value

Is an Open Access journal article a commodity?

I was recently asked this question and here is my reply based on Marx’s critique of the commodity. Implicit in the question is whether something that does not cost anything (zero price) to consume can still be a commodity.

Marx referred to the ‘commodity’ as “the elementary form of wealth. Our investigation begins accordingly with the analysis of the commodity.” That is, we start with the commodity, but have to unravel how it appears in order to understand the totality of capitalist social relations through which it was produced.

To cut to the chase, a commodity is the product of labour which is the source of value. The commodity is not the source of value. The commodity is a ‘bearer’ for value to meet its equivalent value in the market.

“It is the utility of a thing for human life that turns it into a use-value… Use-value realizes itself only in use or in consumption; use-values form the substantial content of wealth, whatever its social form may be. In the form of society which we are going to examine, they form the substantial bearers at the very same time of exchange-value.”

If a product or service deriving from physical and/or mental labour has utility and is consumed by someone other than its producer, it is a commodity. That is not to say that the owner of the commodity will certainly profit from it, but that it simply has the form of a commodity. Marx says nothing about payment here. It’s about two forms of value expressed by the commodity form. If an open access article is a commodity, according to Marx’s analysis, it must have use value and exchange value.

“Hence, commodities are first of all simply to be considered as values, independent of their exchange-relationship or from the form, in which they appear as exchange-values.”

Note that we can identify something as a commodity before knowing its exchange relationship with something else such as money (money is a universal equivalent in the exchange relationship). The price of something, even if zero, does not tell us whether it is a commodity or not. We must not confuse “price” with “value”. It’s about whether its utility is exchangeable and is destined for exchange. It’s about whether the thing is conceived abstractly as an equivalence of something else. What might that be?

If something can be deemed a commodity prior to knowing its eventual equivalence in exchange, then the commodity-ness of it must be the result of something prior to the act of exchange; that is, what is the source of value? Labour.

“The common social substance which merely manifests itself differently in different use-values, is labour. Commodities as values are nothing but crystallized labour.”

I don’t think it’s easy at first to understand the distinction between use value, exchange value and value, but basically, things can have a use value without an exchange value and therefore only possess use value and not value. Value is the form that the use value and the exchange value take in the commodity. You can’t have value without the thing having an exchange value, but the thing can have use value without an exchange value (i.e. I can bake a cake for myself. It’s use is nourishment and pleasure, but it was not produced for the purpose of exchange, unless I become a baker).

Anyway, a commodity = value. What is the source of that value? It’s labour. Therefore, the substance of a commodity = labour.

“A use-value or good only has a value because labour is objectified or materialized in it.”

What is labour? Well, remember that we’re talking about labour in capitalist societies. We’re not concerned with any trans-historical sense of ‘labour’ as effort of some kind, but rather the nature of labour predominant today.

Marx shows that labour can also be analysed as having two forms: concrete and abstract labour. Concrete labour is the physiological effort that has a use. For example, I can employ intellectual and physical effort to write an article or to teach – that’s a concrete, useful expression of my labour power. Abstract labour is the form of equivalence in which capitalist labour is expressed and measured by time. Together, concrete and abstract labour = capitalist labour.

How are these forms of labour expressed in the life of an academic or anyone else? As use value and exchange value. Marx referred to this discovery of the “twofold character of labour” as “one of the two best points in my book (Capital)”. If labour is expressed as both use value and exchange value, then that, of course, makes it a commodity, too. Marx called it a “peculiar” commodity, because it is the only commodity which is capable of producing more value. How does it produce value? Either by lengthening the amount of time one labours (which has natural limits) or by introducing efficiencies in the labour process (e.g. greater division of labour, metrics, KPIs, new technologies and various innovations which replace the useful function of labour, etc.) Either way, the commodity of labour is able to produce a greater amount of commodities than before and therefore more value than before.

Finally and briefly, how is value created? Well, the capitalist pays the worker less than their labour is worth. That is, the employer does not pay the worker an equivalence of their labour power in money. Everywhere commodities are exchanged for their equivalence in the market except the commodity of labour power. That is exploitation. In this usage, ‘exploitation’ does not refer to the working conditions of the worker (the conditions might be wonderful), but rather the worker/labourer/employee/academic (different labels, same person) is not paid what they are worth to their employer. For the worker, there is a bare minimum that they need to sell their labour power for in order to survive, which differs across time and locale. Anything above that is to the benefit of the worker but to the detriment of their employer who is compelled by competitive markets to create surplus value (i.e. profit).

Competitive forces, driven by improved forms of efficiency and innovation, constantly push the price of the commodity down and therefore require the capitalist to ensure that the commodity of labour power is as low as possible, too, so that they continue to produce surplus value. If they don’t produce surplus value, they can’t invest and improve their product and another capitalist will beat them in the market because they did keep wages down, invest part of the surplus in innovation and lower their price.

