[OPE-L:2088] Chapter 5

Alan Freeman (100042.617@compuserve.com)
Mon, 6 May 1996 02:42:21 -0700

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The Gil-Fred discussion (1788, 1913 and 1917, 2049 and most recently 2068)
prompts me to horn in with a slightly different angle on 'the subject of

Fred says [2068]:

"In my previous post [#1788] I presented 7 passages which stated
explicitly that the commodity analyzed in Chapter 1 of Volume 1 is
'capitalist production'."

However Marx says [volume 1:273]:

"Had we gone further, and inquired under what circumstances all, or even
the majority of products take the form of commodities, we should have
found that this only happens on the basis of one particular mode of
production, the capitalist one. Such an investigation, however, would
have been foreign to the analysis of commodities"

There appears to be a slight contradiction; I'll come back to it.

In his introduction to 'Marx's method in Capital' Fred writes

"there are three main prevailing interpretations of Marx's logical method
in Capital: (1) the 'logical-historical' interpretation suggested first
by Engels and later developed by Meek(2) the 'successive approximations'
method introduced by Grossman and adopted by Sweezy (3) the Sraffian
interpretation, based on linear production theory... All the authors of
the essays in this volume agree that these three prevailing interpretations
of Marx's economic theory are fundamentally erroneous."

We too agree that these prevailing interpretations are fundamentally
erroneous. However

(1) they are not the only interpretations. I think we would gain clarity if
Fred could say whether he accepts this, as Gil has already done.
Sequential and nondualistic (TSS) theory has been around for sixteen
years. No-one in this tradition accepts or propounds any of the three
views in Fred's truncated summary. Fred's account of the spectrum of
economic thought, which omits this fourth interpretation, acts as a
fetter on his own cause. I hope to indicate why this might be.

(2) I wish to question whether the distinctions made in this taxonomy of
interpretations are fundamental. I think it can be shown that all three
interpretations have a single common root and fall back on a single structure
of determination and derivation, namely, they seek to define value as
the ratio in which commodities *would* exchange in a *theoretically ideal*
system in simple reproduction. For the logical-historical school this is
a non-existent historical stage of 'simple commodity production'. For the
'successive approximations' school as defined in Fred's introduction this is
an 'idealised simplification' or 'first approximation'. For the Sraffians
this is a mathematical ideal, the 'maximum wage' system in which the
whole surplus is appropriated by workers. *Mathematically* these systems
are identical and, I think it can be shown, historically and genetically
they are merely three variants of the same view.

The question which then arises is this: is it possible to defend Marx's
transformation and Marx's method on the *same* terrain as that taken by
all three of these interpretations, namely, the terrain of simultaneous
valuation? I think that nondualists such as Fred, Bruce and Ramos/Rodriguez
have shown that it is possible and have valiantly done so. *But* the
discussion with Gil reveals, I think, the Achilles Heel of this defence:
it collapses once the restrictive assumptions of Marx's opponents are
abandoned and we study any generalisation from the 'rules of the game'
laid down by Marx's opponents. Fred is, therefore, fighting what I
perceive as a losing battle because he is being forced to make claims
on behalf of Marx which do not correspond to what Marx did or said.

Fred and ourselves agree on two vital points:

(1) constant capital is measured by the value of the money paid for it.

(2) Marx's transformation procedure is consistent

We are not monads. We have everything to gain by clarifying our common ground,
and in the discussion with anyone who, like Gil, holds Marx's approach to be
inconsistent, this is what I think we should seek to do.

The distinctive feature of our 'fourth' interpretation is that it finds
Marx's method consistent without imposing the restrictions imposed on Marx
by the other three interpretations, namely:

(1) we do not assume price-value equivalence as the foundation of the
derivation of value

(2) we do not assume an equal profit rate,

(3) we do not assume constant technology

I think that in his discussion with Gil, Fred has boxed himself
into a corner he does not need to be in because he is not willing
to give up these unnecessary restrictions, imposed by Marx's opponents.

