For any Marxist, the four most aggravating words in the English language are “labour theory of value.” For a casual reader of Marx, it is an earth-shattering critique of his ideas. Even among serious readers, who routinely discard this critique, it is still an aggravation precisely because it gives the impression that his critics do not even understand his arguments. However, I would like to boldly suggest that there is great danger in being misled by the surface of things. Even these obtuse criticisms deserve to be taken seriously. And Marx’s theory of value should rightly be called a labour theory, even when understood in its full context.
Beginning with the obvious definition that needs to be provided, we should explain the labour theory of value. The term is rather misleading, because there is no single lineage or articulation of the labour theory of value—it is more of a sub-division containing multiple theories. These theories all share the property of—as the name suggests—defining value as something that emerges in some sense from labour. In the more straightforward terms, the labour theory of value is the theory that we assign economic value to things in proportion to the labour involved in their creation.
In the context of capitalistic economics, value is closely associated with the price level. To be precise, value is the abstract system of relative desire that is crystalised by the price system. To explain this in intentionally non-mathematical terms, purchasing something at a high price represents the willingness to part with a lot of money, and thereby give up the right to buy some quantity of cheaper goods: therefore, that high-price good is ‘highly valued’ by anyone willing to purchase it. By the same token, if someone requires a very high price before they will part with something to sell it, they must also ‘highly value’ it. You can exactly reverse these explanations to explicate the value of low-price items.
Classical theories of value
In the early days of economics, it made sense to interpret the root of such explanations in terms of labour. Indeed, some readers without a background in economics are nonetheless likely to intuit exactly where labour could figure into this explanation. At any given price level, if the amount of labour necessary to create the good is less than the implied ‘value’ of that price level, purchasing the item would be a net loss compared to simply creating it by oneself. And as a seller, if the implied value of the labour is greater than the price level, selling the good would come at a loss.
These intuitions become crystal clear when discussing a market composed purely of labour: If we imagine a world that contains a racing track that pays people $200 whenever they do a lap and pass Go, the implicit value of running a lap is set at the $200 reward for doing so. If someone tried to pay you $150 to agree to run around the lap for them and to give them the $200 reward, anyone sensible would decline and simply run the lap themselves for $200. And for the person on the other side of this exchange, if they wanted to make money, paying anyone over $200 to run the lap would be less profitable than simply running the lap. No matter how you slice it, it seems as though running the lap is valued at $200 exactly.
However, those with a mathematical mind should have already noticed the problematic nature of such an example. In such a market, composed purely of labour activity, everything is already defined as being labour from the outset. The only way to make money, which has been implicitly accepted by the framing of the example as the only unit of measure for value, is through labour. We have defined value as equivalent to labour by the nature of the universe; this is a purely circular example; this is a tautology.
Such a unity of labour and the finished commodity seems plausible enough at first blush, at least in the case of some goods, since labour is often the primary factor of production. So, we should not be too harsh on those who were taken in by such a theory of value. But we also should not slander them: The labour theory of value advocated by the classical economists was much more sophisticated than this simple example suggests. This is a particularly important point to grasp for Marx’s defenders, who sometimes forget this point in order to make Marx’s deviations from this simple labour theory of value more exceptional than it actually is. This rhetorical effort is embodied by the habit of sometimes referring to Marx’s theory as the ‘socially necessary labour theory of value’ as opposed to the (implicitly inferior) regular labour theory of value advocated by the other classical economists.
Adam Smith, David Ricardo, et al. all display much more nuance on this point than is usually remembered. Let us start with Smith, whose theory of value is the closest to the flattened labour theory out of the major classical economists. Chapter 5 of The Wealth of Nations opens with the following explanation of value:
Every man is rich or poor according to the degree in which he can afford to enjoy the necessaries, conveniences, and amusements of human life. But after the division of labour has once thoroughly taken place, it is but a very small part of these with which a man’s own labour can supply him. The far greater part of them he must derive from the labour of other people, and he must be rich or poor according to the quantity of that labour which he can command, or which he can afford to purchase. The value of any commodity, therefore, to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour, therefore, is the real measure of the exchangeable value of all commodities.