In a university, we therefore have to first ask ourselves: what is the source of the institution’s value? The answer, according to Marx, has to be labour. Then we ask, how is that value expressed? Again, according to Marx, it is expressed in the form of commodities. What are those commodities? I think we can say they are the product of teaching and learning (e.g. the student, whose labour power we help improve, the courses we develop, validate and sell to the student), and research (e.g. patents, papers, books, etc.) which are, at some point, paid for in money as the equivalence of the specific commodity. (We often use the word ‘attract’ rather than ‘paid for’ – our work ‘attracts’ research income).

There may not be a direct relationship between the OA paper and money like there is for non-OA articles, but if the OA paper is used by someone to improve their labour, which is being paid for by a wage, then there is an equivalence between the wage which pays the worker to improve their labour power which makes them a better teacher, researcher, etc. which results in them writing more/better papers, reproducing better students, improving the reputation of the institution, attracting more external revenue of one kind or another. The point is, that capital is a social relation and the creation of value is a dynamic social process that can be distilled down to the time it takes for labour to produce a commodity: “socially necessary labour time”.

Up until recently, UK universities haven’t had to worry so much about the exchange value (value) of their commodities, because of significant public subsidy. A university which exists in a non-subsidised, competitive market, will be forced to analyse itself in this way, and we see this in the various techniques of metrics, costing of courses, emphasis on ‘staff development’, and so on. If OA research outputs do not appear as commodities, it’s because the forces of competition and the measure of productivity haven’t fully caught up with their producers yet. These things take time. Look at what’s happened to the Internet over the last two decades.

As we know, the writing of a journal paper is a huge undertaking in terms of labour time. Most academics write them partially outside of their contracted employment time. This is an example of how labour in the university is paid less than its value (‘exploited’). Innovations in publishing (e.g. word processing, ePrints, OJS) also help reduce the labour time of producing an article. In the case of Open Access, the price of the journal article to the reader is zero, but the value of the paper to the academic’s employer is something else. In the UK, the REF is now the main measure of value of journal articles, regardless of their price to the reader. What happens in preparation for the REF? There’s a huge amount of activity in the academic labour market as employers seek to purchase better sources of value prior to the periodic measure of value being undertaken. The REF determines the exchange value (value) of the journal article, not the purchase price. As such, the REF is also one measure of the value of academic labour, the primary source of all value in higher education.

All quotes from: https://www.marxists.org/archive/marx/works/1867-c1/commodity.htm

These chapters are directly relevant, too:

http://www.marxists.org/archive/marx/works/1867-c1/ch06.htm

http://www.marxists.org/archive/marx/works/1867-c1/ch07.htm

An escape from value is an escape from the economic

In some earlier notes, I argued that Jossa’s conception of a Labour Managed Firm (a form of worker co-operative where the workers democratically divide the surplus rather than receive a wage) did not take into account the central, determining role that value plays in controlling the labour process in any organisation. I said that “What Jossa seems to overlook is that ‘value’, not the wage, mediates labour in a capitalist society.” I wrote:

“In the absence of the wage-relation i.e. the LMF, workers sell the products that they created and own, rather than sell their labour for a wage. It seems that for Jossa, the key to the capitalist firm and therefore the ‘anti-capitalist’ LMF, turns on how property relations are organised. For Jossa, freedom from capitalism is equated with owning the means of production and from that “decisive” moment, a transition from the capitalist mode of production to the socialist mode of production occurs (Jossa, 2012b:405). For Jossa, once property relations are re-organised in favour of the worker, such that the wage can be abolished, labour is no longer a commodity and its value is no longer measured in abstract labour time because “work becomes abstract when it is done in exchange for wages.” (Jossa, 2012a: 836)”

I am currently re-reading John Holloway’s book, Crack Capitalism, and in thesis nine, section four, he makes a strong case for the determinate logic of value, which I think speaks directly against Jossa’s argument for LMF co-operatives and to any form of market socialist enterprise. ¹ Below, I quote at length…

“Value is what holds society together under capitalism. It is a force that nobody controls. Capitalism is composed of a huge number of independent units which produce commodities that they sell on the market. The social interconnection between people’s activities is established through the sale and purchase of commodities or, in other words, through the value of the commodities, expressed through money. Value (manifested in money) constitutes the social synthesis in capitalist society, that which holds together the many different, uncoordinated activities. The state presents itself as being the focal point of social cohesion, but in fact the state is dependent on money and can do little to influence its movement.

… Behind money stands value, the all-conquering drive of the cheap commodity, the commodity produced in the least amount of time. This is hard to resist.

