Marx's ‘Capital’, Philosophy and Political Economy by Geoffrey Pilling 1980

4 The significance of the opening chapters

We have tried to show throughout our examination of Capital that Marx regarded political economy as above all an historical science. The aim of Capital was to investigate the law of motion of a determinate mode of production, namely capitalism. Political economy was an expression of a society where the products of man’s labour were exchanged on the market and above all the reflection of a situation where these conditions became generalized. Political economy is a product of capitalism and it will disappear along with the disappearance of commodity production. Marx, therefore, had one quite specific aim in Capital: it was to lay bare the law of motion of modern society. Marx’s theory of historical materialism summarized the nature of the conditions which had been at the basis of the transition between the various modes of production. This theory, the materialist conception of history, is tested out in Capital against modern society. Thus Capital is not identical with historical materialism as some have thought. It is Marx’s effort to reveal the specific form taken by the contradictions which provide the driving force for the transition to socialism, that is for the overthrow of capitalist society. The theoretical limitations of political economy were rooted in this: the struggle of classes within capitalism was as yet not an extensive or intensive enough phenomenon with a power sufficient to pose the question of the overthrow of capitalism. Marx’s critique of political economy set out to provide a conscious, scientific reflection of this emergence of the working class in its struggle to overthrow capitalism and effect the transition to socialism. It set out deliberately to reflect, in a scientific manner, the process whereby the working class – the most decisive component in the productive forces of modern society came into increasingly severe conflict with the very limitations of bourgeois economy. This is really what Lenin meant when he spoke of Capital being a ‘testing out’ of the materialist conception of history. It is this aim of Marx – to express in scientific form the historical-material interests of a new social force as yet unconscious of itself – that gives to Marx’s work its powerfully polemical character. It is this highly polemical character which has led many of Marx’s opponents to see his work as wholly tendentious, as a work incompatible with the canons of science. In connection with this type of attack – commonplace amongst the ‘legal Marxists’ of the last century – Lenin retorted:[1]

The ‘system of Marx’ has a ‘polemical character’ not because it is ‘tendentious’ but because it accurately portrays the theory of all the contradictions that exist in life. Therefore, incidentally, all attempts to assimilate the ‘system of Marx’ without assimilating its ‘polemical character’ remain and will remain unsuccessful: the ‘polemical character’ of the system is only the accurate reflection of the ‘polemical character’ of capitalism itself.

This polemical nature of Capital certainly marks it off from anything found in the previous work of political economy. Marx, as we have already sufficiently stressed, valued highly the work of Ricardo. But Ricardo’s writing was dispassionate in the extreme. This is clear enough from the tone of his polemic with Malthus. Malthus for Marx was the ‘shameless sycophant’ who prostituted science on behalf of the landed interest. One might have thought that Ricardo – whose work reflected the emergence of industrial capital – would have been involved in bitter exchanges with his adversary. This was far from the case. According to a contemporary observer, ‘Ricardo’s discussion with Malthus and others was carried out in the same peaceful fashion as a chess game or a debate on mathematical problems.’ This is explicable in the following terms: while the Ricardo-Malthus polemic was undoubtedly concerned with very real problems (corn laws, banking legislation, etc.) which certainly affected the material interests of the landowner and the bourgeoisie none the less what was at issue, in the final analysis, was a conflict between two factions of a property-owning class. Despite their differences both factions had an overall interest in the preservation and perpetuation of the existing social order. Marx, on the other hand, came forward as the representative of a class whose historical interests lay in the most decisive and far-reaching social progress; not in the replacement of one class by another but in the abolition of classes. Because the proletarian revolution posed issues which far transcended – in their depth and scope – those of all previous social revolutions, the theoretical struggle involved in the preparation of such a revolution inevitably had a sharper, more polemical character, not previously found.

If Marx always depicts the capitalist as capital endowed with will and consciousness, we can equally depict the book Capital as Marx’s lifelong struggle to express the historical interests of the working class, to give to these interests a conscious revolutionary expression and aim. This ‘purposeful’, ‘subjective’ side of Marx’s work should be stressed; nor should we ignore the enormous privations and wants Marx lived through in the writing of Capital, a work for which, as he himself said, he sacrificed – ‘my health, my happiness in life and my family’. For this subjective side of Marx’s work is not a mere ‘aspect’ but expresses its very essence. This must be clearly said in the face of all those efforts to reduce Marxism to some branch of the social sciences – sociology, economics or whatever and to transform it thereby into an ‘academic Marxism’ which is as acceptable to existing society as was ‘legal Marxism’ some eighty years ago. In this connection it is necessary to draw the sharpest distinction between Marxism and this ‘social science’. The essential point about all social science, is that it starts from an uncritical acceptance of the facts of bourgeois society, facts which it then attempts to correlate in order to discover some regularity within them. Involved here is the traditional notion of an objectivity in which the theoretical and practical work of the observer stands separated from these ‘facts’. Marxism rejects this view of objectivity as entirely spurious. It is only possible to know what something is if we grasp the process by which, through our practice, we have come to it. For Marx, a struggle to grasp the inner-driving forces of capital and the study of the process by which the working class actually achieves consciousness of these inner forces were not separate problems.

Let us put the matter this way: Marx did not set out merely to explain the necessity of the social relations of capital. This would be an entirely one-sided view of Marx’s work, a view which can, under certain circumstances, transform Marxism into its opposite – into an instrument for ‘justifying’ these very social relations. ‘ The social relations of capitalism exist in a state of relative, not absolute, equilibrium, an equilibrium which must be overcome through the struggle of opposed forces which arise on the, basis of these social relations. In this way, Marx grasped always that investigator, if his work was to be truly scientific, must place at the very centre of his endeavours a conscious struggle to understand his own relationship to the forces being analysed; this in turn was, for Marx, inseparable from a study of his own struggle, in theory and in practice, to grasp these facts. Thus in the Communist Manifesto we read:

Finally, in times when the class struggle nears the decisive hour, the process of dissolution going on within the ruling class, in fact within the whole range of the old society, assumes such a violent. glaring character that a small section of the ruling class cuts itself adrift, and joins the revolutionary class, the class that holds the future in its hands. Just as therefore at an earlier period, a section of the nobility went over to the bourgeoisie; so now a portion of the bourgeoisie goes over to the proletariat, and in particular, a portion of the bourgeois ideologists, who have raised themselves to the level of comprehending theoretically the historical movement as a whole.

Here Marx and Engels were in fact writing of themselves. On the basis of all their practical and theoretical work they alone at that stage ‘comprehended theoretically the historical movement as a whole’. They alone had been able to grasp the historical-revolutionary significance of the appearance of the working class, a class ‘in itself’ which had consciously to be transformed into a class ‘for itself’. The actual struggle to do this – and knowing that every aspect of one’s theoretical work was subordinated to this task as for Marx and Engels the real essence of objectivity. Theory could only be developed as an expression and instrument of a definite social force in history. Marx did not ‘criticize’ capitalist social relations merely by revealing the unresolved contradictions in the work of political economy. He sought to show that the very development of capitalism actually created an instrument – the modern working class – which was obliged in life, in practice, to ‘criticize’ capitalism, to ‘criticize’ political economy, a criticism the high point of which was the overthrow of the existing social relations. Here is the very heart of Marx’s ‘critique’ of political economy. Not only must the whole of Capital be seen from this point of view, but at the same time it provides the key to understanding how Marx develops his investigation over the three volumes.

