A loose end in the sweater of Marxian theory

There’s a passage in Capital that really makes me sweat. It goes like this:

When we bring the products of our labour into relation with each other as values, it is not because we see in these articles the material receptacles of homogeneous human labour. Quite the contrary: whenever, by an exchange, we equate as values our different products, by that very act, we also equate, as human labour, the different kinds of labour expended upon them. We are not aware of this, nevertheless we do it.

Why does this worry me? In epistemological terms, this statement is like the loose end of a sweater which, if pulled, could unravel the whole of Marx’s contribution to materialist social thought.



The predominant tendency in sociology is to treat society as, in one way or another, a product of the human mind. For instance, Anthony Giddens understand society as a ‘virtual order’. This virtual order is comprised of knowledge people have about how to act in the world. So despite the orientation of Giddens’s theory to practice, the constitutive stuff out of which society is assembled is fundamentally ideational: it is knowledge in people’s heads. Society is nothing other than the combination of all of this knowledge.

Likewise Max Weber understands society in terms of the meanings and motivations that, in his view, cause social action; Parsons understands society in terms of shared cultural values and normative expectations; and so on. For many important social theorists, it’s not just that human subjectivity is an important part of social life. Look closely at their theories and you find that subjectivity is precisely the stuff that social life is made of.

We can call this type of approach idealist: not in the sense that it idealizes society (although that sometimes happens) or that it advocates the pursuit of lofty ideals (although that sometimes happens also) but in that we approach the understanding of society first and foremost by investigating the ideas of the people in it.


Marx appears to stand opposed to this tendency. In The German Ideology, the “Thesis on Feuerbach”, the Communist Manifesto, and elsewhere, he and Engels argue explicitly against sociological idealism. They assert that to understand society we must begin by studying not what people think but what we do.

And what we do, first and foremost, is material production. Everything we do, even just sitting and thinking, requires prior acts of material production – for instance, of the food and clothing that allow me to sit and think in comfort, and so on.

So Marx treats society as made up primarily of material social relations – that is, concrete, practical relations among human beings engaged in the collective (and generally alienated and exploitative) labour of production.

This assumes that relations of production exceed the subjectivity of the humans who participate in them. In other words, relations of production have important qualities which which their participants may not intend or even know about – and these nonintentional, nonsubjective qualities exert an important, even decisive, causal influence on what people do and what people think


One of the crucial applications of this approach is Marx’s analysis of exploitation.  This analysis is central to the entire theoretical project of Capital.

Marx argues that in a capitalist system all commodities have a value equal to the amount of socially necessary labour-time required to produce them, that this value is objective and measurable, and that all profit comes from the difference between the value (in this sense) which workers produce and the value required to reproduce their labour-power.

Marx is concerned to show that, independently of what workers or even capitalists themselves may think, capitalism depends on exploitation, understood as an objective process in which workers are paid less than the full value of what they produce.

In other words, exploitation is not part of any ‘virtual order’ in Giddens’s sense because, even though it is entirely a product of human action, it happens and has causal effects whether or not any individual human being intends for it to happen or even knows about it.

Let’s look at this a little more closely. Exploitation is the appropriate of surplus value.  But what is value? Where and how does value exist?

Marx defines value as quantity, measured in time, of the socially necessary labour-power expended in producing a commodity. Note that this is not a description of where value comes from; it is a definition of what value is, of what the word “value” means when Marx uses it.

So given this definition, we might be tempted to assume that value is a universal, objective feature of all products of human labour. After all, any thing made by people required some definite amount and quality of labour to produce, in the same sense that it requires some definite amounts and qualities of matter and energy to produce.

But Marx does not take this route, not exactly.


For one thing, only commodities — i.e., only things that are exchanged for other things — have value in the Marxian sense.  Use-values that are not exchanged do not have value per se. So value is not a universal property of all products of human labour.

Furthermore, in his discussion of commodity fetishism, Marx writes that

when we bring the products of our labour into relation with each other as values, it is not because we see in these articles the material receptacles of homogeneous human labour. Quite the contrary: whenever, by an exchange, we equate as values our different products, by that very act, we also equate, as human labour, the different kinds of labour expended upon them. We are not aware of this, nevertheless we do it.

At face value this statement seems to reinforce Marx’s anti-idealism. We don’t intend to relate commodities to each other as values, i.e. as definite quantities of socially necessary labour-time; this just happens because of the relation of commodity exchange.

Except, it happens because we equate as values our different products. The act of equating differing products as values is a subjectively meaningful act.

If we observe the transfer of two sets of objects between two human beings on a purely behavioural level, we do not perceive an exchange of values, just a movement of bodies through space. Only the subjective attribution of the quality of value makes this event a “sale” and a “purchase”. For that matter, the relation of “ownership” involves an element of subjective meaning irreducible to pure behaviour.

