Marx's theory of value and the interpretation of the form of value

Image: Bruno Brandão


The relevance and importance of a debate that may seem obscure to many readers of Marx

As I mentioned in a recent note on my blog The next recession, at the Historical Materialism conference in London, in November 2023, Fred Moseley's new book, Marx's Theory of Value. He discusses how to interpret the first chapter of O Capital. And he criticizes Michael Heinrich's interpretation regarding the value form. Michael Heinrich and Winfried Schwarz (German Marxist critical of Heinrich's interpretation) participated in the presentation of the book.

Moseley's book is an examination of Marx's theory of value contained in chapter 1 of The capital, almost paragraph by paragraph in sections 1 and 2, and a detailed critique of Heinrich's interpretation of value as a form of value, as presented in his 2021 book, How to Read Marx's Capital, which is a translation of his 2018 book Wie das Marxsche Kapital Lesen?

Heinrich is a well-known German Marxist who has published widely on his interpretation of the form of value from Marx's theory of value. His work is influential not only in Germany, but also in the United Kingdom and other countries in Europe and around the world. He criticizes the traditional interpretation of the labor theory of value, according to which the value of commodities is determined solely in production, and argues that value is only created when it is converted into money by the sale of commodities on the market.

Moseley is one of the greatest scholars of Marxist economic theory in the world. He wrote or edited many books on Marxist theory. Instead, he considers that Marx presented a labor theory of value according to which the value of commodities is determined solely in production by the labor time socially necessary to produce the commodities. And Moseley argues in his book that the textual evidence in chapter 1 overwhelmingly supports his interpretation of Marx's labor theory of value.

The relevance and importance of this debate may seem obscure to many readers of Marx. So, Fred Moseley kindly agreed to be interviewed about his new book, as well as the controversy with Heinrich.

MR: How did this book come about?

FM: First, I want to thank you for the opportunity to discuss my book with you and your many readers.

Heinrich's book cited above is a detailed textual study of the first seven chapters of The Capital. Heinrich is not well known in the United States, but is very influential in Germany and other European countries. He's like the David Harvey of Europe. But since I am convinced that Heinrich's book is a fundamental misinterpretation of Marx's theory, I decided to take a critical look at Heinrich's book. 

I started by writing an article about chapter 1, the foundations of Marx's theory and Heinrich's interpretation. I presented this paper at a June 2021 conference sponsored by Gyeongsang National University in South Korea. Palgrave's assistant editor of the Marx, Engels, and Marxism series, Paula Rauhala, saw my presentation and contacted me and suggested that I would write a longer version of my article as a Palgrave Pivot book. The Pivot Book Series is Palgrave's new short book initiative, with a 50 word limit (which I exceeded by 10 words!). I thank Paula for this suggestion. This booklet is the result of your initiative

MR: Please give us an overview of your book.

FM: “My little book is a detailed textual study of Marx's chapter 1 and Heinrich's interpretation of chapter 1. The book consists of only 4 chapters. 

Chapter 1 of this book presents my interpretation of Marx's theory of value in chapter 1 of The capital, including a section on each of the four sections of Marx's chapter 1. Chapter 2 presents Heinrich's interpretation of chapter 1 of The capital and my detailed critique of Heinrich's interpretation, with the same four sections.

Chapter 3 deals with a 55-page manuscript that Marx wrote in 1872 in preparation for the second German edition of volume 1, which deals mainly with section 3 of chapter 1, entitled “Additions and changes to the first volume of The capital“, the importance of which Heinrich emphasized in his book and in previous works in providing textual support for his “interpretation of the value form” of Chapter 1.

This important manuscript has not yet been translated into English. A translation of a four-page excerpt from this manuscript is included in Heinrich's book as an appendix. Thus, chapter 3 of my book presents my interpretation of this manuscript and a critique of Heinrich's interpretation. A complete translation of this manuscript should be a priority for Marxist scholars.

