Value and the Demise of Capitalism: Reconciling Postone and Kurz

Posted on the blog, principiadialectica, is a question to Robert Kurz about his differences with Postone on value and the current crisis that is bugging the hell out of me. In an interview conducted in 2010, Kurz is asked to explain his differences with Postone regarding the impact improvement in the productive power of labor has on value:

“For you, with the gains of productivity, capital loses its substance (abstract work) and, with the third industrial revolution, it loses it absolutely. For Moishe Postone, on the contrary, the gains of productivity increase value, but provisionally. According to him, as soon as the gain of productivity has generalized itself, the growth of value is cancelled, the basic unity of abstract work (the hour of work) having been brought back to its initial level. Thus, for you, value is collapsing, whilst, for Postone, value is growing continually then comes back to its starting point. Hence the question: doesn’t that break down the plausibility of the critique of value? Or should we see in this a point undecided at the moment?”

In Kurz’s argument, the gains of productivity gradually result in capital losing its value content; while, for Postone, the gains in productivity result in the expansion of prospective value until the social relation reaches its endpoint. Although both writers end up at the same point — capital is abolished by its internal laws — the description of the process differs in the perspective of the two writers.

The question posed in the interview is which of these two theoretical approaches is valid for the period leading to the demise of capitalism.

If you think about it the same question of perspective can be posed regarding Marx’s formulation of the organic composition of capital. The organic composition of capital describes a relation between living labor (v) and dead labor in the form of constant capital (c). At some point Marx had to ask himself what was the proper way to pose this relationship. Is the ratio of labor to constant capital falling (v:c), or is the ratio of constant capital to labor rising (c:v)? Marx formulated it as the latter — and I assume he did this for a reason.

In bourgeois political economy the relation between living labor and dead labor is posed as v:c, which is to say the productivity of labor is measured in terms of the quantity of its output. Does Marx’s choice in how this relationship is posed in his own formulation of the organic composition of capital break through fetishistic ideology of bourgeois political economy? Folks like Chris Arthur and Postone can probably answer this much better than I, but I think it deserves attention. I think, although I am prepared to be wrong, that Marx’s organic composition of capital is the answer to this bourgeois formulation in two ways.

First, in his formulation, the ratio c:v suggests constant capital is being measured in terms of variable capital (labor). This first point is important because ratios of this type are considered unit-less unless they relate quantities that have the same dimension. Trying to measure labor in terms of its output requires us to measure abstract labor in the form of a jumbled mass of qualitatively different use values that cannot be compared to one another. Marx’s formulation, by contrast, is measuring constant capital in terms of units of homogenous abstract labor, as we would expect from his method. Second, Marx moves the relation from a focus on output to a focus on the material basis or prerequisites of productive activity. In this instance, Marx sets current activity in the context of past activity, giving us an historical perspective, as we also expect.

Empirically, however, things appear otherwise: while the organic relation, c:v, represents the actual historical progress of abstract homogenous labor, the bourgeois formulation, v:c, appears the more relevant relation, which it is to the capitalist. My argument here is not meant to suggest v:c (labor productivity) is invalid for purposes of analysis; in fact it is essential. We are not only concerned with how things are, but also how they appear to us in their movement. A good theory does not simply explain how things are under the capitalist mode of production, it also has to explain why things appear otherwise — why, for instance, does overwork express itself as too little work?

The antithesis of value after capitalist breakdown

At the heart of the dispute between Postone and Kurz is the very category of value itself and the problem of capitalist production after its breakdown in the 1930s. Postone says in his book, Time, Labor and Social Domination (pdf), that labor time in late capitalism is structured in such a way that what appears socially necessary for this mode of production is superfluous for the social relations of the new society. Which is to say, what constitutes value — socially necessary labor time — must be situated within the mode of production to which it belongs and cannot be treated as a generic category applying also to communism. In terms of the historical trajectory of social labor, socially necessary labor time is only necessary insofar as we a speaking of the capitalist mode of production.

