8. The enactment of closure within Capital: Volume I

8. The enactment of closure within Capital: Volume I

In the previous two chapters we saw how, in the historical context and intellectual climate of the mid to late nineteenth century, Marx, in adopting the problematic of political economy, came to impose a provisional closure within his broad thematic. We traced out how this closure became reflected in the theoretical movement between the Grundrisse and the three volumes of Capital, both in terms of the 'problem of the beginning', and in the change in outline of Marx's proposed plan of work. We shall now, in the following three chapters, examine in detail how this closure comes to be consolidated within the text of Capital itself, through a critical analysis of each of its three volumes. In this analysis we shall seek to tease out those points within the text that are tangential to Marx's principal line of theoretical development, and which thereby point beyond its closure. In doing so we shall find that this closure within Capital is not merely provisional but two-fold. We shall begin our analysis in this chapter with the examination of Volume I.

Since Volume I is by far the most important of all the three volumes of Capital, we propose to examine it in particular detail. As a consequence this rather lengthy chapter will be divided into two parts. The first part will deal with Marx's theory of value, which is developed in Parts I and II of Volume I of Capital; while the second part will deal with Marx's theory of the production of surplus-value and the accumulation of capital, which is set out in the remaining six parts of Volume I.

We have already seen how, by starting with the commodity, Marx comes to close off the question of the subjective, and with this the counter-dialectic of class struggle. We shall not repeat this line of argument here. Instead we shall seek to go a step further. We shall seek to show how, through the dialectical derivation of the category capital from that of the commodity, Marx, from the very beginning of his analysis, poses capital as a unity in opposition whose very possibility contains the inherent possibility of its rupture and crisis. Yet in order to develop his analysis, in order to demonstrate the persistence of capitalism, Marx, we shall find, is obliged to provisionally resolve the contradictions of his categories into an overall unity. Thus although at each step Marx comes to pose, at least implicitly, the question of rupture and crisis, he is also logically obliged to defer it. It is with this repeated deferral of the question of crisis that we shall come to identify as the second part of the two-fold closure that we find imposed by Marx's critique of political economy.

In the second part of this chapter, where we move onto Marx's theory of the production of surplus-value and the accumulation of capital, we shall return once more to the first phase of closure -- the closing off of the subjective -- to see how it is sustained in this, the most fundamental part of Capital. We shall see how this closure is consolidated in Capital through what we shall term the attenuation of Marx's analysis of capitalist production from that of an ontological process of human alienation to that of a quantifiable and objectified process of exploitation. An attenuation that becomes readily apparent once we compare Marx's theory of surplus-value as it is presented in the final version of Capital with its corresponding investigation in the earlier drafts such as the Grundrisse.

* * * I: The theory of value: from the commodity-form to the form of capital

A) The commodity-form and the abstract social labour theory of value

The wealth of those societies in which the capitalist mode of production prevails, presents itself as "an immense accumulation of commodities" its unit being a single commodity. Our investigation must therefore begin with the analysis of a single commodity. (Capital I, p. 35) Here, in the opening sentences of Volume I, Marx unequivocally takes the analysis of the commodity as the starting point for his critique of political economy. We have already examined in detail how Marx came to take up this point of departure and the implications this had for the development of his theoretical project. We shall now begin our examination of Volume I by briefly considering how Marx came to formulate this analysis.

At first sight, what distinguishes the material basis of capitalist society from that of all preceding forms of society is not so much the sheer volume and variety of its tangible wealth, although this is particularly conspicuous, but the specific social form that this wealth takes. Whereas in previous societies particular types of wealth have often taken the form of commodities, it is only in capitalist society that the commodity is the general and all pervasive form of wealth.

If the wealth of a society is to generally take the form of commodities, then it is necessary that this wealth is divided up into distinct and separate objects that may be appropriated as the exclusive private property of individuals. Thus, just as bourgeois society, at first sight, appears as little more than a simple aggregation of independent and atomized individuals, the total wealth of this society appears as a simple aggregation of disconnected commodities.

Yet all this is only the semblance of the capitalist economy. If we follow Marx, and indeed to some extent the classical political economists, below this surface appearance we find that, like any other society, the wealth of capitalist society is produced by a social division of human labour. In fact, as Adam Smith had shown, the increasing volume and variety of wealth produced within the capitalist economy is a direct result of the ever developing complexity of its underlying social division of labour.

On the one side then we find an immense increase in the social complexity and interconnectedness of the production of wealth that accompanies the capitalist development of forces of production; on the other side we find that this wealth is appropriated by the mass of private and atomized individuals. Thus we find that the social character of capitalist production stands in stark opposition to the private appropriation of the wealth that it produces in the form of commodities. The question which arises is: how is this opposition reconciled? What makes the capitalist economy possible?

If wealth is to appear in the form of commodities it must be produced as commodities. Thus the capitalist economy emerges as an economy based on generalized commodity production. In such an economy the wealth of society is produced by disassociated producers, each playing a particular part in the total social division of labour by producing a particular aspect of the total wealth of society. Yet the wealth that each of these producers produce is not produced for its own sake, still less for the sake of society as a whole, but for what it can command for its producer in exchange . Each of these disassociated producers, having produced a particular kind of wealth in the form of a specific commodity, seeks to exchange the wealth they have produced for other kinds of wealth that they require for future production, or for their own personal needs or wants.

As a consequence the social division of wealth is not constructed according to some social plan or custom but is rather constituted through the mutual acts of exchange that occur between these disassociated commodity producers. It is only through the exchange of commodities that each producer comes to be validated and recognized as a part of the total social division of labour; and it is only through such exchange that what each of these producers have produced becomes recognized and validated as part of the total wealth of society. Yet this exchange of commodities, which is necessary for both the reproduction and persistence of the capitalist economy as a generalized commodity economy, cannot be a simple random or accidental exchange. It must be, to some degree, regular and determinate. It is only when the general exchange of commodities possess such regularity and determinancy that each of the disassociated commodity producers can have a reasonable degree of certainty that the commodities which they are about to produce will be exchangeable for the right kind and quantity of commodities which they require. Without this degree of certainty the generalized production of commodities becomes untenable.

So we find that the opposition between the social nature of production, which stems from the social division of labour and which becomes ever more developed under capitalist production, and the disassociated commodity form that the wealth that it creates assumes, can only be resolved and reconciled by the regular and determinate exchange of commodities. But this only serves to raise further question: given that a generalized commodity economy is not static -- and it is quite evident that capitalist economies are far from being static -- how is such determinate and regular exchange possible? As Marx recognized, the answer to this question lies within the commodity-form itself; and it was in answer to this question that Marx opens Volume I with his analysis of the commodity.

i) The commodity-form For Marx, the commodity first appears as the unity of two opposed aspects: exchange-value and use-value. As a simple product of labour the commodity immediately appears in its tangible form as a set of physical attributes that, having been fashioned from nature by a set of concrete labours, constitute it as a socially recognized use-value. Yet for the producer/seller of this commodity these attributes are of no immediate concern except for the fact that they may serve to command other commodities with other use-values in exchange. For the producer/seller of the commodity what is of interest is not so much the use-value of the commodity -- in fact for her the commodity is not a use-value but a non-use-value -- but the commodity as an exchange-value: that is its potential to be exchanged for what it is not.

The exchange-value of a commodity stands in mutual opposition to its use-value and this opposition can only be overcome through the act of exchange. With exchange the use- value of the commodity becomes realized in the hands of its recipient owner who consumes it; while the exchange-value of the commodity becomes realized when its producer/seller obtains her desired other use-values.

Yet the question remains: what is it that allows the regular and determinate exchange of this commodity with other commodities? Marx argues that if a commodity is to exchange with other commodities then, to the degree that such an exchange is not random or accidental, the commodity must have something that is in common with all other commodities with which it may exchange. It must have something that makes it commensurate with other commodities. So what is this common something?

For Marx this common something cannot be any of the 'natural' or physical properties that serve to constitute the commodity's use-value since it is these very properties that act to differentiate one particular kind of commodity from another. While the different use-values that arise from the varying physical and 'natural' attributes of different kinds of commodities make commodity exchange necessary they do not serve to make systematic commodity exchange possible. As Marx points out: This common "something" cannot be either a geometrical, a chemical, or any other natural property of commodities. Such properties claim only our attention only insofar as they affect the utility of those commodities, make them use-values. But the exchange of commodities is evidently an act characterised by a total abstraction from use-value. (Capital I, p. 45) Having dismissed use-value as this common something we come to exchange-value. But exchange-value as such immediately appears only in terms of the multiplicity of other use-values that the commodity can command in exchange, and, as such, appears as being both external and accidental to the commodity itself. As Marx explains: Exchange-value, at first sight, presents itself as a quantitative relation, as the proportion in which values in use of one sort are exchanged for those of another sort, a relation constantly changing with time and place. Hence exchange-value appears to be something accidental and purely relative, and consequently an intrinsic value, i.e. an exchange-value that is inseparably connected with, inherent in commodities seems a contradiction in terms. (Capital I, p. 45) However, on closer inspection we find that: A given commodity, e.g. a quarter of wheat is exchanged for x blacking, y silk, or z gold, &c -- in short, for other commodities in the most different proportions.

Instead of one exchange-value, the wheat has, therefore, a great many. But since x blacking, y silk, or z gold &c., must, as exchange-values, be replaceable by each other, or equal to each other. Therefore, first: the valid exchange-values of a given commodity express something equal; secondly, exchange-value, generally, is only the mode of expression, the phenomenal form, of something contained in it, yet distinguishable from it. (Capital I, p. 45) So what is it that is given 'phenomenal form' or 'mode of expression' by the various exchange-values of a commodity? The answer is the value of the commodity. It is value which each particular commodity has in common with all other commodities, and hence it is value that makes it commensurable with them. Thus in Marx's example; a quarter of wheat is able to systematically exchange with x blacking, y silk or z gold etc. (and these with each other) because a quarter of wheat has the same value as x blacking, y silk, and z gold etc. These different exchange-values of a quarter of wheat serve to express the same value.

But if the exchange-values of a commodity are only the 'phenomenal forms', the 'modes of expression' of the value of that commodity, what is it that determines the substance of value?

ii) The substance of value With this question we reach the very basis from which Marx seeks to launch his critique of political economy. So before we proceed to see how Marx comes to answer this question we must pause to consider the development of his analysis of the commodity-form, and that of the form and substance of value, in the context of bourgeois political economy.

Modern economics, which is largely what Marx would have called vulgar economy, has never been much concerned with the question of the possibility of capitalism nor with the question of what value is. For the modern economist, the existence of capitalism is taken as being self-evident, something that requires either justification or reform rather than explanation. With regards to the question of what value is the modern economist is a little uneasy; it is a question that is perhaps a little too 'metaphysical' and one that is usually confined, if dealt with at all, to the preliminary remarks before the analysis proper.

This embarrassment and uneasiness over the question of value on the part of the modern economist is not, however, surprising. The positivist and empiricist methodology which pervades modern economic thought, as Zeleny has shown, strictly precludes a 'substantialist logic'.(1) All that is admitted with such an underlying methodology is the 'relativist logic' that operates with the relations between positively ascertained phenomena. Thus, to the mind of the modern economist, all reference to notions of the form and substance of value are entirely alien; such notions are regarded as either incomprehensible or at best metaphysical. It is for this reason that the opening chapters of Capital prove so difficult for those trained within the strictures of modern economics and associated disciplines, and why for such a long time, particularly in the English-speaking world where the influence of such positivist and empiricist methodologies has been strongest, the opening of Capital has tended to be overlooked or treated rather summarily.(2)

However, while modern economics precludes all reference to the form and substance of value, this was not true of classical political economy. Classical political economy followed, for the most part, the philosophical tradition of British pragmatic empiricism of the eighteenth century, particularly that school of thought which had been established by Locke. While, as an empiricist, Locke was suspicious of the notion that things had a real essence or substance that made them what they were, and was doubtful as to whether such real essences could be ever truly known, he did not dismiss such notions out of hand; instead he maintained a rather equivocal attitude to the question of real essences. As a result classical political economy was not precluded from a 'substantialist logic' and hence was not prohibited from going behind the surface phenomena of the bourgeois economy to ask what the substance, or at least, the origin of value is.

Yet, although classical political economy was not precluded from a 'substantialist logic', it still shared the perception of modern economics of the existence of capitalism as being self-evident. Furthermore, the conception of substance or real essence inherited from Locke was that of a fixed and unalterable essence which was indifferent to the particular forms that it may assume. As a consequence, insofar as classical political economists came to address the question of what value is, they did so rather obliquely; they stressed the quantitative side of the substance of value and took the form of value as given and therefore without interest. Yet nevertheless the classical political economists located the substance of value as being labour-in-general; and it was this that was, for Marx, perhaps their most important achievement.

Of all the classical political economists it was Ricardo who most consistently defended a labour theory of value and hence it was with Ricardo that classical political economy came closest to identifying labour as the substance of value. Despite the seemingly insurmountable problems that he faced in attempting to reconcile the labour-values of commodities with their prices once he had admitted profit on capital of varying duration, Ricardo persistently defended the view that the labour employed in the production of a commodity determined the value of that commodity, even though this value may be subsequently modified by other factors. This view was sustained against the increasingly vehement criticisms of many of his contemporaries by Ricardo's more or less implicit commitment to labour as not only the principal determinant, or origin, of relative values and prices of commodities, but also as the sole source of, what he terms, their 'true' or 'absolute' value. Ricardo could never bring himself to abandon his labour theory of value, despite all its problems and contradictions, because ultimately for him labour was value; that is labour, which was productive of material use- values, was the very substance of value.(3)

Yet Ricardo was never primarily concerned with the question of the substance of value as such. For him the principal problem was to find an invariable and practical standard with which to measure the distribution of wealth between the three great classes of bourgeois society under varying conditions. He only came to address the question of value insofar as, in line with the Newtonian thinking prevalent in the natural sciences of his time, he sought a standard measure that was itself co-substantial with what it was intended to measure. As Ricardo makes clear in the draft copy of his last and unpublished manuscript, Absolute Value and Exchange-Value: The only qualities necessary to make a measure of value a perfect one are, that it should itself have value, and that value should be itself invariable, in the same manner as a perfect measure of length should be neither liable to be increased or diminished; or in a measure of weight that it should have weight and that such weight should be constant. (Ricardo 1951 Vol. IV, p. 361) Thus it was primarily in terms of a measure of wealth that Ricardo came to address the question of the substance of value and as a consequence he could only go as far as to consider its quantitative aspect. Yet, as Marx recognized, any consideration of the quantitative aspect of the substance of value presupposes an understanding of its qualitative aspect; an understanding that remains for the most part implicit within Ricardo's labour theory of value.

Against any labour theory of value that suggests that labour is the substance of value it may be objected that labour is not homogeneous -- that there exists a vast array of different types of labour -- and that therefore labour cannot serve as the single substance of the value of all commodities. To overcome such an objection it is necessary to demonstrate how the multiplicity of different labours that enter the production of commodities can be reduced to particular expressions of some universal labour-in-general which may then itself serve as the homogeneous substance of value.

For Ricardo, who as we have seen was not much concerned with the qualitative aspect of labour as the substance of value, this reduction of the heterogeneity of labours to labour-in- general was, for the most part, taken as self-evident. Where he is obliged to address such objections Ricardo does so rather summarily. Firstly he argues that, through the operation of the market over a long period of time, the different types of labour can be quantitatively related to one another in accordance to a more or less fixed scale; and then he rules out any further investigation of the matter as being beyond the scope of his analysis. Thus in his Principles of Political Economy and Taxation Ricardo states, firstly: In speaking, however, of labour, as being the foundation of all value, and the relative quantity of labour as almost exclusively determining the relative value of commodities, I must not be supposed to be inattentive to the different qualities of labour, and the difficulty of comparing an hour's or a day's labour in one employment with the same duration in another. The estimation in which different qualities of labour are held comes soon to be adjusted in the market with sufficient precision for all practical purposes, and depends much on the comparative skill of the labourer and intensity of the labour performed. The scale, when once formed, is liable to little variation. If a day's labour of a working jeweller be more valuable than a day's labour of a common labourer, it has long ago been adjusted and placed in its proper position in the scale of value. (Ricardo, 1951, Vol. I, p. 20) And then he goes on to state: As the inquiry to which I wish to draw the reader's attention relates to the effect of variations in the relative value of commodities, and not to their absolute value, it will be of little importance to examine into the comparative degree of estimation in which different kinds of human labour are held. (Ricardo, 1951, p. 12) Hence Ricardo makes his orderly retreat from the problem of the heterogeneity of labour and, with it, the question of the qualitative aspect of labour as the substance of value. But for Marx the solution of this problem was vital; it could not be so easily dismissed. For Marx it was necessary to ask what it was that made this reduction of heterogeneous labours into the homogenous substance of labour-in-general possible and what implications this has for an understanding of labour as the substance of value.

Let us consider this a little more closely. Human labour is not biologically determined; hence in any form of society the division of human labour is first and foremost a social division of labour. This implies that any human individual has the potential, at least in principle, to perform any type of human labour. Human beings are not like animals such as bees or ants where the tasks of each individual is genetically predetermined. The limits imposed on the realization of the human individuals potential to perform any form of human labour are, for the most part, social.

Now, if all human individuals have the potential to perform any type of human labour then there must be something common to all these different types of human labour that allows them to be performed by any human being. So what is this common something? If we strip away all the particularities of all the various types of human labour we find that they are forms of the expenditure of both mental and physical human energy in the pursuit of a particular purpose. It is this ability to expend this physiological energy for a conscious end that is common to all human individuals and which is the common something of all human labour. As Marx himself states: Productive activity, if we leave out of sight its special form, viz, the useful character of the labour, is nothing but the expenditure of human labour-power.

Tailoring and weaving, though qualitatively different productive activities, are each a productive expenditure of human brains, nerves, and muscles, and in this sense are human labour. (Capital I, p. 51) Hence we can say that any particular type of human labour is simply a particular mode of expression of human labour-in- general.

Within a commodity-capitalist economy the social obstacles to the free movement of labour between different lines of employment -- such as caste, gender, serfdom etc. -- tend to be dissolved and the worker becomes more and more indifferent to her own particular form of labour. As a result human labour- in-general takes on an explicit social reality. Furthermore, through the repeated exchange of commodities this labour-in- general becomes abstracted from all the particularities of concrete labour and equalized. As a result the labour embodied in the commodity comes to take on a two-fold character; as Marx points out: On the one hand all labour is, speaking physiologically, an expenditure of human labour-power, and in its character of identical abstract human labour, it creates and forms the value of commodities. On the other hand, all labour is the expenditure of human labour-power in a special form and with a definite aim, and in this, its character of concrete useful labour, it produces use- values. (Capital I, p. 53) In identifying the two-fold character of labour which is embodied in the commodity Marx is able make explicit the qualitative aspect of labour as the substance of value and in doing so he can be seen to fully realize Ricardo's embodied labour theory of value at this point. Yet, as Rubin has shown in his seminal work Essays on Marx's Theory of Value, it would be a grave mistake to interpret Marx, as many commentators have done, as having simply developed the embodied labour theory of value bequeathed to him from Ricardo. Although there is plenty of evidence to suggest such an interpretation in the rather short section two of chapter 1 which deals with the two-fold character of labour embodied in the commodity, if Marx's value theory is considered in the wider context of chapter 1 (particularly in relation to the subsequent section on the value-form), or compared with the more extensive treatment of this subject in his earlier Contribution to the Critique of Political Economy, it becomes clear that, in identifying the two-fold quality of labour, Marx not only realizes Ricardo's embodied labour theory of value, but goes beyond it to develop his own abstract social labour theory of value.

In any society in which the social division of labour is at all developed there must be some form of social process through which labour can be socially evaluated and then allocated to various tasks, and through which the products of such labours can be distributed to the various members of society. In most forms of society this social process will involve either a conscious and deliberative social plan or else be the result of the slow evolution of social traditions or customs. In either case such social processes will require the direct personal or social interaction of the various members of society which will logically precede the actual labour process. In all such societies, therefore, labour is directly and immediately social.

In a generalized commodity economy, however, the social division of labour is only constituted through the exchange of commodities. There is no other social connection between the disassociated commodity producers other than the relations established between their commodities. Hence, the labour of these commodity producers is immediately private and disassociated; it is only through the act of exchange that such labour can become social and recognized as a part of the social division of labour of society as a whole. Thus in abstracting labour-in-general from the diversity of concrete labour, exchange must also involve the abstraction of social from private labour. Thus the substance of value is not simply human labour-in-general, but abstract social labour. As such the substance of value is emptied of all material and physiological content; it is a purely social substance. As Marx himself points out: The value of commodities is the very opposite of the coarse materiality of their substance, not an atom of matter enters into its composition. Turn and examine a single commodity, by itself, as we will, yet insofar as it remains an object of value, it seems impossible to grasp it. If, however, we bear in mind that the value of commodities has a purely social reality, and that they acquire this reality only insofar as they are expressions or embodiments of one identical social substance, viz human labour, it follows as a matter of course, that value can only manifest itself in the social relation of commodity to commodity. (Capital I, P. 54) For a purely embodied labour theory of value, such as that of Ricardo, the value of a commodity is simply the materialization of the expenditure of physiological human energy for a definite end. As such, value is determined as a technical relation of production; as a relation between the human mind and body and its interaction with the natural world. Consequently, the value of a commodity will simply depend on the technically determinant amount of labour time necessary for its production. So the actual labour embodied in the process of production is seen as the very substance of value.

For Marx's abstract social labour theory of value, however, the physiological expenditure of human labour is merely a necessary prerequisite for the substance of value. The substance of value, abstract social labour, is above all a social substance that emerges out of the relation between human beings with their collective appropriation of nature. It is therefore determined as a social relation that emerges through the articulation of production and exchange in an economy of disassociated commodity producers. Because of this it is insufficient to merely see how the substance of value is produced in the sphere of production; it is also necessary to see how this substance of value takes form in the sphere of exchange.

We shall have cause to return to this important distinction between an embodied labour theory of value and Marx's abstract social labour theory of value in due course. But before we can present this comparison we must first proceed to consider Marx's analysis of the form of value -- which is contained in the third section of chapter 1 -- since it is only after this analysis that we can fully grasp the significance of Marx's abstract social labour theory of value.

iii) The form of value So, for Marx, the substance of value is abstract social labour. Hence we may say that the regular and determinate exchange of commodities is possible insofar as the disassociated labour contained within each commodity can be validated as being part of the total social division of labour through the mediation of exchange. The problem now is to uncover the conditions within exchange which allow this validation of disassociated labour as social labour and this requires us to retrace our steps to consider the form of value. As Rubin points out: Leaving aside here the quantitative aspect, or the magnitude of value, and limiting ourselves to the qualitative aspect, we can say that value has to be considered in terms of 'substance' (content) and 'form of value'. The obligation to analyse value in terms of both of the factors included within it means an obligation to keep to a genetic (dialectic) method in the analysis. This method contains analysis as well as synthesis. On the one hand, Marx takes as his starting point the analysis of value as the finished form of the product of labour, and by means of analysis he uncovers the content (substance) which is contained in the given form, i.e. labour. Here Marx follows the road paved by the Classical Economists, particularly Ricardo [and which leads towards an embodied labour theory of value]...But on the other hand, because Ricardo had confined himself to the reduction of form (value) to content (labour) in his analysis, Marx wants to show why this content acquires a given social form. Marx does not only move from form to content, but also from content to form. He makes the 'form of value' the subject of his examination, namely value as the social form of the product of labour -- the form which the Classical Economists took for granted and thus did not have to explain. (Rubin, 1972, P. 113) So how does Marx come to consider the form of value now that he has identified its substance?

As we have already seen, value becomes manifest in the phenomenal form of exchange-value, that is in the relation of exchange that arises between commodities. The simplest value- form is that which arises through the single exchange-value of one commodity for another commodity. This Marx terms the accidental or elementary value-form.

The accidental or elementary value-form may be expressed as follows:

x of commodity A = y of commodity B or, for example: 20 yards of linen is worth one coat This expression may then be further broken down into two polarized (sub)-forms: the relative form, which in this case is taken up by commodity A (the 20 yards of linen), and the equivalent form, which is taken up in this case by commodity B (the coat). Let us first consider the relative form.