My book is theoretically very abstract, in the most abstract part of Marx's theory, the beginning of Marx's theory in which he presents the foundations of his labor theory of value. Marx said in the Preface to the first edition of Volume 1 of The capital  that “beginnings are always difficult in all sciences”; now, This is very true of Marx's theory. The best way to read my book is to have Heinrich's book and volume 1 of The capital in hands.

MR: How would you summarize the main conclusions of your book?

FM: The main conclusions of my book are the following:

1. The object of analysis in Chapter 1 is the commodity, not a separate and isolated commodity, but a representative commodity, a commodity which represents all the goods and properties that   all commodities have in common (use value and  exchange value). In the Preface to the First Edition, Marx described the commodity as the “form elementary” or to "cell shape” of capitalist production. Thus, Marx analyzes the properties of a representative good in a similar way to how cell biology analyzes the properties of a representative cell. It's like putting a commodity under a microscope and analyzing its main properties.

Marx's representative good in Chapter 1 should have been produced but not yet exchanged. This is crucial to the critique of Heinrich's interpretation. According to Heinrich, the object of analysis in Chapter 1 is not the properties of a representative good, but what he calls “exchange ratio” between two goods, which he says is the end result of two real exchanges between the two goods and money in the market.

2. The value of goods is derived in Section 1 of Chapter 1 from the ownership of the exchange value of representative commodity (i.e., of the property of which each commodity is equal to all other commodities in defined proportions).  And this general relation of equality between every commodity and every commodity requires common property possessed by all commodities and which determines the proportions in which different commodities are equal.

Marx argued that this common property of all commodities that determines their exchange values ​​is the objectified abstract human labor contained in commodities. And this is the result of abstract human labor invested in the production of goods.

According to Heinrich, on the other hand, the value of commodities does not derive from a relationship of equality between all commodities, but derives from an analysis of a “exchange ratio” between two goods that, according to him, assumes real exchanges of the two commodities with money on the market.

3. The magnitude of the value of each commodity is “exclusively determined” by the amount of socially necessary labor time spent on production to produce each commodity. Heinrich argues, on the other hand, that the magnitude of the value of a good depends, in part, on the relationship between supply and demand for well on the market. This is the best-known assumption of the interpretation of the form of value in Marx's theory of value.

4. Commodity-producing labor has a double character in production: Both concrete and abstract labor are characteristics of the same labor process in production. Section 2 of Chapter 1, in particular, presents very strong textual evidence to support this interpretation of the dual character in production of commodity-producing work.  

Weaving and clothing making are Marx's two examples in Section 2. The labor process of weaving produces the use value linen. Due to the dual character, abstract human labor produces the value of linen. The same dual character applies to the garment work process (as well as in all other private work activities). The values ​​of linen and weaving are compared by identifying the work times necessary to produce each of the goods. Nada is said about exchange in this section.

Heinrich maintains, on the other hand, that work in production is only concrete work and that it is not yet abstract work. The abstract work only exists in exchange and therefore the dual character of commodity-producing labor only exists in exchange. According to Heinrich's interpretation, clothing and weaving (and any other labor process) have a single character in production, not a dual character. This interpretation is clearly contradicted by Section 2.

MR: Please tell us more about Heinrich's interpretation of the “terms of trade”. This seems to be a central concept in Heinrich's interpretation.

FM: “Heinrich's concept of 'terms of trade' is completely original and his own. No one else puts as much emphasis on this concept and defines it as he does. And it is a new concept in its interpretation; was not included in his 2012 book Introduction to Marx's Capital. And unfortunately, he doesn't explain it very well in this book, especially for such a fundamental concept. 

There is nothing in your Introduction about this concept. There are just a few pages in an appendix at the end of the book about the abstractions that result in this concept (which he doesn't refer to once in the rest of the book). And from there he simply takes his interpretation of the terms of exchange for granted and applies it to different passages in Marx's text. 

