Capitalism and the Value Form

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The following post is the third installment in an ongoing series on some of the key ideas in Marx’s thought. Part one can be found here. The second part is linked here. The last two parts will follow as they are completed: “What is Capital?” and, lastly, “Communism”.

Capitalist Society and the Value Form

Marx begins Capital by raising the question of wealth: “The wealth of societies in which the capitalist mode of production prevails appears as an ‘immense collection of commodities’; the individual commodity appears as its elementary form” (125). In putting forward the contradiction between increased productivity of labor and the division of labor, Marx was able to show that as wealth grows so does exploitation and misery. It is only with capitalism that this contradiction reaches its limit. In no other form of society has the concentration and accumulation of productive powers been so great and exploitation so immense. In capitalism, as Marx writes elsewhere, “the wretchedness of the worker is in inverse proportion to the power and magnitude of his production” (“Estranged Labor”).

So far we have been discussing Marx’s ideas for all societies in general. But Marx’s aim was to understand what was particular about capitalist society, a form of production that was, from a world perspective, only embryonic in his own day. For Marx capitalist society is characterized by the value form, a form of existence and social relations unique in human history. What follows is an attempt to summarize and synthesize this concept.

The Dual Character of Labor

For Marx, central to understanding the organization of capitalist society is the dual character of the commodity. He argues in Capital that one side of the commodity is defined by how it is used, or “use-value.” He defines use by how the commodity “satisfies human needs of whatever kind” (125). We have seen how the idea of “human needs” plays an important role in Marx’s thought. Throughout history human beings have produced uses to satisfy and express their needs, giving rise to particular forms of society.

When looked at as a use the commodity is indistinguishable from the process of fulfilling needs as a general characteristic of all human societies. As such, commodities “constitute the material content of wealth, whatever its social form may be” (Capital, 126). However, the production of uses takes, or, more precisely, cannot be separated from a specific form in each society or historical epoch. In capitalist society, Marx argues, the production of uses has a dual character that consists of its use and its exchange value. As he writes in Capital: “In the form of society to be considered here [uses] are also the material bearers of exchange value” (126).

Marx defines exchange-value as “the quantitative relation, the proportion, in which use-values of one kind exchange for use-values of another kind” (Capital, 126). This type of exchange is necessary because of the division of labor in capitalist society, which is composed of separate workers producing privately and selling their labor power to produce single uses. He writes:

The totality of heterogeneous use-values or physical commodities reflects a totality of similarly heterogeneous forms of useful labour, which differ in order, genus, species and variety; in short, a social division of labour. This division of labour is a necessary condition for commodity production….Only the products of mutually independent acts of labour, performed in isolation, can confront each other as commodities. (Capital, 132)

The form of the production of uses, or mode of production, described here is historically unprecedented. Marx characterizes these “acts of labour” as “mutually independent” and “isolated” from each other. The necessary association of labor is not simply one of alienation between workers but within the workers. Forced into the production of single uses, performing one task cut off from all others, the worker is separated from all other needs and activity. Since the isolated workers cannot directly produce for their needs they must exchange to have them fulfilled. Marx draws the conclusion that the division of labor in capitalist society is the most radical and most complete in human history.

Marx therefore distinguishes the production of the commodity from the production of uses in all previous societies. He writes, “A thing can be useful, and a product of human labour, without being a commodity. He who satisfies his own need with the product of labour admittedly creates use-values, but not commodities. In order to produce the latter, he must not only produce use-values, but use-values for others” (Capital, 131). The “heterogeneous” labors that constitute the totality of all social relations amount to isolated activities producing single uses for specific needs of all other workers, but not the individual workers’ needs. That is wealth – the totality of productive powers.

Marx begins capital with the simple exchange of commodities because he is focused on the particular form of relations between people in capitalist society. The commodity, as a use and exchange, is therefore not a thing, but a social relation between workers. For Marx social relations are relations of labor and the commodity is the form of labor in capitalist society. Marx argues that the dual character of the commodity is also, at the same time, the dual character of labor in capitalist society. Wealth, as productive powers, is simultaneously a use and an exchange value. This dual character of labor, and therefore wealth, fundamentally defines the problem of capitalist society, which Marx captures in the concept of “value”.

Social Relations and Value

Marx asks how can these alienated, isolated individuals, producing a single use – reproducing themselves as a one-sided activity – be interrelated and thereby produce the many kinds of uses necessary for their reproduction as a whole? He identifies labor—the “metabolic” process—as the “common element” that makes the exchange of varied uses possible.

