Disassembly Required. Geoff Mann
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production process comes not from capital’s contribution, but from the labour power workers contribute to the whole relationship. In other words, the appropriation of labour’s surplus value—you can pay them less than what they produce is worth—is the source of wealth in capitalism.
This idea—the basis of the so-called “labour theory of value” (a phrase Marx never used)—is a very big deal. Yet it is frequently misconceived, both by those who think they agree with it entirely, and those who think it mistaken. Interestingly, these contrasting views do not sit on one side or the other of a simple left-right divide. Many on the left reject the labour theory of value, and many on the right accept it, if unwittingly. But either way, in most cases it is misunderstood. Contrary to what it might seem to suggest, Marx is definitively not arguing that labour produces all wealth in all times and places. His point is almost the opposite. If Marx has a “labour theory of value,” it pertains to capitalism alone. Only in capitalism is labour the sole source of value.
The misunderstanding is partly due to the fact that “value” in everyday English is generally considered to be a “good” thing. In addition to something that has some monetary worth, we frequently describe something “substantive” or “positive” as having “value.” Consequently, when we hear that Marx thought labour produced all value, many of us think Marx thought all good and useful things come from labour, and the problem with capitalism is that despite this essential contribution, capital rewards labour unfairly. This resonates with many a lefty’s “progressive” intuition. But Marx said neither of these things. What he actually said is much more insightful and important.
For Marx, “value” is the form wealth takes in capitalism. Value is precisely that abstract, monetized, everything-has-a-price-if-you-dig-deep-enough quality that many decry. It is the generalized relation of equivalence among all those qualitatively different dimensions of the world, rendered in cold quantitative form and expressed in money. Value is the tacit but astoundingly powerful relation that enables us to make an AK-47, an SUV and a field of grain exchangeable as “equivalents”: e.g., 100 AK-47s = 10 SUVs = 1 field of wheat. If you think about it, this is remarkable, and somewhat terrifying. My example is in no way absurd; indeed, the political economy underlying much of the current land-grab in Africa consists in exactly this exchange of equivalents: arms, elite luxury goods, and agricultural land. Capitalism’s historical achievement is to create a systematic and seemingly natural set of social relations that uses labour not to produce useful or beautiful things for the good they provide—if it did, then the “value” of those three things could never be rendered equivalent. Instead, capitalism condemns labour to produce “value” in this specifically capitalist sense.
If we work together to plant a community garden that can feed its members and add something useful to our lives and relationships, we would very comfortably say our efforts produce something valuable. Marx would never deny that, but it has nothing to do with what he meant by value in capitalism. Indeed, he would have said it is a good thing precisely because it does not produce capitalist value, but instead produces what he sometimes called “real wealth,” things that truly contribute to human physical and social well-being. The sources of real wealth are not only human, of course: nature, Marx noted, has a big role to play.
Similarly, it is certainly true that capitalism treats workers unfairly, and any improvement workers can realize in their lives is a “good thing.” But capitalism is not a bad system just because the numbers are off. For Marx, capitalism is bad because it is a systematic set of social relations in which humanity is prevented from realizing its capacity for “real wealth,” human potential, justice, and a non-arbitrary distribution of the means of life. (In fact, capital’s defence of arbitrary distribution, a kind of Darwinism that says that those who are wealthy are “by nature” the fittest in the economic ecosystem, is one of its main self-justifications.) If higher wages were all that is necessary, Marx would have been no more than a wordy and over-philosophical union activist. The problems, however, are much bigger: the wage relation and capitalist social relations themselves. The point is not to redistribute capitalist value, but to overcome it, to destroy it as the relation that rules the world.
The idea that capitalism will persist as long as the rule of value holds is Marx’s essential lesson. This is not a majority opinion, and is easily taken as dismissive of “reformist” efforts to improve working conditions and the distribution of income. I don’t mean to suggest such efforts are useless because they are not “radical” enough. Clearly, any effort on the part of labourers (and unemployed people) to improve the material conditions of their everyday lives is worthwhile. My point is that the fundamental problem with capitalism as a mode of production is not ultimately addressed by the redistribution of capital.
I suppose it is possible to argue that, while the rule of value is not fundamentally challenged by individual struggles to increase labour’s share of wealth, we might yet use such a strategy to sentence capitalism to “death by a thousand cuts,” as it were. Perhaps redistributing capitalist value more fairly, i.e., paying workers what they “really” deserve, might somehow undo capitalism as a mode of production. Maybe it has some built-in constraint that renders it structurally unable to pay “fair” wages to all workers, and if forced to, it would effectively collapse under its own weight.
It is not exactly clear what Marx thought about this strategy. He supported struggles for higher wages and better working conditions, but he also thought that no matter how high the wage rate, the wage relation itself is an essential pillar of capitalism, one that must be knocked down to create a post-capitalist world. If nothing else, he would probably have pointed out that there are some tricky contradictions involved in thinking that rewarding people with higher wages will lead them to toss off the very system now paying them “fairly.” The whole point of paying workers well is to keep the system going—in fact, there is a theory in orthodox economics that says this is exactly what “fair” wages do. So as a social justice strategy, wage demands are key. As a social transformation strategy, they are insufficient.
Yet it must be said that this still does not suggest an obvious reason to reject the idea that if workers were paid “fairly”—presumably at least as much as capitalists—then no one would want to be a capitalist anymore, or would have no self-interested incentive to be one, and the whole mode of production would fall apart. In other words, we might use the wage relation to overcome the wage relation.12 This resonates with Marx’s belief that capitalism’s undoing would come about from inside: the post-capitalist world he felt inevitable—even if he could not tell when it would come—would emerge not through an attack on capital from outside of capitalism, but from the collapse of the social relations that maintained its internal coherence. Ultimately, the main Marxian lesson is that we cannot reach a post-capitalist world unless we forsake, either willingly or because we must, the very relations that define capitalism as capitalism: value, capital, and wage-labour.
After Marx: The Neoclassicals
Marx is sometimes included among classical political economists because he uses the same categories (value, capital, and wage-labour) found in the political economy that came before him. Putting Marx in the classical box might be convenient, but it is more mistaken than helpful. Marx’s whole point was to critique political economy as a way of knowing, not to redo political economy in a “critical” way. He may have used the concepts the classicals developed, but he historicized and destabilized them in ways they could never have imagined.
Be that as it may, the distinctions between Marx and his predecessors do not much clarify the definitively non-Marxian “neoclassical” political economy that came after him. Most of it was largely unaffected by his thought, at least directly, and was thus not only different from Marx, but developed in ignorance of his analytical contribution. Instead, it represented a very different, liberal reaction to the same classical political economy against which he reacted so strongly. The most important differences between this liberal or neoclassical political economy and the older work of those like Smith and Ricardo lie in those “twists” on Smith’s classical take that I mentioned above.
The first twist is in the theory of distribution. There is a stark contrast between classical theories of political