I am sure that most readers of Marx (especially beginning readers) will not understand the meaning and importance of Heinrich's concept of terms of exchange in his interpretation. A young Marx scholar from Australia has written a 2-word review of the book and Philosophy of Heinrich Marx e did not mention the concept of terms of trade. I myself had to work hard to understand it because it is very poorly presented.

Heinrich defines the terms of exchange as an exchange between two goods. Let us take one of his examples taken from Marx:

1 liter of wheat is exchanged for x bitumen.

Heinrich comments that this definition looks like a direct barter exchange between two commodities, but states that this is not the case because direct barter rarely occurs under capitalism. Instead, Heinrich interprets the exchange relationship between two goods such as final result of two real acts of exchange between the two commodities and money on the market.  This way…

1 liter of wheat sells for 10 shillings and 10 shillings is used to buy x boot bitumen

The important point is that Heinrich's concept of the exchange relationship between two commodities presupposes real exchanges between these two commodities and money on the market. Heinrich does not clearly specify whether those acts of exchange that are presupposed in his interpretation of the exchange relationship are assumed to be acts real exchange on the market. However, they must be real acts of exchange to be consistent with Heinrich's general interpretation of the value form, according to which commodities only have value if they have actually been exchanged on the market. 

Prior to actual exchange, according to Heinrich's interpretation, commodities have no value (in fact, products are not even commodities) prior to exchange. The products of labor become commodities and commodities only have value as a result of real exchanges in the market. Therefore, since the commodities that Marx discusses in Section 1 (e.g., wheat and bitumen) must possess value, in order to be consistent with Heinrich's general interpretation of the value form, he must also assume that these commodities were actually sold and bought on the market. If commodities had not actually been exchanged on the market, then those commodities would have no value, according to Heinrich's general interpretation of the form of value.

However, there is no absolutely no textual evidence in none of the various drafts of Marx's Chapter 1 to support Heinrich's peculiar interpretation of the exchange relationship between two commodities: that it presupposes actual acts of exchange between these two commodities and money in the market. This interpretation is Heinrich's invention. He does not cite any other author with a similar interpretation of the terms of trade, because there are none. And the terms of exchange is the most important concept in Heinrich's interpretation of Chapter 1. If his fundamental concept of the terms of exchange is a misinterpretation of Marx's theory, then the rest of Heinrich's interpretation of Chapter 1 is a misinterpretation and is unacceptable.

I think it is clear that the object of analysis in Chapter 1 is the commodity, a representative commodity that is used to analyze the properties that all commodities have in common: use value and value. Chapter 1 is not about exchange. The good discussed in Chapter 1 has been produced but not yet exchanged. Exchange is not considered until Chapter 2 (“The Exchange Process”).

 Over the past few weeks, as I prepared for the HM talk and this interview, I realized more clearly that there is a fundamental contradiction in what Heinrich is trying to accomplish in his recent book. In his previous works he presented (many times and throughout the world) a strong interpretation of the value form of Marx's theory of value, according to which the value of a commodity only exists as a result of a real exchange on the market. 

Before exchange, a commodity has no value (it only has use value). To obtain textual evidence to support this interpretation, he used a handful of key passages taken from various texts in isolation and out of context. As we know, it is always possible to find passages that seem to support almost any interpretation of Marx's theory. And Heinrich is very good at this game.

However, his latest book is different: it is an attempt to interpret the first seven chapters of Volume 1, especially Chapter 1, as a theory of the form of value – and that Marx was the first theorist of value! Heinrich goes from page to page in Chapter 1 and consistently tries to interpret key passages in terms of the value form. This is a very difficult task because there are many passages in these chapters, especially in chapter 1, which contradict an interpretation of the value form. In fact, in my opinion, Heinrich's task is impossible. My book follows his detailed comments point by point and exposes the errors in his interpretation of the form of value.”

MR: What was the main disagreement between you and Heinrich at the launch of your book during the recent Historical Materialism?

