As I mentioned in a recent blog, at the Historical Materialism conference in London in November, there was a book launch for Fred Moseley’s new book Marx’s Theory of Value in Chapter 1 of Capital: A Critique of Heinrich’s Value-Form Interpretation. Michael Heinrich and Winfried Schwarz (a German Marxist who is also critical of Heinrich’s interpretation) participated in the book launch.
Moseley’s book is an examination of Marx’s theory of value in Chapter 1 of Capital, almost paragraph by paragraph in Sections 1 and 2, and a detailed critique of Heinrich’s value-form interpretation of Chapter 1, as presented in his 2021 book How to Read Marx’s Capital, which is a translation of his 2018 book Wie das Marxsche Kapital Lesen?
Heinrich is a well-known German Marxist who has published widely on his value-form interpretation of Marx’s theory of value, and his work is influential not only in Germany, but also in the UK and other countries in Europe and around the world. He criticises the traditional interpretation of the labour theory of value, according to which the value of commodities is determined solely in production, and he argues that value is created only when it is converted into money through the sale of commodities on the market.
Moseley is one of the foremost scholars in the world today on Marxian economic theory. He has written or edited many books on Marxist theory. He reckons instead that Marx presented a labour theory of value according to which the value of commodities is determined solely in production by the socially necessary labor time required to produce the commodities. And Moseley argues in his book that the textual evidence in Chapter 1 overwhelmingly supports the labour theory of value interpretation of Marx’s theory of value.
The relevance and importance of this debate may seem obscure to many readers of Marx. So Fred Moseley kindly agreed to be interviewed on his new book and the controversy with Heinrich.
MR: How did this book come about?
FM: ”First of all, I want to thank you for the opportunity to discuss my book with you and your many readers.
Heinrich’s book cited above is a detailed textual study of the first seven chapters of Capital. Heinrich is not very well known in the US, but he is very influential in Germany and other European countries. He is something like a David Harvey of Europe. But I am convinced that Heinrich’s book is a fundamental misinterpretation of Marx’s theory, so I decided to engage critically with Heinrich’s book.
I started by writing a paper on Chapter 1, the foundation of Marx’s theory and Heinrich’s interpretation. I presented this paper in a Zoom conference in June 2021 sponsored by Gyeongsang National University in South Korea. An assistant editor of Palgrave’s Marx, Engels and Marxism series, Paula Rauhala, watched the my presentation and she contacted me and suggested that I write a longer version of my paper as a Palgrave Pivot book. A Pivot book is a new initiative by Palgrave of short books, with a limit of 50,000 words (which I exceeded by 10,000 words!). I am grateful to Paula for that suggestion and this little book is the result.”
MR: Please give us an overview of your book
FM: “My little book is a detailed textual study of Marx’s Chapter 1 and Heinrich’s interpretation of Chapter 1. The book consists of only 4 chapters.
Chapter 1 of this book presents my interpretation of Marx’s theory of value in Chapter 1 of Capital, including a section on each of the four sections of Marx’s Chapter 1. Chapter 2 presents Heinrich’s interpretation of Chapter 1 of Capital and my detailed critique of Heinrich’s interpretation 1, with the same four sections.
Chapter 3 is about a 55-page manuscript that Marx wrote in 1872 in preparation for the 2nd German Edition of Volume 1, which is mainly about Section 3 of Chapter 1, entitled ‘Additions and Changes to the First Volume of Capital’, which Heinrich has emphasised in his book and in previous works to provide textual support for his ‘value-form interpretation’ of Chapter 1. This important manuscript has not yet been translated into English. A translation of a 4-page excerpt of this manuscript is included in Heinrich’s book as an appendix. So Chapter 3 of my book presents my interpretation of this manuscript and a critique of Heinrich’s interpretation. A translation of this entire manuscript should be a high priority of Marxian scholarship.