He therefore perceives as a threat something which is no threat at all but
on the contrary decisively strengthens the case for Marx's value theory,
namely Gil's insistence that we should discuss exchange at values other
than prices and in societies other than capitalist society.

I have no objection to this at all. I think on the contrary, Marx's value
categories, being derived without the assumption of exchange at values,
are perfectly applicable to the general case, and that moreover Marx's
Chapter 5 analysis, as I suggested in February [1112-14, 1138-39, 1170-71],
can be shown to demonstrate that in *all* commodity-producing
societies the only source of exchangeable value is human labour-power,
that there at no point in history any source of surplus value for society
as a whole other than the sale of labour-power as a commodity, and that
the sum of surplus value and the sum of profits are under all
circumstances the same, and equal to the difference between the value of
the money paid for consumed variable and constant capital (including
materially-depreciated fixed capital), and the value of the money received
for sales. [None of this rules out non-monetary exploitation. This,
however, is not surplus *value*]

Thus, I proposed in [#1171 entitled "The real fundamental Marxian
theorem"] Marx is justified in considering the 'pure' form of sale at
values in discussing the origin of surplus value, because the sum of
profits is an invariant with respect to variations in relative price.
Since the total of profits is independent of what goods sell for (proved
in Chapter 5) the assumption of sale at values at this point, and for the
first time in Volume I, involves no loss of generality.

In the words of the song, who could ask for anything more?

I am not asking Gil to accept this because I know he doesn't. I *am*
suggesting Fred experiment with this argument because, if correct, it fully
refutes Gil and does not capitulate to any of the three deadly interpretations.

The ball is therefore wobbling in Fred's half of the court to say why he
cannot accept an interpretation which achieves everything he asks for and more.
I think his rejection of it till now is based not on disagreement but a failure
to understand what we are saying.

My basic thrust is to suggest a refinement (previously the subject of
quite wide agreement, see #925 and #884) of the following statement that
he (Fred) makes:

"Marx's provisional assumption in Volume I that the prices of individual
commodities are equal to their values plays no essential role in Marx's
theory of the aggregate amount of surplus-value"

The refinement is this:

"Marx's assumption from Chapter 6 onwards that the prices of individual
commodities are equal to their values plays no essential role in his
derivation of value."

This restates a position widely agreed in an earlier debate [see #925]
Fred's statement follows from it and the more general statement is
a firmer ground on which to stand.

The derivation of the category of value depends on the fact that by
exchanging in consistent proportions, commodities prove that they are
commensurable, and that for things to be commensurable there must be
something that they have in common which is not reducible to any
particular property of any particular one of these things.

This argument does not rely on exchange at values. Rather than clog up
this 'exchange' on the question, can I refer any disputants first to the
long debate of January and February. If we don't learn from debates we
are doomed to repeat them.

The suggestion I want to put to Fred is this: the assertion that in
Chapters 1-5 Marx deals only with the capitalist mode of production leads
to statements that are not necessary and not very defensible, and actually
cedes decisive ground to the 'logical-historical interpretation'.

I think it is better to take a firm stand on a different ground, namely
that Chapters 1-5 make no statement about production at all other than to
state that commodities are exchangeable products of labour.

All conclusions of chapter 5 are *independent* of the mode of production
under consideration, because they make no reference to labour-power as a
commodity until the very end: that is, the function of chapter 5 is to
demonstrate that surplus value can arise only on the basis of a commodity
that makes its appearance for the first time *after* chapter 5, a
commodity which both is, and is not, in the sphere of circulation, namely
the commodity labour-power. Precisely because wage-labour makes its first
appearance at this point, it is absent until this point. Otherwise, Marx
would have to assume what is to be proven.

Hence, Gil's argument that antediluvian forms of capital give rise to
autonomous sources of surplus value, are actually refuted (in my view)
fully generally in Chapter 5. There is no need to impose any restriction
in order to get this result, and on the contrary, the attempt to impose
such a restriction seems to place Fred in a textually indefensible position.