FM: It will come as no surprise that the main disagreement in the session was over the meaning of “terms of exchange” in two paragraphs of the Section 1. He argued that I misinterpreted Marx's concept of the exchange relationship, not as an act of exchange between two commodities, but as a relationship of equality between two commodities, and that I simply substituted Marx's meaning in the two passages which for me means an exchange relationship. And he argued that these two passages are evidence that Section 1 looks at individual commodities as part of a term of exchange.

But that is not true. I did not simply substitute the meaning of the terms of trade for Marx's meaning in these paragraphs. Instead, I argued that the exchange relationship in these paragraphs is synonym for exchange value. The exchange value of each commodity is defined in the previous paragraphs of section 1 as the property of each commodity that is same to all other commodities in defined and mutually consistent proportions. This implies that all commodities have a common property that determines the proportions in which different commodities are equal. Therefore, the exchange relationship between two commodities in these paragraphs is also a relationship of equality between two commodities, implying the need for a common property possessed by each of them.

Instead, I argued that Heinrich is the one who misunderstands Marx's concept of the exchange relationship with its bizarre definition as the result of real exchanges between the two commodities and money in the market. There is absolutely no textual evidence supporting this interpretation of actual market exchanges presupposed in Chapter 1. My interpretation of the terms of exchange as a relationship of equality between commodities is much more reasonable and plausible than Heinrich's complicated and peculiar interpretation of the result end of real exchanges between goods and money in the market.

MR: Are there other points you would like to highlight?

“I also want to mention Heinrich's unusual interpretation of the word 'common' in derivation of Marx's value in Section 1 – that value is property common of commodities that determines their exchange values ​​– because it is an important point in his interpretation that he emphasized in all his writings. including the book he reviewed. 

Take the final paragraph of Marx's derivation of value on p. 128: “All these things now tell us is that human labor power is expended in producing them, human labor is accumulated in them. As crystals of this social substance common to all of them, they are values: mercantile values. I argue that the meaning that Marx gives to “common to all” in this passage is the usual meaning of “common”, that is, that each individual commodity possesses the same property by itself, by itself.

Heinrich argues, on the other hand, that the meaning of “common” in this passage and elsewhere is ambiguous: that is, it could also mean a property that each individual commodity possesses, not by itself, but only together with other merchandise in the same place. an exchange relationship (exchange relationship again!), and this is what Marx means here and elsewhere when he says that value is a property of commodities. According to Heinrich, outside of an exchange relationship, an individual commodity does not have the “common property” of value.

However, I do not think that Marx's meaning of “common to all” is ambiguous; Marx states that the common property of commodities is the human labor accumulated in them as a result of the labor used to produce them (each of them), prior to and independent of their exchange with another commodity. Nothing is said about exchange and exchange relations in this final key passage.

Three paragraphs before the passage just cited, Marx presents a geometric example of area as a common property of different geometric figures. The area is a “common property” of each figure, regardless of its comparison with the area of ​​another figure. The similarity between the area of ​​geometric figures and the value of goods is that, in both cases, the objects have a common property, independently of a quantitative comparison between them. Heinrich does not comment on this illuminating geometric example that contradicts his interpretation that the common element of value is created in exchange itself. Clearly, the area of ​​geometric figures is not created by comparing its areas.

Another point I would like to mention. While working on this book, I noticed for the first time that Marx repeatedly used the expression “proper value” of an individual commodity in Section 3 of Chapter 1 (seven times); For example, the “eigenvalue” of 10 yards of linen or the “self-value” of a coat. The proper values ​​of linen and fur are compared and equated, but nothing is said about exchange.

 These passages are clear and unambiguous textual evidence that each individual commodity has its “own value,” regardless of the acts of exchange between commodities and money in the market. This directly contradicts Heinrich's interpretation that an individual commodity only has value if it has actually been exchanged for money on the market. Heinrich cites only 3 of these 7 “self-esteem” passages and provides little or no commentary on any of them. Twice he quotes the accompanying phrases, but not these revealing phrases.”