… We can occupy factories, set up our alternative systems of production, but we will not be able to match the prices of capitalist commodities, we will not be able to produce things as cheaply and as quickly, and, if we were, we would probably be producing them in just the same way as the capitalists.

Value is incompatible with self-determination, or indeed with any form of conscious determination. Value is the rule of necessary labour time, of the shortest time necessary to produce a commodity. Value is controlled by nobody. Capitalists are capitalists not because they control value, but because they serve it.

How can we resist the rule of the cheap commodity and all that it brings with it, especially when the struggle to survive shapes the lives of so many people in the world? The traditional answer is that the only way is a system of planned production that would be even more efficient than capitalism and would respond to people’s real needs. Traditional socialist analysis contrasts the anarchy of the market with the rationality of central planning, but in practice central planning has never been either rational or central, and it certainly has not been an example of self-determination.

… If there is no central planning, then how do we coordinate our different processes of creation or production, if not through the market? And if we produce for the market, what distinguishes us from any other capitalist enterprise?

Whatever the crack, whatever the form of the struggle to break with capitalism, value lays siege, not just as an external force, but through the corrosive, destructive force of money. Money embodies the rationality of capitalism that stands against the non-sense of rebellion. In capitalism, it is the movement of value that determines what should be done and how it should be done: no human, not even the capitalist class, makes those determinations.

Value attacks as a force operating behind our backs, as the silent power of money, introducing cheap commodities, luring people away in the hope of escaping from poverty (the Zapatistas that migrate to find employment in Cancun, for instance). As market, it also stands against us as a palpable limit to what we can do.

Occupied factories, like the hundreds occupied in Argentina in recent years, face immediately the question of their relation to the market. In general, the factories occupied (or ‘recovered’) were faced with closure before the occupation – closure motivated by the inability of their owners to sell their products on the market. When the workers seize the factory, they are faced with the dilemma of having to produce the same commodities for sale on the market: that is the only way that they can ensure their own physical survival. It may be possible to introduce different working relations within the factory or workplace, to do away with hierarchies or introduce the rotation of tasks; it may be possible to use the workplace after working hours for political meetings or cultural activities, but all such changes (significant though they undoubtedly are) take place within the context of the pressures generated by the need to sell the products as commodities on the market. It may perhaps be possible to change the nature of the commodities produced, to produce things that are more obviously socially beneficial, but this will depend on the skills of the workers and the equipment at their disposal, and any alternative products will, in any case, normally require to be sold as commodities on the market.

The action of value may be very subtle and gradual. Fighting it is much more difficult than throwing stones at the police. Many radical groups have seen producing cooperatively for the market as an alternative to working for a capitalist company, or accepting funds from the state. It is an alternative, but at what point does the market impose itself to create the same sort of pressures as exist in any capitalist enterprise? Is there any escape?

… The point is surely that there is no purity here. In order to create a different world, we need to survive physically and, unless we cultivate our own food from the land (a real possibility in the case of peasant revolutionary groups, but difficult in the cities), this requires some sort of access to money, and money, whether it comes from external funding or crime or some sort of employment, always brings limitations and contradictions with it. The challenge is always to see to what extent we can use money without being used by it, without allowing our activities and our relations to be determined by it.

Funding can perhaps be seen as a particular way of building structures of mutual support. A more direct way of doing this is to construct links of mutual assistance between the different cracks.

… This building of links of mutual support between the different cracks in capitalist domination is sometimes seen in terms of the construction of an alternative economy or an economy of solidarity (economia solidaria). This refers to the construction of an economy that is not dominated by value or the pursuit of profit. This is an important development, but there are problems. First, the notion of an alternative economy already seems to impose a definition on the organisation of activities. If I say ‘No, I will not follow the logic of capital, I shall do something else’, then I do not consider my other-doing to be economic, but rather an escape from the economic. In addition, the notion of an alternative economy or economy of solidarity can easily obscure the fact that our other-doing is an act of rebellion, an against-and-beyond. If this against-ness is overlooked, the alternative economy can become simply a complement to capitalist production. If this is the case, then far from constituting a break in capitalist social relations, it helps to underpin them. Certainly, at the end of the day what we want is a social connection based on trust, solidarity, generosity, gift, in place of the social synthesis of value, but for the moment this can only exist as an assault on value, not as a complement to value production.

Value is the enemy, but it is an invisible enemy, the invisible hand that holds capitalism together and tears the world apart. Value creates a powerful and complex field of tension around all our attempted breaks with capitalism, in which it is difficult to draw clear lines between what is ‘revolutionary’ and what is ‘reformist’. Beyond the state, beyond our personal contradictions, it is value, the power of the market, of the cheap commodity, of money, that threatens all the time to overwhelm our cracks.”