The development of Marx’s investigation

Let us give a general résumé of the structure of Capital. In Volume I is found a development of the basic theoretical concepts which reflect the relations of this specific mode of production. Marx, as we know, begins with the simplest, most fundamental, relation of capitalist society – the exchange of commodities. He at once reveals, in the investigation of a simple commodity, the contradictory nature of this cell-form as a unity of value and use-value. He then shows the contradictory nature of the labour incorporated in the commodity – concrete labour and abstract labour. Marx next reveals that the internal contradiction in the commodity finds the form of its self-movement in the external contradiction which appears as the relationship of the relative and the equivalent form of value, polar opposites indissolubly united with each other. The further development of this antagonistic relationship, which reflects the historical growth of commodity production, goes through three stages – a simple, an expanded and finally a universal form of value. In the last of these stages, the product of labour assumes a double form of the commodity itself and its monetary equivalent. The development of money, in its various functions, being the result of an extension of commodity production and at the same time the condition for the growth of these very same relations, constitutes a development of the initial contradiction. Marx now examines the conditions under which money is transformed into capital, the internal contradiction of the general form of the movement of capital (M-C-M') and the resolution of this contradiction in the buying and selling of labour-power. The appearance of this latter category, labour-power, signifies the extension of commodity relations to a scale where they are predominant, where the law of surplus value is raised to a position where it becomes the most basic law of motion of modern society. Now the most essential productive force – labour-power itself – is turned into a commodity. Production of commodities for sale becomes capitalist. The conversion of money into capital in this way denotes the development of the law of value into a new qualitative law – the law of surplus value. It is this law which constitutes the driving force of the entire capitalist system – the source of its self-movement. Marx then shows how the capitalist organization of production involves the concentration in great workshops of hitherto scattered means of production and their conversion, in this process, from productive forces of separate persons into increasingly socialized forces. This transformation occurs, of course, under conditions of increasingly narrow individual appropriation. Marx examines how the drive for a continual increase in the rate of surplus value (demanded by the very nature of capital itself as ‘self-expanding value') runs up against the twin barriers of the limited length of the working day and the growing resistance of the working class. This in turn is the fundamental source of the intensified contradiction between the social character of production and its individual appropriation.... This leads to the transition from simple capitalist cooperation into manufacturing and thence into production by machinery. Marx reveals that the progressive increase in the rate of exploitation demands an uninterrupted expansion of production, that reproduction leads to concentration and centralization of capital and consequently to the ruination of small-scale capital. From another point of view, this very same process of the continual reproduction of capital tends to create an industrial reserve army of labour and with it a trend towards the intensification of class contradictions. In his struggle to penetrate to the essence of capital and its deepening but ever-changing contradictions, Marx shows that these contradictory relations of capital provide the foundation for the emergence and development of a series of interconnected phenomena. To this are devoted the second and third volumes of Capital. In the course of the second and third volumes the process of capitalist circulation is examined – commodities produced in capitalist enterprises must be sold and only on this condition will capital be able to realize the surplus value contained potentially in the commodities and produced by wage-labour. In the final volume, the process of capitalist production, conceived of as a whole, as a dialectical unity of production and circulation, is examined. Marx deals here with the division of surplus value into the forms of profit of enterprise, interest, profits of commerce and ground rent. Marx reveals how the law of surplus value is developed in its external forms and how the law of value grows into the law of production prices. He explains how in the expansion of production the organic composition of capital tends to grow and how, under the influence of this tendency, the rate of profit tends to decline, despite the fact that the need to raise this rate continually forces capital to develop the productive forces, although in its own, increasingly contradictory way.

In the course of this development Marx traces the dialectical movement to the realm of everyday appearances through which bourgeois society functions and in which the forces for its revolutionary overthrow are forged. At the end of this, the third, volume, the most fundamental and characteristic illusions of capitalist society (illusions which are accepted uncritically by ‘vulgar economy') are revealed in their origin, development and crisis. These illusions are thus shown by Marx to be necessary illusions, forms of appearance which express, always in an inverted form, the social relations of capitalist production. Finally Marx arrives at the unfinished chapter ‘Classes’; it is in the struggle of classes that these illusions will be broken up as part of the struggle to overthrow the social conditions which generate, sustain and feed these illusions. Here Marx demonstrates concretely that the ideological sphere is no mere layer on top of the cake, nor is it some rationalization of an easily graspable ‘class interest’. Although Marx’s work does not aim to deal with a complete analysis of capitalism (such a detailed analysis would involve a full treatment of the history of ideological forms, as well as state forms etc.) it does outline the most general forms of social consciousness and reveal the manner in which they are engendered by a definite social being – namely the development of capital. Here is the ‘soul’ of Capital. The emergence and development of the object and its reflection in the consciousness of man (the developing consciousness of the working class) arise from the same process. The development of the social relation of capital itself provides the basis for the grasping in consciousness of the laws of this very development. Here object and subject are united through man’s practice.

Thus, taking Capital as a whole, Marx has given us a picture of the movement of the contradictions of capital in its emergence development and decay. This is the only way to knowledge of the law of motion of a process and of the manifold concrete forms of its appearance at different moments and under different conditions. As against this dialectical conception, all mechanistic approaches prove not only unable to lay bare the movement of opposites in their emergence and development, but such an approach really stands in the way of such a task. This is so, because from the point of view of mechanics, every process commences from a stable equilibrium, where there are either no contradictions; or they are reconciled and balanced and thereby cannot be the source of further development. On this view, contradiction appears only at a known stage of the movement of a process, as a result of the action of external forces, whether these be (in the case of capitalist development) the ‘motives’ of the capitalist, ‘competition’ or whatever. In either case, the source of development is kept entirely in the background.

The place of the opening chapters

A correct understanding of the opening chapter of Capital was, for Lenin, a vital precondition for understanding the work as a whole. And, as we have already noted, if such an understanding was to be achieved it was necessary in Lenin’s view to study the dialectic of this first chapter. What is the status of this opening chapter in which Marx subjects the commodity form of labour to a detailed investigation? In the Preface to Capital Marx himself warns us not to underestimate the importance of the analysis of this, the ‘cell-form’ of capital, while at the same time also warning that the real problem for any science lies always in its beginning. Thus:

Every beginning is difficult, holds in all sciences. To understand the first chapter, especially the section that contains the analysis of commodities, will therefore present the greatest difficulty. That which more especially concerns the analysis of the substance of value and the magnitude of value, I have as much as it was possible popularized. The value-form, whose fully developed shape is the money-form, is very elementary and simple. Nevertheless, the human mind has for more than 2,000 years sought in vain to get to the bottom of it, whilst on the other hand, to the successful analysis of more composite forms there has been at least an approximation. Why? Because the body as an organic whole, is more easy to study than are the cells of that body.... To the superficial observer, the analysis of these forms seems to turn upon minutiae. It does in fact deal with minutiae, but they are of the same order as those dealt with in microscopic anatomy. (Preface to I, pp. 7-8)

What should we make of this passage? I think this: The commodity is the cell-form of bourgeois society because it is the basic relationship of that society, basic in a double sense. First the economic relation, while of course not the only relation in society, is certainly the simplest and one found historically prior to all others. Our method, Engels tells us, ‘starts from the simplest fundamental relations we can find historically, in actual fact, that is economic relations’. Here is a point which has direct bearing upon and implications for the theory of historical materialism. For Engels is, in effect, saying here that economic relations (relations between men in the course of producing their material existence) are the ones found again and again as moments in more complex relations (political, religious, ideological, etc.). The simplest relations are moments which stand at the basis of and are involved in the richer more concrete determinations, but of course these economic relations do not exhaust the higher relations, any more than biology can be understood simply from the point of view of chemistry.

But the commodity form is a fundamental category in a second sense. Historically capital grew out of simple commodity production. ‘Small scale production,’ Lenin explained, ‘engenders capitalism and the bourgeoisie continuously, daily, hourly, spontaneously and on a mass scale’ (LCW, Vol. 34, p. 24). Exchange value has, at particular points in time, constituted a dominant and essential economic category: in antiquity and in the economy of the Middle Ages. Under modern capitalism it is in one respect ‘antediluvian’ in that it has been transcended, sublated into higher and richer economic forms. Yet it none the less remains the basic and fundamental economic relation: but for the exchange of commodities there could be no world market, no commercial, industrial or finance capital. In this respect the study of the commodity-form can be likened to the study of the simplest form of the movement of capital, one that lies at the base of all the higher, more developed forms. The connection between Marx’s procedure and the history of science is worth noting. Engels says, in connection with the study of the most elementary forms of motion, ‘The investigation of the nature of motion had, as a matter of course, to start from the lowest, simplest forms of this motion and to learn to grasp these before it could achieve anything in the way of explanation of the higher and more complicated forms’ (1960, p. 69); and, adds Engels,

All motion is bound up with some change of place, whether it be change of place of heavenly bodies, terrestrial masses, molecules, atoms or other particles. The higher the form of motion, the smaller this change of place. It in no way exhausts the nature of the motion concerned, but it is inseparable from the motion. It therefore has to be investigated before anything else. (p. 70; author’s italics)

In this sense, an investigation of the commodity, an analysis of its inherent contradictions, a study of how those contradictions grow and reveal themselves on the surface of society remains an indispensable basis for the study of capitalist development. But, having said this, we should not at the same time be unmindful of a certain danger here. It is this: while a real study and grasp of the early chapters of Capital is vital, it would be wrong to think that these chapters can in any way exhaust all the complexities in the development of capital, any more than the mechanical form of motion exhausts the higher forms of motion. In response to Lachatre’s plan to bring out a French edition of Capital in serial form, Marx, while recognizing that this would make it more accessible to the working class (‘a consideration which to me outweighs everything else') also warned of the dangers involved in such a proposal. The danger lay in the fact that

The method of analysis which I have employed, and which had not previously been applied to economic subjects, makes the reading of the first chapters rather arduous, and it is to be feared that the French public, always impatient to come to a conclusion, eager to know the connection between general principles and the immediate questions that have aroused their passions, may be disheartened because they will be unable to move on at once. (I, p. 21)

This question of the relationship between ‘general principles’ and ‘immediate questions’ is further complicated by the fact that Marx’s projected plan of work for Capital was left incomplete at his death. In 1857 his plan envisaged the following structure for the work:

1 The book on capital
2 The book on landed property
3 The book on wage labour
4 The book on the state
5 The book on foreign trade
6 The book on the world market and crises

Even on the level of economic relations (leaving aside political, ideological, etc. factors) Marx’s work was therefore incomplete: of the above six projected parts, only the first three were completed (and even here the majority only in draft form which Engels subsequently edited for publication). It is important to keep this incompleteness in mind and for the following reason: it is clearly impossible to get fully to the driving forces of the crises of capital without taking the analysis to the level which Marx was evidently hoping to deal with (Books 4-6).

