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Abstract Labour and Social Mediation in Marxian Value Theory


Nicola M. Taylor

Bachelor of Economics (Honours)
Murdoch University

This thesis is presented as part of the requirement for the Degree of Bachelor of Economics with Honours in
Economics, at Murdoch University.
4th November, 2000


I thank my supervisor, Paul Flatau, for his helpful suggestions and encouragement during the writing of the
dissertation, which also benefited from extensive and enjoyable discussions with Chris Arthur, Riccardo Bellofiore,
Andrew Brown, Jerry Levy, Fred Moseley, Alfredo Saad Filho, Geert Reuten and Michael Williams. Special thanks
are due to Geert Reuten and Alfredo Saad Filho for their invaluable comments and suggestions on earlier drafts and
chapters. Funding for the research was provided by a Murdoch University Honours Excellence Scholarship.


The dissertation inquires into abstract-labour as the source of value in a capitalist economy. A key question is
whether value can exist prior to exchange as a physiological substance embodied in commodities, or whether it is a
social dimension brought into existence only as the result of market activity? A corollary question concerns the
measurement of value: is it measured as an amount of labour time expended in production or is it measured only in
money, as an exchange ratio between commodities?

A textual analysis of the starting point of Capital shows abstract-labour to be an ambiguous concept. Criticism
centres on Marxs lack of clarity with respect to method. First, it is unclear as to whether abstract-labour is a
reductive category describing an amount of homogeneous labour embodied in commodities (a labour theory of
value), or a dialectical universal describing a real abstraction from particular types of labour, established in
exchange (a theory of social form). Second, abstract-labour is conceptualised as a substance of value and this
implies a logical order where value precedes price and, indeed precedes the existence of capitalism.

Theoretical and empirical problems associated with a variety of interpretations of Marxs abstract-labour-embodied
value theory are identified and discussed. The main argument against labour-embodied theories (whether
physiological or social) is that they deny any ontological role to money (capital) in determining the character and
level of productive activity in a capitalist economy. As a result of this value-price dichotomy, the imperative of
valorisation (the process of increasing value) driving the capitalist system is inadequately captured within these

I present and defend a dialectical reconstruction of abstract-labour and value as social categories that come into
existence only to the extent that markets transform the imperatives driving the production process. Causality is
systemic, determining abstract-labour as the form that social labour takes in capitalism and money as the sole
measure of the value of labour, labour-power and commodities. A further determination of the labour process as a
technical process and a valorisation process supports the main conclusion: labour (in the process of valorisation) is
the one and only source of value-added. The result is established without recourse to abstract labour as the value
substance, purging any reliance on autonomous labour-values underlying prices and money.


Statement of Originality i
Acknowledgements ii
Abstract iii
_1. Labour, Value and Money _6
2. Value Theory: Content and Concepts _12
2.1 Two Types of Abstraction _14
2.2 Hegels Logic: Principles and Implications _18
2.3 Abstract Labour: Analytic or Dialectic Abstraction? _22
2.4 Value-Form and Commodity Fetishism _28
3. Two Paradigms, Two Problems _35
3.1 The Technical Paradigm _36
3.2 The Social Paradigm _46
3.3 Abstract Labour: Substance versus Form _56
4. Abstract Labour: A Reconstruction _63
4.1 Critique and Reconstruction _65
4.2 A Systematic Dialectical Starting Point _68
4.3 Concrete Dissociated and Abstract Associated Labour _69
4.4 Reconstructing the Theory of Value-Form _71
4.5 The Concept of Abstract-Labour: a Criticism and a Defence _84
5. Conclusion _92
References _100
1. Labour, Value and Money

In a Postface to the second edition of Capital 1, Marx (1873) complained that his book had not been well understood
and made a number of remarks linking the content of his value theory to Hegels method and form theory. Yet, this
Postface was itself notoriously ambivalent, especially concerning Marxs application of the Hegelian notions of
doubling and appearance to his critique of the classical categories of labour, value and labour time (Arthur, 1993;
Murray, 1993; Reuten, 1993; Smith, 1993). Today the question of Marxs method remains disputed, as does his
value theory. Is it a variation on the classical labour theory of value, arising from a critical transformation of
Ricardian concepts; if not, what kind of a theory is it?

Fischer (1982) suggests that this question constitutes the most comprehensive and controversial issue in Marxian
political economy. At stake is the important question of what type of labour is abstract labour, and what is the
relation of that labour to the value of capitalist commodities. Here, Marxs exposition in the first Chapter of Capital
is a notoriously difficult and enigmatic source. Not only does Marx derive abstract labour differently in the several
language editions of Capital that he edited in his lifetime, but he also presents different views on the concept within
texts (see Bellofiore, 1999; Rubin, 1928/1972). At times abstract labour appears as substance of value: a natural
or physiological property of particular commodities, or a proposition in the derivation of a general law of value
pertaining to all forms of economic organisation in which there is a division of labour. At other times, the concept
expresses a relation of equivalence between private labours that can come about only when diverse commodities are
brought into a form of social equality in the market. In the latter sense, abstract labour has a distinctly
non-Ricardian flavour: it is a category with economic significance only to the extent that the practice of exchange
transforms and defines the imperatives driving the production process.

Marxs ambivalence regarding the ontological character of abstract labour manifests in contemporary debates as a
serious epistemological disagreement over the meaning and measurement of concepts_. Did Marx see value as the
objective representation of a natural substance (abstract-labour) embodied in particular commodities prior to
exchange, therefore measurable in labour time (e.g. Sweezy, 1946; Mandel, 1990)? Or did he see value as an
historical expression of the social form that productive private labour assumes, as it is abstracted, alienated and
mediated by exchange, therefore measurable only in money (e.g. Arthur, 1999; Reuten, 1999; Williams, 1998)? Did
Marx present an original, if somewhat inadequate, synthesis of classical value theory and Hegelian form theory (e.g.
Reuten, 1993); or did he present two contradictory value theories, and shift irresolutely between them (e.g.
Mirowski, 1990)? These questions pose critical problems for any evaluation of the theoretical consistency of
Marxs value theory, raising the question of how far the categories of Capital are in fact adequate to its subject
matter (Bellofiore, 1998a).

This point about the need to re-evaluate Marxs concepts in terms of the cogency of his project provides the
rational for the current inquiry. The dissertation has two objectives. The first object is to clarify the ontological
meaning and methodological status of a central concept of Marxs and Marxian value theory: abstract-labour.
Subsidiary to this is a demonstration that the ambiguities arising out of different interpretations of abstract-labour
inhere in the text of Capital, and not in the great variety of appropriations of it. The second objective is to undertake
a critical investigation into a key proposition of Marxs abstract-labour theory of value: that abstract-labour
embodied in commodities during production (independently of exchange) is the one and only source of surplus
value. Special emphasis will be given to an alternative view of abstract-labour as a category in a theory of social
value or value-form where money has ontological significance in determining economic outcomes, including the
determination of abstract-labour as value. This leads up to a core research question: must Marxs abstract-labour
(embodied) theory of value be abandoned as inadequate to the theorisation of capitalism, or can Marxian categories
be reconstructed to provide a theory of the social constitution of the nexus of value and money? This heuristic
question motivates the analysis throughout the dissertation. I hope to show that a theory of social value is implicit
in Marxs Capital and, moreover, to suggest some ways in which that theory might be explicitly developed.

A full inquiry into Marxian value theory would require a detailed analysis of the whole of Capital engaging the
contentious issue of Marxs theory of science - in relation to that of the classical economists as well as Hegels logic.
Here, I focus in a more limited way on the opening chapter of the first volume where Marx introduces his central
concepts: the commodity, abstract-labour, value, exchange-value, money and value-form. Although these concepts
do not constitute the whole of value theory, the efficacy of the starting point is an important factor in current
disputes. Moreover, in making explicit criteria for evaluating (and reconstructing) Marxs starting point, I hope to
show how the impasse concerning the ontological and methodological status of core concepts abstract-labour and
value might be circumvented, if not resolved.

The first chapter poses a preliminary question concerning Marxs (1867a) development of the double character of
commodities and labour in relation to their determination by social form. Marx clearly saw the value/use-value and
abstract-labour/concrete-labour dualities as crucial to his value theory, but what are we to make of these oppositions?
Are they analytic or dialectical oppositions and how does the answer given to this question prejudice the way that
Marxian value theory is understood? In the first two sections of his chapter, Marxs analysis appears to be similar to
that of the classical political economists. He posits economic relations as the causal product of external
determination, particularly in nature; the concepts of abstract-labour and value are taken to be natural phenomena.
In the final two sections, however, Marxs method seems to be more closely associated with Hegels (1817) Logic.
He suspends a priori presuppositions and understands economic relations only as a development within a social
(systemic) set of interconnected determinations; the concepts of abstract labour and value are social phenomena.
This juxtaposition of competing strands of capitalist thought in Marxs text suggests that Bellofiores (1998a)
question concerning the cogency of Marxs project is not resolvable by reference to the text of Capital, but only by
serious discussion of the analytic status of Marxian categories.

The second chapter reviews the major effect of Marxs ambivalent derivation of abstract-labour: a paradigmatic
splitting of Marxs value theory into concrete-labour-embodied (technical) and abstract-labour-embodied (social)
value theories (cf. de Vroey, 1982). Contemporary debates arising from the paradigmatic split are considered in
relation to the question of the source and measure of value. I identify theoretical and empirical problems in
technical versions of the labour-embodied theory of value, which reduces Marxs abstract-labour theory to a theory
of prices derived from the quantity of labour time embodied in commodities. I then introduce social value theories,
which attempt to integrate technical (natural) and social (historical) elements of Marxs value theory, and thus
establish the necessity of money (and exchange) to the existence of value. The main question is whether these
social theories succeed in resolving the difficulties of a theory of value immanently measured in labour time. I
introduce an argument for money as the only measure of abstract-labour and the only indicator of the actuality of

The third chapter examines recent reconstructions of Marxs concepts, in accordance with systematic dialectical
principles of logic (Hegel, 1812, 1817). The heuristic purpose behind reconstruction is to step outside the
methodological and substantive inconsistencies of Marxian value theory and articulate the unity of production and
exchange within a specifically capitalist totality (Reuten, 1993). From this point of view, Capital is most fruitfully
read as a critical contribution to an ongoing inquiry into the social determination of value and labour, an inquiry
concerned with a problematic very different from that of Ricardo. In these new theories of value-form, Ricardian
(labour-embodied) elements of Marxian value theory are abandoned, along with all reference to abstract-labour as
the embodied substance of value.

The concluding chapter returns to the economic problem of whether value can exist - either ontologically or
conceptually before (market) exchange; I review the alternative responses to the question within contemporary
Marxism. The main conclusion is that labour-embodied theories of value (whether physiological or social) are
inadequate, to the extent that they deny any ontological role to money (capital) in the reproduction of the capitalist
economy. As a result of this value-price dichotomy, the imperative of valorisation (the expansion of value) driving
the capitalist system is inadequately captured within these theories. The analysis supports an argument for
systematic dialectical reconstruction of Marxs concept of abstract-labour as social value, measured only in money.
Current reconstructions verify Marxs key insight: labour is the one and only source of value-added in the
valorisation process. The result is arrived at without any reliance on labour-value substructures underlying prices
and money.

2. Value Theory: Content and Concepts

The subtitle of the first volume of Marxs (1867a) Capital identifies Marxs project as a critique of political
economy. What is the salient feature, or definitive object, of Marxs critique? On this point, Marx is quite clear:
the great merit of classical political economy was to have discovered the content of value in labour; its great defect
was never to have discovered the determination of value and labour by social form_. This raises a preliminary
research question: is Marxs social value theory a clarification and extension of the classical labour-embodied
theory of value, or is it a refutation of it? That Marx is nowhere explicit as to the nature and extent of his break with
the classics has always confused discussions of value theory; it is here that controversy begins.

First, Marx is unclear as to the methodological status of his abstractions, in relation to those of the classical labour
theory of value. In his opening chapter, analytic and naturalistic elements of a labour-embodied value theory appear
to exist side by side - uncomfortably - with dialectical and historical elements of a theory of social form. Second,
these classical and Hegelian elements of capitalist thought seem to be related to the structure of Marxs argument
which proceeds in two movements: the first introducing and elucidating the double character of commodities and
labour, the second determining the double form of commodities and labour. The dialectical mode of argument of
the second movement has been remarked by many writers (notably, Arthur, 1979b; Murray, 1993; and Smith, 1998).
Nevertheless, Marx prefaces this with a non-dialectical (analytic?) first movement from which he derives the dual
character of labour, claiming this as the pivot on which his political economy turns.

In what follows, I aim to show that the substantive problems in Marxs derivation of the dual character of labour
cannot be understood apart from the problems of the method of Capital, itself the subject of a long and unresolved
dispute_. The methodological debate centres on interpretation of the Marxian dialectic in relation to Hegels (1812,
1817) logic, especially the role that dialectical thinking plays in Marx's analysis of social form (therefore his critique
of classical value theory). The first section begins by introducing what is meant by analytic and dialectical
abstraction, identifies possible sources of terminological confusion, and relates alternative conceptions of
abstract-labour to two models of essence and appearance (Ricardian and Hegelian). The second section elaborates
the systematic dialectical mode of argument, and sets out some explicit criteria for judging Marxs presentation.
The third and fourth sections present a textual analysis of the first chapter of Capital, focusing attention on Marxs
problematic derivation of the concept of abstract-labour, in relation to his theory of value-form.

2.1 Two Types of Abstraction

Behind debates on Marxs method in Capital is a generally agreed presumption that this work is somehow distinct
from all other works in political economy, a presumption fuelled by Marxs (1873) own claims about the dialectical
character of the work. Marx was, however, never explicit about his understanding of dialectical reality in relation to
his theory of capitalism. Are economic relations the product of historical processes, mirrored directly in the
concepts of Capital as Engels (1894a, 1894b) believed; or, do concepts appropriate reality at best circuitously, via a
purely logical movement from abstract concepts to concrete determinations as Marx suggested in his (1857/1973)
draft Introduction?

Lack of agreement as to the particular meaning of the historical and/or logical dialectic in Marx turns on the
fundamental question of what, exactly, Marx learned from Hegel. As Arthur (1997) points out, Hegels work
contains examples of both historical and systematic dialectics; the former exhibiting the inner connection
between stages of development in a temporal process, the latter exhibiting the inner articulation of a given whole
(p.10). It appears, from Arthurs account, that Engels conflates the two dialectics, although Marx makes it clear in
his (1857/1973) draft Introduction that his intellectual debt is to Hegels theory of logical development. Arthur goes
on to argue that Engelss misinterpretation of the Marxian dialectic as a logical-historical method has resulted in
major terminological confusions, such that the meaning of Marxs concepts and the role that they play in his value
theory have been widely misunderstood.

One pervasive effect of different understandings of Marxs method is that different Marxian writers use the same
terms and concepts to mean different things. The term abstract-labour may be used for example to refer to a
physiological substance embodied in commodities during production, or to a social form that labour assumes when
commodities are exchanged. In order to clarify these semantic confusions, I propose to use the term
abstract-labour-embodied whenever I refer to interpretations in which abstract-labour is seen to be a substance of
value, a property of commodities with a natural existence independent of the social institution of exchange. I
reserve the term abstract-labour for interpretations of value as a social dimension that acquires actuality only as a
relation between commodities, establishing the equivalence of private labours through practical abstraction in the
market. This terminological decision should not be taken to imply a judgement on Marxs own use of the term
abstract-labour. As I will demonstrate, any attempt to establish whether Marx held a social (abstract-labour)
theory of value or a physiological (abstract-labour-embodied) theory of value founders on textual evidence for both

Although the terminological difficulties associated with the meaning of the concept of abstract-labour may be
over-come by this simple expedient of renaming the terms in a debate, the question of the analytic status of the
concept remains. The solution adopted in this dissertation is to relate alternative interpretations of value theory to
the two models of essence and appearance, distinguished by Murray (1993). In Ricardian models, a dichotomy of
essence and appearance operates such that value (essence) is given as an axiom at the start of a linear derivation, or
as something real that is embodied in commodities as the result of productive activity. Money (appearance) is
then theorised as a phenomenal form, external to the essential character of value. In Hegelian models, essence and
appearance coexist as a unity in difference such that value and its monetary expression are mutually constituted by
the essential character of the capitalist mode of production for exchange. The relation between these models and
interpretations of abstract-labour can be explicated as follows:

In the Ricardian essence-appearance model, value exists a priori and is conserved across analytic levels of
abstraction. In axiomatic models, the value-price relationship is conceptualised in terms of hypotheses about
embodied-labour-values and the cause-effect relationships that result once market relations are introduced into the
basic labour-value models (e.g. Sweezy, 1946). In logical-historical models, capitalist relations impinge upon
earlier forms of productive activity, affecting modifications in a general law of value (e.g. Mandel, 1990). These
analytic and logical-historical approaches posit an independence of value from its external expression in the
value-form (money); in this respect, they are associated with abstract-labour-embodied interpretations of Marxian
value theory.

