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Lecture 6

Finish Capital Chapter 3, Chapter 4, Chapter 5

In terms of the logic, what Marx is saying is that money is the necessary form of appearance of the commodity. So, he is logically deriving the money form from the commodity form. Right? It flows straight from the difference he makes between the relative and equivalent forms. So, dialectically (not functionally) it is necessary on the one hand. On the other hand, the chapter is structured such that what emerges dialectically as the necessary form of appearance, at the same time, appears not to be the case. The way the chapter is constructed, you have unfolding of the category, and, at each stage, you have the veiling of the category which is unfolded. Let me try to elaborate upon that.

Now, we begin with money as a measure. In terms of the logical unfolding, money is the externalized expression of the value dimension of the commodity form. However, this appears not to be the case. There is a qualitative as well as a quantitative incongruence between value and price (which he derives). As a result of this incongruence, both qualitative and quantitative, money does not appear to be the expression of the value of the commodity. So, that which is the expression of the value of the commodity appears not to be. The exact same argument (formally) is made in the second section of the chapter, which deals with the means of circulation. Qualitatively, commodities appear to be objects which are circulated by money. Quantitatively, the sum of prices and the sum of value should be the same (according to Marx). Yet, because of a number of factors (such as turnover time), at any given moment, they are not the same. So, it seems as if prices are determined by the quantity of money and the quantity of money is determined by bullion. Once again, what appears to be the case is (what I will call) the primacy of the means of circulation.

He carries this a step further when he talks about coins. Now, I’m just trying to indicate to you what the logical flow of this chapter is. You recall what we discussed about coins? The fact that coins are used a lot means that, over time, the pound really doesn’t weigh a pound – you have what is frequently called the debasement of currency. So, the difference between the nominal and the real content of money means (according to Marx) that the coin actually becomes a symbol of itself. The fact that the coin becomes a symbol of itself, opens the possibility that it can be replaced by tokens, paper money, by things that don’t have any value at all.

So, where we’ve gotten so far is that according to Marx the commodity is a form of mediation. This mediational dimension of the commodity is externalized as money. Yet, when you begin to examine money, it seems as if the commodity has nothing to do with mediation… because of this series of fetish forms that I have just indicated. The commodity seems to be objects that are mediated by money, and then money itself appears to be something purely conventional. So, the idea that there is something like “value”, just disappears. And it doesn’t disappear because people are trying their hardest to deny it. It disappears because it disappears. This raises the question for us: “Why bother with value theory?” What is he going to be trying to show? But in the meantime, I just want you to notice that what he is saying (among other things), is that methodologically, you cannot start with surface phenomena, and on the basis of those surface phenomena, make an argument one way or the other, about value. That’s the wrong way to go. To do that is to misunderstand the extremely complicated relationship between surface and underlying reality – which isn’t just a 1:1 correspondence. So, you cannot look at prices and rates of profit, and from that, infer a great deal about value (in spite of the fact that thousands of Marxists have done this).

Now, it’s in the section on coinage that he establishes that the money itself, that is, the mediation itself, appears to be without any value at all. So, the idea that value and mediation are tied disappears because you can have a token of a coin – a coin being a token of itself – and from there you can just go to pure numbers (electronic money etc). There’s no reason why you need paper. OK…that sets the stage in the chapter for talking about the means of payment. Now, what is he trying to get at when he discusses the means of payment? He has already talked about how the system itself requires a certain degree of hoarding – since you never just sell and buy immediately, but you sell without buying and you buy without selling. There is a temporal disjuncture. And because of that temporal disjuncture, when you sell, what you should do is hold on to whatever money you get for your sale, that you can then subsequently use that money later for your need – it is not just a continuous flow. What does this have to do with money as a means of payment?

[Video Skips]

…It appears to complete a transaction rather than mediating it – that’s what means of payment is. So, it seems as if the transaction is based on other/different factors – contracts – and the money then fulfils the contract. So, the mediation itself appears to have nothing to do with money, which appears in turn to have nothing to do with value, which appears in turn to have nothing to do with the commodity. Instead, it seems as if you have social ties that are organized on the basis of convention. And this notion that social ties are organized on the basis of convention (like contracts) is (Adorno would use the term) a real illusion – it is reality, and yet it’s not the underlying reality. It’s not simply a misunderstanding, but it’s the way things actually work. So, the fetish here is that the constitution of social relations has apparently nothing to do with the form of social mediation.