Commodity A cannot express its own value in terms of itself. The expression commodity A = commodity A would be a meaningless tautology. Commodity A must therefore find another commodity with which to express its own value and in this case it is commodity B. In relating its own value in terms of commodity B, commodity A finds that its value takes the material and bodily form of the use-values of commodity B. So, in Marx's example, the value of the 20 yards of linen is expressed in terms of the usefulness of one coat that it may obtain in exchange. As a result the intrinsic value of commodity A gains an independent and external expression from its own material and bodily form. The internal opposition within commodity A, between its use-value and its value, now becomes externalized with its relation with commodity B. The use-value of the linen now becomes opposed to its own value externalized in the bodily form of the use-value of the coat.

What is more, in taking up the relative form, commodity A comes to equate the labour embodied within it to the labour embodied in commodity B. That is, in Marx's example, weaving comes to be equated with tailoring. As a result both weaving and tailoring come to express the same quality of being abstract labour-in-general, as Marx himself explains: By making the coat equivalent of the linen, we equate the labour embodied in the former to that in the latter.

Now it is true that the tailoring, which makes the coat, is concrete labour of a different sort from the weaving which makes the linen. But the act of equating it to the weaving, reduces tailoring to that which is really equal in the two kinds of labour, to their common character of human labour. In this roundabout way, then, the fact is expressed, that weaving also, insofar as it weaves value, has nothing to distinguish it from tailoring, and, consequently, is abstract human labour.

It is the expression of equivalence between different sorts of commodities that alone brings into relief the specific character of value-creating labour, and this it does by actually reducing the different varieties of labour embodied in the different kinds of commodities to their common quality of human labour in the abstract. (Capital I, P. 57) So both weaving and tailoring appear within this relation of equivalence as abstract human labour stripped of all their different peculiarities. But this is not all. They do not merely express the common quality of being the products of abstract human labour but also, in this expression, appear as having the same quantity of such abstract labour. The amount of labour embodied in 20 yards of linen is the same amount as that required to produce one coat. So in equating itself to one coat the 20 yards of linen equates the amount of its own labour, and hence its value, to that of one coat.

But this is only a relative expression of the linen's value. As Marx points out, although the amount of labour time necessary to produce the 20 yards of linen, and hence its absolute value, may remain the same, changes in the production of the coat may alter the labour time, and thus the value, of the coat to which the 20 yards of linen is related. Thus for example, the productivity of tailoring may double, thereby cutting the labour time, and with it the value, of the coat by half. Hence the value of 20 yards of linen will be expressed not by one coat but by two. The relative value of 20 yards of linen will appear to have doubled, since it is now worth two coats rather than one, even though it absolute value remains the same. Here we find the limitations of the relative form.

We must now turn to Marx's analysis of the equivalent form. As Marx himself remarks, the equivalent form has a far more enigmatic character than that of the relative form and it is with this form that many of the errors of bourgeois political economy are rooted. Hence it was important for Marx to deal with this form in some detail. The difficulties involved in understanding the equivalent form arise according to Marx from the three interrelated peculiarities of this form. Let us consider each of these in turn.

The first peculiarity is that, in taking up the equivalent form, commodity B (the coat) comes to express the value of commodity A (Linen) in its own use-value. Hence its use-value becomes the phenomenal form of its own opposite -- value. It therefore appears that commodity B's use-value is the very material form of value itself. The utility of the coat is the bodily form of value. Of course this only holds in the elementary form while the coat takes up the equivalent form for linen. As soon as it discards this role, or as soon as linen finds another commodity to act as an equivalent, then the coat ceases to be the incarnation of value for linen.

The second peculiarity, which arises from the first, is that the concrete labour embodied in the equivalent, the coat, comes to express nothing other than abstract human labour. That is tailoring, despite all its concrete particularities, comes to represent no more than abstract human labour-in- general. Hence, as Marx observes, the concrete labour of tailoring becomes the very form through which its opposite, abstract labour, manifests itself. As Marx explains: The body of the commodity that serves as the equivalent, figures as the materialisation of human labour in the abstract, and is at the same time the product of some specifically useful concrete labour. This concrete labour becomes, therefore, the medium for expressing abstract human labour. If on the one hand the coat ranks as nothing but the embodiment of abstract human labour, so, on the other hand, the tailoring which is actually embodied in it, counts as nothing but the form under which that abstract labour is realised. In the expression of value of the linen, the utility of the tailoring consists, not in making clothes, but in making an object, which we at once recognise to be Value, and therefore to be a congealation of labour, but of labour indistinguishable from that realised in the value of the linen. In order to act as such a mirror of value, the labour of tailoring must reflect nothing besides its own distinct quality of being human labour generally.

(Capital I, P. 64) This brings us to the third peculiarity. As the equivalent to the 20 yards of linen the coat stands as readily exchangeable with that linen. As such it stands as the means through which the private, disassociated labour that is embodied in the linen is validated as being social labour. As the equivalent of the labour embodied in the 20 yards of linen the private, disassociated labour embodied in the coat therefore stands at once as socially validated labour. Hence, the private, disassociated labour of the coat becomes the form in which its own opposite, social labour, presents itself.

So, for the third time, the material properties of the equivalent come to serve as the bodily form through which their opposites make their appearance. The failure to distinguish between the intrinsic social properties of the commodity and the material forms in which they must necessarily appear becomes most acute with the understanding of the equivalent form, but the consequent confusion only really becomes apparent once we move beyond the simple elementary form of value to consider its more developed forms, as we shall see.

The elementary form is itself an inadequate form of value. The commodity does not simply relate to one other commodity but to any number of commodities that it may exchange with. We therefore come to the more developed value form which Marx terms the expanded form of value.

The expanded form of value may be expressed as follows:

y of commodity B x of commodity A = z of commodity C w of commodity D etc.

With the expanded form of value commodity A comes to relate its value to all other commodities in turn, each of which then stands equally opposed to commodity A as its equivalent form. Thus, continuing Marx's example, the 20 yards of linen may come to express its value not only in terms of one coat but also in terms of 10lbs of tea, 40lbs of coffee, one quarter of corn, two ounces of gold and so forth. In relating itself to the interminable list of all other commodities it becomes clear that the particular value contained in the 20 yards of linen is indifferent to the particular use-values within which it may be expressed. Hence, with the expanded form, the value of the commodity appears not only as distinct and separate from its own use-value, with its external expression in the particular use-value of another commodity, but as distinct and separate from all use-values -- that is as distinct and separate from use-value in general.

Furthermore, with value standing as distinct and separate from all particular use-values it becomes clear that the abstract social labour that serves to create this value must also stand as distinct and separate from all the particular disassociated and concrete labours that serve to create the wide diversity of use-values of all the different commodities. As Marx himself explains: Every other commodity now becomes the a mirror of the linen's value. It is thus, for the first time, this value shows itself in its true light as a congealation of undifferentiated human labour. For the labour that creates it, now stands expressly revealed, as labour that ranks equally with every other sort of human labour, no matter what its form, whether tailoring, ploughing, mining, &c, and no matter whether it is realised in coats, corn, iron, or gold. The linen, by virtue of the form of its value, now stands in a social relation, no longer with only one other kind of commodity, but with the whole world of commodities...At the same time, the interminable series of value equations implies, that as regards the value of a commodity, it is a matter of indifference under what particular form, or kind, of use-value it appears. (Capital I, P. 68) The expanded form of value is, however, inadequate. Value is only expressed in terms of an indefinite number of particular use-values. Thus while we can see with the expanded form of value how a particular value stands opposed to use-value in general we cannot determine how value in general stands in relation to use-value. For this we must pass on to what Marx terms the general form of value.

The general form of value is expressed as follows:

y of commodity B = z of commodity C = x of commodity A w of commodity D = etc.

In the general value-form the expanded form becomes reversed so that now commodity A stands as the equivalent form for all the other commodities. As a result the material form of commodity A now comes to be the general expression of value, since all commodities can now express and measure their own values in the material form of commodity A. Hence, if we return once more to Marx's example, one coat, 10 lbs of tea, 40 lbs of coffee, one quarter of corn, half a ton of iron, two ounces of gold and so on, can all express their own value in the material and tangible form of 20 yards of linen. As a result every commodity can be equated and exchanged with any other commodity with reference to the 20 yards of linen which stands as their common expression of value . Thus, for example, 80 lbs of coffee, being worth 40 yards of linen can now be directly exchanged with one ton of iron since this is also worth 40 yards of linen.

The material form of commodity A therefore comes to stand as the incarnation of value itself and thus of abstract social labour, as Marx goes on to point out: The bodily form of linen is now the form assumed in common by the values of all commodities; it therefore becomes directly exchangeable with all and every one of them. The substance linen becomes the visible incarnation, the social chrysalis state of every kind of human labour. Weaving, which is the labour of certain private individuals producing a particular article, linen, acquires in consequence a social character, the character of equality with all other kinds of labour.

The innumerable equations of which the general form of value is composed, equate in turn labour embodied in the linen to that embodied in every other commodity, and they thus convert weaving into the general form of manifestation of undifferentiated human labour. In this manner the labour realised in the values of commodities is presented not only under its negative aspect, under which abstraction is made from every concrete form and useful property of actual work, but its own positive nature is made to reveal itself expressly. The general value-form is the reduction of all kinds of actual labour to their common character of being human labour generally, of being the expenditure of human labour- power. (Capital I, P. 72) However, with the general value-form as such, any commodity may stand as the general equivalent. There may therefore be any number of material expressions of the value as they are commodities. Yet for regular and determinate exchange there must be a fixed point of reference for exchange, and thus a standard expression of value. As a result, with the emergence of generalized commodity exchange, a single commodity emerges that, by social convention, comes to exclude all other commodities from the position of the general equivalent. This commodity then becomes the money-commodity, which leads us to the money-form.

The money form may be expressed as follows:

x of commodity A y of commodity B = l amount of gold z of commodity C etc.

Where gold is the money-commodity.

Once the money-commodity has excluded all other commodities as the sole expression of value and direct exchangeability, all other commodities need only express their value in the form of their single exchange-value with a given measure of the money-commodity. That is each commodity need only express its value in terms of its money equivalent -- that is its price. Hence, if for example 2 ounces of gold is designated as being £2 then we may say that: 20 yards of linen is worth £2 one coat is worth £2 ½ a ton of iron is worth £2 and so forth.

However, as Marx observes, unless the money-form is grasped as a whole, money can easily lead to difficulties and confusion. As the sole and general equivalent money comes to express the peculiarities of the equivalent form in their most glaring and 'dazzling' form. Since the money-commodity exclusively reflects the value of all other commodities in its own material form it may appear that value is some natural property of the material substance of money itself; as if it was a natural property like weight, colour or chemical make up. This confusion was perhaps most keenly portrayed in the mercantilist theories of the seventeenth and eighteenth centuries which, in seeing gold as being value itself, advocated the accumulation of gold for its own sake regardless of its relation to the value of other commodities. As a result gold, as the money-commodity, became elevated as the sublime and mystical embodiment of wealth itself.

On the other hand, from the perspective of the relative form of this expression, a perspective taken up by the classical political economists in reaction to the mercantilist theories of their antecedents, money appears as just another commodity. In relating its value to a general equivalent a commodity is indifferent as to which other commodity may be acting as the general equivalent. What is important is that this commodity is able to find an external expression for its own internal value. Thus money is reduced to being an ordinary commodity -- a simple numeraire -- its special status as being the exclusive general equivalent through which all other commodities must express their value in order to become exchangeable becomes denied. As a result money is simply viewed as a mere medium of exchange; a mere oil in the wheels of commerce with no independent movement of its own.

Yet if we grasp the money-form as a whole such confusions fall away. Money emerges as a commodity from amongst the ranks of all other commodities and as such is simply a commodity like any other. But it stands above all other commodities because of its exclusive role as the universal equivalent -- as the external measure of the value of all other commodities. However, in taking this role the money-commodity does not become, in its own material substance, value itself but merely reflects, in this bodily form, the value of all the other commodities. It comes to stand as the externalized expression of the value of all these commodities -- which, as we shall see, may obtain its own relative autonomy of movement. Or as Marx remarks: ...one man is king only because other men stand in the relation of subjects to him. They, on the contrary, imagine they are subjects because he is king. (Capital I, p. 63) B) The money-form i)The money-form and the abstract social labour theory of value As we have seen, through his analysis of the value-form Marx comes to derive the logical necessity of money. Regular and determinate exchange of commodities is only possible in sofaras the labour required to produce them comes to be recognized as abstract social labour in the form of value. But the value of a commodity is only realized and confirmed as such with the sale of that commodity and the transformation of its value into the form of money. It is only in the money- form that the labour required to produce a commodity can stand confirmed as an integral part of the totality of homogeneous abstract social labour of society. Thus a generalized commodity economy must at the same time be a fully monetarized economy.

Furthermore, with the analysis of the value-form we come to the point where we can clearly delineate the distinction that we have made between Marx's abstract social labour theory of value and his realization of the Ricardian embodied labour theory of value. Let us consider this distinction a little more closely.(4)

As we have already noted, an embodied labour theory of value, such as that implicit within Ricardo, identifies the value of a commodity with the technically determined labour necessary for its production. Even if we, along with Marx, distinguish the two-fold quality of the actual labour embodied in a commodity it could be argued that we can still take the actual labour embodied in a commodity as a measure of its value since, being a mere aspect of actual labour, the quality of being labour-in-general will be coextensive with the quantity of actual labour. That is, if the actual and concrete labour necessary to produce a particular commodity doubles then we may reasonably assume that amount of labour-in- general -- the general capacity to expend human energy for a given purpose -- will also have to be doubled.

This proposition has important implications. If the value of a commodity is taken as simply the labour embodied in it during the process of its production, or just an exponent of such labour, then this implies that either all the disassociated labours that may be embodied in commodities are realized as values or that any labour that is not realized as value in exchange is precluded right from the beginning of such an analysis. Therefore, the process through which the labour embodied in commodities becomes realized as the value of those commodities becomes taken as a result. The exchange of commodities is thereby collapsed into a simply extension of the process of production. Production and exchange become identified.

This identification of production and exchange then denies the specific character of capitalism as a generalized commodity economy; that is as an economy in which production is undertaken exclusively for the purpose of exchange rather than for need. Thus the specific social form in which wealth takes in such an economy -- the commodity-form -- also becomes occluded. If the labour embodied in a commodity is automatically realized as value then the opposition between abstract social labour and concrete private labour -- and therefore between value and use-value -- is inevitably resolved and has little if any significance. The circulation of values thereby becomes merely the means with which to circulate use- values. The opposition between use-value and (exchange-) value of the commodity is collapsed into a simple identity.

For Marx's abstract social labour theory of value, value is a social substance that is formed from the social process of production for exchange. As such value cannot be taken simply as a result, but must be considered in terms of its becoming -- that is in terms of its formation. So, while for Marx there can be no value without the expenditure of human labour power, the expenditure of labour power in producing a set of use- values embodied in a commodity does not necessarily produce value. It only does so if this labour is able to count as part of the total abstract social labour of society, and it can only be confirmed as such if the commodity within which it is embodied is sold for money. What is more there is no guarantee that the labour embodied in a commodity will be realized as abstract social labour. This process of the formation of value may become ruptured. The commodity may fail to find a buyer.

If, for whatever reason, a commodity does not find a buyer then not only is its value is not realized but its use-value remains a non-use-value. The opposition between the use-value and value of the commodity opens out into a blatant contradiction. Value no longer stands as a means through which use-values circulate but stands as a barrier to the circulation and realization of use-values. Here we find, in embryonic form, the basic contradiction of the capitalist mode of production; a system in which huge quantities food may be stockpiled or destroyed while millions starve.

With Marx's abstract social labour theory of value the opposition between the value and use-value of the commodity- form is not automatically resolved; instead it becomes conditionally resolved by taking the form of the external opposition between money and the commodity. As Marx himself remarks: We saw in a former chapter that the exchange of commodities implies contradictory and mutually exclusive conditions [i.e. the opposition of value and use-value].

The differentiation of commodities into commodities and money does not sweep away these inconsistencies, but develops a modus vivendi, a form in which they can exist side by side. This is generally the way in which real contradictions are reconciled. (Capital I, p. 106) So, within Marx's abstract social labour theory of value, the opposition of value and use-value is not collapsed into a simple identity but is preserved as a unity in opposition that emerges between the commodity and money. A unity that is at most only provisional and one that must be repeatedly re- established with each repeated cycle of production for exchange. The significance of all this becomes clearer once we come to examine Marx's exposition of the three functions of money in chapter 3 of Volume I.

ii) The three functions of money With his presentation [Darstellung] of the three functions of money we find Marx coming full circle. It had been this very question of money's function which in the Grundrisse had served as the point of departure for Marx's investigation [Forschung] into the theory of value. Now as he draws to the close of his presentation of the theory of value as such we find him once more returning to this erstwhile starting point.

In the Grundrisse Marx's immediate concern had been to refute the contention put forward by Darimon and other socialist theorists that money was the root cause of the periodic crises that beset capitalism, and thereby to show how the various proposals for replacing money by labour chits that arose from such a contention were merely utopian schemes that could never be realized. In refuting Darimon's theory Marx had been obliged to show how money's function as an independent expression of value did not arise as merely a matter of convenience, as the political economists would have it, nor as an arbitrary and unscrupulous invention as the socialists maintained, but was a necessary part of the social regulation of any society made up of disassociated commodity producers.

For Darimon, commodities should, as a matter of justice, exchange in accordance with the labour embodied in their production. However, this basis for exchange had been usurped by money, which, being independent of labour, allowed for a divergence between the real labour-values of commodities and the money-prices at which they came to be exchanged. Not only was this unjust, since it meant the unequal exchange of labour, but it also resulted in crisis when money prices diverged so far from underlying labour-values that the relations of exchange lost all connection to production. Thus both justice and economic rationality demanded that money should be deposed and commodities exchanged directly in accordance with the labour that had been used for their production.

But for Marx, as we have seen, it was necessary for the labour-values of commodities to find an external and material expression in money. It is only with such an independent expression that the various disassociated production processes can be regulated and brought into relation to each other as particular expressions of the total labour of society. Because there is no social plan that precedes production and exchange within a generalized commodity economy the various branches of industry are undertaken without any immediate reference to each other. It is only after production, when the products of various industries enter into exchange, that the labour employed by the different industries become reconciled as parts of the total division of labour. Yet such a reconciliation can only be the result of a process of trial and error in which the 'exception continually proves the rule'. A process that demands that money-prices should be able to deviate from relative labour-values.

In the Grundrisse, Marx goes on to argue against Darimon and his supporters that any attempt to establish a rigid link between the medium of exchange and the actual labour times embodied in commodities could only end in failure. With regards to the proposals to replace money by the issue of labour chits denoting the labour time embodied in particular commodities, Marx argues that either these labour-chits would become just like paper money with the nominal labour-times they claim to represent diverging markedly from the actual labour-time embodied in commodities or else the bank entrusted to issue such chits would increasingly have to regulate production and exchange and thereby abolish the essential relations of a generalized commodity economy.

So for Marx, money, as an independent material expression of value, that exists in opposition to all other commodities, was a necessary function of a generalized commodity economy. As a consequence, money, for Marx, was not itself the cause of crisis but merely acted as a mode of expression of such crises which were an inherent possibility within an economy of disassociated commodity producers.

But now, in Capital, with the presentation of his theory of value, Marx is not so much concerned with money as crisis -- although as we shall see this is still very much present -- since crisis can only be fully understood with the more complex and concrete categories that had yet to be derived; but with the further development of the value-form which arises with the transition of money into capital. Yet, as we shall now see, in order to follow this development of the value-form Marx had to unfold in detail the three functions of money and this led Marx to return repeatedly to the underlying question of crisis.

1) Money as the Measure of Value As the universal equivalent money stands before all other commodities as the universal measure of their values. As such money appears with two distinct and opposed aspects. As Marx indicates in his rather longer exposition of this point in his Contribution to the Critique of Political Economy, it was the one-sided appropriation of these two opposed aspects that split the emergent bourgeois political economy into two opposed camps with regards to the recurrent monetary controversies of the seventeenth and eighteenth century and which still persisted in Marx's own day. And it is against these two camps that Marx began the development of his theory of the functions of money.

So what are these two aspects of money as the measure of value and how did they give rise to the monetary controversies that bedevilled early political economy? Firstly, money stands as the equivalent form for the value of all other commodities; it therefore appears as the universal material expression of value. It was this aspect of money as the measure of value that was taken up by the mercantilists, and also by such philosophical precursors of classical political economy as John Locke. As we have already noted, the mercantilists, beguiled by the peculiarities of the equivalent form in its most dazzling manifestation as money, confused the social substance of value with the material substance of the money-commodity. For them money was the material expression of value because precious metals such as gold and silver were naturally of value. It followed from this that the natural measure of the quantity of the money-commodity was at one and the same time the measure of value. Hence, it was observed, the unit of currencies referred to a specific weight of precious metals, usually either gold or silver.

Against this materialist view of money as the measure of value there arose an opposed idealist camp that was originally championed by early political economists such as James Steuart, and idealist philosophers such as Berkeley. This view had emerged from considering the perspective of the relative form which each commodity must take up in relation to money. In relating their own value to the value of the money- commodity each commodity does not demand the actual presence of the money-commodity. As Marx points out with regard to this point: ...the expression of the value of commodities in gold is a merely ideal act, we may use for this purpose imaginary or ideal money. Every trader knows, that he is far from having turned his goods into money, when he has expressed their value in a price or in imaginary money, and that it does not require the least bit of real gold, to estimate in that metal millions of pounds worth of goods. When, therefore, money serves as a measure of value, it is employed only as imaginary or ideal money. This circumstance has given rise to the wildest of theories. (Capital I, p. 98) Such wild theories that Marx mentions were those that emerged from the idealist camp in the early monetary controversies. Because it is recognized that the real presence of the money- commodity is not required for money to act as a measure of value the idealist camp came to view value as something that could somehow exist apart from the bodily form of money, or even commodities for that matter. Value, in diametric opposition to the mercantilist perspective, came to be seen as purely an ideal or imaginary substance that had nothing to do with matter. This came to be expressed with the theory of nominal standard of value. As Marx comments in his more extensive exposition of this point in the Contribution to a Critique of Political Economy: The fact that commodities are only nominally converted in the form of prices into gold and hence gold is only nominally transformed into money led to the doctrine of the nominal standard of money. Because only imaginary gold or silver, i.e. gold and silver merely as money of account, is used in the determination of prices, it was asserted that the terms pound, shilling, pence, thaler, franc, etc., denote ideal particles of value but not weights of gold or silver or any form of materialised labour. If, for example, the value of an ounce of silver were to rise, it would contain more of these particles and would therefore have to be divided or coined into a greater number of shillings.

(Contribution, p. 76) As Marx goes onto show in his Contribution to the Critique of Political Economy, the confrontation between these idealist and materialist views of money as the measure came to a head around the practical issue of the recoinage of the currency following its debasement due to wear and tear and the consequent practice of clipping coins; and it was still echoed in Marx's own day in the issue of the convertibility of paper money into gold coin. To dispel the confusions that arose from such controversies Marx, both in the Contribution and in Capital, takes up Ricardo's distinction between money as a measure of value and money as the standard of price.

Like Ricardo, Marx sees that money can only act as a measure of value because, like all other commodities, it is a product of human labour. Money does not, as the mercantilists thought, have value due to the innate and natural properties of its own material substance but because this substance is a materialization of human labour. Furthermore, a given amount of this material substance of the money-commodity, like any other commodity, may from one time to the next come to be the materialization of very different quantities of human labour and therefore stand for very different amounts of value. Thus money acts as a measure in two distinct ways.

Money, as the measure of value, can act as the material expression of value in which all other commodities can evaluate themselves because it is itself the product of labour and therefore has value. But the human labour embodied in commodities is not directly reflected and evaluated in terms of the labour embodied in the money-commodity, but rather in terms of the exchange-ratios between the material quantities of these commodities and the money-commodity. The value of a commodity is expressed in its exchange-value in terms of the money-commodity. That is as: x amount of commodity A = y amount of the money-commodity or one coat is worth two ounces of gold Furthermore, with the regular sale of commodities there emerges, as a matter of convenience, a need for a common standard of measurement of the money-commodity. This standard then takes the form of a unit of currency which is established within certain national boundaries by the state authorities, and which represents a given amount of the money-commodity. Thus we have pounds, dollars, yen, francs and so forth. As such money acts as a measure of its own material substance; it acts as the standard of price.

