I. Marx's Theory of Commodity Fetishism

Submitted by Craftwork on March 28, 2017

Marx's theory of commodity fetishism has not occupied the place which is proper to it in the Marxist economic system. The fact is that Marxists and opponents of Marxism have praised the theory, recognizing it as one of the most daring and ingenious of Marx's generalizations. Many opponents of Marx's theory of value have high regard for the theory of fetishism (Tugan-Baranovskii, Frank, and even Struve with qualifications1 ). Some writers do not accept the theory of fetishism in the context of political economy. They see it as a brilliant sociological generalization, a theory and critique of all contemporary culture based on the reification of human relations (Hammacher). But proponents as well as opponents of Marxism have dealt with the theory of fetishism mainly as an independent and separate entity, internally hardly related to Marx's economic theory. They present it as a supplement to the theory of value, as an interesting literary-cultural digression which accompanies Marx's basic text. One reason for such an interpretation is given by Marx himself, by the formal structure of the first chapter of Capital, where the theory of fetishism is given a separate heading.2 This formal structure, however, does not correspond to the internal structure and the connections of Marx's ideas. The theory of fetishism is, per se, the basis of Marx's entire economic system, and in particular of his theory of value.

What does Marx's theory of fetishism consist of, according to generally accepted views? It consists of Marx's having seen human relations underneath relations between things, revealing the illusion in human consciousness which originated in the commodity economy and which assigned to things characteristics which have their source in the social relations among people in the process of production. "Unable to grasp that the association of working people in their battle with nature, i.e., the social relations among people, are expressed in exchange, commodity fetishism considers the exchangeability of commodities an internal, natural property of the commodities themselves. In other words, that which is in reality a relationship among people, appears as a relation among things within the context of commodity fetishism."3 "Characteristics which had appeared mysterious because they were not explained on the basis of the relations of producers with each other were assigned to the natural essence of commodities. Just as the fetishist assigns characteristics to his fetish which do not grow out of its nature, so the bourgeois economist grasps the commodity as a sensual thing which possesses pretersensual properties."4 The theory of fetishism dispels from men's minds the illusion, the grandiose delusion brought about by the appearance of phenomena in the commodity economy, and by the acceptance of this appearance (the movement of things, of commodities and their market prices) as the essence of economic phenomena. However this interpretation, though generally accepted in Marxist literature, does not nearly exhaust the rich content of the theory of fetishism developed by Marx. Marx did not only show that human relations were veiled by relations between things, but rather that, in the commodity economy, social production relations inevitably took the form of things and could not be expressed except through things. The structure of the commodity economy causes things to play a particular and highly important social role and thus to acquire particular social properties. Marx discovered the objective economic bases which govern commodity fetishism. Illusion and error in men's minds transform reified economic categories into "objective forms" (of thought) of production relations of a given, historically determined mode of production-commodity production (C., I, p. 72).5

The theory of commodity fetishism is transformed into a general theory of production relations of the commodity economy, into a propaedeutic to political economy.

Chapter One: Objective Basis of Commodity Fetishism

The distinctive characteristic of the commodity economy is that the managers and organizers of production are independent commodity producers (small proprietors or large entrepreneurs). Every separate, private firm is autonomous, i.e., its proprietor is independent, he is concerned only with his own interests, and he decides the kind and the quantity of goods he will produce. On the basis of private property, he has at his disposal the necessary productive tools and raw materials, and as the legally competent owner, he disposes of the products of his business. Production is managed directly by separate commodity producers and not by society. Society does not directly regulate the working activity of its members, it does not prescribe what is to be produced or how much.

On the other hand, every commodity producer makes commodities, i.e., products which are not for his own use, but for the market, for society. The social division of labor unites all commodity producers into a unified system which is called a national economy, into a "productive organism" whose parts are mutually related and conditioned. How is this connection created? By exchange, by the market, where the commodities of each individual producer appear in a depersonalized form as separate exemplars of a given type of commodity regardless of who produced them, or where, or in which specific conditions. Commodities, the products of individual commodity producers, circulate and are evaluated on the market. The real connections and interactions among the individual - one might say independent and autonomous - firms are brought about by comparing the value of goods and by exchanging them. On the market society regulates the products of labor, the commodities, i.e., things. In this way the community indirectly regulates the working activity of people, since the circulation of goods on the market, the rise and fall of their prices, lead to changes in the allocation of the working activity of the separate commodity producers, to their entry into certain branches of production or their exit from them, to the redistribution of the productive forces of society.

On the market, commodity producers do not appear as personalities with a determined place in the production process, but as proprietors and owners of things, of commodities. Every commodity producer influences the market only to the extent that he supplies goods to the market or takes goods from it, and only to this extent does he experience the influence and pressure of the market. The interaction and the mutual impact of the working activity of individual commodity producers take place exclusively through things, through the products of their labor which appear on the market. The expansion of farmland in remote Argentina or Canada can bring about a decrease of agricultural production in Europe only in one way: by lowering the price of agricultural products on the market. In the same way, the expansion of large-scale machine production ruins a craftsman, making it impossible for him to continue his previous production and driving him from the country to the city, to the factory.

Because of the atomistic structure of the commodity society, because of the absence of direct social regulation of the working activity of the members of society, the connections between individual, autonomous, private firms are realized and maintained through commodities, things, products of labor. "...The labor of the individual asserts itself as a part of the labor of society, only by means of the relations which the act of exchange establishes directly between the products, and indirectly, through them, between the producers" (C., I, p. 73). Due to the fact that individual commodity producers, who perform a part of society's total labor, work independently and separately, "the interconnection of social labor is manifested in the private exchange of the individual products of labor" (Marx in his letter to Kugelmann).6 This does not mean that a given commodity producer A is only connected by production relations to given commodity producers B, C and D, who enter with him into a contract of purchase and sale, and is not related to any other member of society. Entering into direct production relations with his buyers B, C and D, our commodity producer A is actually connected, by a thick network of indirect production relations, with innumerable other people (for example, with all buyers of the same product, with all producers of the same product, with all the people from whom the producer of the given product buys means of production, and so on), in the final analysis, with all members of society. This thick network of production relations is not interrupted at the moment when commodity producer A terminates the act of exchange with his buyers and returns to his shop, to the process of direct production. Our commodity producer makes products for sale, for the market, and thus already in the process of direct production he must take into account the expected conditions of the market, i.e. he is forced to take into account the working activity of other members of society, to the extent that it influences the movement of commodity prices on the market.

Thus the following elements can be found in the structure of the commodity economy: 1) individual cells of the national economy, i.e. separate private enterprises, formally independent from each other; 2) they are materially related with each other as a result of the social division of labor; 3) the direct connection between individual commodity producers is established in exchange, and this, indirectly, influences their productive activity. In his enterprise each commodity producer is formally free to produce, at will, any product that pleases him and by any means he chooses. But when he takes the final product of his labor to the market to exchange it, he is not free to determine the proportions of the exchange, but must submit to the conditions (the fluctuations) of the market, which are common to all producers of the given product. Thus, already in the process of direct production, he is forced to adapt his working activity (in advance) to the expected conditions of the market. The fact that the producer depends on the market means that his productive activity depends on the productive activity of all other members of society. If clothiers supplied too much cloth to the market, then clothier Ivanov, who did not expand his production, did not thereby suffer less from the fall of cloth prices, and he had to decrease his production. If other clothes introduced improved means of production (for example, machines), lowering the value of cloth, then our clothier was also forced to improve his production technology. The separate commodity producer, formally independent from others in terms of the orientation, extent and methods of his production, is actually closely related to them through the market, through exchange. The exchange of goods influences the working activity of people; production and exchange represent inseparably linked, although specific, components of reproduction. "The capitalist process of production taken as a whole represents a synthesis of the processes of production and circulation" (C., III, p. 25). Exchange becomes part of the very process of reproduction or the working activity of people, and only this aspect of exchange, the proportions of exchange, the value of commodities, is the subject of our research. Exchange interests us mainly as the social form of the process of reproduction which leaves a specific mark on the phase of direct production (see below, Chapter Fourteen), not as a phase of the process of reproduction which alternates with the phase of direct production.

This role of exchange, as an indispensable component of the process of reproduction, means that the working activity of one member of society can influence the working activity of another only through things. In the market society, "the seeming mutual independence of the individuals is supplemented by a system of general and mutual dependence through or by means of the products" (C., I, p. 108). Social production relations inevitably take on a reified form - and to the extent that we speak of the relations between individual commodity producers and not of relations within separate private firms - they exist and are realized only in that form.

In a market society, a thing is not only a mysterious "social hieroglyphic" (C., I, p. 74), it is not only "a receptacle" under which social production relations among people are hidden. A thing is an intermediary in social relations, and the circulation of things is inseparably related to the establishment and realization of the productive relations among people. The movement of the prices of things on the market is not only the reflection of the productive relations among people; it is the only possible form of their manifestation in a market society. The thing acquires specific social characteristics in a market economy (for example, the properties of value, money, capital, and so on), due to which the thing not only hides the production relations among people, but it also organizes them, serving as a connecting link between people. More accurately, it conceals the production relations precisely because the production relations only take place in the form of relations among things. "When we bring the products of our labor into relation with each other as values, it is not because we see in these articles the material receptacles of homogeneous human labor. Quite the contrary: whenever, by an exchange, we equate as values our different products, by that very act, we also equate, as human labor, the different kinds of labor expended upon them. We are not aware of this, nevertheless we do it" (C., I, p. 74). Exchange and the equalization of things on the market bring about a social connection among the commodity producers and unify the working activity of people.

We consider it necessary to mention that by "things" we mean only the products of labor, just as Marx did. This qualification of the concept of "thing" is not only permissible, but indispensable, since we are analyzing the circulation of things on the market as they are connected with the working activity of people.We are interested in those things whose market regulation influences the working activity of commodity producers in a particular way. And the products of labor are such things. (On the price of land, see below, Chapter Five.)

The circulation of things - to the extent that they acquire the specific social properties of value and money - does not only express production relations among men, but it creates them.7 "By the currency of the circulating medium, the connexion between buyers and sellers is not merely expressed. This connexion is originated by, and exists in, the circulation alone" (C., I, p. 137). As a matter of fact, the role of money as a medium of circulation is contrasted by Marx with its role as a means of payment, which "expresses a social relation that was in existence long before" (Ibid.). However, it is obvious that even though the payment of money takes place, in this case, after the act of purchase and sale, namely after the establishment of social relations between the seller and the buyer, the equalization of money and commodities took place at the instant when the act took place, and thus created the social relation. "[Money] serves as an ideal means of purchase. Although existing only in the promise of the buyer to pay, it causes the commodity to change hands" (C., I, p. 136).

Thus money is not only a "symbol," a sign, of social production relations which are concealed under it. By uncovering the naivete of the monetary system, which assigned the characteristics of money to its material or natural properties, Marx at the same time threw out the opposite view of money as a "symbol" of social relations which exist alongside money (C., I, p. 91). According to Marx, the conception which assigns social relations to things per se is as incorrect as the conception which sees a thing only as a "symbol," a "sign" of social production relations. The thing acquires the property of value, money, capital, etc., not because of its natural properties but because of those social production relations with which it is connected in the commodity economy. Thus social production relations are not only "symbolized" by things, but are realized through things.

Money, as we have seen, is not only a "symbol." In some cases, particularly in the commodity metamorphosis C-M-C, money represents only a "transcient and objective reflex of the prices of commodities" (C., I, p. 129). The transfer of money from hand to hand is only a means for the transfer of goods. In this case, "Its functional existence absorbs, so to say, its material existence" (C., I, p. 129), and it can be replaced by the mere symbol of paper money. But even though "formally" separated from metallic substance, paper money nevertheless represents an "objectification" of production relations among people.8

In the commodity economy, things, the products of labor, have a dual essence: material (natural-technical) and functional (social). How can we explain the close connection between these two sides, the connection which is expressed in the fact that "socially determined labor" takes on "material traits," and things, "social traits"?

