unoists

case, the Unoist `pure theory' of capitalism bears a striking

resemblance to Weherian `ideal typus', somewhat different from the neo-

classical modelling. However, such a universal abstraction cannot help

but be an `empty abstraction'. The reason is the same as for Marx in

his Grundrisse `Introduction' where he called the `population' an

`empty' abstraction. He called it an `empty abstraction' as it proved

to produce only empty concepts and phrases when the social classes, etc.

of which it was composed were dispensed with. When the Unoists theorise

a pure capitalism at the most abstract level, the basic pre-requisite

categories and concepts for capitalism, e. g. value, surplus-value,

exploitation, etc. are all entirely suppressed and are supposed to be

explained at later stages. Without such prerequisite concepts and

categories, no doubt, the `pure' theory must be an empty abstraction.

This explains why the Unoists explain the category of capital, the

genesis of capital, the transformation of pre-capitalist society into

capitalist society only in the circulation of money and commodities or

in terms of non-economic violence. They cannot explain it in the

context of value-production.

There is one common point the two abstractions share with each

other. Both of them distinguish Marx's abstraction from the neo-

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classical and the Weberfan modellings in the manner of the abstraction.

They argue Marx abstracts (historically and socially) essential elements

of capitalism but others abstract arbitrarily chosen non-essential

elements. This presupposes that a certain preconception of the

`essential elements' must he taken before making the abstraction in

Marx's case.

What puzzles us most in this explanation is how to identify what

are the essentials and what are the non-essentials from the beginning.

A true method, if it deserves the name, would have to explain how to

grasp the essentials in the beginning. But the method in the case of

the western and the Japanese Marxists requests us to start from the

`essentials' as'if we knew the `essentials' and the `non-essentials' but

only did not know which were to he preferred. If we knew the essentials

from the beginning with no special method to derive them, we would, of

course, disregard the non-essentials. But we might be expected to start

from the non-essentials only because we are unfortunately unaware of the

`essentials'. Then, we could finally arrive at the `essentials' by the

guide of a proper method. Sweezy (op cit, pp 11-13) and Meek (op cit,

pp 299-306) explain that only by the repetition of trial-and-errors has

Marx grasped the `essentials' in the abstraction.

"But where to start? How to distinguish the essential from the non-essential? Methodology can pose these questions, but unfortunately it cannot provide ready-made answers. If it could, the `process of scientific understanding' would be a far more routine matter than it actually is. In practice, it is necessary to formulate hypotheses about what is essential, to work these hypotheses through, and to check the conclusions against the data of experience. (Sweezy, op cit, pp 12-13)

In relying on trial-and-error, the alleged manner of the Marxian

abstraction, however, has little specific difference from that of non-

Marxian modellings. Sweezy described the Marxian trial-and-error

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process as due to Marx's personal experience, academic background and

his specific intuition (op cit, pp 12-15). Referring to Hegel's

thought, which emphasised process and development through the conflict

of opposed or contradictory forces, he explained Marx's basic

preconception of the capitalist economy as that of "class conflict".

"It follows that the essential economic relations are those which underlie and express themselves in the form of class conflict. They are the essential elements which must be isolated and analysed through the method of abstraction. Even this hypothesis, however, could lead to divergent procedures. " ( Sweezy, ibid, p 15).

In the above, he posits Marx's "class conflict" as a hypothesis, which

requires an empirical test for its non-falsification. Even after the

empirical test, however, it can never be anything other than a so-far-so-

good conjecture. From the hypothetical "class conflict" as his basic

preconception of the capitalist economy, according to Sweeezy, however,

Marx made several other conjectures in selecting the commodity, finally,

as a starting-point.

"That capital is the all-dominating economic power of bourgeois society' meant to Marx, as it would have meant to one of the classical economists, that the primary economic relation is that between capitalists and workers. ... This relation must form the centre of investigation; the power of abstraction must be employed to isolate it, to reduce it to its purest form, to enable it to be subjected to the most painstaking analysis, free of all unrelated disturbances. ... What is the nature of this capital-labour relation? In form, it is an exchange relation. ... It is evident, therefore, that the study of the capital-labour relation must begin with an analysis of the general phenomenon of exchange. In this way we arrive at the actual starting-point of Marx's Political Economy. " (Sweezy, ihid, pp 16-17)

After all, ultimately, Marx's conjectures are all grounded on his own

personal experiences and intuitions as influenced by Hegel's philosophy.

His starting-point consists of only a tissue of hypotheses, assumptions,

and conjectures, i. e. of dogmatism, as against which there would be an

equal right of counter-dogmatism. Either dogmatism could never be

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justified.

The two interpretations we have so far briefly examined beget

other parallel approaches when applied to Marx's actual analysis of

commodity value. As we will see in 2.2 of this thesis, there are two

approaches in explaining Marx's abstract labour. One is `formal

abstraction', the other is `concrete abstraction'. The one corresponds

to the `selective' abstraction in the western Marxist group (as it

selects a formal identity). The other corresponds to the `universal'

abstraction in the Japanese Marxist group (as it is in the same genus-

species approach). Although they are not from the same corresponding

groups or authors, the parallelism is conspicuous anyway.

1.2 Marx's Method in `Capital'

As against the two interpretations which reduced Marx's method of

abstraction to a `progression from the abstract to the concrete', Mandel

(1972,1976), Nicolaus (1973), etc. began to note carefully that a

`progression from the abstract to the concrete' was necessarily to be

preceded by a `progression from the concrete to the abstract' and the

latter progression was recommended by Marx himself in `Preface' to A

Contribution to the Critique of Political Economy (1970). But they

stopped short of affirming Marx's actual starting-point, the commodity,

was indeed not the abstract but the concrete. Although they made such a

distinction between the two progressions, they simply explained it away

in terms of the distinction between the method of `inquiry' and that of

`exposition' which Marx made in `Postface' to the second edition of

Capital (1976a, p 102).

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Echeverria (1978,1980) was the first to contend that Marx's

starting-point was the concrete.

"a correct scientific method must start from the concrete so as to deduce from it abstract concepts with which to explicate the concrete in its totality" (1980, p 213).

So far as the conceptual ordering was concerned, Echeverria was right

inasmuch as Marx himself insisted in his Marginal Notes on Adolph

Wagner's Lehrbuch der Politischen Oekonomie (op cit, 1975a, pp 198-9),

"I did not start from the concept, value, and did not derive the

concepts, use-value and exchange-value, from the value concept but from

a concretum, the commodity". Echeverria was followed by Sayer (1983).