The key to overcoming the determinate logic of value is an understanding of the “twofold character of labour according to whether it is expressed in use-value or exchange-value”, which Marx regarded as one of the two “best points in my book (Capital)” (Marx, Letter to Engels 24th August 1867). Most of Holloway’s Crack Capitalism is about the two-fold character of labour (use value and exchange value of commodities, and the corresponding concrete labour and abstract labour). Further on in the book, he reflects on the thesis on value and proposes a way to counter value:

“Going to the root of things and understanding that root as our own activity is crucial. Think back to the previous discussion of the force of value and the way in which it imposes the social synthesis upon us (thesis 9, 4). That section was very depressing to write and should be depressing to read because we feel that there is no way out. It is when we open up value and ask what it is that produces value and see that it is our own activity, our abstract labour, then the skies begin to open, we begin to see a way forward, simply because it is not a thing (value), but our own activity that is at the centre. There is a world of difference, then, between an analysis that takes value as its pivot and one (such as this) that places the dual character of labour in its centre.”

Contrary to this approach, in dismissing abstract labour as something overcome in the wage-less Labour Managed Firm, Jossa remains trapped by an economistic understanding of social relations and therefore trapped by value. The same can be said for the worker co-operative form in general. It is a transitional organisational form that moves away from attributes of capitalist labour (towards ownership of the means of production, a democratic division of surplus), but does not in itself overcome the determination of value imposed by the competition of the market.

Freedom is not the emancipation of labour, as in Jossa’s argument, but rather the emancipation from the twofold character of labour, a point also made by Postone, Neary, the Krisis group and others.

Comment on abstract labour and the method of abstraction

I tried leaving this as a comment on ‘The Real Movement‘ but for some reason WordPress mangled it so here it is in full. It relates to my previous notes on Marx’s method of “rising from the abstract to the concrete.”

I agree, Heinrich’s conflation of wealth with value isn’t particularly helpful, but looking at his Introduction to capital (p.68), it may be justified:

“Whereas the various commodities in their material existence represent particular use values and their value (“abstract wealth”) can only be imagined, real money is the “material being of abstract wealth” (MECW, 29:358, corrected translation).”

He seems to be quoting Marx (“abstract wealth”) and interpreting it as “value” (seems fair enough to me), of which money is the material form or “being”. From this, abstract labour can be said to be the substance of (abstract) wealth or value.

On another of your points, you say:

“By inventing an additional category distinct from value, called abstract labor, Heinrich does not have to address Marx definition of value.”

I don’t think that Heinrich has invented an additional category. Marx uses the category of ‘abstract labour’ on a number of occasions, as you know. By calling abstract labour the ‘substance’ of value, the relationship is clear. It’s not distinct. It’s the substance of value. It’s “congealed”, “jelly”, a reduction into “a definite quantity of equal, general, undifferentiated, social, abstract labour”; or, “labour pure and simple, abstract labour; absolutely indifferent to its particular specificity.”

Here’s a nice, helpful riff from Marx:

“The coat is value only to the extent that it is the expression, in the form of a thing, of the human labour-power expended in its production and thus insofar as it is a jelly of abstract human labour – abstract labour, because abstraction is made from the definite useful concrete character of the labour contained in it, human labour, because the labour counts here only as expenditure of human labour-power as such.”

He’s saying:

Value ← abstract labour ← concrete labour ← labour ← labour power

So, we have value, which is derived from abstract labour, which is derived from concrete labour, which is derived from labour, which is derived from labour power. In his analysis, Marx starts with the abstract to arrive at the concrete.

Expressed the other way, we have:

Labour power → labour → concrete labour → abstract labour → value

As Marx indicates elsewhere, depending on which way you think it through, abstract labour might be seen as the expression of labour power, or labour power might be seen as the expression of abstract labour: “concrete labour becomes, therefore, the medium for expressing abstract human labour”.

To arrive at something that is “abstract”, is the result of “abstraction” i.e. abstract thinking. It is not just a category of thought but also a method for Marx, “rising from the abstract to the concrete.”

‘Abstract labour’ is not a substance in the sense of a kernel or essence of a thing, it’s a way of articulating something socially active that normally goes unspoken, so that we understand capital better. Because Marx’s approach is historical materialist, thought is understood to be derived from the real experience of life rather than existing independently. In that sense, abstractions are “real abstractions” and the meaning of “abstract labour” is a matter of life and death.

