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Questions on Marx's critique of labour money

37 posts / 0 new Login or register to post comments Last post spaceman spiff Apr 16 2012 16:42 Hi all. Been a lurker for a while. Always been left-leaning, but felt like a hypocrite for not being able to justify the economics myself, so I recently decided to begin studying the matter first-hand. I started off with A Contribution to the Critique of Political Economy, as that was recommended to me as a necessary place to start, but there is one section that is just baffling the hell out of me. It is in Chapter 2: Theories of the Standard of Money Towards the end of the chapter, Marx begins his critique of John Gray's conception of labour money when he states: "John Gray was the first to set forth the theory that labour-time is the direct measure of money..." I've read through these pages 4 times now, and I just can't comprehend the critique here. The whole section on money has been baffling because of this money commodity issue, and I think I've wrapped my head around that sufficiently to move on. Here is my attempt to break down Marx's critique: Marx is saying that the market, the exchange process, is a social process. And trading in a commodity for a ticket of value is condemning the exchange process to remain an individual anti-social one? (Not sure why, but that's what it seems to say). Then it reads: Quote: But as Gray presupposes that the labour-time contained in commodities is immediately social labour-time, he presupposes that it is communal labour-time or labour-time of directly associated individuals. In that case, it would indeed be impossible for a specific commodity, such as gold or silver, to confront other commodities as the incarnation of universal labour and exchange-value would not be turned into price; (why???) but neither would use-value be turned into exchange-value and the product into a commodity, and thus the very basis of bourgeois production would be abolished. So Marx is saying that only through the social process of trade can the validity of a commodity be ascertained. This relates to mud-pies? If I bring a random product that I have built and claimed it took me a week, the validity of this product can only be achieved if it has use-value, and if this use-value is converted to exchange-value, and if this exchange-value is converted into a price. And this process requires the social aspect of the market, that a bank's simple statement does not meet. Is this analysis at all correct? What baffles me is his continuous criticism of Proudhon. Did Proudhon also propose such a "bank ticket" system?
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23/08/2012 07:46
Questions on Marx's critique of labour money | libcom.org

