Saturday, April 4, 2009

Marx, Capital, Part 1, Chpt.1, Section 4: "The Fetishism of Commodities, and the Secret Thereof."

Christopher Hitchens in “God is not Great” has observed: “Marx and Freud were not doctors or exact scientists. It is better to think of them as great and fallible imaginative essayists.” Whereas in sections one through three, Marx has tried to provide an explanation of what we mean when we say a coat has value, section four abandons this more grounded approach. It is very much an imaginative essay. It introduces the utopian ideal of a planned society that directs and rewards labor in accordance with the labor provided by each citizen.

We are blinded by the fetishism of things, says Marx. A coat is a straightforward object insofar as we envision it as a thing of use to us, something to keep us warm. However, insofar as it is a commodity, the coat is a mysterious thing with the metaphysical qualities that Marx described in the first three sections: use value, exchange value, and an embodiment of human labor. In addition, from the moment that men in any way work for one another, their labor assumes a social form. The coat is warm and useful to the wearer; however, the social relation inherent in the coat stemming from the labor, and the exchange value the coat has with every other thing is not visible. For these reasons we worship the exchange value of Commodities without fully appreciating how they embody labor value and complex social relations.

The fact that value comes from the labor that went into making a thing is an open secret, Marx says, hidden behind the apparent fluctuations of the relative values of commodities. The ultimate money form of valuing commodities conceals, instead of disclosing, the social character of private labor, and the social relations between the individual producers. Marx holds up to the light as examples a society of one (Robinson Crusoe), a dark ages feudal society, and a patriarchal peasant family, and he concludes in each case that the measure of value imparted to all commodities is self-evidently the measure of individual labor power that goes into the sum total of commodities produced by each of these societies.

Then . . . .all of a sudden, we’re not in Kansas anymore. The following passage, no longer descriptive, introduces strongly utopian shades:
“Let us now picture to ourselves, by way of change, a community of free individuals, carrying on their work with the means of production in common, in which the labor power of all the different individuals is consciously applied as the combined labor power of the community. . . . The total product of our community is a social product. One portion serves as fresh means of production and remains social. But another portion is consumed by the members as a means of subsistence. A distribution of this portion amongst them is consequently necessary. . . We will assume . . . that the share of each individual producer in the means of subsistence is determined by his labor time. Labor time would, in that case, play a double part. Its apportionment in accordance with a definite social plan maintains the proper proportion between the different kinds of work to be done and the various wants of the community. On the other hand, it also serves as the measure of the portion of the common labor borne by each individual, and of his share in the part of the total product destined for individual consumption.”
Marx , after several digressions comes back to this theme, concluding that the process of material production “does not strip off its mystical veil until it is treated as production by freely associated men, and is consciously regulated by them in accordance with a settled plan. This, however, demands for society a certain material ground-work or set of conditions of existence which in their turn are the spontaneous product of a long and painful process of development.”


The language in this section is more sweeping and less careful than in the previous three sections. The “let us imagine a society of free men” paragraph comes out of left field. It is not carefully set up or supported by what has come before. The shift from an explanation of what we mean by “value” to imagining a society of free men where everyone labors according to a definite plan set up to serve the needs of societ appears to introduce a very large and complex, and at this point in the book , not self-evident proposition.

Is there a contradiction inherent in "freely associated men (working) in accordance with a settled plan." Who sets the plan? Once the body politic establishes a plan, is it implicit that the power of the state will enforce that plan . . . at which point do we still have men freely associating to create the wealth of society, or do we have the state enforcing its plan on its citizens?

Hobbes, Locke, Rousseau, and Rawls--the giants of Western political theory--would all agree that the individual gives up much of his or her freedom in order to live in society. The alternative is Iraq ca. 2004 where, in Hobbes' memorable phrase "life is nasty, brutish, and short." But the social bargain in the U.S., where lady liberty says "give us your tired, your poor, your huddled masses . . ." has generally been that individuals are free to produce what commodities they wish. We prohibit some activities deemed harmful (e.g. prohibition, drug laws) but at least since we abolished slavery in 1865 we have not been in the business of telling people what to do. Social and economic mobility unfettered by laws has been our ideal.