Let us give a concrete instance of the sort of implications which this involves. It would clearly be naive to attempt an explanation of the structure and crisis of the present world monetary system by mere reference to what Marx says on the question of money in Capital (and even more naive to restrict oneself to what he says in the early chapters of Volume I). While, of course, this specific question will not be our concern here, it is apparent that an examination of the role and structure of the International Monetary Fund, established following the 1944 Bretton Woods negotiations, cannot be carried out merely by looking into the pages of Capital. For the particular crisis of the world money system, with which Bretton Woods tried to grapple, is a product of the entire development and decline of capital in the present century. A proper study of the world money system from a Marxist standpoint would in point of fact require amongst other things a detailed consideration of imperialism, its development since Lenin, together with a study of the relations between nation states (and particularly the relationship between Europe and America) along with an analysis of the role of the state in the economy (‘Keynesianism’, etc.). And even this would not be exhaustive. But all these factors and others would have to be analysed in the light of Marx’s work in Capital.

Engels on Marx’s method

Engels gives a characterization of the early chapters of the Critique which applies equally well to Capital. Reviewing the Critique and drawing attention to its dialectical method, Engels writes:

Even after the determination of the method, the critique of economics could still be arranged in two ways – historically or logically. Since in the course of history, as in its literary recognition, the evolution proceeds by and large from the simplest to the more complex relations, the historical development of political economy constituted a natural clue, which the critique could take as a point of departure, and then the economic categories would appear on the whole in the same order as the logical exposition. This form seems to have the advantage of greater lucidity, for it traces the actual development, but in fact it would thus become, at most, more popular. History moves often in leaps and bounds and in a zigzag line, and as this would have to be followed throughout, it would mean not only that a considerable amount of material of slight importance would have to be included, but also that the train of thought would frequently have to be interrupted; it would, moreover, be impossible to write the history of economy without that of bourgeois society, and the task would thus become immense, because of the absence of all preliminary studies. The Topical method of approach was therefore the only suitable one. This, however, is indeed nothing but the historical method, only stripped of the historical form and diverting chance occurrences. The point where this history begins must also be the starting point of the train of thought, and its further progress will be simply the reflection in abstract and theoretically consistent form, of the historical course. Though the reflection is corrected, it is corrected in accordance with laws provided by the actual historical course, since each factor can be examined at the stage of development where it reaches full maturity, its classical form. (Marx, 1971a, p. 225)

Here Engels is again stressing the unity of ‘logic’ and the actual historical development. Capital is a reflection of the actual course taken by the emergence and decline of a social system, a reflection in that it sums up this movement in a series of concepts. After stressing this point, Engels provides a brilliant sketch of the way in which Marx develops this method. Marx started, says Engels, with the simplest relation to be found, the economic relation first encountered.

We analyse, this relation. The fact that it is a relation already implies that it has two aspects which are related to each other. Each of these aspects is examined separately; this reveals the nature of their mutual behaviour, their reciprocal action. Contradictions will emerge demanding a solution. But since we are not examining an abstract mental process that takes place solely in our mind, but an actual event which really took place at some time or other, or which is still taking place, these contradictions will have arisen in practice and have probably been solved. We shall trace the mode of this solution and find that it has been effected by establishing a new relation, whose two contradictory aspects we shall have to set forth and so on. (1971a, pp. 225-6; author’s italics)

Very important here is Engels’ emphasis upon practice. The theoretical concepts which Marx abstracts in the course of his investigations are abstracted from human practice; we are dealing ehre with ‘an actual event’ which thought must accurately depict. And because we are dealing with an ever-changing reality our concepts must reflect this continual change; they must flow into each other. Engels now goes on to draw attention to the fact that in the relations between things are expressed definite social relations, that is, definite forms of practice. Thus:

Political economy begins with commodities, with the moment when products are exchanged, either by individuals or primitive communities. The product being exchanged is a commodity. But it is a commodity merely by virtue of the thing, the product being linked with a relation between two persons or communities, the relation between producer and consumer, who are at this stage no longer united in the same person ... economics is not concerned with things but the relations between persons, and in the final analysis between classes; these relations however are always bound to things and appear as things. Although a few economists had an inkling of this connection in isolated instances, Marx was the first to reveal its significance for the entire economy thus making the most difficult problems so simple and clear that even bourgeois economists will now be able to grasp them. (p. 226)

And Engels continues his review by stressing the enormous superiority of dialectical thought as against the old metaphysics.

If we examine the various aspects of the commodity, that is of the fully evolved commodity and not as it at first slowly emerges in the spontaneous barter of two primitive communities, it presents itself to us from two angles that of use-value and exchange-value, and thus we come immediately to the province of economic debate. Anyone wishing to find a striking instance of the fact that the German dialectical method at its present stage of development is at least as superior to the old superficially glib metaphysical method as railways are to the mediaeval means of transport, should look up Adam Smith or any other authoritative economist of repute to see how much distress exchange-value and use-value caused these gentlemen, the difficulty they had in distinguishing the two properly and in expressing the determinate form peculiar to each, and then compare the clear, simple exposition given by Marx. (pp. 126-7)

And he ends this review of the early parts of the Critique in the following way:

After use-value and exchange-value have been expounded, the commodity as a direct unity of the two is described as it enters the exchange process.... We merely note that these contradictions are not only of interest for theoretical, abstract reasons, but that they also reflect the difficulties originating from the nature of direct interchange, i.e. simple barter, and the impossibilities inevitably confronting the first crude form of exchange. The solution of these impossibilities is achieved by investing a specific commodity – money – with the attribute of representing the exchange-value of all other commodities. Money or simple circulation is then analysed in the second chapter, namely (1) money as measure of value, and, at the same time, value measured in terms of money i.e. price, is more closely defined; (2) money as means of circulation and (3) the unity of these two aspects, real money which represents bourgeois material wealth as a whole. This concludes the first part, the conversion of money into capital is left for the second part. (p. 227)

Althusser and the early chapters of Capital

In order to underscore the significance of the early chapters of Capital in the light of Engels’ review of the earlier Critique, let us take a slight detour and look at the position of Althusser on these early chapters. According to this author, ‘we ought to re-write Part 1 of Capital so that it becomes a “beginning” which is no longer at all “difficult”, but rather simple and easy’ (Althusser, 1971, p. 95).

For Althusser, in direct opposition to Lenin, Part 1 of Capital is not the key to understanding the rest, it is a positive barrier to that understanding. He therefore gives his readers the benefit of the following advice. ‘I therefore give the following advice: put the whole of Part One aside for the time being and begin your reading with Part Two, “The Transformation of Money into Capital"’ (pp. 79-80), adding, ‘This advice is more than advice: it is a recommendation that notwithstanding all the respect I owe my readers, I am prepared to present as an imperative (p. 80). It should be clear from what we said earlier that the real bête noire for Althusser is Hegel. He is specific on this point. Many difficulties stand in the way of understanding Capital which arise from the survivals in Marx’s language and even in his thought of the influence of Hegel’s thought’ (p. 89). As an instance of these supposed ‘difficulties’ Althusser cites,

the vocabulary Marx uses in Part I: in the fact that he speaks of two completely different things [author’s italics] the social usefulness of products on the one hand and the exchange value of the same products on the other, in terms which in fact have a word in common, the word ‘value’: on the one hand use-value, and on the other exchange value. Marx pillories a man named Wagner (that vir obscurus) with his customary vigour in the Marginal Notes of 1882, because Wagner seems to believe that since Marx uses the same word, value, in both cases, use-value, and exchange-value are the result of a (Hegelian) division of the concept of ‘value’. The fact is that Marx had not taken the precaution of eliminating the word ‘value’ from the expression ‘use-value’ and speaking as he should have done simply of the social usefulness of the products. (p. 91)

What are we to make of this passage? A glance at it reveals that Althusser has made precisely the same mistake as that other ‘vir obscurus’ Wagner. For Marx does not derive the terms ‘value’ and use-value’, from any ‘division’, Hegelian or otherwise, of the concept of value. He derives both these concepts from an analysis of the commodity. And this is crucial. For as we earlier indicated, it means that Marx never starts from any ‘concepts’ (including therefore the value concept). He begins from the simplest form of bourgeois wealth – the commodity. He shows, as against Althusser, that in the commodity far from being ‘completely different things’ use-value and value are inseparably united, are identical, but identical as opposites. Under conditions of commodity production a product of labour can only assume the value-form if it constitutes a definite use-value. In this respect use-value is primary to value in that while use-value can exist independently of commodity production, the reverse is certainly not the case. In unfolding the secret of the commodity form Marx was taking up a problem which had exercised man’s mind since antiquity. Aristotle had written that sandals could be used in two ways: in the first place they could be worn, and second, they could be exchanged for another object. If with Aristotle this two-fold nature of the products of labour was still expressed in necessarily primitive form, the economists of the eighteenth century onwards were much more conscious of this division (see the contrast political economy drew between ‘values’ and ‘riches'), even though they failed fully to understand it. And as Engels ('who had touches of theoretical genius marred by a few weaknesses’, Althusser tells us; pp. 99-100) makes clear, Marx’s ability to provide a clear analysis of the commodity form arose precisely from his indebtedness to German dialectics and principally to Hegel.

