Class as Agency

If the conditions of production, or the productivity of labour, remain constant, the same amount of social labour-time must be expended on the reproduction of a quarter of wheat, both before and after the change in price. This situation is not dependent either on the will of the wheat producer or on that of the owners of the other commodities. The magnitude of the value of a commodity therefore expresses a necessary relation to social labour-time which is inherent in the process by which its value is created. With the transformation of relation appears as the exchange-ratio between a single commodity and the money commodity which exists outside it. This relation, however, may express both the magnitude of value of the commodity and the greater or lesser quantity of money for which it can be sold under the given circumstances. The possibility, therefore, of a quantitative incongruity between price and magnitude of value, i.e. the possibility that the price may diverge from the magnitude of value, is inherent in the price-form itself. This is not a defect, but, on the contrary, it makes this form the adequate one for a mode of production whose laws can only assert themselves as blindly operating averages between constant irregularities.

Marx, Capital, I.1.3 §1

The apparent inconsistency in Marx’s mature social theory between, on the one hand, class analysis, and, on the other, value analysis, is clarified when Marx brings the two together explicitly in his discussion of value. In value theory, value is held to arise out of aggregate social labor-time across a market, so that, for example, the value of a laborer in one common market is subject not to her specific time spent producing a specific product, but to the average time spent by members of the shared labor market at a specific wage. Because we purchase canned pears from packaged in Thailand, the total cost of producing the same pears in the US cannot be greater than the total cost of producing those pears domestically. Neither the worker, nor the investor, is has mastery over the market. “This situation is not dependent either on the will of the wheat producer or on that of the owners of the other commodities. The magnitude of the value of a commodity therefore expresses a necessary relation to social labour-time which is inherent in the process by which its value is created.” From this vantage point, the investors or “owners” are as little in charge of value as the workers or “producers.”

When viewed across markets, this also means that the value of each commodity is independent of from its immediate conditions of production. “With the transformation of relation appears as the exchange-ratio between a single commodity and the money commodity which exists outside it. This relation, however, may express both the magnitude of value of the commodity and the greater or lesser quantity of money for which it can be sold under the given circumstances. The possibility, therefore, of a quantitative incongruity between price and magnitude of value, i.e. the possibility that the price may diverge from the magnitude of value, is inherent in the price-form itself.” Insofar as money is itself a commodity whose value is relative to the aggregate value of all commodities within a market, an investor might — and often does — misjudge the costs of production, which, as Marx notes, are out of her hands. The value form is subject to market-wide conditions. So, too, is the price form. With this difference: consider if Walgreen’s purchases Vitamin-C wholesale when the market is at its peak, estimating that it can sell these at a relatively high retail price; but when Covid-19 strikes, not only can Walgreen’s no longer clear its inventory at that price, but the Vitamin-C producer, who relied upon booming sales, now cannot sell her product to outlets.

Oskar Lange, Branko Horvat, and a host of other Comintern “market socialism” advocates took the absence of planning to be the cause for this “quantitative incongruity between price and magnitude of value.” But that is not at all what Marx — or, indeed, what any neoclassical economist — argued. The incongruity is “inherent in the price-form itself.” “Market socialism” is an oxymoron not because markets are inconsistent with socialism, but because markets are necessarily capitalism. That is to say, once publics establish the prices of commodities publicly, deliberately, rationally, they no longer function as markets because, and insofar as, relative abstract value is an essential feature of the market. “This is not a defect, but, on the contrary, it makes this form the adequate one for a mode of production whose laws can only assert themselves as blindly operating averages between constant irregularities.

What deserves special mention here is that investors are just as incapable of controlling this process as workers or producers.

This is not to suggest either than markets should not be deliberately, publicly, mediated or that, politically, it would not, in theory, be feasible for publics to so regulate markets. It is to suggest, however, that the magic worked by markets cannot be won through planning. Either we operate under the assumption of ΔQ/ΔL, call it what you like, call it “market socialism,” it is still capitalist; or, we scrap ΔQ/ΔL and we elect to mediate social relations in some other manner. But, in a market economy, the owner enjoys as much agency as the worker, which is to say very little.

Leave a Reply

Your email address will not be published. Required fields are marked *