From 21st century America, the thought of commodities being produced in accordance with a social plan, and directing people what to produce, is jarring and would require more than the quiet introduction this idea is given here. Of course in "old Europe" as Rumsfeld has dismissively quipped (and I now mean 1867, the date of publication of Part I of Das Kapital) there was not the expectation that mine workers or industrial workers would have social mobility. In America, too, the economy of half the country was still based on the institution of slavery. Aristotle and the Greeks did not envision social mobility. The Guild's of the middle ages locked people into their work and precluded social mobility. We do live in different and better times.


  1. Roland, As always thanks for the Marxian snippet. By disregarding the wisdom of markets, winter coats have equal value in March and November. (me thinks we know better). By disregarding markets coal has equal value in a sea port with ready access to this commodity (say Newcastle) and a land locked, resource dependant land (fill in the blank). This requires reconciliation.

    I agree that Marx/Engels scientific stuff is appealing but seems a bit Sophomoric for a secular audience today, and the leap of faith to a prescriptive world seems a bit like fantasy.

    In early industrial farmers we mostly have farmers, workers, landed gentry, factory owners, and the petite bourgeous (who get short shrift from M&E). We now have few of the former and lots of knowledge workers. I think we need a new paradigm.

  2. Roland: Thanks for the careful commentary. Marx's attempt to grapple with the question of "value" is particularly interesting in light of current events, where billions of dollars in mortgage-backed securities are now essentially of unknown value, and homes in some areas are worth 50% of what they sold for last year. But I don't see how his proposition -- that the amount of labor input provides the true source of "value" -- is particularly useful. To use the coat example, assume that it takes exactly the same amount of total labor to trap beaver and make a coat from the pelts as it does to shear sheep and make a coat from the wool. (In fact, it probably requires more labor to turn wool into coat). Yet, at least in some places at some times, the beaver coat was far more costly; fashion aside, beaver fur has inherent properties that result in a warmer coat. Similar points can be made about mining diamonds versus coal, harvesting caviar versus cod, etc. The labor model of pricing effectively ignores the fact that groups of humans find some things to be inherently more valuable than other things (e.g., gold, seashells, tulips, diamonds, etc.), regardless of labor input. Therefore, using something other than monetary price to assign value will most often result in the wrong price being assigned, with the result being either shortage or over-supply.

    If history has taught us anything, it's that free markets, while imperfect, are still, by far, the best mechanisms for pricing everything. The only other method is government fiat -- assigning a value based upon "labor inputs" or some other arbitrary measure. Government gets it wrong as often as not, resulting in goods no one wants or goods that everyone wants but few can obtain. See, e.g., the entire history of the USSR.

    I'm afraid we're about to learn this the hard way with regard to health care. The Government will have no choice but to regulate prices for health care services. This will cause the available supply of those services to contract, and we'll end up waiting months to get MRIs and other services that used to be widely available. Just like in the UK today. Or more likely, we'll get gray-market heathcare, with private hospitals, and off-shore clinics.

    Keep up the good work. Jim @ F&B

  3. When I took a course on Marxism in college, the professor made a point of saying that Marxism was a philosophy, not a political or economic system...

    Since that time (early '70's) I have lost my faith in the ultimate perfectibility of man (greed, violence, dishonesty, lack of compassion, lust for power, etc. are so much a part of our world any system that doesn't take that into its core thinking is dreamy fantasy) - and partaken in a kind of work (art) where the labor required to produce the commodity may have little or nothing to do with the market value of the art.

    How do you think the entry of women into the labor market (and the subsequent loss of their free services to society) would have struck Comrade Karl, had he foreseen it? (did he?)

    That being said, I've often felt that I was a commie deep in my heart.