As we have seen, human beings “produce their means of subsistence” collectively. All labor is, by definition, social labor. Since all “things” are, in fact, relations, each individual labor is nothing but a determinate expression of the total labor. The “mode of production” is, as Marx puts it in The German Ideology, necessarily a “mode of co-operation.” Through this cooperation people come into being as social individuals, existing as relations of “mutual interdependence of the individuals among whom the labour is divided.” Consciousness is constituted by “the necessity of associating with the individuals around” us. Society, therefore, exists as the relations of the interdependent self-activity of its members. The “common element” Marx speaks of in Capital is cooperative labor.

Since, according to Marx, common labor is broken up into separate, isolated activities, the association between these activities—necessary for the reproduction of labor—takes an indirect form. In pre-capitalist societies cooperative labor had more direct forms in terms of relations between people and the connection between labor and the means of production. In capitalist society, on the other hand, cooperative labor is organized indirectly, in which individuals are formally separated from each other and the means of production. Given the division of labor, the workers become separated from other kinds of labor necessary to fulfill their many-sided needs. As a result, although common labor is a precondition for human existence and therefore any form of exchange, cooperative labor takes a completely indirect form in capitalism.

However, there has to be direct exchange of labor or else there could be no human life at all. How does this exchange work in capitalism? Marx says, “the exchange relation of commodities is characterized precisely by its abstraction from their use-values” in which the use loses its “material constituents and forms that make it a use-value” (Capital, 127-128). Though it is the concrete and specific qualities of uses that people need, they can only be obtained indirectly because labor is separated from all other kinds of labor, as well as the means of labor. In precapitalist societies labor continued to have some direct access to the means of production, such as peasants and artisans. Yet in capitalism there is a class – the proletariat – that has no such thing. Because of this complete separation, labor in capitalist society has no access to the uses it needs to live. So in the process of getting a use, “All its sensuous characteristics,” Marx writes, “are extinguished.” He continues:

Nor is [the use] any longer the product of the labour of the joiner, the mason or the spinner, or of any other particular kind of productive labour. With the disappearance of the useful character of the products of labour, the useful character of the kinds of labour embodied in them also disappears; this in turn entails the disappearance of the different concrete forms of labour. They can no longer be distinguished, but are all together reduced to the same kind of labour, human labour in the abstract. Let us now look at the residue of the products of labour. There is nothing left of them in each case but the same phantom-like objectivity; they are merely congealed quantities of homogenous human labour, i.e. of human labour-power expended without regard to the form of its expenditure. All these things now tell us is that human labour-power has been expended to produce them, human labour is accumulated in them. As crystals of this social substance, which is common to them all, they are values—commodity values. (Capital, 128)

Concrete labor is transformed into “human labour in the abstract.” Marx is arguing that the relations of labor in capitalism are abstract. We need to take a step back again and think about what this means.

Human activity is social labor. Since people are constituted by social cooperation the means of production unites the individual labors into a whole. However, in capitalism there is only an indirect relation between labor and the means of labor, individual labor, as well as labor and the uses it creates and needs. Marx defines this situation as abstract because there is no direct connection among and between all three of these relations. This is the value form.

Despite labor’s many-sided needs, it can only express those needs through a process of exchange that extinguishes the concreteness of those needs. Instead, exchange becomes a process to achieve the commensurable exchange of abstract human labor. Thus the satisfaction of needs and the relations between the labors that produce those needs are mediated by the relationship of abstract labor.

Since the relations in capitalism are abstract, the activity of living labor is transformed into what seems to be a “substance,” taking on the characteristics of being “congealed.” Although value is a relation and not a thing, it produces its own content, a substance called value, which is “human labour…objectified” (Capital, 129). The alienation of labor—objectification—is expressed in the value relation and transformed into a substance called value. Individuals do not exchange or associate with each other directly or concretely. Instead, they do so through and as value. Social relations take on a homogenous quality. As a “substance,” value is the means of exchange for the uses that human beings need. It is through exchange value – the other side of the commodity – that labors directly relate with each other. Exchange value is the value of the individual use, whose “substance” is value, or alienated, abstract labor. Social labor is mediated by concretely by exchange value.

The value relation arises from the social division of labor in capitalist society. Value is the unity or relation of all individual labors that are at the same time separate from each other because of the division of labor. From the standpoint of value, all labor is “homogeneous,” interchangeable, and therefore alienated from and appearing external to the concrete labor of any one individual. Value therefore becomes a “phantom-like objectivity” that governs relations in capitalist society (Capital, 128).