So, in other words, I think there are two important tracks in this chapter. One of them, I would characterize as the movement from commodity as mediation, to the apparent dropping out of value as mediation. That is, in the first step, the commodity appears not to be mediating, but rather the commodity appears to be an object that is mediated by something else – money. Then, money itself appears to be less of an actual mediation and more of symbol of things that are agreed upon, which is then reinforced once you have money as means of payment. So, the social agreements we are talking about therefore appear to be the result of agreement and contracts and convention, rather than what Marx is trying to get at – this quasi-objective form of mediation. That is, beginning with the commodity, already in the third chapter, Marx is trying to indicate why everything that he said in the first chapter appears not to be the case. But he hasn’t done it by asking: what about this? What about that? He has done it by unfolding the logic itself. So, each step of the logic covers its own tracks.

There is a second track in this chapter that is going to be very important in our discussion of capital. Do you remember when he talks about exchange, and he uses this very weird language? He talks about the transformation of material (stuff) being affected by a change of form. What is happening (he says) is not simply that you take discrete object A and for that you get a magic bean or money or something, for which you then go and get discrete objects C, D, E, and F. Rather, what happens is that when you exchange and get money for it, the value has simply changed its form, from being in the form of commodity, to the form of money. At this point, this is (I think) bizarre. And certainly, if you’re reading this as positive economics its more than bizarre – it’s an economist who just spent too much time in Germany where they think of things in wooly-minded ways. It’s not clear, succinct, short and straightforward (as anyone who lives in the British Isles knows reality is).

Now, I’m going to just make a side comment here that I cannot justify yet. There’s something about this idea of value flowing and changing its form that sounds a little metaphysical, doesn’t it? It does to me. And I want to suggest that ­– since he isn’t talking about the nature of reality, but rather a historically specific form of social mediation ­– this is a metacommentary on metaphysics. And I’ll try to justify that as we go along. It’s the very weird properties of this form mediation that generate what used to be philosophical thought.

Chapter 4

So, whereas in the first, the beginning point, and the end point are qualitatively different from one another – unless you just don’t understand the concept and you take potatoes to the market to buy potatoes [laughter] – with M-C-M’, the two points (beginning and end) are qualitatively identical. So, logically speaking the difference between them is quantitative. And presumably (unless, again, you don’t understand the concept) the M at the end is more than the M at the beginning. And this difference between the M and M prime is…?

Students: Surplus value?

Surplus value. So… finally that fateful word has fallen… “surplus value”. There are many people who say if you want to understand Marx then forget about the first 3 chapters and go straight to surplus value because that will tell you something about exploitation – which it will – however, that is what the category is about completely. Because it is surplus products… or surplus value. And the rest of the book, I’m going to argue, will depend on the recognition that the surplus is a surplus of value and not simply a surplus without further specification. You can have a theory of exploitation easily that doesn’t rely on value theory. So, the question is, or what I would say is: if value theory is only there to prove exploitation then it’s a losing proposition intellectually – you don’t need it. So, let’s at least give me the advance credibility capital that maybe there’s something else going on here. That’s number 1. Number 2, don’t you think it’s very bizarre, that you have these simple little formulas C-M-C, M-C-M’? What do the formulas tell you? Other than what we’ve already talked about. Well, let’s say somebody comes up to you and says, “I really want to understand what is at the heart of this form of social life!” … and you give them three letters [laughter]. Would there be no reaction at all? Would they just say “Thanks! That’s really illuminating!” [more laughter]?

Student: There’s something about this historically specific society that’s generalizable – that can be described with a formula.

I would say not only generalizable, but that it claims that what is generalizable is also homogeneous. Otherwise, you couldn’t possibly refer to society in terms of a little shorthand like that – unless you’re saying, explicitly or implicitly, that there is a level of homogeneity that warrants this kind of formalistic reduction. Not everything lends itself to that kind of formalism. So perhaps, we should just take one minute to talk about form and content with the commodity form.