We shall return in a moment to Marx’s investigation of the commodity. But let us dwell with Althusser a little longer. He wants to leave aside Chapters 1-3 (that is presumably until he has got round to rendering them into simple, non-dialectical language for us). What implications does this ‘leaving aside’ have? It means, for Althusser, that we can plunge immediately into Part II, ‘The Transformation of Money into Capital’. This presents no problem at least for workers, as they will readily understand this section of Marx’s work:

From Part 2 ... you go straight into the heart of Volume One. This heart is the theory of surplus-value, which proletarians will understand without any difficulty, because it is simply the scientific theory of something they experience every day in class exploitation. (p. 80)

And this is not an isolated point, an excusable lapse, as it were. For earlier in his ‘Preface’ to Capital, Althusser writes, ‘If the workers have ‘understood’ Capital so easily it is because it speaks in scientific terms of the everyday reality with which they are concerned: the exploitation which they suffer because of the capitalist system!’ (p. 73) A point emphasized by Althusser, when immediately following we find ‘Capital is a straightforward discussion of their concrete lives’ (p. 74).

To take Althusser’s specific point: is the essence of Capital ‘a straightforward discussion of the “concrete lives” of the working class’? It most emphatically is not. Marx’s aim was not to show workers that they were exploited, ‘something they experience every day’. He aimed for something quite different, something revolutionary in fact. The working class did not need to be told by Marx, or indeed by anybody else, that they were exploited – this they had recognized long before the birth of Marxism. It was a recognition which found a reflection, as always, in practice, in this case the practice of trade unionism. Marx wanted to establish the revolutionary implications of this struggle of the working class. And this revolutionary consciousness does not arise directly from the immediate day-to-day struggle of the working class – it involves grasping the class struggle as a whole, on the basis not merely of everyday class exploitation, but on a real understanding of the relationship of all classes to each other and to the state. This is the real message of Lenin’s What is to be Done? (LCW, vol. 5) against all conceptions of a spontaneous struggle which would automatically generate a scientific consciousness in the working class. The majority of workers ‘know’ they are exploited; what the working class does not spontaneously have is an understanding of the socio-historical roots of this exploitation, nor of all the theoretical and political tasks which are posed in its elimination.

Now this matter has a direct bearing on the status of the early chapters (Chapters 1-3). For it is in these chapters that the logical-historical path whereby capital comes into being is traced. Speaking of the relationship of capital to surplus value, Marx says,

It is quite simple: if with £100, i.e. the labour of 10 (men), one buys the labour of 20 (men) (that is, commodities in which the labour of 20 (men) is embodied), the value of the product will be £200 and the surplus-value will amount to £100, equal to the unpaid labour of 10 (men). Or supposing 20 men worked half a day each for themselves and half for capital – 20 half-days equal 10 whole ones – the result would be the same as if only 10 men were paid and the others worked for the capitalist gratis. (1972, p. 481)

‘It is quite simple.’ But Marx immediately adds a point which implicitly refutes Althusser and establishes that it would be quite false to start from the transformation of money into capital without having grasped first of all the nature of commodity exchange.

The difficulty is simply to discover how this appropriation of labour without any equivalent arises from the law of commodity exchange – out of the fact that commodities exchange for one another in proportion to the amount of labour-time embodied in them – and to start with does not contradict this law. (pp. 481-2)

And it was here that Marx made a development on classical political economy which was to transform completely the science and this development in this case consisted in tracing the connection between the law of value and the law of surplus value, a connection which utterly eluded Ricardo and company.

Now of course Althusser pays formal acknowledgment to the revolutionary struggle of the working class. But it is purely formal acknowledgment. For in his conception the struggles are mechanically, metaphysically separated from the defensive struggle on wages and economic conditions. This is how Althusser poses this relationship:

The economic (trade union) class struggle remains a defensive one because it is economic (against the two great tendencies of capitalism). The political class struggle is offensive because it is political (for the seizure of power by the working class and its allies). These two struggles must be carefully distinguished from one another; although they always encroach upon on another; more or less according to the conjuncture. (Althusser, 1971, p. 84)

Here Althusser’s ‘conjuncture’ is introduced as a pure deus ex machina to escape from a theoretical impasse. For the problem is how is the defensive struggle transformed into the offensive. In the Manifesto, Marx shows how the very historical development of capital itself creates the material conditions for the continual growth of the class struggle from defensive concerns (wage regulation, etc.) to offensive concerns (the high point of which is the seizure of power by the working class). Capital, from this point of view, is an elaboration and working out in detail of Marx’s conceptions, first sketched out in 1848. The point here is this: it is not that the working class is engaged in a defensive struggle which at some unexplained conjunctural moment ‘encroaches’ upon an offensive struggle. As Althusser presents it here the working class is an inert mass, whose consciousness is raised by entirely outside forces (’theory’).[2] This is, however, far from the case. While denying that the working class can spontaneously reach a revolutionary consciousness (such a conception is elaborated in the theory of spontaneity’) Marxism at the same time recognizes that the working class is driven, by the very nature of its struggle in the direction of socialist consciousness. And it is this real movement of the working class which provides one of the bases for the work of Marxists. Thus in his attack on the economists, Lenin, while denying that socialist consciousness appears as a direct result of the proletarian class struggle, did agree with Kautsky that socialism and the class struggle arise side-by-side. In a footnote in What is to be Done? Lenin poses the relationship between the working class and a Marxist consciousness which avoids the mistakes of spontaneity but at the same time sees the living connection between Marxism and the working class. ‘It is often said,’ remarks Lenin, that the working class spontaneously gravitates towards Socialism.

This is perfectly true in the sense that socialist theory defines the causes of the misery of the working class more profoundly and more correctly than any other theory, and for that reason the workers are able to assimilate it so easily, provided, however, that this theory does not itself yield to spontaneity, provided it subordinates spontaneity to itself. Usually this is taken for granted, but it is precisely this which Rabocbeye Dyelo [Workers’ Cause, a magazine published by the Economists, 1899-1902] forgets or distorts. The working class spontaneously gravitates towards Socialism, but the more widespread (and continuously revived in the most diverse forms) bourgeois ideology nevertheless spontaneously imposes itself upon the working class still more. (LCW, vol. 5)

The commodity and use-value

Engels’ treatment of Marx’s method and Althusser’s attitude to the early section of Capital once more serve to draw attention to the dialectical character of Capital as a whole. In considering the nature of Marx’s starting point and his dialectical treatment of the commodity, let us recall Lenin’s characterization of the most general features of dialectics. Lenin writes: ‘The splitting of a single whole and the cognition of its contradictory parts ... is the essence of dialectics’ (LCW, vol. 38, p. 359). Now this question of the ‘single whole’ must be especially kept in mind when considering the point from which Capital begins. If Marx’s aim was to present the capitalist system in the whole sweep of its development, then the commodity had also to be understood in its whole development. The commodity was shown by Marx to be a unity of value and use value. And it was necessary that both these ‘sides’ be kept in view. For a knowledge of both these opposites, in their conflict, is necessary if thought is to get near to the real movement of commodity production. Lenin puts this point in the following way ‘The condition for the knowledge of all processes of the world in their “self-movement”, in their spontaneous development, in their real life, is the knowledge of them as a unity of opposites. Development is the “struggle” of opposites’ (LCW, vol. 38, p. 360). As we have seen, for Marx, in the investigation of economic terms abstraction was essential. But this process of abstraction is a contradictory one. For abstraction to a certain extent kills the living movement of reality. The problem for thought, therefore, is really this: how to depict movement through concepts. The ancient Greek rationalist Zeno regarded movement as ‘sensed truth’. But he did not rest on a mere admission of fact. He was among the first in the history of philosophy to show the contradictory aspects of movement the contradiction between ‘discreteness’ and ‘continuity’ of ‘rest’ and ‘motion’. He was among the first of those who attempted to understand the connection between these aspects; but he was unable to comprehend this contradiction in terms of fixed concepts, and therefore, as a rationalist, came to a denial of the reality of movement. But the question is not whether there is such a thing as movement; that is acknowledged as a fact of experience and verified in the history of science – the problem for thought is thus how to grasp movement through concepts which inevitably tend to coarsen and strangle reality. As Lenin shows this is not a ‘problem’ for thought, so much as an expression of the contradictory nature of all reality, a contradiction which finds its essential expression in dialectics. Thus

We cannot imagine, express, measure, depict movement, without interrupting continuity, without simplifying, coarsening, dismembering, strangling that which is living. The representation of movement by means of thought always makes coarse, kills – and not only by means of thought, but also by sense-perception, and not only of movement, but every concept. And in that lies the essence of dialectics. And precisely this essence is expressed in the formula: the unity, identity of opposites. (pp. 259-60)

And elsewhere in this work Lenin makes this same point when he says that Hegel showed that ‘in abstract concepts (and in the system of them) the principle of motion cannot be expressed otherwise than as the principle of the identity of opposites’ (p. 345).