Certainly, right there in plain text is the assertion that the real measure of value is labour. However, some clarifications are necessary; not even Smith is arguing that labour creates value by some ethereal quality. Instead, this definition comes after the four prior chapters went about establishing a framework and context for the use of the word value. Namely, his theories on the division of labour and of money. Smith defines the exchangeable value of all commodities in terms of the value of labour. However, he defines that labour in terms of ‘the extent of the market’ itself. As he explains in chapter 3 of The Wealth of Nations:
As it is the power of exchanging that gives occasion to the division of labour, so the extent of this division must always be limited by the extent of that power, or, in other words, by the extent of the market. When the market is very small, no person can have any encouragement to dedicate himself entirely to one employment, for want of the power to exchange all that surplus part of the produce, of his own labour, which is over and above his own consumption, for such parts of the produce of other men’s labour as he has occasion for.
In other words, Smith’s labour theory of value is not suggesting that value arises out of labour infinitely in proportion to the cost of that labour. Instead, it is that ‘the real measure’ of each unit of a commodity is the sub-proportioning of the total labour necessary to fulfill ‘the extent of the market’ for that commodity. In simpler language, there is a total value of a market, assumed at a given size. And the value of each good within that market is determined by the labour involved in the production of that good precisely because it entitles you to a proportionate share of that extent of the market. Ironically, a similar specification of the labour theory of value is repeated in Karl Marx’s Capital as follows:
We see then that that which determines the magnitude of the value of any article is the amount of labour socially necessary, or the labour time socially necessary for its production. Each individual commodity, in this connexion, is to be considered as an average sample of its class.
In so doing, Marx was not contradicting classical theories of value so much as explicating that which was only implicit in their logic. Unfortunately, this point is often missed by both Marx’s critics and his defenders, who each approach his work on its face without a proper understanding of its economics. This fact is even more clear in the case of David Ricardo, whose alterations to Smith’s theories were contemporaneous to Marx—Smith himself was old hat by that point. In Ricardo’s On the Principles of Political Economy and Taxation, he argues:
Utility then is not the measure of exchangeable value, although it is absolutely essential to it. If a commodity were in no way useful,—in other words, if it could in no way contribute to our gratification,—it would be destitute of exchangeable value, however scarce it might be, or whatever quantity of labour might be necessary to procure it.
Possessing utility, commodities derive their exchangeable value from two sources: from their scarcity, and from the quantity of labour required to obtain them.
…Adam Smith, however, has no where analyzed the effects of the accumulation of capital, and the appropriation of land, on relative value. It is of importance, therefore, to determine how far the effects which are avowedly produced on the exchangeable value of commodities, by the comparative quantity of labour bestowed on their production, are modified or altered by the accumulation of capital and the payment of rent.
…It appears then that the accumulation of capital, by occasioning different proportions of fixed and circulating capital to be employed in different trades, and by giving different degrees of durability to such fixed capital, introduces a considerable modification to the rule, which is of universal application in the early states of society.
It may be more difficult to follow than in Smith’s case, given that we have abbreviated much more of Ricardo’s argument. However, the essential point is as follows: Ricardo amended Smith’s argument to say that it is not merely that value is derived from the proportion of labour necessary to participate in the total utility of the market. Instead, there are also other factors of production, such as capital and rent. Therefore, rather than proposing a theory of value based on the use of labour to produce a good, Ricardo proposes that value is based on the ‘comparative quantity of labour’ as modified by ‘capital and rent’ that is involved in the total process of production—that is, a total labour theory of value, which is defined as strictly equivalent to a production cost theory of value.