"Marx has no mysteriously previleged starting-point. Like the rest of

mankind, he starts from the material reality of what is given, in the

head as well as in reality; the phenomenal forms of our everyday

experience. " says Sayer (ibid, p 102), "What differs, perhaps, is what

he does with these forms. "

We do not say Marx did not start from the abstract. We say

that, before starting from the abstract, he had to start from the

concrete. The abstract, Marx's starting-point in his synthetic process,

is different from the abstract in others' synthetic process. His

abstract category, unlike others' abstract, is expected to generate new

categories from its own inherent contradictions. The neo-classical

modellings and the Unoist's pure theory are not capable of generating

new categories from within but have to import them from without. To

find out his peculiar abstract category, Marx started from a concrete

and went through a pains-taking analysis of the given concrete. Only by

the use of the `power of abstraction' (Marx, 1976a, p 90), did Marx

secure such an abstract. We will see in Chapter 2 of this thesis in

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what concrete way Marx derived the desirable abstract category, i. e.

abstract labour, from the analysis of `the commodity' using his own

peculiar `power of abstraction'.

Starting from the commodity, at first, Marx derived two

antithetical ingredients, i. e. use-value and exchange-value. With them,

he explained the nature of commodity exchange, as an externalisation of

the commodity's inherent antithesis between value and use-value.

Through the acts of exchange, the externalisation made another

antithesis between relative form of value and equivalent form of value,

i. e. between money form and ordinary commodity form. By the

objectification of the latter antithesis, the commodity is

differentiated into money and ordinary commodity. Marx explained this

by the analogy of embryology (1976a, p 181).

Even when it is externalised, the inherent antithesis between

use-value and exchange-value is still retained in the money as well as

in the ordinary commodities, from which he explains the nature of

commodity circulation. In the process of commodity circulation, the

externalised antithesis between money and ordinary commodity (between

equivalent form of value and relative form of value) combines together

with the inherent antithesis between exchange-value and use-value of the

money and of the ordinary commodities. By the mixed development of such

combined antitheses, according to Marx, the money and the ordinary

commodity are metamorphosed into each other, and thereby generate

another development that transforms money into capital, and labour-power

into a commodity. He explained this by the analogy of ontogeny (e. g.

ibid, pp 198- 227, p 269) as proceeding from an egg (the commodity) to a

larva (the circulation of money and ordinary commodities), from the

larva to a chrysalis (the hoarding of money and ordinary commodities)

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and, finally, from the chrysalis to a butterfly (capital).

From the category of capital, on the other hand, Marx derived

various individual capitals, e. g. industrial capital, merchant capital,

commercial capital, money-dealing capital, money-lending capital,

interest-bearing capital, banking capital, land-capital, etc. in the

same way as he derived the two sub-categories, money and ordinary

commodity from the initially given category, `the commodity'. He

derived such a ramification of capital from the analysis of the

structure of capital-circuits, which he analysed in the second volume of

Capital as the circulation process of the three forms of capital,

i. e. money capital, commodity capital and production capital. This

relied on the analogy of phylogenesis (in the whole third volume of

Capital).

When Marx derived individual capitals, they did not have to

possess identical substance with each other. Among the individuals,

some may well have no substance2. Land, interest-bearing capitals,

banking capitals, etc. are capitals as long as they are self-valorising

values, but they do not subsume labour-powers under themselves. In view

of this, when investigating the substance of commodity value, Marx's

starting-point, "the commodity", was not an ordinary individual

commodity. He started from the concrete. Yet, not from an isolated

individual concrete but from the simplest concrete totality, which

comprised not only all individual categories and relations but also

their relationship to the totality. In other words, `The commodity'

comprises not only ordinary individual commodities but money, capital,

2A deserted house is still a house unless it is demolished but it is not a house if it is not virtually occupiable. A disused car is still a car but it is not a car if it is not safe to drive.

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wage-labour, land, etc., and the external (mutual) relations between

those individual categories plus the relationship of all those

(individual categories and relations) to the whole. It is an organic

whole as a substantive existence. It differs from a mere `idea' or

`sum' of the parts. Some might argue that Marx's starting-point, the

commodity, has no immediate referent in the concrete reality and so must

be an abstract rather than a concrete. This argument is not valid,

however. For a concrete category does not necessarily have to contain a

direct referent in reality; it may as well he a conceptual reproduction

of reality. When Marx said, "the concrete is concrete because it is a

synthesis of many particular determinants, i. e. a unity of diverse. "

(1973, p 101), the concrete in his remark was not an unmediated datum

for thought but was mediated. The concrete totality as a synthesis of

many particular determinants, although not specified as yet, can also be

concrete even if we can hardly find out its direct referent in reality.

This concrete totality comprises not only (a) ordinary individual

categories but also (b) the relation between those individual categories

and (c) the relationship of both (a) and (b) to the totality.

Most empirical. sciences do not admit the `totality' category.

In them, the parts are prevented from finding their significance within

the whole and, the whole degenerates into a mere `idea' or `sum' of the

parts. With the totality out of the way, an individual concrete cannot

be treated any better than a sort of onion, from which one coat is

peeled off after another in its analysis. In the end of the analysis,

there remain only the same onion coats, nothing substantial or nothing

abstract but the superficial sameness. They know well that every factor

in reality is linked (directly or indirectly) with every other and so

any factor in the system cannot be an autonomous, independent variable

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standing out and above to determine other factors. Thus, to explain

something, by seeking for every external relation relevant to it, there

is established a simultaneous determination system. Yet, because the

`totality' as such is missing, the `simultaneous' system cannot help but

be circular since each category presupposes every other and everything

posited thus is also to be a pre-supposition. This is the case with the

supply and demand theory of price. But, despite its circularity, the

`simultaneous' determination has a relative merit against a uni-

directional' determination because the latter ignores the directly and

indirectly linked nature of many relevant factors and so is one-sided

and limited. Thus, some empirical scientists tend to denote the

simultaneous system as "essence" and the uni-directional system as

"phenomenon" (Elster, 1985, pp 124-5).

In Marx's case, by contrast, he provides the circular

`simultaneous' system with a new category, the `totality'. He regards

the `simultaneous' determination as a phenomenal and the `uni-

directional' determination as an immediate actuality3. In physics, the

movement of heavenly bodies is usually explained by the organically

linked forces of the gravitational system which can only exist

3 Hegel (1975, pp 200-222) explains in the same way. In the Essence, Hegel enumerates three grades, i. e. essence, phenomenon and actuality. In others' discussing Hegel's logic, actuality is usually missing. The conventional duality of the essence and the phenomenon maybe refers to the relationship between real actuality and immediate actuality in Hegel's case. A superficial appearance, which must be one-sided and limited, is called `immediate actuality' in Hegel. Real actuality in Hegel is supposed to bridge phenomenon and essence. Essence must show itself, and its appearance is in phenomenon. But the essense appears differently from itself. That is why actuality must bridge the phenomenon and the essence. Without it, the phenomenon will be disconnected from the essence. In case of Marx's value theory, we propose, Hegel's essence, phenomenon and actuality each corresponds to the substance of value, the magnitude of value and the transformation of value, respectively.