MR: What does this debate over the details of Marx's theory of value mean in the big picture?

FM: I think it is important to clarify the details of Marx's theory of value, because it is the foundation of Marx's theory of surplus value as a theory of exploitation in chapter 4, still in volume 1. And the theory of value is also the basis of your theory of the falling rate of profit and crises that you presented so well in your own work. In the Preface to the first edition of The capital, Marx stated: “For the superficial observer, the analysis of these forms [the commodity form of the product of labor and the value form of the commodity] seems to revolve around minutiae. In fact, it deals with minutiae, but also microscopic anatomy.” Microscopic anatomy is necessary to understand organic bodies, and similarly, Marx's theory of value is necessary to understand the capitalist economy.

My book deals specifically with Heinrich's book, but it applies to the interpretation of the evaluative form of Marx's theory in general. And my conclusion is that Marx's theory of value cannot be reasonably interpreted as a theory of the form of value. I think this is an important conclusion. We must abandon the value-form interpretation of Marx's theory.

I am concerned about Heinrich's influence on the understanding of Marx's theory. His interpretation is very influential in Germany and other parts of the world, especially among young people. And I am convinced that this is fundamentally a misinterpretation of Marx's theory. That's why I think it's important to address his interpretation, however popular and erroneous it may be. I hope that my book will be read especially by young people and encourage them to make a deeper study of Marx's theory of value in chapter 1 of The capital and beyond.

Allow me, Micahel Roberts, to add to what I think are the broader issues arising from this debate between Heinrich and Moseley.

Marx expressed it this way:  “Just as the commodity is the immediate unit of use value and exchange value, so the production process, which is the process of producing a commodity, is the immediate unit of the labor process and the process of valorization“. So, for Marx, it is the production process, the effort of human labor that creates value. As Marx once said: “Every child knows that any nation that ceased to function, not for a year, but, say, just for a few weeks, would perish. And every child also knows that the quantities of products corresponding to different quantities of needs require different and quantitatively determined quantities of the aggregate labor of society.”

Heinrich's value-form approach is implicitly a simultaneist approach. Its characteristic is the belief that value arises only at the moment of its realization in the market. Consequently, production and fulfillment collapse and time disappears. But the process of production and circulation (exchange) is not simultaneous, but has temporality. At the beginning of production, there are inputs of raw materials and fixed assets from a previous production period. Thus, there is already value (constant work or “dead work”) in the commodity before of the exchange. Then production takes place to make a new good using human labor. This creates “potential” value, which is realized later (in a modified quantity) when sold.

But why does all this matter? For me, Marx's theory of value attempts to show the fundamental contradiction in capitalism between production for social needs (use value) and production for profit (exchange value). In capitalism, units of production are commodities that have a dual character that embodies this contradiction.

For Marx, money is a representative of value, not value itself. If we think that value is only created by selling the commodity for money and not beforehand, then the labor theory of value is devalued and becomes a theory of money. Thus, as conventional neoclassical economics argues, we do not need a labor theory of value because the price of money is sufficient. Monetary prices are what mainstream economics looks at, ignoring or dismissing the value of human labor power and therefore the exploitation of labor by capital for profit. It eliminates the basic contradiction of capitalist production.

Furthermore, it leads to a lack of understanding of the causes of crises in capitalist production. It is no coincidence that Heinrich dismisses Marx's law of profitability as illogical, “indeterminate” and irrelevant to explaining crises and instead considers excessive credit and financial instability as causes. Heinrich goes so far as to state that in recent years Marx abandoned his law of profitability, although there is no evidence of this.

If the profits (surplus value) of human labor disappear from any analysis to be replaced by money, then we will no longer have a Marxist theory of crisis and no theory of crisis at all.

*Michael Roberts is an economist. Author, among other books, of The great recession: a marxist view (Lulu Press). []

Translation: Eleutério FS Prado.

Originally published in The next recession blog.

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