re value (long reply -- 20+ paras)

Steve.Keen at unsw.EDU.AU Steve.Keen at unsw.EDU.AU
Sat Aug 20 20:55:10 MDT 1994

88** Firstly, a quick apology if several incomplete bits of this
have hit your email--I had some difficulties with my mail system
in composing this **
Dear Chris,
Thank you for an intelligent and challenging posting.

Firstly, let me emphasise that the statement about "not understanding
a word of Capital" was a quote from Marx concerning an interpretation
which argued that he had "dismissed use-value ... from science". Such
an interpretation dominated post-Marxian analysis (in the contributions
of Sweezy, Meek and Dobb), and it is progress at least that many
modern scholars do not so immediately dismiss use-value as they did
(quoting Sweezy, "`Every commodity, Marx wrote, `has a twofold aspect,
that of use-value and exchange-value. Use-value is an expression of
a certain relation between the consumer and the object consumed.
Political economy, on the other hand, is a social science of the
relations between people. It follows that `use-value as such lies
outside the sphere of investigation of political economy."  [Theory
of Capitalist Development, p. 26, citing the Contribution, p. 28]).

You state that I have "totally failed to understand the very
first sentence on the very first page" of Capital, where "Marx
makes totally clear using very precise categories from Hegel's
_Logic_ ... that his intention is to begin his work by
analyzing the two factors of a commodity, use-value (the Substance of
value) and value (exchange value - the Magnitude of value)."

You continue:

"Earlier in this discussion, Steve told us the importance of not
ignoring the Hegelian terminology in Marx and recognizing the _logic_
of Capital. I suggest he heed his own advice and examine the meaning
of Substance and Magnitude in Hegel's _Logic_. If he does he will see
that Substance is the _pure_ qualitative aspect of a thing, whilst
Magnitude is its _pure_ quantitative aspect."

and then, quoting Capital:

"As use-values, commodities are, above all, of different qualities,
but as exchange values they are merely different quantities, and
consequently do not contain an atom of use-value." Page 45.

"While, therefore, with reference to use-value, the labour contained
in a commodity counts only qualitatively, with reference to value it
counts only quantatively, and must first be reduced to human labour
pure and simple. In the former case, it is a question of How and What,
in the latter of How much? How long a time?" Page 52.

You conclude:

"Over and over again, throughout chapter 1, Marx makes clear that he is
using Substance and Magnitude precisely in the Hegelian sense.
Furthermore, it seems to me, he is devoting great effort whilst using
this Hegelian terminology to "discover the rational kernel within the
mystical shell" and turn Hegel "right side up again" as promised on
page 29.

All this is lost on Steve. It is difficult to understand on what real
ground he is opposed to Althusser, since he has in practice heeded his
advice and ignored the "Hegelian" section 1."

Let me begin my reply by noting last comment that Marx promised on p. 29
to turn Hegel "right side up again". I would argue that one thing which
gave delight to Marx was finding deeper dialectical subtleties than
Hegel himself had perceived, and that one of these subtleties was the
dialectic between use-value and exchange-value. You later note that:

"A key aspect of this dialectic concerns the transformation of Quality
into Quantity. Hegel had been the first to clearly grasp that such a
transformation took place and the logic of the transformation. Having
firmly established the qualitative and quantative factors of the
commodity, Marx does show how the qualitative is transformed into the
quantative. *The whole of _Capital_* is about the transformation of
use-values into exchange values. The logic pursued by Marx in grasping
this transformation does follow "the general form of working" of
Hegel's _Logic_."

This makes you believe that:

"It is totally absurd within this context to believe that Marx slipped
a quick transformation of quality into quantity in, so to speak, when
dealing with the commodity labour-power. Such a belief is based on a
complete misunderstanding of what Marx meant by the use-value of

However, I am not arguing that Marx "slipped a quick transformation
of quality into quantity" as a piece of sophistry at this point, but
that he found a "dialectic within the dialectic". In other words, he
found that it was possible to hold that use-value was the Substance
of value and exchange-value the Magnitude of value in general, and
yet find the "contradiction" that in (at least) one instance under
capitalism, the Substance of value was a magnitude, and that using
this contradiction and this contradiction alone, he could explain
surplus value.

This brings me back to the "not understanding the first sentence of
Capital" comment. As I commented once to Gene, I have been very
careful not to stand my entire case on isolated quotes from Marx,
but instead have tried to track the development of his logic. (And
in this sense I find debate by email *very* frustrating, since
in an email post--even a long one like this--I can expose not even
the tip of the iceberg of my supporting evidence). So let's try "the
sentence before the first sentence in Capital": the last paragraph
of the Grundrisse.