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externally and between separate individual bodies. Yet, the whole

universe itself is not explicable by such an external system of

gravitational forces as it moves4 by itself grounding upon its own

intrinsic contradictions. So far as the `totality' category is missing,

the gravitational system which is a circular, simultaneous determination

system cannot explain the universe itself just as the circular supply

and demand theory of price cannot explain the movement of the economy as

a whole .

We said in the above that Marx's starting-point, the concrete

totality, comprises not only (a) ordinary individual categories but also

(b) the relation between those individual categories and (c) the

relationship of. both (a) and (b) to the totality. Of the three things,

Marx examined the last one (c) in two ways. The relationship of (a) to

the totality was the one (a). And the relationship of (b) to the

totality is the other (p). The purely external relation between the

distinct commodities with the totality out of the way is disregarded on

the grounds that it could only produce, at best, a circular,

simultaneous determination system (i). The three categories, a, and

i, are referred to, respectively, as value, market value and market

4 Someone might say the word, `movement' is not suitable for the universe itself on the grounds that there could be no frame of reference for measuring the movement of the whole universe. But in the above case, the movement is not in relation to external things but in relation to itself. An inherent change (e. g. growth) is also a movement. 5 "Every substantial change that is of concern to knowledge manifests itself as a change in relation to the whole and through this as a change in the form of objectivity itself. Marx has formulated this idea in countless places. I shall cite only one of the best-known passages. `A negro is a negro. He only becomes a slave in certain circumstances. A cotton-spinning jenny is a machine for spinning cotton. Only in certain circumstances does it become capital. Torn from those circumstances it is no more capital than gold is money or sugar, the price of sugar. ' (Marx, 1969b, p 159)" (Lukacs, 1971, p 13).

_22_

price.

(a) the relationship value (or social

{R} the relationship --f market value and {y} the (external) ri - market price

of individual commodities to the totality. value) of mutual commodity relations to the totality. individual value elationship between individual commodities.

Among the three, he conceived the first as an essential and the second

as a derivative of the first. "Supply and demand" says Marx (1981, p

296), "imply the transformation from value into market value". Between

the value and the market value, not only a qualitative difference but a

quantitative discrepancy is necessarily implied in his remark. This

presupposes a certain situation in which the commodities of identical

kind can have disparate individual values.

Why can the value category which, in principle, must be of a

social character be individualised in terms of individual value? In

principle, the making of commodity value is in the conversion of the

actual labours expended by private producers into social labour terms.

So, in the conversion, the commodities of identical kind come to have a

unified (social) value. But, according to Marx (ihid, p 296), they may

have disparate individual values. They can only have a unified value as

the market value determined by the supply and demand (by the competition

within the same sector of production), which lies somewhere between the

highest and the lowest individual value. The latter (market value) does

not necessarily coincide with the (social) average of the individual

values depending on the situation of supply and demands. Marx called

6 There are three cases in all of the relationship between market price,

market value and social value.

(Case 1) market prices = market values = social values. " corresponds to a von-Neuman equilibrium " equal rates of profit with no surplus profits (even development)

-23-

the market value which differed from the social value a `false social

value' (1981, p I6 799). Then, how can the commodities of identical kind

have disparate individual values? Are the individual values also of a

social character?

1.3 Marx's Method in Labour-value

As is said in the previous section, Marx started from the simplest

concrete totality, the commodity. In the totality, Marx reduced all

distinct commodities to a mediated uniformity, to commodity values. To

know why the distinct commodities were reducible to commodity values,

Marx had to find out the identical substance which could reproduce the

heterogeneous elements of the commodities as its own external

diversities, and so could transform them into homogeneous elements. It

is shown to be abstract human labour that transforms the heterogeneous

elements of the commodities into the products of the heterogeneous

elements of labour and then into homogeneous labour. All this

characterises Marx's process of abstraction in analysing commodity

values.

When the distinct commodities are reduced to the mediated

uniformity, to commodity values, the next question Marx askes is how or

(Case 2) market prices = market values * social values " the play of supply and demand ceases to influence market prices " equal rates of profit with surplus profits (uneven development)

(Case 3) market prices # market values s social values - corresponds to a Marshallian and/or Wairasian equilibrium " the play of supply and demand does not cease to act "a temporary, accidental equilibrium of supply and demand

- 24 -

in what quantitative proportion they are reduced to the value category.

This refers to the question of how the heterogeneous and diachronous

labours actually expended in producing the commodities change into the

homogeneous and synchronous labours to make the value quantum. Marx

explained this away in terms of a social process. This made his whole

discussion look rather like a circularity.

Marx's value refers to the (quantitative) relationship of

distinct commodities to the totality. Since it relates to the totality,

that is, to the society, it is said to have a social character. This

can be individualised in terms of individual value in distinction from

market value. This implies that the labour amounts calculated in social

labour terms are disparate for individual cases. By this, he meant that

the commodities of identical kind could have disparate individual values

even when they are calculated in social labour terms. How are they

calculated in social labour terms? This refers to the same question as

what Marx meant by the `social process' that determined the quantitative

proportions in which the heterogeneous labours were reduced to

homogeneous labour.

The quantitative reduction problem comprises two distinct

questions; how to synchronise diachronic labours and how to homogenise

heterogeneous labours. The commodities of an identical kind have an

identical use-value as well as an identical value. So, a commodity just

brought in the market place must have the same value not only as the

commodity appearing in the market a long time ago but also as the

(potential) commodity in the production process. This is what we call

the synchronisation of diachronic labours. The diachronous labours

embodied in distinct use-values are to he comprised in the category of

-25-

heterogeneous labour. The heterogeneous labours which obtain for

distinct use-values are homogenised in the same name of the value

quantum, the commodity value.

heterogeneous labours.

This we call the homogenisation of

As for the synchronisation, in the first place, we begin with a

hard and fast demarcation between direct labour and indirect labour,

grounded upon the exchange relation of the commodities necessitated by

their production condition. The direct labours congealed in the

commodities of identical kind are easily synchronised by reference to

the direct labour currently expended in producing the same commodity.

Since the current production condition is incessantly variant, the

direct labours can always be either devalued or appreciated, depending

on the productivity and the intensity of the direct labour7.

