Towards a Marxian Economics: Chapter 7/32

After a two-month hiatus, I am back considering Paul Krugman and Robin Wells standard economic text and how Marx lines up with neoclassical economics. My argument is that Marx adds nothing, or nearly nothing to neoclassical economics, of which he was among the earliest authors. What he adds, and what nearly every department of economics lacks, is a social and historical framework within which to grasp the validity of their framework and models. This means that most economics departments, including the University of California, Berkeley, where I taught for six years, cannot grasp the social and historical validity of their own models. This is both unfortunate and unnecessary.

Chapter 7 in Krugman and Wells is a no-brainer. It deals with taxes. This is one of the subjects that economists have grasped intuitively since the 18th century. There is absolutely no mystery that, for the individual who is taxed, on the goods for which she is taxed, taxes shift the choices that individual makes, the value she enjoys, and the goods she produces, the volume and the price she charges for these goods.

Marx disagrees with none of these observations. Communities smaller than fifty individuals, in which direct communications and direct assessments are sufficient, need not worry about taxes. Larger than fifty, stories are required to convey the need the community suffers and therefore the demand they make on others. This is simply true. In communities larger than fifty, an assessment story needs to be told and needs to be believed.

The story might be a very simple one. You pay me, or I kill you.

But, more often, it is a story about the gods, or virtue, or the temples, or the poor. The story might be very elaborate, or it may be very simple.

Nevertheless, everyone — everyone — understands that taxes draw upon an individual’s marginal product.

They might also understand that taxes contribute to everyone’s marginal benefit: fewer criminals, fewer vagrants, more beautiful gardens, cleaner water, more secure walls, stronger ramparts, better equipped soldiers. And so on.

The contribution that Marx makes to this discussion is marginal. And, for us, it is relatively non-controversial. Taxes generally reproduce the dominant social formation. They reproduce the conditions that benefit capital accumulation for the communities that have created the taxing authority.

Marx was not so dense as to feel that this always or inevitably led capitalists to oppose taxes. Taxes might actually benefit capitalists, either because those who are taxed are those at the bottom of the income hierarchy, as in Great Britain or the US today, or because the taxing authority invests the taxes in ways that benefit those who are taxed, as in Germany, where taxes finance education, health, and welfare and create an employment pool of superior workers and generate a data base that benefit all investors. All of this fits unproblematically within Marx’s mature social theory.

But Marx was not satisfied with these surface forms of appearance. He was more interested in the dependence of this framework upon labor. Sharing, after all, is a good thing. And taxes sound an awful lot like sharing. But, so long as taxes are drawn upon the marginal product, they are drawn upon MPL, the marginal product of labor. That is, they are drawn upon ΔQ/ΔL, where the efficiency of labor (or capital) invokes a line whose destination is never reached. Taxes are drawn upon the efficiency of labor (or capital) whose goal is never, ever, reached. How much more efficient can labor become? How much more efficient capital? The point is, should this line ever flatten or, God forbid, begin to rise, then the marginal value from which taxes could be drawn is relatively less. And this means that our goal is, by definition, Sisyphean.

Marx is not opposed to taxes. Nor is a he fan. He simply wants to point out that taxes are not the solution. Indeed, given that taxes have been around forever, they are not really the problem either. The problem is that taxes are drawn upon a social form that cannot by definition be satisfied. They feed back into a social form whose aim is not satisfaction.

Taxes might be leveraged instead to reduce the role that labor plays in the marginal product. Taxes might be leveraged to reduce this role to zero. What then? In that case, we might decide how we want our extraordinary wealth to be used by us all, together. How would that work? You know, like democracy. Like res publica, the wealth we hold in common. What?

