Ambivalences of Marx’s Critique of Political Economy as Obstacles for the Analysis of Contemporary Capitalism

Historical Materialism Conference, October 10, 2004, London, revised paper


By Michael Heinrich



Many discussions among Marxists about Marx’s “Capital” deal with the correct interpretation of categories like value or money. Participants of such debates try to show what Marx “really meant”, or what is the really important line of argumentation. And then they present that, what they think is the important line, in a way as if all problems are solved.

What I want to sketch is the existence of some fundamental ambivalences in “Capital” itself. Some of the opposite interpretations are rooted in these ambivalences: both sides can rely on “what Marx really said”. Such ambivalences can be obstacles, when we try to understand the contemporary capitalist development with the help of Marxian categories.

In any complex text we can find some ambivalences, some ambiguities, some unclear points, which allow different interpretations. The interesting question is, what is the character of these ambivalences. Did they happen by accident or is there a fundamental problem, a specific structure, which causes specific ambivalences?

The ambivalences of “Capital”, I have in mind, exist not by accident, they result out of deeper problems. Not all, but the most are rooted in the specific character of Marx’s “Capital”, to which the subtitle of “Capital” hints: “Critique of Political Economy” (Kritik der politischen Oekonomie).[1] This subtitle, which was in the years 1857 to 1863 also the title of the whole Marxian project, not only means, that Marx criticizes other theories of political economy. Every scientist criticizes other theories; this normal practice wouldn’t justify such a title. Marx criticizes not only theories (like the Ricardian theory), he criticizes a whole science, the science of political economy and insofar this science is at the centre of the self-understanding of bourgeois society, the fundamental critique of this science is simultaneously a fundamental critique of this self-understanding and an enlightenment about the actual structures and processes of this society. The core of this scientific-political project is a “scientific attempt” to “revolutionize a science” (cf. Marx’s letter to Kugelmann 28th Dec. 1862 about his efforts), which should help to provide a social revolution .

A scientific revolution means a radical critique of the existing categories, a break not only with single theories, but with the theoretical field, in which different theories of the old science are rooted. And Marx did not only claim to have done a scientific revolution, I think we can say, he really did this.

But this scientific revolution, this break with the theoretical field of political economy, was not complete. At some points of his presentation Marx stuck to the field he broke with at the same moment. In the same text we can observe a break with this field and the continuing presence of some elements of this field.

This two sides are not clearly separated. We cannot distinguish them for example along the line of chapters. These two sides constitute two discourses, which are always present, which interfere with each other in many places and in different ways, which give reason to distinct interpretations. The interference of this two discourses causes specific problems in the argumentation of Marx, like for example the well known “transformation problem”, but to talk about this, there is not enough time here.[2] I will try to make clear my thesis by shortly discussing three issues: value, money-commodity, and crisis.


I. Substantialist and Monetary Theory of Value

The ambivalences already start with value, value-form and money. How difficult these issues for Marx have been, we can imagine, when we remember, not only that Marx himself considered the chapter on value and commodity as the most difficult of his book, but also, that the presentation of the material of this chapter was changed several times by him. Marx wrote at least seven variants (from which six remained) with remarkable differences in argumentation. We can find them in:

- “Grundrisse” (1857/58, if we would go into details, already here we could distinguish different attempts to grasp the relation between value and money)

- “Urtext” (1858, draft for “A Contribution …”, here the parts on value and value-form are lost, but important parts dealing with money remained)

- “A Contribution to the Critique of Political Economy” (1859)

- First edition of Volume 1 of “Capital”, Chapter 1 (1867)

- Appendix to the first edition of Volume 1 of “Capital” (1867)

- Manuscript preparing the second edition (1871/72) (first published in MEGA II.6)

- Second edition of Volume I of “Capital” (1872)


To make a long story short: Very abbreviated, my thesis is, that in “Capital” we can find elements of two distinct approaches to value: a “substantialist-naturalist theory of value” and a “monetary theory of value”.