The amount of indirect labour, on the other hand, is not linked

to the current production condition of the commodity in question but to

the ad infinitum production conditions of all the other commodities in

the society. Instead of considering such an infinite sequence, we can

calculate it in current labour terms by reference to the value of the

production materials observed in their own markets. Even if the two

parts of the value, direct and indirect labour, are calculated by

different principles, the calculation is not inconsistent. The apparent

inconsistency which holds only in the case of individual commodities can

7 Devaluation occurs to the commodity previously produced when its

currently necessary social labour time is brought down by the improvement of production conditions. Moral depreciation occurs to the commodities previously produced when its use-value is displaced by another use-value. Depreciation itself is possible when the use-value of a previously produced commodity is physically worn or torn. Value- destruction occurs when the use-value with which the value in question coexists is proved socially useless (or over production). The first three categories have little to do with exchange itself.

-26-

disappear when we take all those individual commodities into account as

a single whole and thus see the indirect labours of the individual

commodities all transpire into direct labours. With this, we can

calculate labour-values empirically.

As for the homogenisation of heterogeneous labours, secondly, it

only concerns direct labour parts because indirect labours are already

homogenised as represented labour in the market value of the production

materials. The amount of direct labour which is an intrinsic magnitude t

can be expressed as J z(t)dt, where t is the duration of direct labour

o

time and i(t) is the intensity of labour. Since the intensity of

labour, i(t), differs in different sectors of production and that varies

with time and places, it is, in principle, immeasurable. We can only

know from the prior analysis of the substance of value that this direct

labour amount, though it is immeasurable, determines the magnitude of

value newly created. But the amount of direct labour is not directly

measurable in social labour terms. If it is measurable, and thus if it

is possible to calculate direct labours in social labour terms in this

manner, the commodities of identical kind can in no case have disparate

individual values.

But, there is no intrinsic existence that never appears. It

shows itself but differently from itself. To show the way in which the

intrinsic magnitude is externalised and thus becomes observable, Marx

Jt introduces an equation form, v(l+e) = i(t)dt, where v is the value of 0 labour-power and e is the rate of exploitation. In capitalist

production, the direct labour amount is externalised in terms of v(l+e).

Marx explained this just after his analysis of value in Chapter 4 of

Capital, vol I. Different capitals may have different v and different e

- 27

just as different production spheres can have different i(t). But from

the homogeneous character of the quantum8, v, Marx discovers the law of

the equal rates of exploitation in different sectors of production and

denotes v(1+e) as v+s in general terms, where s stands for surplus-

value. In this operation, the two magnitudes, v and e, are all

calculated in social labour terms. Thus, the direct labour on the right

side of the equation can be calculated by reference to the social

process reflected in the social values of v and e. Individual

differences within the same sector of production still remain as

individual values, however. The measurement of v(1+e) depends on market

values and so it might cause a charge of circularity. But we deny its

circularity for'two reasons, firstly, because the rate of exploitation

(e) is no exchange category and, secondly, because the `e' is applicable

not to individual labourers but to collective labourer. Only because t

the equation form, v(1+e)= J i(t)dt is in reference to our prior o

analysis of the substance of value, the calculation of the direct

labour, though it is grounded on market values, is not circular.

Then, how to calculate v and e empirically? This belongs to the

transformation problem of values into prices of production.

Empirically, we can only observe market prices. From the ever-

fluctuating market prices, we can easily compute a certain trend of the

fluctuation, viz. average normal prices (Marx, 1976a, p 269, fn 24).

8 So-called competition between labour-powers cannot itself explain the law of equal rates of surplus-value. Nor can the competition between many capitals explain the law of equal rates of profit. The competition, strictly speaking, cannot create such an evenness as the equal rates of something but would rather create enlarged unevenness unless the agents of competition are equal in every aspect, homogeneous in every term. So, we say the competition is simply an external condition of the evenness while the homogeneity is the intrinsic, essential cause of it.

- 28 -

The latter plays a role as a guide-light for producers and consumers (in

the neo-classical case, however, the former acts a guide-light). This

Marx called market value. This market value, Marx explained, was to he

determined somewhere between the highest and the lowest individual

value. But, in capitalist production, the individual values are

individual prices of production. Because the direct labour itself is no

more the agent of production but capital is the agent of production, the

newly created value is supposed to be proportional to the amount of

capital rather than the amount of direct labour. Formerly, the

individual value is expressed as c+v(l+e) where c and v are the market

values. Now, the transformed price of production is expressed as

(c+v)(l+r) where r is the proportionality factor of the new value to the

amount of the advanced capital. Thus, the empirical measurement problem

of v and e comes down to the relationship between c+v(1+e) and

(c+v)(l+r), which we call the transformation problem of value into price

of production.

But thanks to his prior analysis of the substance of value, Marx

argues the profit, r(c+v) must originate in the surplus-value, ev. The

amounts, therefore, should be equalised. Normally, price of production

for individual capitals, (c+v)(l+r), does not coincide with individual

values, c+v(l+e), because of the two mutually conflicting laws, the law

of the equal rates of surplus value and the law of the equal rates of

profit. Its discrepancy is mainly due to the individually different

proportions of capital between c and v. The two laws are antithetic to

each other. The one is in a uni-directional causality and the other in

a circular causality. The former is an immediate actuality, the latter

is in the phenomenon. To avoid the circularity as well as the uni-

directional causality, we have to collapse them into a new one. We

- 29 -

reduce the two laws to the relation of an identity by putting both of

them in the context of the wholeness. We have no more differences in

the capitals' composition. Marx finds the two laws are no longer

conflicting each other. We have only one law instead of the two: total

surplus labour, Eevi, equals total profit, Er(ci+v1), total price of

production, z(l+r)[c1+vi], equals total value, Zc1+v1(l+e). In the

totality of capital, or in the totality of commodity, there is something.

more than a mere `sum of the parts'. A certain substantive existence

must be comprised in it. Otherwise, the two equalities can in no way be

justified. To that extent, without the prior-analysis of the substance

of value, it is impossible to identify the relationship between total

surplus value and total profit, and between total. value and total price

of production. This is why Marx's totality category has been insisted

upon in the previous section, 1.2.

- 30 -

2. ABSTRACTION PROBLEM

2.0 Overview

Abstraction problem in this chapter concerns in what concrete way Marx

exploits his peculiar `power of abstraction'1 in analysing commodity

values, and with what necessity he arrives in the analysis of commodity

value at the conclusion that human labour is the substance of value. We

call this `abstraction problem' only to focus our attention on his

abstraction process, in which he actually used the power of abstraction.

The whole process in which he analyses the commodity value using the

power of abstraction is presented in the first two sections of the first

chapter in Capital, vol. I, 4th edition. We summarise it in the

following five steps, from (1) to (5), as capitulated in the following

six points, from (a) to (f).