The way Marx develops his investigation of the commodity testifies both to the truth of Lenin’s propositions and the essential sterility of Althusser’s position. For Marx does in fact ‘hold fast’ to both sides of the commodity. He reveals throughout the whole of Capital how the contradiction of the commodity form unfolds, intensifies and dominates every aspect of bourgeois society. The contradictions of the commodity are never left behind; nor are they merely ‘returned to’ at various points throughout the three volumes. This basic contradiction (use-value, value) continually reappears in newer and higher forms which grow out of the lower forms as part of an uninterrupted process. It is through the development of these forms that development in the sphere of economy takes place.

Let us examine the question more specifically, from the point of view of the place occupied by use-value in Marx’s analysis. One considerable debt we owe to Rosdolsky lies in the fact that he has done much to clear up the confusion surrounding this matter in most popularizations of Capital. (See Rosdolsky, 1977, Ch. 3). Summing up his discussion and making what is the decisive point he says, ‘Engels was surely right when he perceived in Marx’s treatment of use-value, and its role in political economy, a classic example of the use of the “German dialectical method"’ (p. 95).

Among Marx’s many criticisms of Ricardo’s work was the fact that he had tended to ignore the place of use-value in his economics. For Ricardo, says Marx, it ‘remains lying dead, as a simple presupposition’ (G, p. 320). He was, adds Marx, only ‘esoterically concerned’ with this category (G, p. 647). Now, as Rosdolsky makes clear, the importance of these comments had certainly escaped many writers on Capital. Sweezy’s case is typical and important if only because his Theory of Capitalist Development has long been recognized as perhaps the standard popularization of Marx’s political economy. Sweezy clearly gets the matter of use-value quite wrong. And one source of his error is undoubtedly the confusion of ‘use-value’ with the concept of ‘utility’ found in bourgeois economics. Sweezy writes, ‘Marx excluded use-value (or as it would now be called “utility”) from the field of investigation of political economy on the ground that it does not directly embody a social relation’ (1946, p. 26). And pointing out that bourgeois and Marxian value theories are ‘diametrically opposed’, Sweezy adds, ‘Nor should it be made a matter of reproach against Marx that he failed to develop a subjective value theory, since he consciously and deliberately dissociated himself from any attempt to do so’ (p. 26). Now ‘utility’ is a subjective, a social category concerned with the relationship between an individual’s supposed mental state and material objects. Marx, of course, entirely rejects this starting point as having anything to do with science. For it pretends to deduce social laws from states of mind. It would have been impossible to develop a value theory from such a standpoint. The theory of marginal utility was not a rival value theory, for value is, as a social relation of a specific kind, precisely what is excluded by the upholders of marginal utility theory. But when we come to consider use-value we are dealing with an entirely different matter. Use-value is the substance of all wealth, with an entirely objective existence. Use-values are produced under all social conditions. Thus far from being uninterested in this category, Marx is vitally concerned with it in so far as it is itself a ‘determined economic form’. This is what he says on the subject:

To be a use-value is evidently a necessary prerequisite of the commodity, but it is immaterial to the use-value whether it is a commodity. Use-value as such, since it is independent of the determinate economic forms, is outside the sphere of investigation of political economy. It belongs to this sphere only when it is a determinate form. (author’s italics; I, p. 28)

The key point here is that Marx is not interested in use-value as such. He is interested solely in it in connection with the analysis of given economic forms. His answer to Wagner clears up the matter at issue:

Only an obscurantist who has understood not a word of Capital can conclude: Because Marx repudiates all Germanic professional nonsense about ‘use-value’ in general [author’s italics] in a note to the first edition of Capital, and refers readers who wish to know something about actual use-values to ‘Introduction to Commodity Theory’ – for that reason, use-value plays no role in his work. Naturally, it does not play the role of its contrary, ‘value’, which has nothing in common with it apart from the fact that ‘value’ occurs in the term ‘use-value’. He could just as well have said that ‘exchange-value’ is ignored in my work because it is only appearance-form of value, but it is not ‘value’, since for me the ‘value’ of a commodity is neither its use-value nor its exchange-value. (Marx, 1976, p. 215)

And Marx goes on:

If one has to talk of analysing the ‘Commodity’ – the simplest economic concretum – then one must keep all relationships distant which have nothing to do with the proposed object of analysis. What is to be said of the commodity in so far as it is a use-value, I have said in a few lines. Therefore, but on the other hand have emphasized the characteristic form in which the use-value (the labour product) appears at this point, namely [here Marx quotes from the first volume of Capital] ‘A thing can be useful and a product of human labour without being a commodity. Whoever satisfies his own need by his product creates a use-value, admittedly, but not a commodity. In order to produce a commodity, he not only has to produce a use-value, but a use-value for others, social use-value’ ... Thereby use-value (as use-value of the ‘commodity’ itself) possesses a history-specific character ... Thus it would be pure babbling (as emerges from the preceding) in the analysis of the commodity – since it manifests itself on the one hand as use-value or good and on the other hand as ‘value’ – to ‘tie on’ upon this occasion all sorts of banal reflections concerning use-values or goods which do not fall within the realm of commodities. (pp. 215-16)

Immediately following this passage Marx says that Wagner failed to see that in Capital ‘use-value plays a very important role different from in previous Economics, but that it precisely only comes from the analysis of a given economic structuring, not from intellectualizing hither and yon about the concepts or words “use-value” and “value” (p. 216). Karl Korsch got this question right, even though one would wish to dissent strongly from him on many others. He writes:

With Marx ... use-value is not defined as a use-value in general, but as the use-value of a commodity. This use-value inherent in the commodities produced in modern capitalist society is however, not merely an extra-economic presupposition of this ‘value’. It is an element of the value, and itself is an economic category. The mere fact that a thing has utility for any human being, say for its producer, does not yet give us the economic definition of use-value. Not until the thing has social utility (i.e. utility ‘for other persons') does the economic definition of use-value apply. (Korsch, 1963, p. 123)

(In his last sentence Korsch is not strictly correct; as Engels points out in a parenthesis (I, p. 41) in Capital, commodities do not involve only the production of ‘social use-values'; this use-value must be transferred to another, whom it will serve as a use-value, by means of an exchange’.)

Thus, far from being excommunicated from the investigation of capitalism, use-value plays a central role. We can see this in connection with surplus value itself which, as Marx shows, arises from the use-values of the commodity labour-power. But let us give a series of examples to indicate the role played by use value.

1 Marx gives one clear example in connection with the determination of the rate of profit, to the extent that the rate of profit depends on fluctuations in the value of raw materials. For, as Marx puts it,

it is especially agricultural produce proper, i.e. the raw materials taken from nature, which ... is subject to fluctuations of value in consequence of changing yields etc. Owing to uncontrollable natural conditions, favourable or unfavourable seasons, etc. the same quantity of these use-values may therefore have different prices. (III, pp. 117-18)

Such variations must always affect the rate of profit ‘even if they leave the wage untouched and hence the rate and amount of surplus value too’ (III, p. 115).

2 As a second instance of the role of use-value in the investigation of economic forms we can take the case of the Reproduction Schema given in the second volume of Capital. For Marx the problem of capital turnover was a two-sided one. In the first place, in order that reproduction may be achieved, the total value embodied in the commodities produced must be realized, that is sold at prices equivalent to their value. But at the same time, we are not dealing with a purely value-creating and realizing process. For at the same time reproduction always requires, if it is to be crisis-free, that the use-value of the commodities produced should fulfil definite material conditions for the recommencement of production. If, in an extreme case, all commodities produced were raw materials, workers and capitalists alike would starve (assuming no reserves of food were available). Or if all commodities produced were consumer goods there would be no resources to make good wear and tear of machinery and the economy would eventually grind to a halt. So the use-value composition of the outputs of Departments I and II is clearly a crucial factor in an analysis of the conditions of potential equilibrium and breakdown alike.