Time, Labour and Social Domination

Notes towards a critique of ‘Labour Managed Firms’

We recommend to the working men to embark in co-operative production rather than in co-operative stores. The latter touch but the surface of the present economical system, the former attacks its groundwork. (Marx, 1866)

My previous post outlined the key points from my reading of Egan and Jossa. In these notes, I reflect critically on the significance of labour-managed co-operatives, which are at the centre of their respective and related arguments. ²

Characteristics of a labour-managed co-operative firm

As previously outlined, Jossa identifies a specific form of producer co-operative as “revolutionary” and the institution of such firms at a national level as the actualisation of socialism. We need to be clear about the nature of this “revolutionary” institutional form, which, among other things, may provide a framework for a new model of co-operative university. In point 12 of my previous post, I encapsulated Jossa’s position as follows:

Labour Managed Firms “are cooperatives which fund themselves with loan capital and consequently draw a clear-cut distinction between incomes from work and incomes from capital or property.” (Jossa, 2005:14)

LMFs “effectively reverse the capital-labour relationship… the moment when cooperatives are prevented from self-financing themselves (i.e., provided they are organised as Labour Managed Firms (LMF) rather than Worker Managed Firms (WMF[/note], the description of producer cooperatives as firms run by workers as ‘their own capitalists’ will no longer apply. And as the LMF reverses the capitalistic relationship between capital and labour, it can without doubt be rated a genuine socialist enterprise in which workers cease acting as their own capitalists.” (Jossa, 2005:15)

Does this mean that the LMF abolishes the duality of concrete and abstract labour determined by capitalist wage labour and therefore the production of value based on the exchange of labour as a commodity? For Jossa, “The commodities manufactured by democratically managed cooperatives cease to be ‘in the first place an external object’ unrelated to our work … and turn into the product of free choices made by workers in association.” (2005:8)

It is worth quoting Jossa (2012a: 824-825) in more detail so that we are clear about the unique form of the Labour Managed Firm (LMF) – remember that the difference between the Worker Managed Firm and the Labour Managed Firm is, according to Jossa, “decisive.” ³

LMFs are publicly owned firms whose managers are elected by the members of the firm in line with democratic procedures.
Personnel can be freely hired and dismissed.
Each self-managed firm is free to distribute its surplus to the members or retain it for capital accumulation.
Given the ban on share issuance, LMFs raise capital resources either by contracting loans with banks or other credit institutions or by issuing bonds that can be freely placed on the market.
The division of labour is still applicable, but as it is governed by the decisions made by workers in individual firms, it will be less strict than in capitalistic firms, where it is framed by capitalists.
The interest that bondholders, the ‘capitalists’ of this system, cash on their loans is determined in accordance with methods consistent with orthodox theory.
Even financial companies may be self-managed by workers.
In Vanek’s approach, LMFs tend to maximise average member incomes; conversely, in later theoretical approaches the aim of an LMF is appropriately said to be maximising benefits of every type for the members through majority resolutions by the firm.
The State is allowed to intervene in the economy with the aim of redressing market malfunctions in full keeping with the rules governing parliamentary democracies in general.
Both for the sake of simplicity and because it is not easy to combine markets with planning it is assumed that public policy will not be centrally planned.

Briefly, an LMF can be termed an entity whose workers hire capital, remunerate it at a pre-fixed rate and apportion the firm’s earnings among themselves.

As a result, the firm models to be set against each other are capitalistic versus self-managed firms. In the former, capitalists or their representatives hire workers, pay them a fixed income (the wage rate) and appropriate the residual (the firm’s profit); in the democratic, cooperative or self-managed firm, workers (or their representatives) ‘hire’ capital (capitalists), remunerate it at a fixed rate of interest and appropriate the residual.

Hence, it is possible to describe democratic firms as non-capitalistic entities that reverse the typical capital–labour relation of capitalistic systems. This reversal is triggered by two main factors: (i) decisions are vested in workers, instead of in capitalists (as is the rule in capitalistic companies); and (ii) capitalists and workers switch roles, in terms that capitalists take the place of workers as fixed income earners and the variable incomes traditionally associated with capitalists are earned by the members of democratic firms.”

Jossa argues that this form of democratic, labour-managed, producer co-operative operates differently to a traditional capitalist firm by turning the relationship between capital and labour on its head.

However, what is crucial in this discussion is that on a number of occasions, Jossa emphasises that in his work “capital is defined in orthodox terms as the bulk of existing production means (not as a social relation).” (Jossa, 2012a: 824; 829; 2012b: 406) This conception of capital “as a material thing” (2012a: 829), and a “tool” (2012b: 413-4) has significant theoretical (and in my view practical) implications and we must start to unravel them with a discussion about labour. If a labour-managed co-operative is so distinctive from a worker-managed co-operative, what is “labour”?

Labour

Like his definition of capital, Jossa’s conception of labour is similarly orthodox. He recognises that when labour power is exchanged for a wage, it becomes a commodity and with that, the product from the socialisation of human creativity becomes the ‘property’ of the capitalist, the owner of the means of production. Although Jossa does not make a clear distinction between labour power and labour, we must assume that he understands labour power to be creative human potential and labour to be the application of that potential by the worker.