Apologies for the complicated nature of the questions...figured this was the best place to ask as there are some extremely knowledgeable people here. All help is very appreciated.
offending post to flag it for the moderators' attention. Site admins are listed here, and feedback can be posted in the feedback forum.
jura Apr 17 2012 08:22 Hi, this is an interesting question and it touches some of Marx's fundamental views concerning value. Here's my take on it. I apologize for repeating simple things, but that's because I'm sort of thinking aloud here. Please keep in mind that in A Contribution, Marx does not yet distinguish between exchange value and value. When I say "value" below, it usually means "exchange value" in terms of A Contribution. Generally, what Marx is arguing against in his polemics against labor money is the idea that value can be practically measured directly, in terms of expended labor time. To put it in specifically Marxian terms, this is the idea that value can be practically (i.e. in everyday intercourse) measured by its immanent measure (socially necessary labor time) rendering the external measure (the moneycommodity) useless. Marx thinks this is impossible, and that the external measure of value is indispensable in a commodity-producing society. In my view, this is a notoriously difficult issue and in fact paramount to understanding the difference between political economy and its utopian critics on one hand, and Marx's theory of value on the other hand. According to Marx, a commodity economy is based on a private division of labor. This means that production takes place in autonomous, private units as "private labor": Marx in A Contribution wrote: Labour which manifests itself in exchange-value appears to be the labour of an isolated individual. The products of these isolated, private labors are brought to the market, where, depending on whether their exchange is successful or not, they enter consumption, and become acknowledged as parts of total social production. Thus the private labors which produced these products become acknowledged as parts of total social labor. This way, social labor is permanently constituted and reconstituted via the market from the "atoms" of private labors. This is something specific to capitalism; only in borugeois societies is the majority of products produced for the market, as commodities. Obviously, most of the products brought to the market are qualitatively heterogenous (different in terms of their use-values). In order to be exchanged in certain ratios, to become "equal" so to speak, they have to be reduced to the same homogenous quality, in which they differ only quantitatively. This quality is, of course, value, the amount of abstract social labor (measured in socially necessary labor time) that has to be expended on the production of an average sample of a commodity in average circumstances. However, the producers only find out whether their individual labor time conforms to the socially necessary labor time on the market. A producer may find out that her individual costs are way too high in comparison with the competing producers (resulting in the higher price that she demands), which may drive her out of the market. It may also well happen that more of a certain commodity has been produced than the market can swallow: Marx in Capital I, Ch3 wrote: If the market cannot stomach the whole quantity at the normal price of 2 shillings a yard, this proves that too great a portion of the total labour of the community has been expended in the form of weaving. The effect is the same as if each individual weaver had expended more labour-time upon his particular product than is socially necessary. Or the opposite may happen: there can be less of a commodity than what is demanded.
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Anyway, all of this can only be determined after production is over, when commodities come into relationship with each other and with their potential consumers on the market. Of course, in capitalism, production is consciously the production of commodities, and producers try to anticipate what is going to happen on the market (think consumer surveys etc.). But still, these are just more or less informed guesses, and the ultimate decision always lies with the market. The first important result of all this is that the value cannot be "seen" by looking at an individual isolated commodity. Because value expresses a social relationship of labors (and hence of producers), it can only be expressed relationally. Moreover, the expression "1 yard of linen has the value of 1 yard of linen" is not an expression of value. The second commodity must be something different from linen, i.e. "1 yard of linen has the value of 2 lbs. of coffee". But whether this really holds, whether the time socially necessary to produce 1 yard of linen actually equals the time socially necessary to produce 2 lbs. of coffee, can only be decided after production has taken place and linen and coffee and all other commodities made by all these competing private producers are brought to the market and brought into relations with another. The "reduction to the common denominator", to abstract labor, only takes place in exchange. Here's a nice quote from A Contributionwhich sums some of this up: Marx in A Contribution wrote: Social labour-time exists in these commodities in a latent state, so to speak, and becomes evident only in the course of their exchange. The point of departure is not the labour of individuals considered as social labour, but on the contrary the particular kinds of labour of private individuals, i.e., labour which proves that it is universal social labour only by the supersession of its original character in the exchange process. Universal social labour is consequently not a ready-made prerequisite but an emerging result. Thus a new difficulty arises: on the one hand, commodities must enter the exchange process as materialized universal labour-time, on the other hand, the labour-time of individuals becomes materialized universal labour-time only as the result of the exchange process. This means that there has to be a way of measuring this universal labor time, but the difficulty is that universal labor time is only constitued within the whirlpool of the market itself and changes all the time. This difficulty is solved in A Contribution by introducing the general equivalent, i.e. the money-commodity. The money-commodity functions as a socially-recognized representation of socially-necessary labor time (i.e. it measures the value of commodities and all producers acknowledge money as the general equivalent), which at the same time is relatively autonomous of socially-necessary labor time (i.e. it is precisely an external measure). What this boils down to is that price can diverge from value. Now, according to the bigger picture of Marx's theory, prices necessarily diverge from values, but the reasons for this are remote to the inquiry in A Contribution. However, even if we abstract from the stuff from Volume 3 of Capital (the establishment of a general rate of profit and the distribution of total surplus-value in accordance to it), the quantitative divergence of price from value remains indispensable to a commodity economy. That is because it allows such an economy to deal with its own excesses like overproduction or underproduction. Please excuse the long quote, but I think it's spot-on: Marx in Capital I, Ch3 wrote: Suppose two equal quantities of socially necessary labour to be respectively represented by 1 quarter of wheat and 2 (nearly 1/2 oz. of gold), 2 is the expression in money of the magnitude of the value of the quarter of wheat, or is its price. If now circumstances allow of this price being raised to 3, or compel it to be reduced to 1, then although 1 and 3 may be too small or too great properly to express the magnitude of the wheats value; nevertheless they are its prices, for they are, in the first place, the form under which its value appears, i.e., money; and in the second place, the exponents of its exchange-ratio with money. If the conditions of