Chapter Two: The Production Process and its Social Form

The close connection between the social-economic and the material-physical is explained by the particular connection between the material-technical process and its social form in the commodity economy. The capitalist production process "is as much a production process of material conditions of human life as a process taking place under specific historical and economic production relations, producing and reproducing these production relations themselves, and thereby also the bearers of this process, their material conditions of existence and their mutual relations, i.e., their particular socioeconomic form" (C., III, p. 818). There is a close connection and correspondence between the process of production of material goods and the social form in which it is carried out, i.e., the totality of production relations among men. The given totality of production relations among men is adjusted by a given condition of productive forces, i.e. the material production process. This totality makes possible, within certain limits, the process of production of material products indispensable for society. The correspondence between the material process of production, on the one hand, and the production relations among the individuals who participate in it, on the other, is achieved differently in different social formations. In a society with a regulated economy, for example in a socialist economy, production relations among individual members of society are established consciously in order to guarantee a regular course of production. The role of each member of society in the production process, namely his relationship to other members, is consciously defined. The coordination of the working activity of separate individuals is established on the basis of previously estimated needs of the material-technical process of production. The given system of production relations is in some sense a closed entity managed by one will and adapted to the material process of production as a whole. Obviously changes in the material process of production may lead to inevitable changes in the system of production relations; but these changes take place within the system and are carried out by its own internal forces, by decisions of its managing bodies. The changes are brought about by changes in the production process. The unity which exists at the starting point makes possible a correspondence between the material-technical process of production and the production relations which shape it. Later on, each of these sides develops on the basis of a previously determined plan. Each side has its internal logic, but due to the unity at the start, no contradiction develops between them.

We have an example of such an organization of production relations in commodity-capitalist society, particularly in the organization of labor within an enterprise (technical division of labor), as opposed to the division of labor between separate private producers (social division of labor). Let us assume that an enterpriser owns a large textile factory which has three divisions: spinning mill, weaving mill, and dye-works. The engineers, workers and employees were assigned to different divisions previously, according to a determined plan. They were connected, in advance, by determined, permanent production relations in terms of the needs of the technical production process. And precisely for this reason, things circulate in the process of production from some people to others depending on the position of these people in production, on the production relations among them. When the manager of the weaving division receives the yarn from the spinning mill, he transformed it into fabric, but he did not send the fabric back to the manager of the spinning mill as an equivalent for the previously received yarn. He sent it forward to the dye-works, because the permanent production relations which connect the workers in the given weaving mill with the workers in the given dye-works determine, in advance, the forward movement of the objects, the products of labor, from the people employed in the earlier process of production (weaving) toward the people employed in the later process (dyeing). The production relations among people are organized in advance for the purpose of the material production of things, and not by means of things. On the other hand, the object moves in the production process from some people to others on the basis of production relations which exist among them, but the movement does not create production relations among them. Production relations among people have exclusively a technical character. Both of these sides are adjusted to each other, but each has a different character.

The entire problem is essentially different when the spinning mill, weaving mill and dye-works belong to three different enterprises, A, B and C. Now A no longer delivers the finished yarn to B only on the basis of B's ability to transform it into fabric, i.e., to give it the form useful to society. He has no interest in this; now he no longer wants simply to deliver his yarn, but to sell it, i.e. to give it to an individual who, in exchange will give him a corresponding sum of money, or in general, an object of equal value, an equivalent. It is all the same to him who this individual is. Since he is not connected by permanent production relations with any determined individuals, A enters into a production relation of purchase and sale with every individual who has and agrees to give him an equivalent sum of money for the yarn. This production relation is limited to the transfer of things, namely the yarn goes from A to the buyer and the money from the buyer to A. Even though our commodity producer A cannot in any way pull out of the thick network of indirect production relations which connect him with all members of society, he is not connected in advance by direct production relations with determined individuals. These production relations do not exist in advance but are established by means of the transfer of things from one individual to another. Thus they not only have a social, but also a material character. On the other hand the object passes from one determined individual to another, not on the basis of production relations established between them in advance, but on the basis of purchase and sale which is limited to the transfer of these objects. The transfer of things establishes a direct production relation between determined individuals; it has not only a technical, but also a social significance.

Thus in a commodity society which develops spontaneously, the process is carried out in the following way. From the point of view of the material, technical process of production, each product of labor must pass from one phase of production to the next, from one production unit to another, until it receives its final form and passes from the production unit of the final producer or intermediate merchant into the economic unit of the consumer. But given the autonomy and independence of the separate economic units, the transfer of the product from one individual economic unit to another is only possible through purchase and sale, through agreement between two economic units, which means that a particular production relation is established between them: purchase and sale. The basic relation of commodity society, the relation between commodity owners, is reduced to "a capacity in which they appropriate the produce of the labor of others, by alienating that of their own labor" (C., I, p. 108-109). The totality of production relations among men is not a uniformly connected system in which a given individual is connected by permanent connections, determined in advance, with given individuals. In the commodity economy, the commodity producer is connected only with the indetermined market, which he enters through a discrete sequence of individual transactions that temporarily link him with determined commodity producers. Each stage in this sequence closely corresponds to the forward movement of the product in the material process of production. The passage of the product through specific stages of production is brought about by its simultaneous passage through a series of private production units on the basis of agreements among them, and of exchange. Inversely, the production relation connects two private economic units at the point where the material product passes from one economic unit to the other. The production relation between determined persons is established on the occasion when things are transferred, and after the transfer it is broken once again.

We can see that the basic production relation in which determined commodity producers are directly connected, and thus for each of them the established connection between his working activity and the working activity of all members of society, namely purchase and sale, is carried on regularly. This type of production relation differs from production relations of an organized type in the following ways: 1) it is established between the given persons voluntarily, depending on its advantages for the participants; the social relation takes the form of a private transaction; 2) it connects the participants for a short time, not creating a permanent connection between them; but these momentary and discontinuous transactions, taken as a whole, have to maintain the constancy and continuity of the social process of production; and 3) it unites particular individuals on the occasion of the transfer of things between them, and it is limited to this transfer of things; relations among people acquire the form of equalization among things. Direct production relations between particular individuals are established by the movement of things between them; this movement must correspond to the needs of the process of material reproduction. "The exchange of commodities is a process in which the social exchange of things, i.e., the exchange of particular products of private individuals simultaneously represents the establishment of determined social production relations which individuals enter when exchanging things" (Zur Kritik der politischen Oekonomie, 1907, p. 32).9 Or, as Marx put it, the process of circulation includes Stoff- und Formwechsel (Content and Form of Exchange) (Das Kapital, Volume III Part 2, 1894, p. 363), it includes the exchange of things and the transformation of their form, i.e., the movement of things within the material production process and the transformation of their social-economic form (for example, the transformation of commodities into money, money into capital, money capital into productive capital, etc.), which corresponds to the different production relations among people.

Social-economic (relations among people) and material-objective (movement of things within the process of production) aspects are indissolubly united in the process of exchange. In the commodity-capitalist society these two aspects are not organized in advance and are not adjusted to each other. For this reason every individual act of exchange can be realized only as the result of the joint action of both of these aspects; it is as if each aspect stimulated the other. Without the presence of particular objects in the hands of given individuals, the individuals do not enter into the production relation of exchange with each other. Yet, inversely, the transfer of things cannot take place if their owners do not establish particular production relations of exchange. The material process of production, on one hand, and the system of production relations among individual, private economic units, on the other, are not adjusted to each other in advance. They must be adjusted at each stage, at each of the single transactions into which economic life is formally broken up. If this does not take place, they will inevitably diverge, and a gap will develop within the process of social reproduction. In the commodity economy such a divergence is always possible. Either production relations which do not stand for real movements of products in the process of production are developed (speculation), or production relations indispensable for the normal performance of the production process are absent (sales crisis). In normal times such a divergence does not break out of certain limits, but in times of crisis it becomes catastrophic.

In essence, the connection between the production relations among people and the material process of production have the same character in a capitalist society stratified into classes. As before, we leave aside production relations within an individual enterprise, and deal only with relations between separate, private enterprises, relations which organize them into a unified national economy. In the capitalist society, different factors of production (means of production, labor force and land) belong to three different social classes (capitalists, wage laborers and landowners) and thus acquire a particular social form, a form which they do not have in other social formations. The means of production appear as capital, labor as wage labor, land as an object of purchase and sale. The conditions of labor, i.e., means of production and land, which are "formally independent" (C., III, p. 825) from labor itself in the sense that they belong to different social classes, acquire a particular social "form," as was mentioned above. If the individual technical factors of production are independent, and if they belong to separate economic subjects (capitalist, worker and landowner), then the process of production cannot begin until a direct production relation is established among particular individuals who belong to the three social classes mentioned above. This production relation is brought about by concentrating all the technical factors of production in one economic unit which belongs to a capitalist. This combination of all the factors of production, of people and things, is indispensable in every social form of economy, but "the specific manner in which this union is accomplished distinguishes the different economic epochs of the structure of society from one another" (C., II, pp. 36-37).

Let us imagine feudal society, where the land belongs to the landlord, and the labor and means of production, usually very primitive, belong to the serf. Here a social relation of subordination and domination between the serf and landlord precedes and makes possible the combination of all the factors of production. By force of common law the serf uses a plot of land which belongs to the landlord, and he must pay rent and serve a corvee, i.e., work a given number of days on the manor, usually with his own means of production. Permanent production relations which exist between the landlord and the serf make possible the combination of all factors of production in two places: on the peasant's plot, and on the manor.

In capitalist society, as we have seen, such permanent, direct relations between determined persons who are owners of different factors of production, do not exist. The capitalist, the wage laborer, as well as the landowner, are commodity owners who are formally independent from each other. Direct production relations among them have yet to be established, and then in a form which is usual for commodity owners, namely in the form of purchase and sale. The capitalist has to buy, from the laborer, the right to use his labor force, and from the landlord, the right to use his land. To do this he must possess enough capital. Only as the owner of a given sum of value (capital) which enables him to buy means of production and to make it possible for the laborer to buy necessary means of subsistence, does he become a capitalist, an organizer and manager of production. Capitalists use the authority of directors of production "only as the personification of the conditions of labor in contrast to labor, and not as political or theocratic rulers as under earlier modes of production" (C., III, p. 881). The capitalist "is a capitalist and can undertake the process of exploiting labor only because, being the owner of the conditions of labor, he confronts the laborer as the owner of only labor-power" (C., III, p. 41). The capitalist's status in production is determined by his ownership of capital, of means of production, of things, and the same is true of the wage laborer as the owner of labor power, and the landlord as owner of the land. The agents of production are combined through the factors of production; production bonds among people are established through the movement of things. The independence of the factors of production, which is based on private ownership, makes possible their material-technical combination, indispensable for the production process, only by establishing the production process of exchange among their owners. And inversely: direct production relations which are established among the representatives of the different social classes (the capitalist, worker and landlord), result in a given combination of technical factors of production, and are connected with the transfer of things from one economic unit to another. This tight connection of production relations among people with the movement of things in the process of material production leads to the "reification" of production relations among people.

Chapter Three: Reification of Production Relations among People and Personification of Things

As we have seen, in commodity-capitalist society separate individuals are related directly to each other by determined production relations, not as members of society, not as persons who occupy a place in the social process of production, but as owners of determined things, as "social representatives" of different factors of production. The capitalist "is merely capital personified" (C., III, pp. 819, 824). The landlord "appears as the personification of one of the most essential conditions of production," land (C., III, pp. 819, 824). This "personification," in which critics of Marx saw something incomprehensible and even mystical,10 indicates a very real phenomenon: the dependence of production relations among people on the social form of things (factors of production) which belong to them, and which are personified by them.