The substantialist theory of value relies value to the single commodity and the labour, which is needed to produce this single commodity. A social determination only comes in because labour is only insofar value creating as this labour is “socially necessary labour”. But value seems to have nothing to do with other commodities, it exists as a kind of independent substance inside the single commodity. Superficially read, one can understand the first four of five pages of “Capital” in this way. This substantialist view dominated in traditional Marxism. And indeed, from the first chapter very often only the first four or five pages were taken seriously, and the following fifty pages were neglected.

Combined with this substantialist view on value is a naturalist view on abstract labour. Abstract labour, Marx wrote at the end of paragraph two of chapter one, is labour “in the physiological sense”, the expenditure of brains, nerves and muscles. Of course any labour is expenditure of brains, nerves and muscles, but the question is: is this general attribute of labour really the determinant of a social construction like abstract labour?

One can show that this substantialist and naturalist approach to value does not really leave the theoretical field of classical political economy (I did this in “Wissenschaft vom Wert”). This approach can be read as an improvement of classical economics, a more precise formulation, but not as a break.

A real break with the theoretical field of political economy (and not only with single theories) exists in the second approach. An non-substantial theory of value and an anti-naturalist determination of abstract labour we can find in some arguments in “A Contribution to the Critique of Political Economy”, in the subchapters on value-form and commodity fetishism in “Capital” and especially in Marx reflections on his mode of presentation in a manuscript, which was written in Winter 1871/72, when Marx changed from the first edition of “Capital” to the second.

Especially this last manuscript, is very interesting because it includes considerations which we cannot find in “Capital”, neither in the first nor in the second edition. The manuscript itself as printed text has 50 pages. In the MEGA-edition (Marx Engels Gesamtausgabe) also the variants, the changes Marx made, are presented - and Marx worked very intensively at this text. To present all his changes, and the changes of the changes, 300 additional printed pages were necessary.

In this manuscript among other things Marx makes clear, that his own presentation produced the appearance as if we could speak of a single commodity and the value of this single commodity. But strictly spoken this is wrong: Value and commodity only exist when there is a relation of at least two commodities. After referring to his own presentation of coat and linen as objectivations of human labour as such, he wrote about this “reduction”:

„Aber in dieser Reduktion wurde vergessen, daß keines für sich solche Werthgegenständlichkeit ist, sondern daß sie solches nur sind, soweit das ihnen gemeinsame Gegenständlichkeit ist. Ausserhalb ihrer Beziehung auf einander - der Beziehung worin sie gleichgelten - besitzen weder Rock noch Leinwand Werthgegenständlichkeit oder ihre Gegenständlichkeit als Gallerten menschlicher Arbeit schlechthin“ (MEGA II.6, p.30).

(My own very literally translation: „But in this reduction it was forgotten, that none of it has such value-objectivity for itself, but each of it has it only insofar it is a common objectivity. Outside their relation to each other - outside the relation, in which they are considered as equal - neither coat nor linen possess value-objectivity or their objectivity as congealed quantity of human labour as such.“)

From this follows:

„Ein Arbeitsprodukt, für sich isolirt betrachtet, ist also nicht Werth, so wenig wie es Waare ist. Es wird nur Werth in seiner Einheit mit andrem Arbeitsprodukt“ (MEGA II.6, p. 31)

(„A labour product, considered isolated as such, is not value, nor it is a commodity. It only becomes value in unity with an other labour product.“)

This has important consequences. Value is not only depending on a social substance, it depends on a substance which cannot exist in a single thing and which is not determined by production alone. The specific character of this substance is the cause, why Marx used a lot of metaphors, when he wrote about it. These metaphors as “phantom-like objectivity” or “fantastic objectivity” (the first already appears among the first four pages of “Capital”, that means in that part, which is so often read in a “substantialist” way) are often neglected by readers. But these metaphors are not a question of style, they transport an important information about this very specific not-substantial substance of “value”.