My book is very abstract theory, about the most abstract part of Marx’s theory, the beginning of Marx’s theory in which he presents the foundation of his labour theory of value. Marx said in the Preface to the 1st edition of Volume 1 of Capital that “beginnings are always difficult in all sciences”, and that is certainly true of Marx’s theory. The best way to read my book is to have Heinrich’s book and Volume 1 of Capital close at hand.”
MR: How would you summarise the main conclusions of your book?
FM: “The main conclusions of my book are the following:
1. The subject of analysis of Chapter 1 is the commodity, not a separate, isolated commodity, but a representative commodity, a commodity that represents all commodities and the properties that all commodities have in common (use-value and exchange-value). In the Preface to the 1st edition, Marx described the commodity as the “elementary form” or the “cell form” of capitalist production. So Marx analyses the properties of a representative commodity similar to the way cellular biology analyses the properties of a representative cell. It’s like putting a commodity under a microscope and analysing its main properties.
Marx’s representative commodity in Chapter 1 is assumed to have been produced, but not yet exchanged. This is crucial for the critique of Heinrich’s interpretation. According to Heinrich, the subject of analysis of Chapter 1 is not the properties of a representative commodity, but instead is what he calls an “exchange relation” between two commodities, which he argues is the end result of two actual exchanges between the two commodities and money on the market.
2. The value of commodities is derived in Section 1 of Chapter 1 from the property of the exchange-value of the representative commodity (i.e. from the property that each commodity is equal to all other commodities in definite proportions). And this general relation of equality between each commodity and all commodities requires a common property that is possessed by all commodities and that determines the proportions in which different commodities are equal.
Marx argued that this common property of all commodities that determines their exchange-values is the objectified abstract human labour contained in commodities. And this is the result of the abstract human labour expended in production to produce the commodities.
According to Heinrich, on the other hand, the value of commodities is not derived from a relation of equality between all commodities, but instead is derived from an analysis of an “exchange relation” between two commodities, which he argues presupposes actual exchanges of the two commodities with money on the market.
3. The magnitude of the value of each commodity is “exclusively determined” (p. 129) by the quantity of socially necessary labour-time expended in production to produce each commodity. Heinrich argues, on the other hand, that the magnitude of value of a commodity depends in part on the relation between supply and demand for the commodity on the market. This is the best-known assumption of the value-form interpretation of Marx’s theory of value.
4. The labour that produces commodities has a dual character in production: both concrete labour and abstract labour are characteristics of the same labour process in production. Section 2 of Chapter 1 in particular presents very strong textual evidence to support this interpretation of the dual character in production of labour that produces commodities.
Weaving and tailoring are Marx’s two examples in Section 2. The labour process of weaving produces the use-value of linen, its dual character also being abstract human labour that produces the value of the linen. The same dual character is true of the labour process of tailoring (and all other particular labour activities). The values of the linen and the coat are compared by comparing the labour-time required to produce each one of them and nothing is said in this about exchange in this section.
Heinrich argues, on the other hand, that labour in production is only concrete labour and is not yet abstract labour. Abstract labour comes to exist only in exchange, and thus the dual character of the labour that produces commodities comes to exist only in exchange. According to Heinrich’s interpretation, tailoring and weaving (and any other labour process) possess only a single character in production, not a dual character. This interpretation is clearly contradicted by Section 2.”
MR: Please say more about Heinrich’s interpretation of “exchange relation”. That seems to be a central concept in Heinrich’s interpretation.
FM: “Heinrich’s concept of “exchange relation” is completely original with him. No one else puts so much emphasis on this term and defines it the way he does. And it is a new concept in his interpretation; it was not included in his 2012 book Introduction to Marx’s Capital. And unfortunately, he does not explain this very well in this book, especially for such a fundamental concept. There is nothing in his Introduction about this concept; there are only 1½ pages in an appendix in the back of the book on the abstractions that result in this concept (which he doesn’t refer to once in the rest of the book) and 1½ pages in his first discussion of this concept on pp. 53-54. And from then on, he just presumes his interpretation of exchange relation and applies it to different passages in Marx’s text.