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production, in other words, if the productive power of labour remain constant, the same amount of social labour-time must, both before and after the change in price, be expended in the reproduction of a quarter of wheat. This circumstance depends, neither on the will of the wheat producer, nor on that of the owners of other commodities. Magnitude of value expresses a relation of social production, it expresses the connexion that necessarily exists between a certain article and the portion of the total labour-time of society required to produce it. As soon as magnitude of value is converted into price, the above necessary relation takes the shape of a more or less accidental exchange-ratio between a single commodity and another, the money-commodity. But this exchange-ratio may express either the real magnitude of that commoditys value, or the quantity of gold deviating from that value, for which, according to circumstances, it may be parted with. The possibility, therefore, of quantitative incongruity between price and magnitude of value, or the deviation of the former from the latter, is inherent in the price-form itself. This is no defect, but, on the contrary, admirably adapts the price-form to a mode of production whose inherent laws impose themselves only as the mean of apparently lawless irregularities that compensate one another. Hence, price as the monetary expression of value, and money as the external measure of value, are indispensable to a commodity economy. If you want an economy based on private producers who exchange their products on the market, you need money, because socially necessary labor time cannot be measured directly and is only determined in the totality of exchanges. Some representation of value, however, is necessary for the functioning of such an economy. What Marx criticizes in Gray and Proudhon, then, is precisely the idea that we can keep the atomized structure of the commodity economy (i.e. production taking place in independent units), keep some sort of a market as well (so that products end up where they're useful), but do away with money (and credit and usury, the great evils according to the Proudhonists). On the market, money could be replaced by a material representation of units of labor time ("labormoney"). This was the idea of some of the so-called Ricardian socialists, who turned Ricardo's labor theory of value against capitalism and argued for a just society based on equivalent exchange. Proudhon and his followers later took up and modified this idea as well (more in this in the early parts of Marx's Grundrisse). According to Marx, none of that will work as long as the society is based on a private division of labor. The "bank" or some other institution which issues and distributes labor-money would either have to effectively become a planner of all production (thus abolishing private production) or it wouldn't work at all ("bankruptcy would in such a case fulfil the function of practical criticism", as Marx says in A Contribution). So the crux of Marx's criticism is that you can't abolish money without abolishing the underlying structure of production which necessitates money. This is also clear from a footnote in Capital I: Marx in Capital I, Ch3 wrote: The question Why does not money directly represent labour-time, so that a piece of paper may represent, for instance, x hours labour, is at bottom the same as the question why, given the production of commodities, must products take the form of commodities? This is evident, since their taking the form of commodities implies their differentiation into commodities and money. Or, why cannot private labour labour for the account of private individuals be treated as its opposite, immediate social labour? I have elsewhere examined thoroughly the Utopian idea of labourmoney in a society founded on the production of commodities (l. c., p. 61, seq. [This refers to the parts of A Contribution we're discussing here]). On this point I will only say further, that Owens labour-money, for instance, is no more money than a ticket for the theatre. Owen pre-supposes directly associated labour, a form of production that is entirely in consistent with the production of commodities. The certificate of labour is merely evidence of the part taken by the individual in the common labour, and of his right to a certain portion of the common produce destined for consumption. But it never enters into
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Owens head to pre-suppose the production of commodities, and at the same time, by juggling with money, to try to evade the necessary conditions of that production. Owen is exempted from Marx's criticisms on this issue because he presupposes "directly associated labor" i.e. producers consciously organized in a way that puts them in control of social production, as opposed to a system of private labor, where social production is regulated in a roundabout, ex post sort of way, via exchange on the market. I hope this helps. If anything's unclear, feel free to ask or criticize --On the passage you quoted here's my interpretation in the brackets: Marx in A Contribution wrote: But as Gray presupposes that the labour-time contained in commodities is immediately social labour-time, he presupposes that it is communal labour-time or labour-time of directly associated individuals [i.e. not isolated individuals as in private producers]. In that case, it would indeed be impossible for a specific commodity, such as gold or silver, to confront other commodities as the incarnation of universal labour and exchange-value would not be turned into price [why? because once you have directly associated individuals, you can plan production and abolish the market altoghether hence no exchange-value, no price, no money]; but neither would use-value be turned into exchange-value and the product into a commodity [commodity is a thing produced for the market; no market = no commodities], and thus the very basis of bourgeois production would be abolished. [enter communism] Also, spaceman spiff wrote: Marx is saying that the market, the exchange process, is a social process. And trading in a commodity for a ticket of value is condemning the exchange process to remain an individual anti-social one? (Not sure why, but that's what it seems to say). I'm not sure I understand this what are you referring to? .
jura Apr 17 2012 08:31 Also, you're surely entitled to some prize for starting with A Contribution, probably the least popular of Marx's economic writings!
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Angelus Novus Apr 17 2012 13:26 I think Libcom should hire Jura to do a regular Q&A column for Capital-related questions. But he can't use his regular nickname; it should be called something like "Ask Dr. Capital". Seriously, this idea is a winner. Are the mods reading this?
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andy g Apr 17 2012 13:43 sounds like a winner to me too! Might be unfashionable but I like the "Contribution". Not nearly as polished as Capital but I found it really instructive. Am a bit of a pointyhead when it comes to such things though.....
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Although the arguments are different Charlie's critique of Ricardian / Smithian socialists still seems relevant when discussing ideas of "market socialism". Dave McNally wrote a good book on the subject a few years back http://www.versobooks.com/books/749-against-the-market.
Joseph Kay Apr 17 2012 13:44 If Jura wanted to blog on these kind of things, I'm sure we could set that up. It could be as simple as rescuing excellent forum posts from obscurity and reposting them as blogs so they get more traffic, and are more easily found and linked to in the future. Jura if you're interested, drop me or Steven a PM and we can sort something out.
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andy g Apr 17 2012 13:47 I can see it now: "lie back on the couch and tell me when you first started fixating on the roles of fixed and circulating capital in the reproduction process......"
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andy g Apr 17 2012 13:47 I can see it now: "lie back on the couch and tell me when you first started fixating on the roles of fixed and circulating capital in the reproduction process......"
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jura Apr 17 2012 13:52