In the little story Marx tells about exchange in this passage, the actors involved in an exchange “equate as values our different products”. But where does that equation take place? What makes the simultaneous transfer of two physical objects into an equation of values?


The simplest answer is that that equation takes place in the minds of the participants, that the equation is a perception shared by them.

Why this? Let’s eliminate some alternative possibilities.

  1. Value is not a physical property of the two products in themselves. The structure of the matter-energy which makes up the two products does not change because of the act of exchange.
  2. Value is not, in Marx’s theory, a metaphysical essence. That is to say, value is not a property which pertains to objects independently of their physical composition. We know this because the materialist method of history outlined in The German Ideology rejects metaphysical essentialism in principle.

Value therefore must be physical, i.e. material,  quality of commodities, but one which is located somewhere other than in the objects themselves. That is, value must be a quality which is attached to commodities through their relation to some other part of the natural universe. But what part?

The obvious candidate is the human mind.  Value is a meaning attributed to objects by actors who exchange them.  Therefore, value would exist, physically speaking, in the minds of human beings, as a shared or intersubjective meaning.

This has profound consequences.


In Marx’s analysis, according to his use of the labour theory of value, the entire capitalist economy is  nothing other than a system of the circulation of values. All of the formal properties, exigencies, nomothetic propositions which Marx derives are based on the rule of the conservation in exchange of value, and hence on a concept of value in which the objective equivalency of differing types of labour is established through the exchange of products.

If the value of labour is fundamentally immanent to the domain of human intersubjectivity ,then the entire capitalist economy as Marx theorizes it is located within Giddens’s “virtual order”, i.e. the realm of practically oriented ideation.

This would make exploitation, at most, an unintended consequence of intentional action. Disaster.


Why disaster? Exploitation would no longer appear as a true counterfactual, as a material mechanism which operates independently of human intentionality. Rather it would appear only as an unrecognized implication of the meanings which we attribute to things.

Capital itself would no longer appear as a theoretical work property so called, and merely as an exceptionally thick description of one form of human social action.

Marx’s ‘materialist method of history’ would appear materialist only in the sense that it privileges the material as the primary object of concern for human subjectivity, rather than treating the material as efficacious in itself and as  that which produces human subjectivity.

Marx’s attempt to invert idealist social theory, and stand on its feet that which had precariously on its head, would have failed.

And this would leave us without any systematic materialist social theory from which to begin theorizing the immense project of rebuilding the social order from the roots up.


I think there is another alternative, however. (Of course. I would, wouldn’t I?)

The equivalency established between two products exchanged as commodities, and hence the value (defined as congealed expended socially necessary labour-power) of commodities themselves, may reside not in the minds of the participants to that exchange – or, more precisely, in the intersubjective relation between – but in the mind of the observer – or, more precisely, in the relation between observer and observed. That is to say, it’s not societal members but Marx himself who finds in the exchange of products an equalization of the differing labours expended in their production.

In other words, value is a formal concept. It is a concept developed by a would-be-scientific observer to designate an observed pattern.

This pattern may or may not be present to mind for the participants in the action in question. That is to say, the formal concept is not validated by its correspondence, or invalidated by its non-correspondence, with the subjective intentions of the people to whose actions it is applied.

Rather, a formal concept is validated or invalidated by the epistemological service it provides to the would-be-scientific observer. It is validated by the work that it does.


This service, of course, depends on the purpose of the would-be-scientist. Many formal concepts are simply heuristic: they help to simplify a complex phenomenon with only a minimal loss of meaning or detail. Some are predictive: they help to predict (or retrodict) unknown phenomena from a knowledge of others.

Both of these goals are practical; they relate to epistemological practice. But some formal concepts have a more broadly practical goal: they help to intervene in the phenomena to which they refer, to render knowable the otherwise unknown consequences of socially involved action.

Of course, whenever we evaluate Marx’s concepts, we do so from the perspective of the eleventh thesis on Feuerbach:

The philosophers have only interpreted the world, in various ways; the point is to change it.

So Marx’s labour theory of value, and his analysis of exploitation, was intended by him not simply to describe the world but to assist in changing it. And this is also what we want from it as well.

The concept of exploitation, and with it Marx’s entire theoretical project, stands or falls with the revolution.

5 thoughts on “A loose end in the sweater of Marxian theory

  1. I’m no Marx scholar, but I want to have a go at this anyway. I apologize for any mental pain caused by me going off on something obviously dumb; I assure you it’s unintentional.