Value form analysis makes clear that value only can exist, when we have an independent and general form of value - money. So money is not only an additional feature, a technical tool for making exchange easier (this is the view of classical and of neoclassical economics). Money is basic for the existence of value as generalised social form of labour products, as something, which is present in the whole economy.

This accentuation of money doesn’t deny the connection of value and labour, but we have to be careful in conceiving this connection: it is a connection of value and abstract labour. In the parts, where Marx didn’t argue in a naturalist way, he makes clear, that abstract labour is the result of a an “equalisation of unequal labours forcibly brought about by the social process” (A Contribution to the Critique of Political Economy, CW, vol. 29, p.299: there is wrongly translated: “equalisation of unequal quantities of labour”, but Marx didn’t use the word “quantity” - with “unequal labours” he meant different qualities of labour). So, abstract labour is a violent abstraction from the differences of labour, an abstraction which is only present in exchange, in the relation of commodity to commodity. Value as a generalised form can only exist, when it is mediated by money. (That value is only present in exchange, does not mean, that it is exchange, which founds value, or which is the cause of value.)

As a result of these arguments we can see, that the relation between value and money is much more close than classical and neoclassical political economy and also the mainstream of traditional Marxism describes it: Value is not only the foundation of money, but value cannot exist without money. The substantialist approach can support the first part of this sentence, but the second part is not even understandable for this approach.


Value form analysis (which we can find in part 3 of chapter 1 of “Capital”) is a very strong and important part of “Capital”. But also here we can find a special kind of ambivalence, which is rooted in the shift to a “more popular form” of presentation in the second edition “Capital” (a shift which already starts with the appendix of the first edition). In the appendix and in the second edition Marx changed the sequence of the value-forms. He introduced the money form as the fourth form and dropped the self-contradictory “Form IV” of the first chapter (of the first edition).

By this change he veiled the strong difference of categories between form analysis itself (the content of chapter 1) and form oriented analysis of action, which is the content of chapter 2. Here for the first time the commodity owners appear, in chapter 1 only the form-determinations of the commodities were under investigation but not the action of the commodity owners. Money is the result of the collective action (not an intended action, of course) of the commodity owners. Therefore the transition from the general form of value to the money form is not rooted in a form-analytical argument but in an argument, dealing with action: Marx called it the “social custom” (Capital vol.I, Penguin, p.162).

The consequences of this change was, that in many Marxist discussions, the status and aim of chapter 2 remained unclear. When money already was the result of the value-form analysis of chapter 1, why a second chapter, which also presented money as a result? And further: including the money form in the sequences of the value-forms, Marx strengthens the wrong view, as if value-form analysis is an abbreviation of the historical sequence from simple barter to money mediated exchange, an idea, which many Marxist scholars followed.

But there is also a conceptual problem, which is not rooted in the shift to a “more popular form” and this is my second point: the money commodity.



II. The Problem of the Money commodity

In his analysis of value form, Marx presupposed the necessity of a money commodity. In real exchange relations the money commodity must not be present, it can be substituted, as Marx already analyses in Chapter 3 of “Capital”. But the circulating signs, according to Marx, are substitutes of this special commodity, the money commodity. So the money commodity should be something like an anchor of the whole monetary system. Speaking on a theoretical level, Marx conceptualised his theory of money as if the existence of a money commodity (on the level of categories) would be absolutely necessary.

If this conceptualisation would be correct, we couldn’t understand the contemporary monetary system with Marxian categories, because this system doesn’t depend on a money commodity, neither legally (since the end of the Bretton Woods system), nor really (there is no special money commodity: that central banks possess gold is a historic relic and since years they try to get rid of it by selling small portions, which will not lead to a crash of the gold price).

Fortunately Marx’s conceptualisation is not correct. Not only in practice, also at the level of categories we don’t need to rely on a money-commodity. What Marx has demonstrated in value form analysis was the necessity of the money form (strictly speaking: the necessity of the general equivalent form). But he didn’t demonstrate, that the bearer of this form must be itself a commodity. He just presupposed, that this bearer is a commodity.