Value is the “objectivity” of the total social labor existing in the abstract. As Marx puts it, the “total labour-power of society, which is manifested in the values of the world of commodities, [merely] counts here as one homogenous mass of human labour-power” (Capital, 129). This relation gives rise to a quantitative relation, which characterizes the qualitative or concrete social relations in capitalist society.

The concrete, sensuous activity of labor is reduced to an abstraction. Specific concrete labors and their qualities are constantly turned into or exist as abstract labor in value. The dialectic of concrete and abstract labor further articulates the dual character of labor. It is the relation between living labor and objectified labor, where sensuous activity becomes its own negation in the guise of abstract labor. The specific quality of living needs is transformed into a merely general quantity of value. And all relations in capitalist society are reduced to an abstract quantity. However, this abstractness comes to define the qualitative dimensions of everyday life in capitalism. This inversion will be discussed in a later section on the “commodity fetish.”

The value form expresses social labor in capitalist society. Abstract labor therefore arises directly from the complete separation of labor from the means of production, and the division of labor in capitalist society. Abstract labor represents the standpoint of the totality of labor, the combined productive powers of labor alienated from itself. Absolutely separated and yet bound together in capitalist society, the dialectical process of mutual self-activity must be conducted through the form of value, which exists abstractly as a “totality of many determinations and relations of concrete labor (Grundrisse, 101).

Socially Necessary Labor Time

Value is a social relation, but it has a content. Value appears, or exists in society, as a thing. It seems to reside within the commodity or, more precisely, appears as the same as a use. The use and the value become self-identical. This “thing” defines all the relations in capitalist society in a qualitative sense. It has its own concrete, sensuous characteristics whose objectivity governs the texture of everyday lives. More will be said about this in a later section on the commodity fetish.

In order for this thing or substance to be exchanged, it must be measured. Value exists as specific exchange values – the quantity or magnitude of value of a specific use. But how is this magnitude determined? If abstract labor is the “substance” of value, its magnitude or quantity allows for the exchange of one use for another.

Marx calls this quantitative relation “socially necessary labor time,” which is the “labour-time required to produce any use-value under the conditions of production normal for a given society and with the average degree of skill and intensity of labour prevalent in that society” (Capital, 129). In capitalist society, socially necessary labor time is the measurement of the abstract mass of total labor. Social labor in capitalism is expressed, or “measured,” as labor time. Life is reduced to simple quantities of time without regard to its quality, and thereby opening it up to unlimited exploitation. The difference between value as a quality or substance, and exchange value as a quantity or measurement of that substance, is reproduced in the relationship between abstract labor and socially necessary labor time that daily shapes our lives.

Socially necessary labor time is the conceptual standpoint of the total labor that puts all individual labors in relation to each other.  But socially necessary labor time is also actual in that it arises from the mutual interactions of all labors leading to an average that equalizes otherwise unequal labors. Socially necessary labor time becomes the measurable criteria for labor, allowing the exchange between isolated and unequal labors. Labor time is then defined by its own “socially necessary” measure of what specific labors are “worth” in relation to all other labors. It determines on what basis or value one kind of labor exchanges with other labors. Value becomes the normative social standard that dictates existence through socially necessary labor time.

By defining this concept as “socially necessary,” Marx makes clear that he is historicizing what is necessary labor. It changes over time and is subject to human intervention and the development of the productive forces. What is “socially necessary” in capitalism is the organization of society to produce value. Social relations are mediated by, or reduced to the abstract form of “exchange-values,” as “commodities [that] are merely definite quantities of congealed labour-time” (Capital, 130).

Socially necessary labor time changes throughout the course of history, depending on the development of the productive forces and the social relations of labor. In terms of the capitalist mode of production what is socially necessary changes as capitalism develops. As the productive forces grow, necessary labor time diminishes. The potential for free time emerges concretely in relation to the exponential development of the productive forces.

The continuation of capitalist socially necessary labor time is made possible by the control of the means of production by the capitalist, who enforces the complete separation of labor from the means of production. Only when labor is put into direct relation with the means of labor and, therefore, the capitalist is overthrown, can the real necessary labor based on the immense productive forces of today be realized. Despite the minimum necessary labor time possible today, where we could potentially work very little, actual labor time stays the same or increases – a point to be discussed in a later section.