Anti-Semitic Christian Zionism

It is impossible to read Jewish and Christian biblical literature without bumping into not simply the messianic, but the apocalyptic. And whereas biblical writers are unequivocal in their hope to see the dawn of the messianic age, they are at best ambivalent over the age of the apocalypse, even where, as is often the case, the two are closely linked. I am reminded in this respect of both Walter Benjamin and Rosa Luxemburg, and, to a lesser extent, Theodor Adorno and Max Horkheimer, who saw in their times — the civil wars of the 1920s, fascism in the 1920s and 1930s — not only “disaster triumphant,” but also “divine violence” (Benjamin) and “opportunity” (Luxemburg). There is, in any case, plenty of precedent on the left for seeing in one’s times the two sides of messianism: emancipation and terror, the dawn of God’s community and the apocalypse.

This two-fold, ambivalent, character of the apocalypse has gotten me thinking about the white nationalist, anti-Semitic, Christian Right, which is simultaneously eager to see a radical form of Zionism prevail in Israel and has embraced language about “world Jewry” that is straight from Hitler’s Mein Kampf.

There is a well-known critique of Jewish Zionism in Israel and the United States, which I do not wish to address here. Instead, although the two are related, I want to limit my thoughts to white nationalist, anti-Semitic, Christian Zionism, of the sort pushed by Trump son-in-law Jared Kushner and Trump advisor Stephen Miller. And I want to focus even more narrowly less upon Kushner’s and Miller’s no doubt perverse and twisted reasons for supporting Israel than on white nationalist evangelical Christians, most of whom believe that we are living in the end times, on the eve of Armageddon, the seven year tribulation, and the millennial rule of Christ.

Socially and historically, millennialism appears during times of crisis. This is entirely understandable. Indeed, this is also the case in biblical literature. No matter how many times the gospel writers flag this error — “no one knows the day or hour” (Matthew 24:36) — the Apocalypse of Saint John appears designed to fan the apocalyptic flames; never mind that this text was written almost two millennia ago; never mind that millions of Christians, entirely disregarding Matthew’s warning, have believed themselves to be living during the end times.

It was therefore entirely predictable not only that St John would contribute to the flames, following the destruction of the Temple in Jerusalem in 70 CE, but also that Benjamin, Luxemburg, Adorno, and Horkheimer would make their own contributions in the shadow of fascist terror. These are dark times.

Clearly, however, Hal Lindsey is no Walter Benjamin, Tim LaHaye is no Max Horkheimer. So, aside from the obvious, where do white nationalist, anti-Semitic Christian Zionists differ from their no less hopeful, but also profoundly more critical counterparts?

First, take the reestablishment of Israel as a quasi-monarchical Jewish theocracy. Nothing in science or history or even, truth be told, biblical literature suggests anything even remotely similar to authoritarian Likud domination as somehow “emancipatory,” least of all for Jews. And, yet, in the perverse and twisted minds of white nationalist and Zionist Christians, since the Messiah will return to a restored Temple to rule over a restored Theocratic Kingdom, clearly the secular and overwhelmingly socialist first wave of Zionists in the 1940s and 1950s proved woefully inadequate. Only the militarist, authoritarian, triumphalist Likud party fits the violent image of the Davidic Kingdom formed by white nationalist anti-Semitic Christian Zionists.

Second, white nationalist anti-Semitic Christian Zionists all know how this story ends — not with Likud in charge, but with an equally militaristic and hate-mongering Messiah rapturing all but 10,000 witnesses who serve as God’s protected witnesses through the time of the Great (seven-year) Tribulation at the end of which, Jesus Christ (not Benjamin Netanyahu) will return at the head of a huge army to defeat everyone who is not a born-again believer: yes, including all of the Jews. (Obviously, since no good Jew believes this cock-and-bull story, Likud and its far right accomplices are only all too happy to let white nationalist anti-Semitic Christian Zionists drum up support for Israel in Congress without the least fear that Jesus actually will return and defeat the Jews in a final battle.)