3 As a final example of the importance of a proper consideration of the use-value side of commodity production let us take the example of money. Even with simple commodity circulation, with the emergence of the money-form of the commodity, the value of a commodity must be represented in the form of use-value, that is in the natural form of the commodity. This means that not only must money itself be a commodity, but also that this use-value must be connected to quite specific material properties of this money-commodity. As Marx puts this point,

In proportion as exchange bursts its local bonds, and the value of commodities more and more expands into an embodiment of human labour in the abstract, in the same proportion the character of money attracts itself to commodities that are by Nature fitted to perform the social function of a universal equivalent. These commodities are the precious metals. (I, p. 89; author’s italics)

And Marx immediately adds ‘although gold and silver are not by Nature money, money is by Nature gold and silver’ (I, p. 89; author’s italics).

The formation of money

The first three sections of the opening chapter of Capital are concerned with the formation of money. For Marx, the problem was not to show that money was itself a commodity (in the case of gold this was obvious) but to demonstrate the transition from the most simple, elementary relation of the commodity to money. ‘The difficulty,’ as Marx puts it, ‘lies not in comprehending that money is a commodity, but in discovering how, why and by what means a commodity becomes money’ (I, p. 92). But before looking at the manner in which Marx sets out to trace this process, it is necessary to stress once more that Marx is not engaged in some mere manipulation of concepts, ‘applying’ a few Hegelian concepts and phrases. Marx warns against precisely this view when he tells us:

It will be necessary later, before the question is dropped, to correct the idealist manner of its presentation, which makes it seem as if it were merely a matter of conceptual determination and of the dialectic of these concepts. Above all in the case of the phrase: product (or activity) becomes commodity; commodity exchange value; exchange-value, money. (G, p. 151)

Here Marx is making a point he made over and over again: namely that economic categories reflect real human practice. Engels’ insistence on the unity of the ‘logical’ and the ‘historical’ can be seen in practice in Capital (as well as in the Grundrisse) where logical derivation of the concepts ‘value’ and ‘money’ is paralleled with a historical derivation of these same categories. Marx always confronts the results of his abstract analysis with actual historical developments. The exchange of commodities arises from a long process of economic development and presupposes a certain level of the productivity of labour. The decisive point for the development of commodity production arises when communities are able to produce more than they require for their immediate subsistence, that is as soon as this labour can regularly generate a ‘surplus product’. Now the exchange of products, says Marx, tends not to take place within communities, but between them. This primitive barter is still, however, a long way (both logically and historically) from developed exchange. For this, developed exchange, exchange value has to acquire an independent form. This fact is revealed in two ways. The production of use-value remains the purpose of society. Use-values cease to be merely use-values and become means of exchange or commodities, only after a larger amount of them has been produced than is needed for consumption. But even when this occurs, this surplus takes the form of commodities only within the limits set by the nature of these use-values. Thus ‘the commodities to be exchanged by their owners must be use-values for both of them, but each commodity must be a use-value for its non-owner’ (Contribution, p. 50). It is only when a portion of the products of labour are produced with a special view to exchange that,

the distinction becomes firmly established between the utility of an object, for the purposes of exchange. Its use-value becomes distinguished from its exchange-value. On the other hand, the quantitative proportions in which the articles are exchangeable, becomes dependent on their production itself. Custom stamps them as values with definite magnitudes. (I, p. 88)

So the appearance of the value-form is a reflection of the growth of the productive forces: ‘The necessity for a value-form grows with the increasing nature and variety of the commodities exchanged. The problem and the means of solution arise simultaneously’ (p. 88; author’s italics). Commercial exchange in which commodity-owners exchange and compare articles, never takes place unless the different kinds of commodities belonging to different owners are exchanged for, and equated at values with, one single further kind of commodity. And this commodity thereby acquires, albeit at first within narrow limits, the form of a universal social equivalent. But it lacks as yet any real stability. It appears and disappears with the momentary, often accidental contacts (between communities) which call it into being. It is attached first to this, then to that commodity. It is only with the development and growth of exchange that it fixes itself to particular types of commodities – that is, it is crystallized out into the money form.

To start with, Marx indicates that a commodity will serve as money which represents in a given community the predominant form of wealth – that is to say the commodity most frequently exchanged and circulated as an object of consumption. At this stage, the commodity ‘selected’ is determined by the particular usefulness of the commodity as an object of consumption (salt, hides, etc.) or of production (slaves). In the case of a higher development this situation is transformed into its exact opposite, now it is the commodity which has the least utility as an object of consumption or production that best serves the needs of exchange as such. In the first case, the commodity becomes money merely because of its particular use-value, in the latter case it acquires use-value precisely because of its serviceability as money. This makes the precious metals especially suitable – they are easily divisible and combinable, they are readily transportable owing to the compression of considerable value in a little space.

Having stressed the historical-practical nature of the process which brings the money-form into being, let us now consider how Marx traces this appearance in logic. We know already that the products of labour only constitute values in so far as they embody the same social substance, general human labour. But we know also that it is the labour of individuals, expressing different degrees of intensity, skill, etc, in short definite concrete labour ‘which assimilates particular natural materials to particular human requirements’ (I, p. 42). As such this labour is always objectified ‘in a definite particular commodity, with particular characteristics, and particular relations to needs’, but as human labour in general it needs to be embodied ‘in a commodity which expresses no more than its quota or quantity, which is indifferent to its own natural properties, and which can therefore be metamorphosised onto i.e. exchanged for – every other commodity which objectives the same labour-time’ (G, p. 168). This means that ‘The commodity, as it comes into being, is only objectified individual labour-time of a specific kind, and not universal labour-time. The commodity is thus not immediately exchange-value but has still to become exchange-value’ (Contribution, p. 43). It is of course important to keep in mind the fact that this contradiction between individual and universal labour is a reflection of the contradictory nature of the commodity itself, that is of objectified labour. Thus, ‘Two commodities, e.g. a yard of cotton and a measure of oil, are different by nature, have different properties, are measured by different measures, are incommensurable,’ (G, p. 141). While,

Considered as values, all commodities are qualitatively equal and differ only quantitatively, hence can be measured against each other and substituted for one another ... in certain qualitative relations. Value is their social relation, their economic quality ... As value a commodity is an equivalent for all other commodities: as an equivalent, all its natural properties are extinguished: it no longer takes up a special, qualitative relationship towards the other commodities: but is rather the general measure as well as the general representative, the general medium of exchange of all other commodities. As value, it is money. (G, p. 141)

And it is for this reason that value must take on an existence independent of the bodily existence of the commodity. Marx explains that vital point in the following way;

The property of being a value not only has but must achieve an existence different from its natural one. Why? Because commodities as values are different from one another only quantitatively; therefore each commodity must be qualitatively different from its own value. Its value must therefore have an existence which is qualitatively distinguishable from it, and in actual exchange this separability must become a real separation, because the natural distinctness of commodities must come into contradiction with their economic equivalence, and because both can exist together only if the commodity achieves a double existence, in which it is a mere symbol, a cipher for a relation of production, a mere symbol for its own value. (G, p. 141; author’s italics)

The elementary form of value

We can now examine Marx’s analysis of the movement from direct barter; the succession of the stages of exchange – the ‘simple’, the ‘total’ and the ‘general’ value-forms. As Marx notes:

Everyone knows, if he knows nothing else, that commodities have a value-form common to them all, and presenting a marked contrast with their varied bodily forms of their use-value. I mean their money-form. Here, however, a task is set us, the performance of which has never yet even been attempted by bourgeois economy, the task of tracing the genesis of this money-form, of developing the expression of value implied in the value-relationship of commodities, from its simplest almost imperceptible outline to the dazzling money-form. By doing this, we shall, at the same time, solve the riddle presented by money. (I, pp. 47-8)

We should note, in passing, that despite the fact that Marx here tells us that in tracing the genesis of the money-form he was attempting something never properly considered by bourgeois economy, very few writers on Capital have paid the slightest attention to the sections in Capital dealing with the value-form and its growth. The late Ronald Meek in his Studies in the Labour Theory of Value dismissed the analysis of the value-form in one short paragraph. ‘There is no need’, he writes,

for us to follow Marx’s rather complex analysis of the ‘elementary’, ‘expanded’ and ‘money’ forms of value in any detail. Essentially, what he is trying to do here is to reveal the contradictions which result from the reciprocal interaction of the two sides of the value equation, and to demonstrate the nature of the solutions of these contradictions which logic and history – demand and provide. (Meek, 1973, pp. 173-4)

In our opinion this is quite inadequate,[3] Marx’s analysis on this question cannot be dismissed on the grounds that it is ‘rather complex’. For, as we will endeavour to show, the proper appreciation of the elementary value-form, that is the exchange of two commodities (20 yards of linen = 1 coat), not only provides the key to understanding the nature of money (which classical economy, let alone modern economic theory, failed to understand), but also the key to Marx’s notion of fetishism, which Rubin (1972) in particular has so correctly insisted is one of the foundations of Marx’s entire analysis of capitalism.

