From Das Capital to DOS Capital: A Look at Recent Theories of Value (page 1 of 3)
By Jerry Harris, Chicago/Third Wave Study Group

A number of schools of thought have recently developed which place society in a new age. One common thread is the current mania for "post" isms, i.e., post-industrialist, post-modernist, post-structuralist, post-Fordist, even Peter Drucker's post-capitalist. But these only say what the emerging society isn't, not what it is. It's as if the last two hundred years had been labeled post-feudalism, rather than industrial capitalism.

But what the new schools all recognize is that a revolutionary transformation has taken place. What has yet to be determined is whether society is still in a capitalist stage of development, or whether it has entered an era for which we have no proper descriptive name.

What is crucial in naming a society? For Marx, identifying the economic base was key to understanding the stage of development. Central to his theory of history was his analysis which uncovered capitalism's laws of motion, and how they were qualitatively different from feudal and ancient society. This analysis hinged on his theory of value and accumulation.

Alvin and Heidi Toffler's historic perspective is very similar to Marx's. Their three waves theory also keys in on the economic base as the most fundamental way to identify human development and different historic eras. For the Tofflers, agrarian society, industrial society, and today's information society are the three waves of civilization.

For both Marx and the Tofflers, when the economic base changes, so does the rest of society. The key to this transformation is how wealth is created. If today is a historic period of revolutionary change then a new theory of value, labor and accumulation is needed. This article will review how Marx treated this question, and then discuss fundamental shifts in the third wave economy.

Marx's Theory of Value

For Marx, a key difference between feudal-agrarian and industrial production was the commodification of labor and products. Agrarian labor mainly consumed what it produced, and bartered for what it needed. Markets, usually in the form of the medieval fair, were a secondary adjunct to the local economy. They were not driven by competition, but a simpler mode of exchange which sought to buy low and sell high. Marx summed-up agrarian commercial exchange as Money for Commodities in exchange for greater Money, or M -> C -> M1. Small merchant production was explained as Commodities in exchange for Money, for which you could purchase greater amounts of Commodities, or C -> M -> C1.

But these formulas changed qualitatively with industrial capitalism. Marx explained it as the following:

M -> C -> (mp) -> P -> C1 -> M1.
(lp)

That is, Money in exchange for a Commodity to which is added the means of production and labor power transforms the Commodity through Production into a New Commodity with greater value than the first, which then is sold for greater Money.

Therefore, capitalism places money as both the initiator and goal of production. The commodity and its use are no longer the purpose of production. As Marx explained this transformation:
"The development of commerce and commercial capital brings about everywhere an orientation of production towards exchange values, increases its volume, multiplies and universalizes it, develops money into world money. Commerce therefore has everywhere a dissolving influence on the existing organization of production which, in all its different forms, is primarily oriented towards use value." (Capital III, VA III/pp. 362 4)

The Tofflers also pay close attention to this difference between agrarian and industrial society. They explain it as a split between producer and consumer. In agrarian society the producer mainly consumed his or her own product, so production was based on use value. But industrial society splits this relationship, making everyone dependent on the market to fill their needs. A fundamental shift occurs whereby society becomes organized around exchange value. Everything is for sale, including labor itself.

Capitalism's focus on profit takes place within a competitive market. Competition for greater and greater market share drives the system to accumulate and expand. But unrestricted expansion also leads to destruction. Here lay its core contradiction, and the duality of the system.

The competitive drive causes capitalism to seek new markets, develop new products, and create new technologies, which lower costs and speed production. Technology plays a key role in creating surplus value. Greater profits are not generated simply by lowering wages, but more importantly through the higher productivity of advanced technology. This is the basis for the tremendous creative impulse inherent in the system.

But Marx maintained that value is created only through human labor. The addition of labor, whether intellectual or physical, applied to the original commodity in the process of production, is what makes it possible for the capitalist to sell the new product for more money. Therefore the capitalist must always strive to lower the cost of labor through economic, social and technological means to increase his profits. The greater his accumulation of capital the better he is able to compete. Therefore labor can never possess everything it produces because that undermines profit maximization. What follows is the crisis of overproduction, factory closures, unemployment, and all the social ills that are familiar. In effect, this is the destructive side of capitalism.

This contradiction forms specific social property relations and a mode of exploitation in which workers are reduced to commodities, bought and sold on the labor market. The labor power bought by the capitalist has no value unless applied to the means of production, which is also the property of the capitalist. This social form of production trapped inside private property ownership is the basis for the alienation and exploitation of labor. Therefore the true potential of the productive system can only be liberated when labor is freed from the domination of capital, and the full creative force of production is no longer hindered by capital's need for accumulation. If labor received the value of what it creates, poverty would be eliminated.

Work Without Workers

But what if the worker is eliminated from production? The capitalists, who are always at the cutting edge of economic change, have begun to consider this question. The cover of Fortune magazine in October 1994 declared: "Your company's most valuable asset, Intellectual Capital, new ways to build it and measure it." More >>