But, third, even though times of social, economic, and political turmoil lend themselves to both apocalyptic fears and messianic hopes, it obviously makes a huge difference how we understand “what comes next.” This could appear to be a simple matter of biblical exegesis. But it is not. Here it must be recognized that Zionism itself is a product of nineteenth century ethno-religious nationalism, not altogether different in form from the multiple ethno-religious nationalisms that sprouted all across Europe following the Napoleonic wars. Each language and race its own nation. Right? Each race its own “natural” religion. Right? Here we might simply recall that the author of one of the most influential pseudo-sociological studies at the turn of the nineteenth century, Max Nordau, author of Entartung (Degeneration), was also a fierce Zionist. Contrast this view with Theodor Adorno’s:

The only philosophy which can be responsibly practised in face of despair is the attempt to contemplate all things as they would present themselves from the standpoint of redemption. Knowledge has no light but that shed on the world by redemption: all else is reconstruction, mere technique. Perspectives must be fashioned that displace and estrange the world, reveal it to be, with its rifts and crevices, as indigent and distorted as it will appear one day in the messianic light. To gain such perspectives without velleity or violence, entirely from felt contact with its objects — this alone is the task of thought. It is the simplest of all things, because the situation calls imperatively for such knowledge, indeed because consummate negativity, once squarely faced, delineates the mirror image of its opposite. But it is also the utterly impossible thing, because it presupposes a standpoint removed, even though by a hair’s breadth, from the scope of existence, whereas we well know that any possible knowledge must not only be first wrested from what is, if it shall hold good, but is also marked, for this very reason, by the same distortion and indigence which it seeks to escape. The more passionately thought denies its conditionality for the sake of the unconditional, the more unconsciously, and so calamitously, it is delivered up to the world. Even its own impossibility it must at last comprehend for the sake of the possible. But beside the demand thus placed on thought, the question of the reality or unreality of redemption itself hardly matters.

T Adorno, Minima Moralia, “Finale.”

For Adorno, writing in the shadow of the Holocaust, the question is not who to exclude, who to defeat, who to battle, or who will rule. For Adorno, the question is the light the messiah sheds on how we think about our world “without velleity or violence.”

It is therefore not a matter of biblical interpretation. Not a matter of exegesis. There are, after all, reams of Davidic texts that celebrate and anticipate the warrior Messiah. At the same time, it is also an established, indisputable, fact that Messianism retreats — and retreats quite dramatically — wherever individuals are well cared for, well educated, well protected, healthy, secure, and loved. Indeed, I would even surmise that one of the underlying reasons white nationalist leaders hate social democracy is that their violent Messianic outlook depends upon a violated and damaged clientele who need desperately to be saved.

From this vantage-point it is clear that while Zionism — the establishment of Theocratic Israel — is the means — the destruction of world Jewry in the final battle is the ultimate goal. But this means that white nationalist Christian Zionist anti-Semitism needs to be understood within the context of the growing fascist movement not simply in the US, but throughout South America and Europe.


I am inspired to return to debt by the gospel reading for today’s proper, Proper 19A, Matthew 18:21-35:

Then Peter came and said to him, “Lord, if another member of the church sins against me, how often should I forgive? As many as seven times?” Jesus said to him, “Not seven times, but, I tell you, seventy-seven times. For this reason the kingdom of heaven may be compared to a king who wished to settle accounts with his slaves. When he began the reckoning, one who owed him ten thousand talents was brought to him; and, as he could not pay, his lord ordered him to be sold, together with his wife and children and all his possessions, and payment to be made. So the slave fell on his knees before him, saying, ‘Have patience with me, and I will pay you everything.’ And out of pity for him, the lord of that slave released him and forgave him the debt. But that same slave, as he went out, came upon one of his fellow slaves who owed him a hundred denarii; and seizing him by the throat, he said, ‘Pay what you owe.’ Then his fellow slave fell down and pleaded with him, ‘Have patience with me, and I will pay you.’ But he refused; then he went and threw him into prison until he would pay the debt. When his fellow slaves saw what had happened, they were greatly distressed, and they went and reported to their lord all that had taken place. Then his lord summoned him and said to him, ‘You wicked slave! I forgave you all that debt because you pleaded with me. Should you not have had mercy on your fellow slave, as I had mercy on you?’ And in anger his lord handed him over to be tortured until he would pay his entire debt. So my heavenly Father will also do to every one of you, if you do not forgive your brother or sister from your heart.”