Consequently, the values of commodities are not expressed simply in terms of the physical quantity of the money- commodity -- in terms of ounces and grains of gold -- but as a price. That is we have: one coat is worth £20 Where this £20 is equal to two ounces of gold which is in turn the product of x hours of abstract social labour.

So, as Marx himself points out: As measure of value, and as standard of price, money has two entirely distinct functions to perform. It is the measure of value in as much as it is the socially recognised incarnation of human labour; it is the standard of price in as much as it is a fixed weight metal. As the measure of value it serves to convert the values of all the manifold commodities into prices, into imaginary quantities of gold; as the standard of price it measures those quantities of gold. The measure of values measures commodities considered as values; the standard of price measures, on the contrary, quantities of gold by a unit quantity of gold, not the value of one quantity of gold by the weight of another. (Capital I, p. 100) In making this distinction between money as the measure of value and money as a standard of price Marx is not only able to dispel the confusions that had arisen within various monetary controversies of the early political economists but is also able make clear the series of mediations that lie between the intrinsic value of a commodity and its external expression in money in the form of the commodity's price. Due to such mediations the value of a commodity may find itself expressed in a whole range of prices; and this may arise for two quite distinct reasons.

Firstly there may be a change in the relative value of the commodity with regard to that of the money-commodity. For example, while the abstract social labour time required to produce a particular commodity may remain the same the amount of such labour time needed in the mining of gold may rise or fall. Hence the value of the commodity, although remaining the same, may become expressed in a smaller or greater amount of gold-money.

Secondly, even if the relative value of the commodity with respect to the money-commodity remains the same, the debasement of the currency may lead to the real value of the unit of currency falling below that of its nominal value. Thus in order to express its value in a certain amount of gold the commodity will have to have a higher price.

But this brings us to an important point, which Marx then goes on to consider; because there is no necessary one to one correspondence between value and price, because they are mediated, in taking the price-form value appears as quite accidental and arbitrary: Magnitude of value expresses a relation of social production, it expresses the connexion that necessarily exists between a certain article and the portion of the total labour-time of society required to produce it. As soon as magnitude of value is converted into price, the above necessary relation takes the shape of a more or less accidental exchange-ratio between a single commodity and another, the money-commodity. But this exchange-ratio may express either the real magnitude of that commodity's value, or the quantity of gold deviating from that value, for which, according to circumstances, it may be parted with. The possibility, therefore, of quantitative incongruity between price and magnitude of value, or the deviation of the former from the latter, is inherent in the price-form itself. (Capital I, p. 105) Yet this is not all. As Marx observes there is not only the possibility of a quantitative incongruity between value and its price-form but also the possibility of qualitative incongruence: The price-form, however, is not only compatible with the possibility of a quantitative incongruity between magnitude of value and price, i.e. between the former and its expression in money, but it may also conceal a qualitative inconsistency, so much so, that, although money is nothing but the value-form of commodities, price ceases altogether to express value. Objects that in themselves are not commodities, such as conscience, honour &c, are capable of being offered for sale by their holders, and of thus acquiring, through their price, the form of commodities. Hence an object may have a price without having value. (Capital I, p. 105) But as Marx remarks, this incongruity is...

...no defect, but on the contrary, admirably adapts the price-form to a mode of production whose inherent laws impose themselves only as the mean of apparently lawless irregularities that compensate one another. (Capital I, p. 104) Here, in positing the necessity of the relative autonomy of the price-form from value, Marx steps beyond Ricardo and returns to the his point of departure in the Grundrisse: his critique of Darimon. As we have seen, by adopting Ricardo's distinction between money as the measure of value and money as the standard of price -- by making common cause with Ricardo in asserting labour as the source of value -- Marx was able to dispel the confusions that had arisen concerning money. Value was not a natural and innate property of precious metals but rather precious metals possessed value because they were products of human labour. Thus value was distinct from the material and physical substance of the money-commodity. But, on the other hand, value had to find a material form, it had to become objectified, it could not exist simply in the imagination as a pure notion or idea. But having sided with Ricardo to show how money is an expression of labour-values, Marx now comes to the point of showing how money, as the price- form, is not an expression of value.

For Ricardo, labour-values, that is the labour time embodied in commodities, determined prices. Of course Ricardo recognized that prices would from time to time deviate from their underlying labour-values but once labour-values had been modified for minor complications such as the duration and composition of capitals then any such deviations of prices from values would be purely due to extraneous and accidental causes and were therefore of little concern to establishing the principles of political economy. Yet for Darimon and the socialist it was evident that the deviation of prices from labour-values was far from being an accident but was the norm that had to be explained. For Marx both perspectives were true in that labour-values determined prices only through the continual deviation of prices from labour-values. For the disassociated commodity producers to reconcile themselves as part of the total social division of labour, prices had to have a relative autonomy from labour-values. The deviation of prices from labour-values was therefore no external accident, as Ricardo took it, but an internal necessity.

In stepping beyond Ricardo, the distinctive character of Marx's abstract social labour theory of value now re-emerges with respect to money's function as the measure of value. In standing before exchange the labour embodied in a commodity still remains concrete disassociated labour. The commodity only has value insofar as it can anticipate, on the basis of previous cycles of production and exchange, the realization of this labour as abstract social labour in the form of money. The commodity at this point does not have a value as such, but a potential or latent value. This potential value is then expressed in an ideal or imaginary quantity of money by its ideal price. It is here that we find the kernel of truth of the idealist camp of monetary theorists.

Of course Ricardo (who very much originates from the materialist camp particularly that part represented by John Locke) passes over this point. From his embodied labour theory of value, as we have already noted, the realization of labour as value is taken as a given result. But from the perspective of an abstract social labour theory of value it is very much a real problem. As Marx comments at the end of his section on money as the measure of value: In order...that a commodity may in practice act effectively as exchange-value, it must quit its bodily shape, must transform itself from mere imaginary into real gold, although to the commodity such transubstantiation may be more difficult than to the Hegelian 'concept', the transition from 'necessity' to 'freedom', or to a lobster the casting of his shell, or to Saint Jerome the putting off of old Adam. (Capital I, p. 105) The opposition between the commodity and money cannot be simply collapsed into a formal identity like that of Ricardo, or for that matter into an Hegelian identity, but is a real process that can only ever be held within a provisional unity. The possibility of rupture is inherent and this becomes a little more evident, as we shall now see, once Marx moves on to consider the second function of money.

2) Money as the medium of exchange As we have seen, before exchange money stands before commodities as the external and ideal measure of their value. Now the commodity must enter into the process of exchange and with this money must take on the function of the medium for the circulation of commodities. This function becomes expressed in the formula for the simple circulation of commodities as follows: C1 -- M -- C2 That is: the producer of a commodity (C1) sells her commodities for money (M) which is then used to purchase another set of commodities (C2). Here money appears as the means through which the commodities which are a non-use-value for their producer become transformed into a set of commodities that do have a use-value for that producer. As such money can be seen to unite and resolve the opposition between use-value and non-use-value inherent within each commodity.

But this is not only true for the particular commodity but also for all commodities. The sale of a commodity for one commodity producer is at one and the same time a concluding purchase for another commodity producer. The twin movements C - M and M -- C for a given commodity producer are the movements M -- C and C -- M for two other producers and are consequently merely two links in the chain through which all commodities become circulated by money. Money therefore serves to circulate all commodities, moving them from the hands of their producers into the hands of their consumers and in doing so unites production with consumption.

Simply as a means of circulation money is merely the servant of the movement of commodities. In fact, expressed as a result, the simple circulation of commodities becomes merely: C -- C the formula for the simple exchange of commodities as if in barter. Money consequently vanishes from view, other than as a fleeting symbol of the value of exchanging commodities. As Marx himself goes onto explain: Insofar as the circuit C -- M -- C is the dynamic unity of the two aspects C -- M and M -- C, which directly change into each other, or insofar as the commodity undergoes the entire metamorphosis, it evolves its exchange-value [value] into price and into money, but immediately abandons these forms again to become once more a commodity, or rather a use-value. The exchange-value [value] of the commodity thus acquires only a seemingly independent existence....of gold, when it functions only as specie, that is when it is perpetually in circulation, does indeed represent merely the interlinking of the metamorphoses of commodities and their ephemeral existence as money. Gold [in this function] realises the price of one commodity only in order to realise another, but it never appears in a state of rest or even as a commodity in a state of rest.

The reality which in this process the exchange-value [value] of commodities assumes, and which is expressed by gold in circulation, is merely the reality of an electric spark. Although it is real gold, it functions merely as apparent gold, and in this function therefore a token of itself can be substituted for it. (Contribution, p. 114) So, as Marx goes on to point out in particular detail in the Contribution, in its function as the medium for the circulation of commodities, the money-commodity need only appear as a token of its own value. Indeed it may become represented by something that in itself is as worthless as a scrap of paper. This becomes clear if we briefly consider historical development of coinage and the consequent emergence of paper money.

Once metallic money becomes minted into coins of a standard weight there emerges the problem of the wear and tear of these coins. With the constant circulation of these coins their real weight begins to fall significantly below that of their nominal weight of issue. Yet, within limits these coins still serve to circulate commodities as if they were freshly minted coins with their full weight in gold or silver. Insofar as they are below weight such coins then can be seen to act as simply tokens of value.

But this is not all. With the development of commodity exchange into even minor exchanges of value, less precious metals become pressed into service as small change. Being made of less precious metals the intrinsic value of the metal content of these coins is far below their face value, yet again they are still able to function as a means with which to circulate commodities as if they were in fact made of gold or silver of the requisite weight and value. Money as a token of value becomes even more pronounced with the development of paper money. Since paper money has, for all intents and purposes, little or no intrinsic value it must act as a token for all of its face value. With paper money it then becomes clear that money is present only as a token of value; and it is thus with paper money that we find the medium of circulation par excellence.

As a mere token or symbol, the character of money in its function as a medium of circulation is diametrically opposed to that which we saw it assume with its function as the universal measure of value. In its first function money was only present as ideal or imaginary money. There was no need for the money-commodity to be present in its full material reality for a commodity to express its own intrinsic value in the form of its price. But while their was no necessity for the real presence of money, the pricing of the commodity still presupposed the real existence of money as a real materialization of human labour. If gold did not have a real existence then commodities could not express their value in a nominal amount of its weight.

Yet now, with its function as the medium of circulation, money must have a real presence in order that the commodity's price may be realized; but it need only be present as a symbol or token of itself. Thus the vital characteristic of money is now its presence rather than its real existence as a materialization of abstract social labour. Thus, as Marx himself points out: ...the two functions of money -- as a standard [measure] of value and a medium of circulation -- are governed not only by conflicting laws, but by laws which appear to be at variance with the antithetical features of the two functions. As regards its function as a standard of value, when money serves solely as money of account and gold merely as nominal gold, it is the physical material used which is the crucial factor...On the other hand, when it functions as a medium of circulation, when money is not just imaginary but must be present as a real thing side by side with other commodities, its material is irrelevant and its quantity becomes the crucial factor. Although whether it is a pound of gold, silver or of copper is decisive for the standard measure, mere number makes the coin an adequate embodiment of any of these standard measures, quite irrespective of its own material. But it is at variance with common-sense that in the case of purely imaginary money everything should depend on the physical substance, whereas in the case of the corporeal coin everything should depend on a numerical relation that is nominal. (Contribution, p. 121) It was a failure to grasp and resolve this paradox, which arises from the antithetical characteristics of these two functions of money, that, for Marx, had proved the crucial stumbling block for much of bourgeois political economy. None the more so than for Ricardo.

As we have seen, in the consideration of money in its first function as the measure of value, Marx was able, for the most part, to adopt Ricardo's line of analysis. This was because Ricardo, with his commitment to a labour theory of value, was able to grasp money in its real existence as the materialisation of human labour which is presupposed in the ideal price of a commodity. Again, in his consideration of money in its second function as the medium of circulation, Ricardo correctly identifies money in its real presence as a mere symbol or token of value. But Ricardo, for Marx, was unable to go beyond the analysis of these two functions to consider them in synthesis. Instead, once Ricardo passes from his analysis of money in its first function to an analysis of money in its second function he is obliged to abandon the results of his previous analysis; he has to forget the material existence of money that is presupposed in the ideal price of each commodity. As a result Ricardo, in his analysis of money as a medium of circulation, not only sees money as nothing other than a pure symbol, but comes to adopt uncritically Hume's quantity theory of money.

Hume had been one of the first of the 'practical philosophers' to propose a quantity theory of money. He had argued that the movements in the general price level in the sixteenth and seventeenth centuries were closely connected to import of gold from the Americas. Following every discovery and exploitation of gold seams in the New World there would be a general rise in prices with the importation of this new gold into Europe. The reason Hume put forward for such an increase in the price level following the import of new gold can perhaps be best explained with reference to the identity put forward by a more modern defender of the quantity theory of money who gives his name to the so-called Fischer equations: M.V = P.T This identity states that the total money in circulation (M) multiplied by the average velocity with which this money circulates (V) must equal the sum of all prices (P) multiplied by the number of transactions (T) in a certain period. Now given that the velocity of money was more or less constant and the number of transaction was given, then an increase in the amount of gold, due for instance to the discovery of new gold mines, could only lead to an increase in the general level of prices. Since the value of money was nothing other than the inverse of the general price level, then the value of money was inversely dependent on its quantity. So, for example, if there was an increase in the amount of money then the general price level would rise in order to absorb this increase and hence the value of money would fall, and vice versa.

From the analysis of money as the measure of value, however, it is clear that the value of money is not determined by its relative quantity, but, as with any other commodity, by the socially necessary labour time required for its production. From this analysis it is clear that the value of both commodities and money is determined in production and is therefore prior to circulation and exchange. Consequently, with the total value of commodities already determined, it is the amount of value that needs to be circulated which determines the quantity of money of a given value in circulation rather than the quantity of money which determines the value of commodities and thus the value of money. Hence, insofar as Ricardo adopted Hume's quantity theory of money he was obliged to abandon the results of his analysis of money as the measure of value, and along with it this his important distinction between money as a measure of value and as a standard of price.

This becomes most evident with Ricardo's intervention in the controversy surrounding the convertibility of paper money which required that he examine the relation between paper money and gold.(5) Hume had developed his quantity theory of money exclusively in terms of gold money. The task that Ricardo set himself was therefore to extend this theory so that it could be applied to paper money. For Ricardo, the difference between gold and paper money was that the quantity of gold was ultimately limited by the labour required for its production, whereas the amount of paper money that could be printed was unlimited. If the authorities allowed too much money to be printed then, as with the discovery of new gold mines in the case of gold money, the general level of prices would rise and the value of money would fall.

However, the printing of more paper money was far easier than the discovery of new gold mines. In order to hold in check the great temptation for both banks and governments to print more money, which could only lead to excessive price inflation, Ricardo came to advocate the close connection between the issue of paper money and the amount of gold held and circulating in the country.

For Marx, however, Ricardo had not succeeded in extending the laws of metallic money to paper money but quite the reverse. In showing how the quantity of gold-money in circulation altered the general price level, Ricardo had in fact shown how gold could become a token of itself as if it was purely symbol of value like that of paper money. How was this?

As we have seen, for Marx, the amount of money in circulation was determined, given its velocity of circulation, by its own already determined value and the value of the commodities that required circulation. Now if gold-money is replaced by paper money then this paper money will act as a medium of circulation insofar as it is able to symbolize the value of gold-money. The total value of this paper money will therefore be equal to the value of the gold-money that it now symbolizes i.e. the gold-value required to circulate the total value of commodities. This is regardless of its nominal value. Thus, for example, if the nominal value of this paper money was doubled by doubling the number of notes in circulation, then the total real value of this money would remain the same; it would be just that the real value of each note would be halved. Thus for Marx the quantity theory of money applies to paper money because it is purely symbolic money.

Now, if the amount of gold coins in circulation doubles, although both the total value of commodities that require circulation and the value of gold itself remain the constant, then, if the velocity of these coins in circulation remains the same, then indeed the general level of prices may well double as Ricardo and Hume would argue. But, for Marx, this would not be due to a fall in the value of gold-money, since as we have seen this is constant and determined in the gold mines not in the market, but because these gold coins are forced to act as a token of their own value (even if they are freshly minted coins of the requisite weight and quality). In this case: Gold as a token of value will fall below its real value... (Contribution, p. 172) The gold coins will therefore be acting as if they were paper money, which, as we have seen, is, for Marx, the form of money as the medium for the circulation of commodities par excellence.

So, for Marx, Ricardo had in effect extended the laws of paper money (namely the quantity theory of money) to metallic money. But he could only do so insofar as he considered metallic money purely in its function as a medium of circulation and hence insofar as he could reduce its character to that of a pure symbol or token of value. That is: If gold is money only because it circulates as a medium of circulation... it is forced to stay in the sphere of circulation, like paper money with forced currency issued by the State (and Ricardo implies this)... (Contribution, p. 172) If gold is not forced to stay within the sphere of circulation then any excess over and above that warranted by the value of commodities that require circulation may be withdrawn from circulation. It was Ricardo's failure to recognize this that led to the vehement controversies between his successors and their critics that surrounded the financial crises of the mid-nineteenth century and the 1844 Bank Act which Marx considers in Volume III and which we shall consider in chapter ten.

* The question that we must now ask is: why was Ricardo unable to resolve the paradox that arises with the first two functions of money? Why was he unable to synthesise his analyses of these two functions? Why could he only consider them in isolation? To answer this we must return once more to consider Ricardo's embodied labour theory of value.

As we have already noted, in adhering to his embodied labour theory of value Ricardo only considered the labour embodied in a commodity insofar as it was realized as the value of that commodity. Consequently, for Ricardo, the potential value of a commodity became collapsed into an identity with the actual value of that commodity. As a result the ideal price of the commodity, which is none other than the monetary expression of potential value, was taken to be fully realized in real money with the sale of the commodity. Ricardo therefore saw the movement C -- M, the sale of the commodity as a simple identity; an inevitable exchange of equivalents. He therefore only considered the sale of the commodity -- the movement C -- M - from the perspective of its result.

But the sale of the commodity is at one and the same time a purchase for another commodity owner. Hence just as the movement C -- M could be seen as a simple identity, an inevitable exchange of equivalents, then so could the concluding movement of the simple circulation of commodities, M -- C, be seen as such. Hence Ricardo came to see the entire movement C -- M -- C in its result. He came to see it, in what Marx terms, its dynamic unity; as little more than barter in which money only has a fleeting presence that simply oils the wheels of the circulation of commodities.

By considering the circulation of commodities in its result, by reducing it to little more than barter of the form C1 -- C2, Ricardo came to adopt the propositions of Say's Law which stated that since every sale is at the same time a purchase then total demand must always equal total supply. In adopting Say's Law, as we shall see later, Ricardo came to deny the inherent possibility of capitalist crises.

For Marx's abstract social labour theory of value, the labour embodied in a commodity can only become validated as abstract social labour, and thereby as value, by entering into the exchange and assuming the form of money. Hence Marx has to maintain the distinction between the potential value of a commodity and its realization as an actual value. He has to see the sale of a commodity not as a result but as part of a process. Hence he also comes to see the overall circulation of commodities as a process; a process that may well become interrupted and whose completion is only ever provisional. The simple circulation of the commodity, C -- M -- C, cannot be seen by Marx as a simple identity -- an inevitable exchange of equivalents -- but as a unity of opposition that may well become ruptured.

Thus in the exposition of his analysis of the simple circulation of commodities Marx is obliged to pinpoint the possible interruptions of its overall movement that may emerge in both its phases.

a) C -- M So let us first consider the interruptions that may emerge in the phase of the sale of the commodity; C -- M. Before exchange, a commodity has a notional price that reflects its potential value. But there is no guarantee that this notional price will become real money and thus there is no guarantee that the potential value of a commodity will be realized as actual value. As Marx puts it, the commodity- owner must entice the money with which to realize the value of her commodity out of someone else's pocket; but to do this the commodity must be a use-value for this owner of money: For this, it is necessary that the labour expended upon it [the commodity], be of a kind that is socially useful, of a kind that constitutes a branch of the social division of labour. But division of labour is a system of production which has grown up spontaneously and continues to grow behind the backs of the producers.

The commodity to be exchanged may possibly be the product of some new kind of labour, that pretends to satisfy newly arisen requirements, or even to given rise itself to new requirements. A particular operation, though yesterday, perhaps, forming one out of many operations conducted by one producer in creating a given commodity, may today separate itself from this connexion, may establish itself as an independent branch of labour and send its incomplete product to market as an independent commodity. The circumstances may or may not be ripe for such a separation. Today the product satisfies a social want. Tomorrow the article may, either altogether or partially, be superseded by some other appropriate product. (Capital I, p. 108) Thus the continual change in the social division of labour repeatedly threatens to thwart the realization of potential value. As Marx goes onto to illustrate with his favourite example of the weaver and his 20 yards of linen: ...our weaver's labour may be a recognised branch of the social division of labour, yet that fact is by no means sufficient to guarantee the utility of his 20 yards of linen. If the community's want of linen, and such a want has a limit like every other want, should already be saturated by the products of rival weavers, our friend's product is superfluous, redundant, and consequently useless. Although people do not look a gift-horse in the mouth, our friend does not frequent the market for the purpose of making presents. But suppose his product turns out a real use-value, and thereby attracts money? The question arises, how much will it attract? No doubt the answer is already anticipated in the price of the article, in the exponent of the magnitude of its value.

We leave out of consideration here any accidental miscalculation of value by our friend, a mistake soon rectified in the market. We suppose him to have spent on his product only that amount of labour-time that is on an average socially necessary. The price then, is merely the money-name of the quantity of social labour realised in his commodity. But without leave, and behind the back, of our weaver, the old fashioned mode of weaving undergoes a change. The labour-time that yesterday was without doubt socially necessary to the production of a yard of linen, ceases to be so today, a fact which the owner of money is only too eager to prove from the prices quoted by our friend's competitors. (Capital I, p. 108) Yet it is not only changes in the mode of producing linen that may interrupt the sale of linen and the realization of its potential value; there may be also be a change in the relation between the total supply of linen and the total social demand for it. As Marx goes on to point out: Lastly, suppose that every piece of linen in the market contains no more labour-time than is socially necessary.

In spite of this, all these pieces taken as a whole, may have had superfluous labour-time spent upon them. If the market cannot stomach the whole quantity at the normal price of 2 shillings a yard, this proves that too great a portion of the total labour of the community has been expended in the form of weaving. The effect is the same as if each individual weaver had expended more labour-time upon his particular product than is socially necessary. (Capital I, p. 109) Here then, we can see how, at the very outset of Marx's analysis of the simple circulation of commodities, the very real obstacles that must be vaulted if the potential value of a commodity is to be realized as actual value in the form of money. We can see the possible interruptions that may disrupt the movement of the first phase of the circulation of commodities. But what of the second phase of this circulation? b) M -- C The underlying problem facing the realization of the movement C -- M was that the commodity was not itself immediately exchangeable with other commodities. It had to find an external expression for its exchange-value by placing itself in a relation to money. Money, however, being the universal equivalent, the external expression of exchange- value for all other commodities, is in itself immediately exchangeable with all these other commodities. It would therefore appear that once the commodity had made the bold leap into money then it would be more or less home and dry.

This is indeed true in terms of the transformation of the single commodity taken in its result. But in taking the form of the universal equivalent, what appeared as the solitary act C -- M now emerges as a single link in the innumerable exchanges that make up the general circulation of commodities. The act of sale, C1 -- M, does not immediately or necessarily imply the subsequent act M -- C2. With the mediation of money the exchange of one particular commodity, C1, for another particular commodity, C2, is not, as it is in the case of barter, a single unified act that binds the two commodities together at that instant. Instead two commodities exchange by means of two distinct and independent acts; C -- M and M -- C.

Having made the leap from the particular commodity into money by sucessfully completing the act C1 -- M, the commodity owner is now in possession of money which may be used to purchase any other commodity. Hence the subsequent act M -- C2 may be replaced by the purchase of any other kind of commodity; ie by M -- C3, M -- C4, M -- C5 etc. Or alternatively the subsequent act of purchase may be delayed and the movement of value within the simple circulation of commodities interrupted as money. As Marx points out: No one can sell unless some else purchases. But no one is forthwith bound to purchase, because he has just sold.

