In April, 2013, Monthly Review published an essay, Crisis Theory, the Law of the Tendency of the Profit Rate to Fall, and Marx’s Studies in the 1870s, by the labor theorist, Michael Heinrich, asserting that “In Marx’s work, no final presentation of his theory of crisis can be found. Monthly Review praised the essay, stating:

It is now clear that Marx never ceased to develop his thinking on the phenomena of crises in capitalism, and never ceased to discard earlier formulations; for example, at the end of his life he was focused on questions of credit and crisis. Monthly Review rarely presents its readers with discussions of economic theory at a relatively high degree of abstraction; this, however, is such an occasion. We trust that the author’s exemplary clarity will permit ready access to readers with any degree of interest in Marx’s theory; for those who wish to become familiar with the conceptual outline of Marx’s work, we cannot do better than to recommend the author’s An Introduction to the Three Volumes of Karl Marx’s Capital

In that essay, Michael Heinrich states:

In the so-called “Fragment on Machines,” one finds an outline of a theory of capitalist collapse. With the increasing application of science and technology in the capitalist production process, “the immediate labour performed by man himself” is no longer important, but rather “the appropriation of his own general productive power,” which leads Marx to a sweeping conclusion: “As soon as labour in its immediate form has ceased to be the great source of wealth, labour time ceases and must cease to be its measure, and therefore exchange value [must cease to be the measure] of use value. The surplus labour of the masses has ceased to be the condition for the development of general wealth, just as the non-labour of the few has ceased to be the condition for the development of the general powers of the human head. As a result, production based upon exchange value collapses.”5 These lines have often been quoted, but without regard for how insufficiently secure the categorical foundations of the Grundrisse are. The distinction between concrete and abstract labor, which Marx refers to in Capital as “crucial to an understanding of political economy,” is not at all present in the Grundrisse.6 And in Capital, “labor in the immediate form” is also not the source of wealth. The sources of material wealth are concrete, useful labor and nature. The social substance of wealth or value in capitalism is abstract labor, whereby it does not matter whether this abstract labor can be traced back to labor-power expended in the process of production, or to the transfer of value of used means of production. If abstract labor remains the substance of value, then it is not clear why labor time can no longer be its intrinsic measure, and it’s not clear why “production based on exchange value” should necessarily collapse. When, for example, Hardt and Negri argue that labor is no longer the measure of value, they do not really refer to the value theory of Capital but to the unclear statements of the Grundrisse.7 Marx indirectly addresses this set of problems from the Grundrisse in the first volume of Capital, when dealing with the concept of relative surplus-value: there Marx makes fun of the notion that the determination of value by labor is called into question by the fact that in capitalist production, the point is to reduce the labor time required for the production of an individual commodity—and that was the argument upon which the theory of collapse in the Grundrisse was based.8

In fact, a closer examination of this statement will show Heinrich is engaged in a fundamental revision of Marx’s argument in Capital and the Grundrisse for the express purpose of removing from labor theory both the idea of a final collapse of capitalism based on the inner laws of the mode of production and his law of the tendency of the rate of profit to fall. This is serious piece of academic malpractice and should be condemned.

Let’s walk through how Marx begins his discussion of the capitalist mode of production in Section 1 of Chapter 1 of Capital. Volume 1 and then compare it to Heinrich’s presentation of the same argument.

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Marx begin with the assertion that wealth in a capitalist society “presents itself as ‘an immense accumulation of commodities'”. The commodity is something outside us that satisfies human wants — what these wants and how they are satisfied are not a concern. The physical properties of the commodity, the physical properties that satisfy human wants, has no existence apart from the commodity. The physical properties of the commodity are also independent of the amount of labor required to appropriate it as a useful object. The useful properties of a commodity become a reality only by use or consumption of the commodity. Finally, the useful properties of a thing constitute “the substance of all wealth”, irrespective of the social form of this wealth.

So, what do we now know about the commodity?

It satisfies a human want. It ability to satisfy a human want does not depend on the quantity of labor required to produce it. It becomes a useful object only through use or consumption. All wealth in any society is composed of this property of being useful.

This means, all wealth in any society — no matter the mode of production we consider, including the present one — satisfies human want, does not depend on the labor expended to produce it, and is useful only to the extent it is used or consumed.

What Marx has done here in the first four paragraphs of Capital is overthrow all present Marxist ideology. He has explained that wealth is useful objects that satisfy human needs, having no connection whatsoever to the labor time of society. There is, therefore, no connection whatsoever between the wealth of society and the labor time of society. He has, in other words, completely severed the concept of value (i.e., socially necessary labor time) from the concept of material wealth.