Let’s look at the use-value dimension. I would say that if you’re looking at the use-value dimension, you would say that the use-value has a form – that’s usually the way you think about form and content. But now if we move over to the value dimension, what is the content? He doesn’t even use the word content. He uses the word content when he talks about use-value. Remember he uses the word substance when he is talking about value. It’s abstract human labour, right? Which so far, I’ve been treating as labour acting a socially mediating activity. If you think of form and content with the commodity, you have to distinguish sharply between whether you’re thinking of the commodity in its aspect as use-value (in which case its content has a form) or whether you’re looking at it from the value dimension side - in which case the commodity is a form, it doesn’t have a form – it’s a social form. And form and content on that side of the equation are inseparable. They are inseparable because of this very peculiar homogenous character of the mediation. So, in a sense, this is the dimension of the commodity that underlies the formalism of the system. The formalism does not abstract from the manifold character in reality of what is. But rather, expresses the fact that alongside (or underneath or on top) of this manifold character there is something homogenous which is not a feature of human life, that us not a feature of society, but is a feature of what Marx is trying to get at with Capital – capitalist modernity. So, there’s something about capitalist modernity that warrants the use of formalistic methods (as long as you don’t reify them). Are you understanding what I’m trying to get at? So that the formal (and yet highly oversimplified) little equations of C-M-C and M-C-M’ are, within the framework of this exposition, warranted by the object itself. Does this make sense to you?

Now C-M-C does not disappear. At what level does it remain part and parcel of the society?

Student: For the wage laborer?

For the wage laborer and for most people, right? You are selling your commodity in order to survive. And if you sell it for a decent price, so that you have a home or a car, rigorously speaking, it would be a serious mistake to refer to this as the embourgeoisement of the workers. Because what then characterises the bourgeois?

Student: They follow the M-C-M’ circuit?

Right. They are the character masks of M-C-M’ – of accumulation. That’s the condition of being bourgeois. It’s not being conventional in your manners and kind of stuffy and not really aristocratic, not really a worker and sort of lost in middle-space. All of these things might be true, but they’re beside the point [laughter]. The point is that none of this is defined by consumption – as we will see very soon.

Up to now, when we’ve discussed motion and temporality, it has been circular – circulation, turnover etc. Here, what you’re beginning to have is directionality. We will see that it’s a particular kind of directionality, but it is directional – M-C-M’, C-M’’ – there’s a directionality, this is no longer just a circuit. It will interact with various circuits but it no longer is a circuit. So Marx then says ‘Selling in order to buy finds its measure and it’s goal in a final purpose which lies outside it – the satisfaction of determinate needs (C-M-C). But in buying in order to sell, the end and the beginning are the same – money as exchange value and this already makes the movement an endless one.’ So, the purpose of the latter lies in the movement itself. It is its own purpose. And what’s one name we give to something that is its own purpose? The subject. The subject is its own purpose. You’ll notice that the ground was already prepared for this endless process in talking about hoarding and in the contradiction of money which is boundless and yet bounded. This goal, this purpose is, in spite of appearance, completely separated from the needs and desires of the individuals. They can be functionalized for it, but the process itself does not come out of their needs and desires. It is self-valorization. What capital is is self-valorizing value. This understanding of capital is extremely different from most understandings of capital whether in sociology or economics or anthropology – it’s a very different use of the term. This isn’t to say that the others are wrong, just that this understanding is something different and it’s trying to get at something different.

OK. Let’s look at pages 255 etc. This was talked about in the report, but I want to sort of repeat some of it anyway. What I’d like to do is give you a quote from the introduction to Hegel’s Phenomenology. And I want you just to pay attention not only to the opacity of the language [laughter] – which is not easy – but to how it compares to a passage from Capital. Hegel says (this is in the preface):

“According to my view, which must justify itself by the presentation of the system, everything depends on this – that we comprehend and express the true not as substance but just as much as subject.”

That’s A. B (if you think that’s opaque):

“The living substance is further that being which is in truth subject or which is in truth actual only insofar as it is the movement of positing itself or the mediation between the self and its development into something different. The true is its own becoming, the circle that presupposes its end as its aim and thus has it for its beginning.”

Now, you’ll notice that as soon as we got into the circuit of M-C-M, the beginning and the end were the same, and Marx draws attention to that. But then, he says:

“It is constantly changing from one form into the other without being lost in this movement. Value here, becomes the subject of a process in which while constantly assuming the form of money and commodities, it changes its own magnitude, throws off surplus value from itself considered as original value and thus valorizes itself. For the movement, in the course of which it adds surplus value, is its own movement. Its valorization is therefore self-valorization.”

And then he says:

“Value suddenly presents itself as a self-moving substance which passes through a process of its own and for which commodities and money are both mere forms.”

Now, as you are doubtlessly aware, Marx was very very familiar with Hegel. So, this can’t be accidental – that the language is literally mimicking the language of the introduction of the phenomenology. And instead of seeing it just as some weird icing on top of something much more substantive, we should take a look at what it means.