I am pretty sure that most readers of Marx (especially beginning readers) will not understand the meaning and significance of Heinrich’s concept of exchange relation in his interpretation. A young Marx scholar from Australia wrote a 2000-word review of Heinrich’s book for Marx and Philosophy and she didn’t mention the concept of exchange relation at all. I myself had to work pretty hard to understand it because it is so poorly presented.
Heinrich defines exchange relation as an exchange between two commodities. To take one of his examples that is borrowed from Marx:
1 quarter of wheat is exchanged for x boot-polish.
Heinrich comments that this definition seems like direct barter exchange between the two commodities, but he states that this is not so, because direct barter seldom actually happens in capitalism. Instead, Heinrich interprets the exchange relation between two commodities as the end result of two actual acts of exchange between the two commodities and money on the market. Thus…
1 qtr. of wheat is sold for 10 shillings and 10 shillings is used to purchase x book-polish
The important point is that Heinrich’s concept of exchange relation between two commodities presupposes actual exchanges between these two commodities and money on the market. Heinrich does not clearly specify whether these acts of exchange that are presupposed in his interpretation of the exchange relation are assumed to be actual acts of exchange on the market. However, they must be actual acts of exchange in order to be consistent with Heinrich’s general value-form interpretation, according to which commodities possess value only if they have been actually exchanged on the market.
Before actual exchange, according the Heinrich’s interpretation, commodities do not possess value (indeed, products are not even commodities) before exchange. Products of labour become commodities and commodities come to possess value only as a result of actual exchanges on the market. Therefore, since the commodities that Marx analyses in Section 1 (e.g. wheat and boot-polish) are assumed to possess value, in order to be consistent with Heinrich’s general value-form interpretation, he must also assume that these commodities have been actually sold and bought on the market. If the commodities have not been actually exchanged on the market, then these commodities would not possess value, according to Heinrich’s general value-form interpretation.
However, there is absolutely no textual evidence in any of Marx’s several drafts of Chapter 1 to support Heinrich’s idiosyncratic interpretation of the exchange relation between two commodities – that it presupposes actual acts of exchange between these two commodities and money on the market. This interpretation is Heinrich’s invention. He does not cite any other authors with a similar interpretation of exchange relation, because there are none. And the exchange relation is the most important concept in Heinrich’s interpretation of Chapter 1. If his fundamental concept of exchange relation is a misinterpretation of Marx’s theory, then the rest of Heinrich’s interpretation of Chapter 1 is a misinterpretation and is unacceptable.
I think it is clear that the subject of analysis of Chapter 1 is the commodity, a representative commodity that is used to analyse the properties that all commodities have in common – use-value and value. Chapter 1 is not about exchange at all. The commodity that is analysed in Chapter 1 has been produced, but not yet exchanged. Exchange is not considered until Chapter 2 (“The Process of Exchange”).
In recent weeks, while preparing for the HM conference and for this interview, I have come to realise more clearly that there is a fundamental contradiction in what Heinrich is trying to accomplish in his recent book. In his previous works, he has presented (many times and all over the world) a strong value-form interpretation of Marx’s theory of value, according to which the value of a commodity exists only as a result of an actual exchange on the market. Before exchange, a commodity does not possess value (it only possesses use-value). For the textual evidence to support this interpretation, he has used a handful of key passages that are taken from various texts in isolation and out of context. As we know, one can always find passages that seem to support almost any interpretation of Marx’s theory. And Heinrich is very good at this quotation game.
However, his most recent book is different; it is an attempt to interpret the first seven chapters of Volume 1, especially Chapter 1, as a value-form theory – and that Marx was the original value-theorist! Heinrich goes from page to page in Chapter 1 and consistently tries to interpret key passages in a value-form way. This is a very difficult task because there are so many passages in these chapters, especially Chapter 1, that contradict a value-form interpretation. Indeed, in my view, Heinrich’s task is an impossible task. My book follows his detailed commentaries point by point and exposes the errors in his value-form interpretation.”