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jura Apr 17 2012 14:12 andy g wrote: Might be unfashionable but I like the "Contribution". Not nearly as polished as Capital but I found it really instructive. No, no, no! You see, there's fashionable and then there's fashionable. Capital is so fashionable today that it's made into video lectures with jazzy music and grad students in them. So what. A Contribution and the other less known stuff is still where the real MEGA-monks go dig up their most obscure quotations. On a more serious note, I think A Contribution expresses some of Marx's views much more clearly than Capital (like, for example, the close relationship of exchange and abstract labor) and is well worth reading. However, as an introductory piece, it's probably one of the more difficult texts (but probably also quite rewarding).
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Noa Rodman Apr 17 2012 15:48 It was also the idea of Lassalle. Lassalle wrote: It further follows that, since money is merely the unreal theoretical abstraction of value and represents the antithesis of real products and
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materials, money as such does not need to have any intrinsic reality, i.e. need not consist of any truly valuable material, but may equally be paper money, and it is precisely then that it corresponds most closely to its concept. To which Marx added in the footnote in Capital: Quote: erroneously makes gold a mere symbol of value But the quote you give jura from A Contribution doesn't speak of reduction to abstract labor. It's about social labor. Rubin (ch.13) wrote: However, how can the social character of labor be expressed in exchange? If a frock is the product of the private labor of a tailor, then one may say that the sale of the flock, or its exchange for gold, equalizes the private labor of the tailor with another form of private labor, namely the labor of the producer of gold. How can the equalization of one private labor with another private labor give the first a social character? This is only possible in case the private labor of the gold producer is already equalized with all other concrete forms of labor, i.e., if his product, gold, can be directly exchanged for any other product and, consequently, if it plays the role of general equivalent, or money. The labor producing gold is directly social.
Angelus Novus Apr 17 2012 16:13 Joseph Kay wrote: If Jura wanted to blog on these kind of things, I'm sure we could set that up. It could be as simple as rescuing excellent forum posts from obscurity and reposting them as blogs so they get more traffic, and are more easily found and linked to in the future. Jura if you're interested, drop me or Steven a PM and we can sort something out. Jura, do this, for real. Every couple of months a new Capital inquiry pops up in the theory sub-forum, and you're the default guy who always fields the questions. Might as well formalize things.
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Khawaga Apr 17 2012 16:14 I'd love to see a "Ask Dr. Capital" blog by Jura.
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jura Apr 17 2012 17:25 Wow, that's very nice of you, folks, but I'm worried that it would mean extra work. If nothing else, the language would have to be cleaned up, my writing is really sloppy. I'm pretty sure the content could be improved as well. Perhaps if we made it a cooperative project? Something that could evolve into a series of smaller articles or an FAQ?
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jura Apr 17 2012 17:31 Noa Rodman wrote: But the quote you give jura from A Contribution doesn't speak of reduction to abstract labor. It's about social labor.
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So you don't think that the reduction of private labors to abstract labor only takes place in exchange? Or if you do, then does that hint at gold mean that you think that if gold does not circulate (and hence does not exchange for commodities) anymore, abstract labor ceases to exist? Sounds like a confusion of two levels of abstraction to me .
yourmum Apr 17 2012 17:56 wait.. this is not jura's blog? anyways, i dont see the part of jura in this. just take the questions and jura's answers and publish them on a blog named dr. capital - voil.
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spaceman spiff Apr 17 2012 21:59 Wow, this wage-slave goes to work and finds the thread has exploded Thanks Jura, for the excellent response. Lots to think about! Quote: Please keep in mind that in A Contribution, Marx does not yet distinguish between exchange value and value. When I say "value" below, it usually means "exchange value" in terms of A Contribution Well thank god for that. I've been reading posts here about value and wondering where people were getting it from. Quote: ...this is a notoriously difficult issue and in fact paramount to understanding the difference between political economy and its utopian critics on one hand, and Marx's theory of value on the other hand. I'm guessing it probably is, because as I read Gray's labour-ticket proposal, my first thought was "what a great idea!" I was shocked by how stringently Marx was dismissing it. Quote: If you want an economy based on private producers who exchange their products on the market, you need money, because socially necessary labor time cannot be measured directly and is only determined in the totality of exchanges. Some representation of value, however, is necessary for the functioning of such an economy. This is quite a crucial bit. In my teens I often imagined money to be the source of all the ills in society. Quote: According to Marx, none of that will work as long as the society is based on a private division of labor. The "bank" or some other institution which issues and distributes labor-money would either have to effectively become a planner of all production (thus abolishing private production)... This bit confused me as I read it. Isn't this the definition of a centrally planned economy? If Marx is railing here against central planning, then how did the Bolsheviks end up with such a rigorous centrally planned economy? I imagined that Marx would be for that sort of thing, although at this early stage I'm aware that all my preconceived notions of what Marx advocated could yet be proved to be completely wrong. But even in what you wrote about Gray. I didn't pick up on that key difference between "directly associated labour" and individual labour, and I think that makes all the difference. But I could tell he was here criticizing central planning, which I associate with communism, which I associate with Marx, so I assumed that I had misunderstood everything. But why would Marx be against "the very