(1) Starting from the simplest economic concretum, i. e. the /976A

commodity, Marx ,. p 125) derives the two concepts, use-value and

exchange-value. Then, he discovers at first that the use-value is

inherent in the commodity whilst the exchange-value is external to the

commodities as something accidental and purely relative. He thus

launches an investigation into the (exchange-) value which, like the use-

value, is inherent in the commodity, inseparably connected with it

1 As he himself claims "In the analysis of economic forms [e. g. value- forms .. by LEE], neither microscopes nor chemical reagents are of assistance, the power of abstraction must replace both. " (1976a, p 90), Marx uses his peculiar `power of abstraction' in analysing the commodity values. But his actual use of the power of abstraction has rarely been

examined concretely.

- 31 -

(ibid, p 126). From his observation of the multifarious exchange

relations between commodities, Marx inferred that (exchange-) value was

inherent in the commodity; a commodity has many exchange-values instead

of one whilst each of them expresses the same exchange-value of the

commodity, from which he inferred that the valid exchange-values of a

particular commodity expresses something equal, and so cannot be

anything other than the forms of appearance of the same content inherent

in the commodity (cf. ibid, p 127).

(a) Use-value is inherent in the commodity (ibid, p 126). (b) Every commodity has multifarious exchange-values, whose content is inherent in the commodity (ibid, Ist para. of p 127).

(2) To investigate what the intrinsic value is, Marx's abstraction

process runs as follows. First, he begins with an equation form, "1

quarter of corn =x cwt of iron", by which he represents the exchange

relation of two commodities. From this equation form, he infers that a

common element must exist in the two different commodities.

(c) The exchange-relation of two commodities can be represented by an equation form, which signifies a common element must exist in the two commodities (ibid, 2nd para. of p 127).

(3) Next, to search for the common element of the two commodities, he

passes in review the various properties possessed by the two commodities

in the exchange and, according to the method of exclusion, separates all

those that cannot stand the test until at last only one property

remains, that of being products of labour. Marx's investigation did not

stop short at identifying the property of "being the product of labour"

as the sought-for common element. Even the product of labour is further

investigated until all the distinct products of labour are reduced to

the labour which produced the commodities, and further, finally, to

- 32 -

human labour in the abstract.

(d) If we abstract from their use-value, only one property remains, that of being the products of labour. But the labours which produced the commodities are all to be reduced to the same kind of labour, abstract human labour (ibid, 1st and 2nd para. of p 128).

(4) Most criticisms of Marx, e. g. Boehm-Bawerk (1984, p 69), etc.

have misconceived, only the `property of being the products of labour'

or simply the `abstract human labour' as Marx's sought-for common

element. The moment he arrived at the most abstract category, human

labour in the abstract, Marx turned his attention back to the residue

made up of the heterogeneous properties of the commodity-producing

labour that had been thus far excluded for failing to constitute the

common property. He discovered the residue became a phantom-like

objectivity as homogeneous human labour. Marx explains it in the

context that every human labour expended in producing commodities turns

out to be homogeneous only because abstract human labour is materialised

in them (op cit, p 129). This needs a lot of explanation in the main

part of this chapter.

(e) Now turning back to the residue of the products of labour, we find out in each case nothing but the same phantom-like objectivity, the congealed quantities of homogeneous human labour (ihid, 3rd para. of p 128, italics are LEE's).

(5) In the congealed quantities of homogeneous human labour, he

discovered his sought-for common factor in the exchange relation of

commodities as the value of the commodities (ibid, p 128). In the

values, the labours embodied in commodities are all homogenised. Thus,

he declares (ibid, p 129 &P 131), the substance of value is "labour"

(not abstract labour nor homogeneous labour).

- 33 -

(f) The common factor in the exchange relation is `value'. In the value, the labours embodied in commodities are homogenised as they have abstract labour character. It follows from this that the ultimate cause of the homogenisation of labour in the value is abstract labour, and so the creator of the commodity value is abstract labour. The substance of the commodity value is human labour (ibid, 4th para. of p 128 and 1st para. of p 129).

The three points, (a), (b) and (c), established in the first two

steps are the three premises of Marx's abstraction process. The two

points, (d) and (e), established in the third and the fourth step

consist of the two phases of his abstraction process itself. The last

point, (f), established in the last step is the conclusion of the whole

foregoing steps.

Most anti-Marxian criticisms except for Eldred and Hanlon (1981)

have taken (a) for granted. Eldred and Hanlon (1981) argued, "A given

kind of commodity, the product of a particular type of concrete labour

(say, steelmaking labour) can be realised as a use-value in many

different kinds of consumption practices (say, ship-building, making

screws, making wires, etc. ): Instead of having just one use-value, many

commodities had several" (ibid, p 47). They described the use-value as

an external (not inherent) to the commodity as it turned on the external

circumstance of the commodity's use. Yet, (a) is crucial in defining

the dual nature of the labour embodied in commodities as concrete and

abstract labour. This distinguishes Marx's use-value from the neo-

classical utility concept (one is inherent, the other is not).

Such a use-value then could no longer correspond to a certain

-type of concrete labour but could only verge on the neo-classical

concept of utility. When the use-value cannot correspond to a certain

concrete labour, however, Marx's peculiar one-to-one correspondence

-34-

between the two factors of the commodity, on the one hand, and the dual

character of the labour embodied in the commodity, on the other hand,

can no longer hold2. By criticising Marx's intrinsic use-value concept '"d

contained in (a), Eldred and Hanlon () rejected Marx's dual nature

of labour and, thus, tried to grasp Marx's use-value concept as

something akin to the neo-classical utility concept with the intention

to grope for a certain compromise between Marx's labour theory of value

and the neo-classical utility theory of value as can be seen in their

paper (1981). We, therefore, in this chapter shall begin by defending

(a) in the very first section, 2.1. We will discuss it with (b) and (c)

together since (a), (b) and (c) are the three premises of Marx's

abstraction process.

A certain relationship between value, labour, abstract labour

2 Himmelweit and Mohun (1981) point out that, in a joint production

case, the so-called one-to-one correspondence fails. This argument misconceives Marx's concrete labour concept as specific to a certain process of production rather than to a certain use-value. Our position to the joint production case is in the distinction between a composite production case and a joint production case. In either case, it is true, multiple kinds of use-value are produced in a single process of production. But, in the latter case, unlike the former one, the multiple use-values become a single use-value as a composite commodity, in which sense, only one kind of concrete labour corresponds to the single process of production. But, in the joint production case, by contrast, multiple kinds of concrete labour coexists in a single process of production. On account of this, we argue Steedman's (1975) negetive values arise from two mutually incompatible assumptions (i. e. joint production is not compatible with homogeneous labour). The homogeneous labour category cannot obtain for two partially similar labours. It obtains, as will he seen in 2.2, only in referring to the genuinely heterogeneous labours. Actually, as is seen in 1.3, the most crucial question in Marx's labour theory of value is that of how to calculate (or measure) the unit of homogeneous labour for distinct labours, all the rest is a mere technical problem. Despite this, however, the calculation of the homogeneous labour has never been discussed but, instead, has been assumed from the outset with no verification in Steedman and in most value debates as well. So far as the homogeneous labour is not examined, it was a virtual abandonment of Marx's labour theory of value itself.