MR: What was the main disagreement between you and Heinrich in your book launch at the recent Historical Materialism conference?
FM: “Not surprisingly, the main disagreement in the session was over the meaning of exchange relation in two paragraphs in Section 1. He argued that I misinterpreted Marx’s concept of exchange relation, not as an act of exchange between two commodities, but as a relation of equality between two commodities, and that I just substituted my meaning of exchange relation for Marx’s meaning in the two passages. And he argued that these two passages are proof that that Section 1 analyses individual commodities as part of an exchange relation.
But that is not true. I did not just substitute my meaning of exchange relation for Marx’s meaning in these paragraphs. Rather, I argued that the exchange relation in these paragraphs is a synonym for exchange-value. The exchange-value of each commodity is defined in the preceding paragraphs in Section 1 as the property of each commodity that is equal to all other commodities in definite proportions that are mutually consistent. That implies that all commodities possess a common property that determines the proportions in which different commodities are equal. Therefore, the exchange relation between two commodities in these paragraphs is also a relation of equality between two commodities, which implies the necessity of a common property possessed by each one of them.
Instead I argued that Heinrich is the one who misinterprets Marx’s concept of exchange relation with his strange definition as the end result of actual exchanges between the two commodities and money on the market,. There is absolutely no textual evidence to support this interpretation of actual market exchanges presupposed in Chapter 1. My interpretation of exchange relation as a relation of equality between commodities is much more reasonable and plausible than Heinrich’s complicated and idiosyncratic interpretation of the end result of actual exchanges between commodities and money on the market. “
MR: Are there other points that you would like to emphasise?
“I also want to mention Heinrich’s unusual interpretation of the word “common” in Marx’s derivation of value in Section 1 – that value is the common property of commodities that determines their exchange-values – because it is an important point in his interpretation that he has emphasised in all his writings, including in the book I am criticising.
Take the concluding paragraph of Marx’s derivation of value on p. 128: “All these things now tell us is that human labour-power is expended to produce them, human labour is accumulated in them. As crystals of this social substance, which is common to them all, they are values – commodity values. ” I argue that Marx’s meaning of “common to them all” in this passage is the usual meaning of “common” , namely that the same property is possessed by each individual commodity by itself, on its own.
Heinrich argues, on the other hand, that the meaning of “common” in this passage and in other passages is ambiguous – i.e. it could also mean a property that each individual commodity possesses, not by itself, but only together with another commodity in an exchange relation (exchange relation again!), and this is what Marx means here and elsewhere when he says that value is a common property of commodities. According to Heinrich, outside of an exchange relation, an individual commodity does not possess the ‘common property’ of value.
However, I don’t think Marx’s meaning of “common to them all” is ambiguous at all; Marx states that the common property of commodities is the human labour accumulated in them as a result of the labour expended to produce them (each one of them), prior to and independent of its exchange with another commodity. Nothing is said about exchange and exchange relation in this key concluding passage.
Three paragraphs before the passage just quoted, Marx presents a geometric example of area as a common property of different geometric figures. Area is a ‘”common property” of each figure, independent of its comparison to the area of another figure. The similarity between the area of geometric figures and the value of commodities is that, in both cases, the objects possess a common property independently of a quantitative comparison between them. Heinrich does not comment on this illuminating geometric example which contradicts his interpretation that the common element of value is created in the exchange itself. Clearly, the area of geometric figures is not created by a comparison of their areas.
One other point I want to mention. In working on this book, I noticed for the first time that Marx repeatedly used the phrase the “own value” of an individual commodity in Section 3 of Chapter 1 (seven times); for example, the “own value” of 10 yards of linen or the “own value” of a coat (see pp. 100 and 104-06 of my book). The own values of the linen and the coat are compared and equated, but nothing is said about exchange. These passages are clear and unambiguous textual evidence that each individual commodity possess its “own value”, independent of acts of exchange between commodities and money on the market. This directly contradicts Heinrich’s interpretation that an individual commodity possesses value only if it has been actually exchanged with money on the market. Heinrich quotes only 3 of these 7 ‘own value’ passages and presents little or no commentary on any of them. Twice he quotes the adjoining sentences, but not these revealing sentences.”