If a given person enters a direct production relation with other determined persons as owner of certain things, then a given thing, no matter who owns it, enables its owner to occupy a determined place in the system of production relations. Since the possession of things is a condition for the establishment of direct production relations among people, it seems that the thing itself possesses the ability, the virtue, to establish production relations. If the given thing gives its owner the possibility to enter relations of exchange with any other commodity owner, then the thing possesses the special virtue of exchangeability, it has "value." If the given thing connects two commodity owners, one of whom is a capitalist and the other a wage laborer, then the thing is not only a "value," it is "capital" as well. If the capitalist enters into a production relation with a landlord, then the value, the money, which he gives to the landlord and through the transfer of which he enters the production bond, represents "rent." The money paid by the industrial capitalist to the money capitalist for the use of capital borrowed from the latter, is called "interest." Every type of production relation among people gives a specific "social virtue," "social form," to the things by means of which determined people enter into direct production relations. The given thing, in addition to serving as a use value, as a material object with determined properties which make it a consumer good or a means of production, i.e., in addition to performing a technical function in the process of material production, also performs the social function of connecting people.

Thus in the commodity-capitalist society people enter direct production relations exclusively as commodity owners, as owners of things. On the other hand, things, as a result, acquire particular social characteristics, a particular social form. "The social qualities of labor" acquire "material characteristics," and objects, "social characteristics" (C., I, p. 91). Instead of "direct social relations between individuals at work," which are established in a society with an organized economy, here we observe "material relations between persons and social relations between things" (C., I, p. 73). Here we see two properties of the commodity economy: "personification of things and conversion of production relations into entities [relations among things]" (C., III, p. 830), "The materialization of the social features of production and the personification of the material foundations of production" (Ibid., p. 880).

By the "materialization of production relations" among people, Marx understood the process through which determined production relations among people (for example, between capitalists and workers) assign a determined social form, or social characteristics, to the things by means of which people relate to one another (for instance, the social form of capital).

By "personification of things" Marx understood the process through which the existence of things with a determined social form, for example capital, enables its owner to appear in the form of a capitalist and to enter concrete production relations with other people.

At first sight both of these processes may appear to be mutually exclusive processes. On one hand, the social form of things is treated as the result of production relations among people. On the other hand, these same production relations are established among people only in the presence of things with a specific social form. This contradiction can be resolved only in the dialectical process of social production, which Marx considered as a continuous and ever-recurring process of reproduction in which each link is the result of the previous link and the cause of the following one. The social form of things is at the same tune the result of the previous process of production and of expectations about the future.11

Every social form related to the products of labor in capitalist society (money, capital, profit, rent, etc.), appeared as the result of a long historical and social process, through constant repetition and sedimentation of productive relations of the same type. When the given type of production relations among people is still rare and exceptional in a given society, it cannot impose a different and permanent social character on the products of labor which exist in it. "The momentary social contact" among people gives the products of their labor only a momentary social form which appears together with the social contacts which are created, and disappears as soon as the social contacts end (C., I, p. 88). In undeveloped exchange, the product of labor determines value only during the act of exchange, and is not a value either before or after that act. When the participants in the act of exchange compare the products of their labor with a third product, the third product performs the function of money in embryonic form, not being money either before or after the act of exchange.

As productive forces develop, they bring about a determined type of production relations among people. These relations are frequently repeated, become common and spread in a given social environment. This "crystallization" of production relations among people leads to the "crystallization" of the corresponding social forms among things. The given social form is "fastened," fixed to a thing, preserved within it even when the production relations among people are interrupted. Only from that moment can one date the appearance of the given material category as detached from the production relations among people from which it arose and which it, in turn, affects. "Value" seems to become a property of the thing with which it enters into the process of exchange and which the thing preserves when it leaves. The same is true of money, capital and other social forms of things. Being consequences of the process of production, they become its prerequisites. From this point on, the given social form of the product of labor serves not only as an "expression" of a determined type of production relations among people, but as their "bearer." The presence of a thing with a determined social form in the hands of a given person induces him to enter determined production relations, and informs him of its particular social character. "The reification of production relations" among people is now supplemented by the "personification of things." The social form of the product of labor, being the result of innumerable transactions among commodity producers, becomes a powerful means of exerting pressure on the motivation of individual commodity producers, forcing them to adapt their behavior to the dominant types of production relations among people in the given society. The impact of society on the individual is carried out through the social form of things. This objectification, or "reification," of the production relations among people in the social form of things, gives the economic system greater durability, stability and regularity. The result is the "crystallization" of production relations among people.

Only at a determined level of development, after frequent repetition, do the production relations among people leave some kind of sediment in the form of certain social characteristics which are fixed to the products of labor. If the given type of production relations have not yet spread widely enough in the society, they cannot yet give to things an adequate social form. When the ruling type of production was crafts production, where the goal was the "maintenance" of the craftsman, the craftsman still considered himself a "master craftsman" and he considered his income the source of his "maintenance" even when he expanded his enterprise and had, in essence, already become a capitalist who lived from the wage labor of his workers. He did not yet consider his income as the "profit" of capital, nor his means of production as "capital." In the same way, due to the influence of dominant agriculture on precapitalist social relations, interest was not viewed as a new form of income, but was for a long time considered a modified form of rent. The renowned economist Petty tried to derive interest from rent in this manner.12 With this approach, all economic forms are "subsumed" under the form which is dominant in the given mode of production (C., III, p. 876). This explains why a more or less extended period of development has to take place before the new type of production relations are "reified" or "crystallized" in the social forms which correspond to the products of labor.

Thus the connection between the production relations among people and the material categories must be presented in the following manner. Every type of production relation which is characteristic for a commodity-capitalist economy ascribes a particular social form to the things for which and through which people enter the given relation. This leads to the "reification" or "crystallization" of production relations among people. The thing which is involved in a determined production relation among people and which has a corresponding social form, maintains this form even when the given, concrete, single production relation is interrupted. Only then can the production relation among people be considered truly "reified," namely "crystallized" in the form of a property of the thing, a property which seems to belong to the thing itself and to be detached from the production relation. Since the things come forth with a determined, fixed social form, they, in turn, begin to influence people, shaping their motivation, and inducing them to establish concrete production relations with each other. Possessing the social form of "capital," things make their owner a "capitalist" and in advance determine the concrete production relations which will be established between him and other members of society. It seems as if the social character of things determines the social character of their owners. Thus the "personification of things" is brought about. In this way the capitalist glows with the reflected light of his capital, but this is only possible because he, in turn, reflects a given type of production relation among people. As a result, particular individuals are subsumed under the dominant type of production relations. The social form of things conditions individual production bonds among particular people only because the social form itself is an expression of social production bonds. The social form of things appears as a condition for the process of production which is given in advance, ready-made, and permanently fixed, only because it appears as the congealed, crystallized result of a dynamic, constantly flowing and changing social process of production. In this way, the apparent contraction between the "reification of people" and the "personification of things" is resolved in the dialectical, uninterrupted process of reproduction. This apparent contradiction is between the determination of the social form of things by production relations among people and the determination of the individual production relations among people by the social form of things.

Of the two sides of the process of reproduction which we have mentioned, only the second side - "personification of things" - lies on the surface of economic life and can be directly observed. Things appear in a ready-made social form, influencing the motivation and the behavior of individual producers. This side of the process is reflected directly in the psyche of individuals and can be directly observed. It is much more difficult to trace the formation of the social forms of things from the production relations among people. This side of the process, i.e., the "reification" of production relations among people, is the heterogeneous result of a mass of transactions of human actions which are deposited on top of each other. It is the result of a social process which is carried on "behind their backs," i.e., a result which was not set in advance as a goal. Only by means of profound historical and social-economic analysis did Marx succeed in explaining this side of the process.

From this perspective, we can understand the difference which Marx often drew between the "outward appearance," the "external connection," the "surface of phenomena," on the one hand, and "internal connection," "concealed connection," "immanent connection," the "essence of things," on the other hand.13 Marx reproached vulgar economists for limiting themselves to an analysis of the external side of a phenomenon. He reproached Adam Smith for wavering between "esoteric" (external) and "exoteric" (internal) perspectives. It was held that the meaning of these statements by Marx was very obscure. Critics of Marx, even the most generous, accused him of economic metaphysics for his desire to explain the concealed connections of phenomena. Marxists sometimes explained Marx's statements in terms of his desire to differentiate between methods of crude empiricism and abstract isolation.14 We feel that this reference to the method of abstraction is indispensable, but far too inadequate to characterize Marx's method. He did not have this in mind when he drew an opposition between the internal connections and the external connections of a phenomenon. The method of abstraction is common to Marx and many of his predecessors, including Ricardo. But it was Marx who introduced a sociological method into political economy. This method treats material categories as reflections of production relations among people. It is in this social nature of material categories that Marx saw their "internal connections." Vulgar economists study only outward appearances which are "estranged" from economic relations (C., III, p. 817), i.e., the objectified, ready-made form of things, not grasping their social character. They see the process of the "personification" of things which takes place on the surface of economic life, but they have no idea of the process of "reification of production relations" among people. They consider material categories as given, ready-made "conditions" of the process of production which affect the motives of producers and which are expressed in their consciousness; they do not examine the character of these material categories as results of the social process. Ignoring this internal, social process, they restrict themselves to the "external connection between things as this connection appears in competition. In competition, then, everything appears inside out, and always seems to be in reverse."15 Thus production relations among people appear to depend on the social forms of things, and not the other way around.

Vulgar economists who do not grasp that the process of "personification of things" can only be understood as a result of the process of "reification of production relations among people," consider the social characteristics of things (value, money, capital, etc.) as natural characteristics which belong to the things themselves. Value, money, and so on, are not considered as expressions of human relations "tied" to things, but as the direct characteristics of the things themselves, characteristics which are "directly intertwined" with the natural-technical characteristics of the things. This is the cause of the commodity fetishism which is characteristic of vulgar economics and of the commonplace thinking of the participants in production who are limited by the horizon of the capitalist economy. This is the cause of "the conversion of social relations into things, the direct coalescence of the material production relations with their historical and social determination" (C., III, p. 830). "An element of production [is] amalgamated with and represented by a definite social form." (Ibid., p. 816). "The formal independence of these conditions of labor in relation to labor, the unique form of this independence with respect to wage-labor, is then a property inseparable from them as things, as material conditions of production, an inherent, immanent, intrinsic character of them as elements of production. Their definite social character in the process of capitalist production bearing the stamp of a definite historical epoch is a natural, and intrinsic substantive character belonging to them, as it were, from time immemorial, as elements of the production process" (Ibid., p. 825).16

The transformation of social production relations into social, "objective" properties of things is a fact about commodity-capitalist economy, and a consequence of the distinctive connections between the process of material production and the movement of production relations. The error of vulgar economics does not lie in the fact that it pays attention to the material forms of capitalist economy, but that it does not see their connection with the social form of production and does not derive them from this social form but from the natural properties of things. "The effects of determined social forms of labor are assigned to things, to the products of that labor; the relation itself comes forth in a fantastic manner in the form of things. We have seen that this is a specific property of commodity production. .. Hodgskin sees in this a purely subjective illusion behind which the deceit and interest of the exploiting classes is concealed. He does not see that the manner of presentation is a result of the actual relation itself, and that the relation is not an expression of the manner of presentation, but the other way around" (Theorien uber den Mehrwert, 1910, Vol. III, pp. 354-355).

Vulgar economists commit two kinds of errors: 1) either they assign the "economic definiteness of form" to an "objective property" of things (C., II, p. 164), i.e., they derive social phenomena directly from technical phenomena; for example, the ability of capital to yield profit, which presupposes the existence of particular social classes and production relations among them, is explained in terms of the technical functions of capital in the role of means of production; 2) or they assign "certain properties materially inherent in instruments of labor" to the social form of the instruments of labor (Ibid.), i.e., they derive technical phenomena directly from social phenomena; for example, they assign the power to increase the productivity of labor which is inherent in means of production and represents their technical function, to capital, i.e., a specific social form of production (the theory of the productivity of capital).