    Value can be defined without an observer as neither material nor subjective by analogy with information theory. You can observe the exchange of data, but the information content of data is really determined by what sort of decisions the data can engender. In simple terms, 180,000 times the letter a or Hamlet is exactly the same amount of data, but reading Hamlet can change your life because it contains more information. So the exchange of an object is an exchange of value if it changes the life of someone: clearly for food, the alternative is to starve, so food has value; if somone gets a TV, and starts watching TV as a result, the TV had value; if someone gets a TV, puts it out on the porch and henceforth ignores it, not so much. Of course Marx predates Shannon by quite a bit.

    The workers who produce the television, package it, sell it and ship it also change their life: instead of doing something “natural”, they work in alienating conditions to make money to be able to afford a TV themselves. They give up value (quality of life) to receive some other value (a TV), but since the capitalist makes profit for providing the capital without actually changing his life at all himself, the time all of the workers in the production chain of the TV put in to produce a TV is less than they need to put in to receive one (because they need to make a TV for the capitalist for free). Because Marx views the contribution of the capitalist as inferior of nonexistent, this state of affairs is unfair and exploitative. (Real socialism replaced the capitalist with the bureaucrat.)


    • That’s very interesting. It seems to work. I’m not sure whether it’s congruent with Marx’s conceptualization or is simply an alternative to it (sounds like the latter, at first glance), but it’s exciting either way. I’ll have to look up Shannon’s work – thanks!


  2. I’ll have to bookmark this entry, a textbook I have on the intellectual history of economic thinking that takes a Marxist theoretical bent tries to shoehorn every concept in the book into an empiricist “labor theory of value” lens, but also argues that there are no satisfactory proofs that value is ever absolute. I also like the book “Everyday Corruption and the State” for clues to why no matter where you work, no matter what the time of day, your sense of value is very fuzzy. Informal credit systems analysis, like credit theories inclusive of microcredit models and social networks as credit systems, sheds some light on the apparent innumeracy of expressed value theory in everyday life. People don’t want a reductionist price theory or an ultimatum game they could lose in the market place – they use a lot of indirection socially to negotiate credit-worthiness by way of social distance, and use metaphor and sales culture tricks just as heavily in their close relationships as when they are selling used cars off a lot. Doctors try to sell patients on a treatment plan without explaining all the diagnostics or the reasons for expecting recovery one way rather than another in similar ways (to used car salesmen), which probably contributes to skepticism of biomedicine, just from mistrust of how information asymmetry can be used exploitatively, and often is.


  3. I think that your proposed solution to the problem you perceive in the law of value is erudite and sophisticated in the extreme, indeed ingenious. But I think it involves a level of nominalism that risks doing major violence to Marx’s materialism. Under your terms, the law of value, and indeed, value itself, would be reduced to nothing more than fictions- scientifically useful fictions, to be sure, but fictions nonetheless. Ironically, this solution jumps out of one fire into another, much bigger one: where value was once a mostly objective phenomenon that, in the course of its movements, had to pass through an implicit mental calculus along the way, as a theoretical fiction it becomes a *completely* subjective phenomenon, residing entirely in the mind- this time, of the observer, if not the participants.

    No Marxist myself, but I don’t think that the theory of value bursts into flames the minute it comes into contact with the subject. Bear in mind that the moment of mental calculation under discussion is a distal link in the causal chain, a mere intermediate mechanism, and not the prime mover.What’s important is that “exploitation”, like language, has an analytically independent structure whose warp and woof cannot be causally reduced to the subjective; the circulation of value need not be conceived in terms of pure psychic automatism and in any case cannot be.

    Your own monist conception of the ontological indivisibility of social stuff makes the distinction between the “material” and “virtual” order irrelevant. Under monism, the distinction between “material” and “ideal” as it stands is meaningless, and would be rigorously recast as “economic production” and “ideology”.

    I also think that, in order to avoid absurdity, Marxist propositions such as “the social being of men determines their consciousness” need to be strictly qualified. There is no moment in which the human being can be said to initially carry out practical activities in some sort of complete mental blackout and acquire the capacity to think only later. Marx’s account (in The German Ideology) of the “moments” in the development of consciousness is a scientifically worthless ruin unless it is understood as functional as opposed to historical (i.e. it should be taken as an inventory of the features that the faculty of consciousness of a being that must actively engage with a social and physical environment must have in order to exist as such, and not as account of a putative sequence in which those features were acquired, one by one).

    None of this is to say that practice always entails step-by-step rationalistic cogitation a la Descartes. But the premise and rationale of action theory is that practical being-in-the-world is distinct from both Cartesian rationalism and psychic automatism; practical action can be resolved into neither ghost nor machine.



    • Interesting. I agree with you in general. I’ll have to think more about this because part of me wants to defend my formulation against the charge of idealism. Intuitively I feel there’s something deeper going on here in terms of the relations among subjects, objects, and scientific explanations, but I’ll need to work it out.


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