-35-

and homogeneous labour is elaborated in (f) and contributes a notion of

what value is and what the substance of value is. But the relationship

in (f) has never been properly noted in previous Marxian and anti-

Marxian literature. The various categories of value, labour,

homogeneous labour and abstract labour are usually seen as if being

interchangeable with each other, and so the `substance of value' has

never been distinguished from `value' itself (it is usually presumed

that `labour=value'). This sort of misconception stems from the

confusion of the two phases of Marx's abstraction process, i. e. (d) and

(e}. The (e) which is the second phase of Marx's abstraction process

has been ignored in discussing Marx's value theory as if Marx's

abstraction process concluded at (d) rather than proceeded to (f).

As to (d), (e) and (f), some other questions still need to be

discussed; why and how the abstraction from use-value results in value

and abstract labour, why and how actually expended heterogeneous labours

take on a phantom-like objectivity as homogeneous labour; how

homogeneous labour is different from abstract labour; why in the

commodity is congealed homogeneous labour, etc., etc.

Boehm-Bawerk (. 1984), who had no idea of (e), i. e. the second

phase of Marx's abstraction process, could not contribute at all to (e)

and (f). Instead of asking the more fundamental questions, i. e. why and

how actually expended heterogeneous labours take on a phantom-like

objectivity as homogeneous labour, how the homogeneous labour is

distinguished from abstract labour, why in the commodity are the

congealed homogeneous labour, etc., Boehm-Bawerk (- 6'J' t, pp 64-80) asks

only the following futile questions.

(1) The exchange of two commodities cannot be conceived under an equation form. Where equality and exact equilibrium obtain, no change is likely to occur to disturb the balance. When in the case

-36-

of exchange the matter terminates with a change of ownership of the commodities, it points rather to the existence of some inequality which produces the alteration (pp 68-9). (2) Marx rigged the result by excluding the exchangeable goods which are not products of labour in the search for the common factor which lies at the root of exchange value (p 70). (3) Even when non-labour products are excluded, there is no reason why there should he no alternatives to labour as "the common factor" (p 75).

In the above, (1) questions (c) while (2) and (3) both question (d).

Recent anti-Marxian criticisms, Eldred and Hanlon (1981, p 47), Cutler,

Hindess, Hirst and Hussain (1977, p 14), Bowles and Gintis (1981a, p6),

etc. realised there was a big problem in (1). (1) only argues that it

is "inequality" that yields an exchange of two commodities, which admits

a certain content inherent in the two commodities must be existent to

define the "inequality" of the commodities. Whence, the inherent

content which (b) argues for is not denied in (1). (1) does not

disagree with (b). (1) only criticises the equivalent exchange not the

existence of the inherent content. Yet (c) derives from (b), and (c)

itself does not argue any equivalent or non-equivalent exchange but only

argues the `equation form'. So, (1) might not be capable of denying

(3). Thus, they had to revise (1) into (1') as follows;

(1') Exchange may be conceived as being equivalent in the juridical sense, that is, that both parties to it agree to the equity of the terms of the exchange and receive what they were promised, but not as an equation (there not being any substantive identity between the things exchanged). (Cutler, Hindess, Hirst and Hussain, 1977, p 14, italics are sic. ).

Thus, (1') attacks an equation whereas (1) did an equality. (1') denies

any substantive identity whatsoever between the things exchanged and so

rejects both (b) and (c) whereas (1) accepted (b) while denying (c).

As for the other two questions which Boehm-Bawerk raised, i. e.

(2) and (3), both attack (d) alone and are repeated in many anti-Marxian

criticisms, e. g. Cutler, Hindess, Hirst and Hussain (1977, pp 58-9),

- 37 -

Hodgson (1982, pp 76-9), Elster (1985, p 139), etc. Thus, they have

long occupied a central position in most value debates. Marxian replies

to them, however, have been made in a teleological context only.

According to them (e. g. Pilling, 1972, -Gerstein, 1976, Elson, 1979b,

Himmelweit and Mohun, 1981, etc. ), since Marx aimed to interpret

capitalist society with the value concept, Marx `defined' value as a

purely social substance, as human labour3. This has two drawbacks.

Firstly, it ignores some other cases of labour that can never have any

social implication (e. g. products of direct domestic labours).

Secondly, it assumes what has to be proved from the very beginning. The

pre-supposition that value is a social substance is not verifiable until

Marx's other remarks, (a), (b), (c), (d), (e) and (f) are fully

examined. Or else, quite often, it has been justified from a pragmatic

standpoint as being useful as a heuristic device in explaining the

exploitation of the working class (Dobb, 1940,1973, Sweezy, 1942, Meek, A

1973k Mandel, 1972, Morishima, 1973, Brody, 1974, etc. ). But even such

a heuristic device is still teleological. Exceptionally, however, if

human labour were presumed to be an estranged labour as in Arthur's

3 This argument assumes, in the first place, a certain social relation

between individuals grounded on a certain specific [or capitalist! ] social division of labour system, and then argues the social relation between individuals is reflected in the value relation between the commodities the individuals produce. So, the non-producers based on a property relation rather than labour relation are from the outset precluded in the so-called commodity fetish. By contrast, however, Marx starts from a commodity relation and then analyses it to find that it reflects a certain system of division of labour. So, he is capable of extending his analysis further into the production relation between persons based on not only labour relations but also property relations. In the former case, if you want to include the non-producers case, you would have to define from the outset the production relation being based

on property and labour relations both. If then, the value relation between commodities should be seen as reflecting not only labour

relations but also property relations, which leads to the same perspective as the neo-classicals.

- 38 -

suggestion (1986), it might well be justified to have presupposed that

value had a social implication as it directly implied the commodity

exchange relation. But the estranged labour category seems to be an

unnecessary detour. The simple commodity production is logically far

better than the estranged labour as a premise in analysing commodity

values since the latter requires more sophisticated explanations.

Marxian replies to (1') also have a drawback. The replies have

deviated from the essence of (c) which (1') attacked. Arthur (1979a, p

71) and Harris (1978, p 307) replied to (1') in the terms of "equivalent

exchange" as a stipulated axiom. Elson (19796 pp 153-4), on the other

hand, also replied to (1') in the terms of "equation" as a conventional

axiom. We will show in 2.1 that both replies have confused (1) with

(1').