Jossa spends some time discussing abstract labour in the context of the labour theory of value where he is specifically concerned with the ‘problem‘, of transforming value into prices. Although he doesn’t define abstract labour in any certain terms, he eventually, and reassuringly, aligns himself with Bonefeld’s analysis. Unfortunately, he doesn’t seem to take very much from Bonefeld.

Jossa’s conviction is that in a labour-managed firm, labour power is not commodified and the duality of concrete and abstract labour (which Marx refers to as one of his two key contributions to political economy) no longer exists. We might expect that a post-capitalist form of labour no longer has the attributes of capitalist labour, as analysed by Marx, but in an attempt to avert “an insoluble contrast between Marxism and orthodox economic science” (2012a: 835), Jossa is willing to dismiss outright Marx’s dialectical method as well as his labour theory of value.

My reflections so far have provided evidence that—thanks to the demonstration that self-managed firms neither use labour power as a commodity nor, as a result, turn concrete labour into abstract labour—the theory of democratic firm management goes to refute the assumed link between the notion of commodity and Hegelian dialectics… Work becomes abstract when it is done in exchange for wages, and as democratic firms use no hired workers, such work as is done in these firms can never be abstract. As a result, the idea that the labour power-commodity identity is a dialectical contradiction is ruled out as a matter of course. (2012a: 836)

What is key here, is that Jossa thinks that abstract labour is determined by the wage. Without the wage, work “can never be abstract.”

Fine & Saad-Filho (2010: 20-21) provide a useful discussion of labour, which can help us understand Jossa’s views, without committing them to sharing his conclusions:

To distinguish the workers from their ability or capacity to work, Marx called the latter labour power, and its performance or application labour. The most important distinguishing feature of capitalism is that labour power becomes a commodity. The capitalist is the purchaser, the worker is the seller, and the price of labour power is the wage. The worker sells labour power to the capitalist, who determines how that labour power should be exercised as labour to produce particular commodities. As a commodity, labour power has a use value, which is the creation of other use values. This property is independent of the particular society in which production takes place. However, in capitalist societies use values are produced for sale and, as such, embody abstract labour time or value. In these societies, the commodity labour power also has the specific use value that it is the source of value when exercised as labour. In this, labour power is unique.

On the other side to the class of workers are the capitalists who control the workers and the product of labour through their command of wage payments and ownership of the tools and raw materials or means of production. This is the key to the property relations specific to capitalism. For the capitalist monopoly of the means of production ties the workers to the wage relation, explained above. If the workers owned or were entitled to use the means of production independently of the wage contract, there would be no need to sell labour power rather than the product on the market and, therefore, no need to submit to capitalist control both during production and outside, in society.

Jossa’s conception of capital and labour under capitalism accords with this description of labour and labour power in terms of the labour-capital property relation. In the passages above, all authors seem to align themselves with a material view of capital as a thing (i.e. property) which capitalists, a class of people who own the means of production, control.

In the absence of the wage-relation i.e. the LMF, workers sell the products that they created and own, rather than sell their labour for a wage. It seems that for Jossa, the key to the capitalist firm and therefore the ‘anti-capitalist’ LMF, turns on how property relations are organised. For Jossa, freedom from capitalism is equated with owning the means of production and from that “decisive” moment, a transition from the capitalist mode of production to the socialist mode of production occurs (Jossa, 2012b:405). For Jossa, once property relations are re-organised in favour of the worker, such that the wage can be abolished, labour is no longer a commodity and its value is no longer measured in abstract labour time because “work becomes abstract when it is done in exchange for wages.” (Jossa, 2012a: 836)

This view of capitalism and its alternative of socialism is common and can be considered the “orthodox” view. However, I think that despite the crucial importance to socialism of labour controlling the means of production, this alone is not a decisive characteristic of a new mode of production. Whereas Jossa argues that in the Worker Managed Firm the workers “are their own capitalists” and in the Labour Managed Firm, “workers cease acting as their own capitalists”, in my view both types of firm continue to operate in the capitalist mode of production, according to the law of value. In the passages quoted above, Jossa and Fine & Saad-Filho posit capital as a material thing and capitalists as controllers of the means of production and therefore of labour. This view is not objectionable and Marx discussed capital and capitalists in these terms, too. However, Marx and other later writers elucidated their conceptualisation of capital in much richer terms that, I think, deny the “decisive” significance of whether a wage is paid or surplus collective income is shared democratically. In both cases, capital and the law of value remains in control of both the workers and the capitalists. I discuss this next.

What is “value”? If Jossa represents an orthodox view of Marxism, other writers such as Clarke, Elson and Postone offer a more radical and in my mind more convincing explanation of value and its role in capitalist society.