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basis of bourgeois production would be abolished."? Isn't that what he supports? Quote: I'm not sure I understand this what are you referring to? I think I had a fuzzy understanding of what you've said, but wasn't able to communicate it. So let's recap: - Labour in capitalism is based on the division of labour amongst individuals in society. - Commodities must have use-value and exchange-value to be commodities, otherwise they are mud-pies, and not social labour. - The exchange process is a social process, because it requires the infinite interactions of thousands of individuals. - Through the process of exchange, concrete labour is abstracted, or "dehumanized". It becomes abstract universal labour. - This abstraction of labour allows commodities to become commensurable through their one common quality - abstract universal labour. - Once they are commensurable, they appear on the market where their social validity is tested. A price is materialized for this commodity through the interaction of the socially necessary labour-time expended into its production and supply and demand. - The final price is a marker of the social validity of the commodity; a price that is higher than what the SNLT indicates means there is demand for such a commodity (if the sale is made), or that the labourer expended too much time into its production (if the sale is not made). - Over time, all commodities fluctuate in price around the values indicated by their SNLT, only fluctuating when a change has occurred in the means of production, or when a change occurs in their supply or demand. Now, using labour-money condemns this process to remain concrete labour. (Can't it still be abstracted into universal labour-time?) This is because the bank cannot function as a viable test of the product's validity in the way that the market does, and the 'mud-pie screen' is removed. This is because the social validity is only certified by the bank, and not by the collective social wisdom of the market. The price cannot be set by the general equivalent, because it is based on the SNLT established by society through the market. So is Marx arguing here for the importance of the market and the necessity of money? Why is Marx against abolishing 'the basis of bourgeois production'? Why does not Marx support the use of such a bank? Does it not relate to the "dictatorship of the proletariat"? Isn't communism a centrally planned economy where all labourers are, as Gray had hoped, directly associated labour? Why is the sky blue? Heh no I'm kidding. As for your comments on Contribution, I'm glad you think it's a tough place to start, because I'm finding it tough. What annoys me is the lack of organization. It's written like a novel, when I want it to be written like a textbook, with chapter headings and sub-headings and side-bars with definitions, all colour-coded for quick retraction and visual retention. Instead he is moving from one topic to the next at great speed, and I stumble on things like nominal money and real money and the realization that he is actually for the use of gold as money. The whole bit about money confounded me to such a degree that I went and purchased Suzanne de Brunhoff's Marx on Money. I'm not sure why. I want to read Capital first at least. I just figured this will develop into an extremely important topic. Lastly, I think an FAQ would be a good thing to start. Have you guys not heard of the Anarchist FAQ? It's been published too. Also, one more thing - how do you organize your quotes? Either you have a phenomenal memory to be able to pull quotes from the thickets of Marx's thoughts, or you must have some system of organizing them?
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Apologies for the onslaught of questions and thanks for the great response once more.
Angelus Novus Apr 17 2012 22:48 spaceman spiff wrote: The whole bit about money confounded me to such a degree that I went and purchased Suzanne de Brunhoff's Marx on Money. I'm not sure why. I want to read Capital first at least. I just figured this will develop into an extremely important topic. Lastly, I think an FAQ would be a good thing to start. Have you guys not heard of the Anarchist FAQ? It's been published too.. http://monthlyreview.org/press/books/pb2884/ "I hear from many people whod love to read Capital, but find the thing almost prohibitively daunting. Michael Heinrich has written an excellent little introduction to Marxs masterpiece. Among its many virtues is that it takes money and finance seriously, which many Marxists dont. But even if youve read lots of Marx, you can still learn a lot by reading this book." Doug Henwood, editor, Left Business Observer "Whether one is a traditional world-view Marxist like myself, or a student who wants to understand this world we live in, or an activist who is committed to changing it, Michael Heinrichs succinct, lucid, compelling summary of the three volumes of Marxs Capital is a must-read in our time of crisis." Paul LeBlanc, professor of history, La Roche College; author, From Marx to Gramsci and Marx, Lenin and the Revolutionary Experience "The best introduction to Capital I have read. Heinrich has done the world of Marx scholarship a great service. In presenting Marxs critique of the entire structure of capitalism, Heinrich manages to be comprehensive, deep, and clear at the same time. While making a substantial advance in analyzing Marx, he makes this book accessible to readers who are relatively unfamiliar with Marx." Michael Perelman, professor of economics, California State University, Chico; author, The Invisible Handcuffs of Capitalism and The Confiscation of American Prosperity "A brilliant presentation of Marxs Capitalit would be hard to imagine a more timely publication. Anyone who thought Marx was irrelevant to todays movement needs only to read this book to see things differently. Whether people describe themselves as anarchists or socialists, all of us can benefit from understanding what Marx actually wrote. Must reading for everyone in the Occupy movement and for everyone who wants to understand social relations in contemporary capitalist societies." Paddy Quick, member, Union for Radical Political Economics; St. Francis College "In only 220 pages the author achieves a summary of the three volumes of Capital: explaining the connection between labor, commodities, and money, how surplus value arises, what capital is, the role of banks and stock exchanges, and from where crises arise. Alongside this he manages to fit in the history of Marxism, demystify the ambiguous term dialectic, and throw in a final chapter on the role of the state in capitalism, all the while refuting common mistakes about the Marxian corpus." Stephan Kaufmann, Berliner Zeitung
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jura Apr 18 2012 07:46 spaceman spiff wrote:

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Well thank god for that. I've been reading posts here about value and wondering where people were getting it from. The distinction comes from Capital, Volume 1. Although it is important, I don't think you have to worry about it before you start reading the book. Then you will encounter it on the first few pages. spaceman spiff wrote: This bit confused me as I read it. Isn't this the definition of a centrally planned economy? If Marx is railing here against central planning, then how did the Bolsheviks end up with such a rigorous centrally planned economy? I imagined that Marx would be for that sort of thing, although at this early stage I'm aware that all my preconceived notions of what Marx advocated could yet be proved to be completely wrong. OK, let me try to rephrase Marx's critique. Gray wants to replace money (as it exists in a bourgeois society and as it is analyzed in one of the chapters of A Contribution) with labor-money (pieces of paper representing labor time, i.e. so-and-so many hours expended by member of society) and establish a "bank" which would issue the money and do all the time accounting. At the same time, he wants to keep private producers (i.e. no planning!). For Marx, this in itself is contradictory, and the contradiction is even expressed in Gray's own writing. Either the bank would end up being a planner (as Marx says, the tendency is clear "if his [Gray's] bank is examined carefully") effectively telling the producers what to do (based on democratic decisions or just authoritarian command, but that's not the issue here) but then, why insist on private producers, and, well, money? In fact, if the bank would become such a planner, then the private basis of production would be in fact abolished. Marx thinks that even Gray felt this contradiction, because Marx in A Contribution wrote: Although Gray merely wants to reform the money evolved by commodity exchange, he is compelled by the intrinsic logic of the subject-matter to repudiate one condition of bourgeois production after another. Thus he turns capital into national capital, and land into national property and if his bank is examined carefully it will be seen that it not only receives commodities with one hand and issues certificates for labour supplied with the other, but that it directs production itself. In his last work, Lectures on Money, in which Gray seeks timidly to present his labour money as a purely bourgeois reform, he gets tangled up in even more flagrant absurdities. So Marx basically thinks that Gray is inconsequential, because on the one hand, he presupposes the bourgeois basis of production (private division of labor), while on the other hand, he clearly wants to get rid of the ills of capitalism only by reforming the monetary system. (You can see how this sort of critique extends to initiatives like ATTAC and the Tobin Tax and all sorts of other well-meaning schemes!) Marx, of course, is in favor of "directly associated producers", i.e. a planned economy where the producers themselves are in control of social labor and allocate their effort by means of a plan, without a market (and money, and exchange value etc.). It's not the planning bit he criticizes, it's the inconsequentiality of Gray's critique. The other possibility (or the other part of the contradiction) is that the "bank" would not be a planning institution, in which case Marx thinks the economy simply wouldn't work as I quoted in my previous post, "bankruptcy" would then fulfil the function of "practical criticism". This was indeed the case of similar utopian efforts in the 19th century. spaceman spiff wrote: But why would Marx be against "the very basis of bourgeois production
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would be abolished."? Isn't that what he supports? I guess this (along with some of your other quesitons above) is clearer now: Marx did support abolishing bourgeois production and replacing it with planning. It's the theoretical underpinnings of Gray that he criticizes. spaceman spiff wrote: Now, using labour-money condemns this process to remain concrete labour. (Can't it still be abstracted into universal labour-time?) This is because the bank cannot function as a viable test of the product's validity in the way that the market does, and the 'mud-pie screen' is removed. This is because the social validity is only certified by the bank, and not by the collective social wisdom of the market. The price cannot be set by the general equivalent, because it is based on the SNLT established by society through the market. OK, thanks, now I see what you mean. Good point. Yes, Marx's criticism of the labor-bank and labor-money basically says that they cannot function as a viable alternative to the capitalist market (as long as private producers are the basis of production), because they cannot magically turn concrete labor into abstract labor, and private labor into a part of social labor. The only way is to presuppose directly associated producers, who collectively decide on what is going to be produced (i.e. they treat their labor as social from the beginning, each working member being an "organ" of the total social labor) etc., but then the basis is no longer a private division of labor (which, you have to remember, Gray and the others wanted to keep!). spaceman spiff wrote: As for your comments on Contribution, I'm glad you think it's a tough place to start, because I'm finding it tough. What annoys me is the lack of organization. It's written like a novel, when I want it to be written like a textbook, with chapter headings and sub-headings and side-bars with definitions, all colour-coded for quick retraction and visual retention. Instead he is moving from one topic to the next at great speed, and I stumble on things like nominal money and real money and the realization that he is actually for the use of gold as money. Oh yeah! Marx got reproached the hell out of him for publishing A Contribution (1859) as it is. The socialists in Germany were expecting this big book on the proletariat and communism and how to achieve it and what they got was... a treatise on commodities and money. You can imagine that the writing style didn't help much. Something similar happened with the first edition of Capital (1867), which Marx urged by Engels then tried to reorganize (consciously in a more "textbook" way, i.e. more headings and sub-headings) and popularize in the second edition (1872). The results are ambivalent; some say the popularization went too far and introduced ambiguities in the text which then led to misinterpretations. Generally, though, I think Capital is easier (and more exciting) to read than A Contribution. On the other hand, the first three chapters are basically taken from A Contribution (with modifications and important insertions, but still) which means they are difficult, but if you've read A Contribution, you already know what you're dealing with. A big advantage is that if you decide to read Capital, there is quite a lot of introductory secondary literature as well as other stuff (like David Harvey's lectures on YouTube or the threads here) to help you out. On gold: It's not that Marx wants gold to be money (policy-suggestions were none of Marx's business he's in it for a destructive theoretical and practical critique of bourgeois society), it's that (a) historically, it was the case in his time (either that or bi-metallism), and (b) his theory of value and money presupposes that money is always "bound" to a commodity (as in a gold standard), for historical and theoretical reasons. There is a huge debate around: - whether (b) is really true; - whether (b) is important for the whole of Marx's theory; - what do we do with (b) in the face of the apparent lack of (a) today (i.e. in the post-1970s system of floating exchange rates).
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This is known as the discussion about the money-commodity. There are many different positions in it, some of which were discussed in the threads on here. spaceman spiff wrote: The whole bit about money confounded me to such a degree that I went and purchased Suzanne de Brunhoff's Marx on Money. I'm not sure why. I want to read Capital first at least. I just figured this will develop into an extremely important topic. Oh boy . You are pretty serious about it, aren't you! Brunhoff is by all means a classic. spaceman spiff wrote: Also, one more thing - how do you organize your quotes? Either you have a phenomenal memory to be able to pull quotes from the thickets of Marx's thoughts, or you must have some system of organizing them? Thank you for the compliments, but it's actually much more simple than that: once you read the text two or more times, and perhaps some secondary literature to go with it, it just gets drummed into your head. A search on marxists.org helps to locate the specific passages. I do keep hand-written notebooks with copied passages from stuff I read, but use them quite rarely. The book by de