Consider his earlier-cited statement:

"In my previous post (1788) I presented 7 passages which stated
explicitly that the commodity analyzed in Chapter 1 of Volume 1 is
'capitalist production'"

I read #1788 and all these quotations, as might be expected. I regret to
say that I think a dispassionate observer is struck by the fact that all
7 of them point to the opposite conclusion, namely, Marx appears to have
systematically purged everything that might lead the reader of Chapter 1
of Volume 1 to think it is confined to the capitalist mode of production.

All the citations except one are from previous drafts of Capital - the
Grundrisse, the Ur-Text, the second draft, etc - and the only one actually
published in Chapter 1 clearly refers to the book as a whole rather than
the chapter. There is a very large and resounding silence, namely, the
first five chapters of Capital as finally published.

A very valid point Althusser makes is that absences speak as loud as
presences. Why *doesn't* Chapter 1 speak about the Capitalist Mode of
Production - when all the preparatory stuff, cited by Fred, does? It is
very hard to believe this is an oversight - just as it is very hard to
believe that, if Chapter 1 had been based on the assumption of value-price
equivalence, Marx would not have said so. So I am afraid that for me,
Fred's very diligent research seem to prove exactly the opposite of what
he says: they prove that in preparing the first five chapters of Volume 1
for printing, Marx assiduously removed all the bits which Fred has assiduously

I think there is good reason: surely Marx, the logician, knew that the most
important error to avoid in any systematic development of his subject, was
assuming what had to be proved? He therefore confined himself to the most
general features of the commodity, assuming no more than that it was an
exchangeable product of labour. The process of logical development then
adds further determinations to what has been shown in these first six
chapters, to the point where by Volume III we are dealing with the full
capitalist mode of production complete with free capital movement,
equalisation of the profit rate, technical progress and so on. But at no
point, and this is the key, does any part of capital *assume* what is
later proven.

This remarkable logical feat seems to me greatly underrated in the
literature. For me it is the decisive reason that Marx's theory of money
is superior to its neoclassical rivals, all of which assume capitalist
production in order to derive money. This makes nonsense of the fact that
money exists both before and after capitalism. With Marx, on the contrary,
the category of money is established before the category of wage labour
and capitalist production, and does not depend on either category.

So, on p273 we find the following passage cited at the beginning:

"Had we gone further, and inquired under what circumstances all, or even
the majority of products take the form of commodities, we should have
found that this only happens on the basis of one particular mode of
production, the capitalist one. Such an investigation, however, *would
have been foreign to the analysis of commodities* [my emphasis - AF]"

Note: "would have been foreign to the analysis of commodities".

And then:

"The production and circulation of commodities can still take place even
though the great mass of the objects produced are intended for the
immediate requirements of their producers, and are not turned into
commodities, so that the process of social production is as yet by no
means dominated in its length and breadth by exchange-value. The
appearance of products as commodities requires a level of development of
the division of labour within society such that the separation of use-
value from exchange-value, a separation which first begins with barter,
has already been completed. But such a degree of development is common
to many economic formations of society with the most diverse historical
characteristics". And so on and so on.

Then we find at the conclusion of this important passage:

"we know by experience that a relatively feeble development of commodity
circulation suffices for the creation of all these forms. It is
otherwise with capital. The historical conditions of its existence are
by no means given with the mere circulation of money and commodities. It
arises only when the owner of the means of production and susbsistence
finds the free worker available, on the market, as the seller of his own
labour-power. And this one historical pre-condition comprises a world's
history. Capital, therefore, announces from the outset a new epoch in
the process of social production"

This seems pretty clear-cut. Until now, Volume I has concerned itself only
with those aspects of the commodity which are to be found in all societies
which produce commodities. Now, and only now, we limit ourselves to the
specifically capitalist epoch because now, and only now, do we consider
the one commodity that becomes generally available as as a commodity in
this epoch, namely, labour-power. And this specific commodity, we
conclude, is the real foundation of capital.

This holds no terrors for me and I don't think it ought to for Fred. The
*preceding* chapters are an abstraction, not a simplification.