There is, in addition to socially necessary labor time in its two forms — value and surplus value — a growing quantity of labor time that is neither. This is labor time that Kurz refers to in his essay, “The Apotheosis of Money” as value that cannot reenter capitalist reproduction. Both writers argue this mass of labor time takes the form of workers who have been rendered superfluous by the development of the productive forces bound up with capital. This includes not only the mass of workers who are unable to find employment, it also includes most workers who are actually holding  jobs that produce no value (for example, soldiers, human resources, etc.), and it includes a further mass of workers who are unproductive in the capitalist sense, i.e., workers who produce commodities that are not consumed productively.

Kurz explains that the employment of these workers is determined by the needs of capital for a third sector of capitalistically unproductive consumption. This, I guess, has been referred to as “third persons”, although they are actually proletarians. The argument of both writers suggest this sector of unproductive consumption must increase along with the increase in the organic composition of capital. And, so far as I can see, there is no actual dispute on this issue between them.

The problem here is not to be found in the arguments of the two writers, but in the concept of value itself as a category of analysis. Value is nothing more than socially necessary labor time, but this socially necessary labor time has now assumed antithetical forms. In the first form, this socially necessary labor time appears as the labor time required for the production of commodities. This form of value arises directly from the level of development of the productive forces themselves and the organic relation between constant and variable capital. It can be characterized by the constantly growing quantity of capital necessary to set in motion a constantly diminishing quantity of labor.

But there is also a form of socially necessary labor time (value) that is required to maintain the existing relations of production — as both writers explain. While socially necessary labor time in the first form constantly diminishes, socially necessary labor time in the latter form must constantly increase. Which is to say, despite (and on account of) the increase in the productivity of labor power — which constantly diminishes the labor time required by society to satisfy its needs — the total labor time of society necessary to maintain capitalist relations of production must constantly increase.

This latter form of socially necessary labor time (value) is only socially necessary with regards to the existing relations of production, but is actually superfluous when considered from the perspective of society passing to a higher mode of production. The force driving the growth of this superfluous labor is already given in the Marx’s analysis of expansionary character of the capitalist mode of production and its incessant demand for new markets.

However, while this labor is only necessary in relation to the capitalist mode of production, but really superfluous from the standpoint of a future communist society, it is not correct to say this form of socially necessary labor time is somehow arbitrary or not of true theoretical significance. The division of value into these antithetical forms does not mean the two rest idly side by side, they each also influence the development of the other. The impact of an increase in the productivity of labor power on value in its first form, as Postone argued, requires the constant expansion of the total labor time of society. While the development of value in its second form, as Kurz argued, renders the consumption of value in the first form increasingly only apparently productive. Increasingly, the productive employment of labor itself serves only to expand the unproductive consumption of newly created values. Once value assumes these antithetical forms, the demise of value, of socially necessary labor time, is just a matter of time.

Value as the dark matter of political-economy

Now the problem with demonstrating this beyond mere theoretical assertion is that value, in Marx’s theory, cannot be directly apprehended. Value is the dark matter of political-economy, and as such can only be inferred from the behavior of things we can observe, like prices. The price of a commodity, however, is not its value, but only the expression of the value of the commodity in the material of money. Moreover, the price of an object may not have any relation whatsoever to its value. An example of this can be seen in the recent announcement by Russia of the discovery of an asteroid crater several decades ago estimated to contain trillions of carats of super hard industrial grade diamonds. Although no human labor has been expended on this cache, it is still estimated to have a market value in the range of several quadrillion dollars — an entirely ideal valuation, but one that enters Russia’s ledger as an asset nonetheless. On the other hand, a commodity can end up unsold in the market, i.e., it can have a large quantity of actual value but no price — as GM, whose car sales in Europe fell this past month, discovered to its dismay.