jura Apr 18 2012 07:44 Also, yeah, probably the best book on Capital in English that you can get (the best I've seen, anyway) is the one by Michael Heinrich that Angelus Novus links to above. I got it in German some four years ago and it really is Moses and the prophets. Even though now I don't agree with some of the details of Heinrich's interpretation of Marx, given the utter shit that passes as "reading guides" to Capital and "very short introductions" to Marx, I think anyone could do much, much worse than pre-order Heinrich's book.
#20
Noa Rodman Apr 18 2012 08:16 jura wrote: Noa Rodman wrote: But the quote you give jura from A Contribution doesn't speak of reduction to abstract labor. It's about social labor. So you don't think that the reduction of private labors to abstract labor only takes place in exchange? Or if you do, then does that hint at gold mean that you think that if gold does not circulate (and hence does not exchange for commodities) anymore, abstract labor ceases to exist? Sounds like a confusion of two levels of abstraction to me . I don't think the issue of abstract labor figures in Marx's critique of Proudhon's labour-time scheme, and in the quote you gave Marx speaks of turning private into social labor. I disagree with the circulationist reading of abstract labor, but that is a derail.
#21
Railyon Apr 18 2012 08:32 Mind = blown I feel so stupid now Guess I really need to get myself a copy of Heinrich's intro when it gets praised as "moses and the prophets" lol, and thanks for pointing out "Marx on money", never heard of that one before. Highly relevant to my interests.
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jura Apr 18 2012 08:45 Noa Rodman wrote: I don't think the issue of abstract labor figures in Marx's critique of Proudhon's labour-time scheme, and in the quote you gave Marx speaks of turning private into social labor. I think it does. In a commodity-producing society, the process in which private labor becomes acknowledged as part of social labor (and total social labor itself is constituted) is the same as the process in which concrete labor (and individual labor time) is reduced to abstract labor (and socially necessary labor time). I think this is evident from the quote where Marx speaks of social labor-time and "particular" (i.e. qualitatively-determined, concrete) kinds of labor "of private individuals". In bourgeois society, the two poles, 1. concrete + private (+ use-value) and 2. abstract + social (+ value) are faces of the same coin, in my view.
#23
jura Apr 18 2012 08:53 Also, Suzanne de Brunhoff: Marx on Money Rapidshare link Zippyshare link ~ 10 MB PDF scan
#24
ocelot Apr 18 2012 14:27 jura wrote: Marx in Capital I, Ch3 wrote: The question Why does not money directly represent labour-time, so that a piece of paper may represent, for instance, x hours labour, is at bottom the same as the question why, given the production of commodities, must products take the form of commodities? This is evident, since their taking the form of commodities implies their differentiation into commodities and money. Or, why cannot private labour labour for the account of private individuals be treated as its opposite, immediate social labour? I have elsewhere examined thoroughly the Utopian idea of labour-money in a society founded on the production of commodities (l. c., p. 61, seq. [This refers to the parts of A Contribution we're discussing here]). On this point I will only say further, that Owens labour-money, for instance, is no more money than a ticket for the theatre. Owen pre-supposes directly associated labour, a form of production that is entirely in consistent with the production of commodities. The certificate of labour is merely evidence of the part taken by the individual in the common labour, and of his right to a certain portion of the common produce destined for consumption. But it never enters into Owens head to pre-suppose the production of commodities, and at the same time, by juggling with money, to try to evade the necessary conditions of that production. Owen is exempted from Marx's criticisms on this issue because he presupposes "directly associated labor" i.e. producers consciously organized in a way that puts them in control of social production, as opposed to a system of private labor, where social production is regulated in a roundabout, ex post sort of way, via exchange on the market. See this always confused the hell out of me. Unless Marx is confusing Owen's earlier plans for communist communities (in the 1813 "New View Of Society" and the 1821 "Report to the County of Lanark of a Plan for relieving Public Distress") with his later National Equitable Labour Exchange (NELE) of 1832, after his failure in the US at New Harmony. Which is not impossible, as Marx
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did sometimes get the details on the "Ricardian Socialists" wrong or confused sometimes. The fact was that the NELE was indistinguishable from Grey's labour notes schemes - the artisans still produced in private and exchanged their goods for the labour notes. The scheme went bankrupt within a year, accordingly. So I don't see that Owen's NELE scheme pre-supposes directly social labour at all (unlike his New Vision scheme).
ocelot Apr 18 2012 14:31 Noa Rodman wrote: Rubin (ch.13) wrote: However, how can the social character of labor be expressed in exchange? If a frock is the product of the private labor of a tailor, then one may say that the sale of the flock, or its exchange for gold, equalizes the private labor of the tailor with another form of private labor, namely the labor of the producer of gold. How can the equalization of one private labor with another private labor give the first a social character? This is only possible in case the private labor of the gold producer is already equalized with all other concrete forms of labor, i.e., if his product, gold, can be directly exchanged for any other product and, consequently, if it plays the role of general equivalent, or money. The labor producing gold is directly social. This I also don't get at all. My understanding, possibly mistaken, of directly social labour, is labour that produces goods that are not privately held for exchange in the market, but goods that are the collective property of the wider collective body and to be distributed according to some agreed just principle, not through exchange. Now you appear to say that (private) labour producing gold is directly social because gold can exchange for all other commodities?
#26
jura Apr 18 2012 14:46 ocelot wrote: See this always confused the hell out of me. Unless Marx is confusing Owen's earlier plans for communist communities (in the 1813 "New View Of Society" and the 1821 "Report to the County of Lanark of a Plan for relieving Public Distress") with his later National Equitable Labour Exchange (NELE) of 1832, after his failure in the US at New Harmony. Which is not impossible, as Marx did sometimes get the details on the "Ricardian Socialists" wrong or confused sometimes. The fact was that the NELE was indistinguishable from Grey's labour notes schemes - the artisans still produced in private and exchanged their goods for the labour notes. The scheme went bankrupt within a year, accordingly. So I don't see that Owen's NELE scheme pre-supposes directly social labour at all (unlike his New Vision scheme). Well, being a one-sided Marx nerd, I don't know much about Owen's writings. But I remember that in the economic manuscripts, Marx usually refers to the New Lanark period (and calls Owen a "communist" or the creator of what was criticized as a "communist utopia" as opposed to the French thinkers, whom Marx labels "socialist"), but also to Owen's lectures from the late 30s. The matter could be settled by looking at the contents of Marx's library, published in MEGA IV/32. The introduction to the volume (which is available online) says that Marx had 16 titles by Owen at hand.
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Angelus Novus Apr 19 2012 09:51 jura wrote:

#28
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[I do keep hand-written notebooks with copied passages from stuff I read, but use them quite rarely. One thing I noticed is some folks using topically labeled post-it notes to mark specific pages of Capital so as to look up specific quotes quickly. I wish I had the self-discipline to do that. It would come in handy.
Angelus Novus Apr 19 2012 09:53 yourmum wrote: just take the questions and jura's answers and publish them on a blog named dr. capital - voil. The point though is that it should be a Libcom blog, since 1) this place generates a certain amount of traffic, and 2) a lot of the questions to the theory forum are Capital-related. So a mod would have to set it up. I'd be happy to help dig up some of Jura's "greatest hits" from the archives, though. It would help if the search function would generates results by post, though.
#29
Joseph Kay Apr 19 2012 10:46 spaceman spiff - sorry to hijack your thread! Angelus/jura - the technical possibilities are we either give one of you blog permissions and you collaborate behind the scenes (PMs, emails, whatever works for you), or perhaps better would be to set up a new 'Dr Capital' account (or whatever name you choose) which you can both use and we'll give that blogging permissions (similar to how Recomposition works). Obviously it's for you guys to decide if you want to do this, if it's too time consuming etc. Personally I think even if it just collected a load of things which have already been written it would be useful to have it all in one place.
#30
spaceman spiff Apr 19 2012 11:11 Thanks again for the posts guys I've heard a lot of good things about Heinrich's Capital intro, but I feel like I've been pussyfooting around actually getting my hands dirty with Capital for a while now. I mean I've spent years reading wikipedia articles and blog posts, so I feel it's time to get the information straight from the source. Do you recommend starting off with Heinrich's book before Capital? Because I plan on moving to Capital soon, once I'm done taking notes on Contribution. In a utopian world where I don't need to work and have all the time in the world, I'd then move my study to: Capital 2 and 3 Marx on Money The Anarchist FAQ Perhaps "Alienation" by Bertell Ollman Sort out the debate between central planning and decentralized socialism Understand the 'transformation problem' Then to the critiques by Von Mises and Hayek...or perhaps I should check those out earlier. I find that challenging your ideas is a healthy thing, and I don't want my cumulative knowledge of economic theory to be just from Marx Anyway, that's the dream, at least @Jura:
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Quote: Gray wants to replace money... with labor-money ...and establish a "bank" .... At the same time, he wants to keep private producers (i.e. no planning!). For Marx, this in itself is contradictory, and the contradiction is even expressed in Gray's own writing. Either the bank would end up being a planner (as Marx says, the tendency is clear "if his [Gray's] bank is examined carefully") effectively telling the producers what to do (based on democratic decisions or just authoritarian command, but that's not the issue here) but then, why insist on private producers, and, well, money? In fact, if the bank would become such a planner, then the private basis of production would be in fact abolished.... Ah I see now. I think what was throwing me off was the negative tone in which Marx wrote "abolish the basis of bourgeois production". It came off as if he was against the whole idea fundamentally, and not just because Gray was confused. I've been listening to the Diet Soap podcast today, in which Brendan Cooney is interviewed, and Cooney commented that Marx often criticizes others for 'not knowing why they were right'. I think this is a bit similar. Gray had the right direction, according to Marx, of removing bourgeois production and having directly associated labour, but he didn't know how to achieve those things because he lacked an understanding of the fundamentals. Anyway you've definitely cleared this passage up for me, thanks a lot for that. You're providing a valuable service here Jura!
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Questions on Marx's critique of labour money | libcom.org

Questions on Marx's critique of labour money | libcom.org

Questions on Marx's critique of labour money | libcom.org

Questions on Marx's critique of labour money | libcom.org

jura Apr 17 2012 13:52

Questions on Marx's critique of labour money | libcom.org

Questions on Marx's critique of labour money | libcom.org

Questions on Marx's critique of labour money | libcom.org

Questions on Marx's critique of labour money | libcom.org

jura Apr 18 2012 07:46 spaceman spiff wrote:

Questions on Marx's critique of labour money | libcom.org

Questions on Marx's critique of labour money | libcom.org

Questions on Marx's critique of labour money | libcom.org

Questions on Marx's critique of labour money | libcom.org

Questions on Marx's critique of labour money | libcom.org

Angelus Novus Apr 19 2012 09:51 jura wrote:

Questions on Marx's critique of labour money | libcom.org

Questions on Marx's critique of labour money | libcom.org

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