Simon Clarke (1979: 4)

The more radical interpretation of the concept of value gave it more than a strictly economic significance. Marx’s concept of value expresses not merely the material foundation of capitalist exploitation but also, and inseparably, its social form. Within Marxist economics this implies that value is not simply a technical coefficient, it implies that the process of production, appropriation and circulation of value is a social process in which quantitative magnitudes are socially determined, in the course of struggles between and within classes . Thus the sum of value expressed in a particular commodity cannot be identified with the quantity of labour embodied in it, for the concept of value refers to the socially necessary labour time embodied, to abstract rather than to concrete labour, and this quantity can only be established when private labours are socially validated through the circulation of commodities and of capital . Thus the concept of value can only be considered in relation to the entire circuit of capital, and cannot be considered in relation to production alone.

Elson (1979: i)

Why is Marx’s theory of value important? It is important because Marx’s theory of value is the foundation of his attempt to understand capitalism in a way that is politically useful to socialists. It is not some small and dispensable part of Marx’s investigation of capital; it constitutes the basis on which that investigation takes place. If we decide to reject that theory, we are at the same time rejecting precisely those tools of analysis which are Marx’s distinctive contribution to socialist thought on the workings of capital. The debate about Marx’s value theory is, in fact, a debate about the appropriate method of analysis, about the validity of the concepts which are specific to, and constitute the method of, historical materialism. The outcome of this debate therefore has implications far beyond the way in which we understand prices and profit in the capitalist economy. It has implications for the question of how we should carry out our empirical investigations today of the international restructuring of capital accumulation; of new forms of class struggle, of the capitalist state; and of the possibilities for socialism. It has implications for the fundamental question of whether what is distinctive about Marx’s method of analysis is really of any use to socialists today.

Postone (1993: 188-90)

The abstract character of the social mediation underlying capitalism is also expressed in the form of wealth dominant in that society. Marx’s “labor theory of value” is not a labor theory of wealth, that is, a theory that seeks to explain the workings of the market and prove the existence of exploitation by arguing that labor, at all times and in all places, is the only social source of wealth. Marx analyzed value as a historically specific form of wealth, which is bound to the historically unique role of labor in capitalism; as a form of wealth, it is also a form of social mediation.

Marx explicitly distinguished value from material wealth. This distinction is crucially important for his analysis. Material wealth is measured by the quantity of products produced and is a function of a number of factors such as knowledge, social organization, and natural conditions, in addition to labor. Value is constituted by human labor-time expenditure alone, according to Marx, and is the dominant form of wealth in capitalism. Whereas material wealth, when it is the dominant form of wealth, is mediated by overt social relations, value is a self-mediating form of wealth.

What Jossa seems to overlook is that ‘value’, not the wage, mediates labour in a capitalist society.

According to Marx, labour in a capitalist society has two aspects: concrete and abstract labour. Concrete, physiological labour, produces an objective form of social wealth i.e. useful things: a chair, for example. Those things are valued because of their utility (‘use value’) and for their ability to be exchanged for other commodities, usually money. In a capitalist society, most things are made in order to be sold for a surplus compared to the total cost of producing them. In other words, almost all useful things are made primarily to be commodities. Therefore, a commodity, has both a ‘use value’ (the expression of its utility), and an ‘exchange value’ (the expression of its value).

I have said that ‘value’ is realised in the act of exchange, as ‘exchange value’, such that the product of labour has a use value and an exchange value. In order to have a value that is realised in the act of exchange, there must be a measure of equivalence so that the exchange value (value) of a commodity can be exchanged for another commodity, regardless of its utility. This is how we exchange the chair commodity for an ‘equivalence’ of the money commodity. This equivalence is an abstraction – not simply a mental, reasoned form of abstraction, but a ‘real abstraction’ where the desire or imperative for producing value creates a relation of abstract equivalence between different commodities. The thing or product, which is real and has ‘use value’, is exchanged in its abstract form i.e. value, expressed as exchange value.

The use value (the useful thing) is the product of concrete, physiological labour. It ‘contains’ that labour. Its exchange value is mediated by value, a real abstraction which is measured by ‘abstract labour’. Abstract labour is the labour ‘contained’ in the product when exchanged as a commodity. As most products are produced so as to be exchanged as commodities, we can say that the products of concrete labour in general, circulate in the exchange process as containers of abstract labour. Strictly speaking, a commodity is therefore nothing but abstract labour. Viewed as a social whole – a local, national and international market of commodity exchange – each commodity is, and expresses, a fraction of the abstract labour undertaken at the level of society as a whole. It is because of this, that like the equivalence of exchange, there is an equivalence of labour: abstract labour. If the equivalence of exchange is measured by the real abstraction of ‘value’, which mediates labour, how is the abstraction of labour measured?