In contrast with Ricardian models, Hegelian models apply a conceptual rather than an ontological dialectic;
what Arthur (1979b) calls the logic of the concrete. Within the conceptual dialectic, all axioms are eschewed, and
concepts such as value and abstract-labour have a provisional existence, yet to be determined within the analysis:
the actual existent is first of all possibility, but without further determination it is only that (Reuten and Williams,
1989, p.10). What this means is that concepts are given provisionally as universal/particular oppositions that require
further grounding in more concrete determinations (I elaborate more fully this Hegelian mode of argument in section
2.2, below). Fundamentally, a view of value and value-form as internally interconnected and mutually determined
by an existent (capitalism) identifies Hegelian models as theories of social form, associated with an abstract-labour
theory of value.

At this point, it might well be asked how any evaluation of Capital is possible? Given profound epistemological and
methodological disagreements about the meaning and status of value concepts, to what sort of test might Marxs
theory be subjected? Is it an analytic or logical-historical theory concerned with theorising the implications of a
natural trans-historical law of value, or a systematic dialectical theory concerned with theorising the internal
connection between concepts applicable only to a particular social form?

In arriving at a decision, we have only Marxs cursory and ambivalent remarks on method to go by. At the time of
writing the 1857 draft Introduction Marx seems to have agreed with Hegels conceptual dialectic, arguing that the
object of a scientific inquiry is to grasp the essence of the phenomenon of interest as a concentration of many
determinations, hence unity of the diverse (1857/1973, p.102). Hence, he concluded, the scientifically correct
method is one in which abstract determinations lead towards a reproduction of the concrete by way of thought
(p.101). Is it possible, then, to read the opening chapter as an attempt to ground abstract universal dualities (the first
movement, contained in sections 1-2) in the more concrete structures of commodity exchange (the second
movement, contained in sections 3-4)? With this question in mind, the next section sets out criteria for evaluating
Capital as a systematic dialectical theory. These criteria are derived from Hegels (1812) Science of Logic.

2.2 Hegels Logic: Principles and Implications

Williams (1998) identifies two moments in Hegels logical system of conceptual development. The first is a
moment of inquiry into empirical perceptions of reality and existing theories of it: or, as Marx put it, the working-up
of observation and conception into concepts (Marx, 1857/1973, p.101). Through this process of working-up the
researcher arrives at an all-embracing abstraction determined by the interconnection of all the necessary moments of
the totality (Reuten and Williams, 1989, p.20). The second moment is one of presentation, proceeding in the
reverse direction to grasp the abstract-universal starting point in its internal (logical) interconnectedness, its concrete
conditions of existence. The moment of presentation is not concerned with analysis, but with systematic
interconnection, specification, synthesis, reconstruction and concretisation from the most abstract starting point
(Williams, 1998, p.189).

The first thing to note about the starting point of a systematic dialectical presentation is that it is a universal
abstraction, yet determinate in that it presupposes the totality of an empirical reality that has been interrogated in the
moment of inquiry. The second point is that thinking can make nothing of the abstract universal notion except by
opposing to it: (1) an abstract universal negation (what it is not), and (2) its concrete particularity. To take Hegels
example: the abstract universal animal is further determined only by thinking through its abstract negation as plant
or mineral and its concrete particularity as dog and cat. Third, negation and particularity are brought into existence
by applying opposing concepts to the empty abstraction, and in this very specific sense the doubling of concepts
creates contradiction. Fourth, contradiction motivates transcendence of the abstract universal concept by demanding
concrete grounds, or conditions of existence. The grounding moment a movement of force, or tendency
provides for the actual coming into being of the abstract identity of opposites (Reuten and Williams, 1989). Thus,
the universal animal is grounded in the concrete determination of how precisely particular animals are different and
how they are connected. It is this unity in difference that the systematic dialectic seeks.

At the start of the presentation, difference is still sunk in the unity, not yet set forth as different (Hegel, 1833, p.83).
Opposed concepts are brought into being and united by the gradual transcendence of abstract determination towards
concrete determination until the stage of a self-reproducing actual existence is reached (Reuten and Williams,
1989, p.24). The systematic dialectic is thus best apprehended as within itself a circle in which the first is also the
last and the last is also the first (Hegel, 1812, p.71). Indeed, the whole object of the presentation is to confirm what
is first posited provisionally as possibility and to determine this possibility as indeed actual, concrete,
self-reproducing, or endogenous existence, which requires no external or exogenous determinants for its systematic
reproduction (Reuten, 1993, p.93). If the method is applied to value theory, three crucial implications follow.

First, the relation of causality to determination is complex and given systemically rather than externally.
Determinations given externally are contingent rather than necessary to the existent_. Moreover, the totality and its
determinations are mutually constituted such that: theory culminates in a stage that is true for itself, i.e.,
concretely and actually, then this shows that an earlier stage leading up to it must have been true in itself, i.e.
abstractly and potentially (Smith, 1990, p.49). Causality is therefore established retrogressively: the beginning is,
as such, already something derivedand there is no need to deprecate the fact that it may only be accepted
provisionally and hypothetically (Hegel 1812, p.841). The provisional character of the starting point as an
abstraction that results from a process of empirical inquiry - will be confirmed by the capacity of logic to ground all
related elements in the system of mutual determinations that cause the existent to be what it essentially is.
Ultimately, value in its complete, finished form must make good the promise of a law of value (Arthur, 1997, p.33).

The second implication of Hegels system is that science alone determines its object, and comprehends it. In social
science, the object of theory is to establish the mutable logic of social practices in a systematic form. Hegels logic
is a method enabling this reconstruction in thought of a real subject that retains its autonomous existence outside
the head just as before, but is knowable only as a product of a thinking head, which appropriates the world in the
only way it can (Marx, 1857/1973, p.101). As a method, the systematic dialectic need make no claim to perfect
correspondence with reality, or to perfectly reflect real entities. The systematic dialectical project is, in fact, far
more modest in this respect than most Marxist theories with their ontological presuppositions and claims to directly
represent capitalist reality. Claims to success are based, rather, on the theorys capacity to comprehend the relevant
concrete phenomena (prices, profits, labour-time) of the reality to be explained, as mediated and reconstituted by the
theory. Since theory approaches reality at best circuitously, the systematic dialectical project is explicitly
open-ended and can never be considered complete (Reuten, 1993).

The third implication of Hegels unity of ground and existence is that it does not allow for the isolation of essence
and appearance within the analysis; in this it differs fundamentally from the linear (Ricardian) models introduced in
the last section (2.2). In the Hegelian model, value is not comprehensible as an essence behind the phenomenal
appearance of price, as most Marxists would have it. On the contrary, the concept of value first appears only as
the abstract negation of an opposite abstract universal, use-value. The exchange relation then constitutes the
ground, or first condition for the existence of value, by showing value that it cannot exist for itself but only as it
appears in the concrete body of an equivalent commodity or - more concretely still - the form of a universal
equivalent (money). Price, as the most concrete determination of money, cannot exist apart from value but
necessarily contains within it the antecedent abstract moment: appearance shows nothing that is not in the essence,
and in the essence there is nothing but what is manifested (Hegel, 1817; cited, Reuten and Williams, 1989, p.23).

It is clear, then, that relative prices cannot be derived from value (or from labour-values) as propositions are
derived in an axiomatic or in a logical-historical analysis. Indeed, both Hegel and Marx explicitly reject the
empiricist/materialist conflation of knowledge and reality constituted by an axiomatic identification of laws with
constant conjunctions of events. The proof of the theory rests solely on the adequacy of the theoretical (systemic)
grounding of the abstract starting point; that is, on the intrinsic merits of the presentation itself Reuten (1993).
With these criteria in mind, the next section turns to Marxs (1867a) starting point: his exposition of the double
character of commodities and labour, which takes place over the first two sections of his opening chapter in Capital

2.3 Abstract Labour: Analytic or Dialectic Abstraction?

The opening sentences of the first chapter of Capital set the stage for Marxs (1867a) analysis of the double character
of the commodity, upon which so much depends:

The wealth of societies in which the capitalist mode of production prevails appears as an immense collection of
commodities; the individual commodity appears as its elementary form. Our investigation therefore begins with
the analysis of the commodity (Marx, 1867a, p.125).

From a Hegelian perspective, this paragraph suggests both the object of inquiry - capitalist wealth - and its most
abstract universal manifestation the commodity. Yet, having suggested the determinate character of the
commodity as a starting point for his inquiry into the universal form of wealth in a particular type of society, Marx
immediately suspends the presupposition and moves towards to a generalisation of commodities as use-values for
others, social use-values (Marx, 1867a, p.131). By the end of the first section, what is established is that the
commodity is a useful object produced specifically for exchange - such that its useful property (its use-value) is
verified only when it is exchanged for use-values of a different type. Thus, the commodity is constituted in a very
broad sense as an entity of double character: use-value (quality) and exchange-value (quantity).

What has this duality to do with the commodity form as an appearance of capitalist wealth? Marx does not address
this important question, but embarks upon a digression into the exchange relation and the question of what it is that
enables diverse use-values to exchange in predictable proportions. It is in this context, that he first introduces value
as a term for the relation of equivalence between commodities the common factor in the exchange relation
(1867a, p.128). Here, the substance of value is what is common in diverse commodities after the particular useful
property (use-value) of the commodity is discarded. Since nothing is left but the property of being products of
labour, Marx concludes that congealed quantities of homogenous human labour give the exchange relation its
phantom-like objectivity (p.128). In order that particular types of labour should be considered equal human
labour, however, a similar abstraction must be made from the heterogeneous characteristics of particular concrete
types of labour.

Thus, abstract labour makes a first appearance in Capital as a term used to describe homogenous labour, constituted
as an abstraction from concrete particularity. What is common to labour once its heterogeneous characteristics are
discarded is human labour-power expended without regard to the form of its expenditure, and in aggregate this
constitutes the total capacity to labour, or total labour power of society (Marx, 1867a, p.128-129). Although, in
particular instances, diverse labours are performed with different levels of intensity and skill, each unit of abstract
labour-power is the same as any other, to the extent that it has the character of a socially average unit of
labour-power and acts as such (p.129). Given this simplification, the value of any commodity is measured by the
average amount of labour time required to produce that particular commodity with a socially given level of skill and
technology. What exclusively determines the magnitude of value of any article is therefore the amount of labour
socially necessary, or the labour time socially necessary for its production (p.129).

The first point to note about this derivation of the double character of labour is that Marx arrives at the concept of
abstract labour by way of a reductive abstraction from the heterogenous characteristics of material use-values and the
useful labour that produces them:

If then we disregard the use-value of commodities, only one property remains, that of being products of labour. But
even the product of labour has already been transformed in our hands. If we make abstraction from its use-value,
we abstract also from the material constituents and forms which make it a use-value.The useful character of the
kinds of labour embodied in them also disappears; this in turn entails the disappearance of the different concrete
forms of labour. They can no longer be distinguished, but are altogether reduced to the same kind of labour, human
labour in the abstract (Marx, 1867a, p.128).

The remarkable thing about this passage, from a Hegelian point of view, is that the double character of labour as
abstract and concrete is not constituted as a unity in difference, presupposing a specific totality (capitalist
commodity production). First, concrete-labour is not posited as an abstract universal opposed to abstract-labour, but
as particular labour transformed into abstract labour, apparently in the mind of the researcher. Second, there is no
reference to the market - thus, no reference to the exchange relation as constituting the first condition of existence of
abstract-labour. If a concept of social abstraction is implicit in the derivation (in our hands?) it is only because an
exchange relation is already inherent in Marxs description of commodities as use-values for others. Given the
social nature of the commodity, it is curious that Marx delays any explicit discussion of the activity of exchange as a
universal ground for his abstract-labour/concrete-labour opposition. When he does so, however, the difference with
the previous passage is striking:

But the act of equating tailoring with weaving reduces the former to what is really equal in the two kinds of labour,
to the characteristic they have in common of being human labour. This is a roundabout way of saying that weaving
too, in so far as it weaves value, has nothing to distinguish it from tailoring, and, consequently, is abstract human
labour. It is only the expression of equivalence between different sorts of commodities which brings to view the
specific character of value-creating labour, by actually reducing the different kinds of commodity to their common
quality of being human labour in general (Marx, 1867a, p.142; my italics).

Here the concept of abstract-labour is clearly given not as a property of commodities, but as a relation between
commodities arising as the result of a real social practice - the act of exchanging commodities. The different types
of physiological energy expended on weaving and tailoring are abstract only in so far as they create value, and
value is a universal expression of equivalence or relation between commodities. How are we to understand this
passage in relation to the last? Is abstract-labour intended to be a genus in a hierarchy, a reductive (mental)
generalisation from particular types of physiological energy expended in productive activity? Or, is it intended to
refer to the result of a social practice that requires for its existence and perpetuation an actual disregard for
use-values affected by a practice of bringing products of labour (and labour itself) into a form of equivalence on the
market as values? The point is that abstract labour cannot be both of these things: it cannot be at the same time an
indeterminate category of productive activity in general and a determinate category of a particular system of
production for exchange. As early as 1928, Isaak Rubin made this important observation:

One of two things is possible: if abstract labour is an expenditure of human energy in physiological form, then value
also has a reified-material character. Or value is a social phenomenon, and then abstract labour must also be
understood as a social phenomenon connected with a determined social form of production. It is not possible to
reconcile a physiological concept of abstract labour with the historical character of the value that it creates. The
physiological expenditure of energy as such is the same for all epochs and, one might say, this energy created value
in all epochs. We arrive at the crudest interpretation of the theory of value, one that sharply contradicts Marxs
theory (Rubin, 1928/1972, p.135).

Rubin (1928/1972) was certainly correct to point out that the existence of value has a purely social reality for Marx,
in that it makes an objective appearance only in the relation of commodity to commodity and does not therefore
include a single atom of matter. His statement that a physiological reading contradicts Marx is much more
doubtful however. Marx (1867a) not only derives value as merely congealed quantities of human labour-power
expended without regard to the form of its expenditure (p.128), but he goes on to introduce labour-power (the
capacity to perform labour) as a simplifying assumption. Further, he justifies this purely by analytic convenience:
we shall henceforth view every form of labour-power directly as simple labour-power; by this we shall simply be
saving ourselves the trouble of making the reduction (Marx, 1867a, p.135). Thus, the magnitude of value comes to
depend only on the average quantity of abstract labour socially necessary to produce a commodity, given some
average level of skill and technology.

The extent to which this is important depends not only on the theoretical issue of whether value can exist prior to
exchange (as labour embodied in particular commodities), but also on the empirical issue of how the theory can be
usefully applied to a competitive money economy (Reuten, 1993). In Reutens view, any attempt to add up concrete
(pre-market) labour hours must confront the actual discounting to simple labour that Marx sought to avoid. Even if
socially necessary labour time is taken as an immanent measure of embodied abstract-labour and the simplification
avoided, there is still a requirement to explain why it is that socially necessary labour must itself appear in money
form. The latter question constitutes Marxs critical challenge to the classics; the issue, then, is how well he
answers it (Backhaus, 1969/1980).