Value and Money

The dual character of the commodity means that every use is also a value. It also means that no particular labor producing uses, is directly related to any other. Therefore the only way uses exchange with each other is through money. Money becomes the universal commodity in capitalist society, interchangeable with all others. As Marx says, “The simple commodity form is therefore the germ of the money-form” (Capital, 163). Marx traces the logic of the simple commodity – dialectically a use and a value – to its concrete expression in money. We need to follow those steps to understand the basic importance of money and what role it plays.

Marx begins Capital by looking at the single, isolated commodity, which serves as the starting point for bourgeois ideology in the form of the abstract, isolated individual. Marx points out, however, that there must be a “common element” that makes the exchange of single uses possible. This “common element” is social labor, which exists as value. As Marx says, “The common factor in the exchange relation….is therefore its value” and “exchange-value [is] the necessary mode of expression, or form of appearance, of value” (Capital, 128). In other words, social labor as value makes possible the exchange of uses, but exchange value – what each use is “worth” in relation to every other commodity – is the concrete means by which value exists. Marx is focused on the form of social labor here as isolated, individual labors. Value structures “the social relation between commodity and commodity” and each commodity – and therefore each kind of labor – relates to the other as “poles of the expression of value.” These poles are at the same time both “mutually exclusive or opposed extremes” and the “inseparable moments” of a unity of all mutual labors (Capital, 139-140).

Marx traces the logic of the single commodity to reveal the fact it can only exist in relation to other commodities. The dual form of labor, expressing itself as an “internal opposition between use-value and value, hidden within the commodity, is therefore represented on the surface by an external opposition” between labors of a different kind (Capital, 153).

Marx extends the logical relationship between two commodities into a relation of many commodities. From there he moves conceptually to the totality of social labor, in which all commodities relate to each other simultaneously, or as many sides of a single social labor. Conceptually, therefore, value becomes the “general social form” of labor that expresses “the whole world of commodities”; that is, all the specific concrete labors as relations of the totality of social labor (Capital, 159). Value is “the social expression of the world of commodities” and, as such, “the general human character of labour forms its specific social character” (Capital, 160).

Marx starts with the single commodity, but discovers within it the world of social labor. Since the single, isolated commodity is the ground of bourgeois thought, Marx begins from this assumption, only to explode it from within to reveal the “common element,” or social labor alienated from itself in the “world of commodities.” Marx conducts an immanent critique by inhabiting bourgeois thought and pushing it apart based on its own contradictions. This critique is made possible because it inhabits the contradictory movement of alienated labor actively attempting to abolish itself. By following the logical relationship of the value relation from the simple to the general form, Marx reveals abstract, alienated labor that exists concretely as the “world of commodities.”

In addition, by beginning with the single commodity and moving to the general form of the value relation, Marx moves from the particular to the universal. In doing so, he shows how what seems like a ‘natural’ or organic order in capitalist society is, in fact, riddled with contradictions that are pulling it apart. In contrast, political economy begins with the universal “society” and then works toward the particular, subsuming it into a homogenous whole. In the process, political economy abstracts or strips away the contradictions immanent to this “universal” society, which is not so universal at all.

By developing the logic of the commodity relation, Marx finally moves to money. Money concretely expresses the general or universal form of value. Money represents the universal commodity (historically gold) that can be immediately exchanged with all others. It mediates the relationship between specific kinds of labor in capitalist society. Value seeks out an independent expression in money because of the absolute alienation of labor in capitalism. By necessity money expresses the value relation as the universal commodity by mediating all relations. Because labor and the means of labor are separated, and therefore relations are completely indirect, a mediating step occurs in the association between people, one’s own activity, and the reproduction of life in general. Money becomes that step. If value makes all things exchangeable, then money is the universal and concrete means by which different sides of social labor relates to itself.

Since the use becomes “merely abstract human labour’s form of realization,” the opposite is also true: the human need that corresponds to the use is reduced to an abstraction as a value (Capital, 150). From the standpoint of value, the specific qualities of the use – and the sensuous human needs to which it corresponds – exist quantitatively as a particular measure of labor time or exchange value represented as money. From the standpoint of value the creation of uses as an expression of human needs is merely incidental. Instead, only money matters.