With this observation Marx then rounds on those who adhere to Say's Law: Nothing can be more childish than the dogma, that because every sale is a purchase, and every purchase a sale, therefore the circulation of commodities necessarily implies an equilibrium of sales and purchases. If this means that the number of actual sales is equal to the number of purchases, it is a mere tautology. But its real purport is to prove that every seller brings his buyer to market with him. Nothing of the kind. (Capital I, p. 114) And as he adds in the corresponding passage in the Contribution with reference to the commercial crisis of 1857/58: The metaphysical equilibrium of purchases and sales is confined to the fact that every purchase is a sale and every sale is a purchase, but this gives cold comfort to the possessors of commodities who unable to make a sale cannot accordingly make a purchase either. (Contribution, p. 97) Here then Marx comes back to the point of crisis. Say's Law, with its reduction of the simple circulation of commodities to the immediate identity of barter, precludes the possibility of crisis. But systematic and regular exchange of commodities cannot persist within the narrow confines of barter; it requires the mediation of money and with this inevitably comes the possibility of crisis: Circulation bursts through all restrictions as to time, place, and individuals, imposed by direct barter, and this it effects by splitting up, into antithesis of a sale and a purchase, the direct identity that in barter does exist between the alienation of one's own and the acquisition of some other man's product. To say that these two independent and antithetical acts have an intrinsic unity, are essentially one, is the same as to say that this intrinsic oneness expresses itself in an external antithesis. If the interval in time between the two complementary phases of the complete metamorphosis of a commodity become too great, if the split between the sale and the purchase become too pronounced, the intimate connexion between them, their oneness, asserts itself by producing crisis. (Capital I, p. 115) So, considered in the dynamic unity of the simple circulation of commodities money has only a fleeting existence that serves to mediate and thus unite the process C -- M -- C. But at the same time as mediating and unifying this process money also splits it up into two independent and antithetical acts C -- M and M -- C. As such the movement of value through this circuit must become interrupted, for a greater or lesser time, as money. With this money begins to appear with its own independent existence. An appearance that comes to fruition with the third function of money; money as money.

3) Money as money The third function of money -- money as money -- serves as the ground for both money as a measure of value and money as the medium of circulation. It is from the perspective of money as money that the one-sided perceptions of money that arose with its first two functions can be finally resolved. For Marx it is an important failing of bourgeois political economy, including that of Ricardo, that it has failed to fully grasp the nature of money in its third function.

As we have seen, with money as the measure of value, money was present as ideal or imaginary money. Although money as the measure of value presupposed the real material existence of the money as a commodity it did not require its real and material presence. With money as the medium of circulation, money had a real material presence but only as a symbol or token of the real material existence of the money-commodity. Now, however, with money as money, money has to have a real material presence, it must be 'present in its own golden person'. As such it asserts its own independent existence as: ...the sole form of value, the only adequate form of existence of exchange-value, in opposition to use-value, represented by all other commodities. (Capital I, p. 130) Marx identifies three forms through which money comes to exhibit its own independent existence over and against all other commodities: as a hoard, as a means of payment and as world money. Let us briefly consider each of these in turn.

a) money as a hoard: Money first asserts its own independence from all other commodities by withdrawing itself from the very process of commodity circulation and becoming a hoard. As we have seen, the process of commodity circulation must become interrupted, at least momentarily, as money. Now if this interruption is indefinitely prolonged then value becomes petrified as a hoard of money. With the miser this petrifaction is no mere accident, but an end in itself. The miser sells not in order to buy but in order to accumulate the universal expression of social wealth and power; an accumulation that has no limits: The desire after hoarding is in its very nature unsatiable. In its qualitative aspect, or formally considered, money has no bounds to its efficacy, i.e. it is the universal representative of material wealth, because it is directly convertible into any other commodity. But, at the same time, every actual sum of money is limited in amount, and therefore, as a means of purchasing has only limited efficacy. This antagonism between the quantitative limits of money and its qualitative boundlessness, continually acts as a spur to the hoarder in his Sisyphus-like labour of accumulating.

It is with him as it is with a conqueror who sees in every new country annexed, only a new boundary. (Capital I, p. 133) While the role of the miser is of historical importance as a precursor to the capitalist, logically she still stands as a mere possibility. But the act of hoarding does not just arise with the miser; although with her it gains its fullest expression. While money as a hoard stands opposed to the circulation of commodities it still presupposes it and is in constant tension with it. Money can only become a hoard by being withdrawn from circulation and it can only preserve itself as the universal and most adequate form of value insofar as it has the potential to convert itself back into any particular form of wealth by re-entering the circulation of commodities.

But while money as a hoard depends on the circulation of commodities, the continued circulation of commodities comes to depend on a process of hoarding and dishoarding to bring the amount of money into accordance with the value of commodities requiring circulation. As Marx explains in the Contribution: The total quantity of gold in circulation must...perpetually increase or decrease in accordance with the varying aggregate price of the commodities in circulation...This is only possible provided that the proportion of money in circulation to the total amount of money in a given country varies continuously. Thanks to the formation of hoards this condition is fulfilled.

If prices fall or the velocity of circulation increases, then money ejected from the sphere of circulation is absorbed by the reservoirs of hoarders; if prices rise or the velocity of circulation decreases, then these hoards open and a part of them streams back into circulation. (Contribution, p. 136) This process of hoarding and dishoarding as a means to ensure the continuity of circulation becomes even more important with the more developed circulation of capital; which we shall see when we turn in the following chapter to consider Volume II of Capital. But for now we must proceed to the second form of money as money.

b) Money as the means of payment: As a hoard money came to assert its independent existence by withdrawing from circulation; now, as a means of payment, money asserts its independence by re-entering circulation and gaining its own independent movement.

Commodities may be bought and sold without any immediate exchange of money from the buyer to the seller. The buyer may instead agree to pay the seller at some more convenient date in the future. The relation between buyer and seller then becomes one of debtor and creditor. In this way the circulation of commodities is able to overcome, at least temporarily, the limits imposed by the need for the immediate presence of money -- of 'hard cash'. But sooner or later these debts must be settled by money. The real presence of money is only defered, and money must eventually become hoarded to meet these debts.

However, by overcoming the need for the immediate presence of money by defering it, not only is the movement of commodities freed from the disciplines of ready cash but also the movement of money becomes independent, or at least relatively autonomous, from the movement of commodities. Thus the independent existence of money becomes also gains its own independent movement.

With money as a hoard, and money as a means of payment, we can see then how money emerges with its own distinct and independent existence and movement over and against that of all other commodities. However, before we proceed to consider the implications of this we must briefly, for the sake of comprehensiveness, consider the third form of money as money -- world money -- which in a certain sense is a something of a digression for Marx's exposition as far as we are concerned.

g) World money: As world money, money obtains its most adequate form as the universal form of value. It is the ultimate form of money as simply money. But any full consideration of this form presupposes an analysis that points beyond Marx's Capital to his proposed but never written books on the state, foreign trade and the world market. So why did Marx retain this section on world money that appears both in the Contribution and Capital?

Firstly, it would seem a matter of theoretical tidiness. With money as world money, where money becomes the citizen of the world, money comes to 'fulfil its concept'. With world money, Marx's analysis of money as simply money comes to a point of closure.

Secondly, Marx has to include world money in order consolidate his critique of Ricardo's quantity theory of money whose essential arguments had been, for Marx, obscured by its reference to foreign trade and the international movements of gold bullion. He therefore has to at least indicate how the laws that govern money as world money may differ, and in some case are the reverse, of those that govern domestic money.

Whatever other reasons that may be produced to explain the inclusion of world money they do not concern us here. We must return to the implications that arise with the emergence of the independent existence and movement of money as money which was established with its first two forms.

* With money coming to assert its own independent existence and movement we reach the closest point to the full expression of the possibility of crisis. In the independent and external form of money, which now can assert its own movement over against the use-values represented by all other commodities, value can move independently of use-value. Yet there must still be a unity of value and use-value. If these two poles move too far apart then they must be forcibly re-united; and this occurs through crisis. As Marx elucidates in his Theories of Surplus-Value in terms of the rupture between purchase and sale in the simple circulation of commodities: If, for example, purchase and sale...represent the unity of two processes, or rather the movement of one process through two opposite phases, and thus essentially the unity of the two phases the movement is essentially just as much the separation of these two phases and their becoming independent of each other. Since, however, they belong together, the independence of the two correlated aspects can only show itself forcibly, as a destructive process. It is just the crisis in which they assert their unity, the unity of the different aspects. The independence which these two linked and complimentary phases assume in relation to each other is forcibly destroyed. Thus the crisis manifests the unity of the two phases that have become independent of each other. (TSV II, p. 500) And we should add that this independence between two phases of the simple circulation of commodities only emerges because money is able to gain its own independent existence and movement over and against that of all other commodities.

But, while Marx's investigation in his Theories of Surplus- Value at this point is made against bourgeois political economy on the basis of the question of crisis; and while also, as we have seen, Marx's presentation [Darstellung] in Capital repeatedly returns to, and is propelled forward by, the question of crisis; Marx, in Capital, is not primarily concerned with this question. At this level of abstraction, capitalism is simply an economy of generalized commodity exchange; there can be only the possibility of crisis, and as Marx himself comments: The conversion of this mere possibility into a reality is the result of a series of relations, that, from our present standpoint of simple circulation, have as yet no existence. (Capital I, p. 115) Hence, in concluding the passage where he examines the possibility that a commodity may not be sold -- the rupture in the movement C -- M -- Marx remarks: Here, however, we are only concerned with the phenomenon in its integrity, and we therefore assume its progress to be normal. (Capital I, p. 110) Here we see Marx coming to reassert the analysis of the integrity or unity of the commodity and money over that of their opposition and separation, and the consequent question of crisis.

So while the question of crisis repeatedly serves to drive Marx's exposition forward it is not its end. In establishing the independent existence and movement of money, and thus of value, Marx is not primarily concerned with the question of the possibility of crisis -- he is not concerned with showing the necessary independence of money in order to refute reformist and utopian solutions to the problem of capitalist crisis as he was in the Grundrisse -- but rather with establishing the ontological basis for capital. Consequently the question of crisis has to be closed off and placed at the margins of Marx's presentation here in Capital. In fact, as we shall show, crisis remains marginal throughout Capital. It belongs to a new presentation [Neue Darstellung] beyond Capital. Here then, we come to a crucial point of closure within Capital.

C) The capital-form With the analysis of the value-form we saw how Marx derived the necessity for the value of the commodity to take an external expression in the form of money. We then saw how money itself comes to gain its own independent existence and movement over and against all other commodities. An independence that becomes most evident in the midst of rupture and crisis.

With the appearance of money's own independent existence and movement, money can no longer be seen as a mere fleeting servant for the exchange and circulation of commodities; a mere means with which use-values are transferred from the hands of their producers to those of their consumers. The possibility now arises of money becoming the master of commodities; of money subordinating the circulation of commodities and use-values to its own independent movement -- the independent and external movement of value.

Having established the opposition and externalization of value into the material form of the commodity that arises with its money form, and with this the possibility of its own independent existence and movement, Marx is now in a position to derive capital; he is now able to present the transition of value from its money-form into the form of capital. The form within which value finally becomes the self-determining and self-mediating process of its own self-expansion.

How then does Marx make this transition from the money-form to the capital-form? Let us return to the simple circulation of commodities, but this time let us take up the perspective of money.

Unlike the commodity, which enters circulation only then to fall out of it again once it reaches the hands of its consumer, money, on entering the sphere of circulation is constantly being displaced from one hand to another. From the perspective of money's own movement circulation therefore appears as an extended chain of exchanges as follows: ...M -- C -- M -- C -- M -- C -- M ...

A movement that cannot only be reduced to the common phase of simple commodity circulation (i.e. C-M-C) but also to its inverted form, M -- C -- M. With this expression money is seen as the beginning and end of the process, (which is now buying in order to sell rather than selling in order to buy) while the commodity appears as merely its means.

Yet as such this process does not have its own motivation; it is merely an inverted reflection of the simple circulation of commodities. With the simple circulation of commodities, the commodity is sold because it possesses the quality of a non-use-value for its producer but at the same time has a use- value for the owner of money. Having transformed her commodity into money the commodity producer can then buy another commodity that does have the quality of being a use- value for her. Thus the motive force for simple circulation of commodities arises from the qualitative difference in commodities with respect to their use-values. In its inverted form -- M -- C -- M -- there can be no such qualitative difference since money is the same homogeneous commodity.

Yet as we saw with the miser, money may become coveted and accumulated for its own sake. The motive for the inverted form of the simple circulation of commodities may therefore become the quantitative difference between M1 and M2. This inverted form of the simple circulation of commodities then becomes expressed in what Marx terms the general formula of capital, or, alternatively, the formula of merchant capital: M -- C -- M' Where M < M' Here the miser, who accumulated money by selling but not buying, now develops into the merchant who accumulates money not by withdrawing money from the process of circulation but by buying commodities cheap and selling them dear.

Whereas the motive force for the simple circulation of commodities lay outside the sphere of commodity exchange itself in the needs and desires of the commodity producers themselves, the motive force for the circulation of the merchant becomes internal to it. It emerges as the insatiable accumulation of the universal and abstract wealth represented by money. With this formula we find the formal expression of capital -- the process of the self-expansion of value.

In developing into the form of capital, value comes to subordinate the movement of use-values to its own ends -- to its own self-expansion. As capital, therefore, value becomes an independent and objective force whose movement appears autonomous from the will and desires of human beings. But for value to take up the form of capital it has to overcome an important contradiction between its own general expression and the circulation of commodities.

Taken in its 'integrity', in its 'normal' course, the circulation of commodities appears as being based on the free and equal exchange of commodities. Commodities have, for the most part, been assumed to exchange according to their values. But the circuit of merchant capital implies unequal exchange. Either the merchant buys commodities below their value and then sells at their value, or else she buys them at their value but then sells them above their value. In either case the merchant must be able to impose an unequal exchange in either the first phase of buying, or else in the second phase of selling. While for each individual merchant there may be a possibility of taking advantage of the divergence of the prices of commodities from their values in order to buy cheap and to sell dear, over all it is a zero sum game since the total value in circulation is predetermined by the values created in production. One dealer's gain must be another's loss. Hence there can be no general basis for merchant capitalist's profit, and thus for the self-expansion of value, within the circulation of commodities. With the generalization of commodity exchange, merchant profit, by itself, become impossible.

How then is it possible for value to become self-expanding within a world of equal exchange? How is the transition from money to capital to be made? The answer is that the capitalist must find a commodity which can be used to create a value greater than that embodied within itself; and the only such commodity is labour-power. As Marx argues: The change of value that occurs in the case of money intended to be converted into capital, cannot take place in the money itself, since in its function of means of purchase and of payment, it does no more than realise the price of the commodity it buys or pays for; and, as hard cash, it is value petrified, never varying. Just as little can it originate in the act of circulation, the re-sale of the commodity, which does no more than transform the article from its bodily form back again into its money-form. The change must, therefore, take place in the commodity bought by the first act, M -- C, but not in its value, for equivalents are exchanged, and the commodity is paid its full value. We are, therefore, forced to the conclusion that the change originates in the use-value, as such, of the commodity, i.e. in its consumption. In order to be able to extract value from the consumption of a commodity, our friend, Moneybags, must be so lucky as to find, within the sphere of circulation, in the market, a commodity, whose use-value possesses the peculiar property of being the source of value. The possessor of money does find on the market such a special commodity in capacity for labour or labour-power. (Capital I, p. 164) The value of labour-power is determined, like the value of any other commodity, by the labour time necessary for its reproduction. In order to reproduce labour-power it is necessary to maintain the worker as a living individual who can continue to posses the capacity to labour. The labour time necessary to reproduce labour-power is consequently that which is required to produce the means of subsistence consumed by the worker and her family.

In taking possession of the labour-power of the worker the capitalist takes possession of the very source of value. By putting the worker to work, by consuming her labour-power, the capitalists is able to gain possession of freshly created value through the embodiment of the worker's labour in the final product. Yet the value the worker creates through the objectification of her labour is determined quite independently from the value of her labour-power. It is therefore possible for the capitalist to obtain a value at the end of the production process very much different from the value she paid for the worker's labour-power.

It is from this difference between the value of labour and the value of labour-power that we find the very basis of surplus-value and profit and hence of the self-expansion of value as capital. Indeed Marx ranks his discovery of the distinction between labour and labour-power alongside his distinction between abstract social labour and concrete private labour as his greatest advance over bourgeois political economy that he makes in Capital. By uncovering this vital distinction between labour and labour-power Marx is able to show in his theory of surplus-value how the semblance of capitalism as an economy based on the free and equal exchange of commodities is in fact based on the exploitation of labour. But in developing his theory of surplus-value Marx has to pass beyond the semblance of capitalism as an economy of generalized commodity exchange to examine its essential relations of production. As Marx himself concludes: The consumption of labour-power is at one and the same time the production of commodities and of surplus-value.

The consumption of labour-power is completed, as in the case of every other commodity, outside the limits of the market or of the sphere of circulation. Accompanied by Mr. Moneybags and by the possessor of labour-power, we therefore take leave for a time of this noisy sphere, where everything takes place on the surface and in the view of all men, and follow them both into the hidden abode of production, on whose threshold there stares us in the face 'No admittance except on business.' Here we shall see, not only how capital produces, but how capital is produced. We shall at last force the secret of profit making.

The sphere that we are deserting, within whose boundaries the sale and purchase of labour-power goes on, is in fact a very eden of the innate rights of man.

There alone rule Freedom, Equality, Property and Bentham. Freedom, because both buyer and seller of a commodity, say of labour-power, are constrained only by their own free will. They contract as free agents, and the agreement they come to, is but in which they give legal expression to their common will. Equality, because each enters into relation with the other, as with a simple owner of commodities, and they exchange equivalent for equivalent. Property, because each disposes only of what is his own. And Bentham, because each looks only to himself....

On leaving this sphere of simple circulation or of exchange of commodities, which furnishes the 'Free- trader Vulgaris' with his views and ideas, and with the standard by which he judges a society based on capital and wages, we think we can perceive a change in the physiognomy of our dramatis personæ. He, who was before the money-owner, now strides in front as the capitalist; the possessor of labour-power follows as his labourer.

The one with the air of importance, smirking, intent on business; the other, timid and holding back, like one who is bringing his own hide to market and has nothing to expect but a hiding. (Capital I, p. 172) * So, we have seen that with repeated reference to the question of rupture and crisis Marx was able to establish the independent existence and movement of value in its money-form, which then allowed him to identify capital as the form of self- expanding value. Thus we find that, while this question is at this point ever present, it is always marginal to Marx's principal line of theoretical development, since, at this stage, Marx's main concern is to present the derivation of capital in its integrity.

This marginalization of the question of crisis and rupture becomes even more pronounced now that Marx comes to delve into the essential relations of capitalist production with the development of his theory of surplus-value, as we shall see.

* * * II) The theory of surplus-value

In the first part of this chapter we followed in some detail the development of Marx's analysis of the commodity-form that is set out in the opening chapters of Capital. With this analysis we saw how Marx came to pose the question of the possibility of capitalism as an economy of generalized commodity exchange. However, in the course of addressing this question Marx increasingly came to invoke its inverse; the impossibility of capitalism; that is the possibility of its crisis and rupture. As we saw Marx did not seek to deny or preclude crisis; in fact it remains preserved within his abstract social labour theory of value -- and indeed it was repeated reference to this very question which served to drive Marx's analysis of money forward and thereby allowed him to derive the very category of capital.

Yet, for Marx, the question of crisis, however important to a socialist critique of capitalism, could, for the most part, only be deferred at this stage in his analysis. In fact, as we shall now see, in setting out his 'great discovery' -- his theory of surplus-value -- Marx has to fully marginalize and suppress this question along with that of class subjectivity and the counter-dialectic of class struggle. This, as we shall conclude, becomes reflected in what we shall term the provisional attenuation of Marx's abstract social labour theory of value into that of a quasi-embodied labour theory in the course of this exposition, and for that matter in the rest of the three volumes of Capital.

However, in the second part of this chapter, our main concern will be to see how the first fold of the closure that we have identified is both sustained and intensified within Marx's theory of surplus value. We shall therefore come to see how the attenuation of Marx's abstract labour theory of value parallels the attenuation of Marx's consideration of the capitalist production process from that of a subjective/objective process of alienation to that of an objective process of exploitation.

Before we consider how Marx's exposition of his theory of surplus-value -- around which Volume I, and in fact Capital as a whole, is constructed -- comes to impose and sustain this two- fold provisional closure in his broader thematic, we must first of all set out its salient points of development. Since the analysis of the remaining parts of Volume I of Capital are perhaps the most well known and commented upon of Marx's work and are not immersed in the dialectical complexities of form and substance that characterized his analysis of the commodity-form we need not detain ourselves too long in this task.

A) The theory of surplus-value and the accumulation of capital

i) The presuppositions for the production of surplus-value (the reduction of labour to variable capital) As we have seen, there is no basis for the self-expansion of value within the realm of free and equal exchange of money and commodities. If 'Mr Moneybags' is to make his money act as capital he must first buy labour-power and then put it to work in creating new values in the sphere of production. He must take possession of the very labour processes through which new commodities are produced. So Marx now proceeds to consider the labour process which produces commodities.

The labour process through which a commodity is produced is at one and the same time a process that produces the commodity's use-value and a process that produces that commodity's value. Hence, like the commodities that it produces, the capitalist labour process is two-fold. In chapter 7 Marx considers these two opposed aspects of the capitalist labour process in turn.

Taken in abstraction, the capitalist labour process, in its aspect as the production of use-values, is like any other form of labour process. It stands as a universal process of human labour; as nothing other than simple human praxis. It is simply conscious human activity that seeks to transform nature to its own ends and purposes. As Marx puts it : Labour is, in the first place, a process in which both man and Nature participate, and in which man of his own accord starts, regulates, and controls the material re- actions between himself and Nature. He opposes himself to Nature as one of her own forces, setting in motion arms and legs, head and hands, the natural forces of his body, in order to appropriate Nature's productions in a form adapted to his own wants. By thus acting on the external world and changing it, he at the same time changes his own nature. (Capital I, p. 173) All such human praxis, regardless of the specific social form it may assume, is constituted by three essential elements, which Marx identifies as follows:

...1, the personal activity of man i.e. work itself, 2, the subject of that work, and 3, its instruments. (Capital I, p. 174) Firstly, there must be purposeful human activity -- human labour. But this labour must have something external to work on. So secondly there must be a subject of work, which may be furnished either directly or indirectly from nature. Thirdly, as soon as it becomes at all developed, human labour must not only have something to work on but also something to work with - that is some form of an instrument of labour such tools or machines with which to augment the limited powers of the human mind and body. The more human labour develops the more the subjects and instruments of labour become themselves the products of earlier human labour (with the subject of human labour thereby becoming what Marx terms raw materials) and together come to constitute the necessary conditions of present human labour. Without these necessary conditions of labour, without these means of production, labour can only remain as a mere potential. It is this very condition that the wage-labourer finds herself in before the capitalist, as we have previously noted.

So, insofar as the capitalist labour process is one of the production of use-values, insofar as it simply seeks to transform nature to human ends and purposes, it stands as a representative of universal human labour, albeit in its most advanced and developed form. It is this aspect, as Marx points out, that bourgeois political economy holds aloft when it seeks to present the capitalist mode of production as the mode of production that is both natural and eternal. Yet this ignores the other aspect of capitalist production from which it derives its historical specificity; its aspect as a process of valorization.

In producing commodities the capitalist labour process not only produces use-values but values. Yet it is not the production of values as such that is the object of the capitalist production process but rather the production of surplus-value. As Marx rather sarcastically points out, if at the end of the production process the value of the commodities produced merely replaced the value of the labour-power and the means of production consumed in their production then the capitalist will be a little more than just peeved. The sole drive and purpose of labour process under the rule of capital is not the production of use-values to directly meet human needs nor simply the production of exchange-values with which to satisfy human needs via exchange, but the production of surplus-value with which to expand capital.

The question that Marx now addresses is: how is the labour process subsumed to the production of surplus-value and thus to the quantitative expansion of capital?

There are two fundamental preconditions for capitalist production. Firstly the means of production must be readily available as commodities that can be purchased by a sufficient quantity of money. Secondly the direct producers must be dispossessed from both the means of production and the means of subsistence so that their only means of survival is through the sale of their labour-power. On the basis of these two fundamental preconditions the capitalist is in a position to interpose him or herself between the worker as the bearer of labour, and the subject and instruments of that labour without which nothing can be produced. To take advantage of this the capitalist must first of all convert a part of her money- capital into those commodities that may serve as means of production, and then use the remaining portion of her money- capital to purchase the labour-power of the worker. As a result the worker is only able to gain the means of subsistence by working, and can only work by selling her labour-power to the capitalist. The capitalist is therefore able to take possession of the value-creating properties of the worker's labour by putting her to work with the means of production and consuming her labour power as labour in the process of production.