The fundamental error of the 'logical-historical' view is to mistake
simplification for abstraction. It holds that in Capital 1 part 1 we find
a complete 'working model' of capitalism. I think this is the real
foundation of nearly all modern reconstructions of Marx. It is a
very widespread view which I don't think is entirely absent even from
Fred's thinking. But there is *no* model of production at this point.
There is just an abstract analysis of the commodity as an exchangeable
product of labour. Being abstract, it is equally true for all societies in
which commodities exist.

That is precisely why, for example, one cannot at this point deduce the
magnitude of value from a simultaneous equation. There just isn't enough
information present to do that, without incorporating assumptions that are
yet to be proved.

We do not yet know, for example, whether the means of production are
commodities or not. We don't even know until Chapter 6, how the labourers
receive their means of consumption. [VI:135n: 'At this stage of our
presentation, the category of wages does not exist at all']. It is not
until the citation I just gave that this most basic determination is

What we find until this point is common to capitalist and precapitalist
(and postcapitalist) commodity production. This is therefore necessarily
independent of any *particular* mode of production. It refers neither to
an imaginary precapitalist age as Meek assumes, nor to a hypothetical and
idealised 'simple circulation' stage as Sweezy supposes, nor to the
specifically Capitalist Mode of Production. It does not refer to a
determinate mode of production at all. It sums up, in its most abstract
form, those features of the commodity that are common to all modes of
production in which the commodity appears.

This view cuts equally against the 'historical-logical' approach which
insists, contrary to what I just suggested, that the early parts of
Capital do in fact refer to a specific society, the specific society that
historically precedes capitalism.

It is true that 'the object of Capital is the Capitalist Mode of
Production'. But this does not at all preclude a discussion at an
abstract level of features of the Capitalist Mode of Production which also
exist in other modes of production. It is one thing to say 'the object of
Capital is the Capitalist Mode of Production' and entirely another to say
'the object of Capital is *nothing but* the Capitalist Mode of

In a work on oaks, one also discusses acorns, as Hegel would not hesitate
to remind us. In order to know a thing, one must also know its process
of becoming and of ceasing to be. That means one must know what, in
its process of becoming, is preserved from earlier modes of production
and transcended in the new. Now, the commodity exists in capitalism
but it also exists before capitalism and after capitalism. The point
is not that the commodity does not exist except under capitalism,
but that under capitalism it becomes a different thing. [VI:950: 'We
see here how even economic categories appropriate to earlier modes of
production acquire a new and specific historical character under
the impact of capitalist production']

I hazard a guess that Fred's real concern is the following: that if we
acknowledge Marx discusses precapitalist features of the commodity in
Volume 1, the door opens to the 'logical-historical' interpretation. I
don't think this is so.

>From where *does* the 'logical-historical' interpretation receive its real
vitality? In my opinion it receives it from the simultaneous equation
definition of value. I am astonished that Fred does not consider this.
Let us study the equation

v = va + l

What kind of society must be presupposed, in order for this equation to
hold any meaning which supports Marx's frequent assertions that value
regulates exchange? Answer: a society in which goods are not only *produced*
in accordance with this equation but also *exchanged* in accordance with it.
Valiant attempts have been made on this list to sever every link between 'labour
embodied' and 'exchange value' but it stretches a point. Even the most cursory
reading of Marx confirms that in his view the value of a commodity bears a definite,
though possibly transformed, relation to its exchange value.

But the only society for which this equation could represent relations of
exchange is one in which the rate of profit is not equalised, a society in
which goods are exchanged at their values and undergoing simple
reproduction. In this case, the money paid for constant capital would have
a value equal to vA, the value added by labour would be L, and the value
of sales vX would actually be vA+L. Divide by X and we get the 'standard

The perversion that occurred, starting somewhere around the mid-1930s, is
that this equation ceased to be a conclusion from Marx's value analysis in
the restricted and simplified cases studied in Volume II, and became instead
a *definition* of value. Value came to be defined by the assumption of
reproduction instead of vice versa.