2.4 Value-Form and Commodity Fetishism

Marxs answer to the riddle of money is presented in the third section of his opening chapter. For the first German
edition of Capital, Marx wrote a special Appendix (1867b) on the The Value-Form, for he explains to Engels
the matter is too decisive for the whole book (cited Arthur, 1979b, p.69). In my view, the decisive character of the
value-form lies in the conceptual movement it inaugurates - from the double character of commodities and labour to
their determination by social form. In a crucial passage at the start of the third section Marx sets out to make the
transition, positing the commodity as a duality of natural form and value form (Marx, 1867a, p.138). Introducing
the argument, Marx declares enigmatically:

Not an atom of matter enters into the objectivity of commodities as values; in this it is the direct opposite of the
coarsely sensuous objectivity of commodities as physical objects. We may twist and turn a single commodity as we
wish; it remains impossible to grasp it as a thing possessing value. However, let us remember that commodities
possess an objective character as values only insofar as they are all expressions of an identical social substance,
human labour, that their objective character as values is therefore purely social. From this it follows self-evidently
that it can only appear in the social relation between commodity and commodity (Marx, 1867a, p.138-9).

What does this passage mean? Firstly, Marx further elucidates the double character of the commodity: (1) it has a
material natural existence (objectively, it is a useful object) and (2) it has a non-material social existence
(objectively it is a value). This is clearly an elaboration of the conceptual use-value/value distinction; the material
properties of the commodity are embodied in it and constitute its useful quality, yet it cannot be grasped in itself as a
thing possessing value. Secondly, diverse commodities are objectively commensurable have value only in so far
as they express a social phenomenon namely, the equalisation of human labour. Moreover, the equalisation is
affected not in production but exchange, when the diverse labours of private dissociated producers are verified as a
relation between commodities. It follows self-evidently that value is not a physiological substance but a purely
social concept, referring to the historically specific form that social labour takes when its products are exchanged
against one another.

At first sight, this passage appears to verify Rubins (1928/1972) social interpretation of the concept of abstract
labour as the social form that private labour assumes when commodities are exchanged. On this reading, Marx
explicates the necessity that the value of a commodity be represented in the bodily form of an equivalent commodity:
human labour creates value, but is not itself value. It becomes value only in its coagulated state, in objective form
(Marx, 1867a, p.142, also p.149). The notion that human labour is value only when it takes on an objective
(equivalent) form underwrites Marxs derivation of money as the universal equivalent commodity against which all
other commodities exchange. This leads to an important argument, introduced in the fourth section: namely that in a
system of generalised production for exchange, a reification takes place such that the social character of the
relationship between private producers appears inverted as a monetary relationship between the objects they
independently produce. This inversion is a social phenomenon specific to the bourgeois mode of production, as
Marx argues:

The value-form of the product of labour is the most abstract, but also the most universal form of the bourgeois mode
of production; by that fact it stamps the bourgeois mode of production as a particular kind of social production of a
historical and transitory character. If then we make the mistake of treating it as the eternal natural form of social
production we necessarily overlook the specificity of the value-form, and consequently of the commodity form
together with its further developments, the money form, the capital form, etc (Marx, 1867a, fn.34, p.174).

In this footnote, and elsewhere in this section on commodity fetishism, Marx denounces the classical political
economists for their failure to comprehend the specificity of the value form as a historically unique form of social
domination over value content. Where value and its measurement (in labour time) appear in classical value theory
with self-evident and nature-imposed necessity as economic laws or external determinations relevant to any form
of productive activity, these formulas are, for Marx, but ideological manifestations of the social form itself (Marx,
1967a, p.175). The secret of the structure and development of the capitalist economy is therefore to be found in the
material abstraction of commodity exchange, and the inverted reality of value-forms that it creates. In other words,
the entire system has to be grasped (within limits yet to be specified) as form-determined (Arthur, 1993, p.66).

Is this social interpretation of Marxs value-form theory convincing? One difficulty is that Marx retains a
reference to value as labour in its coagulated state thereby creating a link to the classical theories that he explicitly
criticises. The objective form into which socially equalised human labour necessarily coagulates might then be
interpreted as a physiological labour embodiment (in the body of a particular commodity, or universally in the
money commodity) that takes place independently of any monetary abstraction from concrete-labour in exchange.
A physiological interpretation of social equalisation implies a Ricardian model of reification, in which the relation
of things is constituted as a form of appearance autonomous of the real social relations hidden behind it. In
other words, labour as essence is defined, in contrast to the form of appearance, in a formal, logical way as the
universal, typical and principal (Backhaus, 1969/1980, p.101).

Given Marxs retention of physiological references, Backhaus concludes that the social mediation implied by Marxs
theory of value-form can only be construed as a pseudo-dialectical movement of pseudo-dialectical contradiction
(p.101). The main point is that Marx fails to explicate the double character of labour as the essential opposition of
capitalist production, grounded in the internal social structures that constitute labour in this double form. Thus, the
value-form appears not as an abstract-universal mode of association determining the social form of private
productive activity in capitalism, but more ambiguously as a theory of commodity money derived from the
exchange relation.


Returning to the preliminary question posed in this chapter: is Marxs abstract-labour theory of value a clarification
and extension of the classical labour-embodied theory of value, or is it a refutation of it? The textual analysis
presented here confirms that Marx is nowhere explicit as to the nature and extent of his break with the classics.
Especially problematic is Marxs (1867a) retention of abstract labour as the substance of value, viewed
ontologically as a real property of commodities, motivating the exposition towards a natural trans-historical theory
of value. Indeed, the whole of the opening chapter is replete with naturalistic references to value as congealed
quantities of [abstract] labour or labour in a coagulated state, suggesting that abstract-labour and
embodied-labour are not intended to be opposites in Marxs value theory. The status of the commodity as an
all-embracing concept for capitalist production is therefore ambiguous and the theory of commodity fetishism
obscure, based apparently on a separation of the form of appearance of things from its genesis in the social relations
that give rise to it. In this regard, Marxs first chapter seems to accord better with the Ricardian model of essence
existing autonomously of its appearance than it accords with Hegels conceptual unity of essence and ground; the
latter requiring that abstract universals are validated by the more concrete determinations that give rise to them.

On the other hand, Marx claimed in his 1873 Postface to the second German edition of Capital, to have utilised a
variation of Hegels method to distinguish between the social (value) and material (use-value) characteristics of the
commodity-form, so introducing into political economy a unique critique of classical value theory. In this sense, I
think that it is justifiable to ask how well the conceptual development of concepts in Capital accords with criteria
derived from Hegels (1812) Science of Logic. Indeed, good reasons for judging the whole of Capital a systematic
dialectical work have been summarised by Smith (1993, 1998) and by Arthur (1998b, 2000). Here, I have not set
out to dispute their conclusions, but only to establish some of the difficulties involved in the interpretation of Marxs
value concepts as universal abstractions at the start of a systematic dialectical exposition.

The main difficulty in the conceptual development of the opening chapter lies in the reductive character of Marxs
core concepts. Most crucially, abstract-labour is first derived as a generalisation from concrete particularity. This
accords better with an analytic derivation of concepts than it does with the contradictory (abstract universal)
oppositions that motivate the Hegelian mode of argument. Nevertheless, Marxs theory of value-form does set out a
rudimentary theory of the social (form) determination of the twofold character of entities and processes in capitalism.
It also suggests the methodological direction required for a systematic dialectical development of that theory (see
chapter 4, below). Before turning to this development, the next chapter explores the lasting effects of Marxs
attempt to synthesise classical value theory and Hegelian form theory: a paradigmatic splitting of the Marxian
abstract-labour-embodied theory of value into a technical and a social paradigm.

3. Two Paradigms, Two Problems

The first two sections of this chapter examine two distinct Marxian paradigms derived from
abstract-labour-embodied interpretations of Capital: the technical and the social paradigm (cf. de Vroey, 1982).
The value theories arising from this splitting of Marxian theory are discussed with reference to two core problems.
Firstly, what type of labour is socially equal abstract labour: is it a substance embodied in commodities prior to
exchange, or is it a form that social labour assumes when human activity takes the value-form and is brought under
the aspect of time? Secondly, what is the appropriate measure of abstract labour: is it labour time, or money?
These questions ultimately return to the core question of whether in a capitalist economy - value can be said to
have any meaningful existence prior to exchange. The third section answers the question in the negative.

Throughout the chapter, I aim to show that paradigmatic splits within Marxism are explicitly related to the way in
which the interconnection of value and money is theorised within the two models of essence and appearance
described in the last chapter (section 2.1). Both technical and social interpretations tend to adopt an ontological
(Ricardian) approach to value and its measurement, so that paradigmatic differences turn primarily on alternative
conceptions of the relation of production to exchange in the circuit of capital (Clarke, 1980). Conceptual dialectical
(Hegelian) approaches occupy a minority position within the social paradigm and are distinguished from all other
positions by their rejection of labour-embodied value theory and by an explicit attempt to develop Marxian
categories to accord with Hegels logical principles. Since the current chapter is concerned with interpretations of
Marxs (1867a) value theory rather than reconstructions of it, conceptual dialectical approaches are not discussed
here but in the next chapter.

3.1 The Technical Paradigm

Rubins (1928/1972) insight into the social character of abstract labour lay dormant in the literature for almost fifty
years. During this time, physiological interpretations of the concept dominated studies of Marxs Capital. Sweezy
(1946) proposes, for example, that abstract labour is equivalent to labour in general; it is what is common to all
productive human activity (p.30). Although this conflation of physiological labour and abstract labour can be
traced to Marxs first chapter, it eliminates by assumption any determining role for the value-form in the constitution
of value; hence, money doesnt matter, but is only a veil over the exploitation of labour. This section examines the
implications of this reading of Marxian value theory in two influential views of the economy seen as a system of
technical production: the orthodox view (e.g. Dobb, 1940; Meek, 1956; Sweezy, 1946) and the Sraffian view (e.g.
Lippi, 1980; Steedman, 1977).

Arthur (1997) traces the origins of the orthodox view to an epistemological standpoint linking conceptual
development to historical development, in such a way that the former is taken to be a corrected reflection of the
latter. What results is a logical-historical methodology, according to which Marx begins the first volume of Capital
by describing a stage of simple commodity production in which value attains its classical form, then goes on to
describe capitalist production as a secondary derivative form of value production_. Hence, Marxs law of value
is a natural law which applies universally - up until the time when it is modified by the onset of the capitalist
form of production (Engels, 1894a, p.103; 1894b, p.1037). Given this linear view of historical processes, the role
of Marxian value theory is taken to be an investigation of the general law of value, and of its capitalist modifications.

The idea that values might play a determining role in the elucidation of the general laws governing historical
development has permitted a great variety of labour-embodied interpretations holding to some variant of
logical-historical methodology. In extreme historicist versions, labour is simply collapsed into value, as in
Mandels (1990) bald statement that labour is value; indeed, Mandel posits several historical modes of production
in which the allocation of labour is determined by value. Sweezy (1946), in contrast, favours logical aspects of the
method and foists on Marx a procedure of successive approximation, where the structure of Capital is seen to
provide a series of analytic models, each a more complex approximation to capitalist reality than the last. In these
models, value is reduced to an axiom in a theory of general equilibrium developed in the first instance with
reference to simple commodity production and later on adapted to capitalism (Sweezy, 1946, p.53). Labour
embodied in commodities is conserved within these modifications, irrespective of whether they are proposed to
capture historical processes, or to be a stage in logical approximation to reality.

Locating value in the natural/physical dimension constitutes Marxs central problem as one of labour allocation in
any society where there is a division of labour and a high degree of labour mobility (Sweezy, 1946, pp.31-34). A
reductive abstraction from heterogeneous concrete labour is seen to be necessitated by the existence of an aggregate
social labour force which is capable of transference from one use to another in accordance with social needs (p.32).
In this vein, Sweezy argues that the value of a particular commodity is a share of materialised abstract labour
expended by societies total labour force: a part of the total wealth-producing activity of society (p.33). As a
proportion of social labour, the abstract labour embodied in a commodity is inevitably implied in the very notion of
a total labour force available to society (p.31). From a different perspective, Steedman (1977, p.38) provides a
similar argument for abstract labour as a social average derived from adding up and averaging out the labour
productivity of different sectors of the economy to arrive at the vector of labour-values for different commodities.

The immediate implication of conflating physiological labour and abstract-labour is that the substance of value
must be theorised at the concrete-physical dimension as a pre-market phenomenon where concrete heterogeneous
types of labour are reduced to homogenous quantities of abstract-labour embodied in commodities in the form of
labour-time. That is, quantities and qualities of time - such as the intensity and duration of work - are taken to be
the common elements in diverse expenditures of energy, constituting commodities as values. If a measure of
duration is used, particular labours (for simplification, i and j) might be considered in terms of respective concrete
hours of labour expended in production (Li and Lj) and summed: Li + Lj = L, where (L) is the total labour expended
in an economy, materialised abstract labour. Whether values are realised in money-form in actual exchange is
irrelevant to the actual creation of value since value clearly pre-exists the market as a proportion of expended labour.

Given that physiological abstract-labour is susceptible to measurement in time units, which I dispute, it is a short step
to say that the labour values derived in volume one of Capital are intended as an approximation to the prices and
profits discussed in volume three (Sweezy, 1946, p.33). Value theory then becomes the unifying quantitative
principle enabling economists to make postulates in terms of the general equilibrium of the economic system
(Dobb, 1940, p.5), with the rate of profit also interpreted as a ratio among labour embodied magnitudes (Meek,
1956). Simple though this is, the concrete-labour embodied theory has inherent difficulties concerning the actuality
of value, both at the empirical level, and theoretically. Firstly, an argument that value magnitudes exist before the
determination of exchange ratios is obliged to trace the relationship between labour-values and prices of
production_ once competition (and a general rate of profit) is introduced into the model. Secondly, it must answer
to the question of how the labour-values presupposed axiomatically at the start of the analysis can be
operationalised and measured independently of the market.

The first problem concerning the divergence of labour-values and prices of production given a general rate of
profit - has received a great deal of attention in the economics literature under the rubric of the transformation
problem. This problem concerns the structural relationship between Marxs value analysis in the first volume of
Capital and his derivation of prices of production in the third volume, and is therefore outside the scope of this
dissertation_. Here, I focus on the second problem, which has to do with Marxs transformation of concrete-labour
into abstract-labour in the first chapter of Capital, and the problems of abstraction arising therefrom. The main issue
is the reduction to simple labour required in order that the units of time devoted to particular productive tasks can be
summed as labour-values. Consider, for example, an hour of labour devoted to making sausages. Does that hour
of expended labour produce the same amount of value as an hour of labour devoted to making a computer chip?
Presumably an empirically useful measure of homogeneous labour embodied in commodities requires some
adjustment for intensity and skill. Given that measures of skill and intensity simply do not exist in national
accounting statistics, how then are these adjustment coefficients to be arrived at?

Related to the issue of measurement is the issue of the theoretical relationship between the value of simple labour
and the value of labour power. In Marxs conceptual framework, the value of labour power is determined by the
value of the subsistence bundle of goods plus a moral element. In a superb analysis, Philip Harvey (1985) points out
that this theory of the value of labour power implies no necessary relationship between the value of skilled labour
and its physical or value productivity. Moreover, there is evidence for unsystematic differences in the rates of
exploitation of simple and skilled labour. Harvey concludes that it is doubtful that any solution to the problem of
reducing skilled to simple labour exists which is simultaneously consistent with Marxs theory of the value of labour
power and with the theory of value (1985, p.95). Even if the reduction to simple labour were possible in practice,
the calculation of surplus value in Marxs framework still depends upon the difference between the value of labour
power and the value of the labour contained in the commodity.