So, seen from the perspective of the capitalist, the original sum of money-capital must divest itself of its monetary form and assume the material and objective forms of both labour-power and the means of production. But in assuming these two distinct material forms capital acts at the same time to subsume them as objective moments within its own movement of self-expansion. Labour-power becomes subsumed as variable capital, while the means of production become subsumed as constant capital. As such these two parts of productive capital have two quite distinct objective functions in the valorization process through which new values are produced and capital expanded. Labour-power, being set in motion as labour, functions as the active principle of capital that acts on and transforms the inert and passive material forms of the means of production that comprise constant capital. It takes hold of the raw materials and instruments of labour and works them up into new commodities with new use- values bearing new and expanded values.

As the active objective principle of capital, as variable capital, labour's function with respect to the process of valorization is two-fold. Firstly labour acts to preserve the value of the means of production used up in the labour process. The past labour embodied in the in material forms of the means of production, and represented by their value, is transferred, and thereby preserved, by the action of labour into the new material forms of the final product which it creates. Secondly, labour acts to create new value which is added to that preserved from the means of production. This freshly created value that becomes embodied in the final product presents itself in two parts; that part which serves to replace the value of labour-power, the value advanced for the worker's means of subsistence, and a second part beyond this, which constitutes surplus-value, which is then appropriated 'free of charge' by the capitalist.

From this Marx is able to derive his well known formula for the value of the commodity under the conditions of capitalist production: w = v + c + s That is to say: the value of the final product, w, equals the value of variable capital (i.e. the value of labour-power), v, plus the value advanced for constant capital (i.e. the value paid for the means of production used up in the period of production), c, plus surplus-value, s.

So with this analysis of the capitalist labour process that is set out in chapters 7 and 8 we find the preconditions for Marx's theory of surplus-value. Yet in preparing the way for Marx's exposition of his theory of surplus-value we can discern an abrupt shift in emphasis away from subjective/objective ontology of the labour process as human praxis towards the reified forms of the labour process as a process of valorization. As a result labour comes to be considered only insofar as it can be reduced to an objective moment within capital's process of self-valorization. Reduced to the objective form of variable capital, labour-power, and indeed the worker, becomes counterposed to the means of production, not as subject to object, but as the active, as opposed to the passive, objective component of capital. The relation of labour to capital thereby appears as the reified relation of variable to constant capital; as a purely objective relation that finds its quantitative expression in what Marx later terms the value composition of capital as follows: k = c/v

Where k is the value compostion of capital.

Labour-power appears as a mere quantitative and objective element of productive capital. As a consequence the worker himself stands within this analysis as a mere object -- as a mere thing -- as Marx himself admits in passing: Man himself, viewed as the impersonation of labour- power, is a natural object, a thing, although a living conscious thing, and labour is the manifestation of this power residing in him (Capital I, p. 196) Here then, right from the start of Marx's theory of surplus- value, we can see how Marx closes off the subjective by emphasising the objective and reified relations of the capitalist production process. But let us now proceed to consider how this is further developed within Marx's presentation of the theory of surplus-value as such.

ii) The theory of the production of surplus-value as such With the commencement of production, as we have seen, labour- power becomes counterposed to the means of production as variable to constant capital. Through the course of production, labour-power, in creating fresh value, now becomes counterposed to the surplus-value that it itself creates.

Insofar as the capitalist is able to force the worker to work beyond that time required to reproduce the value of labour-power which the capitalist advanced as variable capital, then the new value created by the labour of the worker comprises two parts and is expressed as: l = s + v Where l is the value created by living labour.

The degree to which the capitalist is able to force the worker to produce surplus-value, that is the degree to which the capitalist can exploit the worker, is then quantitatively expressed by the proportion of newly created value the capitalist can appropriate as surplus-value to that part which merely replaces the value advanced to pay for the worker's labour-power. That is by what Marx terms the rate of surplus- value (or alternatively the rate of exploitation), e: e = s/v The essential relation of capitalist production can now be seen as the exploitation of labour by capital which assumes an objective and quantifiable expression in the rate of surplus-value. Here, with the exploitation of labour and the consequent production of surplus-value we can see how, in the process of capitalist production, the ceaseless drive of the capital-form to leap beyond its quantitative limits is substantiated. The question that Marx must now ask is how can capital overcome its own quantitative limits by increasing the rate of surplus-value (and subsequently how does this serve to qualitatively transform the very nature of the production process)?

The rate of surplus-value can be increased extensively, through what Marx terms the production of absolute surplus- value, or else intensively, through what he terms the production of relative surplus-value. Let us briefly consider each of these in turn.

With the production of absolute surplus-value the capitalist seeks to produce ever more surplus-value by extending the length of the working day. If the time required for the worker to reproduce the value of her own labour-power is constant then any extension of the working day will lead to an increase in the labour time devoted to producing surplus- value. Hence by lengthening the working day the capitalist is able increase the production of surplus-value and thereby raise the rate of surplus-value. For instance, if it takes the worker four hours of labour to produce the value of her labour-power and the worker is obliged to work eight hours a day, then the worker will work for four hours producing surplus-value for the capitalist and the rate of surplus-value will be 100%. If, however, the capitalist is able to make the worker work for twelve hours with no extra pay then the worker will produce eight hours of surplus-value for the capitalist and the rate of surplus-value will double to 200%.

Of course there are strict limits to the actual extension of the working day since there are only so many hours in the day and only so many days in the week and the worker needs time to recuperate. Against this the capitalist will make every effort to squeeze every last minute of the day that she can from her workers. It is therefore this endless drive towards the production of absolute surplus-value which presses the capitalist to force her workers to worker harder and longer, but such efforts are ultimately limited by the length of the working day and the stamina of the workers. These limits can only be overcome through the production of relative surplus- value.

The production of relative surplus-value is achieved through the application of new techniques of production and new technologies which increase the productive power of labour. Insofar as the value of labour-power is determined by a given set of use-values that comprise the means of subsistence of the worker, then, with the growing productive power of social labour, the socially necessary labour time required to produce these use-values will tend to decline. As a result the value of the worker's means of subsistence will fall and along with it the value of her labour-power. With this fall in the value of labour-power the worker will be able to reproduce the value of variable capital in a shorter working time. With the length of the working day given, the worker will therefore be working for a longer time producing surplus-value for the capitalist.

For example, if our worker works for twelve hours, of which four reproduce the value of her labour-power, then, as we have seen, the rate of surplus-value is 200%. Now, suppose the time it takes for the worker to reproduce the value of her labour-power falls to two hours. Then, given that the working day remains at twelve hours, the worker will now be working for ten hours for the capitalist and hence the rate of surplus- value will double to 500%.

Hence, through both the production of absolute and relative surplus-value, through both the intensive and extensive exploitation of labour, capital is able to realize itself as self-expanding value. It continually seeks to overcome barriers to its own quantitative expansion but in doing so it comes to alter the very character of the labour process, subsuming it to its own nature.

Marx examines this qualitative transformation of the production process brought about through the drive for the production of relative surplus-value in Part IV of Volume I. Here, in great detail, Marx traces out the vast increase in the productive powers of labour that the specifically capitalist mode of production had already achieved in his day. From the advantages of the division and co-operation of labour that came into being with the emergence of the factory system, to the harnessing of science and technology with the mechanization and automation of production, Marx recounts vividly the historical development of the capitalist mode of production. However, while this account of the enormous development of the productive forces brought about by the relentless drive for the production of relative surplus-value is amply illustrated by its dire consequences for the plight of the working people, its primary theoretical concern is the objective development of capitalist production as a force in itself. The implications drawn out for the plight of the working people, and indeed of humanity as a whole, are at this stage merely a counterpoint to Marx's main theoretical theme.

So, in the presentation of Marx's theory of surplus-value as such, we can see the relation of capital to labour, which is essential to capitalist production, being set out as both an objective and quantifiable relation; as the relation of variable capital to surplus-value. Having been reduced to variable capital the labour of the worker remains within this analysis as a mere object, but now it appears not as an active but as a passive object; a natural barrier to the production of surplus-value. A mere object of exploitation. Let us consider this important point a little more closely.

Both the production of absolute and relative surplus-value is limited by the worker's need to rest and recuperate, which limits the length of the working day, and by the workers need for a given means of subsistence, which determines the value of her labour-power. Yet such needs of the worker, from the perspective of the production of surplus-value, are simply external and natural barriers to be overcome. The production of surplus-value, and its analysis, must ceaselessly drive towards the reduction of the worker to mere biological necessity. Indeed as we have previously noted when we considered the incorporation of the book on wage-labour, it is only at the very margins of the theory of surplus-value that this reification of labour into mere natural object is in any way reversed, and then as only a tangential digression.

In quantitative terms, as we have seen, the needs of the worker are, beyond a certain point, irreducible. The worker needs so much time to recuperate and so much means of subsistence to restore her labour-power. A quantitative barrier that can only be deferred by the production of relative surplus-value which by increasing the rate of surplus- value comes to qualitatively transform the process of production and with it the relation between variable capital and surplus-value.

Even in Part IV where Marx moves from the quantitative to the qualitative aspects of the production of surplus-value, his main concern is to show how the drive to increase the production of relative surplus-value manifests itself in the historical transformation of the technical relations of production and the objective organization of labour as a productive force. The worker, and indeed the working class, remain here as mere object (albeit an historical one).

iii) The reproduction of the preconditions of capitalist production

With the theory of surplus-value it becomes clear that capital can only realize itself as self-expanding value through the exploitation of labour. It can only break through its quantitative limitations through the extraction of surplus- value from living labour, and this is given quantitative expression as the rate of surplus-value; s/v. However, for capital to maintain itself as self-expanding value this surplus-value must itself become, at least in part, expanded capital, that is it must accumulate as capital. We therefore come to the theory of reproduction and accumulation of capital which finds its quantitative expression in the rate of profit:

r = s/ (c + v) This we find in Part VII of Volume I. Let us then consider Marx's theory of accumulation The structure and development of Marx's argument in Part VII lacks the overall clarity that was evident in the earlier chapters of Capital. We find Marx's presentation repeatedly interrupted by rather minor digressions that address certain points raised by bourgeois political economists, revealing this part of Volume I to be still very much in a work in progress. Yet despite its lack of polish we can still summarize the principle arguments at work rather succinctly.

For capital to sustain itself as self-expanding value it must be able to reproduce its own preconditions and this reproduction is two-fold. Firstly it must reproduce the material preconditions for further production. So at the end of the production process it must have reproduced the means of production and the means of subsistence consumed during the production process. But to accumulate it must not only reproduce these means of production and subsistence, it must reproduce them on an expanded scale. It must create the material conditions for its own expansion via the expansion of the preconditions of material production.

Secondly, capital must reproduce itself as a social relation. It must reproduce the conditions in which the worker has nothing to sell but her labour-power. The capitalists must therefore find themselves at the end of the production process in the exclusive possession of both the means of production and the means of subsistence so that worker is excluded from them.

How then does capital reproduce its own social and material preconditions? The short answer to this is that at the end of the production process both the means of production and the means of subsistence emerge in the form of commodities that are the private property of the capitalists. The workers, who have consumed the means of subsistence produced in the previous production cycle, once more find themselves with only their own labour-power to sell to replenish their means of survival. Thus the workers must again enter the labour market to sell their labour-power, and again the capitalists will have the means with which to pay for it. But it is not enough merely to reproduce this precondition; it must be reproduced on an expanded scale if capital is to accumulate.

How then does Marx proceed?

Firstly we must point out that Marx, in considering the reproduction of the material preconditions for capitalist production, is not at this point concerned with determining the precise quantitative relations between the means of production and the means of subsistence that must hold between particular departments and branches of industry to ensure the successful accumulation of capital; that as we shall see is considered in Volume II with the schemas of reproduction. What Marx is primarily concerned with here in Volume I is how capital as a whole, in producing the means of production and subsistence as commodities, can purchase the means of production from itself, and sell the means of subsistence in exchange for labour-power, in accordance with the laws of free and equal exchange of the circulation of commodities. Marx is therefore primarily concerned with the quantitative relations of value.

At the beginning of production capital comprised the combined value of the means of production and the means of subsistence exchanged for labour-power. At the end of production we have a mass of commodities whose value has been augmented by surplus-value expropriated in the course of production. So we have: c + v => c + v + s or C => C + s The value of capital advanced, C, has become augmented by the production of surplus-value, s.

For capital to accumulate not only must the original value of the capital re-enter the subsequent production cycle by assuming the material forms of both the means of production and the means of subsistence but so must surplus-value. Surplus-value must become capital; it must become capitalized by assuming the material forms of an increased mass of means of production and subsistence. At least in part, s => DC It can be seen then, that taken as a whole, capital can only accumulate insofar as surplus-value is capitalized in subsequent production cycles. The rate of accumulation is therefore limited, and hence ultimately regulated, by the relation of surplus-value to the mass of originally advanced capital -- that is by the rate of profit. That is; if the rate of accumulation is: g = DC/C and given that s = DC then it follows that with r = s/(c + v) = s/C then r = g It is only insofar as surplus-value is capitalized that capital can accumulate because a certain part of the surplus- value produced must be consumed by the capitalist as unproductive revenue. Surplus-value therefore becomes divided into that part which is to be capitalized and that part which is to be consumed as revenue. We therefore have the expression: s = R + DC where R is the revenue of the capitalist.

The rate of accumulation thereby becomes: g = (s -- R)/ C However, in becoming capitalized surplus-value is further divided into that part which is capitalized in the material form of the means of subsistence to be exchanged for labour- power and that part which is capitalized in the form of the means of production. We therefore have the expression: s = R + Dc + Dv Here then we have the quantitative value relations that must hold to ensure that capitalist production is able to reproduce its material preconditions in the realm of exchange without rupture or crisis. But as we have noted it is not enough for capital to supply the necessary quantities of the means of subsistence and production in the form of commodities. It must also have an ample supply of labour-power which it does not directly produce itself. So Marx must now consider how capital accumulation comes to regulate the reproduction of labour-power through the growth of working population.

The accumulation of capital faces an external barrier in the limits to the natural growth in the working population. It is no good for the capitalist class as whole to expand the production of the wage goods if the amount of labour-power that they can command is limited. Given that the supply of labour-power is directly limited by the size of the population then the increase in the amount of variable capital that can be accumulated will be limited by the growth in the working population. With a constant value composition of capital this limitation on the accumulation of variable capital will at the same time be a barrier to the accumulation of capital as a whole.

However, capital can constantly defer this ultimate barrier imposed by the limited growth of the working population by revolutionizing the production process so that the value composition of capital is reduced. Here, in graphic detail, Marx describes at great length how capital, through continued technological change and reorganization of production, comes to repeatedly expel labour from the process of production. How it protects itself from the limitations of the natural growth of the working population by the creation and maintenance of an 'industrial reserve army' of unemployed workers. And how, as a result, the working conditions of working class alternate between the overworking of capitalism's boom times to the enforced idleness of its slumps.

Yet while Marx describes in graphic detail how the rhythms of the accumulation of capital impose themselves, and thereby regulate the conditions of the working class, he is still only concerned with the working class as object; in itself, as the simple aggregation of individual workers, as an objective condition for capital's accumulation. Just as the worker stood as an objective and natural barrier to the production of surplus-value, so now does the natural growth in the working class stand as an objective and natural limit to the accumulation of capital. Indeed here we only see the production of both relative and absolute surplus-value writ large, in terms of not merely of production but in terms of the unity of both production and circulation.

With Marx's theory of accumulation we see how the production of surplus-value logically produces its own material and social presuppositions. And once more we can see Marx setting out from the quantitative and objective relations of capitalist production. Even when Marx proceeds to the qualitative it is still firmly rooted in the objective. The worker, now the working class, remains as mere object regulated by the rhythms of the objective laws of the dialectic of capital. This is further sustained, although necessarily to a lesser degree, in Marx's analysis of the historical genesis of capital in the concluding Part VIII of Volume I which is concerned with the 'primitive accumulation of capital'. We have dealt with this before in chapter 7 and need not consider this conclusion to Volume I any further here.

* So to conclude: in the presentation of Marx's theory of surplus-value that we find in Capital we can see that Marx comes to emphasize the objective; that is he is primarily concerned with the manifestation of the essential social relations of capitalist production in the reified and quantifiable categories of political economy. These reified categories are given quantitative expression by the three ratios; k, e and r, which then mark the development of Marx's theory of surplus-value. So, while k = c/v marks the preconditions of the production of surplus-value, e = s/v marks the production of surplus-value itself and r = s/(c + v) marks the post-conditions of the production of surplus-value (or surplus-value as its own presupposition).

This emphasis on the objective -- this closing off of the counter-dialectic of class struggle -- becomes far more evident if contrasted to the process of investigation that led up to the presentation of Marx's theory of surplus-value in Capital. As we shall now see in the following section of this chapter, in his investigation into the production of surplus-value Marx is far more concerned with how the social relations of capitalist production become reified; how, for example, labour becomes reduced to a mere objective component of capital -- as variable capital. Capitalist production is consequently seen as not merely an objective process of exploitation but also as an ontological process of alienation; a process in which the worker not only produces surplus-value for the capitalist but in doing so is reduced from subject to object while producing capital as an alien subject.

B) Alienation and exploitation in Marx's theory of surplus- value The dialectic of human praxis -- and preserved within this the whole question of human alienation -- forms the ontological basis for the entire Marxian project; and it is in no way displaced within Marx's critique of political economy. Indeed, as a critique and as a advocation of communism, this problematic of a critique of political economy is ultimately incomprehensible in the absence of this ontological basis. As Arthur has noted:

On the basis of...[the] ontological priority accorded to productive activity all modes of production are open to radical critique. It is the interplay in Marx's theory between the permanent moment of mediated unity of man and nature, and the historically specific forms that this takes, that allows critical space for the diagnosis of the self-supersession of a given form. (Arthur 1986, p. 143) In fact we could say that Marx's critique of political economy is driven forward by the very ontological question of how, in the social forms and categories historically specific to the bourgeois epoch, the process of human productive activity becomes at one and the same time a process of alienation and reification. If this is so then it would seem reasonable to expect that with the theory of surplus-value, where Marx comes to set out the essential laws and forms of capitalist production itself, that such ontological questions would stand well to the fore. And indeed this is evident in the very opening of Marx's presentation of the theory of surplus-value where he considers the two-fold character of the capitalist labour-process.

Firstly, as we have seen, considered in its character as a process for producing use-values the capitalist labour-process appears as simply a process of universal human praxis, as a first order mediation that serves to unite the human being with nature and society. Secondly, seen as a process of valorization, the capitalist labour process can be understood as a second order mediation. A mediation in which the unity of the human being with nature and society is not only an alienated unity but also one that is historically specific. Hence we may say that the two-fold character of the capitalist labour process is a distinction that can be seen to derive directly from the basic ontology of human praxis. A distinction inscribed at the very out set of Marx's theory of surplus-value.

However, in moving onto the relation of variable and constant capital in chapter 8, Marx proceeds to develop the theory of surplus-value primarily as a theory of exploitation. A line of theoretical development within which the working class only enters as exploited object rather than as alienated subject. Only after the quantitative analysis of the production of surplus-value has turned into the qualitative analysis of the changes in the very nature of the labour process brought about the production of relative surplus-value do we find the worker cast in any way as subject. Only then do we find the worker situated in the poverty of exclusion and only then do we find, in historical terms, the subjective resistance of the worker to the advance of capital (with for example Marx's description of the Luddite movements in chapter 15). Even then the worker as subject is for the most part confined to empirical and descriptive digressions that are peripheral to the main theoretical thrust of the theory of surplus-value.

Thus we find that despite all its early promise, the principal line of theoretical development of Marx's theory of surplus-value that is presented in Capital comes to bury its ontological basis, and with it the subjectivity of the counter- dialectic of class struggle, and instead asserts the objectivist logic of capital. This is witnessed by the numerous 'objectivist' readings of Capital. From the Althusserian readings, that deny all connection of Capital to the writings of the early 'immature' Marx; to the readings of the Neo-Ricardians, who seek to reduce Marx's theory of exploitation to a pure objectivist theory of the distribution of a social product. So we may well ask once more: why is this?

As we saw when considering the 'problem of the beginning' in the previous chapter, the social relations between human beings become manifest within bourgeois society as relations between things. This reification of social relations means that the economic relations of the capitalist mode of production present themselves as objective laws and categories. And it was as such that they were grasped by bourgeois political economists. Therefore, in making his critique of political economy Marx had to start with bourgeois economic relations as object. Their subjective side had to be suppressed. Hence Marx began with the simplest bourgeois economic form, value as object -- that is as the commodity. In developing value into its form as capital Marx has to reassert it as object. He has to establish it the objective laws of capitalist production independently and in abstraction from its subjective determinations. It is in this way that he comes to provisionally assert the dialectic of capital over the counter-dialectic of class struggle as a logical necessity.

As a consequence of all this the whole question of human alienation that arises with the ontology of human praxis becomes necessarily attenuated in Marx's theory of surplus- value to that of the problem of exploitation. The problem of the alienated subject thereby becomes closed off. But it is only provisionally closed off. We can still see in the problem of exploitation the problem of alienation albeit in attenuated form. In fact we may say that the problem of exploitation is simply the objective and quantitative aspect of the problem of human alienation within the capitalist mode of production.

Having restated our thesis concerning the provisional closure of the subjective in relation to Marx's presentation of the theory of surplus-value we must now see how it became consolidated.

i) From the Grundrisse to Capital The attenuation of the problem of alienation into that of exploitation within the presentation Marx's theory of surplus- value in Capital becomes evident once we consider it in relation to the formation of this theory, not only in terms of the Grundrisse but also in what has become known as the 'missing sixth chapter' of Capital.

This 'missing sixth chapter' or, to give its full and proper title, the 'Results of the immediate process of production', was written between 1863 and 1866 and was a fragment of the preliminary drafts of Capital which Marx was writing at that time. According to Mandel, in his introduction to the English translation of this fragment, the 'Results of the Immediate Process of Production' was to have been the seventh chapter of Volume I. This is indicated by a provisional list of contents contained in one of Marx's notebooks which is thought to have been written in 1862 and that Mandel details as follows: After the first five parts, which are maintained in the final version, it reads as follows: 6. Reconversion of surplus-value into capital.

Primitive accumulation. Wakefield's colonial theory.

7. Results of the Production Process -- the change in the form of the law of appropriation can be shown either under 6 or 7.

8. Theories of surplus-value.

9. Theories of productive and unproductive labour. (Capital *I, p. 943) Chapters 8 and 9 of this plan were subsequently dropped to be incorporated into Marx's Theories of Surplus-Value. Furthermore, the first chapter (which corresponds to Part I in the final published version) was then to have been designated as an introduction leaving the fragment being marked as chapter 6. Hence it is referred to as the 'missing sixth chapter'. In the final version, however, what had been chapters became parts. What was to have been chapter 6 was then dropped and replaced by the present Part VI: Wages, that came with the incorporation of the book on wage-labour, while money and commodities was reincorporated into the main text as Part I.

So what then do we find in this 'missing sixth chapter'? In broad content Parts II and III, which are the parts most relevant for our purposes, recapitulate the entire theoretical development of the theory of surplus-value that is contained in Parts IV and V of Capital as it exists today. The question that arises is why, given that Marx had considered in great detail the theory of surplus-value in Parts IV and V should he deem it necessary to go over this ground once more before bringing Volume I to its conclusion? What was it in his original treatment of the theory of surplus-value that was inadequate?

We may obtain a possible answer to this question if we consider this recapitulation of the theory of surplus-value a little more closely. What we find in Parts II and III of the 'missing sixth chapter' is an attempt by Marx to come to grips with the fetishized character of capital. Marx is concerned to show in detail how capital as first and foremost a social relation manifests itself as a thing -- that is how the capital relation becomes reified. In fact we may say that 'missing sixth chapter' has an homologous relation to the theory of surplus-value as the fourth section of chapter 1 (the section that is concerned with commodity fetishism) has to the development of the commodity-form and the theory of value. It seeks to correct the overly 'objectivist' treatment of the relation of capital that emerges within the principal line of theoretical development presented in Parts IV and V.