Readers of Marx will immediately notice the importance of introducing capital into a theory of value. Even outside of Marx, classical economics was establishing some of the core concepts that Marx used in his theory of surplus value. Namely, a difference between the immediate value of labour and the exchange value of a good as modified by the introduction of capital. Indeed, had Marx’s works never existed, one could still have proposed a rough outline of something like Marx’s theory of exploitation by using Ricardo’s On the Principles of Political Economy and Taxation. But, in order to explain this fully, we should finally move on to the theory of value given in Marx’s Capital.
Value for Marx
Marx’s theory of value starts by specifying multiple different value-forms. Two of these, exchange value and use value, should already be intimately familiar due to the work of the other classical economists: This same separation between value in terms of utility and value in terms of exchange was present in both Smith and Ricardo. For example, Smith said:
The word Value has two different meanings, and sometimes expresses the utility of some particular object, and sometimes the power of purchasing other goods which the possession of that object conveys. The one may be called value in use; the other, value in exchange.
However, Marx’s value-forms are meaningfully different from this binary. The labour theories of value employed by Smith and Ricardo each respectively define exchange value in terms of labour—subject to the context explained above. Value in use is relegated to a kind of separate variable that shapes the market without directly determining exchange value. According to Ricardo, the utility derived from a good is a pre-condition to its need to be exchanged, but it is not strictly related to its exchange value. However, for Marx, exchange value is not determined by labour in and of itself. Instead:
Exchange value, at first sight, presents itself as a quantitative relation, as the proportion in which values in use of one sort are exchanged for those of another sort, a relation constantly changing with time and place. Hence exchange value appears to be something accidental and purely relative, and consequently an intrinsic value, i.e., an exchange value that is inseparably connected with, inherent in commodities, seems a contradiction in terms.
…Let us take two commodities, e.g., corn and iron. The proportions in which they are exchangeable, whatever those proportions may be, can always be represented by an equation in which a given quantity of corn is equated to some quantity of iron: e.g., 1 quarter corn = x cwt. iron. What does this equation tell us? It tells us that in two different things – in 1 quarter of corn and x cwt. of iron, there exists in equal quantities something common to both. The two things must therefore be equal to a third, which in itself is neither the one nor the other. Each of them, so far as it is exchange value, must therefore be reducible to this third.
A simple geometrical illustration will make this clear. In order to calculate and compare the areas of rectilinear figures, we decompose them into triangles. But the area of the triangle itself is expressed by something totally different from its visible figure, namely, by half the product of the base multiplied by the altitude. In the same way the exchange values of commodities must be capable of being expressed in terms of something common to them all, of which thing they represent a greater or less quantity.
This common “something” cannot be either a geometrical, a chemical, or any other natural property of commodities … As use values, commodities are, above all, of different qualities, but as exchange values they are merely different quantities, and consequently do not contain an atom of use value.
If then we leave out of consideration the use value of commodities, they have only one common property left, that of being products of labour. But even the product of labour itself has undergone a change in our hands. If we make abstraction from its use value, we make abstraction at the same time from the material elements and shapes that make the product a use value; we see in it no longer a table, a house, yarn, or any other useful thing. Its existence as a material thing is put out of sight. Neither can it any longer be regarded as the product of the labour of the joiner, the mason, the spinner, or of any other definite kind of productive labour. Along with the useful qualities of the products themselves, we put out of sight both the useful character of the various kinds of labour embodied in them, and the concrete forms of that labour; there is nothing left but what is common to them all; all are reduced to one and the same sort of labour, human labour in the abstract.
In other words, there are three separate value-forms discussed here: Exchange value, use value, and Value. And only the third, Value—as a foundational, abstract concept—is determined by labour. This is the first of the two main defences of Marx’s labour theory of value, and it goes something like this: “Neoclassical economics’ so-called refutation of the labour theory of value only addresses the role of labour in exchange value. It has nothing to say about Marx’s Value.” However, this is something of a simplified reading of Marx and a complete failure to summarise neoclassical economics. The shift in value theory that took place during and since the Marginal Revolution was not just the refutation of the classical theory of exchange value, but the unification of use value and exchange value through the ‘subjectification’ of value. In other words, the Marginal Revolution has a lot to say about Marx’s value-forms and could even be said to go as far as rejecting them outright.