First, yes, there is something about debt forgiveness in there somewhere, along with a not negligible bit of social stratification — the slave-master relationship — and outright cruelty. He handed him over to be tortured? “So my heavenly Father will also do to every one of you”? Really?

But I am also inspired to return to debt because barely a day goes by without my being accosted by views on debt, often from the pens of economists who ought to know better (e.g., the late David Graeber), that do less to clarify than to obscure the nature of debt under capitalism.

This is largely the fault of left-leaning scholars, some of whom regrettably are Marxian, who have never fully come to terms with the truly revolutionary character of the capitalist social formation. In their view, the essence of debt remains today, as it was prior to the emergence of capitalism, a form of stealing; which, without question, is precisely what it was prior to the emergence of capitalism.

In the capitalist formation, debt rests upon the multiple temporal horizons on which value operates. These multiple horizons were but poorly understood in the era of classical economic thinking, from roughly 1776-1860. The first substantive breakthrough came with Jean-Baptiste Say, who was able to develop a mathematically rigorous model for showing how the values of all goods in any market both shaped, and in turn were shaped by, the values of all other goods. The next substantive breakthrough came with William Stanley Jevons, who was able to show that the values of identical goods in different places and the same good at different times, including the monetary good, could and often did differ substantially. Jevons also showed that the same monetary instrument at the same instant could be credited with different values depending on its own differing possible temporal horizons, i.e., the future value of the assets in which it could be or would be invested.

In this context debt arises from an investor’s calculation that the present value of the monetary good in her possession will have marginally greater value at some specified future date, when a loan is due, than it enjoys in the present; whereas the debtor calculates that her debt in the present will be marginally lower on some specified future date, when her debt is due, than it bears in the present. If we consider all of the multiple debt schedules that every business of any considerable size is juggling simultaneously, never mind any reasonably well-endowed household, it is clear that both lenders and debtors are unceasingly calculating future values with dates of maturity and anticipated values that differ wildly from one another. This is not a defect, as Marx noted, but a feature. The monetary instrument does not measure value in a snapshot, but in a three-dimensional, constantly shifting, montage.

This also, of course, holds for the labor commodity. Yes. Labor is the source of all value. And, yes. The labor commodity is unique insofar as, unlike other commodities, it wants to live and can only do so if it submits to the marginal value of its good, its own labor. (We assume, for the time being, the “Ava,” the lead in Hollywood’s Ex Machina, is a fiction and that machines and intellectual property are not subject to the same compulsion to desire life.) To the multiple product lines of human beings, therefore, there are also multiple schedules based, among other things, on the marginal values of the products investors anticipate winning from their employment. Note, as well, that for Marx, as for other economic thinkers after 1860, the value of the labor commodity is calibrated and recalibrated moment by moment not only in relation to the aggregate values of all human labor product lines, but all commodities in aggregate, such that the values enjoyed by the labor commodity may fluctuate wildly even when the immediate conditions of production (factor costs) remain relatively constant.

Debt under capitalism rests upon a calculation that the macroeconomic ratio ΔQL, the marginal product of labor (MPL), will continue to grow; a calculation that the numerator, the change in quantity, will continue to outpace the change in labor required to produce that change in quantity; and, therefore, that tomorrow’s dollar will continue to be worth more than today’s dollar; and, therefore, that investing that dollar today will generate greater value than that dollar spent today. But what if that does not hold true? What if tomorrow’s dollar is worth less? What if ΔQ, the change in quantity, is not keeping up with ΔL, the change in the labor required to produce that change in quantity? In that case, the future values of today’s goods will be less than their present values. And, as an investor, in that case, it would be foolish for me to lend capital today to make less value tomorrow and it would be foolish for me to borrow capital today to realize less value tomorrow.

As Lord Keynes showed almost a century ago, it is impossible to compel investors to invest money today to make less money tomorrow. This is the definition of bad debt.