MR: What difference does this debate over the details of Marx’s value theory make in the bigger picture?
FM: “I think it is important to get the details of Marx’s theory of value straight, because it is the foundation for Marx’s theory of surplus-value as a theory of exploitation in Volume 1. And the theory of value is also the foundation of his theory of the falling rate of profit and crises that you have presented so well in your own work. In the Preface to the 1st edition of Capital, Marx stated: “To the superficial observer, the analysis of these forms [the commodity-form of the product of labor and the value-form of the commodity] seems to turn upon minutiae. It does in fact deal with minutiae, but so does microscopic anatomy.” Microscopic anatomy is necessary for the understanding of organic bodies, and similarly Marx’s theory of value is necessary for an understanding of the capitalist economy.
My book is specifically about Heinrich’s book, but it applies to the value-form interpretation of Marx’s theory in general. And my conclusion is that Marx’s theory of value cannot be reasonably be interpreted as a value-form theory. I think that is an important conclusion. We should move on from the value-form interpretation of Marx’s theory.
I worry about Heinrich’s influence on the understanding of Marx’s theory. His interpretation is very influential in Germany and elsewhere in the world, especially among young people. And I am convinced that it is a fundamental misinterpretation of Marx’s theory. So I think it is important to engage with his popular but mistaken interpretation. I hope that my book will be read especially by young people and it will encourage them to make a deeper study of Marx’s theory of value in Chapter 1 of Capital and beyond.
Let me add my pennyworth to what I think are the wider issues arising from this debate between Heinrich and Moseley (MR).
Marx put it this way: “As the commodity is immediate unity of use value and exchange-value, so the process of production, which is the process of the production of a commodity, is the immediate unity of process of labour and process of valorisation.” So, for Marx, it’s the process of production, the exertion of human labour that creates value. As Marx once put it: “Every child knows that any nation that stopped working, not for a year, but let us say, just for a few weeks, would perish. And every child knows, too, that the amounts of products corresponding to the differing amounts of needs demand differing and quantitatively determined amounts of society’s aggregate labour.”
The value-form approach of Heinrich is implicitly a simultaneist approach. Its characteristic feature is the belief that value comes into existence only at the moment of realisation on the market. Consequently, production and realisation are collapsed into each other and time is wiped out. But the process of production and circulation (exchange) is not simultaneous, but temporal. At the start of production there are inputs of raw materials and fixed assets from a previous production period. So there is already (constant or ‘dead labour’) value in the commodity before exchange. Then production takes place to make a new commodity using human labour. This creates ‘potential’ new value, which is realised later (in a modified quantity) when sold.
But why does all this matter? For me, Marx’s value theory is about showing the fundamental contradiction in capitalism between production for social need (use-value) and production for profit (exchange value). Under capitalism, units of production are commodities that have a dual character which epitomises this contradiction.
For Marx, money is a representative of value, not value itself. If we think that value is only created when selling the commodity for money and not before, then the labour theory of value is devalued into a theory of money. Then, as mainstream neoclassical economics argues, we don’t need a labour theory of value at all because the money price will do. Money prices are what mainstream economics looks at, ignoring or dismissing value by human labour power – and therefore the exploitation of labour by capital for profit. It removes the basic contradiction of capitalist production.
Also, it leads to a failure to understand the causes of crises in capitalist production. It is no accident that Heinrich dismisses Marx law of profitability as illogical, ‘indeterminate’ and irrelevant to explaining crises and instead looks to excessive credit and financial instability as the causes. Heinrich even claims that in later years, Marx dropped his law of profitability although the evidence for that is non-existent.
If profits (surplus value) from human labour disappear from any analysis to be replaced by money, then we no longer have a Marxist theory of crisis or any theory of crisis at all.
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