It needs to be noted that Marx deepens his method here. The dialectical character of the commodity as a use and exchange value develops further into a dialectic of concrete and abstract standpoints. We have already seen that while the value relation is abstract, it finds its concrete expression as exchange value. However, the use is inseparable from its exchange value and they must be thought of together at the same time. “The body of the commodity,” Marx writes, “always figures as the embodiment of abstract human labour, and is always the product of some specific useful and concrete labour. This concrete labour therefore becomes the expression of abstract human labour” (Capital, 150).

Marx is laying the groundwork to understand the inverted world of capitalism in which concrete labor is converted into an abstraction, but returns in “phantom” form concretely as money. Since social labor does not relate to itself concretely, it must do so abstractly through money as a concrete mediating step. Money represents and embodies this abstract relation concretely. The indirect form of labor at the heart of the value form, the dual character of labor, is the reason Marx argues that the “simple commodity form,” the dual form of labor, is “the germ of the money-form” (Capital, 163). The alienation that arises from the the dual form – the separation of labor from the means of labor – is the material condition for money itself.

Finally, Marx argues that value confronts us as an objective reality. There is no voluntary “relationship between two individual commodity-owners” as bourgeois political economy argues. Therefore “it is not the exchange of commodities which regulates the magnitude of their values, but rather the reverse, the magnitude of the value of commodities which regulates the proportion in which they exchange” (Capital, 156). Value, concretely personified by the capitalist and materialized in the system of exchange itself, exists as the precondition or already-existing basis for interchange and association.

The objectivity of the dual form of labor therefore determines the means by which mutual exchange and the satisfaction of needs occurs in a society of the value form. The individual does not associate with another person concretely based on their “specific, concrete, useful kind of labour” because it is “only a particular kind of labour and therefore not an exhaustive form of appearance of human labour in general” (Capital, 157). Instead we must associate with each other as money which expresses “human labor in general,” or the totality of social labor.

Through money, value appears to exist independent of commodities, and activity becomes a thing or substance that appears externally, but that we otherwise need. Money becomes the objective concrete, sensuous need for human beings. Without it they cannot live. Money is not simply the expression of an “alien power” that arises externally. It is internally reproduced as part of human activity and therefore desire. The consequences of this will be explored later when we talk about Marx’s idea of the “fetish”.

All sign of social labor is erased and money takes it place. Capitalist society does not seem to be made up of social labor, but by the “natural laws” of isolated individuals pursuing their self-interests in the form of money.  Money therefore controls the world as a power everyone must obey or die. We need to return to the role of money when we look later at the nature of capital.

Surplus Labor and Productive Forces

Capitalism is not the first class society, but it is unlike all other class societies before it. However, political economy viewed the past in terms of capitalist society. Bourgeois political economy simply considered capital like any accumulated, or surplus labor that served as the basis for the reproduction of society. This allowed the “dismal science”, Marx noted, to view production “as encased in eternal natural laws independent of history, at which opportunity bourgeois relations are then quietly smuggled in as the inviolable natural laws on which society in the abstract is founded” (Grundrisse, 87). Instead, Marx argued, it was necessary to pay attention to the concrete development of particular forms of society.

Marx emphasized the uniqueness of capitalism above all else. Of course, the accumulation of labor and its reproduction has been the general basis for all societies. However, given the specific form of particular societies, social relations change over time depending on the historical development of society. In order to understand capitalism, Marx argued, it is necessary to ask what is capital and how is it different from all previous forms of production.

Marx’s methodological step in historicizing social relations is linked to his notion of self-activity as free activity. For Marx it is necessary to “conceive human activity itself as objective activity.” As he had already made clear in the “Theses” and “Estranged Labor”, labor reproduces itself objectively. Consequently, social labor creates its own relations and forms of production. According to Marx, this is the historical process. He writes in the Grundrisse that “production does indeed have its determinants and preconditions which form its moments. At the very beginning these may appear as spontaneous, natural. But by the process of production itself they are transformed from natural into historic determinants, and if they appear to one epoch as natural presuppositions of production, they were its historic product for another. Within production itself they are constantly being changed” (97). Capitalist society is a historical development like all other forms of society because social forms constantly change as an expression of self-activity. By definition, then, capitalism does not correspond to the “natural” disposition of human beings, but is itself the development of labor.

The dehistoricization of capitalism by political economy allowed capitalist apologetics to hide the origins of accumulated labor in the self-activity of labor. More will be said about that later, but for now it is important to see that for Marx existing social relations are an expression of labor’s relation with itself. This is equally true for the concept of productive forces, which, as we have seen, is a relation of past and present labor. Marx developed this concept further in his idea of surplus or accumulated labor. Marx conceived of surplus labor as the growing productive powers of self-activity.