These two mistakes, which at first glance seem contradictory, can actually be reduced to the same basic methodological defect; the identification of the material process of production with its social form, and the identification of the technical functions of things with their social functions. Instead of considering technical and social phenomena as different aspects of human working activity, aspects which are closely related but different, vulgar economists put them on the same level, on the same scientific plane, so to speak. They examine economic phenomena directly in those closely intertwined and "coalesced" technical and social aspects which are inherent in the commodity economy. The result of this is a "wholly incommensurable [relation] between a use-value, a thing, on one side, and a definite social production relation, surplus-value, on the other" (C., III, p. 818); ". .. a social relation conceived as a thing is made proportional to Nature, i.e., two incommensurable magnitudes are supposed to stand in a given ratio to one another" (Ibid., p. 817). This identification of the process of production with its social forms, the technical properties of things with social relations "materialized" in the social form of things, cruelly revenges itself. Economists are often struck with naive astonishment "when what they have just thought to have defined with great difficulty as a thing suddenly appears as a social relation and then reappears to tease them again as a thing, before they have barely managed to define it as a social relation" (Critique, p. 31).

It can easily be shown that "the direct coalescence of material relations of production with their historical-social form," as Marx put it, is not only inherent in the commodity-capitalist economy, but in other social forms as well. We can observe that social production relations among people are causally dependent on the material conditions of production and on the distribution of technical means of production among the different social groups in other types of economy as well. From the point of view of the theory of historical materialism, this is a general sociological law which holds for all social formations. No one can doubt that the totality of production relations between the landlord and the serfs was causally determined by the production technique and by the distribution of the technical factors of production, namely the land, the cattle, the tools, between the landlord and the serfs, in feudal society. But the fact is that in feudal society production relations among people are established on the basis of the distribution of things among them and for things, but not through things. Here people are directly related with each other; "the social relations between individuals in the performance of their labor, appear at all events as their own mutual personal relations, and are not disguised under the shape of social relations between the products of labor" (C., I, p. 77). However, the specific nature of the commodity-capitalist economy resides in the fact that production relations among people are not established only for things, but through things. This is precisely what gives production relations among people a "materialized," "reified" form and gives birth to commodity fetishism, the confusion between the material-technical and the social-economic aspect of the production process, a confusion which was removed by the new sociological method of Marx.17

Chapter Four: Thing and Social Function (Form)

The new sociological method which Marx introduced into political economy applies a consistent distinction between productive forces and production relations, between the material process of production and its social form, between the process of labor and the process of value formation. Political economy deals with human working activity, not from the standpoint of its technical methods and instruments of labor, but from the standpoint of its social form. It deals with production relations which are established among people in the process of production. But since in the commodity-capitalist society people are connected by production relations through the transfer of things, the production relations among people acquire a material character. This "materialization" takes place because the thing through which people enter definite relations with each other plays a particular social role, connecting people - the role of "intermediary" or "bearer" of the given production relation. In addition to existing materially or technically as a concrete consumer good or means of production, the thing seems to acquire a social or functional existence, i.e., a particular social character through which the given production relation is expressed, and which gives things a particular social form. Thus the basic notions or categories of political economy express the basic social-economic forms which characterize various types of production relations among people and which are held together by the things through which these relations among people are established.

In his approach to the study of the "economic structure of society" or "the sum total of the relations of production" among people, Marx18 separated particular forms and types of production19 Marx analyzed these relations among people in a capitalist society types of production relations in the following sequence. Some of these relations among people presuppose the existence of other types of production relations among the members of a given society, and the latter relations do not necessarily presuppose the existence of the former: thus the former assume the latter. For example, the relation between financial capitalist C and industrial capitalist B consists of B's receiving a loan from C; this relation already presupposes the existence of production relations between industrial capitalist B and laborer A, or more exactly, with many laborers. On the other hand, the relations between the industrial capitalist and the laborers do not necessarily presuppose that capitalist B had to borrow money from the financial capitalist. Thus it is clear that the economic categories "capital" and "surplus value" precede the categories "interest-bearing capital" and "interest." Furthermore, the relation between the industrial capitalist and the workers has the form of purchase and sale of labor-power, and in addition presupposes that the capitalist produces goods for sale, i.e., that he is connected with other members of society by the production relations of commodity owners with each other. On the other hand, relations among the commodity owners do not necessarily presuppose a production bond between the industrial capitalist and the workers. From this it is clear that the categories "commodity" and "value" precede the category "capital." The logical order of the economic categories follows from the character of the production relations which are expressed by the categories. Marx's economic system analyzes a series of production relations of increasingly complex types. These production relations are expressed in a series of social forms of increasing complexity - these being the social forms acquired by things. This connection between a given type of production relation among people and the corresponding social function, or form, of things, can be traced in all economic categories.

The basic social relation among people as commodity-producers who exchange the products of their labor gives to the products the special property of exchangeability, which then seems to be a natural property of the products: the special "form of value." Regular exchange relations among people, in the context of which the social activity of commodity owners has singled out a commodity (for example gold) to serve as a general equivalent which can be directly exchanged for any other commodity, give this commodity the particular function of money, or the "money form." This money form, in turn, carries out several functions, or forms, depending on the character of the production relation among buyers and sellers.

If the transfer of goods from the seller to the buyer and the inverse transfer of money are carried out simultaneously, then money assumes the function, or has the form of a "medium of circulation." If the transfer of goods precedes the transfer of money, and the relation between the seller and the buyer is transformed into a relation between debtor and creditor, then money has to assume the function of a "means of payment." If the seller keeps the money which he received from his sale, postponing the moment when he enters a new production relation of purchase, the money acquires the function or form of a "hoard." Every social function or form of money expresses a different character or type of production relation among the participants in exchange.

With the emergence of a new type of production relation - namely a capitalistic relation which connects a commodity owner (a capitalist) with a commodity owner (a worker), and which is established through the transfer of money - the money acquires a new social function or form: it becomes "capital." More exactly, the money which directly connects the capitalist with the workers plays the role, or has the form, of "variable capital." But to establish production relations with the workers, the capitalist must possess means of production or money with which to buy them. These means of production or money which serve indirectly to establish a production relation between the capitalist and the workers has the function or form of "constant capital." To the extent that we consider production relations between the class of capitalists and the class of laborers in the process of production, we are considering "productive capital" or "capital in the stage of production." But before the process of production began, the capitalist appeared on the market as a buyer of means of production and labor power. These production relations between the capitalist as buyer and other commodity owners correspond to the function, or form, of "money capital." At the end of the production process the capitalist appears as a seller of his goods, which acquires an expression in the function, or form of, "commodity capital." In this way the metamorphosis or "transformation of the form" of capital reflects different forms of production relations among people.

But this still does not exhaust the production relations which connect the industrial capitalist with other members of society. In first place, industrial capitalists of one branch are connected with the industrial capitalists of all other branches through the competition of capital and its transfer from one branch to another. This relation is expressed in the formation of "the general average rate of profit," and the sale of goods at "prices of production." In addition, the class of capitalists is itself subdivided into several social groups or subclasses: industrial, commercial and money (financial) capitalists. Besides these groups, there is still a class of landowners. Production relations among these different social groups create new social and economic "forms": commercial capital and commercial profit, interest-bearing capital and interest, and ground-rent. "Stepping beyond its inner organic life, so to say, it [capital] enters into relations with outer life, into relations in which it is not capital and labor which confront one another, but capital and capital in one case, and individuals, again simply as buyers and sellers, in the other" (C., III, p. 44).20 The subject here is the different types of production relations, and particularly production relations: 1) between capitalists and workers; 2) between capitalists and the members of society who appear as buyers and sellers; 3) among particular groups of industrial capitalists and between industrial capitalists as a group and other groups of capitalists (commercial and financial capitalists). The first type of production relation, which is the basis of capitalist society, is examined by Marx in Volume I of Capital, the second type in Volume II, and the third in Volume III. The basic production relations of commodity society, the relations among people as commodity-producers, are examined by Marx in A Contribution to the Critique of Political Economy, and are reexamined in Part I of the first volume of Capital, which has the heading "Commodities and Money" and which can be treated as an introduction to Marx's system (in the first draft Marx intended to call this part: "Introduction. Commodities, Money." See Theorien uber den Mehrwert, 1910, Vol. III, p. VIII). Marx's system examines various types of production relations of increasing complexity as well as the increasingly complex corresponding economic forms of things.

The basic categories of political economy thus express various types of production relations which assume the form of things. "In reality, value, in itself, is only a material expression for a relation between the productive activities of people" (Theorien uber den Mehrwert, III, p. 218). "When, therefore, Galiani says: Value is a relation between persons - 'La Ricchezza e una ragione tra due persone' - he ought to have added: a relation between persons expressed as a relation between things" (C., I, p. 74). "To it [monetary system] gold and silver, when serving as money, did not represent a social relation between producers" (C., I, p. 82). "Capital is a social relation of production. It is a historical production relation."21 Capital is "a social relation expressed (darstellt) in things and through things" (Theorien uber den Mehrwert, III, p. 325). "Capital is not a thing, but rather a definite social production relation, belonging to a definite historical formation of society, which is manifested in a thing and lends this thing a specific social character" (C., III, p. 814).22

Marx explained his conception of economic categories as the expression of production relations among people in greatest detail when he dealt with the categories value, money and capital. But he more than once pointed out that other notions of political economy express production relations among people. Surplus value represents "a definite historical form of social process of production" (C., III, p. 816). Rent is a social relation taken as a thing (C., III, p. 815). "Supply and demand are neither more nor less relations of a given production than are individual exchanges."23 Division of labor, credit, are relations of bourgeois production (Ibid., pp. 126-145). Or as Marx stated in a general form, "economic categories are only the theoretical expressions, the abstractions of the social relations of production (Ibid., p. 109).

Thus the basic concepts of political economy express different production relations among people in capitalist society. But since these production relations connect people only through things, the things perform a particular social function and acquire a particular social form which corresponds to the given type of production relation. If we said earlier that economic categories express production relations among people, acquiring a "material" character, we can also say that they express social functions, or social forms, which are acquired by things as intermediaries in social relations among people. We will begin our analysis with the social function of things.

Marx often spoke of the functions of things, functions which correspond to the different production relations among people. In the expression of value one commodity "serves as an equivalent" (C., I, p. 48 and p. 70). "The function of money" represents a series of different functions: "Function as a measure of value" (Ibid., p. 117), "function as a medium of circulation" or "function as coin" (Ibid., p. 117 and p. 126), "function as means of payment" (Ibid., pp. 127, 136, 139), "function of hoards" (p. 144) and "the function of money of the world" (p.144). The different production relations between buyers and sellers correspond to different functions of money. Capital is also a specific social function: "...the property of being capital is not inherent in things as such and in any case, but is a function with which they may or may not be invested, according to circumstances" (C., II, p. 207). In money capital, Marx carefully differentiated the "money function" from the "capital function" (C., II, pp. 36, 79). The subject here, obviously, is the social function which capital performs, connecting different social classes and their representatives, capitalists and wage workers; the subject clearly is not the technical function which the means of production perform in the material production process. If capital is a social function then, as Marx says, "its subdivision is justified and relevant." Variable and constant capital differ in terms of the different functions which they perform in the "process of expanding" capital (C., I, pp. 208-209); variable capital directly connects the capitalist with the worker and transfers the labor-power of the worker to the capitalist; constant capital serves the same purpose indirectly. A "functional difference" exists between them (C., I, p. 210). The same is true of the division into fixed and circulating capital. "It is not a question here of definitions [of fixed and circulating capital - I.R.] which things must be made to fit. We are dealing here with definite functions which must be expressed in definite categories (C., II, p. 230; emphasis added). This distinction between the functions of fixed and circulating capital refers to different methods of transferring the value of capital to the product, i.e., to the fuller partial restoration of the value of capital during one turnover period (Ibid., pp. 167-168). This distinction between social functions in the process of transferring value (i.e., in the process of circulation) is often confused by economists with a distinction between technical functions in the process of material production, namely with a distinction between the gradual wear and tear of the instruments of labor and the total consumption of raw materials and accessories. In the second part of Volume II of Capital, Marx devoted a great deal of energy to showing that the categories of fixed and circulating capital express precisely the above-mentioned social functions of transferring value. These functions are, in fact, related to particular technical functions of means of production, but they do not coincide with them. Not only do different parts of productive capital (constant and variable, fixed and circulating) differ from each other by their functions, but the division of capital into productive, money and commodity capital, is also based on differences in function. The "functions of commodity and commercial capital" are distinguished from the "functions of productive capital" (C., II, pp. 127, 79; C, III, p. 269, and elsewhere).