Next, Marx turns to the subject of value: material wealth is not simply useful, it is also the material depositories of exchange value. Marx begins with exchange value, not value itself. Since exchange value changes constantly, the idea that there is an exchange value inherent in commodities seems absurd. To explain why this might not be so, Marx discusses the relative value of commodities:

x quantity of one commodity = y quantity of another commodity = z quantity of a third commodity

As exchange values — but not as use values — each can be substituted for the others. Each commodity might satisfy a different human want, but as exchange values one is as good as the other. As use values the objects have nothing on common, but as exchange values they are identical. Their exchange values must be an expression of something contained in them but distinguishable from their capacity to satisfy human wants. This is important to Marx’s analysis: exchange value expresses something contained in a useful object — a commodity — that must be distinguished from the capacity of the commodity to satisfy a human want.

That the commodities are identical as exchange value, despite being different as use value, suggests to Marx that they share something in common. This something, he argues, can have nothing to do with the useful qualities of the commodities — that is, with the commodities as material wealth. Marx concludes this thing that makes them identical as exchange values does not contain an atom of use value (material wealth). This thing, says Marx, which they all share in common, and which must be distinguished from material wealth, is labor.

Labor, in other words, is not material wealth. This means, first of all, every argument over hours of labor raises the objection that a reduction in hours of labor must leave the working class poorer. However, Marx begins Capital with the explicit assumption that values “consequently do not contain an atom of use value”, i.e., not an atom of material wealth. As exchange value, labor is abstracted from all the qualities of use values, of material wealth, of objects that can satisfy human wants. Value is labor, but only insofar as this labor is not aimed at satisfying a particular human need and is abstracted from all qualities necessary for that satisfaction.

Marx calls this value, “human labour in the abstract.” It is, he argues, an “unsubstantial reality”, “a mere congelation of homogeneous human labour” and “labour power expended without regard to the mode of its expenditure”. All we can tell about the commodities from this value, is that human labor was expended to create them. When commodities are exchanged, their labor time expresses itself as something totally independent of their properties as material wealth. Exchange value is the only form in which the labor time of commodities can manifest itself (to us).

Marx then moves to discuss labor time separate from the form in which it becomes apparent to us. This labor is not any particular useful expenditures of labor, but labor in the abstract. How do we measure this expenditures of labor in the abstract? (Remember, Heinrich asserts this labor time in the abstract cannot be measured, but Marx set out to do just this.) The labor time must be measured by its duration — measured in weeks, days, hours. (So, it turns out, abstract homogenous labor can be measured and Heinrich is mistaken.)

Each unit of this abstract homogenous labor, identical in all aspects, has the character of the average labor power of society, and takes effect as such. Which is to say, it requires no more than needed on average 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.”

Marx reiterates this:

“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.”

Did I says Heinrich is mistaken in his assertion abstract labor cannot be measured? Okay, then let me reiterate it. Of course, one can take as much time as one wants to build a chair, but Marx is fairly clear: Only that labor time that is socially necessary for the production of chairs counts as value. This is not determined by the productivity of any particular carpenter or his skill level, but by

“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.”

“Socially necessary labor time”, in other words, set an upper limit on the duration of labor time that counts as value. This is a material limit imposed on the producers. It is not, a mental construct, although it gives rise to mental constructs. It is a material limit imposed on each producer by the activity of all the producers taken together. What counts as socially necessary labor time is subject to many influences: skills, science, organization, technology, physical conditions. The influences are such that any increase in labor time required to produce the commodity increases the value of the commodity. And any decrease in the labor time required to produce the commodity reduces its value. The socially necessary labor time of the commodity is correlated with its quantity, and inverse to the productiveness of labor.

This means, above all, that some objects can be material wealth, without being embodiments of value, i.e., embodiments of socially necessary labor time. Marx gives two examples: nature and the production of use value for the satisfaction of the needs of the producer. In order to produce value a producer must produce a useful object for someone else by means of exchange (in the market). Moreover, if an object has no usefulness, it contains no value, and the labor does not count as labor (i.e., value producing labor).

Heinrichs presentation of Marx’s argument

Let us now compare this to Heinrich’s argument in his Monthly Review essay, to see if we can find differences.