In the case of value, Kurz’s argument on unproductive labor holds, I think: we cannot measure value even indirectly from the prices of individual commodities in the market, but only by looking at prices as a whole. Only at the level of the entire world market, can we assume the sum of prices must equal the sum of all socially necessary labor times. But this is not all: remember we are not talking about specific form of labor times — that can be neatly divided into productive and unproductive expenditures of human labor — but a single mass of abstract homogenous social labor time. Postone’s and Kurz’s argument suggests, therefore, that there is now two distinct quantities of socially necessary labor time for one and the same expenditure of abstract homogenous labor time. The first measure expresses the expenditure of labor time determined by the development of the productive forces; the second expresses this same expenditure of labor time in terms of necessities arising from existing relations of production — the latter being a prospective quantity of value. The arguments of Postone and Kurz, therefore, imply there can no longer be a single measure of socially necessary labor time and thus there can no longer be a single expression of abstract homogenous labor that is now unequal within itself and, moreover, growing increasingly more unequal.

Two irreconcilable expressions of value

Since money, in Marx’s theory, is the value form that expresses the value of a commodity (i.e., socially necessary labor time required to produce it), this would seem to imply money itself must assume two different and irreconcilable forms. The first form must express socially necessary labor time in the strict sense of the term; an expression of the productive forces of society. This form cannot be anything other than a commodity money, which here I assume to be gold in keeping with Marx. (As always, this does not imply gold is the only commodity that can serve this role — but all the other commodities suck by comparison.)

The second form must express socially necessary labor time whose expenditures is required to maintain the existing relations of production, i.e., the total labor time of society. This form of socially necessary labor time is, as Postone argues, entirely prospective, i.e., it reflects value as it must appear if the existing relations of production are to be maintained. Kurz also includes this prospective sense in his argument, but from a different angle, as the increasing dependency of social production on credit money and the accumulation of fictional claims to the future profits of productively employed capital.

Since this form of money is “prospective exchange value” or “fictitious exchange value”, it can be represented by a token of money. But to say it can be replaced by a token of money, however, is not to say this money form is only symbolic; in a crisis this token must be able to become money in the strict sense of that term, i.e., commodity money, or gold. If this cannot happen, or only happens in part, the unconverted token are worthless. As Kurz explains, the quantity of tokens in circulation that correspond to the notion of socially necessary labor time consistent with maintaining existing relations of production, since they are entirely fictitious,  necessarily implies the constant expansion of the mode of production and the consequent expansion of unproductive consumption of value. It requires, in other words, the incessant expansion of the quantity of token (fictitious) money in circulation in relation to the quantity of commodity money that would serve if the existing relations of production were succeeded by a higher stage of these relations.

The expansion of the quantity of token in circulation, therefore, is not arbitrarily determined by political diktat, but by requirements of the existing relations of production. The relation between the two money forms is not arbitrary: in turn as prices measured in the commodity money fall, prices measured in valueless tokens of money must increase, or, what is the same thing, the so-called purchasing power of the tokens must depreciate. This is true with regards to the prices of specific commodities, but, more importantly, with regards to the sum of prices in the two forms.

The data provided by the bourgeois state that Marxists routinely rely on for analysis uncritically, therefore, is not satisfactory in this undigested form, but must be further subjected to analysis employing Marx’s strict definition of the value form. The question posed to Kurz, in fact, was somewhat misleading, since the interviewer did not realize the hidden connection between Kurz’s and Postone’s remarkable arguments. The alleged differences between the two writers only appears to be differences because of the irreconcilable split within value itself.

This split in what constitutes socially necessary labor time into irreconcilable forms prefigures the collapse of commodity production. The progress of commodity production in the direction of its collapse can be visualized in the empirical data and is not subject to dispute. It exists, first, in the growing mass of unemployed who are now utterly cut off even from unproductive employment along with a growing mass for whom unproductive employment is their only opportunity. Second, in the growing mass of idled capital seeking “safe harbor” in state issued debt instruments, which must be fed constantly with new state issued debt. Finally, it can be visualized in the ever increasing divergence in nominal prices of commodities as measured in fascist state issued tokens and these same prices measured in terms of physical quantities of gold.