Thus different categories of political economy describe different social functions of things, corresponding to different production relations among people. But the social function which is realized through a thing gives this thing a particular social character, a determined social form, a "determination of form" (Formbestimmtheit),24 as Marx frequently wrote. A specific social function or "economic form" of things corresponds to each type of production relations among people. Marx more than once pointed out the close relationship between the function and the form. "The coat officiates as equivalent, or appears in equivalent form" (C., I, p. 48). "This specific function in the process of circulation gives money, as a medium of circulation, a new determination of form" (Kritik der Politischen Oekonomie, p. 92). If the social function of a thing gives the thing a specific social-economic form, then it is clear that the basic categories of political economy (which we considered above as expressions of different production relations and social functions of things) serve as expressions of social-economic forms which correspond to things. These forms give things their function as "bearers" of the production relations among people. Most often Marx called the economic phenomena which he analyzed, "economic forms," "definitions of forms." Marx's system examines a series of increasingly complex "economic forms" of things or "definitions of forms"(Formbestimmtheiten) which correspond to a series of increasingly complex production relations among people. In the Preface to the first edition of the first volume of Capital, Marx pointed out the difficulties of "analyzing economic forms," particularly "the form of value" and "the money form." The form of value, in turn, includes various forms: on one hand, every expression of value contains a "relative form" and an "equivalent form," and on the other hand, the historical development of value is expressed in the increasing complexity of its forms: from an "elementary form" through an "expanded form," value passes to a "general form" and a "money form." The formation of money is a "new definition of form" (Kritik der Politischen Oekonomie, p. 28). Different functions of money are at the same time different "definitions of form" (Ibid., p. 46). Thus, for example, money as a measure of value and as a standard of price are "different definitions of form," the confusion of which has led to erroneous theories (Ibid, p. 54).25 "The particular functions of money which it performs, either as the mere equivalent of commodities, or as means of circulation, or means of payment, as hoard or as universal money, point, according to the extent and relative preponderance of the one function or the other, to very different stages in the process of social production" (C., I, p. 170; emphasis added). What is emphasized here is the close connection between the forms (functions) of money and the development of production relations among people.

The transition of money into capital indicates the emergence of a new economic form. "Capital is a social form which is acquired by means of reproduction when they are used by wage labor" (Theorien uber den Mehrwert, Vol III, p. 383), a particular "social determination" (Ibid., p. 547). Wage labor is also "a social determination of labor" (Ibid., p. 563), i.e., a determined social form of labor. The component parts of productive capital (constant and variable, fixed and circulating, examined in terms of the differences of their functions, also represent different forms of capital (C., II, pp. 167-168, and elsewhere). Fixed capital represents a "determination of form" (C., II, p. 169). In the same way, money, productive capital, and commodity capital are different forms of capital (C., II, p. 50). A particular social function corresponds to each of these forms. Money and commodity capital are "special, differentiated forms, modes of existence corresponding to special functions of industrial capital" (C., II, p. 83). Capital passes "from one functional form to another, so that the industrial capital. . . exists simultaneously in its various phases and functions" (Ibid., p. 106). If these functions become independent from each other and are carried out by the separate capitals, then these capitals take on independent forms of commodity-commercial capital and money commercial capital "through the fact that the definite forms and functions which capital assumes for the moment appear as independent forms and functions of a separate portion of the capital and are exclusively bound up with it" (C., III p. 323).

Thus economic categories express different production relations among people and the social functions which correspond to them, or the social-economic forms of things. These functions or forms have a social character because they are inherent, not in things as such, but in things which are parts of a definite social environment, namely things through which people enter into certain production relations with each other. These forms do not reflect the properties of things but the properties of the social environment. Sometimes Marx simply spoke of "form" or "determination of form," but what he meant was precisely "economic form," "social form," "historical-social form," "social determination of form," "economic determination of form," "historical-social determination" (See, for example, C., I, p. 146, 147, 149; C., III, p. 816, 830; Kapital, Vol. III, Book II, pp. 351, 358, 360, 366; Theorien uber den Mehrwert, Vol. III, pp. 484-485, 547, 563; Kritik der Politischen Oekonomie, p. 20, and elsewhere). Sometimes Marx also says that the thing acquires a "social existence," "formal existence" (Formdasein), "functional existence," "ideal existence." (Cf, C., I, pp. 125, 129; Theorien uber den Mehrwert, Vol. III, pp. 314, 349; Kritik der Politischen Oekonomie, p. 28, 101, 100, 94.) This social or functional existence of things is opposed to their "material existence," "actual existence," "direct existence," "objective existence" (C., I, p 129; Kritik der Politischen Oekonomie, p. 102; Kapital, Vol. III, Book II, pp. 359, 360, and Vol. III, Book I, p. 19; Theorien uber den Mehrwert, Vol. III, p. 193, 292, 320, 434). In the same way the social form or function is opposed to the "material content," "material substance," "content," "substance," "elements of production," material and objective elements and conditions of production (C., I, p. 36, 126, 146, 147, 149; C., III, pp 824-5; Kritik der Politischen Oekonomie, pp. 100-104, 121; Theorien uber den Mehrwert, Vol. III, p. 315, 316, 318, 326, 329, 424, and elsewhere).26 All these expressions which distinguish between the technical and social functions of things, between the technical role of instruments and conditions of labor and their social form, can be reduced to the basic difference which we formulated earlier. We are dealing with the basic distinction between the material process of production and its social forms, with two different aspects (technical and social) of the unified process of human working activity. Political economy deals with the production relations among people, i.e., with the social forms of the process of production, as opposed to its material-technical aspects.

Does this not mean that Marx's economic theory isolated the production relations among people from the development of productive forces when he analyzed the social form of production in isolation from its material-technical side? No at all. Every social-economic form analyzed by Marx presupposes, as given, a determined stage of the material-technical process of production. The development of the forms of value and money presupposes, as we have seen, constant "exchange of matter" (Stoffwechsel), the passage of material things. Value presupposes use value. The process of the formation of value presupposes the process of producing use values. Abstract labor presupposes a totality of different kinds of concrete labor applied in different branches of production. Socially necessary labor presupposes a different productivity of labor in various enterprises of the same branch. Surplus value presupposes a given level of development of productive forces. Capital and wage labor presuppose a social form of technical factors of production: material and personal. After the capitalist's purchase of labor power, the same difference between material and personal factors of production acquires the form of constant and variable capital. The relation between constant and variable capital, i.e., the organic composition of capital, is based on a certain technical structure. Another division of capital, into fixed and circulating, also presupposes a technical difference between the gradual wear and tear of instruments of labor and the complete consumption of the objects of labor and of labor power. The metamorphoses, or changes, of form of capital are based on the fact that productive capital directly organizes the material process of production. Money or commodity capital are more indirectly related to the material process of production, because directly they represent the stage of exchange. Thus on the one hand there is a difference between enterprise profit, commercial profit and interest, and on the other hand between productive and unproductive labor (employed in trade). The reproduction of capital presupposes the reproduction of its material component parts. The formation of a general average profit rate presupposes different technical and organic compositions of capital in individual industrial branches. Absolute rent presupposes a difference between industry, on the one hand, and agriculture on the other. Different levels of productivity of labor in different agricultural enterprises and extractive industries, caused by differences in fertility and location of plots, is expressed in the form of differential rent.

Thus we see that production relations among people develop on the basis of a certain state of productive forces. Economic categories presuppose certain technical conditions. But in political economy, technical conditions do not appear as conditions for the process of production treated from its technical aspects, but only as presuppositions of the determined social-economic forms which the production process assumes. The productive process appears in a given social-economic form, namely in the form of commodity-capitalist economy. Political economy treats precisely this form of economy and the totality of production relations which are proper to it. Marx's renowned theory according to which use value is the presupposition and not the source of exchange value must be formulated in a generalized way: Political economy deals with "economic forms," types of production relations among people in capitalist society. This society presupposes given conditions of the material process of production and of the technical factors which are its components. But Marx always protested against the transformation of the conditions of the material process of production from presuppositions of political economy into its subject matter. He rejected theories which derived value from use value, money from the technical properties of gold, and capital from the technical productivity of means of production. Economic categories, (or social forms of things) are of course very closely related to the material process of production, but they cannot be derived from it directly, but only by means of an indirect link: the production relations among people. Even in categories where technical and economic aspects are closely related and almost cover each other, Marx very skillfully distinguished one from another by considering the former as the presupposition of the latter. For example, the technical development of personal and material factors of production is a presupposition or basis on which the "functional," "formal" or social-economic distinction between variable and constant capital develops. But Marx decidedly refused to draw a distinction between them on the basis of the fact that they serve "as payment for a materially different element of production" (C., III, p. 32). For him this difference lay in their functionally different roles in the process of "the expansion of capital" (Ibid). The difference between fixed and circulating capital lies in the different ways that their value is transferred to products, and not in how fast they wear out physically. The latter distinction gives a material basis, a presupposition, a "point of departure" for the former, but not the distinction we are looking for, which has an economic and not a technical character (C., II, p. 201, Theorien uber den Mehrwert, Vol. III, p. 558). To accept this technical presupposition as our subject matter would mean that the analysis would be similar to that of vulgar economists whom Marx charged with "crudity" of analytical method because they were interested in "distinctions of form" and considered them "only from their substantive side" (C., III, p. 323).

Marx's economic theory deals precisely with the "differences in form" (social-economic forms, production relations) which actually develop on the basis of certain material-technical conditions, but which must not be confused with them. It is precisely this that represents the completely new methodological formulation of economic problems which is Marx's great service and distinguishes his work from that of his predecessors, the Classical Economists. The attention of Classical Economists was directed to discovering the material-technical basis of social forms which they took as given and not subject to further analysis. It was Marx's goal to discover the laws of the origin and development of the social forms assumed by the material-technical production process at a given level of development of productive forces.