First of all, before we get into what the report emphasizes (what this says about Marx and Hegel), you’ll notice it’s at this point that the “metaphysical” dimension of value begins to make sense. What I mean is, that as long as were only dealing conceptually with what seemed to be exchange, the whole idea of the metamorphosis of commodities and the Formwechsel (change of form), didn’t seem to make much sense. Or maybe it made sense, but it seemed unnecessarily complicated – why do it this way? What Marx is saying here however, is that this process: M-C-M’-C-M’’ is a process of the self-valorization of value which will change its form from money to the commodities to money to the commodities to money to the commodities – where the commodities here are not the bread that you get in the corner store, but rather raw materials, machinery, and labor. And what he’ saying is that value is flowing through these – that is to say, the change of form suddenly begins to make sense. And you can only get this quantitative development if you see it as this flow of form. So, the justification for talking about Formwechsel begins to be made here – it wasn’t really made in the chapter in which it was introduced. As long as you’re thinking of this simply as a static exchange, Marx’s way of describing things is really superfluous – it’s unnecessary, you don’t need it. But now you begin to see what he’s getting at. And what he’s trying to get at is what he regards as being the hallmark of modernity which is this non-teleological, endless process that the is referring to as the self-valorization of value. Does this make sense to you? You see though how what comes later tries to justify what comes earlier, so that it’s very different from an argument that starts with certitude and then just builds from that.

[Video Skips]

So, Marx takes Smith’s categories and he says that they do have some validity – Smith’s mistake was to regard them as being transhistorical. By viewing them as transhistorical, of course, then Smith cannot understand why they are valid for modernity either. Now, I want to suggest that the book Capital is, at the same time, a critique of Hegel and the critique of Hegel follows along similar lines. First of all, the nature of the critique of Hegel is really different than Marx’s critique of Hegel when he was very young – that the problem with Hegel is that he was an idealist (everybody knows this). Hegel was an idealist and you take him and you turn him on his head or his feet or whichever way is up [laughter]. Here, we have a very different kind of critique. Marx is taking the language that Hegel uses for the Geist, and he is describing capital with that language. Now if you’re using language like a self-moving substance that is subject, on the one hand what you’re doing is you’re trying to get beyond Cartesian dualism – that’s fine. What else are you trying to do? Self-moving….

Student: Talk about a dynamic.

You’re talking about a dynamic. And as Lukacs always points out, with Hegel, what theme becomes essential to philosophy?

Student: History.

History. With Hegel you have the logic of history. Once Marx says that capital is actually what Hegel was talking about with Geist, what he is doing is saying that Hegel was right – there is logic of history. But Hegel was wrong – it is not a feature of the human condition, and it doesn’t apply to human societies. It is, however, a feature of capitalism. What is it that’s a feature of capitalism? What is it that’s historically specific…? See, the common understanding of Marx’s critique of Hegel is that Hegel has all these idealist categories and Marx following Feuerbach says, “This is bull! It’s really just human beings – we are doing it all! So, get rid of this idealist nonsense and pull it down to earth where it belongs. We just have human actors.” Now, what is the implication of saying that capital is the self-moving substance that is subject?

Student: A lack of human agency in the dynamic.

A lack of human agency in the dynamic. There are abstract forms that are characterized (among other things) by virtue of them being generative of a temporal dynamic. Now these abstract forms are created by humans of course, however, humans aren’t the agents. I know… this is a terrible thing to say. If humans were agents there would be no historical logic. The existence of a historical logic is at odds with the idea of human agency (as the poststructuralists know very well). However, here we are not talking about a metanarrative, we are talking about a structure – but it’s a structure very different from the structure of structuralism. The structure of structuralism is synchronic, and change is diachronic and contingent. What is logical is the movement, not any kind of static structure. It’s the exact opposite of structuralism.

[Video skips]

In a sense, what Marx is suggesting (and what he’ll then try to show) by referencing Hegel is that a dialectical historical logic does exist, but that that logic is not of history as such but of capitalism precisely because the social form has become a self-moving substance. Now, to come back, you mentioned species being. To reference the early works in a slightly different way, the independent existence of the form of social relations is alienation. Not the alienation by people of part of a pre-existing essence, because the constitution of an alien, compelling, social other that results from the circumstance that social relations are created by objectifying activity – humans create Society (with a capital S) behind their own backs. Here, I agree with Adorno who says that the word Society is really only valid for capitalism.

Student: Only?