What is exactly the connection between self-activity and surplus labor? Once again, Marx conceived of self-activity as a dialectical relation of content and form. Labor materializes itself in the world, form changes depending on the content of needs. In turn, form realizes needs that become the foundation or precondition for new needs. In this way, Marx moves conceptually from self-activity to the mode of production and from there to the productive forces. At the center of the method and analysis is the sensuous, active quality of human beings. “Labour is the living, form-giving fire; it is the transitoriness of things, their temporality, as their formation by living time” (Grundrisse, 361). Labor is the free development of content and form in the process of constant change.

Yet, as the idea of the productive forces demonstrates, the development of labor does not stay the same, but expands and qualitatively deepens. Therefore “the transitoriness of the forms of things is used to posit their usefulness” for further labor (Grundrisse, 361). Since past needs “posit” the foundation and thus propulsion for new needs, the “forms of things” change accordingly. As a result, the materials of labor in the metabolic process “are preserved not in their form but in their substance.” The objectification of needs are simply “moments of labour itself,” realizing these needs in continuously changing forms of these substances  (Grundrisse, 360). Marx gives an example from the textile industry in the making of spindles, which helped weave cotton into thread to make textiles:

The use value of wood and iron, and of their form as well, are preserved only by being posited as a means of living labour, as an objective moment of the existence of labour’s vitality. As an instrument of labour, it is their destiny [ ] to be used up, but used up in the process of spinning. The increased productivity which it lends to labour creates more use values. (Grundrisse, 362)

The creation of the spindle makes possible the further and more productive transformation of cotton into a series of uses that build upon each other. Marx notes that “in each of these subsequent processes, the material has obtained a more useful form, a form making it more appropriate to consumption.” In the case of clothing, cotton cannot be worn directly, but must be transformed into thread and then clothing. The substance of cotton goes through a series of changes that involve a successive “suspension of its form” until it can “directly become an object of consumption” (Grundrisse, 361). Only “living labour,” Marx concludes,  “preserves the use value of the incomplete product of labour by making it the material of further labour.” Living activity dissolves the form of the substance and thereby transforming it into a new use “by working it in a purposeful way, by making it the object of new living labour” (Grundrisse, 362). The substance, once again, becomes a means to realize the free changing needs of people.

Past labor has an inner connection with current and future labor in which it is not only the form that changes, but also the substance. “This preservation of the old use value is not a process taking place separately from the increase or the completion of the use value by new labour; it takes place, rather, entirely in this new labour of raising the use value.” The substance is transformed into a new quality by new labor. The use as substance is “again posited as material objectivity of purposeful living labour”  (Grundrisse, 362). The substance is preserved and at the same time fundamentally changed in the creation of its new form. The new form of the substance is a qualitatively expanded and deepened form that corresponds to more developed needs and multiplied human powers. Marx defines these needs and their material expression as surplus labor, which is, in the final result, the creation of wealth, or new productive powers.

Surplus Value and the Wage

Marx’s concept of self-activity is one in which the powers of labor expand and do not stay the same. However, although what is produced by labor are simply “moments of labour itself” in constant change and activity, as the value-form they exist as a “substance [of] objectified labour time” (Grundrisse, 363). In capitalism the creation of surplus labor takes the form of surplus value. To understand why that is the case we have to return to the dialectic of labor in capitalism.

Given the dialectical character of labor in capitalism, value can only be reproduced by living labor. Therefore living labor must be reunited with the means of production to create that value. The capitalist must reunite labor with the means of production because only then “the separation of labour from its objective moments of existence—instruments and material—is suspended” (Grundrisse, 360). Once this separation is “suspended” the commodities, which are simply dead, objectified labor, are worked on and further transformed, reanimated as new moments of living labor. “Objectified labour ceases to exist in a dead state as an external, indifferent form on the substance, because it is itself again posited as a moment of living labour; as a relation of living labour to itself in an objective material, as the objectivity of living labour.” Living labor transforms the objects of past labor and, as a result, “the raw materials and the instrument are preserved not in their form but in their substance” (Grundrisse, 360). Only living labor can create this surplus value as a surplus of itself. The value of the object is advanced and expanded because its use is renewed in a new form by living labor. As Marx puts it, “The quantity of objectified labour is preserved in that its quality is preserved as use value for further labour, through the contact with living labour” (Grundrisse, 363).