In the course of the investigation evident in the Grundrisse we find a complex tangle of the question of the exploitation of labour with that of its alienation and the associated question of the fetishization of the capital-labour relation, particularly in the parts concerning the transition of money and labour into capital. What is more this tangle is further compounded by various digressions into such tangential problems as the distinction between productive and unproductive labour and the abstinence theory of profit. As a result we find that, in the Grundrisse, Marx never gets to the point of producing the categories of variable and constant capital, which are so vital in the development of Marx's critique of political economy in Capital, even though all the essential elements for these twin categories are there.

In moving towards his presentation [Darstellung] Marx has to cut through this tangle. Firstly the tangential digressions are relocated. We find the question of productive and unproductive labour deferred for the most part to Volume II (although it is a question still addressed in the 'missing sixth chapter'); while the abstinence theory of profit is, as we have seen, relocated to the discussion of the accumulation and reproduction of capital in Part VII. Secondly, and more importantly for the question at hand, it appears that all material relating to the fetishization of the capital relation and the objectivisation and alienation of labour was removed from the principal line of theoretical development and placed in what we now have as the 'missing sixth chapter'. This allowed Marx to proceed smoothly from his analysis of the capitalist labour process to the distinction between constant and variable capital of chapter 8 and from there to derive, without any unnecessary complications, the quantitative relations of the theory of surplus-value.

Of course this raises the question of why the 'missing sixth chapter' was omitted from the final version of Capital. We may speculate that Marx simply blended its contents back, particularly within Part VII on the accumulation and reproduction of capital. If this was so then its impact has clearly been lost. An answer to this question depends on a close comparison of the preliminary manuscripts and the final published versions. This a task that can only be left to those more conversant with the original German manuscripts.

Given that we are correct in our understanding of the broad development of Marx's theory of surplus-value from the Grundrisse, through the 'missing sixth chapter' to final published versions of Capital, then we may proceed to discern the movement of closure more closely. This we shall do by considering the attenuation of the question of alienation -- and with it class subjectivity -- in terms of the three distinct and successive moments of capitalist production that, as we have seen, were given, at least implicitly, quantitative expression in Capital under the three headings which we have previously identified: 1) k, the value composition of capital (the relation of variable to constant capital).

2) e, the rate of surplus-value (the relation of surplus labour to necessary or unpaid labour).

3) r, the rate of profit (the expansion of capital as a whole).

Let us then consider each of these three moments of capitalist production in the light of what we find in the corresponding parts of the Grundrisse and the 'missing sixth chapter'.

1) k: the opposition of variable capital to constant capital Capitalist production presupposes the reduction of the worker as subject to the commodity-object, labour-power, and then, in the act of production, subsumes labour-power to itself as variable capital. As a result productive capital becomes a unity of opposition: a unity of variable capital opposed to constant capital -- of living to dead labour -- both subsumed within the social form of value as capital. In Marx's presentation of the theory of surplus-value in Capital this opposition is, for the most part, taken as a result. What is important for Marx in this presentation is to show the distinctive roles variable and constant capital play in the preservation and creation of value and thereby reveal the basis upon which surplus-value is expropriated by capital. As a consequence we find the working class entering Marx's exposition of the relations of capitalist production as little more than mere object; as variable capital, a mere objective component part of the self-expansion of capital.

In the Grundrisse and in the 'missing sixth chapter' this is not so much the case. In the Grundrisse Marx is still at work in abstracting from class subjectivity, while in the 'missing sixth chapter' he can be seen attempting to correct any overemphasis on the 'objectivity' in his exposition of the theory of surplus-value that may lead to a fetishistic understanding of the social relations of capitalist production. Thus in these two works we find the opposition of the variable to constant capital as also the opposition of labour to capital and hence of worker to capitalist. An opposition of subjects that can only too easily erupt into class antagonism. It is with this that the provisional resolution of this opposition that the attenuation of class subjectivity is established in Marx's exposition of the theory of surplus-value in Capital, and thus it is this relation that we must examine in particular detail.

The transition of money into capital, and with it the subsumption of labour-power into variable capital, is a movement of two distinct phases. The first phase occurs within the realm of free and equal exchange of commodity circulation. The second phase occurs within the exploitative realm of capitalist production. Yet while these two phases are distinct each serves to structure the other. The capitalist only buys labour-power in order to set it to work in the sphere of production so as to produce surplus-value, but in producing surplus-value for the capitalist in the production process the worker reproduces the preconditions for her reappearance in the realm of exchange as the commodity labour-power.

This connection is all the more clear in the Grundrisse since, unlike Capital where the two phases are treated for the most part separately -- the first in Part II and the second in Part III -- the two phases of this transition are considered side by side. And this is also true, albeit to a lesser extent, in the 'missing sixth chapter'.

How is the sale and purchase of labour-power structured by the capitalist relations of production that presuppose it? As Marx points out, simple commodity circulation merely presupposes a number of free and equal commodity owners each of which acts at one time as a buyer and at another as a seller hence there exists no distinction between them except in the plurality of the commodities they have to sell. This is no longer true once commodity exchange is seen to be based on capitalist production: Although capitalist and worker confront each other in the market place only as buyer, money, on the one hand, and seller, commodity, on the other, this relationship is coloured in advance by the peculiar content of their dealings. This is particularly true since both sides appear constantly, repeatedly in the market-place playing the same opposed roles. If we consider the relations of commodity-owners in general in the market- place we see that the same man appears alternatively as the buyer and seller of wares. The fact that two men differ from each other as buyer and seller is of ever diminishing significance since in the course of time everyone assumes all the roles in the sphere of circulation. Now it is also true that once the worker has sold his labour-power and transformed it into money, he too becomes a buyer, and the capitalists appear to him as the mere sellers of goods. But in his hand money is nothing but a means of circulation. In the actual commodity-market, then, it is quite true that the worker, like any other owner of money, is a buyer and is distinguished by that fact alone from the commodity owner as seller. But on the labour-market, money always confronts him as capital in the form of money, and so the owner of money appears as capital personified, as a capitalist, and he for his part appears to the owner of money merely as the personification of labour-power and hence of labour, i.e. as a worker. The two people who face each other on the market-place, in the sphere of circulation, are not just a buyer and a seller, but capitalist and worker who confront each other as buyer and seller. Their relationship as capitalist and worker is the precondition of their relationship as buyer and seller. Unlike the situation in the case of other sellers, the relationship does not arise directly from the nature of commodities. This derives from the fact that no one directly produces the products he needs in order to live, so that each man only produces a single product as a commodity which he then sells in order to be able to acquire the products of others.

Here, however, we are not concerned with the merely social division of labour in which each branch of labour is autonomous...What we are concerned with here is the division of the constituents of the process of production itself, constituents that really belong together. This division leads to the progressive separation of these elements and their personification vis-a-vis each other..(Capital *I, p. 1014) So, with simple commodity exchange, where the social division of labour was made up of disassociated commodity producers, social relations manifested themselves as relations between things, i.e. commodities. The free and equal exchange of undifferentiated commodities manifested in reified form a relationship of freedom and equality between the homogeneous mass of commodity owners. But now, once it emerges that this simple commodity exchange presupposes capitalist production, all this becomes restructured. The worker comes before the capitalist stripped of all means of subsistence and excluded from the means of production. She stands with nothing to sell but her labour-power. The capitalist stands before the worker in possession of money that can both command the means of subsistence with which the worker needs to live and the means of production without which the worker's labour-power is useless. The dominant social relation now emerges as the polarized relation of capitalist as buyer to the worker as seller. A relationship that becomes manifest in reified form in the opposition of labour to the means of production.

Let us consider this in a little more detail; firstly from the point of view of the capitalist and then from the point of view of the worker.

The capitalist enters the market-place as the possessor of money. But money as such is not yet capital: In itself this sum of money may only be defined as capital if it is employed, spent, with the aim of increasing it. In the case of the sum of value or money this phenomenon is its destiny, it inner law, its tendency, while to the capitalist, i.e. the owner of the sum of money, in whose hands it shall acquire its function, it appears as intention, purpose.

(Capital *I, p. 976) As such:

...in this originally simple expression of capital (or of capital to be) as money or value, every link with use- value has been broken and entirely destroyed. But even more striking is the elimination of every unwelcome sign, all potentially confusing evidence of the actual process of production. (Capital *I, p. 976) So, as money, capital appears as general exchange-value in opposition to all use-values. But money can only act as capital, it can only become self-expanding value, if it can subsume the use-values necessary for the production of new values to itself. However: The only utility whatsoever which an object can have for capital can be to preserve or increase it. We have already seen, in the case of money, how value, having become independent as such -- or the general form of wealth is capable of no other motion than a quantitative one; to increase itself. It is according to its concept the quintessence of all use values; but, since it is always only a definitive amount of money (here, capital), its quantitative limit is in contradiction with its quality. It is therefore inherent in its nature constantly to drive beyond its own barrier....Everything which has been said here about money holds even more for capital, in which money actually develops in its completed character for the first time. The only use value i.e. usefulness, which can stand opposite capital as such is that which increases, multiplies and hence preserves it as capital. (Grundrisse, p. 270) As Marx goes on to show the only such use-value is that of the commodity labour-power -- productive labour. But money as capital does not merely seek to assume the form of labour- power but also that set of commodities whose use-values serve to make up the means of production. How does labour-power distinguish itself from all these other such commodities? How is it that these other commodities, as use-values, do not also stand opposed to capital as they do to money in the simple circulation of commodities?

Stood before money as capital, as opposed to money as a mere medium of exchange within the movement of simple circulation, all commodities, other than labour-power, stand not as use- values as such but as particular expressions of value against the general expression of value which is represented by money. What is important is not their material substance which distinguishes them from each other and from money, but their common social substance as objectified labour. But what is distinct and opposed to objectified labour?

The only thing distinct from objectified labour is non- objectified labour, labour which is still objectifying itself, labour as subjectivity. Or, objectified labour, i.e. labour which is present in space, can also be opposed, as past labour, to labour which is present in time. If it is to be present in time, alive, then it can be present only as the living subject, in which it exists as capacity, as possibility; hence as worker.

(Grundrisse, p. 272) Thus money-capital stands in unison with all other commodities since they, like itself, are expressions of objectified labour. All except labour-power, which stands opposed to money-capital -- in the bodily form of the worker -- as the only active and subjective force that capital can use to increase and preserve itself as self-expanding value. So: The use value which confronts capital as posited exchange-value is labour. Capital exchanges itself, or exists in this role, only in connection with not- capital, the negation of capital, without which it is not capital; the real not-capital is labour. (Grundrisse, p. 274) So capital as the expression of its substance -- as dead objectified labour -- has to posit as its very opposite the living subjectivity of the worker. The being of capital can only become through its not-being in the form of the living worker. This inverted ontology of the dialectic of capital confronts the consciousness of the would-be capitalist by the peculiar nature of the commodity that is labour-power.

Firstly, and most importantly, labour-power, unlike all other commodities confronts the would-be capitalist as a non- object; as the potential of subjective activity of the worker. Consequently, whereas all other commodities appear as objects that are not only alienable but also separable from their owners, labour-power, although it is alienable (although it can be sold) is inseparable from the subjective being of its bearer -- the worker. As Marx comments: ...the commodities purchased by the capitalist as the means of production in the production process or labour process are his own property. They are in fact no more than his money transformed into commodities and they are just as much the existing reality of his capital as that money. Even more so, indeed, since they have been changed into the form in which they will really function as capital...These means of production are therefore capital. On the other hand, with the remaining portion of the money invested, the capitalist has purchased labour-power...living labour. This belongs to him just as effectively as do the objective conditions of the labour process. Nevertheless, a specific difference becomes apparent here: real labour is what the worker really gives to the capitalist in exchange for the purchase price of labour, that part of capital that is translated into the wage. It is the expenditure of his life's energy, the realisation of his productive faculties; it is his movement and not the capitalists'.

Looked at as a personal function, in its reality, labour is the function of the worker, and not the capitalist.

Looked at from the standpoint of exchange, the worker represents to the capitalist what the latter receives from him, and not what he is vis-a-vis the capitalist in the course of the labour process. So here we find that...the objective conditions of labour, as capital, stand in opposition to the subjective conditions of labour, i.e. labour itself, or rather the worker who works. (Capital *I, : p. 982) Hence, to the mind of the capitalist, in transforming his money into productive capital that part which has become the means of production stands opposed to that part used to purchase labour-power; as capital versus labour. And as Marx goes on to comment: It is this that forms the foundation for the fetishism of the political economists. (Capital *I, p. 983) Since capital appears not as a social relation but as a collection of things: the means of production as object opposed to labour as subject.

But this is not all. Not all of the original money-capital can be advanced so as to purchase the means of production. A part is advanced to purchase labour-power and takes the objective form of the means of subsistence of the worker. Indeed, like the means of production themselves, these means of subsistence will be the products of capital; of labour objectified in previous production cycles. To this extent the means of subsistence can be viewed in a similar manner to the means of production. For example, food for the worker can be taken as analogous to fuel for a machine. But this is only insofar as the worker can be reduced to a mere object like a machine. Yet capital posits the worker as a free subject. In advancing the wage to the worker the consumption of the means of subsistence becomes a matter for the worker and ceases to be of immediate concern to the capitalist. It vanishes from view, unlike the material forms of the means of production which persist within the productive operations of capital. As Marx puts it: ...the means of production leave circulation and enter into the labour process as specific commodities, e.g.

cotton, coal, spindles etc. In doing so, they still possess the shape of the use-values they had while circulating as commodities. Once they have entered the process, they proceed to function with the qualities that cotton, etc. has as cotton, corresponding to their use-values, to their characteristics as things. The position is otherwise with that portion of capital we have called variable...the portion of capital that the capitalist expends on the purchase of labour-power -- is nothing but the means of subsistence available on the market...and destined for the individual consumption of the workers... [The] consumption of these commodities as use-values constitutes a process that has no direct bearing on the immediate process of production...and which in fact operates outside its limits. (Capital *I, p. 983) Hence: ...the capital earmarked for wages appears formally as something that has ceased to exist in the eyes of the capitalist, but which belongs to the worker as soon as it has assumed its true shape of the means of subsistence destined to be consumed by him...Thus this portion of capital is specifically distinguished from the capital present in the form of the means of production, and this is yet another reason why in the capitalist mode of production the means of production appear as capital in and for itself in distinction from, and in contrast to, the means of subsistence. (Capital *I, p. 985) But the means of subsistence are not actually opposed to the means of production, since they too are objectified labour, but rather to the living labour-power with which they are exchanged: This appearance is dispelled quite simply...by the circumstance that the form of the use-values in which capital exists at the conclusion of the production process is that of the product, and this product can be found embodied both as means of production and as means of subsistence. Thus both are capital to an equal extent and so both are present in opposition to the living labour-power. (Capital *I, p. 985) Here we are being drawn into the actual process of production. Before we consider this second phase let us consider the point of view of the worker as she enters into exchange with capital.

As objectified and alienated labour capital must posit labour as pure subjective activity: Labour posited as not-capital as such is: 1) not- objectified labour [nicht-vergegenstandlichte], conceived negatively...As such it is not-raw-material, not-instrument of labour, not-raw-product: labour separated from all means of labour, from its entire objectivity. This living labour, existing as an abstraction from these moments of its actual reality...this complete denudation, purely subjective existence of labour, stripped of all objectivity.

Labour as absolute poverty: poverty not as shortage but as total exclusion of objective wealth...2) Not- objectified labour, not-value, conceived positively...is not-objectified, hence non-objective, i.e. subjective existence of labour itself. Labour not as an object, but as activity; not as itself value but as the living source of value. (Grundrisse, p. 295) The worker, as the embodiment of such subjective activity, must therefore be posited as pure subject. But capital must not only presuppose the worker as a pure subject but also as a formally free and independent subject. The worker enters the labour market, at least formally, as a free and equal commodity-owner on par with the capitalist and to this extent is radically distinct from workers in other modes of production. As Marx points out: ...he [the worker] is in this exchange an equal vis-a- vis the capitalist, like every other party in exchange; at least so he seems. In fact this equality is already disturbed because the worker's relation to the capitalist as a use-value, in the form specifically distinct from exchange value, in opposition to value posited as value, is a pre-supposition of this seemingly simple exchange; because, thus, he stands in an economically different relation -- outside that of exchange, in which the nature of the use value, the particular use value of the commodity is, as such, irrelevant. This semblance exists, nevertheless as an illusion on his part and to a certain degree on the other side, and thus essentially modifies his relation by comparison to that of workers in other social modes of production. (Grundrisse, p. 284) As a formally free and independent subject the worker is free to dispose of her wage as she thinks fit, it being of no immediate concern to the capitalist outside of production; and since the worker: ...exchanges his use value for the general form of wealth [money] he becomes co-participant in general wealth up to the limit of his equivalent -- a quantitative limit which, of course, turns into a qualitative one, as in every exchange. But he is neither bound to particular objects, nor to a particular manner of satisfaction. The sphere of his consumption is not qualitatively restricted, only quantitatively.

This distinguishes him from the slave or serf etc. (Grundrisse, p. 283) The worker here then becomes constituted formally as the 'sovereign consumer'. An aspect of the worker's condition so beloved by the bourgeois economists. But also hidden here beneath the worker as a free and independent subject we have the roots of the worker as a revolutionary subject.

So, with labour being posited in exchange as not-capital we find that the worker is: ...formally posited as a person who is something for himself apart from his labour, and who alienates his life expression only as a means towards his own life. (Grundrisse, p. 289) And hence within the exchange between capital and labour the worker must be presupposed by capital as a free and independent subject, opposed to capital as its subjective antithesis.

Yet this is only the formal aspect of the exchange between capital and labour -- its semblance. As noted above, the apparent equality of exchange between the capitalist and the worker is 'disturbed' by the economic and social relations that such an exchange presupposes. Economic and social relations that mean that the confrontation on the labour market between the worker and the capitalist is markedly asymmetrical.

Firstly, (and still rather formally) the worker comes to the labour market as a simple commodity owner. Her purpose is to obtain the means with which to satisfy her needs: The object of his exchange is a direct object of need, not exchange-value as such. He does obtain money, it is true, but only in its role as coin; i.e. only as a self- suspending and vanishing mediation. What he obtains from the exchange is therefore not exchange-value, not wealth, but a means of subsistence, objects for the preservation of his life, the satisfaction of his needs in general, physical, social etc. (Grundrisse, p. 284) The worker is consequently confined within the movement of the simple circulation of commodities, i.e. C-M-C. A confinement accentuated by the antithetical movement of the capitalist.

The capitalist on the other hand comes to the market representing money, in its fullest independent expression, as capital. The capitalist seeks the means with which to expand the general form of his wealth -- money. For the capitalist the movement is that of M-C-M. So whereas the exchange between capital and labour is for the worker a question of (concrete) survival, for the capitalist it is one of (abstract) enrichment.

Yet these two counterposed purposes with which the capitalist and the worker confront each other within exchange, and which structure their asymmetrical positions, presuppose the exclusion of the worker from both the means of production and the means of subsistence. So that the worker finds: ...opposed to him and confronting him as alien property, all the means of production, all the material conditions of work together with all the means of subsistence, money and means of production. In other words, all material wealth confronts the worker as the property of the commodity possessors. What is proposed here is that he works as a non-proprietor and that the conditions of his labour confront him as alien property. The fact that Capitalist No.1 owns money and that he buys the means of production from Capitalist No.2, who owns them, while the worker buys the means of subsistence from Capitalist No.3 with the money he has obtained from Capitalist No.2, does not alter the fundamental situation that Capitalists Nos. 1, 2 and 3 are together the exclusive possessors of money, means of production and means of subsistence. (Capital *I, p. 1003) The relations of exchange which formally posit the worker as a free and independent subject therefore presuppose the real class relation between the worker as a member of the dispossessed class of non-proprietors and the capitalist as a member of the propertied class that has the exclusive ownership and control of the means of subsistence and production. Yet, as Marx points out, this real class relation which is presupposed by the sale and purchase of labour-power confronts the worker in a fetishized form: Thus even in the first process [the act of exchange as opposed to the process of production], what stamps money or commodities as capital from the outset, even before they have been really transformed into capital, is neither their money nature nor their commodity nature, nor the material use-value of these commodities as means of production or subsistence, but the circumstances that this money and this commodity, these means of production and these means of subsistence confront labour-power, stripped of all material wealth, as autonomous powers, personified in their owners. The objective conditions essential to the realisation of labour are alienated from the worker and become manifest as fetishes endowed with a will and a soul of their own. Commodities, in short, appear as the purchasers of persons. The buyer of labour-power is nothing but the personification of objectified labour which cedes part of itself to the worker in the form of the means of subsistence in order to annex the living labour-power for the benefit of the remaining portion, so as to keep itself intact and even to grow beyond its original size by virtue of this annexation. It is not the worker who buys the means of production and subsistence, but the means of production that buy the worker to incorporate him into the means of production. (Capital *I, p. 1003) So, within exchange, the worker is formally posited as a free and independent subject but only insofar as the worker's destiny is to be subjected to the autonomous movement of alien objectified labour. The worker's existence is one of the 'absolute poverty of exclusion'; yet at the same time the 'general possibility of all wealth'. A subject, a free will; but one without the means to realize itself. Here then we find in embryonic form the objective basis for the fundamental class antagonism of the capitalist mode of production that arises through the objective confrontation of labour and capital. We are moving tangentially towards the question of the counter-dialectic of class struggle.

But before this can be developed it is necessary for Marx to examine the second phase in the relation of capital to labour to see how labour is actually subordinated and annexed to capital in the very process of production.

* We have seen how on entering the realm of exchange: The labour which stands opposite capital is alien [fremde] labour, and the capital that stands opposite labour is alien capital. (Grundrisse, p. 266) Each stands as both independent and separate from the other. Yet now, on entering phase of production, Marx shows how labour becomes subordinated within the overall unity of capital. How labour, in becoming objectified through the capitalist process of production, comes to produce capital as an alien and autonomous force. And hence how labour becomes object while capital becomes subject.

As in Capital, in the Grundrisse Marx considers the capitalist production process as two-fold: firstly as a process that produces use-values, and then secondly as a process of valorization. Let us take each of these in turn.

On entering the labour process the worker becomes directly united with the means of production as they exist as use- values. In working on and with these means of production the worker interacts with them purely in terms of their natural properties from which the final product is to be fashioned. This relationship of the worker to the means of production has important implications, as Marx proceeds to draw out as follows: If we now consider the aspect of capital in which it originally appears in distinction from labour [i.e. the means of production], then it is merely passive presence in the process, a merely objective being, in which the formal character which makes it capital -- i.e. a social relation existing as a being-for-itself [fur sich seiendes] -- is completely extinguished. It enters the process only as content -- as objectified labour in general; but the fact that it is objectified labour is completely irrelevant to labour -- and the relation of labour to it forms the process; it enters into the process, is worked on, rather, only as object, not as objectified labour. Cotton which becomes cotton yarn, or cotton yarn which becomes cloth, or cloth which becomes the material for printing and dyeing, exist for labour only as available cotton, yarn, cloth. They themselves do not enter into any process as products of labour, as objectified labour, but only as material existences with certain natural properties. How these were posited in them makes no difference to the relation of living labour towards them; they exist for labour only in so far as they exist as distinct from it, i.e. as materials for labour. (Grundrisse, p. 302) Thus, although the worker is united with the means of production in the labour process through her real productive connection with them, she is still opposed to them insofar as they appear not as objectified labour, as the work of fellow workers, but as given objects. Yet insofar as the worker is united by her real connection with the means of production as use-values the worker herself becomes a mere objective element of the capitalist production process which now appears as simply a natural process of labour: On another side, in so far as labour itself has become one of capital's objective elements through the exchange with the worker, labour's distinction from the objective elements of capital is itself a merely objective one; the latter in the form of rest, the former in the form of activity. The relation is the material relation between one of capital's elements and the other; but not its own relation to both. It therefore appears on the one side [in which capital is still opposed to labour as the use-values of the means of production] as a merely passive object, in which all formal character is extinguished; it appears on the other side [that side in which labour is viewed as united with the substance of capital as simply its active moment] only as a simple production process into which capital as such, as distinct from its substance, does not enter. (Grundrisse, p. 302)

Regarded as a simple production process: ...capital in its being-for-itself, i.e. the capitalist, does not enter at all. It is not the capitalist who is consumed as raw material and instrument of labour. And it is not the capitalist who does this consuming but rather labour. Thus the process of the production of capital does not appear as the process of the production of capital, but as the process of production in general, and capital's distinction from labour appears only in the material character of raw materials and instruments of labour. (Grundrisse, p. 303) This has important consequences from both the perspective of the worker and of the capitalist. For the capitalist, the capitalist mode of production appears as natural and thus eternal while capital, identified as simply the means of production, appears as indispensable. As Marx remarks: It is this aspect -- which is not only an arbitrary abstraction, but rather an abstraction that takes place within the process itself on which the economists seize in order to represent capital as a necessary element of every production process. Of course, they do this only by forgetting to pay attention to its conduct as capital during this process. (Grundrisse, p. 303) For the worker the capitalist appears as unnecessary and parasitical, and, insofar as the capitalist is concerned with the actual production process, she may be viewed as either an impediment or at best a damn nuisance. Furthermore, in identifying the means of production as capital, the demand may be raised for capital without the capitalist! Yet in response to such demands from socialists of his time Marx remarks: Then capital appears as a pure thing, not as a relation of production which, when reflected in itself, is precisely the capitalist. I may well separate the capital from a given individual capitalist, and it may can be transferred to another. But, in losing capital, he loses the quality of being a capitalist. Thus capital is indeed separable from an individual capitalist, but not from the capitalist, who, as such, confronts the worker. (Grundrisse, p. 303) So regarded as a simple labour process, the worker, on entering the capitalist production process, is united with the means of production and is able to objectify himself through the mediation of his labour; his labour stands in this sense as human praxis. But the capitalist labour process as a simple process of labour cannot be entirely abstracted from the commodity exchange it presupposes. Thus even from this perspective the means of production, as we have noted, still stand opposed to the worker as object rather than as objectified labour. The worker, therefore, to that degree can be seen to stand separated from other workers (but perhaps no more than any simple commodity producer would stand separated from other simple commodity producers). All this becomes markedly different once we come to view the capitalist labour process as a process of valorization.