This gives rise to a third problem: that the value of labour power cannot be known until the value of the subsistence
bundle is known. In other words, the real equivalent of money wages is known only at the end of the circuit and not
at the beginning. The consequence seems to be that it is impossible to calculate the amount of surplus value in
production, since before exchange we do not know the value of labour power to subtract from the value created
(Bellofiore, 1989, p.9). Bellofiore concludes that a discounting to simple labour cannot - either in fact or in theory -
be arrived at before a monetary (market) evaluation of the social value of different types of labours. If
labour-values cannot exist before exchange, it becomes meaningless to attempt to demonstrate that allocation in
accordance with prices of production modifies - but does not supersede - allocation in accordance with

In sum, it is difficult to see how a technical privileging of value-creation in production is sufficiently explanatory in a
monetary economy where the production of commodities presupposes (and is dependent upon) the competitive
exchange of commodities and labour in output and labour markets. It is also not obvious how a natural or
physical-technical theory of the allocation of productive labour is a theory of capitalism - a system based on the
production of useful objects for profit. Finally, it is not obvious how the technical interpretation of Marxian
abstract-labour differs from Ricardian concrete-labour, or indeed from Steedmans (1977) adaptation of Sraffian
theory where class distribution of the social product is derived directly from technical conditions of production and
real wage rates.

De Vroey (1982) cites Lippis (1980) Value and Naturalism and Steedmans (1977) Marx after Sraffa as seminal
works in the assault on orthodox Marxian value theory, from within the technical paradigm itself. The assault
targets a core proposition of the technical reading of Capital - that labour embodied in commodities in production is
the sole source of value, as against the Smithian view in which capital is also identified as a contribution to value.
For both of the writers identified by de Vroey, the Sraffian framework provides an alternative method for arriving at
the same result. The key is to see profit as a subtraction from wages, the magnitude of which is determined once
the exchange between labour-power and capital has taken place (Lippi, 1980, p.95). In this way the rate of profit
can be calculated without recourse to any concept extraneous to the logic of exchange_. Thus, Lippi writes:

It is no longer a matter of analysing production in terms of embodied labour, from which it follows that surplus-value
is the material pre-condition for profit. Rather the origin of profit lies in a social relationship: the reduction of
labour-power to a commodity and the manner in which its price is socially determined makes it possible for surplus
labour to appear in commodity production (Lippi, 1980, p.101).

Lippis (1980) main argument is that the key to understanding profit is to see labour power as a commodity traded on
the labour market, hence the (value) price of living labour is socially determined before its expenditure in production,
giving rise to the possibility for profit ex-post. The Marxian view of value as the real social cost thus contains a
rational kernel that must be extricated from the naturalistic law of value which sees value as labour embodied in
commodities at the end of the production process. Lippi argues that the Marxian retention of these naturalistic
elements can only lead to a failure to grasp the radical historicity of capitalism as a unique form of commodity
production in which the equalisation of various sorts of useful labour comes about only in and through exchange.
As an exchange phenomenon, abstract-labour is a real abstraction that must be interpreted precisely as an aspect of
labour that becomes social in opposition to the immediately private character of the concrete labour expended in the
production process.

I much agree with Lippis insight into the role of the exchange relation, but not with his conclusion; namely, that the
main insights of Marxian value theory can be demonstrated more effectively by replacing value analysis with a
Sraffa-based analysis of prices of production. Steedmans (1977) analysis proceeds in exactly this way to locate
Marxian value theory in a conceptual and mathematical framework constrained by the technical question of
whether Marxs two aggregate equalities total profit and surplus value, and total price of production and value
can be made to determine prices simultaneously. In effect, capitalism is theorised as a production matrix involving
the relationship between two sets of equations, one representing the value system and the other the price system, with
money a numeraire. From a demonstration that equilibrium prices (hence the distribution of the social product) can
be derived directly from technical conditions of production and real wage rates, Steedman is able to argue that the
Marxian (orthodox) labour-embodied theory of value is redundant as a price theory.

The Sraffian critique advanced by Lippi (1980) and Steedman (1977) is of interest here only to the extent that it
reflects on the character of the labour-embodied interpretation of value theory_. As a critique of labour-embodied
theory it is - as de Vroey (1982) rightly points out - a palace revolution which misses completely the critical debate
in the 1970s on the role of abstract-labour and money in Marxian value theory. Although Lippi advances a valuable
insight into abstract-labour as a real abstraction in exchange, he uses this to endorse a shift from Marxian value
analysis to a Sraffa-based analysis of prices of production. Yet, the Sraffian analysis, especially as it is elaborated
by Steedman (1977), wholly neglects the determination of the commodity and labour by the unique form of capitalist
production and focuses instead on types of productive activities, the method of production and the concrete goods
produced. Money has no role to play except as a numeraire, and labour appears explicitly as the product of labour
employed in each sector for the average wage, so must be interpreted as concrete labour. This interpretation of the
object of Marxian value theory (as a naturalistic price theory) identifies the Sraffa-based critique as a variant within
the technical paradigm, or as de Vroey (1982) succinctly puts it, a naturalistic deformation of the social reality of
capitalism (p44).

The technical paradigm is, in my view, globally inappropriate as an interpretation/critique of Marxs
abstract-labour-embodied theory as he developed it in Capital. Marx emphatically does not propose to add up
specific (concrete) labour hours into a concrete-labour-embodied total. On the contrary, he starts out from abstract
unobservable entities, crystals of social substance: ALi+ALj = AL, where ALi and ALj are the amounts of socially
necessary labour required to produce commodities i and j. Marx also makes it clear that these abstract magnitudes
have no observable manifestation, but require further grounding in a social or determinate system of commodity
exchange. Hence, the simplifying assumption does not say, as Sweezy (1946) and Steedman (1977) would have it,
that Li + Lj = L, or that L is equivalent to materialised abstract labour - given certain axiomatic assumptions about
discounting to simple labour. Nor does it imply that Marxian value theory can be read as an axiomatic, or formalist,
equilibrium theory of distribution and prices. These arguments are taken up in a variety of Marxian value theories,
collectively identified by de Vroey (1982) as constituting a social paradigm.

3.2 The Social Paradigm

De Vroey (1982) characterises the shift from a technical to a social paradigm as a shift from value theory constructed
without any consideration of circulation or money to an argument for the necessity for a connection between the
physical-technical dimension and the social dimension of economic activities (p.40). In this section, I consider the
development of the social paradigm as it is currently affected by two debates: the first associated with the English
publication of Rubins (1928/1972) Essays and his (1927/1978) Lectures, the second associated with the Italian
writing on abstract-labour (reviewed by Bellofiore, 1999).
In a series of scholarly essays and analyses of Marxs published texts and unpublished drafts, Rubin (1928/1972)
undertook an extensive refutation of physiological interpretations of abstract labour and the associated interpretation
of Marxian value theory as a natural law of labour distribution, or price determination. In the process, he
introduced into the literature a critical and subsequently influential distinction, that between private and social

Rubins (1928/1978) main argument was based on the insight that private labour cannot be immediately social labour
in an economy where production and consumption are separated and organised into independent individual units. In
such an economy, the problem of social cohesion is such that one cannot conceive of the labour embodied in
commodities as socially necessary in isolation from the exchange process. Private labour is validated as socially
necessary only if: (1) it produces the average number of commodities typically produced in an hour in a particular
industry (a technical production criterion), and (2) the labour expended must produce a quantity of commodities
exactly equal to social needs (an exchange criterion). If either condition fails, then the ideal labour-value of a
commodity will not be equal to its actual value, reflected in price. Rubin (1927/1978) explored this dialectic of
production and exchange (of value and its money form) as the essence of Marxs double characterisation of labour:

The labour of a commodity producer is directly private and concrete labour, but together with this it acquires an
additional ideal or latent characteristic as abstract universal and social labour. Marx was always amused by the
Utopians who dreamed of the disappearance of money and believed in the dogma that the private labour of a private
individual contained in (a commodity) is immediately social labour (Rubin, 1927/1978, pp.124-2).

Rubin (1927/1978) concluded that: Abstract labour and value are created or come about, become in the process
of direct productionand are only realised in the process of exchange when commodities are traded for money
(p.125). The important point is that private labour is validated as social labour only when the commodity is sold.
From this perspective, the Marxian theory of value cannot be a production theory since, in the absence of sale, no
value is realised. On the other hand, it is not a circulation theory, since the magnitude of value realised depends
upon the average technical conditions of production (and the average level of skill) prevailing in an industry at the
time of exchange.

The immediate impact of Rubins focus on the role of money in value theory was to enlarge the scope of the debate
on Marxian value theory, raising the crucial question of the order of determination in a capitalist economy. De
Vroey (1982) argues, for example, that exchange creates value, but production determines its magnitude (p.40).
Elson (1979) on the other hand holds onto a production theory a value theory of labour allocation in which value
has both an immanent measure in labour hours and an external measure in money. Himmelweit and Mohun
(1981/1994) hold to an intermediate position in that the market carries on as a real process the commensuration of
the products of labour under commodity production (p.158). What is common to all of these theories, is an
argument that the mutual interdependence of production and exchange within the circuit of capital denies the validity
of any axiomatic derivation of price from concrete hours of labour expended in producing a commodity. Given a
dynamic process in which each firm competes to capture extra profits through revolutions in production there is, in
fact, no reason why the labour embodied ideally in any particular commodity should be realised actually in its
price (Fine, 1988). Equilibrium theorising must therefore be eschewed; the nature of capitalism is such that the
object of the value-founded theory of price is permanently impeded by the working of a diachronic logic which
irreversibly modifies these norms (de Vroey, 1982, p.41).

Rubins (1928/1972) distinction between private-concrete labour and abstract-social labour has been seen by some
writers as a conflation of Marxs categories of abstract and social labour (Likitkijsomboon, 1995). This is incorrect;
abstract-labour is not, for Rubin, immediately social labour (measured in money), but embodied labour (measured in
labour time, but realised in exchange). What Rubins distinction does imply is a theorisation of circulation not as a
mere stage in the analysis of production, but as integral both to the realisation of value and to reproduction, itself the
result of two exchanges (of money capital for labour power and of commodity capital for money). In the circuit of
capital, value and price exist in a co-constitutive relationship such that socially necessary labour time is the
immanent measure of value, but price is its necessary and only objective expression (Murray, 1993, p.50). In short,
the necessity that abstract labour is validated as social labour precludes the adding up of concrete pre-market labour
times - the aggregation suggested by Sweezy (1946, p.33) - or the adding up of vectors the aggregation in
Sraffian-Marxist theories (eg Steedman, 1977).

In sum, where the technological paradigm sees abstract-labour as a reduction from concrete particularity and related
to the problem of aggregation or commensurability, the social paradigm sees abstract-labour as a real abstraction or
an abstraction in practice brought about only through the process of exchanging commodities in the market.
Although this allows a role for money in the realisation of value it does not imply as some writers have argued -
that money is the sole measure of abstract labour: that labour only becomes abstract in the act of exchange between
the commodity and money (Gleicher, 1983/1994, p.175). Most of the writers identified by Gleicher as belonging to
the Rubin school are, in fact, unequivocal defenders of Marxs abstract-labour-embodied theory of value, and
Rubin maintains that quantities of abstract-labour, measured in time, causally determines the exchange ratios of
commodities (Eldred, 1984). The shift to a social paradigm does not, therefore, entail an abandonment of
production as the moment of value-creation, so much as it entails an attempt to integrate this moment more
effectively within the circuit of capital as a whole.

A second development within the social paradigm also holds to an abstract-labour embodied interpretation of value
while attempting to develop the monetary side of Marxs value theory (see Bellofiore, 1989; Bellofiore and Finelli,
1998). This monetary interpretation derives from Collettis (1972) view of the abstraction affected in the market -
not as an abstraction from the concrete objectivity of labour, but as an alienation of the subjectivity of individuals:
abstract labour is alienated labour, labour separated or estranged with respect to man himself (p.86). From this
perspective, the essential feature of commodity exchange is that it transforms human capacities into a congealation
of labour which is value, turning it into a distinct entity, an entity which is not only independent of man, but also
dominates him (p.87).

The complexities of Collettis argument, explored in Bellofiores (1999) review of the Italian debate, are beyond the
scope of this analysis. Here it is sufficient to point out that Collettis interpretation of Marxs value theory as a
theory of fetishism retains the Ricardian essence and appearance model, to the extent that value is assumed to have
an autonomous existence determining the (alienated) character of productive activity in capitalism. In this respect, it
is subject to the critique advanced by Backhaus (1969/1980): namely, that severing the essential interconnectedness
of form and essence renders the phenomenon of reification unfathomable (pp.101-4). Colletti certainly recognises
the problematic character of a value theory of alienation: I cannot yet state whether the idea of an inverted reality is
compatible with a social science (cited Bellofiore, 1999, p.40). In the 1970s Napoleoni sought to resolve this
difficulty by suggesting that abstract-labour-embodied is value first regarded as activity, and afterwards as its
product or result (Napoleoni, 1975; cited Bellofiore, 1999, p.48).

Napoleonis argument is traced out by Bellofiore (1999): (1) commodities are ideal money before exchange; (2)
actual money is the necessary phenomenal form of an immanent measure of value as embodied labour time; (3) the
transition from ideal money in production to actual money in exchange cannot be assumed; (4) labour-power
systematically produces money only when it takes the wage-form, and this entails the separation of workers from
means of production; (5) when the technical labour process is fully subsumed under the valorisation process (the
process of increasing value), objectified abstract-labour embodied in technical inputs (Marxs constant capital)
dominates the living labour of the worker (Marxs variable capital) and extracts surplus value from it; (6) the centre
of the valorisation process is this real and immediate process of production, and it is here that living labour is
alienated as value. This real hypostatisation (process of substantive creativity) is behind the reification of human
relations in the capitalist system of production for exchange.

The modern monetary theory emerging from the Italian debate is an extremely rich and sophisticated attempt to
retain Marxs abstract-labour-embodied value theory while, at the same time, emphasising the crucial role played by
money (and the exchange relation) in constituting value as actual in a capitalist economy. The interconnectedness
of exchange and production is conceptualised, within this theory, as a relationship between potential
value/abstract-labour created in production and measurable (in principle) in labour time, and actual value/abstract
labour that comes into existence only when commodities are exchanged for money (Bellofiore, 1989; 1999).
Through this distinction between potential and actual abstract-labour/value, the privileging of production is
maintained since the alienation-abstraction of objectified labour arising from exchange is posited by the more
fundamental abstraction-alienation of living labour in the production process (Bellofiore and Finelli, 1998, p.53).
In other words, money and capital are theorised in terms of two relationships with labour: (1) the (quantitative)
market driven exchange of labour-power for wages, and (2) the (qualitative) production driven subordination of
living labour to its quantitative aspect, the expansion of value.

At the centre of these twin relationships is the domination of capital over labour. The crucial point is that
abstract-labour, although actual only in exchange, is derived not from the exchange relation, but as a
consequenceof the subjection to capital of wage workers living labour (Bellofiori and Finelli, 1998, p.54).
Hence, the human capacity to labour (labour-power) is sold on the market for a quantity of money (wages), but this
exchange of labour-power for wages itself presupposes the existence of an exploitative production process
subordinating living labour under its quantitative aspect (the production of value). This constitutes value as more
than a regulator of circulation or labour allocation; it is the autonomous determinant of the form of the production
process and grounds the intrinsic dynamic of capitalist society (Postone, 1993, p.278).

In his contribution to the critique of Napoleoni, Arthur (1999) suggests that the Italian conflation of the abstract
character of the exchange relation with the abstract character of the labour that constitutes value is a tempting
conceptual mistake since both are, in fact, determined by the value-form (Arthur, 1999). That is, value creation is
enabled not by the abstraction from heterogeneous particularity (in money/exchange), nor by the existence of
productive activity under the aspect of time, but specifically by the subordination of productive activity to the
imperatives of profit. In other words, the exchange of labour-power for money and the subjugation of living labour
under the aspect of time presupposes a form of productive activity dominated by the requirement for valorisation,
and it is this domination of form over content that demands the representation of abstract-labour in money. Marx
(1867a) says as much:

the labour objectified in the means of production can only be increasedto the extent to which it sucks in living
labour and objectifies it as money, as general social labour. It is therefore, pre-eminently in this sense which
pertains to the valorisation process as the authentic aim of capitalist production that capital as objectified labour
(accumulated labour, pre-existent labour and so forth) may be said to confront living labour (immediate labour,
etc)(Marx, 1867a, pp.993-994).