But let us look at this debt from the vantage point of the only commodity, the human commodity, eager to maintain its life. Viewed from the vantage point of capital, investing even in this commodity beyond its marginal value would be foolish. To illustrate this point, we can think of three workers. For the first, the reserve wage, the wage below which she will refuse employment, is $200/hour; for the second, the reserve wage is $100/hour; for the third, it is $50/hour. But let us suppose that even at $1/hour an investor anticipates realizing less than $1 in future value. That is to say, what if there is no wage at which an investor anticipates realizing a return? In that case, the value of the labor commodity is zero. In fact, it is less than zero. In order to preserve whatever value investors still enjoy, in that case, they must neither a lender nor a borrower be.

Lord Keynes penned an interesting section in his General Theory in which he contemplates a regulatory solution to this problem:

If I am right in supposing it to be comparatively easy to make capital-goods so abundant that the marginal efficiency of capital is zero, this may be the most sensible way of gradually getting rid of many of the objectionable features of capitalism. For a little reflection will show what enormous social changes would result from a gradual disappearance of a rate of return on accumulated wealth. A man would still be free to accumulate his earned income with a view to spending it at a later date. But his accumulation would not grow. He would simply be in the position of Pope’s father, who, when he retired from business, carried a chest of guineas with him to his villa at Twickenham and met his household expenses from it as required. Though the rentier would disappear, there would still be room, nevertheless, for enterprise and skill in the estimation of prospective yields about which opinions could differ. For the above relates primarily to the pure rate of interest apart from any allowance for risk and the like, and not to the gross yield of assets including the return in respect of risk. Thus unless the pure rate of interest were to be held at a negative figure, there would still be a positive yield to skilled investment in individual assets having a doubtful prospective yield.

JM Keynes, General Theory, Chapter 16.

Notice. Lord Keynes is not suggesting that investors cannot win returns on all investments. They simply cannot win returns on money. They have to invest in stuff. Moreover, they can leave things to their heirs and assigns. But they cannot leave capital goods. The paragraph could well have been written by Thomas Piketty and Immanuel Saez. What the paragraph does not say, and cannot say, is that investors are forbidden from investing in other’s ventures, investments that presumably will mature and yield returns greater than the original investment. In other words, we have not really escaped from the lender-debtor framework with its multiple, differential, temporal horizons.

A second attempt by capitalism to leap over its shadow was proposed by Friedrich von Hayek, who, in 1932, over the signatures of this LSE colleagues, engaged in a highly acrimonious debate with Lord Keynes and his oxbridge colleagues on the pages of the Times of London. Following his mentor, Carl Menger, von Hayek held to a “realist” view of the monetary instrument. Borrowing from the future to pay for the present (i.e., printing money and lowering interest rates) was illegitimate, claimed von Hayek, because it cheated creditors of the real value of their assets in the present). Lord Keynes demurred. First, just as they had for the Great War, so in the Great Depression, public emergency took precedence over the wealth of the rentier; but, second, just as investors in the Great War actually realized the value of their capital, and then some, so they might anticipate healthy returns in from their investment in the present. Lord Keynes and his oxbridge colleagues proposed not monetary realism, but monetary relativism.

Ironically, at the time of this acrimonious exchange, von Hayek was dissertation advisor at LSE to a certain Oscar Lange, the same Oscar Lange who during the war was a professor of economics at the University of Chicago, and who, following World War II, took his dissertation advisor’s monetary realism all they way to Poland. From there monetary realism spread throughout the Comintern as the only acceptable doctrine in truly socialist economies.

On this view, debt was a capitalist invention, a means to steal, not from the rentier, as von Hayek thought, but from the state — and, therefore, by inference, from the workers who were identical to the state. The only challenge was to identify and confer upon all things, including the monetary instrument, their true value.

Perhaps even more ironically, this Austrian School “realist” view of money and debt became a non-negotiable pillar among Eastern European and Soviet economic thinkers, including, not surprisingly, Karl Polanyi, notwithstanding the many points of contention between Polanyi and von Hayek.