Let us follow Marx’s argument. From the beginning he indicates that in the elementary or accidental value-form (x commodity A = y commodity B) is expressed, in ‘external’ form the ‘internal’ contradiction within the commodity itself. In the first edition of Capital we find the following crucial passage.

The inner opposition contained in the commodity of use-value and value is thus manifested by an external opposition; that is the relationship of two commodities of which the one counts immediately only as use-value, the other immediately as exchange-value, or in which both of the opposite determinants of use-value and exchange-value are apportioned among the commodities in a polar manner. (Marx, 1976, p. 61)

And a similar passage is found in the third edition where we read:

The opposition or contrast existing internally in each commodity between use-value and value, is therefore, made evident externally by two commodities, being placed in such relation to each other, that the commodity whose value it is sought to express, figures directly as a mere use-value, while the commodity in which that value is to be expressed, figures directly as mere exchange-value. Hence the elementary form of value of a commodity is the elementary form in which the contrast contained in that commodity between use-value and value, becomes apparent. (author’s emphasis; I, p. 61)

These passages are crucial and worth considering carefully for the following reason: Marx is here presenting value in truly dialectical manner. For value is an inner relation of the commodity to itself, reversed in outward form through the relation to another commodity. This other commodity (here the coat) plays the passive role of the mirror in which the inwardly contradictory nature of the commodity that expressed its value (the linen) plays the active role. Here is expressed the fact that dialectics obliges one always to discover, behind the outward form of a thing’s relation to another thing, its own inner nature, its own being. (We should note that the properties of a thing – say the linen – are not the result of its relation to other things – the coat – but only manifest themselves in such relations.) Of course dialectics does not reduce the external relations (between two commodities in the elementary form of exchange) to the internal contradiction of the commodity. The question was not one of reduction, but of deriving the former from the latter and thus comprehending both in their objective necessity. Exchange-value has to be derived from the contradiction between value and use-value within the cell of bourgeois society.

True to the dialectical conception of the whole work, Marx tells us that this elementary form is the key to understanding the mystery of the entire value-form, just as the contradictory nature of the commodity is the ‘germ’ of all the more developed contradictions. Thus, ‘The whole mystery of the form of value lies hidden in this elementary form. Its analysis, therefore, is our real difficulty.’ It is, putting the matter more concretely, the contradictions of this elementary form which provide the essential key to all the higher, more general contradictions: ‘We perceive, at first sight, the deficiencies of the elementary form of value; it is a mere germ which must undergo a series of metamorphoses before it can ripen into the price-form’ (I, p. 62; author’s italics). Thus Marx says, ‘The antagonism between the relative form of value and the equivalent form, the two poles of the value-form is developed concurrently with the form itself (I, pp. 67-8). Now it is precisely because the equation 20 yards of linen = 1 coat is the ‘germ’ of all the contradictions of capital that we must investigate it thoroughly. Lenin spoke specifically of this point in Capital when he wrote:

Just as the simplest form of value, the individual act of exchange of one given commodity for another, already includes in an underdeveloped form all the main contradictions of capitalism – so the simplest generalization, the first and simplest formation of notions (judgements, syllogisms, etc.) already denotes man’s ever deeper cognition of the objective connection of the world. Here is where one should look for the true meaning, significance and role of Hegel’s Logic. This NB. (LCW, Vol. 38, p. 178)

In other words, as Lenin points out elsewhere in the Philosophical Notebooks, even in the simplest copular judgment ('Fido is a dog') is found the germ of dialectics (the relation between the individual and the universal, between chance and necessity, the identity of opposites, etc.) so in the elementary value-expression is found the as yet hardly perceptible germ of the entire movement of capital.

Now in this elementary value form (for simplicity’s sake we will throughout use Marx’s example, 20 yards of linen = 1 coat) the linen plays the active role, the coat the passive. The qualitative-quantitative contradiction of the commodity linen is ‘resolved’ in the relationship of this commodity linen to its equivalent-form, the coat. But it is not resolved in the sense that the initial contradiction disappears – it is heightened into an even sharper antagonism. Thus, ‘The relative form and the equivalent form are two intimately connected, mutually dependent and inseparable elements of the expression of value; but at the same time are mutually exclusive, antagonistic extremes, i.e. poles of an expression’ (I, p. 48). (We can note in passing that this antagonistic nature of the elementary value-form comes across even more strikingly in German by the fact that linen is a feminine word and coat a masculine.) At the outset Marx leaves aside an investigation of the purely quantitative side of this relationship. Here alone is revealed one important aspect of Marx’s difference with the political economists whose attention, as we have seen, was directed almost wholly to this quantitative side. Marx says, on this point,

It is the expression of equivalence between different sorts of commodities that alone brings into relief the specific character of the value-creating labour, and this it does by actually reducing the different varieties of labour embodied in the different kinds of commodities to their common quality of human labour in the abstract. (I, p. 49)

Two points should be noted in connection with this and many similar passages. First, one already made and therefore a question that need not detain us, namely the objective character of this reduction of concrete to abstract labour. Second, the fact that the two-fold character of labour embodied in the commodity is only made manifest, only ‘brought into relief’ in the elementary value-form, in the simple relation between two commodities. just as the two-fold character of the commodity is only made visible through its relations with another commodity, the same is equally true for the two-fold nature of the labour which produces the commodity.

But, notes Marx, it is not adequate merely to grasp the value-creating nature of labour (that is, abstract labour); it is necessary to see that the reduction of concrete labour to abstract labour is not and cannot be a direct one. It is, by its very nature, a mediated process, one in which the abstract labour congealed in the commodity in congealed in the form of some object and only in this indirect way can it become ‘value’. In a passage which shows the not immodest distance separating Marx from all those who read him as a ‘consistent empiricist’ we find:

There is however something else required beyond the expression of the specific character of the labour of which the value of the linen consists. Human labour-power in motion, or human labour, creates value, but is not itself value. It becomes value only in its congealed state, when embodied in the form of some object. In order to express the value of the linen as a congelation of human labour, that value must be expressed as having objective existence, as being something materially different from the linen itself, and yet a something common to the linen and all other commodities. The problem is already solved. (I, p. 51)

Marx is here stressing the fundamental fact that in a society of atomized private producers the labour of the individual is not directly social, nor can it ever be. The labour of the individual becomes social only through the negation of its own original character, by appearing in a directly opposed form. Despite the increasingly socialized nature of production under the capitalist system, there is no unified, conscious, mechanism of social planning. The only ‘planning’ takes place through the blind force of the market. ‘The total movement of this order is its disorder.’ Hence, Marx, in summing up his discussion of the relative form, says, ‘The value of the commodity linen is expressed by the bodily form of the commodity coat; the value of one by the use-value of the other.... Thus the linen acquires a value-form different from its physical form’ (I, p. 52). Speaking of the linen, Marx says, ‘In order to inform us that its sublime reality as value is not the same as its buckram body, it says that value has the appearance of a coat, and consequently that so far as the linen is value, it and the coat are as like as two peas’ (I, p. 52). Marx then turns to the peculiarities of the equivalent form (the coat). It is through an examination of these ‘peculiarities’ that he shows how the contradictions in the elementary form of value are in fact overcome – overcome by being taken into a higher unity in the money form. For the peculiarities of the form 20 yards of linen = 1 coat highlight with even more force the indirect, unconscious nature of the process of production under capitalism, a process which therefore demands, and finds, some universal value-form (money) in which this indirectness is turned into its opposite. The three peculiarities are:

1 ‘Use-value becomes the form of its manifestation, the phenomenal form of its opposite, value.’

2 The fact ‘that concrete labour becomes the form under which its opposite direct human labour manifests itself.’

3 The fact ‘that the labour of private individuals takes the form of its opposite, labour directly social in its form’ (I, pp. 55-8).

Here are brought out by Marx (brought out after the detailed investigation of the elementary form which has so often been neglected in commentaries on Capital) all the major contradictions of capital – although naturally only in embryonic form. In particular we should note the fact that the two-fold character of labour which is first revealed in the elementary value-form (remembering the importance of the concrete-abstract labour distinction in Marx’s work):

The body of the commodity that serves as the equivalent, figures as the materialization of human labour in the abstract, and is at the same time the product of some specifically concrete labour. This concrete labour becomes therefore the medium for expressing abstract human labour (I, p. 58)

And further

if on the one hand the coat rates as nothing but the embodiment of abstract human labour, so, on the other hand, the tailoring which is actually embodied in it, counts as nothing but the form under which that abstract labour is realized. In the expression of the value of the linen, the utility of the tailoring consists, not in making clothes but in making an object, which we at once recognize to be value, and therefore to be a congelation of labour, but of labour indistinguishable from that revealed in the value of the linen. In order to act as such a mirror of value, the labour of tailoring must reflect nothing besides its own abstract quality of being human labour generally. (I, p. 58)

The development of the value-form

Precisely because of the unresolved contradictions of the elementary value-form, it must develop into newer higher forms in which these contradictions are never lost, but always sublated. Out of the internal contradictions of the form 20 yards of linen = 1 coat grows the expanded value-form, namely 20 yards of linen = 1 coat, 2 sheep, 1/2 ton of iron etc. This form comes into actual existence for the first time as soon as a particular product of labour, such as cattle, is no longer exceptionally, but habitually, exchanged for various other commodities (I, p. 66). (This stage corresponds to the ‘particular’ in Hegel’s logic: a series of particular commodities play the role of equivalent alongside each other.)