Understanding why Postone and Kurz do not in fact disagree on the issue of value has significance for our understanding of the movement of society. The difference between the two is only a difference of perspective: Postone is viewing value as embodiment of a set of social relations, while Kurz is viewing value as the material substance of abstract labor. The problem here is that value in these two now antithetical forms is becoming increasingly separated and at odds, as we might expect if commodity production is indeed approaching its demise.

The socially necessary labor time required to produce commodities no longer corresponds to the socially necessary labor time required to maintain the existing capitalist relations of production. The phenomenal expression of this antagonism is the growing quantity of fictional claims to the future profits of productive employed capital in all forms that is now necessary just to maintain existing levels of profitability. Sooner or later no increase in the quantity of debt will have any effect in maintaining or increasing profits, and the tipping point will be reached — Kurz’s devaluation shock. The trigger to Kurz’s predicted event, may have already happened with Lehman, which forced the extraordinary (and, even by historical standards of fascist state economic policy, insane) measures by the Federal Reserve that we have seen in this crisis.

Apocalypse Now?

So, back to the alleged differences between Postone and Kurz. On the one hand, I think it is clear that the alleged difference consists of no more than Postone’s and Kurz’s different perspective on the growing contradiction within socially necessary labor time itself.  On the other hand, it also results from an alleged different assessment of the result of the present crisis. Postone thinks this division of socially necessary labor time into antithetical forms does not, of itself, leads to the collapse of capitalism:

“Against the analyses of Robert Kurz, I don’t believe that these developments will necessarily lead to the collapse of capitalism, even if the dynamic of expansion stalls. The current crisis-ridden developments could instead lead to the creation of highly militarized states, in which a large number of people have become superfluous and are kept in check by authoritarian-repressive measures. That is not a very pretty scenario, but capitalism could survive. So I don’t believe in an inevitable collapse, unless what is meant is the regression into relations of capitalist barbarism.”

Kurz, it is alleged, felt this process must necessarily lead to this collapse. Although Postone’s conclusion is generally taken as a point of difference with Kurz, in fact nothing could be further from the truth. This is how Kurz explained his notion of collapse in December:

“One has to distinguish between a crisis or even the collapse of capitalism, and the transcendence of capitalism. Those are two different kettles of fish. The actual emancipatory transcendence of capitalism depends upon a critical consciousness, which can either develop or not. That is independent of the crisis. Capitalism is an imposition which should always be criticized. (My emphasis) The crisis, on the other hand, is purely objective, not a result of criticism, but rather of a systemic logic independent of the consciousness of social agents. However, the conditions of critique can intensify and change, as can practical critique through crisis developments. A collapse of the global financial system is actually overdue. In a manner that is unprecedented in the history of capitalism, the future creation of surplus-value is already mortgaged. Capitalism has already used up its future to such an extent, that a recovery is simply no longer possible. There is now, step by step, a process in which this unreal, anticipated value creation is realized as a crisis development. What happens when a collapse occurs? It isn’t just a collapse of the financial system. Rather, what is pre-financed here for a miserably long time is actual reproduction. Everything is indebted.”

In the above quote, Kurz took pains to distinguish between what he defines as the objective collapse of capitalism and the supersession of the mode of production by communist society. This latter depends on the development of what he calls a “critical consciousness’ within society. If this consciousness does not develop, Kurz warns it must end in Postone’s barbarism:

But there is no guarantee that this supersession will be successful. The leap may not occur; it could come too late, it could fall short, it could miss its target. Human beings could also destroy themselves, and the system of commodity production and the capitalist relation have at their disposal all the means required to achieve that end and are developing all tendencies in that direction. The so-called conservatives, whose ranks are increasingly filled by old social critics (attached to old patterns of conflict), are today conservatives precisely in relation to the absurd and self-destructive character of the society of the total market, and for that reason are no longer “conservators”, but sick priests of annihilation. Maybe this annihilation will not necessarily be as absolute and as physical as the atomic apocalypticists imagined, although that version should not be entirely ruled out. But it would be yet more cruel and perverse to pass from the system of commodity production to a second barbarism, as one can already observe in many phenomena.