The equation commits the precise error which, as Fred's textual research
establishes, Marx so painstakingly eliminated, for the reasons given in
the citation with which I opened this post. It imposes the assumptions of
Volume II - price-value equality, simple reproduction, no technical change
- on Volume I. It *deduces* Volume I from Volume II.

But once this logical reversal is accomplished, once the equations start
writing the theory, then of course, a 'story' has to be invented to
accompany the equations. Since nothing Marx writes in Volume I justifies
such a derivation of value, everyone who adheres to this equation ends
up constructing an 'intepretation' of Marx in which either he holds
that there was once a society which reproduced in accordance with this
equation, or Volume I models a simplified form of society in which this
'conceptually' happens, or that such a society is the 'essence' of his
theory of value: *any* story will do, just to get the goods exchanging
in proportion to the values predicted by this ridiculous equation.

Compare the following:

Sweezy, The Theory of Capitalist Development, p23:

"Marx begins by analysing 'simple commodity production', that is to say a
society in which each producer owns his own means of production and
satisfies his manifold needs by exchange with other similarly situated

Laibman, p11:

"Our framework is the pure form of Marx's 'simple commodity production':
we imagine an economy in which every active participant owns, and
therefore has access to, means of production, representing the
possibility of direct interaction with nature, directly or indirectly.
Every individual therefore must perform labour using self-owned
resources: commodities thus produced are then exchanged"

Meek (Studies in the Labour Theory of Value, xxxiv):

"The first model, if one wishes, can be taken to represent an elementary
form of Marx's 'simple commodity production'. And it is fairly easy to
show that under the assumed circumstances the prices of the different
commodities will, as in Marx's model, be proportionate to the different
quantities of labour which have been directly and indirectly employed to
produce them. For if, as we are assuming here, there is no form of
income other than the 'wages; accruing to the direct producers, all
input-costs ultimately reduce to 'wage'-costs...if wages per head are
assumed to be uniform over the economy as a whole, price ratios will be
equal to embodied labour ratios.'

Dobb (Theories of Value and Distribution p148):

"If things exchanged in proportion to labour expended, changes in this
rate could not per se affect relative exchange values, nor could changes
in the latter react upon the exploitation-ratio when represented in this
way. The (Labour) Value category, or the 'approximation' of Volume I,
thus embodied something essential that would otherwise have been
lacking...To conduct analysis within the category of Value involved
certain implicit assumptions...these consisted in a uniformity in
specific respects in the conditions of production of constituent
industries or lines of production (alternatively one could speak of
ignoring for the time-being the effects of lack of uniformity and
focussing attention upon the global configuration - or yet again,
referring to a situation where there was mobility of labour between
industries but as yet no separate mobility of capital in the modern

And so it goes on.

These are not distinct interpretations: they present one homogenous view.

What is the driving force behind these fabricated rewritings of Marx's
theory, which find - we agree with Fred - absolutely no textual support
within Marx? [the words 'simple commodity production', rightly singled out by
Fred as a core concept of the more or less revisionist interpretations
cited above, appear nowhere in Capital, or if they did I couldn't find them.
You will find them only in Engels].

The 'logical-historical' appelation is an error but it is not the common
factor. If we were to list these citations as a 'quiz' I doubt of many OPE
members could tell which view came from which stable unless they had the
text in front of them. They are all of a piece.

The common factor is the search for a hypothetical society in which goods
really *would* exchange at their values.

The aim is to find a set of production relations such that the circle can
be squared between values derived from v = va + l, and the blatant fact
that goods do not exchange in accordance with this equation, never have
done, and never will. The 'solution' in every case is to *construct* an
ideal society in which goods do exchange in accordance with this
equation: to construct a set of *production* relations on the basis of
which we can postulate *exchange* at the values which would arise from
these production relations.

The way out is equally clear: it is to go to the root of the problem and
abandon the entire idea that the foundation of Marx's theory of value is
any kind of 'working model', with it the idea that value can only be
derived on the assumption that goods exchange at their values, and with
that the idea that *any* of Marx's theory can be represented with a
simultaneous equation.