So, where did these economic thinkers get it wrong? They got it wrong, let me suggest, right out of the block. Capitalist debt differs fundamentally from debt prior to the emergence of capitalism. That is because capitalist debt, although it expresses itself in the monetary commodity, is in fact grounded in the social valuation of the labor commodity. When in the fourteenth century masters began to measure the value of their workers in equal units of abstract time, the abstract form of value generated in this calculation took on the appearance of a transcendental social form valid for all commodities, no matter their kind. The value of labor was no longer counted a specific practice, e.g., carpentry, that produced a specific good, e.g., furniture. Instead, the practice, carpentry, was translated into a duration of time having value. And the furniture was translated into the value of that time. Translated into value, labor becomes infinitely transportable not only spatially, but temporally. Its value produces a future value that is greater or smaller than its current value. This quasi-independent value, once it has acquired general social validity, appears to be dictated by society in general. Oscar Lange can object that debt is stealing from workers. Friedrich von Hayek can object that debt is stealing from investors. But, as Marx repeatedly noted, the thief here is not the capitalist. The thief is the value form of the commodity or, more specifically, capitalism.

Back to Matthew’s gospel. Why was Jesus so preoccupied with debt forgiveness. Why would his Father even go as far as torturing creditors who failed to forgive debt? What exactly is at stake here?

Let us suppose for the moment that the only debt we should owe anyone is love (Romans 13:8). And let us suppose that debt forgiveness is the essence of divine emancipation. Finally, let us suppose then that we are all debtors and that in the divine economy we all owe this debt. But then let us suppose that this debt was paid. What, the debt to love one another? No. The debt paid was the debt accumulated for our failure to love one another. What exactly is at stake here? Do you claim to be a Christian? Do you claim to be a Christian nation? Is your debt forgiven? So, how are you going to respond to individuals and nations indebted to you?

Occam’s Razor

According to Wikipedia, Occam’s razor is “the problem-solving principle that ‘entities should not be multiplied without necessity.[1][2] The idea is attributed to English Franciscan friar William of Ockham (c. 1287–1347), a scholastic philosopher and theologianwho used a preference for simplicity to defend the idea of divine miracles.”

I have been thinking about Ockham lately on two registers. One is the extravagant, ebullient, proliferation of dogmas required of and by right wing Christian nationalists as “biblical” or “Christian.” The other register involves the things we can say that, while most likely true and reliable, are not theologically required.

Take abortion. Neither pro- nor anti-choice, pro-life and anti-life, are biblical teachings per se. They are not “Christian.” This is not to say that Christians cannot build an argument on one side or the other. But Occam’s razor challenges us: why bother? Is it really necessary to the definition or identity of “Christian,” even “biblical Christian”? Not really.

But now take something like gun control. With all of the killing, violence, some of it quite grizzly and questionable, positively endorsed in biblical texts, there might seem to be no question but that Christians must be pro-violence, grizzly violence — dash the babies on the rocks violence. And, yet, most of us would say: well, no, there are really good, non-theological, non-required, reasons why we should control who owns and how owners use what kinds of guns. Gun control, required by the Bible? Probably not. A good thing? Probably.

One of the tell-tail signs of hypostasy is that it claims divine authority for convictions that are not clearly divine and denies recognition for human convictions that are not prohibited.

This is kind of a definition of white Christian nationalism, of Trump’s unique variety of fascism, which is not the same as German, Italian, or Spanish fascism, but is without question fascist. It claims divine authority for convictions — such as pro-life or gun ownership or police killings of black men — that are clearly not divine and it denies recognition for human convictions — the social franchise, public care for all, respect for all people — that are not prohibited by the Bible.

Occam’s razor. Think about it.

Post-Industrial Society

I have recently come across this relic of a relic, Daniel Bell’s Coming of Post-Industrial Society, which reflects orthodox Marxian social theory’s foregrounding of industrial capitalism back onto itself. If orthodox Marxists were correct and if the driving impetus behind capitalism is industrialization, then post-industrial society, if it is even capitalism at all, is something that requires an entirely different analytical frame, perhaps information or financialization or technology or artificial intelligence.