The neoclassical critique of Marx’s value-forms would begin with a very simple point—firstly, by returning to this quote from Marx:
In 1 quarter of corn and x cwt. of iron, there exists in equal quantities something common to both. The two things must therefore be equal to a third, which in itself is neither the one nor the other. Each of them, so far as it is exchange value, must therefore be reducible to this third.
But if we stop for a moment and read over this claim carefully—carefully and especially mathematically—one burning question will frustrate any thinking person. Why? Why must this equivalency be reduced to a third category? There is a reason that Marx asserts it, of course, which we will analyse, but it can only be reverse engineered from his subsequent conclusions. His immediate justification barely goes partway. Marx says:
This common “something” cannot be either a geometrical, a chemical, or any other natural property of commodities. Such properties claim our attention only in so far as they affect the utility of those commodities, make them use values. But the exchange of commodities is evidently an act characterised by a total abstraction from use value. Then one use value is just as good as another, provided only it be present in sufficient quantity … As use values, commodities are, above all, of different qualities, but as exchange values they are merely different quantities, and consequently do not contain an atom of use value.
This quality-quantity difference can be simplified like so: If use values were expressed as a quantity, the use value of different goods could be equated. That is, two goods with entirely unrelated uses would each be treated as identical through their mutual quantification. However, uses are each independent from one another since they are qualities. It is only through the quantitative exchange of commodities that we compare them. For example, drinking water and wearing clothing each have use values that are mutually unintelligible on their own terms. But when we exchange clothes for water, we mutually quantify them. Due to this jump from quality and quantity, Marx assumes a certain “something” that is being transformed into these two respectively qualitative and quantitative value-forms. As Marx says:
Commodities come into the world in the shape of use values, articles, or goods, such as iron, linen, corn, &c. This is their plain, homely, bodily form. They are, however, commodities, only because they are something two-fold, both objects of utility, and, at the same time, depositories of value. They manifest themselves therefore as commodities, or have the form of commodities, only in so far as they have two forms, a physical or natural form, and a value form.
As already discussed, this certain “something” that lies between the two is a concept of Value that is measured in labour. This Value is the necessary intermediary—as in the previously discussed equation of exchange where each commodity must be reducible into a third. The reason that Marx is asserting the need for this intermediary is because he is claiming that an exclusively qualitative value-form cannot be intelligible in an exclusively quantitative value-form. Therefore, we need some kind of quantitative use value or qualitative exchange value to translate between the two. For Marx, this is labour. Even if the use values of two unrelated commodities cannot be compared directly, they can each be compared to the labour Value necessary to acquire those use values—and can hence be understood quantitatively for the purpose of exchange.
We should briefly address one of the common retorts used against Marx’s critics—that is, the question of socially necessary labour. Marx amends his statement on the labour theory of Value in order to head off some of its clearest weaknesses like so:
Some people might think that if the value of a commodity is determined by the quantity of labour spent on it, the more idle and unskilful the labourer, the more valuable would his commodity be, because more time would be required in its production. The labour, however, that forms the substance of value, is homogeneous human labour, expenditure of one uniform labour power. The total labour power of society, which is embodied in the sum total of the values of all commodities produced by that society, counts here as one homogeneous mass of human labour power, composed though it be of innumerable individual units. Each of these units is the same as any other, so far as it has the character of the average labour power of society, and takes effect as such; that is, so far as it requires for producing a commodity, no more time than is needed on an average, no more than is socially necessary. The labour time socially necessary is that required to produce an article under the normal conditions of production, and with the average degree of skill and intensity prevalent at the time. The introduction of power-looms into England probably reduced by one-half the labour required to weave a given quantity of yarn into cloth. The hand-loom weavers, as a matter of fact, continued to require the same time as before; but for all that, the product of one hour of their labour represented after the change only half an hour’s social labour, and consequently fell to one-half its former value.