Only. We just project a great deal onto other forms of human life. So, what this means though (and I’m going to try to elaborate upon this as we go through what seems to be just descriptions of how things on the shop floor look terrible) is that capital really is the alienated other. It’s not just a mystification. Capital is greater than the sum of its parts – I cannot justify that right now. But what it would imply is that capital cannot simply be appropriated by the immediate producers. We’ll get to that. What it means is that the question of the overcoming of capital goes much deeper than the question of the abolition of private property. It has to entail the abolition of capital – and capital and private property are not exactly the same thing. They’re related, but they are not the same thing. You can talk about private property without coming close to self-valorizing value. It’s the dynamic which is at the heart of this book. And because the dynamic is at the heart of this book, Hegel is very much at the heart of this book. However, its Hegel… not turned on his head… but Hegel turned around slightly. What becomes clear from his language (I would say) is that as opposed to the way Lukacs interprets Hegel’s notion of the identical subject/object, it is not the proletariat, and it’s not humanity. It’s the forms – the social forms – which ties together with the whole idea of alienation. So, in other words, if we are talking about these social forms that are abstract, and as we’ve seen time after time after time, do not appear to be social at all, then one of the things that Marx is saying here is what is rational about Hegel is his idealism. Because those “forms” actually cannot be simply dissolved into the actions of individual agents, whose actions are hidden from themselves and therefore they don’t appear to be agents – in fact, they’re not agents. So, it’s the idealism that’s rational…and a certain kind of inversion which now becomes irrational or reactionary.

Capital: Chapter 5

Part of what he was talking about addresses a point that was raised earlier about merchant capital. You always have to bear in mind that Marx is trying to talk about a society characterized as a whole by these forms. Whereas merchant capital can be generative of profit, it can’t be generative of surplus value. What that means is that within the framework of what he’s trying to do, surplus value is a capital of totality – profit need not be. So the whole argument about circulation – in circulation, out of circulation – really does not refer to individual economic acts or transactions, but rather society as a whole.

Now, I’m just going to mention something as a placeholder for later when we talk about the purchase and sale of labor-power: it’s very important to keep in mind that value isn’t wealth. Because at this point, it becomes very easy just to slip off that track and say, “This is a theory about how the workers are getting squeezed… period…end of story.” It is a theory about the way that the workers are getting squeezed, but that isn’t the end of the story.

Now, to come back to chapter 5 (and this is a point I was going to make before)… you can’t base this on a theory of use-value. Now, I want to take one step back and remind you of something which is that in the first chapter of Capital when Marx talks about that logically, you have to imagine that all commodities have to have something in common in order to be commensurable and from there he goes onto abstract labor, I mentioned to you is what he doesn’t entertain is that what they all have in common is that they are useful. Why couldn’t you do a metric based on utility? …Which after all was then done… I believe it’s called marginal utility. Yet, here, at this point in the exposition is the point where he even refers to theories that try to base everything on utility. Why here and not at the beginning? Is it because he’s like me and he kind of forgot[laughter]? Probably not. So, I want you just to think about this for a second. This isn’t a guessing game I just want you to think. What is it that we’re talking about here, in this chapter of Capital, that we were not talking about so overtly in the first chapter of the book?

[Video Skips]

So, once you’re talking about self-valorizing value and this is what Capital is, you are talking about a dynamic. I want to suggest to you that the real argument against a theory of utility is not on the basis of exchange but on the basis of dynamic. As long as you’re thinking of equilibrium in exchange you could say well this seems arbitrary, why labor and not utility, and then someone will accuse you of right-wing bourgeois deviationism (which is probably the case, but doesn’t actually say anything [laughter] and certainly, intellectually isn’t much of an argument). I’m trying to suggest, that for Marx also, it’s by no means self-evident, as indubitable truth that value is a function of labor and labor-time. That only begins to be clear once the dynamic is introduced, and the next 300-400 pages are about the dynamic. I think (and I could be wrong) it would be a great challenge for anyone to try to theoretically reproduce that dynamic on the basis of a theory of utility. So, if you understand that the real object of this is not exchange, not exploitation, but dynamic, then it also makes sense as to why it is only here that he introduces use-value theories. He doesn’t engage in debate with use-value theories in the first 2 pages – he wouldn’t have had a leg to stand on at that point. Slopping in poor Condillac by the hair isn’t contingent – there’s a reason for it. So, in other words, I’m just trying to reinforce something I’ve said before several times: you cannot just take the first chapter of Capital and take it as being self-evident and argue against other economic theories on the basis of the first chapter alone. You can, but the more you do the more dogmatic you’re going to be. Because the argument isn’t the first chapter. The first chapter is the beginning and I’m slowly trying to unfold the argument.