"Get back to work, you muppets."

Main Points Behind the Labour Theory of Value

The following text comes from a pamphlet I am collaborating on. Myself and another comrade are working on distilling Value, Price and Profit down into an even simpler-to-digest form. All the text below is a summary of section 6 of Value, Price and Profit. It deals with the Marxist labour theory of value in its entirety, and its basic relationship to the expression of value in terms of money, price. The rest of the pamphlet will obviously deal with profit.


A. The Labour Theory of Value

1. We need to begin our investigation by asking “what is economic value?” Bourgeois economists don’t have a good answer to this question, but Marxists do.

2. Everyday we become involved in acts of economic exchange. Transactions that you make at the cash register are acts of exchange. We exchange the commodity of money for other commodities, like clothes, TVs, milk, fruit and vegetables, etc.

3. Marx points out that a single commodity is exchangeable for countless other quantities of other commodities. The ratios of commodities required for a successful exchange change depending on the commodity, but the value of the commodities always remains the same.

4. The value of the commodities is the mysterious third thing that makes the exchange of commodities possible. This third thing common to all commodities in exchange, value, is able to be separated out of the equation and analysed separately on its own. We are able to express this identical measure of commodities independently of their physical existence.

5. The value of commodities when they are exchanged is a social function of commodities. It has nothing to do with a commodity’s physical existence. Value is the “social substance” of a commodity, and this “social substance” is Labour. Marx says: “To produce a commodity a certain amount of labour must be bestowed upon it, or worked up in it” (Marx: 1960, 71).

6. This labour is not the individual labour of a single person, but Social Labour. Marx says:

A [person] who produces an article for their own immediate use, to consume it themselves, creates a product, but not a commodity. As a self-sustaining producer they have nothing to do with society. But to produce a commodity, a person must not only produce an article satisfying some social want, but their labour itself must form part and parcel of the total sum of labour expended in society (Marx: 1960, ibid).

7. Crucially, this labour must be integrated into the Division of Labour in society. In order for a commodity to be a commodity, and for it to have value so it can be exchanged, the labour expended on it must be performed as part of the social process of capitalism.

8. The value in commodities is therefore crystalised labour. It is fixed inside the commodity. The only way the value of a commodity can change is if more labour is worked upon it. The more labour a commodity has bestowed upon it, the more value it will have.

9. How do you measure the quantity of labour in a commodity, in order to work out its value? Marx answers this question. The time that the labour lasts. The amount of labour in hours, minutes, seconds. Perhaps even months, or years.

10. It might be pointed out that this theory might not get us any closer to understanding value. Don’t people work at different paces, and at different levels of skill? The lazier worker would bestow much more labour on a commodity, and would therefore make it worth more than someone who worked harder. In the same way wouldn’t someone clumsy make a commodity worth the same, or even more than someone with great skill? Marx has an answer for this:

This, however, would be a sad mistake. You will recollect that I used the world ‘Social labour’, and many points are involved in this qualification of ‘Social’. In saying that the value of a commodity is determined by the quantity of labour worked up or crystallised in it, we mean the quantity of labour necessary for its production in a given state in society, under certain social average conditions of production, with a given social average intensity, and average skill of the labour employed (Marx, 1960: 74).

Marx gives an example on this point. The introduction of the power loom into England in the industrial revolution appeared to make workers work even more. They went from working nine or ten hours daily to working seventeen to eighteen hours a day. But the value of the cloth that weaver dropped by half. This was because it now took only half the time using the new machines to weave the same amount of cloth out of yarn. The product of twenty hours labour now had the same value of what used to take ten hours.

The name for this concept is called Socially Necessary Labour Time. It is easy to work out the average value of labour time in this way. The average of the overall skill, intensity, and productivity of labour, the “aggregate” ratios of all these factors, can be taken from statistics about global or national economic output.

11. If the amount of time it took to make the same amount of commodities stayed the same, the value of those commodities would stay the same. But the productive powers of society are constantly changing. Labour productivity goes up and down all the time. In the short term, labour might be less productive, and create less product per hour, minute, second. But in the long term, since the industrial revolution, labour has become continuously more productive. It is simple to find graphs on the increasing productivity of labour. It is a law of capitalism that the greater the productive powers of labour, the less value will be bestowed upon the commodities created. The less productive labour is, the more values individual commodities will have. This is because there will be less labour bestowed upon more productively made commodities, and vice versa.

12. The productivity of labour also depends on other factors. Apart from the skill and intensity of labour, the productive powers of labour depend on:

First. The natural conditions of labour, such as fertility of soil, mines, and so forth.