This extremely profound difference in analytical method between the Classical Economists and Marx reflects different and necessary stages of development of economic thought. Scientific analysis "begins with the results of the process of development ready to hand" (C., I, p. 75), with the numerous social-economic forms of things which the analyst finds already established and fixed in his surrounding reality (value, money, capital, wages, etc.). These forms "have already acquired the stability of natural, self - understood forms of social life, before man seeks to decipher, not their historical character, for in his eyes they are immutable, but their meaning." (Ibid., emphasis added.) In order to discover the content of these social forms, the Classical Economists reduced complex forms to simple (abstract) forms in their analyses, and in this way they finally arrived at the material-technical bases of the process of production. By means of such analysis they discovered labor in value, means of production in capital, means of workers' subsistence in wages, surplus product (which is brought about by increased productivity of labor) in profit. Starting with given social forms and taking them for eternal and natural forms of the process of production, they did not ask themselves how these forms had originated. For Classical Political Economy, "the genetic development of different forms is not a concern. It [Classical Political Economy] only wants to reduce them to their unity by means of analysis, since it starts with them as given assumptions" (Theorien uber den Mehrwert, Vol. III, p. 572). Afterwards, when the given social-economic forms are finally reduced to their material-technical content, the Classical Economists consider their task complete. But precisely where they stop their analysis is where Marx continues. Since he was not restricted by the horizon of the capitalist economy, and since he saw it as only one of past and possible social forms of economy, Marx asked: why does the material-technical content of the labor process at a given level of development of productive forces assume a particular, given social form? Marx's methodological formulation of the problem runs approximately as follows: why does labor assume the form of value, means of production the form of capital, means of workers' subsistence the form of wages, increased productivity of labor the form of increased surplus value? His attention was directed to the analysis of social forms of economy and the laws of their origin and development, and to "the process of development of forms (Gestaltungsprozess) in their various phases" (Ibid.). This genetic (or dialectical) method, which contains analysis and synthesis, was contrasted by Marx with the one-sided analytical method of the Classical Economists. The uniqueness of Marx's analytical method does not consist only of its historical, but also of its sociological character, of the intense attention which it paid to social forms of economy. Starting with the social forms as given, the Classical Economists tried to reduce complex forms to simpler forms by means of analysis in order finally to discover their material-technical basis or content. However, Marx, starting from a given condition of the material process of production, from a given level of productive forces, tried to explain the origin and character of social forms which are assumed by the material process of production. He started with simple forms and, by means of the genetic or dialectical method, he went on to increasingly complex forms. This is why, as we said earlier, Marx's dominant interest is in "economic forms," in "determinations of forms" (Formbestimmtheiten).

Chapter Five: Production Relations and Material Categories

At first glance all the basic concepts of Political Economy (value, money, capital, profit, rent, wages, etc.) have a material character. Marx showed that under each of them is hidden a definite social production relation which in the commodity economy is realized only through things and gives things a determined, objectively-social character, a "determination of form" (more precisely: a social form), as Marx often put it. Analyzing any economic category, we must first of all point to the social production relation expressed by it. Only if the material category is an expression of a precisely given, determined production relation, does it enter the framework of our analysis. If this material category is not related to a given production relation among people, we pull it out of the framework of our analysis and set it aside. We classify economic phenomena into groups and build concepts on the basis of the identity of the production relations which the phenomena express, and not on the basis of the coincidence of their material expressions. For example, the theory of value deals with exchange between autonomous commodity producers, with their interaction in the labor process through the products of their labor. The fluctuation of the value of products on the market interests economists not for itself, but as it is related to the distribution of labor in society, to the production relations among independent commodity producers. For example, if land (which is not the product of exchange) appears in exchange, then production relations in this case do not connect commodity producers with commodity producers, but with a landowner; if the price fluctuations of plots of land have a different influence on the course and distribution of the production process from the price fluctuations of the products of labor, then we are dealing with a different social relation, a different production relation, behind the same material form of exchange and value. This social relation is subject to special analysis, namely in the context of the theory of rent. Thus land, which has price, i.e., a money expression of value (as a material category), does not have "value" in the sense mentioned above, i.e., in the act of exchange the price of land does not express the functional social relation which relates the value of the products of labor with the working activity of independent commodity producers. This led Marx to the following formulation, which has often been misinterpreted: "Objects that in themselves are not commodities, such as conscience, honor, &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. The price in that case is imaginary, like certain quantities in mathematics. On the other hand, the imaginary price-form may sometimes conceal either a direct or an indirect real value relation; for instance, the price of uncultivated land, which is without value, because no human labor has been incorporated in it" (C., I, p. 102). These words of Marx, which have often puzzled and even provoked the mockery of critics,27

express a profound idea about the possible divergence between the social form of working relations and the material form which corresponds to it. The material form has its own logic and can include other phenomena in addition to the production relations which it expresses in a given economic formation. For example, in addition to the exchange of products of labor among independent commodity producers (the basic fact of the commodity economy), the material form of exchange includes the exchange of plots of land, the exchange of goods which cannot be multiplied by labor, exchange in a socialist society, etc. From the standpoint of the material forms of economic phenomena, the sale of cotton and the sale of a painting by Raphael or a plot of land do not in any way differ from each other. But from the standpoint of their social nature, their connection with production relations, and their impact on the working activity of society, the two phenomena are of a different order and have to be analyzed separately.

Marx frequently emphasized that one and the same phenomenon appears in a different light depending on its social form. Means of production, for example, are not capital in the workshop of a craftsman who works with them, though the same things become capital when they express and help to realize a production relation between wage laborers and their employer-capitalist. Even in the hands of a capitalist, means of production are capital only within the limits of the production relation between the capitalist and the wage laborers. In the hands of a money-capitalist, the means of production play a different social role. "Means of production are capital if, from the worker's standpoint, they function as his non-property, i.e., as someone else's property. In this form, they function only as opposed to the labor. The existence of these conditions in the form of an opposition to labor transforms their owner into a capitalist, and the means of production which belong to him, into capital. But in the hands of money-capitalist A, capital lacks this quality of opposition which transforms his money into capital, and thus the ownership of money into the ownership of capital. The real determination of form (Formbestimmtheit) through which money or commodities are transformed into capital has disappeared in this case. Money capitalist A is not in any way related to a worker, but only to another capitalist, B" (Theorien uber den Mehrwert, Vol. III, pp. 530-531, emphasis by Marx). Determination of social forms, which depends on the character of production relations, is the basis for the formation and classification of economic concepts.

Political Economy deals with determined material categories if they are connected with social production relations. Inversely, the basic production relations of the commodity economy are realized and expressed only in material form, and they are analyzed by economic theory precisely in this material form. The specific character of economic theory as a science which deals with the commodity capitalist economy lies precisely in the fact that it deals with production relations which acquire material forms. Of course the cause of this reification of production relations lies in the spontaneous character of the commodity economy. Precisely because commodity production, the subject of economic theory, is characterized by spontaneity, Political Economy as the science of the commodity economy, deals with material categories. The logical specificity of theoretical-economic knowledge must be derived precisely from that material character of economic categories, and not directly from the spontaneity of the national economy. The revolution in Political Economy which Marx carried out consists in his having considered social production relations behind material categories. This is the genuine subject of political economy as a social science. With this new "sociological" approach, economic phenomena appeared in a new light, in a different perspective. The same laws which had been established by the Classical Economists were given a completely different character and meaning in Marx's system.28

Chapter Six: Struve on the Theory of Commodity Fetishism

Marx's approach to economic categories as expressions of social production relations (which we treated in the previous chapter) provoked criticism from P. Struve in his book, Khozyaistvo i Tsena (Economy and Price). Struve recognizes the merit of Marx's theory of fetishism in the sense that it revealed, behind capital, a social production relation between classes of capitalists and workers. But he does not consider it correct to stretch the theory of fetishism to the concept of value and to other economic categories. Struve and other critics of Marx transform the theory of fetishism from a general, fundamental basis of Marx's system into a separate, even if brilliant, digression.

Struve's critique is closely related to his classification of all economic categories into three classes: 1) "Economic" categories which express "economic relations of each economic agent with the outside world,"29 for example, subjective value (tsennost). 2) "Intereconomic" categories which express "phenomena arising from interactions among autonomous economic units" (p. 17), for example, objective (exchange) value. 3) "Social" categories which express "phenomena which arise from interactions among economic agents who occupy different social positions" (p. 27), for example, capital.

Struve places only the third group ("social" categories) within the concept of social production relations. In other words, in the place of social production relations, he puts a narrower concept, namely production relations between social classes. From this starting point, Struve admits that production relations (i.e., social and class relations) are concealed behind the category of capital, but by no means behind the category of value (Struve uses the term "tsennost"), which expresses relations among equal, independent, autonomous commodity producers and thus is related to the second class of "intereconomic" categories. Marx correctly discovered the fetishism of capital, but he was mistaken in his theory of the fetishism of commodities and commodity value.

The inaccuracy of Struve's reasoning is a result of his unfounded classification of economic categories into three classes. First of all, to the extent that "economic" categories are expressions of "pure economic" activities (within the economic unit), cut off from all social forms of production, they are altogether outside the limits of Political Economy as a social science. "Intereconomic" categories cannot be as sharply distinguished from social categories as Struve suggests. The "interaction among autonomous economic units" is not only a formal characteristic which applies to different economic formations and to all historical epochs. It is a determined social fact, a determined "production relation" between individual economic units based on private ownership and connected by the division of labor, i.e., a relation which presupposes a society with a given social structure and which is fully developed only in the commodity capitalist economy.

Finally, when we examine the "social" categories, it must be pointed out that Struve limited them, without adequate foundation, to the "interaction among economic agents who occupy different social positions." But it has already been shown that the "equality" between commodity producers is a social fact, a determined production relation. Struve himself grasped the close connection between the "intereconomic" category (which expresses equality between commodity producers) and the "social" category (which expresses social inequality). He says that social categories "in every society are built according to the type of economic intercourse, and seem to acquire the form of intereconomic categories...The fact that social categories, in intereconomic intercourse, wear the clothes of intereconomic categories, creates an appearance of identity between them" (p. 27). Actually, this is not an instance of wearing the wrong clothes. What we are confronting is one of the basic, highly characteristic features of the commodity-capitalist society. It consists of the fact that in economic life social relations do not have the character of direct social domination of some social groups over others, but that they are realized by means of "economic constraint," i.e., by means of the interaction of individual, autonomous economic agents, on the basis of agreements between them. Capitalists use power "not as political or theocratic rulers" but as "the personification of the conditions of labor in contrast to labor" (C., III, p. 881). Relations among classes have, as their starting point, relations between capitalists and workers as autonomous economic agents. These relations cannot be analyzed or understood without the category of "value."

Struve himself could not consistently maintain his point of view. In his view, capital is a social category. However, he defines it as a "system of interclass and intraclass social relations" (pp. 31-32), i.e., relations between classes of capitalists and workers on the one hand, and relations between individual capitalists in the process of distribution of the total profit among them, on the other hand. But relations between individual capitalists are not brought about "by the interaction of economic agents who occupy different social positions." Why are they then subsumed under the "social" category, capital? This means that the "social" categories do not only include interclass relations, but also intraclass relations, i.e., relations between persons who are in the same class position. Yet what prevents us from seeing value as a "social" category, from seeing relations among autonomous commodity producers as social production relations, or in Struve's terminology, as social relations?

We thus see that Struve himself did not maintain a sharp distinction of social-production relations into two types: inter-economic and social. Thus he is wrong when he sees a "scientific inconsistency in the construction" by Marx according to which the "social category, capital, as a social 'relation' is derived from the economic category, value" (tsennost) (p. 29). First of all it must be pointed out that Struve himself, on page 30, contradicts himself when he classifies value (tsennost) as an "intereconomic" and not an economic category. Apparently Struve relates subjective value (tsennost) to "economic" categories, and objective, exchange value, to "intereconomic" categories. (This can be seen by comparing this statement with his reasoning on page 25.) But Struve is very familiar with the fact that Marx derived (the concept of) capital from objective, and not subjective, value, i.e., according to Struve's own terminology, from the intereconomic, and not the economic, category. It is because of this that Struve attacks Marx. As a matter of fact, the "social" category, capital, as well as the "intereconomic" category, value, belong to the same group of categories in Marx's system. These are social-production relations, or as Marx sometimes said, social-economic relations, i.e., each expresses an economic aspect and its social form, as opposed to their artificial separation by Struve.

By narrowing the concept of production relations to the concept of "social" or more precisely, class relations, Struve is aware that Marx uses this concept in a wider sense. Struve says: "In The Poverty of Philosophy, supply and demand, division of labor, credit, money, are relations of production. Finally, on page 130 we read: 'a modern factory, based on the application of machinery, is a social production relation, an economic category.' It is obvious that all the generally used economic concepts of our time are treated here as social production relations. This is undoubtedly correct if the content of these concepts refers in one way or another to social relations among people in the process of economic life" (p. 30). But not negating, one might say, the accuracy of Marx's conception of production relations, Struve nevertheless finds this concept "exceptionally undetermined" (p. 30), and he considers it more correct to confine the scope of this concept to "social" categories. This is highly characteristic of some critics of Marxism. After Marx's analysis, it is no longer possible to ignore the role of the social aspect of production, i.e., its social form. If one does not agree with Marx's conclusions, all that remains is to separate the social aspect from the economic, and to disregard the social aspect, to assign it to a separate field. This was done by Struve; this was done by Bohm-Bawerk, who based his theory on the motives of "pure economic activity," i.e., on the motives of the economic agent isolated from a given social and historical context - promising that later on, sometime in the future, the role and significance of the "social" categories will be examined.