Having looked at Marx’s treatment of the elementary form in some detail, this expanded form need not detain us over-long. However, we need to draw attention to the fact that the relations which were in the elementary form (the individual) relatively imperceptible now manifest themselves with greater force and clarity in this higher form.

It is thus that for the first time that value shows itself in its true light, as a congelation of undifferentiated human labour. For the labour that creates it, now stands expressly revealed as labour that ranks equally with every other sort of human labour, no matter what its form, whether tailoring, ploughing, mining etc. (I, p. 63; author’s italics)

Expressed in the expanded form is an expansion of the actual social relations of commodity production. For the linen, by virtue of its form of value, no longer stands in a social relation with merely one kind of commodity, but ‘with the whole world of commodities’ and becomes a true citizen of the world of commodities (I, p. 63). The semblance of the relations of the elementary form now takes on apparent form in another sense. (We should note that Marx here deals quite consciously with this movement from ‘semblance’ to ‘appearance’, an appearance in which it becomes possible to identify clearly the opposites in the phenomena under investigation.) For what seemed previously mere chance is now revealed to be necessity in this expanded form.

In the first form ... it might for ought that otherwise appears, be pure accident, that the two commodities are exchangeable in definite quantities. In the second form on the contrary, we perceive at once the background that determines and is essentially different from this accidental appearance. The value of the linen remains unaltered in magnitude, whether expressed in coats, coffee, or iron, or in numberless different commodities, the property of as many different owners. The accidental relation between two individual commodities disappears. (I, p. 63)

Further, says Marx, ‘It becomes plain that it is not the exchange of commodities which regulates the magnitude of their value; but on the contrary, that it is the magnitude of their value which controls their exchange proportions’, a point which, incidentally, makes clear Marx’s conception of the relationship of ‘production’ to ‘exchange’. And just as in the case of the elementary form so now in the case of the expanded, Marx goes on to reveal the deficiencies of this total form.

In the first place, the relative expression of value is incomplete because the series representing it is interminable. The chain of which each equation of value is a link, is liable at any moment to be lengthened by each new kind of commodity that comes into existence and furnishes new material for a fresh expression of value. (I, p. 64)

This form, precisely because it is always by its nature incomplete and ‘deficient in unity’ (I, p. 64) gives way to a higher form, the General Form of Value, expressed as follows

1 coat
10 lbs of tea
40 lbs of coffee, etc.
= 20 yards of linen

This form, like all economic forms, has a definite material base, that is, a definite foundation in human history. This form ‘expresses the value of the whole world commodities in terms of a single commodity set apart for the purpose, namely, the linen, and this represents to us their values by means of their equality with linen’ (I, p. 66).

It is in this General Form that all the different, opposed, commodities (and by extension all the particular concrete types of labour embodied in these commodities) are united in one commodity. The previous ‘deficiency in unity’ of the total form is now overcome. As such this General Form of Value preserves within it the elementary form, but in an inverted way:

All commodities now express their value (1) in an elementary form because in a single commodity; (2) with unity, because in one and the same commodity. This form of value is elementary and the same for all, therefore general. (I, p. 65)

And this unity, summed up in the General concept is no mere mechanical unity, no mere addition of each commodity, individually, apart from the rest, ‘finding’ the form of its value in one single, excluded commodity. Quite the contrary: the unity is a dialectical unity, for in one excluded commodity is represented the ensemble of all commodities, their joint action. (This should be seen in the light of the earlier discussion of the nature of dialectical concepts as opposed to those constructed on the basis of purely formal thought.) This point is made clear when Marx compares the elementary and expanded forms with the general.

The two earlier forms either express the value of each commodity in terms of a single commodity of a different kind, or a series of many such commodities. In such cases, it is, so to say, the special business of each single commodity to find an expression for its value, and this it does without the help of the others. These others, with respect to the former, play the passive parts of equivalents. The general form of value, C, results from the joint action of the whole world of commodities, and from that alone. A commodity can acquire a general expression of its value only by all other commodities, simultaneously with it, expressing their values in the same equivalent; and every new commodity must follow suit. It thus becomes evident that, since the existence of commodities as values is purely social, this social existence can be expressed by the totality of their social relations alone, and consequently that the form of their value must be socially recognized form. (I, p. 66; author’s italics)

Thus it is not that each commodity ‘finds’ its value in its passive opposite. Now we have a transformation of opposites. For the excluded commodity (here the linen) finds the value of all the other commodities in an objective process, one where ‘every new commodity must follow suit’. The passive has now become active and the active passive. The social relations of commodities are now revealed as objective relations in and through which ‘by joint action’ the value of each commodity is expressed in the one excluded commodity. If the General value-form embraces, as it does, the whole world of commodities in their movement, then it must be the abstract epitome, a condensed history of this whole world, or, as Marx says (I, p. 67), the ‘social résumé’ of that world.

Now we are on the edge of the emergence of the money-form, expressed by:

20 yards of linen
1 coat
40 lbs of coffee
10 lbs of tea, etc.
=2 ounces of gold

Money appears when the exclusion of one commodity, seen in the General Form, becomes finally restricted to one commodity, gold. A commodity which may have served as a single equivalent in isolated exchanges (elementary form) or as a particular equivalent alongside several others (the expanded form) now serves as a universal equivalent. Only when this monopoly position is firmly established does the general form give way to the money-form.

Clearly, not all aspects of this opening chapter of Capital have been examined. But in tracing the transition from commodity to money, Marx was laying the essential basis for the rest of his work as well as making an enormous advance over anything achieved in political economy. For he has now traced the origin of money and in this way laid the foundation for understanding the mystery which surrounds this fetishized form in which men’s social relationships appear embodied in a metal. Precisely because even the best figures in political economy were unable to tackle the problem of the historical nature of the predominant forms of bourgeois economy, for them money did remain a mystery, merely a thing, merely a symbol. We can best look at this problem by examining Marx’s theory of fetishism and the place which it occupies in his work.


1 A flavour of this polemical character can be seen in Marx’s comments on Edmund Burke: ‘This sycophant who, in the pay of the English oligarchy, played the romantic laudator temporis acti against the French Revolution, just as, in the pay of the North American Colonies at the beginning of the American troubles, he played the Liberal against the English oligarchy, was an out and out vulgar bourgeois. “The laws of commerce are the laws of Nature and therefore the laws of God.” No wonder that, true to the laws of God and of Nature, he always sold himself in the best market’ (I, p. 760).

2 Attacking the ‘humanist-historicist’ interpretation of Marxism Althusser (Reading Capital, pp. 140-1) argues that ‘Marxist theory is produced by a specific theoretical practice, outside the proletariat, and that Marxist theory must be ‘imported’ into the proletariat.’ He claims that this quite one-sided view was actually upheld by Lenin.

3 This omission on the part of Meek and most others is surprising given Marx’s many explicit statements on the problem of the form of value. Urging Marx not to change a draft he had made of the early sections of Capital, Engels writes (16 June 1867), ‘The second sheet especially bears rather strong marks of your carbuncles, but that cannot be altered now and I do not think you should do anything more about it in an addendum, for, after all, the philistine is not accustomed to this sort of abstract thought and certainly will not cudgel his brains for the sake of the form of value. At most the points here established dialectically might be set forth historically at somewhat greater length, the test to be made from history, so to speak, although what is most necessary in this respect has already been said. But you have so much material that you can certainly still make quite a good digression upon it, which will demonstrate to the philistine from history the necessity for the development of money and the process which takes place in connection with it.’ (Marx and Engels, 1956, p. 226; author’s italics). And Marx’s reply to this point is equally instructive in bringing out the importance of the value-form and its dialectical character. Marx says (p. 228), ‘As to the development of the form of value I have and have not followed your advice, in order to behave dialectically in this respect as well. That is to say I have 1) written an appendix in which I describe the same thing as simply and pedagogically as possible, and 2) followed your advice and divided each step in the development into paragraphs, etc. with separate headings. In the preface I then tell the “non-dialectical” reader that he should skip pages x-y and read the appendix instead. Here not merely philistines are concerned but youth eager for knowledge etc.'