Second. Upon the progressive improvement of the Social Powers of Labour, such as are derived from production on a grand scale, concentration of capital and combination of labour, subdivision of labour, machinery, improved methods, appliance of chemical and other natural agencies, shorting of time and space by means of communication and transport, and every other contrivance by which science presses natural agencies into the service of labour, any by which the social or cooperative character of labour is developed (Marx, 1960: 75).

B. Value and Price

13. None of the above theory applies to the price of a commodity. It only applies to a commodity’s value.

14. Price is a particular form that value assumes in the capitalist system. Price is the monetary expression of value. Price is the form of value in money form. This can be put another way. Price is the value of money.

15. The price of money used to be the value of gold. This was called the “gold standard”. Working out the value of money in this way was easy. The pound or the dollar would be set to a specific weight of gold. The amount of socially necessary labour time that it took to produce that specific quantity of gold was the value of the British pound or the American dollar.

16. The international gold standard for the US dollar was abolished by Richard Nixon in 1971. All major currencies are now “free floating”. This means that the price of money is now self-referential. The value of money now changes every millisecond. The value of money is now determined by speculation, by the rapid exchange of money for other commodities on the global market.

17. This doesn’t contradict the Marxist labour theory of value in any way at all. Money is a commodity like any other. Because money is a commodity, it is exchangeable in definite ratios with other commodities. This means it has value. It now no longer necessary to explain conceptually what the value of money is. It can be determined empirically at every instant with a computer.

18. Money is the universal equivalent commodity. It is the commodity that every other commodity uses to express its value in order to be exchangeable on the market. Money is the appearance of value, where socially necessary labour time is the essence of value.

19. Under normal, stable conditions, the price of a commodity will coincide with its value. This means that the price of a commodity will exactly express the amount of socially necessary labour time crystallised in it. This means that identical commodities produced under different concrete regional conditions will have the same price.

20. The market is a dynamic system, and the price of money and of commodities is constantly changing. Market prices may coincide with the values of commodities, but that is not always the case. Contrary to the slander levelled against the Marxist labour theory of value, Marx holds a place for the market forces of supply and demand in his economics. Marx follows Adam Smith in holding that two different concepts explain the reason why prices have the quantities they do. The first concept is market price. The market price of a commodity is determined by the laws of supply and demand. The second concept is the natural price. The natural price of the commodity is the price a commodity should have, and to which all market forces are tending the price to become under equilibrium. Under normal, stable conditions, conditions of equilibrium, a commodity will have its natural price. A commodity’s natural price expresses its value exactly.

21. All of what has been said above assumes that the capitalist system being discussed is a perfectly free market. Contrary to what the enemies of Marxist economics say, Marx assumes in his model of capitalism that it is a perfectly free market. The existence of monopolies under capitalism will distort market forces, and will cause commodities to avoid having their natural price. But that is not our concern here.


“Value, Price and Profit” in The Essential Left (Unwin Books: London, 1960).

What to Do After You’ve Punched a Nazi

I was overjoyed when I saw the video footage of the anarchist punching Richard Spencer. Richard Spencer is reputed to have coined the phrase “alt-right”, and behaves in exactly the same way as a neo-Nazi, although he disavows the label. Slate quotes an article from the New York Times that describes what Spencer did at one of his speeches:

He railed against Jews and, with a smile, quoted Nazi propaganda in the original German. America, he said, belonged to white people, whom he called the “children of the sun,” a race of conquerors and creators who had been marginalized but now, in the era of President-elect Donald J. Trump, were “awakening to their own identity.”

As he finished, several audience members had their arms outstretched in a Nazi salute. When Mr. Spencer, or perhaps another person standing near him at the front of the room — it was not clear who — shouted, “Heil the people! Heil victory,” the room shouted it back.

This is just one example out of many of the toxic activities that Spencer has been engaged in.

The Rise of the Far Right

Racism, white nationalism, neo-Nazism and all other kinds of toxic bigotry are on the rise in Western countries. With the inauguration of Donald Trump as the US President, layers of the population who are sympathetic to these ideas are going to feel more confident in becoming vocal and more organised in their toxic and inhuman ideology.

For many on the far-left, the video clip of Spencer being punched was a refreshing moment of catharsis. For many, Spencer was getting exactly what he deserved, and the attack represented a powerful “Fuck You” to the Far Right. The Far Right has been on the rise in Western countries, and so far it seems like little is happening to stop it.