According to Heinrich:

“The social substance of wealth or value in capitalism is abstract labor”

From what I can tell, Marx never speaks of a “social substance of wealth”. He speaks of the substance of value and of material wealth. Material wealth is an object that satisfies a human want, no matter the form of the want or the form of its satisfaction. Marx goes out of his way to strictly segregate this material wealth from value, when he states:

“This property of a commodity is independent of the amount of labour required to appropriate its useful qualities.”

Heinrich, because he completely misapprehends this rigorous establishment of the fundamental premises of the capitalist mode of production, conflates wealth (i.e., use value) and value (i.e., socially necessary labor time) in his argument. Actually, it is not like Heinrich made a mistake here; He has been studying this text for years. He knows it and all of the supporting texts with it to a degree, I could never match, yet he begins his discussion of crisis theory by deliberately and knowingly conflating material wealth and socially necessary labor time, i.e., use value and exchange value.

Next, he states:

“it does not matter whether this abstract labor can be traced back to labor-power expended in the process of production, or to the transfer of value of used means of production.”

Again, Heinrich is mistaken and, as a world famous scholar on Marx’s writings, should know it: Marx specifically addresses objects that cannot be traced back to the labor process as “use values”, when he states:

“A thing can be a use value, without having value. This is the case whenever its utility to man is not due to labour. Such are air, virgin soil, natural meadows, &c.”

None of the objects mentioned can be traced back to the labor process and all are use values, not values. In fact, the case is the opposite: not every object of labor is a value, although it may be a use value.

Next Heinrich argues:

“If abstract labor remains the substance of value, then it is not clear why labor time can no longer be its intrinsic measure, and it’s not clear why “production based on exchange value” should necessarily collapse.”

A good point, but fortunate for us, nowhere does Marx state in Capital that “abstract labor remains the substance of value”. Marx states that if we abstract from the “useful character of the various kinds of labour”, “there is nothing left but what is common to them all … human labour in the abstract.”

Marx then states,

“When looked at as crystals of this social substance, common to them all, they are – Values.”

The social substance is not abstract labor, it is itself value; This value is labor abstracted from all of its useful qualities. By inventing an additional category distinct from value, called abstract labor, Heinrich does not have to address Marx definition of value.

Heinrich then makes the outrageous claim that Marx refuted his own collapse theory from the Grundrisse in Capital. So what is basis for Heinrich’s assertion Marx refuted his Grundrisse argument on collapse in Capital? Let me see if I can find it. I am sure this must be true, since, in all the reviews of Heinrich by Marxists academics, not one questioned this bizarre idea held by Heinrich. And indeed we find the offending passage in chapter 12 of Capital:

“why does the capitalist, whose sole concern is the production of exchange-value, continually strive to depress the exchange-value of commodities?”

Heinrich argues the answer to this silly question, addresses, “the unclear statements of the Grundrisse.” That is, somehow, based on chapter 12 of Capital,

“it’s not clear why ‘production based on exchange value’ should necessarily collapse”

In the Grundrisse, Marx argues capital reduce labor time in the necessary form so as to expand it in the superfluous form. In chapter 12 of Capital Marx makes THE EXACT SAME GODDAMNED ARGUMENT AS IN THE GRUNDRISSE. But, of course, no labor theorist who read Heinrich’s essay in the Monthly Review, nor the MR editors themselves, challenged his argument. No one said,

“Hey, Mike. About this thing you say in this paragraph about Capital contradicting Grundrisse — not so much, man.”

The answer to Quesnay’s answer is obvious: the capitalist is not concerned with value, but is only interested in surplus value. Marx does not contradict his collapse thesis, but explains its social logic. What drives capitalism to its doom is the constant expansion of surplus labor time at the expense of necessary labor time. And what drives the constant expansion of surplus labor time?

Anyone? Anyone? Bueller?

Could it possibly be the tendency of the rate of profit to fall? Could it possibly that the “law” of this “tendency of the rate of profit to fall”, is the constant expansion of surplus labor time at the expense of necessary labor time?

It is understandable that Monthly Review disagrees with Marx — Hey, take a fucking number and stand in line with all the other simpletons who declare they have overthrown the labor theory of value! But why would Monthly Review publish a piece of academic trash that fails to demonstrate even its most basic propositions?

It is precisely in section 1 of chapter 1 of Capital, Volume 1, that Marx sets out the initial premises upon which he build a complete model of the capitalist mode of production. The fundamental revision of those premises by Michael Heinrich cannot help but remove the essential argument Marx makes: the capitalist mode of production is a historically limited, relative mode of the production of wealth that must collapse.

Shame on you, Michael Heinrich, and shame on the Monthly Review for publishing this act of academic vandalism.