The surplus created is not simply a new quantity of commodities, but qualitative changes in the production process in the form of new technology, knowledge and ways of life. These new productive powers are the surplus that the capitalist accumulates as value. Since these productive powers exist as value, the production of the use in the hands of living labor, preserves and expands the value. In this way surplus labor exists as surplus value in capitalist society.

Given the dialectical character of labor in capitalism, which arises from the separation of labor from the means of production, the surplus does not return to the collective worker. Instead, surplus labor goes to the capitalist since he controls the means of production as his private property.

However, labor must be daily reproduced or renewed in order to produce more surplus the following day. So the capitalist must allow the worker to consume a certain number of uses in order to renew himself. In order to appropriate these uses, the worker receives a wage from the capitalist. Since the worker has nothing but his ability to labor, he must endlessly return to the capitalist for his daily subsistence by exchanging this ability for a wage.

The wage is the exchange value of labor power. The value of labor power is determined “by the labour-time necessary for the production, and consequently also the reproduction, of this specific article.”  In other words, the value of labor power is determined like any other commodity in capitalist society. Therefore labor power, or the ability to labor, “requires a certain quantity of the means of subsistence” and “the value of labour-power is the value of the means of subsistence necessary for the maintenance of its owner” (Capital, 274).

Living labour adds a new amount of labour; however, it is not this quantitative addition which preserves the amount of already objectified labour, but rather its quality as living labour, the fact that it relates as labour to the use values in which the previous labour exists. But living labour is not paid for this quality, which it possesses as living labour—if it were not living labour, it would not be bought at all—rather, it is paid for the amount of labour contained in itself. What is paid for is only the price of its use value. (Grundrisse, 363)

If that labor power is the value of the means of subsistence for the ability to labor another day, then this is measured by past socially necessary labor. The worker creates new labor – a surplus – that contributes to the establishment of a new socially necessary labor, a new productive force, or a qualitative change in the totality of human powers. Living labor receives back past labor – necessary labor – but not future labor, or surplus labor, so that the worker can only appropriate previous labor, in the form of uses, which become the means of subsistence of labor.

So the collective worker does not receive the surplus it creates, but only the means to subsist in its present condition. While the productive powers – the surplus – grow exponentially, the condition of labor is defined by past labor. The gap grows historically on a global scale as the productive powers expand. This contradiction, once again, expresses the dialectical or “dual character” of labor in capitalist society. As Marx writes:

But the past labour embodied in the labour-power and the living labor it can perform, and the daily cost of maintaining labour-power and its daily expenditure in work, are two totally different things. The former determines the exchange-value of the labour-power, the latter is its use-value…the value of labour-power, and the value which that labour-power valorizes in the labour-process, are two entirely different magnitudes. (Capital, 300)

The “dual character” of labor in capitalism means that the category of labor is strictly split into labor power and living labor. Labor as living activity – as use – creates surplus value. As Marx puts it,  “the specific use-value which this commodity possesses of being a source not only of value, but of more value than it has itself” (Capital, 301). As labor power, however – as an exchange value – it exists as the wage. This division is absolute in capitalism.

The dual character of labor leads to a contradiction in which “a commodity whose use-value possesses the peculiar property of being a source of value, whose actual consumption is therefore itself an objectification” (Capital, 270). In other words, “the seller of labour-power, like the seller of any other commodity, realizes its exchange-value, and alienates its use-value” (Capital, 301). The use, once exchanged, does not belong to the worker, but to the capitalist.

Surplus value arises from the fact that the worker is separated from this surplus that the worker creates once the use of living labor is appropriated by the capitalist. Surplus value is therefore a further expression of the class relation. The worker’s relation to the means of production, and therefore surplus labor – growing productive powers, social wealth and new forms of life – is mediated by the wage. It for this reason that Marx says value only “exists once labor power has become a commodity” (Capital, 300). Only when labor has no other choice but to sell its capacity to labor in order to live does the capitalist system truly begin to take hold. Only when labor is completed alienated from the means of production has the value form fully come into being.

The wage expresses this alienation in three interrelated ways. First, the wage expresses the alienation of the worker from the means of production, from the means for labor to realize itself. Directly social labor is, therefore, not possible and this relation only takes place indirectly through the quantity of money the worker receives by which to appropriate the uses to satisfy needs. The wage, as a quantity of labor time, mediates living labor’s qualitative relation with itself and the means of production.