There are two key points established in this paragraph. Firstly, Marx is unifying labour into a quantifiable unit. This is a necessary idea for his larger point about the intermediation of commodity use values. He abstracts away the complexities of productive capacity that weighed down Ricardo’s often convoluted value theory, and instead creates a new unit called “socially necessary labour” that universalises labour as a factor of production. This universalisation is essential for differentiating his theory of Value from exchange value, and therefore is essential for his theory of surplus value. In addition, it addresses some more abstract objections to labour as a foundation of Value. For example, those that point out that wasted labour on a meaningless task of digging holes does not create any value that can be metamorphised into either other value-forms. Even as this paragraph is more half-baked than Marx’s other arguments, it is not actually too instrumental to his theory of Value beyond addressing certain abstract critiques, so I will not address its specifics too much in this post.
Regardless, the necessity of this whole song and dance lies in Marx’s theory of commodity fetishism. When we compare labour as an intermediary of use value, we are conscious of the social relations present in any exchange. However, through money, we reify the social properties of labour into the physical commodity of money. Therefore, we allow for the pure quantification of all Value. This logical development—the labour theory of Value (not exchange value), to the transfer of Value into a money-form, to the concept of commodity fetishism—is the core of Marx’s Capital, his theory of surplus value, and his entire understanding of the proletariat. As Nikolai Bukharin said:
The problem of value has constituted a fundamental question of political economy since the earliest days of the science. All other questions, such as wage-labour, capital, rent, accumulation of capital, the struggle between large-scale and petty operation, crises, etc., are directly or indirectly involved in this fundamental question.
Therefore, the fact that neoclassical economics does not accept this theory of value as articulated is problematic—at least, for any contemporary reading of Marx that chooses to accept those critiques of the classical model that were made by neoclassical economics. Orthodox Marxists who wish to operate in a purely classical space are free to do so. At their own peril.
Marginalism and quantification
Neoclassical theories of value are, like all of the foundations of neoclassical economics, built on marginalism. Marginalism rejects the totalised comparisons of classical economics, which we saw exemplified in this quote from Marx: “Each individual commodity, in this connexion, is to be considered as an average sample of its class.” Instead, every commodity—indeed, every economic concept—is measured “at the margin.” That is, according to its immediate context. A commodity is not the average of its class in any exchange, it is precisely that additional commodity. There is no total except as a sum of individual factors.
Such a way of defining things is likely more confusing than anything, so we will stick with examples. A plate of steel is not valued according to the average of all plates of steel. It is valued according to the value of that singular plate of steel in its particular context. This approach has obvious uses with many kinds of exchange value. A meal is valued proportionately to one’s need to eat—and it suddenly becomes worth much less “at the margin” of where you would have more than you could possibly eat at that moment: You would need a considerable discount to value a second meal from McDonald’s the same as an equally priced first meal, assuming both were to be eaten at a given lunch. But how does this marginalism change any of the analysis of the classical economists and of Marx? Quite a lot, as it turns out.
Under a marginal theory of value, an exchange of commodities cannot contain “something common to both. The two things must therefore be equal to a third, which in itself is neither the one nor the other. Each of them, so far as it is exchange value, must therefore be reducible to this third.” Each exchange occurs at the point of contact itself—where one thing is surrendered in order to gain another. Each of these individual points of contacts may interact systematically with one another, but they are still each determined at the marginal point of contact. For example, let us accept Marx’s model of the exchange of commodities. In this model, there are three points of contact: A qualitative need is compared to the quality of the labour necessary to acquire that need; the quantity of that labour is compared to the quantity of the labour necessary to acquire a different need; the quality of that second act of labour is compared to the quality of that second need. Through these three connections (quality -> quality; quantity -> quantity; quality -> quality), a comparison between needs is reached. Under Marx’s theory, we cannot directly jump from the first step to the last because we cannot abstractly compare the quality of one need (let us say, food) to another need (let us say, housing)—there is no meaning in ranking food or housing as abstractly better than each other.