Marx's final statement in the Grundrisse manuscript proper is headed
"Value", and is marked "to be brought forward"--as indeed it was,
to the opening words of both the Contribution and Capital. It clearly
presents the dialectic of the commodity as the major intellectual
discovery made by Marx in the course of composing the Grundrisse:

"The first category in which bourgeois wealth presents itself is that of
the commodity. The commodity itself appears as unity of two aspects. It
is use-value, i.e. object of the satisfaction of any system whatever of
human needs. This is its material side, which the most disparate epochs
of production may have in common, and whose examination therefore lies
beyond political economy. Use-value falls within the realm of political
economy as soon as it becomes modified by the modern relations of
production, or as it, in turn, intervenes to modify them... Now how does
use-value become transformed into commodity? Vehicle of exchange value.
Although directly united in the commodity, use-value and exchange value
just as directly split apart. Not only does the exchange value not appear
as determined by the use-value, but rather furthermore, the commodity
only becomes a commodity, only realises itself as exchange value, in so
far as its owner does not relate to it as use-value." (p. 881)

I have tried to establish that there is much more to this juxtaposing
of use-value and exchange-value that simply, as Gene put it, a short-hand
for the fact that the exchange-values produced by labor-power exceed the
exchange-values it needs to reproduce. I could point to numerous
where Marx makes the association Chris denies:

"Steve appears to think that the "itself" at the end of the quotation
from Marx refers to the "use-value" and is therefore saying that the
"use-value" has value. In fact, it is the commodity labour-power that
both has value, as do all commodities, and at the same time is a
source of value greater than the value of itself. No other commodity
possesses this *quality*, which is the "specific use-value", *the
unique quality*, of human labour power. Not an atom of quantity here!"

Instead, I'll point to just three (the following two paragraphs are excerpted
from my thesis):

Marx contrasts his easy ability to derive the source of surplus value with
Ricardo's struggles to do the same. "What the capitalist acquires
through exchange is labour capacity; this is the exchange value which he
pays for. Living labour is the use-value which this exchange value has for
him, and out of this use-value springs the surplus value and the suspension
of exchange as such." (pp. 561-62). Similarly, a throw away reference to
Proudhon shows implicitly the importance Marx placed on deriving a logical
basis for surplus: "the surplus value whi
solved by this fearless thinker simply by
mystifying it, 'all work leaves a surplus', 'I posit it as an axiom'.. The
fact that work goes on beyond necessary labour is transformed by Proudhon
into a mystical quality of lab
s that it is
vital to properly identify what is the exchange value of a commodity and
what is its use-value, at least in the case of the commodity labour power:

"Labour capacity is not = to the living labour which it can do, = to the
quantity of labour which it can get done - this is its use-value. It is
equal to the quantity of labour by means of which it must itself be produced.
The product is thus in fact exchanged not for living labour, but for
objectified labour, labour objectified in labour capacity. Living labour
itself is a use-value possessed by the exchange value [,labour capacity,]
which the possessor of the product [,the capitalist,] has acquired in
trade." (p. 576)
Highlighting two of the phrases above:

"Living labour is the use-value which this exchange value has for

"out of this use-value springs the surplus value and the suspension
of exchange as such"

"Labour capacity is not = to the living labour which it can do, = to the
quantity of labour which it can get done - this is its use-value."

I don't believe that I am being obstruse to see this use-value as
quantitative. This is the "dialectic within the dialectic", that what
is in general qualitative can under the specific circumstances of
capitalist production become quantitative. This "contradiction" has
vast explanatory power, and it is this which I feel is lost from Marx's
analysis by an "insistence" that use-value is, under all circumstances,
qualitative, and that therefore only exchange-value really matters.

Two further instances of the explanatory power of this contradiction
arise in the question of the reduction of skilled labor to unskilled,
and in the question of the price of money. You will find the first of
these discussed in the second of the papers I sent Gene (where I show
that Hilferding in fact solved the dilemma almost a century ago). The
way Marx used this in his monetary analysis is discussed briefly in my

So, far from being un-Hegelian, I would argue that I've found a way in
which Marx again "turned Hegel the right way round", by transcending
dialectically the appearance that use-value was always and everywhere
qualitative. To some extent, it frustrates me that I have spent most
of my time on the "negative" aspects of this discovery, that it
undermines the labor theory of value from within Marx himself, because
there are numerous positive aspects of it--of which the reduction
problem and the monetary aspects are perhaps the main two.

Steve Keen


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