Restricting the theory of fetishism to the field of "social" categories, Struve considers it wrong to stretch the theory to intereconomic categories, for example to the concept of value. This accounts for the duality of his position. On one hand, he has high regard for Marx's theory of capital as a social relation. But on the other hand, with respect to other economic categories, he himself supports a fetishistic point of view. "All intereconomic categories thus always express phenomena and objective relations, but at the same time human relations - relations among people. Thus subjective value, which is transformed into objective (exchange) value, from a state of mind, from a feeling fixed to objects (things) becomes their property" (p. 25). Here it is impossible not to see a contradiction. On one hand, we analyze "objective, and at the same time human" relations, i.e., social production relations which are realized through things and are expressed in things. On the other hand, here we are dealing with the "property" of the things themselves. Thus Struve concluded: "From here it is clear that 'reification,' 'objectification' of human relations, i.e., the phenomenon which Marx called the fetishism of the commodity world, appears in economic intercourse as a psychological necessity. If scientific analysis, consciously or unconsciously, restricts itself to economic intercourse, the fetishistic point of view manifests itself methodologically as the only accurate point of view" (p 25). If Struve had wanted to prove that economic theory cannot remove material categories, and that it has to examine the production relations of a commodity economy in their material form, then he would obviously be right. But the question is whether, following Marx, we analyze the material categories as the form in which the given production relations are manifested, or as the property of things, which is Struve's inclination.

Struve, with yet another argument, tried to advocate a fetishistic, material interpretation of "intereconomic" categories. "Considering inter-economic categories Marx forgot that in their concrete and real manifestations they are inseparably connected with the relations of man toward the external world, to nature and to things" (p. 26). In other words, Struve emphasized the role of the process of material production. Marx took sufficient account of that role in his theory of the dependence of production relations on the development of productive forces. However, when we study social forms of production, i.e., production relations, we cannot draw conclusions about the significance of material categories from the significance of things in the process of material production. Marx threw light on the question of the particular interrelationship between the material process of production and its social form in a commodity-capitalist society. It is on this, in fact, that he built his theory of commodity fetishism.

Some of Marx's critics have tried to restrict the theory of fetishism in a manner which is just the opposite from Struve's. Struve recognizes the fetishism of capital, but not the fetishism of value. To some extent we find just the opposite in Hammacher. According to Hammacher, in the first volume of Marx's great work, "capital is defined as the totality of commodities which represent accumulated labor," i.e., a material definition of capital is given, and only in Volume III does the "fetishism of capital" appear. Hammacher holds that Marx transferred to capital the characteristics of commodities purely by analogy, considering "commodities and capital as being only quantitatively different."30

The assertion that in the first volume of Capital, capital is defined as a thing and not as a social relation does not even have to be disproved, because it contradicts the entire content of the first volume of Capital. It is just as mistaken to think that Marx saw only a "quantitative" difference between commodities and capital. Marx pointed out that capital "announces from its first appearance a new epoch in the process of social production" (C., I, p. 170). But commodities as well as capital conceal within themselves determined social relations in a material form. The fetishism of commodities as well as the resulting fetishism of capital are equally present in the capitalist society. However, it is inaccurate to confine Marx's theory of fetishism only to the field of capital, as Struve does, or only to the field of simple commodity exchange. The materialization of social production relations lies at the very basis of the unorganized commodity economy, and it leaves its imprint on all the basic categories of everyday economic reasoning and also on Political Economy as the science of the commodity capitalist economy.

Chapter Seven: Marx's Development of the Theory of Fetishism

The question of the origin and development of Marx's theory of fetishism has until now remained completely unexamined. Though Marx was very thorough in pointing out the origins of his labor theory of value in all his predecessors (in three volumes of Theories of Surplus Value he presented a long list of their theories), Marx was very stingy in his remarks on the theory of fetishism. (In Volume III of Theorien uber den Mehwert, pp. 354-5, 1910 edition, Marx mentions an embryonic form of the theory of fetishism in Hodgskin's work. In our opinion, the remarks are very unclear, and refer to a particular instance.) Although the question of the relation of Marx's theory of value to the theory of the Classical Economists was discussed in economic literature with great zeal though without particular success, the development of Marx's ideas on commodity fetishism has not attracted particular attention.

A few observations on the origin of Marx's theory of commodity fetishism can be found in Hammacher's book (cited earlier). In his view, the origins of this theory are purely "metaphysical." Marx simply transferred to the field of economics Feuerbach's ideas on religion. According to Feuerbach, the development of religion represents a process of man's "self-alienation": man transfers his own essence to the external world, transforms it into god, estranges it from himself. At first Marx applies this theory of "alienation" to ideological phenomena: "the entire content of consciousness represents an alienation from economic conditions on the basis of which ideology must then be explained" (Hammacher, op. cit., p. 233). Later Marx expands this theory to the field of economic relations and in them he reveals an "alienated" material form. Hammacher says that "for almost all earlier historical epochs, the mode of production itself represented a universal self-alienation; social relations became things, i.e., the thing expressed what was actually a relation. Feuerbach's theory of alienation thus receives a new character" (Ibid., p. 233). "Human needs are realized and appear in the form of alienated essences in religion, according to Feuerbach, just as economic relations do in social life according to Marx" (p. 234). Thus Marx's theory of fetishism represents "a specific synthesis of Hegel, Feuerbach and Ricardo" (p. 236), with a primary influence of Feuerbach, as we have seen. The theory of fetishism transfers Feuerbach's religious-philosophical theory of "alienation" into the field of economics. Thus it can be seen that this theory does not contribute in any way to an understanding of economic phenomena in general and commodity forms in particular, according to Hammacher. "The key to the understanding of Marx's theory lies in the metaphysical origin of the theory of fetishism, but it is not a key for unveiling the commodity form" (p. 544). The theory of fetishism contains an extremely valuable "critique of contemporary culture," a culture which is reified and which represses living man; but "as an economic theory of value, commodity fetishism is mistaken" (p.546). "Economically untenable, the theory of fetishism becomes an extremely valuable sociological theory" (p. 661).

Hammacher's conclusion on the sterility of Marx's theory of fetishism for understanding the entire economic system and particularly the theory of value is a result of Hammacher's inaccurate understanding of the "metaphysical" origins of this theory. Hammacher refers to The Holy Family, a work written by Marx and Engels at the end of 1844, when Marx was still under strong influence of utopian socialist ideas, particularly Proudhon's. Actually in that work we find the embryo of the theory of fetishism in the form of a contrast between "social," or "human" relations, and their "alienated," materialized form. The source of this contrast was the widespread conception of Utopian Socialists on the character of the capitalist system. According to the Utopian Socialists, this system is characterized by the fact that the worker is forced to "self-alienate" his personality, and that he "alienates" the product of his labor from himself. The domination of "things," of capital over man, over the worker, is expressed through this alienation.

We can quote certain citations from The Holy Family. The capitalist society is "in practice, a relation of alienation of man from his objectified essence, as well as an economic expression of human self-alienation" (Literatunoye nasledie, Literacy Legacy, Vol. II, Russian translation, 1908, pp. 163-4). "The definition of purchase already includes the manner in which the worker relates to his product, as toward an object which is lost for him, which is alienated" (p. 175). "The class of the propertied and the class of the proletariat represent human self-alienation to the same extent. But the first class experiences itself as satisfied and confirmed in this self-alienation. It sees in this alienation a confirmation of its power. In this alienation it holds an image of its human existence. However, the second class experiences itself annihilated in this alienation. It sees its own weakness in this alienation, and the reality of its inhuman existence" (p. 155).

It is against this "apex of inhumanity" of capitalist exploitation, against this "separation from everything human, even from the appearance of the human" (p. 156) that Utopian Socialism raises its voice in the name of eternal justice and of the interest of the oppressed working masses. "Inhuman" reality is contrasted with Utopia, the ideal of the "human." This is precisely why Marx praised Proudhon, contrasting him to bourgeois economists. "Sometimes political economists stress the significance of the human element, though only one aspect of this element, in economic relations, but they do this in exceptional cases, namely when they attack a particular abuse; sometimes (in the majority of cases) they take these relations as they are given, with their obviously expressed negation of everything human, namely in their strict economic sense" (p. 151). "All the conclusions of political economy presuppose private property. This basic assumption is, in their eyes, an incontestable fact which is not susceptible to further investigation. .. However, Proudhon exposes the basis of political economy, namely private property, to critical examination " (p. 149). "By making working time (which is the direct essence of human activity as such) the measure of wages and the value of the product, Proudhon makes the human element decisive. However, in old political economy the decisive factor was the material power of capital and landed property" (p. 172).

Thus in the capitalist society the "material" element, the power of capital, dominates. This is not an illusory, erroneous interpretation (in the human mind) of social relations among people, relations of domination and subordination; it is a real, social fact. "Property, capital, money, wage labor and similar categories, do not, in themselves, represent phantoms of the imagination, but very practical, very concrete products of the self-alienation of the worker" (pp. 176-177). This "material" element, which in fact dominates in economic life, is opposed by the "human" element as an ideal, as a norm, as that which should be. Human relations and their "alienated forms" - these are two worlds, the world of what should be and the world of what is; this is a condemnation of capitalist reality in the name of a socialist ideal. This opposition between the human and the material element reminds us of Marx's theory of commodity fetishism, but in essence it moves in a different world of ideas. In order to transform this theory of "alienation" of human relations into a theory of "reification" of social relations (i.e., into the theory of commodity fetishism), Marx had to create a path from Utopian to Scientific socialism, from praises of Proudhon to a sharp critique of his ideas, from negating reality in the name of an ideal to seeking within reality itself the forces for further development and motion. From The Holy Family Marx had to move toward The Poverty of Philosophy. In the first of these works Proudhon was praised for taking as the starting point of his observations the negation of private property, but later Marx built his economic system precisely by analyzing the commodity economy based on private property. In The Holy Family, Proudhon is given credit for his conception that the value of the product is constituted on the basis of working time (as "the direct essence of human activity"). But in The Poverty of Philosophy, Proudhon is subjected to criticism for this theory. The formula on "the determination of value by labor time" is transformed in Marx's mind from a norm of what should be into a "scientific expression of the economic relations of present-day society." (The Poverty of Philosophy, cited earlier, p. 69). From Proudhon, Marx partially returns to Ricardo, from Utopia he passes to the analysis of the actual reality of the capitalist economy.

Marx's transition from Utopian to Scientific Socialism introduced an essential change into the above-mentioned theory of "alienation." If the opposition which he had earlier described between human relations and their "material" form meant an opposition between what should be and what is, now both opposing factors are transferred to the world as it is, to social being. The economic life of contemporary society is on the one hand the totality of social production relations, and on the other a series of "material" categories in which these relations are manifested. Production relations among people and their "material" form is the content of a new opposition, which originated in the earlier opposition between the "human" element in the economy and its "alienated" forms. The formula of commodity fetishism was found in this way. But several stages were still necessary before Marx gave this theory its final formulation.