We reply to (1') in 2.1 where we discuss (a), (b), (c). We

reply to (2) in relevant parts of both 2.1 and 2.2 arguing that non-

labour products cannot he left out of consideration in Marx's analysis

of commodity value. Especially in Appendix to 2.1, we show certain

forms of exchange instead of certain objects of it must be excluded in

the analysis of commodity value (even labour-products must he excluded

while some non-labour products are to be included). We reply to (3) in

2.2, arguing that even when non-labour products are taken into account,

the only property to remain as the common factor will still be that of

`being products of labour'.

In 2.2, we discuss the main part of Marx's abstraction process

which comprises (d), (e) and (f). We will compare our own

interpretation of Marx's abstraction process with other Marxian

interpretations of it, and thus show in what way Marx has derived not an

empty but a legitimate abstract category which is capable of unfolding

- 39 -

11

itself out of itself, by itself, probing its own depth only to reproduce

the concrete totality in mind.

In 2.3, we deal with a most crucial question; on the reality of

Marx's abstract labour concept. We shall show Marx's abstract labour is

not a metaphysical category (like Robinson, 1964,1977, etc. ) nor labour

represented in exchange values (like Rubin, 1973,1978), but is a real

existence as a consequence of its being commodity-producing labour. We

show that any commodity-producing labour can satisfy the two

requirements for the reality of abstract labour; the free mobility of

labour and the versatility of labour. Since abstract labour is the

result of Marx's abstraction, the abstract labour must be the most

abstract and, therefore, by definition, cannot have any direct referent

in the immediate world. Nevertheless, we show it is realistic.

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2.1 Three Premises in Marx's Abstraction

This section works with the following three premises in Marx's process

of abstraction of commodity values.

(a) Use-value is inherent in the commodity. (b) Every commodity has multifarious exchange-values, whose content is inherent in the commodity. (c) The exchange-relation of two commodities can be represented by an equation form. The equation form signifies a common element must exist in the two commodities.

In the above, (a) is to define the dual nature of labour in his later

abstraction process, and (b) is to define the existence of an intrinsic

value in his later abstraction process. (c) is a synthesis of the two;

both (a) and (b) are presupposed in (c).

As for (a), to begin with.

As mentioned in the previous section, Eldred and Hanlon (1981)

were novel in criticising (a) and, thereby, questioning Marx's one-to-

one correspondence between the two factors of commodity (use-value and

value), on the one hand, and the dual nature of the labour embodied in

commodities (concrete labour and abstract labour), on the other hand,

which forms the very ground of Marx's abstraction of commodity values.

In return for denying Marx's dual nature of labour, Eldred and

Hanlon (1981) proposed an alternative duality, i. e. concrete labour {_

embodied labour) versus abstract labour (= represented labour). 4 In

this duality, they conceive abstract labour as a represented labour,

i. e. as the abstraction made in exchange from all kinds of concrete

4 The duality of labour is distinct in the two cases. Marx's duality Eldred and Hanlon's duality

use-value --t concrete labour embodied labour --#, concrete labour

value - abstract labour represented labour -f abstract labour

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labour, as the universal character of particular concrete labours. This

duality is a contrast to Marx's dual nature of labour. When Marx gave

the second section of the first chapter of his Capital the title, "The

Dual Character of the Labour Embodied in Commodities", the dual

character of labour referred exclusively to embodied labour.

Eldred and Hanlon offer a counter-example against (a): a given

kind of commodity, the product of a particular type of concrete labour

(say, steelmaking labour), can he realised as a use-value in many

different kinds of consumption practices (say, shipbuilding, making

screws, making wire, etc. ), which suggests that, instead of having just

one use-value, commodities have several (ibid, p 47). If the use-value

is multiple for each commodity, it would no longer he in one-to-one

correspondence with concrete labour and should be dependent on the

external circumstance of its use and/or on its immediate consumer. But,

on the contrary, if use-value is the product of concrete labour, then

the use-value would be inherent and unique in the commodity.

However, that objection was already anticipated by Marx himself

in the first section of the first chapter of Capital vol. I.

"Every useful thing is a whole composed of many properties; it can therefore he useful in various ways. The discovery of these ways and hence of the manyfold uses of things is the work of history" (Marx, 197c p 125)

Marx acknowledges in the above that a use-value can have several

usefulnesses. But he distinguishes between the usefulness and the use-

value itself as follows.

"The usefulness of a thing makes it a use-value. But this usefulness does not dangle in mid-air. It is conditioned by the physical properties of the commodity, and has no existence apart from the latter. It is therefore the physical body of the commodity itself, " (ibid, p 126)

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In the above, he attributes to the physical body of the steel rather

than to the external circumstance of the steel's use: why steel is (and

why crockery is not) useful in ship-building, making screws, wires, etc.

Crockery has no adequate physical property in making screws, wires, ship-

building, etc. and so is not useful in those. Such a physical property

of the usefulness Marx called use-value, which has nothing to do with

the external circumstance of its use nor with its immediate consumer.

The best evidence for the inherency of the use-value is in the

organic character of use-value units. A tiny unit, say, 10 mg of steel

is still a steel but its use-value is not the use-value as steel but as

a mineral nutrient or a medical ingredient; similarly a half unit of

calf is no more a calf but is called veal, etc. A certain discontinuity

is necessarily involved in the quantitative measurement of use-values:

its quantitative change must have its limit, by exceeding which the

quality suffers a change. Even if there were a qualitative change

through a quantitative change of use-value, it would not be a change of

quality altogether but only of its definite character. In the case of

the neo-classical concept of utility, however, there can be no

discontinuity in measuring utilities. It is often definable even for a

tiny unit of goods whilst use-value is not definable unless in terms of

another use-value (e. g. 10mg of stell as a mineral or medical

ingredient).

The measure of utility is not inherent in commodity but turns on

the external circumstance of its use and/or on its immediate consumer.

For this reason, although steel is not in general substitutable by

paper, for instance, on account of each's peculiar physical property,

steel's and paper's utility are in principle mutually substitutable.

There is no hard and fast demarcation between steel's utility and

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paper's utility as all those rest on the immediate consumer of them.