Here, Marx identifies labour power expended in the technical production process as the fundamental source of value,
but labour power expended in the process of valorisation is the fundamental determinant of the authentic
transformation of labour into capital. The logical order is therefore exactly the reverse of that advanced by
Bellofiore and Finelli (1998). Labour time (calculated as intensity or duration) acquires practical reality only
because labour-power has taken the value-form (wages) and is bought by capitalists on the market as an input to
production. As an actual abstraction affected by the subordination of the productive process to the imperatives of
valorisation abstract-labour can have no measure other than money. Thus, Arthur (1999) concludes:

Money is the only measure of success; it is the existent form of abstract wealth (Marx) and this means that the
activity producing it is itself posited as abstract, that the living labour employed in the capitalist labour process
counts only as an abstraction of itself, as a passage of time (Arthur, 1999, p.149).

Arthurs concludes that the constitution of labour as abstract in the capital relation is in truth more fundamental than
its constitution as abstract in exchange (Arthur, 1999, p.146). If the argument is granted, it seems meaningless to
isolate the technical labour process (the source) from the valorisation process (where the measure is constituted),
although the conceptual distinction is useful. That Marx himself sought an independent or immanent measure of
value constituted in labour time must then be seen as a retreat to the Ricardian vice that has subsequently plagued
Marxian social science, at least in its technical labour-embodied and abstract-labour-embodied varieties (Reuten,

For Bellofiore (1999), of course, it is only potential abstract-labour-embodied that is measured in time units in
production, and actual abstract-labour is indeed measured in money in exchange. Hence, only potential value
can be calculated (at least in principle) in time units before exchange. Since there is no guarantee that commodities
will find an outlet, the actual accounting of the labour time expended in production can be interpreted as a measure
of abstract-labour/value only on the assumption that the short term expectations of firms are fulfilled (Bellofiore,
1999, fn.14, p.52). The argument for money as the sole measure of value is, however, quite independent of whether
an immanent measure of abstract-labour-embodied (in time units) can be defined theoretically. What is at stake is
not the possibility of an empirical inquiry based on a monetary version of the abstract-labour-embodied theory of
value, but its relevance in an economy where the production and distribution of commodities and labour is
determined by the value-form. In the last and final section I briefly elaborate this criticism as it applies to both
technical and social interpretations of Marxs abstract-labour-embodied value theory.

3.3 Abstract Labour: Substance versus Form

In the light of the previous discussion, the shift in the 1970s from a technological to a social paradigm can be
interpreted as an attempt by Marxist philosophers and economists to grapple with a core question of Marxs
economic theory: what is value, and how is it determined? Within the technical paradigm, the ontology of value is
typically broached as a Ricardian problematic. If the quantitative connection between commodities is not arbitrary,
the price of a commodity must expresses the unifying reality of an externally given set of exchange relations; hence,
a quantity of value is intrinsic in a commodity in the same way as weight expresses something intrinsic to mass.
This path leads to the argument that value must be prior to and independent of the exchange relations into which the
commodity enters, in the same way that the mass of an object has an autonomous existence, quite independent of its
measure. The quest for value as essence hidden beneath phenomenal form leads out of the sphere of exchange
relations and into the sphere of production, theorised as a technical labour process. A dichotomy of essence and
appearance operates, such that money (value-form) has no ontological or determining influence on economic
activity; the value-creating substance is physiological abstract-labour, a generalisation from concrete-labour;
abstract-labour is self-evident and trans-historical substance of value, requiring no special determination - social or

I have argued that treating abstract-labour as a physical/natural substance severs the labour process from the social
determination of commodities and labour and leads to all sorts of conundrums, the most obvious of which is the
immanent measure of value in labour-time. As Rubin (1928/1972) was the first to point out, the notion of
socially necessary labour time cannot be constituted in production alone but depends on the mediating influence of
the market (see pp.155-8). Rubin recognises, for example, that the determinants of the technical labour process
duration and intensity of labour, skill levels and output per unit of time all have social determinants to do with the
valorisation rather technical processes. Duration of labour depends upon socially acceptable working conditions,
intensity of labour on the socially average technique and organisation of production, qualification on the market and
state provision of education and training and output on social determinants of demand, socially and systemically

A second difficulty in the technical interpretation of abstract labour as a physiological substance of value is posed by
skilled labour. A useful measure of abstract-labour-embodied in units of time must, presumably, take some account
of inter- and intra-industry averaging of differing intensities of labour, as well as differing skill levels and production
techniques. Given a lack of discounting coefficients for intensity and skill, the alternative solution is to sum
concrete-labour hours expended in production to arrive at the total number of hours of labour expended in an
economy. In this case, abstract-labour is just labour, and the analysis of capitalism turns out to be just a particular
instance of a more general analysis of human interchange with nature: labour, reproduction and want satisfaction, in
general. Money and competition have no role in technical labour-embodied value theories other than to move rates
of surplus around until rates of profit are equal.

The empirical question of whether discounting to abstract-labour is possible before exchange has been an important
component of contemporary critiques of concrete-labour-embodied (technical) value theories. It has, however, been
seen by several writers as equally a problem for abstract-labour-embodied (social) value theories (Clarke, 1980).
Although Marx posits abstract labour as socially necessary labour - ALi + ALj = AL, (with ALi and ALj socially
necessary amounts of particular labour hours i and j) - the difficulty is that AL is still taken by Marx to be the
substance of value, a pre-market entity. In general, social developments of Marxian value theory retain this
assumption; although abstract-labour is the social form taken by productive private labour in capitalism rather than
a physiological substance this form comes about in production and is merely realised, or validated, in exchange.
Money as the means facilitating circulation is imposed on the analysis as an external measure of value, assumed to
be quite independent of the existence of value in itself. The immanent (albeit unobservable) measure of value is still
embodied labour-time. Given that the reproductive process in capitalism is driven by the imperatives of valorisation
(the process of value increase, measured in money) it is difficult to see how this can be the case.

In my view, the fundamental problem exhibited by much of the writing within the social paradigm is that it
recognises the importance of money in the circuit of capital, but at the same time denies any ontological role to the
value-form. In these theories, the ontological foundation is one of conservation, with abstract-labour/value created
in production and carried over untransformed from one level of abstraction to the next (for an expansion on this
criticism see Mirowski, 1990 and Reuten, 1993). Marx, himself, criticised this physiocratic conception as an
attempt to portray the whole production process as a process of reproduction, with circulation merely as the form of
this reproductive process; and the circulation of money only as a phase in the circulation of capital (Marx, 1863,
p.344). The essence of Marxs criticism of the physiocrats was precisely that capitalist production and circulation
cannot be treated as independent spheres - between which relations of dependence or interdependence can be
established - but are inseparable elements determined within a totality. Value as a social relation cannot be
determined either in production or exchange but exists only as a process; that is, as a result of the motion of capital
through the differentiated moments of the circuit as a whole.

At this point it might be objected that some versions of the social interpretation of abstract labour do involve a shift
in the ontological status of the concept of value. De Vroey (1982), for example, sees concrete-labour as transformed
into abstract-labour only in the market, when the products of that labour are homogenised as money: exchange
creates value (p.40). In a similar fashion, Himmelweit and Mohun (1978, p.75) identify exchange as the critical
moment instituting a real disregard of the heterogeneous characteristics of concrete labour and differentiated
products, and constituting these as value equivalents (Himmelweit and Mohun, 1978, p.75). In these theories, the
market performs the reduction to (AL) establishing value as a market phenomenon. The view that exchange creates
value is, however, unconvincing given Rubins technical condition; namely that the quantity of value produced must
depend upon the technical conditions (and organisation) of production and the productivity of labour. What these
theories seem to amount to is an alternative privileging of exchange as the critical moment in the process of
valorisation, rather than an attempt to conceptualise abstract-labour and value as a process brought about by the
specificities of a particular form of production for exchange.

In sum, the major achievement of the social paradigm is an attempt by theorists to conceptualise the value-creating
substance (abstract-labour-embodied) as a historically determinate (social) form of labour determined by the specific
character and organisation of capitalist production. This value dimension is unique to capitalist reality in as much as
it typifies a society where the social link between producers is realised only ex post through commodity exchange as
a relation between things. This insight leads to the second achievement of abstract-labour-embodied value theory:
an attempt to conceptualise the circuit of capital as an interconnected whole. Yet, it is precisely at this point that the
social paradigm breaks down. The chief failing is a continued privileging of production as the primary moment
within the circuit of capital (Clarke, 1980) coupled with a retention of the Ricardian conservation principle
(Mirowski, 1990; Reuten, 1993). In consequence, the social paradigm does not go far enough to establish money as
the ontological link between the value-form and its material foundation, as no Marxist starting from an
abstract-labour-embodied theory can.


This chapter outlines a paradigmatic split arising from Marxs treatment of the category of abstract labour in the
opening chapter of Capital. The split originates in the fundamental question of whether abstract-labour is a
physiological substance embodied in commodities during production (a technical value theory), or a social form
assumed by concrete private labour when useful objects are produced for exchange by independent producers (a
social value theory). I have argued that both readings are subject to the same critique, to the extent that they retain
an abstract-labour-embodied theory of value. Firstly, a measure of value in labour time requires a simplification to
homogeneous abstract-labour, irrespective of whether the pre-market entities are taken to be hours of concrete-labour
(as in the technical theory) or unobservable/potential quantities of abstract-labour (as in the social theory).
Secondly, the paradigm of production implicit in all labour embodied theories militates against an adequate
theorisation of the circuit of capital as a whole.

With respect to these two arguments, I agree with Reuten (1993) that the embodied character of abstract-labour is
more fundamental than the empirical question of whether, in principle, it is possible to arrive at a pre-market
measure of homogeneous labour. In a capitalist economy, where labour, consumption and production are separate
activities and subject to the imperatives of valorisation, private labour must assume a social value-form (wages) and
concrete-labour can be abstract-labour only to the extent that it does so. An adequate theory of value must come to
terms with this domination of value-form over value-content. One way to theorise form-determination is to see
money as ontologically significant in determining economic activity; in this case, the Ricardian essence and
appearance model (where money is but a veil over exploitation) breaks down, and the concept of abstract-labour as
labour embodied in production must be abandoned. This argument is most cogently expressed in current
reconstructions of abstract-labour not as a pre-market substance measured in labour time, but as the determinate
social form that comes only when the imperatives of valorisation dominate the technical labour process. The main
point of reconstruction is to demonstrate that labour is the source of value, without reference to abstract-labour as an
embodied value substance.

4. Abstract Labour: A Reconstruction

In previous chapters, we have seen that Marxian value theories often posit an autonomous reality - axiomatically or
historically then assume that the economic categories directly mirror that reality. The project of reconstructing
Marxian value theory begins altogether differently, with the hermeneutical question: how is it meaningful to say that
value exists beyond its concept? The theories analysed in this chapter suspend any axiomatic identity of value with
the explicit working out of structural tendencies or laws of history. On the contrary, what is known to be real is
always socially contingent, always mutable and always open to interpretation (Reuten and Williams, 1989, p.14).
From this perspective, the object of value theory is to prove the actuality of value in capitalism by demonstrating its
logical (systemic) necessity - leaving open the ontological status of reality in itself_.

This chapter sets out and engages the debates surrounding two attempts to explicate the actuality of value in
capitalism. As a third paradigm, this systematic-dialectical approach is emergent in contemporary Marxism
through the confluence of ideas generated by the neo-Hegelian critiques of Capital (notably Backhaus 1969/1980;
see my chapter 2) and the debates over abstract labour (see my chapter 3). Crucially, the reconstructions resulting
from this intellectual synthesis do not claim to be consistent with Marx, nor are they concerned primarily with
interpreting Capital as a systematic dialectical work. Indeed, they explicitly aim to step outside the inconsistency
of Marxs method in order to develop what they see as only implicit in Capital: a dialectical theory of the value-form
as the specifically bourgeois form of associated abstract-labour (Reuten, 1999, p.92). From this reconstruction of
the value-form, labour is constituted as the sole source of value, measured in money.

The analysis proceeds as follows. The first chapter presents a brief digression on the meaning of reconstruction in
Marxian methodology, including a review of current readings of Hegels (1817) Logic in relation to Marxs Capital.
The second section questions Marxs commodity as an abstract-universal starting point for a systematic dialectical
inquiry into value. The third section examines a reconstruction of the commodity that aims explicitly to theorise
the peculiar characteristics of the form of value; namely, the commodity form and, most importantly, to develop
money as a form of value (Eldred and Hanlon, 1981, p.24). The fourth section explicates the dominance of the
value-form over the economic activity in the determination of the labour process as a duality of technical process and
valorisation process (Reuten and Williams, 1989). The fifth section demonstrates the systemic necessity of labour
as the only source of value-added in capitalism. The sixth and final section defends the main conclusions of
reconstructed abstract-labour against a current abstract-labour-embodied critique.

4.1 Critique and Reconstruction

In an analysis of reconstruction and deconstruction in Marxian theory, Arnason (1984) argues that the basic
intentions of a theory must be identified before the more critical work of reconstruction can start (p.57). He
identifies two general methodological principles: firstly, a hermeneutical principle locating the theorist in question in
relation to a previous body of knowledge; secondly, a principle specifying the theorys contribution to the
developmental logic within that tradition.

Applying Arnasons (1984) principles to the present context, the hermeneutical criterion for reconstruction refers to
the way in which the theories examined in this section are situated in relation to the paradigmatic split within
Marxism. Location within the social paradigm identifies contemporary value-form theory as a contribution to the
critique of concrete-labour-embodied (Ricardian) remnants in Marxian theory. The main critique is directed against
the ontology of conservation and the privileging of production. The particular relevance of the Ricardian
essence-appearance model to the analysis of capitalism is also questioned. From this critical/hermeneutic
perspective, Marxs reformulation of the classical value problem as a problem of social form is a major step forward
from classical theory; the subsequent Marxian retreat to the natural realm of value substance, a major step back.

With respect to developmental logic, Marx experiments with different strategies and modes of argument throughout
his work, but the transition from the (1857/1973) draft Introduction to Capital seems to involve a retreat from
Hegels (1817) speculative logic to a more reductionist methodology. As Fraser (1997) points out the
Logic/Grundrisse interconnection is therefore vital to current efforts to reunite the Hegelian and Marxian dialectics.
According to Fraser, the systematic dialectical method of the Logic is not subject to Marxs metaphysical complaint
that Hegel fell into the illusion of conceiving the real as the product of thought concentrating itself, probing its own
depths, and unfolding itself out of itself, by itself (1857/1973, p.101). Fraser rejects any reading of Hegel as a
negative influence to be expunged, and denies that Hegelian logic imports mystical idealism into Marxian political
economy. Marxs attempt to divorce Hegels dialectical method from his idealist ontology does seem to be based
on a confusion since Hegel himself makes no distinction between epistemology and ontology_. The point is that
Marx set the terms of the debate wrongly; if there is no metaphysical idealism in Hegels method, there is no need to
rescue it from mysticism.

Reconstruction begins, then, with a view of the Hegelian and Marxian dialectics not as opposites but as intrinsically
similar, one and the same, two of a kind (Fraser, 1997, p.82). Despite unanimity on this point, there are several
contemporary variations on the systematic dialectical approach. For simplicity, I group these into two broad strands
of thought. The first strand is concerned with reconstituting the ontological foundations of Marxian value theory by
reinterpreting Marxs critique of Hegel in relation to his critique of capital. For Arthur (2000), the two critiques are
inseparable in the sense that Hegels false ontology may be seen as a philosophical absolutisation of the standpoint
of capital (p.105). If Hegels world is an inverted reality, so too the reality of capital is an inverted world in which
the value abstraction claims priority over its material bearers and the ideal logic of capital imposes itself on human
beings (p.105). In this approach, what is there in Hegel is a reconstruction of the logic of reality through the
exposition of a categorical system. Such a reconstructive method is evident in Marxs systematic progression of
socio-economic categories reconstructing the capitalist mode of production in thought, beginning with the simplest
abstract category and dialectically advancing towards the concrete whole (Smith, 1990).