While it is generally assumed Kurz differs from Postone in that he believes in “the collapse of capitalism” while Postone does not, in fact both hold to the idea that the present crisis does not necessarily give way to a communist society. Both writers actually agree that capitalism may be replaced by some form of state capitalist militarized barbarism. Where Kurz differs from Postone is that he considers this a collapse of capitalism, while Postone suggests he would qualify his argument to include Kurz’s result.

This scenario shared in common by the two writers, I think, is just a warmed over version of the survivalist myth of the collapse of civilization I referred to in an earlier post. The idea behind Postone’s and Kurz’s post capitalism apocalypse is predicated on the idea that communism results from what Kurz calls “critical consciousness”, not the existence of a mass of superfluous workers utterly cut off from labor, who can never reconnect to the regime of value producing labor.

The collapse and supersession of capitalism

Kurz makes this argument although his own analysis shows this mass of superfluous persons already exists right now, not just in the form of a growing mass of workers cut off from all employment, but also another, far larger, mass of workers whose existence is masked in the hidden form of unproductive labor. When, in the course of this crisis, the fascist state proves unable to deliver on the “promise” of full employment, Kurz offered no guidance for how communists should address this failure.

Both writers make the surprising argument that the necessary results of capitalist development can be held at bay by state force alone. And they both assume the state apparatus is autonomous from the development of an otherwise totalizing process of capitalist production. In Kurz’s argument, the state can survive the demise of the value form; whereas, Postone seems to argue state force alone is capable of maintaining the social relations bound up with the value form. In either case, the state can survive the abolition of the substance of value.

Can the state machinery survive capitalism? I think this is the question raised by Kurz’s and Postone’s difference. If Kurz and Postone are correct in their post capitalist scenarios, Bakunin and Duhring were essentially correct in their arguments against Marx and Engels. If capitalism is totalizing in the full sense of that term, there is, in reality, no real dividing line between politics and economics. To put it another way, is it possible to argue GM’s executive management committee can survive in the absence of GM? What I think this agreement between the two writers displays is a focus not on the historical prerequisites of human activity, but on the activity and its product — it is, in a phrase, a form of the value fetish itself, with the state as a self-moving construct.

What makes this all the more astonishing is that its solution requires only recognizing the logical implications of Kurz’s own analysis, which does not, as Postone and Kurz suggest, require “critical consciousness” at all; and it can be empirically derived from the impact crisis itself on the mass of society. If an ever growing mass of workers cannot find work within the existing social workday, that social work day need only be shortened.

This is not only the necessary solution to this crisis, it is — more important for our interest — the only necessary precondition required for communism itself — free disposable time won by the mass of society from existing capitalist relations of production.

I think the failure of both Postone and Kurz to realize this stems from the long held belief among Marxists that the workers need to be told what their demands are. The workers are in the street demanding an end to austerity and unemployment, but somehow they do not “really” understand what they are fighting for. Thus, before they can gain their solution, communism, they must be theoretically developed enough to recognize that this solution is what they are striving for.

This contradicts Marx’s basic formulation of the relation between the productive forces and the relations of production under the capitalist mode of production. Although, as Marx showed, the capitalist class did not need to realize it was aimed at the bourgeois democratic republic, but achieved it anyway; the working class must, by contrast, admit it aims to end this state before it can do so.

Capitalism has already prepared the material basis for its own demise and its supersession by communism by having created a great mass of society already cutoff from all productive labor. All we have to do is wrest this material — our own disposable time — back from capital in order to realize the new society.