More than this, to the far Left, it seems like the most prominent attempts to deal with the Far Right have been wrong-headed. People like Spencer take pride in their bigotry, and aren’t open to rational discussion about their views. Far-leftists are correct when they diagnose the white supremacist mind as twisted and out of touch with reality. The system of assumptions upon which their ideology rests are grounded on irrational emotions, not solid empirical evidence. Many on the left think that this means that the only way you can fight neo-Nazism and white supremacism is by doing exactly that–physically fighting Nazis.

Propaganda and Gossip

The video clip of Spencer being punched seemed to represent more than just evidence of an act of praxis. It was a moment for celebration. This was a massive propaganda win for leftists. On the video Spencer skulks off after being attacked, clutching his head and looking back to make sure he can avoid any further violence.

But what seems like a massive propaganda win is turning into a topic for gossip among the in-crowd. I agree with some leading comrades that the ideological value of this video clip of Spencer being punched is radically dwindling. The clip is being used to make more and more abstract memes that appeal to only those “in the know” about what to do about neo-Nazis.

Some leading comrades have commented that the endless celebration of one Nazi being punched is not going to make sense to the common American, or the common American worker. I agree with this. Most workers in the US and other Western countries are not organised, and haven’t been educated about what a neo-Nazi is, and why it is a good thing for this lone anarchist to have punched one. There will of course be different levels of class consciousness among the general population, but we shouldn’t make assumptions that this video clip is immediately going to translate our message over to the average person.

Black Blocs and Direct Action

I would like to broaden this discussion by talking about the significant anarchist presence at the Trump inauguration. Many will already know that many anarchists attended the Trump inauguration in an organised “Black Bloc”. Some anarchists engaged in “insurrectionist” tactics. This means setting out to challenge authority through violent means. Many anarchists at the Trump inauguration took insurrectionism to mean being violent to neo-Nazis and damaging private property. Insurrectionist tactics are one example of what Communists call “direct action”. Direct action is when one engages in direct public protest instead of (usually clandestine) negotiation in order to achieve strategic aims.

The punching of Spencer is an example of an anarchist engaging in insurrectionist direct action. Like the action of punching Spencer, many on the far Left celebrated the violent direct action of the Black Blocs. To me at least, this rioting represented something powerfully symbolic. Against the reverence of the (small) attendees of the inauguration, and the (frustrating) platitudes of liberal commentators and protesters, the Black Bloc advertised the message of the far Left: “We won’t put up with this!”

But like the punching of Spencer, the insurrectionist direct action by the anarchists probably isn’t going to translate into sympathy for our cause among the unorganised working class. In fact I (not without a sense of shame) agree with the trot Paul D’Amato in his 2012 online article Diversity of tactics or unity in action?: by engaging in mere gossiping and in-crowd discussion about the direct action of the anarchists at the inauguration we risk being elitist and sectarian in our approach to building our movement.

The Difference Between Strategy and Tactics

Insurrectionist direct action is a very real and live device in the Communist toolkit for achieving strategic goals for our movement. But it is a mere tactic, and not a strategic goal in and of itself. If we continue to just gossip and celebrate our use of tactics, we lose sight of the bigger picture of the Communist cause. If the celebration of punching Nazis, smashing windows, and getting into fights with the police continues for much longer, we will not be doing our jobs properly.

Insurrectionist direct action is “sexy”. Everyone loves a good story about a confrontation they had with the cops. But it is not enough to build our movement. In fact the direct opposite is going to help us with the revolution. Slow, painstaking and patient organising in our workplaces and communities is going to help us grow in numbers and strength. This is real power. Brute physical strength is not enough to help us grow and win. It is a necessary component of helping us win, but it is not sufficient. Only organising is sufficient, as well as necessary.

Organising is always necessary as well as sufficient tactic for building our strategic goals because it always builds power. Insurrectionism only works sometimes, and in isolated cases. Further, insurrectionism is a corollary of organising. A large layer of people need to have been previously organised in order to make insurrectionism intelligible and understandable.

We can go even further. Insurrectionism is not a good tactic in and of itself. Its goodness as a tactic is derivative. It is good because of what it brings about. It is good because of its consequences. It is therefore not an intrinsic good. Think about the justifications Communists give for insurrectionist direct action: It helps expose systems of authority. It physically resists and dispels bigotry. It displays, in powerful symbolic form, the message and strength of the Left to others.

All of these justifications point outside the internal organisation of the working class. This demonstrates that insurrectionism is not an intrinsic good. It is, however, still a good of some kind. Which means insurrectionism could and must be practiced when it is necessary.

The question all Communists should be asking themselves is: when should I be engaging in direct action? What kind of direct action is sufficient for our overall strategy?

I personally think that Trump’s inauguration was a better time for insurrectionism, than others. But we need to be mindful that we aren’t raising mere tactics to the level of strategy.