A second application of the systematic dialectic eschews ontological adventures altogether in favour of an
epistemological project, founded on a concept of reality as determined by a science, where science is a systematic
production of knowledge by way of rational and inter-subjective discourse (Reuten and Williams, 1989, p.14).
Reconstructing Marxian value theory as scientific (in the above sense of the term) invokes a return to
transcendental idealism as a philosophical principle: that is, social reality is taken to be all that we
inter-subjectively know about it. Conversely, transcendental idealism is reconstructed not as the solution to a
thought-reality dualism founded on the Kantian unknowable thing in itself, but as a dialectical exchange between
social reality and our thinking about it. Where, in Hegel (1817) fundamental categories are treated as pure
categories independent of contingent empirical instantiation, the rectified systematic dialectic is a method for an
ongoing inquiry into empirical perceptions of capitalist reality as well as existing theories of it (Reuten, 1993). The
rest of the dissertation is concerned, primarily, with the methodological principles developed within this second
approach, and their application to the reconstruction of Marxian categories.

4.2 A Systematic Dialectical Starting Point

The systematic dialectical critique of Capital begins with Marxs commodity as an abstract universal concept for the
capitalist mode of production. As I have demonstrated, the difficulties of Marxs opening chapter arise out of his
inconsistent management of the commodity form, especially the dualities of use-value and value, concrete-labour
and abstract-labour. Might these difficulties be overcome by a different reading of the commodity as a preparatory
(rather than a universal) notion belonging to the moment of critical inquiry, so preceding the presentation proper?
Banaji (1979) does exactly this; taking Marxs comment on the commodity as an appearance - a reflected sphere of
the total process of capital - he argues that the commodity as a concept has still to be posited in its
particular-universal doubling of use-value/value (p.30). Arthur (1997) gratefully accepts this reading, which
implies that Capital has a double starting point: (1) the commodity as an analytic category in a preliminary process
of inquiry, and (2) value as the synthetic abstract universal starting point for a dialectical presentation. In a
comment written shortly before his death, Marx (1879) appears to confirm these readings of the commodity as a
preparatory notion and value as the universal capitalist concept:

In the first place I do not start out from concepts, hence I do not start out from the concept of valueWhat I start
out from is that simplest social form in which the labour-product is presented in contemporary society, and this is the
commodity. I analyse it, and right from the beginning, in the form in which it appears (Marx, 1879, p.198).

It seems plausible, then, that the first two sections of Capital have to do with perceptions and with the process of
working these up into concepts. On this reading, the presentation proper does not commence until the reconstitution
of the commodity as an entity of double (material-social) form, in the third section. The argument that Marxs
presentation of his social value theory begins properly with his determination of the value-form is not particularly
new (see Murray, 1993). What is new in the systematic dialectical critique is an argument for dissociated labour
(rather than the commodity) as the most abstract universal concept for the bourgeois [private] mode of association.
As a requirement for social cohesion in a system based on the dissociation of labour, production and consumption,
the interplay of the value-form and the exchange relation constitutes the first moment in which abstract-labour and
value are determined as actual.

4.3 Concrete Dissociated and Abstract Associated Labour

An early attempt to reconstruct Marxs starting point beginning with the contradictory nature of the value-form is
represented in the work of the Sydney-Konstanz research group (Eldred and Hanlon, 1981; Eldred, Hanlon, Kleiber
and Roth, 1982, 1983). Here the value-form is posited, at the outset, as the money-form derived by Marx as
universal equivalent. Further elaboration then establishes the money-form as dominant over the social allocation of
labour and it is this dominance over the labour process that signifies the transition of the value-form from the sphere
of exchange to its domination of bourgeois production (Eldred and Hanlon, 1981, p.27). The essence of the
value-form as the mode of association is that it enables industrial commodities to be produced by concrete
dissociated labour. The contradictory character of the industrial (capitalist) commodity is thereby established as the
universal-particular opposition of abstract associated and concrete dissociated labour:

To emphasise the value character of the commodity, we refer to it as a product of abstract associated labour, as a
universal, as a member of the universe of the industrial commodity-products of labour. By contrast, the commodity
as a product of dissociated concrete labour will be referred to as a particularity (Eldred and Hanlon, 1981, p.29).

This constitution of the double character of commodities and labour is a very different formulation from Marxs
analytic derivation of abstract labour and value from the useful qualities of labour and objects respectively. In place
of analytical (reductive) derivation, we now have the internal doubling of a concept into particularity and
universality, referred to by Reuten and Williams (1989) as the basic form of internal opposition or contradiction
in dialectical thinking. In a system of private independent production (bourgeois production), the basic form of
contradiction is that dissociated labouring activities only become associated in the exchange of their result,
objectified labour, represents the kernel of the contradiction between production and exchange (Eldred and Hanlon,
1981, p.31). It is important to note that the contradiction inherent in the concept of dissociated labour is not
resolved by its negation in exchange; on the contrary, association is a necessary condition enabling the very
existence and perpetuation of dissociated activity, given the microeconomic organisation of production and

Although the necessity of money seems to be demanded by the value-form (the need for association) rather than the
exchange relation (the need for exchange ratios between commodities), Eldred, Hanlon Kleiber and Roth (1982)
retain the commodity albeit reconstituted as a duality of money and use-value - as their starting point. Later
reconstructions abandon this starting point, and begin directly with concepts of dissociated-concrete and
associated-abstract labour (Reuten, 1988a; and Reuten and Williams, 1989). In these later reconstructions, the
concept of value-form itself undergoes transformation. It becomes more than the monetary manifestation of value
in the specifically capitalist mode of association enabling the dissociation of production, consumption and labour
(although it is this also); more, crucially, the value-form comes to define the bourgeois epoch as uniquely
form-determined (Reuten, 1988a). The next section examines this particular development of Marxian theory and
elaborates some of its implications.

4.4 Reconstructing the Theory of Value-Form

The basic elements of the theory of value-form as a theory of form-determination are set out in Reuten (1988a) and
in Reuten and Williams (1989). The movement towards the starting point is introduced through Hegels (1817)
preparatory universal notions of being and nothing, from which self-production is derived as a universal notion
analogous to Hegels becoming. Self-production is first posited as a contradictory notion in that the individual
cannot develop (become) outside of society; sociation (social activity) is therefore a natural (trans-historical)
necessity both for the reproduction and development of the human individual, whatever the form of society.

In bourgeois production (further specified as private, independent production), sociate activity is negated by
dissociation; that is, by the separation of production and consumption into distinct activities, and their organisation
into independent units. Dissociation imparts to labour its historically specific form as independent private labour.
In each unit, however, labour is dependent, having no access to means of production. A concomitant of labours
independence at the level of macro-organisation and dependence at the level of micro-organisation is that the
production of useful objects must conform to an aim external to the usefulness of the objects themselves. In order to
exist, dissociated activity therefore requires a moment of association transcending the sociation-dissociation
opposition. This moment of association is the value-form, constituted as systematically prior to the market, in
contradistinction from both Marx (1867a) and Eldred and his associates (1981, 1982, 1983) who begin with
commodity exchange.

The value-form as bourgeois mode of association acquires further determination in the exchange relation, which
aligns dissociated production and consumption and constitutes the labour expended in microeconomic units as
interdependent or social labour. In this way, the exchange relation constitutes the first condition of existence of
dissociated activity. The exchange relation is the grounding moment, the movement of force that provides for the
coming into being of dissociation-association as an identity of opposites (Reuten and Williams, 1989).
Association shows the contradiction (dissociation) that it cannot exist for itself, but must exist only in conjunction
with a moment of association as a difference in unity (dissociation-association). The exchange relation
nevertheless remains at the level of an abstract-universal, and is therefore inadequate as a representation of the
totality of determinations and internal relations constitutive of capitalist production for exchange; the object-totality
has yet to be determined, concretely.

The immanent dynamic of the presentation is driven on by this persistent inadequacy of concepts to comprehend
fully the form and dimensions of their conditions of existence. The form determination of exchange (as bourgeois
form) is first given by the fact that the divergence of physical inputs and outputs to the productive process is not in
itself the aim of productive activity (as might be the case if production and consumption were not separated).
Rather, the opposition underlying the form of exchange is a universal-particular opposition of value and use-value.
Essentially, value satisfies a necessary requirement for association; namely, that heterogeneous (incommensurable)
objects be made commensurable or conformable to a universal, unitary form or common denominator (Reuten,
1988a, p.50). As such, value is the necessary dimension of labour and of the useful objects produced by it in the
bourgeois mode of production (p.51).

The argument for the bourgeois mode of association as form-determined now proceeds as follows: given
dissociated production, consumption and labour, and given the exchange relation as the mode of association, the
particular products of labour necessarily have to take on a social-universal form: value. To be validated as socially
necessary (and not wasted), both inputs and outputs to the productive process (including labour power) must take on
this social-universal form, in disregard for their particular useful qualities. More crucially, the production of surplus
value (value-added over and above the original value of inputs) replaces the production of use-values as the external
driving force of production. Without the creation of value-added, private productive activity is interrupted and

This mode of production further entails the contradiction that the social form is the external determinant of this mode
of private production! Thus the abstract-social-universal form dominates over the private-particular such that the
private-particular is determined by the abstract social-universal form. As such the bourgeois mode of production is
form-determined (Reuten, 1988a, p.52).

In a systematic dialectical presentation, the process of arriving at the ever more concrete determinations of the
value-form must continue until capitalism the existent is apprehended as actualitywhich requires no external or
exogenous determinants for its systematic reproduction (Reuten and Williams, 1989, p.23). The essential unity of
the presentation consists in this continuous movement of existence and ground, further determined as a unity of
essence and appearance. The market further grounds this essential unity by constituting the products of
dissociated labour as commodities, and associated labour as abstract-labour in the form of money. The relation
between the value-form and the exchange relation now becomes clearer.

The relationship is essentially this: the value-form of labour and its products is constituted in the market, a mode of
social synthesis centred on the function of money as a universal equivalent. In this capacity money is vested with
an abstract capacity to equate, symbolically, all products on the market and all types of labour in money terms.
Thus, the salient feature of money is that it has assumed the compelling necessity of an objective social law, aptly
described by Sohn-Rethel (1978) as the law of the separation of exchange and use (p.25). The abstraction affected
by money is not therefore an abstraction in mind, but a practical abstraction that takes place every time individuals
perform the act of exchanging commodities as values, in the market. Thus:

The abstraction does not spring from labour but from exchange as a particular mode of social interrelationship, and it
is through exchange that the abstraction imparts itself to labour, making it abstract human labour. The money
abstraction can be more properly termed the exchange abstraction (Sohn-Rethel, 1978, p.6).

Money grounds, concretely, the distinction between use and exchange as mutually exclusive practices. The practice
of use covers an infinite field of human activities, comprising mans interchange with nature. This material
practice must be foregone while the social practice of exchange holds sway. According to Sohn-Rethel (1978),
relative prices a still more concrete determination of money - are what creates the system of social communication
between dissociated producers and consumers, mediating the actions of individuals, performed independently and in
complete oblivion of the socialising effect. The negation of use-value in exchange is therefore a real abstraction or
an event in time and space that enables an actual disregard for the useful properties of commodities and their sole
expression as quantitative differences measured in terms of a uniform common denominator.

The concept of real abstraction is not unique to value-form theory; indeed it is a cornerstone of many contemporary
abstract-labour theories of value (see chapter 3). I consider the term problematic, however, in that it makes
implicitly - an ontological claim that is difficult to sustain; namely that the categories of thought are given directly by
historical (social) reality. Mohun (1984), for example, advances an ontological subordination of the theory to the
real world as a materialist critieria governing the adequacy of a theory to its object (p.396). Elsewhere, he argues
that this materialist position requires a (more or less) adequate reflection in thought of an abstraction process that
really occurs independently of thinking about it (1994a, p.218). Hence, Marxian theory can be seen as a correction
to the inadequate Ricardian reflection of reality. The correction to the labour theory of value maintains the
essentialist ontology in which value is labour time (1994a, p.215), but recognises that the real historical abstraction
takes place in exchange. The moment of exchange is thus the critical one, causally affecting the divergence of
commodity prices and values (Mohun, 1984, p.401; also Himmelweit and Mohun, 1978). Lurking behind this
concept of real abstraction is the old Ricardian ontology of value, combined with a logical-historical conflation of
material reality with hypotheses/theories about it.

While Reuten and Williams (1989) do not extend their criticism to the concept of real abstraction it is interesting
that they do not use the term, but refer instead to actual abstraction as the social recognition of labour and its
products in the market. In actual social intercourse, the meaning of exchange - as the social nexus for the operation
of the value-form as mode of association of private production is constituted as value and its measure is constituted
as money. Thus, Reuten (1988a) writes:

In as much as the space of an object is further constituted by the measure of length (for which, e.g. metres or yards
are standards), the value of an object is further constituted by the measure of money (for which, e.g., a dollar or a
pound sterling are standards). Both length and money are constituted in social intercourse and as such they are
social facts (Reuten, 1988a, p.51).

The double constitution of value and its measure are only understandable as social facts to the extent that they are
universally recognised and validated as such through the practice of exchange. The meaning of value and the
meaning of money cannot be given a priori, but must be re-constituted continuously in practice and dialogue,
extending to the practice of knowledge production itself. In Capital, Marx (1867a) seems to come close to a similar
concept of actual abstraction when he writes in the last pages of his opening chapter:

The production of commodities must be fully developed before the scientific conviction emerges, from experience
itself, that all the different kinds of private labourare continually being reduced to the quantitative proportions in
which society requires them. The categories of bourgeois economics consist precisely of forms of this kind. They
are forms of thought which are socially valid, and therefore objective, for the relations of production belonging to
this historically determined mode of social production, i.e. commodity production (Marx, 1867a, pp.168-69).

Of course, the exchange of commodities for quantities of money is also an exchange between owners of those
commodities, so that actual abstraction is insufficient in itself to convey the social meaning of exchange as the
transfer of possession under property laws. Reuten and Williamss (1989) maintain that the contradiction between
the right to property and the right to existence (the contradiction between competition subjects as the holders of
property or the capacity to labour) is transcended by the doubling of competitive society into civil society and the
state. As an attempt to theorise the value-form determined economy as the crucial moment of society (and the
crucial determinant of economic policy), the project of systematic dialectical reconstruction may be seen as an
ambitious attempt to complete a project that defeated both Hegel and Marx. The current dissertation remains,
however, at the level of abstract-universal concepts, and is concerned only with Reuten and Williams (1989)
preliminary constitution of the form-determined economy as capitalist production.

The movement from the bourgeois form of production (characterised by dissociate activity) to capitalist production
(characterised by the capital-labour relation) takes place through the interplay of value-form and the exchange
relation in the market and concerns the nexus of value and price. The first point is that the value of a commodity
appears only as a money price, and this price can be anticipated in production as ideal money. Reuten and Williams
(1989) coin the term ideal pre-commensuration to describe the anticipation of the value of labour and products (in
production) before any actual commensuration (in the market). The concept of ideal pre-commensuration
establishes the necessary interdependence of production and circulation required by the specifically capitalist form of
productive activity based on the production of commodities for sale. Fundamentally, ideal pre-commensuration
implies that the valorisation process (the process of increasing value) dominates the technical process (the process of
producing useful objects) forcing a doubling of the labour process into a technical process (of use-value production)
and a valorisation process (of value-production). To the extent that productive activity is determined by the
imperatives of valorisation, form dominates content and capitalist production is constituted as form-determined.

The concept of capital can now be introduced as the value-form of means of production and labour-power, given
abstract meaning as self-valorisation; that is, money -> production -> more money (Reuten, 1988a, p.54). The
contradictory character of capital as self-valorisation is that form (value) determines content (use-value), yet form
requires content for its existence. With the introduction of capital, the contradiction of the bourgeois epoch - that
the social form (value) is the external determinant of the private production of useful objects - is transcended into
the sphere of the economywhence it is termed capitalist production (Reuten, 1988a, pp.54-55). Transcendence
of bourgeois (private) production into the sphere of the (social) economy does not resolve this contradiction inherent
in dissociate activity, but further determines the use-value/value duality as a contradictory duality of valorisation and
technical processes. This duality is crucial to the main conclusion of Reuten and Williams (1989) systematic
dialectical theory: the determination of labour as the sole element adding value in the process of valorisation.