But the original premise is mistaken. Industry should not be mistaken for the factories and assembly lines, which migrated elsewhere (China, Mexico, Singapore, and Thailand) in the 1970s. Industry should instead be understood as an expression of ΔQ/ΔL, where a change in quantity is increasing more quickly than the change in labor; where, in other words, labor (and/or capital) is industrious. This is how all neoclassical economic theorists, including Marx, understood industry. Factories and assembly lines are but one expression of industry. But so too are organizational efficiencies, informational efficiencies, technological efficiencies, and so on.

But this means that, beginning with Bell, theorists of post-industrial society, insofar as they take the false premise of industrial society as their point of departure, reproduce the theoretical morphology of that premise. It is a relic of a relic.

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.

Stalin’s Science

So stellt sich der Lichteindruck eines Dings auf den Sehnerv nicht als subjektiver Reiz des Sehnervs selbst, sondern als gegenständliche Form eines Dings außerhalb des Auges dar. Aber beim Sehen wird wirklich Licht von einem Ding, dem äußeren Gegenstand, auf ein andres Ding, das Auge, geworfen.

Has anyone else been struck by how terribly awful this analogy is for Marx’s purposes? Was it edited out of later versions, or added in? I cannot tell, but it is definitely not there in the Otto Rühle edition.

Marx appears to be suggesting that there is a direct relationship between objects and eyes, without any social or psychological mediation; and that the active role played by social actors in seeing is akin to the active role aggregate duration plays in the determination of value. That is to say, he appears to be suggesting that, just as aggregate value distorts the objective values of commodities, so . . . in a world governed by (Stalinist) science, objective seeing is realized?

The analogy does not even support Marx’s argument, which is why it was edited out of the Rühle edition?


Use value and value

“The emphasis is on the appearance that pushes a certain type of satisfaction into the foreground. This appearance is the same as the one that unites both aspects of the commodity and masks the structural gap between use-value and exchange-value.”

— The Capitalist Unconscious: Marx and Lacan by Samo Tomsic

This ignores the more than apparent unity and tension immanent to the commodity:

To say that these mutually independent and antithetical processes form an internal unity is to also that their internal unity moves forward through external antitheses. These two processes lack internal independence because they complement each other. Hence, if the assertion of their external independence proceeds to a certain critical point, their unity violently makes itself felt by producing — a crisis. There is an antithesis, immanent in the commodity, between use-value and value, between private labour which must simultaneously manifest itself as directly social labour, and a particular concrete kind of labour which simultaneously counts as merely abstract universal labour, between the conversion of things into persons and the conversion of persons into things; the antithetical phases of the metamorphosis of the commodity are the developed forms of motion of this immanent contradiction. These forms therefore imply the possibility of crises, though no more than the possibility. For the development of this possibility into a reality a whole series of conditions is required, which do not yet even exist from the standpoint of the simple circulation of commodities (Capital I.I.3 §2 (a)).

The two-fold character of the commodity for Marx is not a feature of human ontology but of a specific form of production; not in other words a distortion of an otherwise sound process but the product of that process itself.

Hysteria and the Commodity Form

“The hysteric is, indeed, Freud’s proletarian.”