However, under marginal theory, if we imagine that we are presented directly with either a house or a large crate of food and are given the option of taking one as an act of charity, even if we cannot compare the needs in abstract, each person will still create an implicit, conditional ranking by choosing one over the other in that exact moment at the margin. We do not need to speculate on any further meaning from that, and it does not carry any automatic meaning for how they would choose next time. All we gained from this exercise is the process of exchange at the margin in the act making a single trade-off in a given context. In such a circumstance, it is important to understand that the two needs were not compared in terms of the quantity of labour necessary to produce either one. A person simply chose between the two, on the basis of their marginal use value, and took the one they wanted more in a direct comparison.
Marginalism is often misunderstood—even by its advocates—as quantifying everything. However, it does the precise opposite. It qualifies everything—and then builds a language of ordinal mathematics in order to study these quality relations as though they were quantified. This can be easily understood when using the mathematics of utility functions. Let’s say that Person A was repeatedly offered charitable gifts that were some combination of food and shelter (as an abstraction of more or less “usable” housing). Now, each time Person A chooses between the two charitable options with indifference or randomness we assign both choices an ordinal ranking N. From this, we would derive something like this function:
Where X is an amount of a commodity—food—and Y is an amount of the other commodity—shelter. In this case, we must remember that we are not deriving the amounts (X, Y) by reference to some objective quantification. Instead, we can assume that among a given set of functions where Y is stable, the minimum possible increase in X would increase N by the minimum possible change among the set of functions with this given value of Y. This implicitly create an ordinal set of possible values for X in proportion to the number of possible values for N. Since there are infinite possible values for N at a given value for Y, there are infinitely as many values for X that each only have an ordinal (relative) quality compared to one another. The same is true when X is stable and Y is free to vary.
The net result of this is a function where we rank every combination of gifts of food and shelter strictly in qualitative proportion to one another without reference to a concrete, reducible third value-form. In other words, the popular assumption that is baked into Marx’s work, that qualitative value is non-countable and non-discrete, need not be true when working at the margin. The qualitative value of commodities cannot be compared in abstract, but they can be directly compared in each exchange. In other words, the need for an intermediary source of Value vanishes once we do away with the confused intent to assign a general value to the totality of a commodity. Instead, the act of exchange is subjectivised to that particular momentary and ephemeral exchange of two qualities, and therefore contains the full embodiment of use value.
The most cogent response to this challenge to Marx’s theory of value came from Nikolai Bukharin in Economic Theory of the Leisure Class. There are two key challenges that warrant a response: Firstly, that the abstract assumptions necessary to establish marginality are unrealistic next to a real capitalist economy. As Bukharin explains:
No business man, from wholesaler down to peddler, ever has the slightest thought of the “utility” or “use-value” of his commodity. In his mind, the content so vainly sought by Böhm-Bawerk [an advocate of marginal value theory] is simply non-existent. In the case of purchasers who buy the products for their own use, the matter is a little more complicated; we shall speak below of the purchase of means of production. Here again the path pursued by Böhm-Bawerk leads nowhere. For any “housewife,” in her daily “practice,” begins both with the existing prices and with the sum of money at her disposal. It is only within these limits that a certain evaluation based on utility can be practiced.
…It follows that neither the concept of “use-value” (Karl Marx) nor that of “subjective use-value” (Böhm-Bawerk) may be taken as the basis of an analysis of price. Böhm-Bawerk’s point of view is in sharp contradiction with reality, and yet he had made it his task to explain reality.