As soon as we consider the capitalist process of production as a process of valorization then the capitalist enters in person. Firstly as the 'risk taker' and secondly as the 'supervisor of production'.

Every production process runs the risk of failure and under capitalism it is the capitalist whose capital is set in motion by a particular process of production who is primarily responsible for bearing such risk. Yet more importantly the capitalist must act as a supervisor over the production of surplus-value. The capitalist must, on the one hand, ensure the most efficient use of both the raw materials and instruments of labour within the process of production. On the other hand, the capitalist must ensure at the very least that the worker works at the social average intensity and if possible even harder. And what is more: He [the capitalist] must also see to it that the work is performed in an orderly and methodical fashion and that the use-value he has in mind actually emerges successfully at the end of the process. At this point too the capitalist's ability to supervise and to enforce discipline is vital. Lastly, he must make sure that the process of production is not interrupted or disturbed and that it really does proceed to the creation of the product within the time allowed for by the particular labour process and its objective requirements. (Capital *I, p. 986) It is here, as risk taker and supervisor of production, that the capitalist makes her claim for profit. A point Marx deals with in some detail, as we shall see later, in Volume III of Capital. What is important here is that now the capitalist enters as the very will of capital against labour in the process of the production of surplus-value. A process that we shall now see has fundamental implications for the social being of the worker.

Considered in terms of a simple labour process the worker can be viewed as making use of the means of production that make up the substance of capital to produce the use-value of the final product. But once it is recognized that the aim which dominates capitalist production is the production of surplus-value it becomes clear that the means of production uses the worker: The means of production made use of by the worker in the actual labour process are, it is true, the property of the capitalist, and they therefore confront his labour, which is the only expression of his life, as capital...On the other hand, however, it is he who makes use of them in the course of his work. In the actual process, the worker uses the means of labour as his tools, and he uses up the object of labour in the sense that it is the material in which his labour manifests itself...The situation looks quite different in the valorisation process. Here it is not the worker who makes use of the means of production, but the means of production that make use of the worker. Living labour does not realize itself in objective labour which thereby becomes its objective organ, but instead objective labour maintains and fortifies itself by drawing off living labour; it is thus that it becomes value valorising itself, capital, and functions as such.

The means of production thus become no more than leeches drawing off as large amount of living labour as they can. Living labour for its part ceases to be anything more than a means by which to increase, and thereby capitalise, already existing values...it is precisely for this reason that the means of production appear eminenmment as the effective form of capital confronting living labour. And they now manifest themselves moreover as the rule of past, dead labour over the living. It is precisely as value-creating that living labour is continually being absorbed into the valorisation process of objectified labour. In terms of effort, of the expenditure of life's energy, work is the personal activity of the worker. But as something which creates value, as something involved in the process of objectifying labour, the worker's labour becomes one of the modes of existence of capital, it is incorporated into capital as soon as it enters the production process. This power which maintains old values and creates new ones is therefore the power of capital, and that process is accordingly the process of its self- valorisation. Consequently it spells the impoverishment of the worker who creates value as value alien to himself. (Capital *I, p. 987) So, as a process of valorization -- as a process for the production of surplus-value -- the relation of living labour to the means of production becomes inverted. Living labour, the subjective activity of the worker, is now no longer a means through the worker comes to realize herself as an objective/subjective social being but is rather the means through which capital comes to realize itself as such.

As a consequence labour becomes a mere object for capital; it becomes reduced to being a mere thing. As a result the social relation between labour and capital becomes reified; it manifests itself as a relation between the means of production as object and living labour as object. As Marx goes on to point out: Within the framework of capitalist production this ability of objectified labour to transform itself into capital, i.e. to transform the means of production into the means of controlling and exploiting living labour, appears as something utterly appropriate to them...as inseparable from them and hence as a quality attributable to them as things, as use-values, as means of production. These appear, therefore, intrinsically as capital and hence as capital which expresses a specific relationship of production, a specific social relationship in which the owners of the conditions of production treat living labour-power as a thing, just as value had appeared to be an the attribute of a thing and the economic definition of the thing as a commodity appeared as an aspect of its thinghood, just as the social form of conferred on labour in the shape of money presented itself as the characteristics of a thing. (Capital I, p. 988) With the successful completion of the valorization process labour becomes objectified in the final product as an alien value. As such it stands confirmed as aqn object that was previously merely presumed with the purchase of labour-power as a commodity. With the expropriation of surplus-value labour merely appears quantitatively as that component part of the final product's value as represented by variable capital.

Yet in coming to this result it becomes clear that the capitalist process of production is by its very nature a process of alienation. A process within which not only the worker but also the capitalist becomes alienated, but in two quite distinct ways. This point is made quite emphatically by Marx in the following passage.

The functions fulfilled by the capitalist are no more than functions of capital -- viz. the valorisation of value by absorbing living labour -- executed consciously and willingly. The capitalist functions only as personified capital, capital as a person, just as the worker is no more than labour personified. that labour is for him just effort and torment, whereas it belongs to the capitalist as a substance that creates and increases wealth, and in fact is an element of capital, incorporated into it in the production process as its living, variable component. Hence the rule of the capitalist over the worker is the rule of things over man, of dead over the living, of the product over the producer. For the commodities that become the instruments of rule over the workers (merely as the instruments of the rule of capital itself) are mere consequences of the process of production; they are its products. Thus at the level of material production, of the life-process in the realm of the social -- for that is what the process of production is -- we find the same situation that we find in religion at the ideological level, namely the inversion of subject into object and vice versa. Viewed historically this inversion is the indispensable transition without which wealth as such, i.e. the relentless productive forces of social labour, which alone can form the material base of a free human society, could not possibly be created by force at the expense of the majority. This antagonistic stage cannot be avoided, any more than it is possible for man to avoid the stage in which his spiritual energies are given a religious definition as powers independent of himself. What we are confronted by here is alienation [Entfremdung] of man from his own labour. To that extent the worker stands on a higher plane than the capitalist from the outset, since the latter has his roots in the process of alienation and finds absolute satisfaction in it whereas the right from the start the worker is a victim who confronts it as a rebel and experiences it as a process of enslavement. At the same time the process of production is a real labour process and to the extent to which that is the case the capitalist has a definite function to perform within it as supervisor and director, his activity acquires a specific, many-sided content. But the labour process is no more than an instrument of the valorisation process, just as the use-value of the product is nothing but a repository of its exchange-value. The self- valorisation of capital -- the creation of surplus-value -- is therefore the determining, dominating and overriding purpose of the capitalist; it is the absolute motive and content of his activity. And in fact it is no more than the rationalized motive and aim of the hoarder -- a highly impoverished and abstract content which makes it plain that the capitalist is just as enslaved by the relationships of capitalism as is his opposite pole, the worker, albeit in a quite different manner. (Capital *I, p. 990) Here, in the midst of this very passage, we can see the explicit preservation of Marx's early Young Hegelian thematic of alienation and human liberation within his mature thematic of capitalism and its overthrow. We are once more back with the concerns of the young Marx of the 1844 Manuscripts, of the Holy Family and so forth! But these concerns are now armed with the critique of political economy! The very process of capitalist production is one of human alienation; but it at the same time this process, by preparing the material pre- conditions for the free human society heralded by communism, holds the seeds for its own supersession, and with it of human liberation. We are nearing the threshold for the eruption of class subjectivity; of the point of emergence of the counter-dialectic of class struggle!

So, we can see that within the Grundrisse and the 'missing sixth chapter' we find that Marx's examination of the capital and labour process is not only very extensive but is also developed explicitly in ontological terms. As a consequence the question of capitalist production as a process of alienation is always well to the fore and with it the eruption of class subjectivity -- of the counter-dialectic of class struggle -- is always imminent. This is in stark contrast to Capital where this relation is approached for the most part from its result; under the heading of variable and constant capital. There the question of capitalist production as a process of alienation and reification is marginal to the main line of theoretical development and where it appears it is for the most part addressed in purely descriptive or illustrative terms. Here then, if nowhere else we can detect most clearly the movement of closure that occurs with the presentation of Marx's theory of surplus-value. But this movement of closure is not only evident in the relation of dead to living labour. It is also evident in the other two quantitative expressions that mark Marx's theory of surplus-value as we shall now seek to show.

2) e: The rate of surplus value (i.e. the rate of exploitation): the relation of surplus labour to necessary labour

As we have seen, in Capital Marx develops his analysis of the production of surplus-value, and thus of the relation between surplus and necessary labour, under the headings of 'the production of absolute surplus value' and 'the production of relative surplus value'. Such headings indicate that in this exposition Marx's emphasis is on the material and quantitative aspects of this relation. An emphasis that is contrast to that of the 'missing sixth chapter' in which this relation is considered under the alternative headings of 'the formal subsumption of labour under capital' and 'the real subsumption of labour under capital'. Both these pairs of headings enclose the same relations but from two distinct aspects -- as Marx himself notes: If the production of absolute surplus-value was the material expression of the formal subsumption of labour under capital, then the production of relative surplus- value may be viewed as its real subsumption. At any rate, if we consider the two forms of surplus-value, absolute and relative, separately, we shall see that absolute surplus-value always precedes relative. To these two forms of surplus-value there correspond two separate forms of the subsumption of labour under capital, or two distinct forms of capitalist production. (Capital *I, p. 1025) So what do we find under these two alternative headings in the 'missing sixth chapter'? In what sense do they give rise to a shift in emphasis from that which we find in Capital?

With the distinction of the formal to the real subsumption of labour under capital, as opposed to that of the production of absolute and relative surplus-value, Marx comes to concentrate on the subjective and qualitative aspects of the capitalist production process. That is he is concerned with how capital comes to imposes itself as a social relation through the process ad relations of production. To see this let us consider each of these terms in turn.

a) Firstly then, the formal subsumption of labour under capital. All class societies are based on the appropriation of surplus labour by a dominant class from an exploited class of direct producers. What essentially distinguishes each of these class societies from each other is the manner in which this surplus labour is appropriated; that is, the particular social form which surplus labour assumes. It is the social form of surplus labour which defines the basic class relations of any social formation and thus the essential character -- the social being -- of its constituent classes. With the capitalist mode of production the specific social form of surplus labour is surplus-value. With the division of living labour into necessary and surplus labour time and the appropriation of this surplus labour time as a given quantity of surplus-value, which then accumulates as capital, we come to the essential class relation of the capitalist mode of production which distinguishes it, and its constituent classes, from other modes of production that form the basis of other class societies.

The formal subsumption of labour arises when capital simply takes over a pre-existent labour process and makes it a means for producing surplus-value. Even though the actual labour process is materially unaffected, except for the fact that the drive towards the production of absolute surplus-value may to a certain extent intensify it, the social relations of production become those of capital. In fact, because with the formal subsumption of labour the material relations of production, at least in their qualitative aspects, remain the same as in pre-capitalist modes of production, capital, as a specific social form, can be starkly contrasted to those social relations that arise under other modes of production. And indeed in the 'missing sixth chapter' this is what Marx does. He proceeds under the heading of the formal subsumption of labour to compare the relation of capital to labour -- of the worker to the capitalist -- with that of the slave to the master, the serf to the lord, the journeyman to the master craftsman and so forth, in order to bring out the specific character of capital as a historically specific social relation.

Let us consider how Marx makes these comparisons that bring out the historically specific qualitative character of the social relation that exists between the worker and the capitalists.

Compared with the slave or the serf the worker's condition appears as one of freedom. Both the slave and the serf are directly subjugated both politically and personally to their master or lord. The slave stands merely as the property of her master, a mere instrument vocale, while the serf stands as a mere appendage to the land. In contrast to this the worker stands as a free subject, free to choose his own exploiter and free to spend to the limits of her own wage. As such the worker stands as an independent individual that to a certain extent works for herself: ...there is scope for variation (within narrow limits) to allow for the worker's individuality, so that partly as between different trades, partly in the same one, we find that wages vary depending on the diligence, skill or strength of the worker, and to some extent on his actual personal achievement. Thus the size of his wage packet appears in keeping with the results of his own work and its individual quality...In the case of the slave, great physical strength or a special talent may enhance his value to a purchaser, but this is no concern to him. It is otherwise with the free worker who is the owner of his labour-power. (Capital *I, p. 1032) On the other hand, if the worker is contrasted with such independent producers such as the independent peasant or yeoman, then her apparent freedom and individuality begins to pale. As Marx remarks: What a gulf there is between the proud yeomanry of England of which Shakespeare speaks and the English agricultural labourer! (Capital *I, p. 1033) In contrast to such independent producers what becomes clear is the worker's indifference to what she has to produce, to her own particular labour. As Marx goes on to say: Since the sole purpose of work in the eyes of the wage labourer is his wage, money, a specific quantity of exchange-value from which every particular mark of use- value has been expunged, he is wholly indifferent towards the content of his labour and hence his own particular form of activity. (Capital *I, p. 1033) This becomes even more evident if we contrast the relation of the worker to the capitalist with that of the journeyman and the master craftsman. While as a direct precursor to the worker/capitalist relation, and although it may have certain similarities in that the journeyman may be paid a wage there is still a striking contrast: The master does indeed own the conditions of production -- tools materials, etc. (although tools may be owned by the journeyman too) -- and he owns the product. To that extent he is a capitalist. But it is not as a capitalist that he is a master. He is an artisan in the first instance and is supposed to be a master of his craft. Within the process of production he appears as an artisan, like his journeymen, and it is he who initiates his apprentices into the mysteries of the craft...Hence his approach to his apprentices and journeymen is not that of a capitalist, but a master of his craft, and by virtue of that fact he assumes a position of superiority in the corporation and hence towards them. (Capital *I, p. 1029) The relation between the journeyman and the master craftsman is therefore based on the personal recognition of the skill in a specific craft. The dominant position of master is not based on his general wealth; not on: ...exchange-value as such [as it is with the capitalist], but a life appropriate to a certain status or condition... (Capital *I, p. 1030) As such both the master craftsman and the journeyman are limited and confined by their particular trade. For the master craftsman: ...capital is restricted in terms of the form it assumes, as well as in value. It is not a definite quantum of objectified labour, value in general, at liberty to assume this or that form of the conditions of labour depending on the form of living labour it acquires in order to produce surplus labour. Before he can invest money in this particular branch of trade, in his own craft, before he can set about purchasing either the objective conditions of labour, or acquiring the necessary journeymen and apprentices, he has to pass through the prescribed stages of apprentice and journeyman and even produce his own masterpiece. He can transform money into capital only in his own craft, i.e. not merely as the means of his own labour, but as a means of exploiting the labour of others. His capital is bound to a definite use-value and hence does not confront his own workers directly as capital. (Capital *I, p. 1029) Capital becomes a dominant relation once it can break free of all such bonds to particular use-values; once it becomes universal. Then the master craftsman becomes a capitalist: The purely formal conversion of production based on handicraft into capitalist production, i.e. a change in which for the time being the technological process remains the same, is achieved by the disappearance of all these barriers. And this brings about changes in the relations of supremacy and subordination. The master now ceases to be a capitalist because he is a master, and becomes a master because he is a capitalist.

The limits on his production are no longer determined by the limits imposed on his capital. His capital (money) can be freely exchanged for labour, and hence the conditions of labour of any kind whatever. He can cease to be an artisan. (Capital *I, p. 1031) But the universality of capital brings with it the universality of labour that confronts it and which it has to subsume to itself. As Marx makes clear in the Grundrisse: ...labour is of course in each single case a specific labour, but capital can come into relation with every specific labour; it confronts the totality of all labours...On the other side, the worker himself is absolutely indifferent to the specificity of his labour; it has no interest for him as such, but only in as much as it is in fact labour and, as such, a use-value for capital. It is therefore his economic character that he is the carrier of labour as such -- i.e. labour as a use- value for capital; he is a worker, in opposition to the capitalist. This is not the character of the craftsman and the guild-members etc., whose economic character lies precisely in the specificity of their labour and their relation to a specific master. (Grundrisse, p. 296) Here then, even with the mere formal subsumption of labour under capital, we come to the objective foundation of the working class as the universal class whose liberation spells the end of all classes and the liberation of humanity. We are almost back once more in the midst of the Holy Family! But only potentially. This tendency can only be developed and realized with the real subsumption of labour under capital. Before turning to consider the real subsumption of labour under capital we must examine all this in a little more detail by drawing together the ontological implications of these historical comparisons that arise with the formal subsumption of labour.

As we have already seen, capital must posit the worker in the realm of exchange as a free and independent subject. A subject who is able to assert her own needs over and against capital to a limited extent. The capitalist, therefore, can never completely reduce the worker to a mere beast of burden, or a mere human instrument of production, however much he tries, unlike the slave-master. The worker's needs re-assert themselves in the rigidity of the wage, of necessary labour in and against surplus labour. So unlike the slave, who stands to the slave-owner as a mere object of ownership, or indeed the serf who stands as a mere appendage of the soil, the worker stands opposed to capital as an independent subject that must be repeatedly subjected to the production of surplus- value. The possibility of revolt is therefore repeatedly posed with every renegotiation of wages and conditions; of the extent and intensity of necessary labour time against surplus labour time.

Furthermore, as a formally free and equal commodity-owner the worker is free to sell her labour-power to any capitalist who has a use for it. In contradistinction to the journeyman, for example, the worker does not confront a particular master in person but, at least formally, all of capital. The relation between the capitalist and worker is essentially an impersonal, objective economic relation, in stark contrast to all other class relations of previous modes of production. But as such the worker's exploitation stands potentially as not the exploitation by this or that capitalist but of capital as a whole; capital as an entire class system. The worker is potentially not merely an independent subject but a revolutionary subject!

However, the worker can only become a revolutionary subject as part of the subjectivity of a revolutionary class. Yet in being posited as a formally free and equal commodity-owner the worker stands not only in an impersonal and objective economic relation with the capitalist but also with other workers. The labour of others confronts each worker as alien objects that constitute her means of production and her means of subsistence. The working class therefore stands as a universal but atomized class. Its potential as revolutionary subject remains blocked with its mere formal subsumption under capital.

Indeed, as Marx himself indicates, with the mere formal subsumption of labour the subordination of the working class appears as a purely economic one which has little or no overt political expression: ...[The formal subsumption of labour under capital] dissolves the relationship between owners of the conditions of labour and the workers into a relationship of sale and purchase, a purely financial relationship.

In consequence the process of exploitation is stripped of every patriarchal, political, or even religious cloak. It remains true, of course, that the relations of production themselves create a new relation of supremacy and subordination (and this also has a political expression). But the more capitalist production sticks fast in this formal relationship, the less the relationship itself will evolve, since for the most part it is based on small capitalists who differ only slightly from the workers in their education and their activities. (Capital *I, p. 1027) Let us now move onto the real subsumption of capital.

b) The real subsumption of labour under capital. As we have seen, with the real subsumption of labour under capital we find that the very material nature of the production process is constituted according to the dictates of capital; we come to the specifically capitalist mode of production. This much is clear from Capital. But also with the real subsumption of labour under capital we find that the potential radical subjectivity of the individual worker becomes the real possibility of the revolutionary subjectivity of the working class. We find the development of the tendency towards communism and the dissolution of the capitalist mode of production. Let us consider this social and qualitative aspect, that is somewhat curtailed in Capital, a little more closely.

Unfortunately the passage concerned with the real subsumption of labour under capital in the 'missing sixth chapter' is rather fragmentary; consequently we must extrapolate a little with some help from the Grundrisse. What then can we find?

The real subsumption of labour under capital proceeds, both logically and historically, from where the formal subsumption of labour under capital leaves off and does so on the material basis of the production of relative surplus-value. In doing so the real subsumption of labour under capital serves to realize and substantiate capital as a social relation. As Marx himself points out: The general features of the formal subsumption remain, viz. the direct subordination of the labour process to capital, irrespective of the state of its technological development. But on this foundation there now arises a technologically and otherwise specific mode of production -- capitalist production -- which transforms the nature of the labour process and its actual conditions. Only when that happens do we witness the real subsumption of labour under capital...The real subsumption of labour under capital is developed in all the forms evolved by relative, as opposed to absolute surplus-value. (Capital *I, p. 1034)

Yet, as Marx recognizes, the real subsumption of labour under capital does not only develop and transform the material forces of production but also serves to develop and transform the very nature of capital as a social relation: On the one hand, capitalist production now establishes itself as a mode of production sui genesis and brings into being a new mode of material production. On the other hand, the latter itself forms the basis for the development of capitalist relations whose adequate form, therefore, presupposes a definite stage in the evolution of the productive forces of labour. (Capital *I, p. 1035) So, how does the development of the forces of production on the basis of the production of relative surplus-value serve to develop and realise capital as not only as a material relation of productive forces but also as a social relation?

The tendency towards the fragmentation and automation of the labour process tends to reduce work to a meaningless series of operations for the worker. The worker becomes reduced to being a mere 'cog in the industrial machine'. To this degree work becomes emptied of all concrete content for the worker; it appears as little more than abstract labour. The formal freedom and individuality of the worker that is posited in the realm of exchange now confronts the real indifference of the worker in production and becomes revealed for what it is: the mere formality of individuality, the mere formality of 'choice'. To this degree then the worker stands as no different to all other workers; the working class tends towards homogeneity.

But this is not all. The concentration and centralization of production -- its increasing socialization -- means that the worker increasingly becomes a part of a huge social process. The worker becomes part of the collective worker that confronts, and is exploited by, the collective capitalist.(6) Thus with the development of the productive forces with the real subsumption of labour under capital there emerges not only a tendency towards the homogenization of the working class but also towards its unity in opposition to capital and the capitalist class.