— The Capitalist Unconscious: Marx and Lacan by Samo Tomsic

Hysteria is enveloped in the same mystery as the proletariat because it might erupt at any moment. But just as the young Marx mistook this possibility as emancipatory, so Freud mistook hysteria as a psychological symptom of a social pathology. In a paper I presented to the Social Theory Workshop at Chicago, I invited the workshop to explore both the formal and analytical similarities Max Weber found between the charismatic religious warrior and religious hysteria, which Weber believed was amplified by women priests (G u G, 6). Weber projected onto ancient warrior religion the two-fold form of the commodity not only in India, the principle object of Gemeinschaft und Gesellschaft, Kapital 6, but also in ancient Judea, Greece, and China. In each case, the sublime was felt to threaten the rigid structures by which Weber felt it was bound. Explicitly Weber settled upon this analytical form following his discovery of Heinrich Rickert’s Grenzen in 1903. But, since it is so pervasive among scholars (see for example Edmund Burke’s Beautiful and Sublime written well before Kant’s Analytik) from the mid-18th century forward, a purely intellectual genealogy misses its broader and deeper social grounding in the two-fold commodity form itself. Hysteria is, from this vantage point (like the charismatic religious warrior) an expression of the abstract value form of the commodity, which both Freud and Weber transhistoricized and universalized as a quasi-medical ontologically fundamental condition. Unlike Freud and Weber, however, by 1867 Marx had come to recognize the social and historical specificity of the proletariat. So, yes, the hysteric is Freud’s proletariat. But Freud had not yet, and would never come to recognize the hysteric’s production and productive role composing the commodity.

Misreading the Proletariat

“Unconscious labour and abstract labour both lack concrete personification and embodiment, since their materiality consists in labour-power, which the discursive apparatus isolates in the living body and which the signifier or value represents independently from the relation to the signified. Because of this lack of concrete embodiment, Marx and Freud produced two ‘fetishisations’, that is, they forced two social personifications of abstract and unconscious labour. Marx could only invent the social symptom by fetishising the proletariat and the industrial reserve army as the point where the contradictions of the capitalist structure become empirical. This, of course, entails the misunderstanding that Marx’s critique descends from the realm of metaphysical abstractions to the concrete analysis of social conditions and to concrete men and women. The fetishisation in question maybe repeats the very same operation as commodity fetishism, but it articulates something that one might call Marx’s hypothesis: the individual who is affected by capitalism is the same as the one who constitutes the subject of value. This clearly inverts the fetishist hypothesis, according to which the subject of capitalism is capital itself. The sameness of the industrial proletariat and of the subject of value implies that the industrial labourer, in a given historic moment, the industrial revolution, embodies the split in the subject of labour and the alienation introduced by the capitalist organisation of production. Their hypothetical sameness does not contradict the fact that the subject of value designates the radical alienation of the individual that embodies it.”

— The Capitalist Unconscious: Marx and Lacan by Samo Tomsic

If, as Tomšič claims, Marx fetishizes the industrial proletariat, then he reproduces the distinction he is eager to overcome. But, the truth is nearly the opposite. In its Freudian-Lacanian form, focus is placed on the subject and subject formation as human subject. Restoring integrity to that subject is central to that project. This meant, for the young Marx, discovering how the capitalist social formation distorted and displaced species being. In this case, the industrial proletariat, the self-creating subject that creates its own value, can only become this subject by recovering the value alienated from it by the ruling capitalist class. But, by 1858 Marx was already uncomfortable with this approach. Marx recognized that its subject remained the subject of capitalism even should capitalism be superseded. That is to say, Marx realized that the industrial proletariat, since it was among capitalism’s most illustrious products, cannot also be the subject of a non-capitalist social formation. In capital, Marx dispenses with the fetish for which Tomšič faults him, identifying the subject of capitalism instead with the abstract value form of capital. At best Marx displays agnosticism over whether or what the subject of a non-capitalist social formation would be. Positively stated, Marx identifies the industrial proletariat as a commodity — an individuated or particularized form of appearance of the abstract value form of the commodity and that abstract form of value — that lends itself to being fetishized: it displays a power that has no body; its body is not equal to the value invested in it. Which is to say, the mature Marx criticizes the young Marx’s fetishizing of the industrial proletariat. Moreover, in that critique, Marx also implicitly finds fault with anthropologies, such as Freud’s, that take the two-fold character of the human being to be ontologically fundamental rather than, as Marx feels, an expression of their commodification. But the human being emancipated from commodification is neither a use-value and value recombined (Marx’s definition of the commodity) nor a use-value without value. Rather would the human beings emancipated from capitalism be shaped by other social forms, generating their own pathologies, and, perhaps, like subjects prior to the emergence of capitalism, still tormented by their contingent relationships to themselves, to others, and to the world.