Second, separation from the means of production means that labor must constantly reproduce itself as the wage. Having no other means to live, the worker must go to the capitalist and receive a wage. In the production process, where labor is reunited with the means of labor, the capitalist gets the transformation of his uses into something new for free because he keeps the new use that contains the surplus created by the worker. But the worker came to the capitalist as labor time, measured by the commodities he consumes as the basis for his reproduction. The powers of social labor are accumulated by the capitalist while in return the workers receive the wage. Because the workers have no control over the powers of social labor, they must return to the capitalist again the next day and receive their wage in order to survive.

Third, the wage obscures the relation between necessary and surplus labor, and therefore, labor time and surplus time. Surplus labor accumulated in the production process constantly creates a new foundation for the productivity of labor. The result of growing productivity is the lessening of labor time through the use of machines, improved technique based on the increase in knowledge, and new ways of life. However, since the capitalist keeps this surplus the lessening of labor time does not accrue to the worker. The surplus is confiscated and the worker only gets the old value that reproduces the worker for another day – necessary labor, but not surplus labor. The wage expresses the simple reproduction of existing labor, but not new labor – the new productive powers – which the worker creates.

The radical split between labor power and labor, between necessary and surplus labor, and between wage and surplus is rooted in the reality that the ability to labor becomes distinct from the actual activity. Living labor only becomes a reality under the direction and control of the capitalist. Living labor does not belong to itself, to be used freely and according to its own desire, but to capital. The productive powers of humanity take the form of value accumulated by the capitalist, while the great majority of humanity becomes increasingly impoverished relative to that wealth. The value relation is one in which the self-activity of humanity constantly creates and reproduces its own chains. As Marx writes:

The turn into its opposite [ ] therefore comes about because the ultimate stage of free exchange is the exchange of labour capacity as a commodity, as value, for a commodity, for value; because it is given in exchange as objectified labour, while its use value, by contrast, consists of living labour, i.e. of the positing of exchange value. The turn into its opposite arises from the fact that the use value of labour capacity, as value, is itself the value-creating force; the substance of value, and the value-increasing substance. In this exchange, then, the worker receives the equivalent of the labour time objectified in him, and gives his value-creating, value-increasing living labour time. He sells himself as an effect. He is absorbed into the body of capital as a cause, as activity. (Grundrisse, 674)

Given the dual form of labor, the “quality” of living labor “is measured simply by the quantity of labour time which has produced it” (Grundrisse, 359-360). The dual form of commodified labor as living labor and labor time is expressed as a use, as an activity within the production process and, as an exchange, as an objectified thing that is produced. The capitalist deploys the use of living labor, but in the form of labor time, which the worker receives back as a quantity of money. By producing uses as labor time, labor reproduces itself as socially necessary labor time. This is what appears as its “substance” or value. Only living labor can alter and create new powers and objects. The capitalist must have living labor, but labor carries out its transforming activity as labor time.

There will be more to say in the next section about this profound inversion and its consequences. It is enough to say here that the behind the relation between wage and surplus is the separation of labor as activity and the conscious will to freely use and develop that activity. To this extent the value relation is the very antithesis of freedom.  So Marx argues that this dialectical relation is one in which “the process of the consumption of labour-power is at the same time the production process of commodities and of surplus-value” (Capital, 279). Social labor creates surplus in search for a wage, but in exchanging the ability to labor for that wage, the social relations of alienation and exploitation are reproduced.

In capitalism the surplus time created develops exponentially, taking form in the means of production, new technique and social knowledge, as well as new forms of life. This surplus time is therefore material wealth in the form of uses, but equally important as an unlimited creative potential in the form of free time. However, the value form of relations, with its radically deepened division of labor and complete separation of labor from the means of production has created wealth that cannot be realized by living labor, by actual human beings.

Marx did not discover labor time. Smith and Ricardo first theorized it. However, Marx decisively broke with these founders of modern political economy by understanding that the origin of surplus value lay in excess time the worker labored every day over and above the amount of time it took to reproduce the value of her labor power. This is the meaning of the wage. In capitalism the gap between necessary and surplus labor grows exponentially, but human beings are reduced to the paltry wage and a life spent in its constant acquisition. Relative to the growing wealth produced in capitalist society (real and potential), human life is ground down to smaller and smaller amounts of labor time, an ever diminishing value. To get a better sense of the monster that is paradoxically sustained by and devours all human life, we need to next examine Marx’s concept of capital.

Next up: What is Capital?

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