Abstract labour is objectified as ‘value’, which is realised in the moment of commodity exchange. Money is a commodity, the most explicit expression of the equivalence of value. Labour is a commodity, because it is undertaken for money i.e. a wage. The value of abstract labour is socially determined through the equivalence represented by the exchange value. What determines this equivalence changes constantly, based on a number of factors, such as the rate of productivity, the availability of skilled labour and ultimately the time it necessarily takes to produce the commodity using labour broadly understood i.e. mental and manual labour, living human labour and the ‘dead’ labour embodied in machinery. All of these manifestations of labour are related by the time it takes to produce the commodity. What may take living human labour to produce in two weeks, may take the ‘dead labour’ of machinery one minute to produce. Therefore, the value of abstract labour is determined by the ‘socially necessary labour time’ that it takes to produce commodities for exchange. Marx writes: “How, then, is the magnitude of this value to be measured? By means of the quantity of the ‘value-forming substance’, the labour, which it contains. This quantity is measured by its duration, and the labour-time is itself measured on the particular scale of hours, days, etc.”

From this analysis, we can say that the real abstraction of labour time determines value in capitalist society, and that because the majority of things are produced primarily for the purpose of exchange, socially necessary labour time determines the social and private lives of all members of that society. This includes the owners of capital, who themselves are governed by the same imperative: what Postone calls the ‘determinate logic’ of this value-creating process i.e ‘capital’.

A determinate mode of production

According to this view, capitalism is driven by a determinate logic expressed by the ‘commodity form’ (i.e. use value and exchange value). Regardless of whether the worker is paid a wage for the production of the commodity, if the commodity is exchanged (e.g. for money), it has an exchange value that expresses its value and therefore the value of its substance: labour. In capitalist society, value, the substance of which is (abstract) labour, is the dominant form of social wealth. Therefore, whether the worker is paid directly for their labour by the owner of capital (i.e. a ‘wage’), or draws her means of subsistence from the surplus value realised in the exchange process of commodities produced under conditions of production which she, on the face of it, controls; at the point at which the product of her labour, the commodity, is exchanged, its value is determined by the equivalence of socially necessary (abstract) labour time. As such, in the Labour Managed Firm, despite not receiving a conventional ‘wage’, and despite owning the means of production, the worker is “their own capitalist”, and remains dominated by the abstract ‘logic’ of value.

In order to be free from the domination of the logic of value, which mediates labour and therefore all social relations, it is not sufficient to control the specific means of production i.e. a ‘firm’. The problem must be tackled at all levels of society, locally, nationally and internationally, in order to overcome the overwhelming logic of this valorisation process located in both the production and the exchange of commodities, i.e. use values primarily produced for exchange value. Value is the form of social wealth in capitalism. What is the form of wealth ⁴ in a post-capitalist society where the imperative of creating value has been overcome? That is the question we are left with.

It is worth reiterating that the production of value fundamentally determines our lives: it is the organising principle of social relations. We know this because the majority of people need to sell their labour (‘labour power’) in order to survive from one year to the next. In many societies, there are ways of alleviating periods of unemployment (welfare, charity, loans), but this is not a solution to the problem of self-reproduction nor a socially acceptable form of subsistence. In the absence of a formal wage, as in the Labour Managed Firm, the worker still needs to draw an income from the surplus value created by the exchange of products they produced (i.e. the ‘commodity form’ still operates). As such, value and its real abstraction of equivalence between commodities and labour time remains the determinate of social relations.

However, despite our lives being fundamentally determined by the necessity to sell our labour as a commodity, within this overwhelming constraint, there is some contingency due to the dynamic, changing, social and ultimately contradictory nature of capital, expressed as value, the substance of which is human labour. Capital needs labour. Capital must confront labour.

Attacking the groundwork

Marx recognised that producer co-operatives, more so than consumer co-operatives, “attacked the groundwork” of capitalism. My notes above do not contest this, nor are they intend to dismiss the work of Egan, Jossa and the significant benefits of labour-managed co-operative production. Certainly, workers owning and democratically controlling the means of production is an essential part of the transition to socialism and both Jossa and Egan acknowledge that Labour Managed Firms are not the whole answer to achieving a post-capitalist society. Their work is very valuable in attacking the groundwork of capitalism, but in my view while the ownership of the means of production might change, the mode of production remains the same, determined by the law of value. The struggle to achieve a federation of labour-managed co-operatives on a national and international scale is as crucial today as it was in Marx’s time. In undertaking that struggle for the means of production, we must continue to critique the mode of production and recognise that despite the class opposition, both the worker and the capitalist remain unfree, bound to a particular mode of production that requires another strategy of theoretical and practical attack.