As can be seen from the citations from The Poverty of Philosophy, Marx said more than once that money, capital and other economic categories are not things, but production relations. Marx gave a general formulation to these thoughts in the following words: "Economic categories are only the theoretical expressions, the abstractions of the social relations of production" (The Poverty of Philosophy, p. 109). Marx already saw social production relations behind the material categories of the economy. But he did not yet ask why production relations among people necessarily receive this material form in a commodity economy. This step was taken by Marx in A Contribution to the Critique of Political Economy, where he says that "labor, which creates exchange value, is characterized by the fact that even social relations of men appear in the reverse form of a social relation of things" (Critique, p. 30). Here the accurate formulation of commodity fetishism is given. The material character which is present in the production relations of the commodity economy is emphasized, but the cause of this "materialization" and its necessity in an unregulated national economy are not yet pointed out.

In this "materialization" Marx apparently sees above all a "mystification" which is obvious in commodities and more obscure in money and capital. He explains that this mystification is possible because of the "habits acquired in everyday life." "It is only through the habit of everyday life that we come to think it perfectly plain and commonplace, that a social relation of production should take on the form of a thing, so that the relation of persons in their work appears in the form of a mutual relation between things, and between things and persons" (p. 30). Hammacher is completely right when he finds that this explanation of commodity fetishism in terms of habits is very weak. But he is profoundly mistaken when he states that this is the only explanation given by Marx. "It is startling," Hammacher says, "that Marx neglected the grounds for this essential point; in Capital no explanation whatever is given" (Hammacher, op. cit., p. 235). If in Capital these "habits" are not mentioned, it is because the whole section of Chapter I on commodity fetishism contains a complete and profound explanation of this phenomenon. The absence of direct regulation of the social process of production necessarily leads to the indirect regulation of the production process through the market, through the products of labor, through things. Here the subject is the "materialization" of production relations and not only "mystification" or illusion. This is one of the characteristics of the economic structure of contemporary society. "In the form of society now under consideration, the behavior of men in the social process of production is purely atomic. Hence their relations to each other in production assume a material character independent of their control and conscious individual action. These facts manifest themselves at first by products as a general rule taking the form of commodities" (C., I, pp. 92-93). The materialization of production relations does not arise from "habits" but from the internal structure of the commodity economy. Fetishism is not only a phenomenon of social consciousness, but of social being. To hold, as Hammacher does, that Marx's only explanation of fetishism was in terms of "habits" is to neglect altogether this definitive formulation of the theory of commodity fetishism which we find in Volume I of Capital and in the chapter on "The Trinity Formula" in Volume III.

Thus in The Holy Family, the "human" element in the economy is contrasted to the "material," "alienated" element just as ideal to reality. In The Poverty of Philosophy Marx disclosed social production relations behind things. In A Contribution to the Critique of Political Economy, emphasis is placed on the specific character of the commodity economy, which consists of the fact that social production relations are "reified." A detailed description of this phenomenon and an explanation of its objective necessity in a commodity economy is found in Volume I of Capital, chiefly as it applies to the concepts of value (commodity), money and capital. In Volume III, in the chapter on "The Trinity Formula," Marx gives a further, though fragmentary, development of the same thoughts as they apply to the basic categories of the capitalist economy, and in particular he emphasizes the specific "coalescence" of social production relations with the process of material production.

  • 1Rykachev is an exception. He writes: "Marx's theory of commodity fetishism can be reduced to a few superficial, empty and essentially inaccurate analogies. It is not the strongest but almost the weakest section in Marx's system, this notorious disclosure of the secret of commodity fetishism, which through some kind of misunderstanding has preserved an aura of profundity even in the eyes of such moderate admirers of Marx as M. Tugan-Baranovskii and S. Frank." Rykachev, Dengi i denezhnaya vlast (Money and the Power of Money), 1910, p. 156.
  • 2In the first German edition of Capital, the entire first chapter, including the theory of commodity fetishism, appeared as one part with the general title "Commodities" (Kapital, I, 1867, pp. 1-44).
  • 3Bogdanov, A., Kratkii kurs ekonomicheskoi nauki (Short Course of Economic Science), 1920, p. 105.
  • 4Kautsky, K., The Economic Doctrines of Karl Marx, London: A. and C. Black, 1925, p. 11. (This translation of Kautsky's work contains misprints which are corrected in the citation given above.)
  • 5The letter "C" stands for Capital, and the Roman numeral stands for the volume. The page numbers refer to the three volume edition of Karl Marx's Capital published by Progress Publishers, Moscow: Vol. I, 1965; Vol. II, 1967; Vol. 3, 1966 [Translators]
  • 6Karl Marx and Frederick Engels, Selected Works, Volume II, Moscow: Foreign Languages Publishing House, 1962, p. 461.
  • 7The way this social property of things, which are expressions of production relations among people, takes part in the creation of production relations among particular individuals, will be explained below, in Chapter 3.
  • 8One cannot agree with Hilferding's conception that paper money does away with the "objectification" of production relations. "Within the limits of a minimal quantity of means of circulation, the material expression of social relations is replaced by consciously regulated social relations. This is possible because metallic money represents a social relation even though it is disguised by a material shell" (R. Hilferding, Das Finanzkapital, Wien: Wiener Volksbuchhandlung, 1910). Commodity exchange by means of paper money is also carried out in an unregulated, spontaneous, "objectified" form, as is the case with metallic money. Paper money is not a "thing" from the point of view of the internal value of the material from which it is made. But it is a thing in the sense that through it are expressed, in "objectified" form, social production relations between buyer and seller.
    But if Hilferding is wrong, then the opposite view of Bogdanov, who holds that paper money represents a higher degree of fetishism of social relations than metallic money, has even less foundation. Bogdanov, Kurs politicheskoi ekonomii (Course in Political Economy), Vol. II, Part 4, p. 161.
  • 9In the Russian translation by P. Rumyantsev, this is incorrectly translated as "result" - Kritika politicheskoi ekonomii (Critique of Political Economy), Petersburg, 1922, p. 53. Marx said Erzeugung (production, establishment) and not Erzeugniss (product, result). [Below, when Rubin quotes from the Russian translation, we will quote from K. Marx, A Contribution to the Critique of Political Economy (translated by N.I. Stone), Chicago: Charles H. Kerr and Co., 1904, and in future citations we will refer to this edition as Critique.]
  • 10Cf. Passow, Richard, Kapitalismus. Jena: G. Fischer, 1918, p. 84.
  • 11Below we give a brief presentation of conclusions developed more fully in our article, "Production Relations and Material Categories," Pod znamenem marksizma (Under the Banner of Marxism), 1924, No. 10-11.
  • 12Cf. I. Rubin, Istoriya ekonomicheskoi mysli (History of Economic Thought), Second Edition, 1928, Chapter VII.
  • 13See C., III, p. 817; and other works.
  • 14J Kunov, "K ponimaniyu metoda issledovaniya Marksa" (Towards an Understanding of Marx's Method of Research):" Osnovnye problemy politicheskoi ekonomii. 1922, pp. 57-58.
  • 15Marx, Teorii pribavochnoi stoimosli (Theories of Surplus Value), Vol. II, p. 57.
  • 16Only by viewing this "coalescence" of social relations and material conditions of production from this point of view does Marx's theory of the dual nature of commodities become clear to us, as well as his statement that use values appear as the "material depositories of exchange value" (C., I, p. 36). Use value and value are not two different properties of things, as is held by Bohm-Bawerk. The contrast between them is caused by the contrast between the method of natural science, which deals with the commodity as a thing, and the sociological method, which deals with social relations "coalesced with things." "Use value expresses a natural relationship between a thing and a man, the existence of things for man. But exchange value represents the social existence of things" (Theorien uber den Mehrwert, 1910, Vol. III, p. 355).
  • 17In general, the connection between things and social relations among people is more complex and many-sided. Thus, for example, taking into consideration only phenomena which are closely related with our theme, we can observe: 1) in the economic sphere of various social formations, the causal dependence of production relations among people on the distribution of things among them (the dependence of production relations on the structure and distribution of productive forces); 2) in the economic sphere of the commodity-capitalist economy, the realization of production relations among people through things, their "coalescence" (commodity fetishism in the precise meaning of the words); 3) in various spheres of various social formations, the symbolization of relations among people in things (general social symbolization or fetishization of social relations among people). Here we are only concerned with the second topic, commodity fetishism in the precise meaning of the words, and we hold it indispensable to make a sharp distinction between this topic and the first (The confusion between the two is noticeable in N. Bukharin's Historical Materialism [English language edition: New York: Russell and Russell, Inc., 1965], Russian edition, 1922, pp. 161-162) and between this topic and the third (A. Bogdanov's theory of fetishism suffers from this confusion).
  • 18Marx, "Preface" to A Contribution to the Critique of Political Economy, Chicago: Kerr and Co., 1904.
  • 19We have in mind various forms or types of production relations among people in a capitalist society, and not various types of production relations which characterize different types of social formations.
  • 20Emphasis added.
  • 21K. Marx, Wage Labour and Capital, in Marx and Engels, Selected Works, Moscow: Foreign Languages Publishing House, 1962. In this edition, the passage cited above is translated: "Capital, also, is a social relation of production. It is a bourgeois production relation, a production relation of bourgeois society," p. 90.
  • 22Marx most often said that a production relation "is represented" (sich darstellt) in a thing, and a thing "represents" (darstellt) a production relation.
  • 23K. Marx, The Poverty of Philosophy, New York: International Publishers, 1963, p. 43.
  • 24The concept of Formbestimmtheit or Formbestimmung plays a large role in Marx' system. The system is concerned above all with the analysis of social forms of economy, namely production relations among people. Instead of Formbestimmrheit, Marx often said Bestimmrheit. V. Bazarov and I. Stepanov sometimes very correctly translate the latter term with the word "form" (Cf. Kapital, Vol. III, Book II, pp. 365-366, and the Russian translation, p. 359). It is completely impermissible to translate "Bestimmtheit" with the word "nomination" ("naznachenie"), as is often done by P. Rumyantsev (Kritik der Politischen Oekonomie, p. 10, and the Russian translation, p. 40). The translation "formal determination" ("formal'noe opredelenie") also misses Marx's point. (Nakoplenie kapitali i krizisy, The Accumulation of Capital and Crises, by S. Bessonova.) We prefer a precise translation: "determination of form" or "definition of form."
  • 25Translated as "distinct forms of expression" in the English edition of the Critique, 1904, p. 81. (tr.)
  • 26It must be pointed out that sometimes Marx uses the terms "function" and "form" in a material-technical sense, the first term very often, the second more rarely. This creates a terminological inconvenience, but in essence this does not prevent Marx from making clear distinctions between the two senses of these terms, except for some passages which are unclear and contradictory (for example, in Volume II, part II of Capital). On the other hand, the terms "substance" and "content" are used by Marx not only to refer to the material process of production, but also to its social forms.
  • 27"Real phenomena, such as the value of land, are presented as 'imaginary' and 'irrational,' while imaginary concepts, such as the mysterious 'exchange value,' which does not appear in exchange, are identified as the only reality" (Tugan-Baranovskii, Teoreticheskie osnovy marksizma, Theoretical Bases of Marxism, 4th Ed., 1918, p. 118). The passage by Marx which was cited above means that, even though the purchase and sale of land does not directly express relations between commodity producers through the products of their labor, it is nevertheless related to these relations and can be explained in terms of them. In other words, the theory of rent is derived from the theory of value. Riekes incorrectly interpreted this passage in the sense that the protection of landed property requires expenditures, i.e., labor, which is expressed in the price of land (Riekes, Hugo, Wert und Tauschwert, Berlin: L. Simion, [n.d.] p. 27).
  • 28 Ignorance of this essential distinction between Marx's theory of value and the theory of the Classical Economists accounts for the weakness of Rosenberg's book (Isaiah Rosenberg, Ricardo und Marx als Werttheoreriker; eine Kritische Studie, Wien: Kommissionsverlag von I. Brand, 1904).
  • 29Khozyaisrvo i Tsena (Economy and Price), Vol. I, p. 17.
  • 30Hammacher, Emit, Das philosophisch-okonomische System des Marxismus, Leipzig: Duncker and Humbtot, 1909, p. 546.