The contradictory duality of the labour process is explicated in Reuten (1988a, pp.55-58) and in Reuten and Williams
(1989, pp.65-74) as follows. The technical labour process (the process of use-value production) requires three
inputs to production: nature (freely available to capital), means of production (previously produced within the sphere
of capitalist production) and labour power (a human capacity, created and socialised within the household and, thus,
outside the sphere of value production). Of the three inputs to production, only labour power is not produced for
sale, is not driven by the imperatives of valorisation and is not immediately available for the creation of value (that
is, the household is not a firm and human capacities are not produced as commodities). This leads to an important
new insight: labour power cannot be a commodity - as Marx (1867a) would have it because being produced for
sale under capitalist relations of production is a necessary aspect of the commodity, and this is not an aspect of
labour power_.

Two crucial implications follow: firstly, if labour power is not a commodity, then the price of labour-power cannot
be systematically related to its (non-existent) price of production; the supply price of labour power contains no
value-added (Reuten and Williams, 1989, pp. 70, 89, 165, 167). In this respect, labour power differs fundamentally
from the technical means of production produced within the capitalist process (the price of which is related to price
of production) and from nature (freely available to capital). Secondly, labour power does not create value unless
subject to the valorisation process: it must be brought under the value-form (the wage) and under the aspect of time
(the employment contract). As Williams (1998) points out, this autonomous character of labour power has
enormous political and economic ramifications:

the compulsion of formal subordination, the struggles over the labour process derived from the inability of
employers simply to switch on their workers, and the consequent need for real subordination (human resource
management), together with the characteristics above, add up to a very major difference between labour-power and
(other commodities), including those constituting other means of production (Williams, 1998, p.192).

Given that, in capitalism, the allocation of labour to the production of different commodities is coordinated with
respect to the pursuit of money denominated profits, ideal pre-commensuration (in money terms) relates value to
labour. Fundamentally, the decision to employ labour is mediated by the purchase of labour power, and this
depends on the price of labour power and the price of the commodities it produces. Since labour power is not a
product of value relations and has no pre-existing price of production the value of labour power is not determined, as
Marx (1867a) argued, by the value of the subsistence consumption bundle plus some moral element. Nor is it
determined in neo-Ricardian fashion by a vector of labour times. On the contrary, the value of labour is determined
partly by market forces in commodity and labour markets, partly by distributional and labour struggles and partly by
the macroeconomic policy stance of the state (Williams, 1998). The wage is the only price of labour power.

The wage, as a manifestation of the value-form of labour power is pure quantity (expressed in money) and
motivates an immediate move to valorisation. This subordination of the technical labour process under the
valorisation process determines the labour expended within the capitalist production process as the one and only
factor creating value-added, with one important caveat:

The argument that only labour potentially creates value-added should in no way be read to imply that value-added is
in some way proportional to labour (for which at this level an aggregative measure is anyway lacking), as a
labour-embodied theory of value would have it. It is only the validation of labour and its products in the market that
determines where and how much value (-added) is actualised (Reuten and Williams, 1989, p.70).

Summarising the argument: there are three factors contributing to the technical production of use-value (nature,
means of production and labour) but only one factor contributing to valorisation: labour. This follows from the
systemic determination of labour power as the only factor of valorisation grasped by the value-form (the wage) and
produced outside of capitalist commodity production. The relation between surplus value (-added) and surplus
labour cannot, however, be immediately given in production as the orthodox (labour-embodied) argument would
have it. The basic reason for this is systemic: quantitative determination must await the introduction of money,
valorisation and capital. Only at the moment of association is (dissociated) private labour constituted as (associated)
social labour and abstract-labour constituted as aggregate value-added: Y = mL, where (Y) is total value-added, (m)
is the value productivity of labour and (mL) is abstract-labour (Reuten and Williams, 1989, pp.94-98). Hence,
surplus value (s) is given by: s = (m - w) L, where w is the wage-rate (Reuten and Williams, p.105).

On the basis of their reconstructions of abstract-labour and surplus value, Reuten and Williams (1989) claim to
confirm Marxs (1867a) most important insight concerning the sole source of surplus value: labour. The main
conclusion is that the privileging of labour as the only source of value-added can be arrived at without recourse to
abstract-labour as the substance of value, and without an immanent measure of value, either in physical or
hypothetical units of labour time. Critics argue to the contrary that, by abandoning Marxs concept of embodied
abstract-labour, reconstructed value-form theory does not (indeed cannot) provide a quantitative theory of prices and
profits. The next section examines this criticism. Of particular interest is the shift that occurred very early in this
particular debate, from disputation about the relation of the reconstruction to Marxian value theory (Likitkijsomboon,
1995), to a much more open-ended and indeterminate discussion of the logical foundations of the value equation
(Moseley, 1997). Aside from the substantive issue, the debate confirms the link established throughout this
dissertation between disagreements about method and the indeterminacy of substantive debates.

4.5 The Concept of Abstract-Labour: a Criticism and a Defence

Likitkisomboon (1995) argues that:

value-form theory from Rubin to Reuten conflates concepts of abstract-labour and social labour, resulting in a
series of conceptual collapses that finally degenerates into the rejection of abstract-labour [embodied],
labour-value and labour-exchange ratios, leaving in place only exchange-value, the value-form, price-form and
money, all without quantitative grounds (Likitkijsomboon, 1995, p.93).

Likitkijsomboon does not, however, articulate the logical foundations for his criticism, and these must be educed
from his argument. More interesting in the current context, is Moseleys (1997) further development of
Likitkijsomboons logical objection. Moseley takes as his main target the Reuten and Williams (1989) equation of
aggregate value-added and the monetary expression for abstract labour: Y = mL.

According to Moseley (1997), the equation has three elements: Y, m, and L. In order for these elements to be
constituted into a meaningful theory, two of the three variables must be determined independently of the equation.
These two variables would then mutually determine the third variable. If Y (value-added) is the dependent variable,
then (m) and (L) must be determined exogenously, and taken as given in the equation. This is a logical necessity
if the equation is not to be a tautology (true by definition) or indeterminant (two unknowns in the one equation). If
this is agreed, then there can be only two logical options for the independent determination of abstract labour, mL:
mL is determined as a function of some other variable(s), also independent of Y, as expressed in some other
equation(s). Abstract labour is then taken as given in the equation for the determination of value-added;
mL is an effect, not explained further and simply taken as given in the equation.

Moseley (1997) argues that these logical requirements must be met in order to give an adequate theory of the
magnitude of value-added: there are no other options. The Reuten and Williams (1989) value-form equation clearly
does not conform to these requirements of formal logic (since the elements of the right and left sides of the equation
appear to be mutually determining). Moseley confesses that the exact meaning of this mutual determination is not
entirely clear to me (p.4). Nevertheless, he concludes that the consequence of abandoning abstract labour as the
substance of value (as determined independently of prices) seems to be that this [value-form] interpretation presents
no quantitative theory of the determination of the magnitude of value-added, or of the total price of commodities.
The value-added is simply taken as given, not explained (p.4). If (Y) is taken as given, surplus-value is also
unexplained by the Reuten and Williams equation: s = mL wL
; where surplus-value (s) is the difference between value-added (mL) and wages (wL).

Moseley (1997) follows up his criticism of the logical foundations of reconstructed value theory with an
abstract-labour-embodied interpretation of Marxs value theory as a plausible hypothesis, the validity of which
should be evaluated on the basis of the extent to which it can explain the important phenomena of capitalism (p.1).
The reduction coefficients (criticised by Reuten and Williams) can, he says, be assumed taken as given - since a
scientific theory may involve the postulation of unobservable entities (p.3). According to Moseley, the main
advantage of an axiomatic assumption of simplified abstract labour as the substance of value is that it provides a
quantitative theory of profit, which is the main question of Marxs theory (pp.1-2). The appropriate way to test
such a metaphysical theory is to evaluate the explanatory power of the theory on the basis of the range of
important phenomena that can be explained on the basis of the postulated unobservable entities (p3). The essential
implication is that important conclusions of Marxs theory struggles over the duration and intensity of labour,
technical change, and the falling rate of profit cannot be obtained from the value-form theory because value-added
is not explained by the quantity of labour hours.

The first point to note about Moseleys (1997) critique is what is implicit or unacknowledged in it. The core
assumption is that Marxism can develop as an explanatory social science only when its central concepts are
expressed as theorems and elucidated in formalist models designed to prove derived postulates via testable
(plausible) hypotheses_. A corollary to this is an assumption that the methods of analytic philosophy and
therefore a formalist interpretation of the disputed equations - are generally agreed upon, so constituting an
appropriate critique; no alternative option is available to consideration. This is quite extraordinary, given that the
entire project of value-form theory is, in essence, a refutation of analytic abstraction! What is at stake, in fact, is not
the equation but the status of abstractions in Marxian and value-form theory, and the different meanings of value that
result from these conceptual alternatives.

For Reuten and Williams (1989), abstract labour is an actual social abstraction (or, to borrow Sohn-Rethels term, an
exchange abstraction), not merely a cognitive abstraction, as it is for Moseley (1997). This means that the
disputed equation is not intended to establish a relationship between independent and dependent variables, but to say
something fundamental about capitalist society: what is fundamental is that (m) and (L) are inextricably
interconnected and that their unity makes capitalism what it essentially is. In capitalism, value and price are
mutually constituted by exchange, the only process whereby the private, concrete-labour of individuals becomes
validated as social, abstract-labour. Hence, there is no sense in which abstract-labour is independent of its monetary
expression. On the contrary, abstract-labour is (mL): labour-time measured in money, where the money
productivity of labour (m) is the dominant operator.

From this perspective, an axiomatic or formalist logic is wholly inappropriate to the development of a theory of
social value. Given the unity of value and price, Moseleys (1997) question must be rephrased: can any theory
predict prices on the basis of labour-time? By itself labour - as measured in time - is not homogenous (a reductive
abstraction), and can be made homogenous only by assuming away a real problem, by definition (as Marx, in fact,
did). Moreover, labour-time is not a constant since labour-productivity changes over time. Since there is no
adequate measure of physical labour productivity, there is also no adequate measure of socially necessary labour
time. How then does an abstract-labour-embodied theory explain prices and profits, as Moseley (1997) demands?
The value-form answer is pre-commensuration. Firms expectations about prices and elasticities of demand for a
product influence the allocation of concrete labour between industries, ensuring that causation is two-way: (L)
depends on (Y) and (Y) depends on (L).

The crux of the argument is that essence is not value, but the systemic form-determination that gives (Y = mL) the
specific meaning that puzzles Moseley: the value-added (Y) has a value dimension - that is, a monetary form - as
does abstract labour (mL). Concrete labour does not have a value-form, but is brought under the dimension of
value, and is form-determined. The empirical work that logically accompanies this theory of social value is not
therefore concerned with the verification of hypotheses about labour-values and/or their conservation in prices.
Rather its first concern is with an inquiry into how the value dimension interacts with core (non-contingent) elements
of the system, such as a tendency towards the equalisation of profit or a tendency for equal prices in a market. A
second inquiry is concerned with how contingent divisions of surplus into profit, interest and rent between and
within industries impacts on the actual profit and rate of profit of firms (e.g. Reuten, 1988b; 1998). Given the
research agendas of prominent writers within the paradigm, it might be legitimately argued that value form theory
expands the scope of theoretical and empirical research beyond the unnecessary fixation on the determination of
profits by so-called labour-values, thereby challenging the Ricardian assumption that this is Marxs main
objective. Value-form theorists argue, on the contrary, that the main objective of Marxian theory is to determine
labour as the only (single) source of value-added, and to investigate the implications of the model for contemporary


The substantive point established in this chapter is that labour is the sole factor of value-added in the valorisation
process, establishing value as a pure quantitative (monetary) relationship between abstract-labour and prices. In this
relationship labour is not the causal element; rather causality is attributed to the systemic essence of capitalism.
Given dissociated labour, production and consumption: (1) the value to labour relationship must be continuously
reconstituted as the system reproduces itself and (2) this necessitates the value-form as the mode of association,
constituting labour and value as abstract in exchange. The more concrete grounding of abstract-labour and value
in price, the interdependence of essence and ground and the systemic determination of elements implies that the
independence requirements of formal logic are not captured in the Reuten and Williams (1989) value equation, and
should not be. Indeed the whole motivation for reconstruction is the inadequacy of the analytic approach, based as
it is on the stipulation of causal links from abstract-labour-embodied to value and price. The key objection to this
approach is that it misses the role of the market (price system) in allocating labour to different technical-material
labour processes, as it misses the co-constitution of value and price that makes the form-determined economy what it
essentially is.

If the object of the value-form reconstruction of abstract-labour has been misunderstood, this is in large part due to a
critical failure to understand the rectified systematic dialectical model on which it is based. Moseley (1997), for
example, does not recognise that what is at stake in the reconstruction of abstract-labour is not the absence or
presence of an equation, but the interpretation and meaning of the equation. Moreover, interpretation and meaning
are not given at this level of abstraction (as they are in the case of an axiomatic exposition) by the requirements of
formal logic, but must be socially constructed within a dialogic-dialectical-synthetic framework. Fundamentally,
value is not given within the systematic dialectical argument at all on the contrary, axioms are eschewed and the
existence of value must be demanded by the logic of the exposition.

Ultimately, the methodological imperative guiding a systematic presentation remains the determination of the
object-totality; that is, to resolve, systematically, the contradiction and inadequacy from which the presentation
starts, and so arrive at a comprehension of reality (Reuten and Williams, 1989, p.20). In the case of capitalism,
however, the comprehension is never complete since value cannot reproduce itself as a self-sustaining totality.
Fully determined, the value-form can fully grasp neither labour-power (which takes on the value-form, but is not
produced within the capitalist economy) nor money (as the sole autonomous existence of the value-form: see
Williams, 1992, 1998). Indeed, the failure of capital to fully determine these conditions of its existence is what
enables the necessary privileging of abstract labour to be derived from the value-form as the one and only factor
contributing to value-added in the valorisation process.

Moseleys (1997) argument against the systematic dialectical determination of the relation of labour to value fails
entirely to understand the character of the systemic causation determining this result; as such, he does not engage the
value-form argument but instead attacks a straw man. This approach to debate within Marxism provides an
illuminating demonstration of an argument advanced throughout this dissertation. That is, without agreed criteria
for evaluating arguments - and without arguments to justify those criteria - there is no way to resolve points of
controversy, either in discussions of Marxs value theory, or in discussions of reconstructions of it. In my view, one
of the strong points of systematic dialectical theory in comparison with most of the other theories examined here -
is that it makes explicit the logic only implicit in Capital, and within which the substantive conclusions of Marxs
value theory can be demonstrated with clarity and consistency. Clearly, if conceptual explicitness and clarity are
eschewed, the Marxian inquiry into abstract-labour as value will remain intractable.

5. Conclusion

The object of this dissertation was to inquire into abstract-labour as the source of value in a capitalist economy. I
began with the proposition that schools of thought within Marxism are distinguishable according to their views on
the ontological existence of value and its relation to money. For Marxists, the core research question is whether
value can exist prior to exchange as a physiological substance (abstract-labour) embodied in commodities, or
whether it is a social dimension brought into existence only as the result of market activity? A corollary question
concerns the measurement of value: is it measured as an amount of homogenous labour time expended in production,
or is it measured only when it is expressed in money as an exchange ratio between commodities?