Again this unity of the working class in production stands in stark contradiction to its atomization in the realm of exchange. Whereas the workers increasingly stand united in the production process as individual members of the collectivity of social labour, in the realm of exchange they stand as individual consumers and commodity-owners. Marx treats this point in terms of the transition from the formal to the real subsumption of labour under capital in the Grundrisse as follows: [With the formal subsumption of labour the] point of unity of all these scattered workers lies only in their mutual relation with capital...The coordination of their work exists only in itself, in so far as each of them works for capital -- hence possesses a centre in it -- without working together. Their unification by capital is thus merely formal, and concerns only the product of labour, not labour itself...[With the real subsumption of labour under capital] capital appears as the collective force of the workers, their social force that ties them together, and hence as the unity which creates this force. Afterwards as before, and at every stage of the development of capital, this all continues to be mediated through the many [the workers] exchanging with the one [the capitalist], so that exchange itself is concentrated in it; the social character of exchange; it exchanges socially with the workers, but they individually with it. (Grundrisse, p. 586) Yet, as we have noted, even with the formal subsumption of labour the worker as subject may come to assert her own needs over and against capital and this may well disrupt the proportion between necessary and surplus labour time: ...so that when competition permits the worker to bargain and to argue with the capitalists, he measures his demands against the capitalists' profit and demands a certain share of the surplus-value created by him; so that the proportion becomes a real moment of economic life itself." (Grundrisse, p. 597) With the development brought about by the real subsumption of labour under capital, and with it the development and unification of the working class, comes the collective assertion of the needs and use-values of the working class that becomes expressed in the common wage: ...in the struggle between the two classes -- which necessarily arises with the development of the working class -- the measurement of the distance between them, which, precisely, is expressed by wages itself as a proportion [ie surplus labour time to necessary labour time/ the rate of surplus-value], becomes decisively important. The semblance of exchange vanishes in the course [Prozess] of the mode of production founded on capital...This...enters into the consciousness of the workers as well as the capitalists. (Grundrisse, p. 597) Any further development of this belongs for Marx to the book on wage-labour, and what is more presupposes the question of profit and the social reproduction of the working class -- as indeed does the potential subjectivity of the collective capitalist -- and so we can proceed no further. Instead we must turn to briefly consider the qualitative side of the final quantitative relation -- the rate of profit -- which may offer us a few more insights.

3) r = s/(c + v): The rate of profit, profit and accumulation With 'c/v' we were concerned with the commencement of production. With 's/v' we were concerned with the process of production itself. Now, with 's/(c+v)' -- (or more strictly speaking s/C) -- we are concerned with the culmination of the production process and its subsequent transition into the process of reproduction and accumulation where capital emerges as a self-mediating and self-reproducing movement. Let us then consider this.

For the capitalist the worker enters the process of production as the commodity labour-power. As a commodity, labour-power, and its use as living productive labour, is alienated from the worker in that it has been previously sold to the capitalist in the labour market. It belongs to the capitalist as her commodity. Yet, as we have previously noted, as subjective activity labour-power is inseparable from the worker's presence as subject. However, during the course of production the worker's labour becomes objectified in the material form of the final product. Living labour not only comes to produce a value that is alien to the worker but also an object that, as such, is separable from the worker as subject. Hence, with the completion of the process of production, the worker and her living labour appear as merely a vanishing moment in the movement of capital's self- expansion.

So, with production completed, the worker exits the scene leaving the results of her labour in the hands of the capitalist in the form of the final product. With the appropriation of surplus-value the only trace of labour is that part of the value of the final product that serves to represent the value of labour-power. Labour-power becomes a mere component and indifferent part of capital as a whole: it assumes the objective form of variable capital.

This reduction living labour to the objectified forms of variable capital and surplus-value (as surplus-product), and their consequent separation from the worker as subject, has two important implications. Firstly, the productive power of labour appears as the productive power of capital. As Marx himself notes: Since -- within the process of production -- living labour has already been absorbed into capital, all the social productive forces of labour appear as the productive forces of capital, as intrinsic attributes of capital, just as in the case of money, the creative power of labour had seemed to possess the qualities of a thing.

What was true of money is even truer of capital...

(Capital *I, p. 1052) This productive force that is now ascribed to capital is then personified in the person of the capitalist. It then appears that it is the capitalist who is the 'wealth creator' not the worker! Secondly, with the worker and living labour now expunged, capital can only measure itself against itself. Consolidated in the form of profit, surplus-value, the augmented part of capital, can only counterpose itself to the original mass of capital. The rate of surplus-value, s/v, becomes eclipsed by the rate of profit, s/(c + v): Capital is now realised not only as value which reproduces itself and is hence perennial, but also as value which posits value. Through the absorption of living labour time and through the movement of its own circulation (in which the movement of exchange is posited as its own, as the inherent process of objectified labour), it relates to itself as positing new value, as producer of value. It relates as the foundation to surplus-value as that which it founded.

Its movement consists of relating to itself, while it produces itself, at the same time as the foundation of what it has founded, as value presupposed to itself as surplus-value, or to the surplus-value posited by it...Because of the inclusion of circulation, of its movement outside the immediate production process, within the reproduction process, surplus-value appears no longer to be posited by its simple, direct relation to living labour; this relation appears, rather, as merely a moment of its total movement. Proceeding from itself as the active subject, the subject of the process -- and, in the turnover, the direct production process indeed appears determined by its movement as capital, independent of its relation to labour -- capital relates to itself as self-increasing value; i.e. it relates to surplus-value as something posited and founded by it; it relates as well-spring of production, to itself as product; it relates as producing value to itself as produced value. It therefore no longer measures the newly produced value by its real measure, the relation of surplus labour to necessary labour, but rather by itself as its presupposition. A capital of a certain value produces in a certain period of time a certain surplus-value. Surplus-value thus measured by the value of the presupposed capital, capital thus posited as self- realising value -- is profit; regarded not sub specie aeternitas, but sub specie -- capital is, the surplus- value is profit; and capital as capital, the producing and reproducing value, distinguishes itself from itself as profit, the newly produced value. The product of capital is profit. The magnitude, surplus-value, is therefore measured by the value magnitude of the capital, and the rate of profit is therefore determined by the proportion between its value and the value of capital. (Grundrisse, p. 745) We are at the completion of the ontological inversion of the subject/object that specifies the capitalist relations of production as a second order mediation; as a form of human activity in which human labour is not only objectified but alienated. An inversion that has been enacted in the production process by means of the exploitation of labour.

Hence capital emerges as its own subject; as a self- mediating and self-reproducing autonomous and alien force that stands over and against human labour. But it is now a force that is not only confined to the immediate process of production. Surplus-value, now consolidated as profit, becomes a social power that forms and regulates society as a whole: From surplus-value to profit, that is, to generalised and socialised surplus-value: originally a category of production, surplus-value has now become a social category. A leap forward of the analysis becomes necessary, then. It is called for by the productive force of capital and by the force of expansion of surplus-value from its place of origin [production] to the general conditions of this formation. (Negri, 1991, p. 85) As Negri indicates here, we have now reached a critical point in the development of Marx's exposition. We have reached the immediate limit of Marx's theory of surplus-value and of capitalist production as such. In Capital, as we have already noted, Marx proceeds from this point by considering the reproduction of both the material and social preconditions of capitalist production in the predominantly quantitative and objective terms of the accumulation of capital. Thus we found there how surplus-value breaks up into the quantitative value elements of revenue and the component parts of the newly expanded value (i.e. s = R + Dc + Dv); and how the accumulation of capital regulates the working population and the rhythm and intensity of its working activity. Yet is this theory of capital accumulation enough? Is their not an impetus, as Negri argues, towards a leap in analysis towards class subjectivity and thus class antagonism at this point?

Indeed capital now stands as subject, as a social power personified by the collective capitalist, by the capitalist class. As socialised surplus-value: Profit...is always that of the 'capitalist class'...In this political figure of profit the tendency of the development is anticipated: profit begins to concretise not only as the sum of surplus-values and as the equalisation of individual profits, but also as a political force, as a pole of social antagonism... [Negri, 1991, p. 93) Yet the accumulation of capital necessarily produces on an ever greater scale the proletariat as an opposed, if not antagonistic, social subject: ...it is not only true to say that labour produces on a constantly increasing scale the conditions of labour in opposition to itself in the form of capital, but equally, capital produces on a steadily increasing scale the productive wage-labourers it requires. Labour produces the conditions of its production in the form of capital, and capital produces labour, i.e. as wage- labour, as the means towards its own realization as capital. Capitalist production is not merely reproduction of the relationship: it is reproduction on a steadily increasing scale. And just as the social productive forces of labour develop in step with the capitalist mode of production, so too the heaped-up wealth confronting the worker grows apace and confronts him as capital, as wealth that controls him. The world of wealth expands and faces him as an alien world dominating him, and as it does so his subjective poverty, his need and dependence grow larger in proportion. His deprivation and plenitude match each other exactly. And at the same time, there is a corresponding increase in the mass of this living means of production of capital: the labouring proletariat.

The growth of capital and the increase in the proletariat appear, therefore, as interconnected -- if opposed -- products of the same process." (Capital *I, p. 1061) Here we have it. With profit and accumulation we are on the verge of the eruption of class subjectivity and class antagonism and with this the possibility of the tendency within capitalism towards its overthrow and communism. Yet all this is premature. The impetuous leap towards such class subjectivity, towards crisis and the tendency for communism must at this point be held back. It is tangential to Marx's principal line of theoretical development at this point. In Capital this impetus is defused through the historical excursus of the primitive accumulation of capital in Part VIII of Volume I. With this excursus capital as a social power is considered only in terms of its becoming, and hence in mainly historical and descriptive terms. In the Grundrisse, on the other hand, in which, as we have seen, ontological questions are far more to the fore, and which was written within the prospect of crisis, this impetuous leap forward could not be held completely in check. Instead, as Negri observes, Marx pushes forward to consider the tendency towards communism through the break down and crisis of capitalism that is signalled by the tendency for the rate of profit to fall.

As we shall see in more detail when we come to consider Volume III and Marx's theory of the tendency for the rate of profit to fall in chapter 10, Marx argues that with the progressive mechanization and automation of production the mass of dead to living labour will tend to rise enormously leading to a rise in what he terms the organic composition of capital. This rise in the organic composition must be offset by a continual rise in the rate of exploitation otherwise the rate of profit will fall. It is the failure of the rate of exploitation to rise sufficiently fast to offset the rise in the organic composition of capital that leads to the tendency for the rate of profit to fall which expresses to capital itself its own historical limits. Thus we find on the one side a growing mass of dead and objectified labour being opposed to living labour in production, while on the other side an enormous increase in the proportion of surplus labour time to necessary labour time as capitalism develops.

However, in the Grundrisse, the tendency for the rate of profit does not simply express an objective and quantitative limit to the accumulation of capital but a qualitative and ontological one. It poses the possibility for the inversion of the inversion of the subject/object that is imposed within the social relation of capital.

Firstly, the growing organic composition of capital means that the alienation of the worker becomes increasingly apparent: The fact that in the development of the productive forces of labour the objective conditions of labour, objectified labour, must grow relative to living...this fact appears from the standpoint of capital not in such a way that one of the moments of social activity -- objective labour -- becomes the ever more powerful body of the other moment, of subjective, living labour, but rather -- and this is important for wage-labour -- that the objective conditions of labour assume an ever more colossal independence, represented by its very extent, opposite living labour, and that social wealth confronts labour in more powerful portions as alien and dominant power. The emphasis comes to be placed not on the state of being objectified, but on the state of being alienated, dispossessed, sold... (Grundrisse, p. 831) And this alienation becomes even more apparent once the worker sees her labour as increasingly social labour rather than merely individual labour. To this extent the problem for the worker becomes one not merely of distribution -- of a higher wage -- but capitalist production itself. It is only: ...with the positing of the activity of individuals as immediately general or social activity, the objective moments of production are stripped of this alienation; they are thereby posited as property, as the organic social body, within which the individuals reproduce themselves as individuals, but as social individuals. (Grundrisse, p. 832) With this recognition comes the possibility for the struggle for communism.

Secondly, the growing rate of exploitation not only undermines the very basis of capitalist production but at the same time prepares the conditions for the full and all round development of the human individual that could be released in the free time of a communist society: As soon as labour in the direct form has ceased to be the great well-spring of wealth, labour time ceases and must cease to be its measure, and hence exchange-value [must cease to be the measure] of use-value. The surplus labour of the mass has ceased to be the condition for the development of general wealth, just as the non-labour of the few, for the development of the general powers of the human head. With that, production based on exchange-value breaks down, and the direct, material production is stripped of the form of penury and antithesis. The free development of individualities, and hence not the reduction of necessary labour time so as to posit surplus labour, but rather the general reduction of the necessary labour of society to a minimum, which then corresponds to the artistic, scientific etc. development of the individuals in the time set free, and with the means created for all of them. Capital itself is the moving contradiction, [in] that it presses to reduce labour time to a minimum, while it posits labour time, on the other side, as sole measure and source of wealth. Hence it diminishes labour time in the necessary form so as to increase it in the superfluous form; hence posits the superfluous in growing measure as a condition -- question of life and death -- for the necessary. On the one side, then, it calls to life all the powers of science and of nature, as of social combination and of social intercourse, in order to make the creation of wealth independent (relatively) of the labour time employed on it. On the other side, it wants to use labour time as its measuring rod for the giant social forces thereby created, and to confine them within the limits required to maintain the already created value as value. Forces of production and social relations -- two different sides of the development of the social individual -- appear to capital as mere means, and are merely means for it to produce on its limited foundation. In fact, however, they are the material conditions to blow this foundation sky high. (Grundrisse, p. 705) So the accumulation of capital creates both the objective and subjective conditions of a communist society and with its inherent tendency towards crisis and breakdown provides the opportunity for its realization.

This is all very well as far as it goes. However, it may be asked: how does the diminishing of direct labour time undermine itself as a measure of value? How does capital confine the great productive forces it has created on this basis? And how is all this expressed in terms of the falling rate of profit? In terms of the surface phenomena of prices, wages etc? Such questions cannot be answered by Marx at this point, and this is no accident but a matter of logical necessity.

In Volume I, as in the Grundrisse as a whole, Marx only considers the individual capital insofar as it immediately represents capital-in-general; that is insofar as it is the generality of capital-in-general. Capital is only considered in its immediate unity. This has two important and interconnected implications. Firstly, in taking capital in its immediate unity Marx can only defer, if only provisionally, the question of crisis, of the rupture in its movement. This, as we shall see, is true of Capital in all its three volumes.

Secondly, the immediate unity of capital implies that the unity of the capitalist class is presupposed. It is only when we reach Volume III, when we come to the singularity of capital-in-general, where the individual capital is counterposed to the totality of social capital, that we could begin to find the objective and material basis on which the capitalists are able to constitute themselves as a class. Indeed, in starting from capital-in-general the working class can only be represented in its disunity; as the atomized individual worker that we find throughout both Capital and the Grundrisse.

It is true, as we have sought to show, that in the Grundrisse, as in the 'missing sixth chapter', Marx, in contrast to Capital, comes to stress the qualitative and ontological side to the relations of the capitalist production process. Hence, whereas in Capital we the find the worker reduced mainly to a mere objective form, entering as the commodity labour-power or as variable capital, in the Grundrisse and in the 'missing sixth chapter' the subjective conditions of the worker are far more to the fore. Yet these subjective conditions are very much those of the atomized worker. Of course these conditions contain the possibility of a radical or revolutionary subjectivity, as we have sought to indicate, but only as a mere potential. We are very far from the constitution of the working class as subject (this perhaps belonged to the book on wage-labour). Obversely, the capitalist only stands as the immediate personification of capital-in-general. How the capitalist class is itself constituted is for the moment presupposed and in Capital, as in the Grundrisse, we are again very far from examining this presupposition. Indeed the question of class is only addressed at the end of Volume III and then it is perhaps a little premature.

We must therefore say in response to Negri that the leap from the revolutionary openness of the Grundrisse to the 'Marx beyond Marx' must alas proceed through the provisional closure of all three Volumes of Capital.

So, to conclude. By comparing Marx's theory of surplus- value and the accumulation of capital that we find in Volume I of Capital with that which we find in both the Grundrisse and the 'missing sixth chapter' we can clearly discern the consolidation of the movement of closure which serves to close off the question of class subjectivity and the counter- dialectic of class struggle.

Yet at the same time, in making this closure, Marx has to defer and close off the question of crisis. This second fold within the provisional closure enacted by Marx's problematic brings us back to the question of value with which we began this chapter. Let us then return.

* * C) Value, surplus-value and the provisional closing off of crisis From the results of our analysis laid out in Part I of this chapter we may conclude that any embodied labour theory of value, such as that of Ricardo, is constituted on the basis of, what we may term, the double identity of value.

Firstly we have the qualitative identity of value which states that the value of any commodity is the labour embodied in its production. Labour, therefore, is value. Hence we have the movement: L ---> V The labour embodied in a commodity in its production becomes its value when it enters the realm of exchange. Equally, we also have the reverse movement: V ---> L Value in exchange can consequently command labour to be used in production to produce future commodities. With this double movement we have the qualitative identity of production and exchange.

Secondly, we have the quantitative identity of value. The identity of value with price. Of course Ricardo would have been the first to admit that this is not a strict identity. Prices may well deviate in magnitude to values, but this would only be due to certain accidental or external factors or modifiers. For the most part the long term or natural price of a commodity would be determined by the magnitude of its value. Hence we have: V ---> P The magnitude of value becomes the magnitude of price.

Constituted on the basis of this double identity of value any embodied labour theory of value, as has been previously noted, precludes the possibility of crisis by asserting the identity of production and exchange. This, however, is not true of Marx's abstract social labour theory of value which is elaborated in the opening chapters of Capital. For Marx, production and exchange form a unity of opposition not a simple identity. A unity of opposition that is itself reflected in the double unity of opposition of value, rather than a double identity, and as a consequence is able to include the necessity of crisis and rupture as an inherent moment within the analysis of the capitalist mode of production. Hence, from the perspective of Marx's abstract social labour theory of value, an embodied labour theory of value appears as being both abstract and one-sided, reducing, as it does, the provisional unity of value to a mere absolute identity.

So we may say that with the abstract labour theory of value the double identity of value becomes expanded into a double unity of opposition of value as follows.

Firstly, the identity of labour and value expands into the qualitative unity of opposition of value. As we have seen, for Marx the concrete disassociated labour that is embodied in the immediate production of a commodity only becomes value insofar as it is validated as its opposite -- abstract social labour -- through the exchange of commodities. Value is merely the provisional unity of these two opposed aspects of the labour in the commodity-form. There is no guarantee that the labour embodied in the production of a commodity will in fact become validated as value by becoming its opposite. Indeed there is the ever present possibility that labour will not be validated as value; that the commodity will remain unsold. Hence we have the ever present potential for rupture in the movement between production and exchange -- the inherent possibility of crisis.

Secondly, the identity of value with price expands into the quantitative unity of opposition of value. With the relative autonomy of money as expression of value, the magnitude of specific prices necessarily deviate from the magnitude of specific values. In fact it is only through such deviations that the law of value can assert itself over the otherwise uncoordinated actions of independent and competitive commodity producers. Yet with such deviations there is always the ever present possibility that the divergence of price from value will become so large that their underlying unity can only be forcibly reimposed through rupture and crisis. So again from this quantitative aspect of value we have the ever present possibility of rupture and crisis within capitalism as a generalized commodity economy, albeit only in embryonic form.

So within Marx's abstract social labour theory of value, which is elaborated in Parts I, II and III of Volume I, the possibility of rupture and crisis is preserved. This is so even though Marx, as we have seen, is primarily concerned with the possibility of capitalism as an economy of generalised commodity exchange. While in being concerned with the possibility of capitalism, Marx is obliged to stress the unity of the capital-form as it develops out of the commodity-form and the money-form; but he never reduces this identity to an absolute identity. In fact, as was clearly evident in the analysis of the money-form, the underlying question of rupture and crisis preserved within his value theory necessarily served to drive Marx's analysis forward. The unity of these forms could only be understood through their oppositions and contradictions.

With Marx's theory of surplus-value however the angle of approach changes and throws a different light upon the question of value. In moving from the surface appearance of capitalism as an economy of generalized commodity exchange to the essential relations of capitalist production Marx is no longer concerned with the relations of exchange that exist between independent commodity producers but with the class relation that exists between the worker and the capitalist. A relationship that is not expressed through the equality of values but through the exploitation of the worker through the production and appropriation of surplus-value by the capitalist.

In order to lay bare this essential relation of capitalist production Marx is obliged to abstract production from exchange and distribution. He is obliged to consider capitalist production as such. However, in making this abstraction Marx does not banish exchange or circulation completely. On the contrary, the sphere of exchange that was examined so closely in the first three parts of Capital is still present as the presupposition of his theory of surplus- value. Yet while present, exchange only enters insofar as it directly and simply reflects the immediate results of production; that is only insofar as it is in unity with production. Hence we find the surplus-labour appropriated in production is assumed to be realized as surplus-value; just as the total labour embodied in the commodity is assumed to be realized as the total value of the commodity.

Such assumptions are not only necessary to simplify the analysis of the production of surplus-value and the exploitation of labour but are a direct consequence of the movement of abstraction that we find in Capital. Marx is not at this point concerned with the competitive opposition of many capitalists as commodity producers but with the capitalist relation of production -- with capital in its opposition to labour. Each capital is considered only insofar as it represents capital-in-general so that the capitalist stands as the capitalist and the worker stands to her as the worker. To counterpose capital to labour capital must be first posited in its unity. Thus it is its unity that is emphasized over its opposition.

The result of this movement of abstraction is that, with the provisional assumption that labour equals value and value equals price -- and hence surplus-labour equals surplus-value which then equals profit -- Marx's labour theory of value reappears as if constituted on the basis of the double identity of value. It appears as if it was an embodied labour theory of value. Indeed this apparent reduction of Marx's theory of value into an embodied labour theory of value is sustained beyond the theory of surplus-value into his theory of capital accumulation, and in fact throughout Volume II. As we shall see, through all the remaining theoretical development in Capital labour is persistently identified with value, while it is only in Volume III that Marx begins to relax the assumption of the quantitative equality of values with prices.

It is this apparent reduction of Marx's value theory to an embodied labour theory of value that has led so many commentators, and indeed many Marxists, to regard Marx as a classical political economist; as a direct successor to Ricardo! The apparent stark contrast between the theory of value in the opening two parts of Capital and the rest of Capital has pitted the defenders of the former, the abstract labour and value-form theorists, against the interpreters of the latter, the Neo-Ricardians and Sraffian Marxists, into a bitter and irreconcilable controversy in recent years. A point that we shall consider in more detail in our concluding chapter.

However, this stark contrast in Marx's value theory is only apparent. As we have argued, Marx has to emphasize the unity of value in order to emphasize the unity of capital. In doing so Marx's abstract labour theory of value becomes provisionally attenuated into what we may term a quasi- embodied labour theory of value. Marx, in stressing this side of his value theory, never completely abandons the hard won gains of the first two Parts of Capital. His abstract social labour theory of value remains preserved, along with the question of rupture and crisis, within the categories and distinctions made in these earlier stages of Capital. Thus labour is never collapsed into value, value is never collapsed into price; as indeed the more developed category of surplus labour is never collapsed into surplus-value or into profit, and so forth.

* * * Conclusion

This then brings us to the conclusion of our consideration of Volume I of Capital. From our close exegesis of the theoretical line of development of this opening volume we have seen how within it Marx comes to impose and sustain his provisional two-fold closure. Firstly in terms of the attenuation of his consideration of capitalist production from that of a process of alienation, which was more apparent in the Grundrisse and the 'missing sixth chapter', to that of a quantitative process of exploitation. Secondly, in the development of Marx's abstract labour theory of value, through its unfolding from the commodity-form, through the money-form, to the form of capital, which posited capitalist production and exchange as a unity in opposition; and then, with the emphasis on its unity, the attenuation of this abstract labour theory of value to a quasi-embodied labour theory of value.

We must now consider how this provisional closure is sustained in the remaining two volumes of Capital. So, in the following chapter, we shall turn our attentions to Volume II.


1. See Zeleny (1968).

2. For a philosophical treatment of the question of value from the 'standpoint of the modern economist' see Robinson (1962). In this work Robinson makes it quite explicit that, as a modern economist, she sees value as a 'metaphysical concept'.

3. Ricardo's commitment to a labour theory of value can be traced back to Locke's proposition that labour is the origin of the right to property ownership.

4. With the recovery and translation of Rubin's seminal work that sets out Marx's abstract social labour theory of value -- (Rubin, 1972) -- there has followed a substantial amount of literature in recent years concerning the distinction between Marx's labour theory of value and the embodied labour theory of value of Ricardo. For a comprehensive review of various approaches to Marx's labour value theory see De Vroey (1982). For a discussion of the distinction between Marx's abstract social labour theory and Ricardo's labour embodied theory, see, for example, Pilling (1972) and Himmelweit & Mohun (1978).

5. See Ricardo's letters and essays on the bullion controversy that are contained in (Ricardo, 1951, Vol.III).

6. This tendency towards class subjectivity and antagonism of the collective worker and the collective capitalist is considered in (Negri, 1991, 1988).