Secondly, Bukharin argues that the subjectification of an exchange, as is implicit in marginal theory, is psychological rather than economic, because value is based on objective reality in an economy. Once again, quoting Bukharin:
We shall attempt below to subject this “creative thought” to the necessary examination; but let us state at the outset that the critics of the Austrian School often point out that the latter has confused value with use-value; however, that its theory belongs rather to the domain of psychology than to that of political economy, etc. No doubt this objection is fundamentally correct.
…We already know that according to the views of the subjectivist school, we must seek the basis of social-economic phenomena in the individual psychology of men. In the case of price, this demand requires us to begin our analysis of price with the individual evaluations. Comparing the Böhm-Bawerk mode of treatment of the question of value with that of Karl Marx, the difference in principle between them at once becomes clear: in Marx the value concept is an expression of the social connection between two social phenomena, between the productivity of labour and price; in capitalist society (as opposed to a simple commodities society) this connection is very complicated.
On the first of these criticisms: It is precisely true that the qualitative comparison of use value as practiced within marginal theory is entirely unrealistic. Not only does it not occur in a capitalistic economy, but it also does not occur in any economy in the historical record. Barter, as demonstrated by an overwhelming body of research, is an entirely theoretical idea. No matter how early the economy that historians have studied, they have found some intermediary commodity that has been fetishised via the money-form.
But this is the entire point—that is, once you carry through Koujin Karatani’s method of transcritique, and reread Marx backwards, so to speak. Marx used classical economics to explain the emergence of the commodity fetish, and thereby derived the presence of the labour theory of Value as being reified within the money-form. However, if we begin from the reality of the capitalist economy, where use values are quantified by the money-form, and travel backwards from there to neoclassical economics—which is more rigorous than the classic methods that Marx abstracted from, logically speaking—one finds something very different from Bukharin’s critique. Neoclassical marginal theory does not challenge the reality of the capitalist economy based around the commodity fetish that Marx described, but rather his earlier abstraction of a labour Value theory.
In essence, without this abstraction, the fundamental flow of Marxian economics cannot function in its orthodox form. However, we need not throw out the baby with the bathwater. Even if the first chain of abstraction is broken and, as Bukharin says, the reality of commodity fetishism is still convincing, we merely need to reassess Marx from the level of money instead of abstractions at the level of labour. We can still re-think through Marx’s Capital to find a working model—if we start from end of chapter one and read it backwards. This monetary approach to Marx is in fact a common thread in contemporary theory, and so there is hope yet.
As for the second point, I hope it is not too dismissive to simply discard Bukharin in only a few words. There is no such thing as objective value. This is precisely why we have to return to money instead of labour—modes of exchange over modes of production—in order to rescue Marx from himself. Bukharin himself admits the unity of the first critique with his accusations of subjectivism and psychological reasoning, as below:
If the objective value is nothing more or less than a resultant of the subjective evaluations, it must not be grouped with the chemical and physical properties of commodities. On the other hand, it differs from them in principle: it contains not an “atom of matter,” being descended from and shaped by immaterial factors, namely, the individual evaluations of the various “economic subjects.” However peculiar this may sound, we must nevertheless point out that the pure psychologism so characteristic of the Austrian School and of Böhm-Bawerk is perfectly compatible with a vulgar, excessively materialistic fetishism, in other words, with a point of view essentially naive and uncritical.
On this point, Bukharin is even more correct than he intends. The subjective reality of the economy is something fully embodied in the material fetish. Money is where all of the abstract illusions of economic theory turn into cold material reality. Bukharin is unhappy with this answer because it leaves a gaping hole where the dream of objective value once stood, and in his time it seemed unanswerable. The terrifying point of an economy based on a fetish is that it is very much subjective—it emerges from naked belief and ideology and little else. That is, that money inverts dialectical materialism on its head. When social relations are commodified, the superstructure falls upward towards the substructure. Everything is topsy-turvy in Wonderland.