A second objective of the dissertation was to engage an old question of Marxian political economy about the
subject matter of Marxs value theory - in a new way by making explicit the methodological (and ontological)
commitments of various positions within the value debates. On this point, I have shown that serious disagreements
on Marxs method underpin paradigmatic splits within Marxian value theory and that these are linked to disputes on
the status and character of his value concepts_. Although substantive differences between varieties of Marxian
value theory are linked to questions of method, this is seldom made explicit and axiomatic and/or logical-historical
methods remain, implicitly, at the core of what counts today as Marxian science. The dissertation set out to
challenge the dominant view by deriving alternative criteria for judging Marxs (and Marxian) value theory, and for
inquiring into the necessary interconnection between abstract-labour (as the source) and money (as the measure) of

To address these twin objectives, the second chapter posed a preliminary question concerning Marxs development
of the abstract-labour/concrete-labour and value/use-value dualities. Marx clearly saw these dualities as crucial
to his value theory, but what are we to make of them? Are they analytic or dialectical oppositions and how does the
answer given to this question prejudice the way that Marxian value theory is understood? A textual analysis of the
starting point of Capital shows abstract-labour to be an ambiguous concept. First, it is unclear as to whether
abstract-labour is a reductive category describing an amount of homogeneous labour embodied in commodities (a
labour theory of value), or a dialectical universal describing a real abstraction from particular types of labour,
established in exchange (a theory of social form). Second, the shift in method that accompanies the transition from
the double character of commodities and labour (in sections 1-2) to their determination by social form (in sections
3-4) retains an ontological commitment to the Ricardian concept of value conserved in the bodily form of
commodities. If value is taken to be a pre-market property of commodities, then the social character of abstraction
as the essence behind the reification of commodities produced capitalistically for sale is difficult to interpret, as
Backhaus (1969/1980) has pointed out.

The ambivalence of Marxs derivation of core concepts in his opening chapter suggests that criteria for judging the
subject matter of Marxian value theory cannot be derived by reference to the text of Capital alone, since any
explicit statement of method is missing from it. Moreover, there is evidence for the coexistence of two incompatible
strands of thought in Marxs text. The first strand, associated with classical political economy, posits economic
relations as the causal product of external determination, particularly in nature; the concepts of abstract-labour and
value are taken to be natural phenomena. The second strand, associated with Hegel, suspends a priori
presuppositions and understands economic relations only as a development within a social (systemic) set of
interconnected determinations; the concepts of abstract-labour and value are social phenomena. The juxtaposition
of these opposed ontological (and methodological) positions creates, in my view, an irresolvable tension; today,
developments of Marxian value tend to collapse into one strand of Marxs thought or the other, giving rise to the
technical and social paradigms described by (de Vroey, 1982).

The third chapter employed de Vroeys (1982) framework to explore a paradigmatic split within Marxism, according
to whether value is interpreted as a natural law of labour allocation or social dimension based on the capital-labour
relation. Crucially the technical paradigm conceptualises the economy as a system of production and defines the
object of value theory as the quantitative problem of allocating total social labour among alternative productive
tasks; money does not matter, it is simply a veil over the exploitation of labour. In contrast, the social paradigm
focuses on the necessity of a connection between the physical-technical dimension and the social dimension of
economic activity. The relationship between production and circulation becomes central; money is the
indispensable link between private and social labour in decentralised economy characterised by the absence of any a
priori rule of social cohesion. The integration of production and exchange within the circuit of capital brings the
ontological question of value centre stage. Yet, paradoxically, most abstract-labour-embodied theories within the
social paradigm seek to retain an emphasis on value-creation in production, albeit in the shape of ideal value that
becomes actual value only in exchange.

Is it plausible to argue that money is necessary to the objective existence of value and in the same breath to advance
a mode of argument where money is an independent concept - introduced by Marx at a more concrete level of
abstraction? I think not. The essence of Marxs (1863/1963) criticism of the physiocrats is precisely that capitalist
production and circulation are not independent spheres between which relations of dependence or interdependence
can be established; on the contrary, they are interdependent and inseparable elements determined within a totality.
A theory of social value seems to require a conceptualisation of this interdependence of value and price; that is, a
theory of value as a process that comes about only as a result of the movement of capital through differentiated
moments of the circuit as a whole.

The critique advanced in the final section of the third chapter focused attention on the failure within both technical
and social strands of Marxian thought to recognise the impediments to conceptual understanding that result from a
retention of abstract-labour as an embodied value substance (whether physiological or social). The inherent
weakness of both schools is a reliance on the Ricardian model of essence and appearance in which the essential
independence of value (essence) and money (form) operates to privilege value creation in production and
conservation in exchange. Although more sophisticated varieties of the abstract-labour-embodied value theory
recognise a co-constitution of value and price, they nevertheless deny that money (the value-form) has any
ontological significance with respect to the determination of economic activity. As a result of this value-price
dichotomy, the imperative of valorisation (the quantitative expansion of value) driving the capitalist system is
inadequately captured within these theories.

Chapter four presented several arguments for a systematic dialectical reconstruction of Marxian value theory without
recourse to a concept of abstract-labour as the homogenous property embodied in commodities in production. In
this chapter, I set out to show that what is gained by dropping the concept of abstract-labour as substance of value
is a coherent integration of capitalist production and exchange as interrelated moments within the object-totality,
constituted by the movement of capital, as an interconnected whole. Two important new insights emerge from
current reconstructions of abstract labour. First, labour power is produced outside value relations; it is not a
commodity and its value has no systematic relation to its (non-existent) price of production. The privileging of
labour power as the one and only source of value-added in the valorisation process is derived from its unique status
as an input to production produced outside capitalist value relations. Second, labour power is not purchased unless
individual capitalists expect that the labour extracted from labour power will contribute more to the value of output
(in money) than it cost (in money). Reutens (1988a) felicitous coining pre-commensuration makes this double
character of the labour process clear.

The substantive conclusion of the systematic dialectical value-form theory is that abstract-labour is neither substance
nor cause of value; in fact, value has no substantive content. Thus, for Reuten and Williams (1989), abstract labour
is value measured in money (mL). What this means is that abstract-labour becomes a social fact only in money,
which is the sole autonomous means determining the production and distribution of use-values and the allocation of
labour among alternative uses in a capitalist economy. The essential point is that causality is systemic: the relation
of value to labour is constituted by the subordination of productive activity (the technical labour process) to the
pursuit of profit.

The methodological conclusion is that the interconnections of core elements within the capitalist system can be
determined only with logical necessity. This entails an abandonment of science seen as an exploration of
substructural essences (labour-values) beneath phenomenal appearances (prices). Marx undermined his own use of
this kind of metaphor by repeatedly pointing out that no matter how deeply you dig into the commodity, you can find
no trace of value in it. The negation of the metaphor is reinforced by the fact that Capital begins with a micro-level
examination of exchange as the basic constituent of a system of social interconnections. To ignore systemic
determination is to take a step back to the substance metaphor in discussing value theory, and this leads inevitably to
a Ricardian regress (Reuten, 1993).

Given these substantive and methodological conclusions, the core research question posed at the beginning of the
dissertation can now be restated: must Marxs abstract-labour (embodied) theory of value be abandoned and Marxian
categories reconstructed to provide a systemic determination of abstract-labour as social value? Here, I have
answered unequivocally: yes. Firstly, a systematic dialectical reconstruction of Marxs categories preserves the
main insights of the abstract-labour-embodied theory, especially the demonstration of labour as the only source of
value-added in the valorisation process. Secondly, it facilitates a better grasp of the contradictory character of
contemporary capitalism as a system increasingly dominated by the needs of financial and banking capital,
systemically determined by an imperative to valorise and a tendency to subsume all that is useful under the value
form. It is this historical character of value as self-valorisation that the abstract-labour-embodied value theory
cannot fully grasp, committed as it is to a conception of value created in production and justified, axiomatically or
historically, as a principle of movement through history.


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_ The origins of the debate are to be found in the confluence of the 'new Australian-German idealism' (Backhaus,
1969/1980; Eldred, Hanlon, Kleiber and Roth, 1982, 1983); the rediscovery of Rubins (1928/1972) Essays on
Marxs Theory of Value; the emergence of a concept of 'real abstraction' (Arthur, 1979a; Himmelweit & Mohun,
1978; Mohun, 1984); the Italian debate on abstract-labour (reproduced in the International Journal of Political
Economy, 1998; reviewed Bellofiore, 1999); and Elsons (1979a) Value Theory of Labour. Important
contemporary contributions include: Arthur (2000), Bellofiore (1989), Itoh (1993), Likitkijsomboon, (1995), Mohun
(1994a), Murray (1993, 1997), Postone (1993), Reuten and Williams (1989), Sekine (1998), Smith (1990), Williams
(1992, 1998); and contributions by these and other writers to the following edited collections: Arthur and Reuten
(1998), Bellofiore (1998b), Mohun (1994b), Moseley, (1993b), Moseley and Campbell (1997); and individual papers
by Arthur, Reuten and Bellofiore in Rivista Di Politica Economica (1999).

_ Marx (1867a) writes: Political economy has indeed analysed value and its magnitude, however incompletely, and
has uncovered the content concealed within these forms. But it has never once asked the question why this content
has assumed that particular form, that is to say, why labour is expressed in value, and why the measurement of labour
by its duration is expressed in the magnitude of the value of the product (pp.173-175).

_ Marxs 1857 draft Introduction to the Grundrisse plays a major role in the dispute on the method of Capital. In
these notebooks, Marx makes explicit comments on the scientifically correct method for political economy. The
Grundrisse was first published in German in 1953 (although the Introduction existed from 1903 onwards and parts of
the notebook were published in German in 1939-41). The coincidence of the 1973 English publication of the
Grundrisse with the 1972 English publication of Rubins (1928) Essays on Marxs Theory of Value contributed to a
concerted attack on technical labour-embodied interpretations of value theory in the 1970s and 1980s. Since this
dissertation is primarily concerned with the reception of Marx in the Anglo-Saxon literature, I cite the English
publication dates. Similar considerations are used in dating Backhaus (1969/1980) whose work, originally
published in German, influenced the development of contemporary reconstructions of value theory.
_ For example, money is determined as necessary to capitalism but its form as gold or credit is contingent in the
sense that the form taken by money does not change what capitalism essentially is (Reuten and Williams, 1989).
_ Marxs (1857/1973) statements on method in the draft Introduction contradict Engelss linking of Hegels
systematic and historical dialectics: It would therefore be unfeasible and wrong to let the economic categories
follow one another in the same sequence as that in which they were historically decisive. Their sequence is
determined, rather, by their relation to one another in modern bourgeois society (p.107). Marxs demand that
economic categories must articulate only the essential elements of an existing system flatly contradicts a
logical-historical reading of conceptual development. He states clearly that: In the succession of the economic
categories, as in any other historical social science, it must not be forgotten that their subject here modern
bourgeois society is always what is given, in the head as well as in reality (p.106). According to Marx, the
object of value theory is to explicate the inner connections of the particular system of production for exchange in
which value relations fully obtain.
_ In Sweezys model, there is a logical priority of labour-values over prices of production. To determine these
prices it is necessary to know the average value rate of profit; that is, the ratio of total surplus labour over the sum
of constant and variable capital advanced in the whole economy, both calculated in labour-embodied terms. This
ratio is then applied to the value of the capital advanced in each industry, resulting in an estimation in prices of
production of the output of each sector (1946, pp.109-130).
_ The main objection is that it is not possible to have a simultaneous realisation of Marxs two equalities sum of
values and sum of prices, and sum of surplus values and sum of profits. Hence, the relationship between
exploitation of workers and entrepreneurial profits is unclear. There have been a great number of solutions
proposed to this transformation problem; for contemporary vindication of the procedure, the interested reader is
referred to the New Solutions offered by Foley (1982) and the more orthodox conclusions offered by Moseley
(1993a). Despite differences between these writers, a common theme is that exchange values and prices of
production are alternative rules of exchange, with the former privileged as a first approximation to prices. Marxists
who reject labour-embodied interpretations of Marxs value theory generally reject both the problem and its
solution on the grounds that a mathematical relationship between the magnitudes hardly makes sense (Smith,
1990, p.171). Although I do not elaborate here upon the transformation problem, the dissertation indirectly supports
Smiths view.
_ In his Production of Commodities by means of Commodities, Sraffa (1960) sets out a model of capitalism where
inputs and outputs are measured in physical units other than labour. Taking as given in physical terms these
technical conditions of production, the size and composition of the social product and the wage he simultaneously
sets prices and the (gross) rate of profit. The reference to labour is implicitly shown to be redundant since a correct
theory of prices can be arrived at without it, and still show class conflict through the inverse relation between wages
and profits. Lippi (1980) and Steedman (1977) made explicit the implications of Sraffas theory for the orthodox
(Ricardian-Marxist) labour-embodied theory of value.
_ I have treated the critiques advanced by Lippi (1980) and Steedman (1977) as contributions to an internal dispute,
originating from within the technical paradigm. In this context, I use the term Sraffian merely as a convenient
label for a particular type of (equilibrium) model that is used by Lippi and Steedman to dispute the relevance of the
orthodox labour-value model. I have not engaged the much broader (inter- and intra-) paradigmatic disputes on
the relationship between Marx, Sraffa and Ricardo and the Hegelian foundations of Marxs critique of political
economy (for reviews see Bellofiore, 1999, Fischer, 1982 and Itoh, 1993). These so-called value controversies
took place in the 1960s and 1970s and are relevant to the current discussion of the ontology of value only in the
sense that they inspired a return to Capital and a reinterpretation of Marxs core concepts. The reinterpretation of
abstract-labour as a social concept rather than a physiological concept was especially instrumental in bringing
about the demise of the technical paradigm, in both of its guises (orthodox and Sraffian).
_ In his Introduction to The Historiography of Economics, Blaug (1991) introduces Rortys terms historical
reconstruction and rational reconstruction as opposite approaches to the history of ideas. Historical
reconstruction engages past thinkers in their own terms and attempts to arrive at a correct interpretation of what
they have done. Rational reconstruction engages past thinkers in contemporary terms in order to locate their
mistakes and to verify that there has been rational progress in the course of intellectual history (Blaug, 1991, p.ix).
So, Marxs theory might be judged inadequate because it is Hegelian (idealist) and reconstructed to accord with a
materialist principle, or it might be judged inadequate because it is logical-historical and reconstructed to accord
with Hegelian principles of logic. The analogy with rational reconstruction should not be pushed too far, however.
The crucial point is that reconstruction is an ongoing, systematic and incomplete process both in thought and in
reality. Thus, the project of reconstruction requires continuous interrogation of empirical perceptions and existing
theories of them. In this way, the reconstruction is at one with Quinian pragmatism in arguing that there can be
no analytics without semantics (Williams, 1989, p.189).
_ I am indebted to Geert Reuten for this insight, confirmed by the Hegel Dictionary (compiled by Michael
Inwood, 1992, Blackwell, Oxford) in which the term ontology is not even mentioned.

_ In Capital, Marx writes: This division of a product into a useful thing and a value becomes practically important,
only when exchange has acquired such an extension that useful articles are produced for the purpose of being
exchanged, and their character as values has therefore to be taken into account, beforehand, during production (cited
Williams, 1998, p.192).
_ Moseley (1997) is incorrect in believing that the rectified systematic dialectical method precludes either empirical
investigation or the falsification of arguments. A claim that reality is fundamentally epistemological and constituted
by inter-subjective knowledge of it immediately constitutes the practice of science as a semantic, social practice. If
inter-subjectivity (or subjectivity in Smith, 1993) is incorporated into the conceptual scheme, then the dualistic
distinction between inquiry and presentation collapses and the developing systemic presentation must continually
re-interrogate reality, and incorporate the results into the presentation (Williams, 1998, p.191). The primary site of
this interrogation of actuality by the systemic conceptual structure is at the level of the empirical, grasped as
concrete. And the empirical is intrinsically particular and specific; hence, the role of conceptual abstraction is to
grasp the patterned internal connections and organisation of these empirical specificities (p.191).
_ Considerable terminological confusion results from alternative understandings of the meaning of Marxian
concepts. If the concept abstract labour is used by one writer to denote the homogenous physiological/ahistorical
substance of value and by another writer to donate the social/specific form assumed by social labour in Capitalism,
debate tends to degenerate rapidly into a dialogue of the deaf. To circumvent the problem, I have specified the
meaning of terms as they are used in particular varieties of Marxian value theory, leaving open the question of
Marxs own (ambiguous) use of these terms.