The case is different with use-values. Steel's use-value can in no case

he substitutable by paper's use-value. This explains why use-value is

inherent in the commodity whilst utility is not; no matter even if the

use-value is of a non-labour product bought and sold as a commodity. [q. e. d. of (a) ]

Every commodity is a use-value, but every use-value is not a

commodity. Depending on its quantitative abundance, for the reasons of

its aforesaid organic character, a use-value passes through three

distinctive stages; use-value for its immediate owner, use-value for

others, and use-value for none (Marx, 1970, p 50). Only in the middle

stage among the three, the use-value has its definite character as a

commodity. The neo-classical equality of marginal utilities may also

seem to explain such a critical point of the conversion from use-value

for its immediate owner to use-value for others. But the case is quite

different. In the case of utility theory, the use-value to be converted

into a commodity is not entirely useless for its immediate owner but

merely less useful than the use-value to be exchanged with it. But in

case of the use-value theory, the use-value to convert must be entirely

unimportant in the direct consumption of its immediate owner, and so is

useful for its immediate owner only as an exchange-value. From this we

obtain the following proposition as a corollary of (a).

(P2.1) a use-value versus a commodity: Every use-value is not a commodity, but every commodity is a use-value. The use-value as a commodity, of course, needs not necessarily be a product of labour.

As for (b), secondly.

Marx's second premise, (b) exchange value is inherent in the

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commodity takes root in the following observation.

"A given commodity, a quarter of wheat for example, is exchanged for x boot-polish, y silk or z gold, etc. In short, it is exchanged for other commodities in the most diverse proportions. Therefore the wheat has many exchange-values instead of one. But x hoot-polish, y silk or z gold, etc., each represents the exchange- value of one quarter of wheat. Therefore x boot-polish, y silk, z gold, etc., must, as exchange values, be mutually replaceable or of identical magnitude. It follows from this that, firstly, the valid exchange values of a particular commodity express something equal, and secondly, exchange-value cannot be anything other than the mode of expression, the `form of appearance', of a content distinguishable from it. " (Marx, 1976a, p 127)

In this observation, the exchange-value of a certain commodity is simply

conceived to be the quantity of another commodity that exchanges for one

unit of the former commodity. The exchange-value of a quarter of wheat,

for example, changes constantly with time and place depending upon what

becomes its counterpart in exchange. It can he x boot-polish at one

place, y silk at another place, and z gold at the third place etc. They

must be synchronous, however, if they express the exchange-value of one

and the same thing. Otherwise, they will not be mutually replaceable,

nor of identical magnitude. Only when they are synchronous are they

mutually replaceable or of identical magnitude. When they are mutually

replaceable and of identical magnitude, then they can express something

equal. Although the content is not yet identified and whether a

commodity's content is identical with other commodities' contents is not

yet certain, it is affirmed that the content, which we may call

tentatively an intrinsic value, is inherent in the commodity if only its

multifarious exchange-values are synchronous. 5

5 The inherent content in (P2.2) and in (b) both is somewhat different

from an intrinsic value. Firstly, the inherent content may not he uniform for different commodities in quality as well as in quantity. Yet commodity A's intrinsic value may not differ in quality from commodity B's intrinsic value. Secondly, the inherent content obtains through the multiplicity of exchange relations. But the intrinsic value

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It is not known what the inherent content is, what constitutes

the content of the exchange-values. Nor is it known yet whether

distinct commodities having distinct use-values may also have distinct

inherent contents. But it is affirmed that exchange-value is inherent

in the commodity if only there are multifarious synchronous exchange

relations for each commodity. The commodity in this case need not be

products of labour. Even uncultivated land, if it is traded for money

within infinite synchronous exchange relations of it, can have the

inherent content of its exchange-value. Its content, though it is

inherent, may not be identical with that of other commodities as Marx

said in Capital, vol. I, "the imaginary price-form may also conceal a

real value relation or one derived from it, as for instance the price of

uncultivated land, which is without value because no human labour is Q

objectified in it. " (Marx, 197( p 197). So, we have the following

proposition (P2.2).

(P2.2) the inherency of exchange-value: every commodity has its own multifarious exchange-values, whose content must be inherent in the commodity provided that its multifarious exchange-values are synchronous. No matter even if the commodity is a non-labour product.

The only difference between (b) and (P2.2) is in the proviso of the

latter, "provided that its multifarious exchange-values are

synchronous". But the provisory clause needs to be eliminated for a

complete verification of (b). In Appendix to 2.1, we revise (P2.2) into

(b) by showing that the definition of the commodity already satisfies

the provisory clause. For the moment, since we have no clear definition

of the commodity yet, we have to add such a proviso in the light of a

purely formal logic. [q. e. d. of (b)]

cannot obtain even through the multiplicity. A necessity itself is

something different from the multiplicity of the same experience.

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As is seen in (P2.2), non-labour products are not precluded in

the premise for analysing commodity values. According to Marx (1976, p

197), there are two kinds of non-labour product that count as

commodities; the first kind is of regular, customary commodity, the

second kind is of accidental, occasional commodity.

Under the first kind fall uncultivated land, systematised

bribery and the like. This kind is among the most important objects of

commerce and is transacted as such. It has the same form of price as

any other commodity and conceals a real value relation in itself. This

is because, as (P2.2) says, it can have multifarious and synchronous

exchange relations as in the case of ordinary commodities. Yet its

value relation is not comprehensible unless as a certain category of

capital.

By contrast, the second kind is among the exceptional objects of

accidental, occasional exchanges. The commodities which originally

cannot become commodities in principle and yet are still offered for

sale (e. g. morality, conscience, honour, bribery) are the case. They,

too have a price form. But the price form has no inherent content

because, as (P2.2) says, their exchanges are not accompanied by their

own infinite synchronous exchange relations. Their price form does not

conceal in itself a real value relation even as a capital and must be

explained away as definitely contingent.

Boehm-Bawerk (1984, p 69-73), Hodgson (1982, P 78), etc. raised

an objection against this. They argued that non-labour products were

not to be included in considering Marx's equation form because, if the

non-labour products had been included in the equation form, human labour

would not have been identified as the sought-for common element. But we

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show in 2.2 that, even if non-labour products are included, it makes no

difference at all to the result of Marx's abstraction; the sought for

common element will still be human labour.

As for (c), lastly.

Marx (l97$ p 127) started from the multifarious, synchronous

exchange relations and then affirmed in (b) that every commodity has the

inherent content of its exchange-values. In (c), to investigate what

the inherent content is, and to know whether the inherent contents of

the commodities are identical or not, Marx posits another premise. He

abstracts a single exchange relation from the infinite (multifarious)

exchange relations, and then puts it in an equation form, "1 quarter of

corn =x cwt of iron", which signifies the existence of a common element

of identical magnitude in the two different things, in 1 quarter of corn

and similarly in x cwt of iron. This we call Marx's third premise, the

equation form of exchange. As to the equation, there have been two

polemics. (1) how can a single exchange relation he justified as

abstracted from infinite (multifarious) exchange relations? (2) how can

the `equation' form of the single exchange relation be justified?

(1) Eldred and Hanlon (198