In the first chapter of the first edition of “Capital” we can find an important hint, why it is not necessary, that the bearer of the money-form must be a commodity. Chris Arthur already accentuated the relation of money and commodity as the relation of the universal to the particular. But Marx showed more: In the first edition, Marx made clear, that money is a very special universal: Money is an universal, which exists as an individual at the same level as the particular. He used an impressive picture for this: it is as if besides the concrete lions, tigers, birds and so on, also “the animal” is existing and walking around (MEGA II.5, p. 37).

Continuing this (what Marx didn’t do), we can conclude, that “the animal” cannot really exist as an individual besides the concrete lions, tigers etc. There must be “something”, which is accepted as “the animal”, which is a representation of “the animal”. “The animal” cannot exist as an individual, it can only be represented. It can be represented by a certain animal, the lion for example. Then the lion counts not only as lion but also as “the animal”. Or it can be represented by a plate with a big letter “A”.

In short: At the level of value-form analysis it is not possible to determine the character of the concrete something, which is representing the universal as an individual. This something can be a commodity or a pure sign. So, a money commodity can exist, but its existence is not “necessary”.

At the level of credit theory, which Marx started to develop in volume 3 of “Capital” it is possible to demonstrate, that a monetary system based on a money commodity can only exist for a limited period of historical transition. Although Marx himself didn’t draw this conclusion, his approach to the credit system gives all the elements for this demonstration.

In the preface of the first edition of “Capital”, Marx made clear, that he didn’t want to analyse a special period of capitalist development, but capitalism itself. And at the end of volume 3 he formulated, that his aim is to present the “ideal average” of the “inner organization of the capitalist mode of production”. The money commodity however doesn’t belong to this “ideal average”. In this case Marx confounded a transitional attribute of the capitalist money system with its “ideal average”.



III. Monetary or non-monetary theory of Capital and Crisis

Similarly to the monetary theory of value, there is also a monetary theory of capital. This is very clearly in “Grundrisse” and in “Urtext”, where we can find the so called “transition from money to capital”. There Marx argues, that money as an independent and durable form of value can only exist, when there is not only the movement C - M - C, but also the movement M - C - M, which implies M - C - M´. So, there is a strong connection not only between value and money (shown by the value form analysis) but also between money and commodity (as generalised forms) and capital, so that we cannot have one of it, without the other.

In “Capital” Marx dropped this transition, so that the reader could think the analysis of money and commodity is independent from the analysis of capital, an appearance which then contributes to the plausibility of the idea Marx would analyse in the first three chapters a pre-capitalist “simple commodity production”. The separation of the first three chapters the lack of a transition to capital (at the level of categories) also gives some plausibility to the idea of “market socialism”, which depends on the possibility of an comprehensive market system without capital. We don’t know, why Marx omitted this important transition from money to capital, probably he tried to argue a little bit more popular.

Only a very small rest of this tight connection between money and capital we can find explicitly in “Capital”. In Chapter 4 of “Capital”, when Marx is discussing the general concept of capital, he accentuates the importance of money as the “independent form” by which value can state its “identity with itself”. Although capital is neither money nor commodity, but the process of valorisation, in this process money plays a special role: only in the form of money capital can rely on itself; capital can measure the degree of valorisation etc.

In volume I of “Capital” a general analysis of capital is given in section 2. During the following sections, in which the production of absolute and relative surplus value, wages and accumulation is analysed, money plays not a crucial role. This does not mean, that we can investigate capital without money. This absence of money as an issue is above all a consequence of the particular subject under investigation: the production process without its mediation by circulation. Money then appears in some places of volume II of “Capital”, and in volume III, in the section on interest and credit, money affairs again become the centre of consideration - and we all know how fragmented, how unfinished this section is.

In many Marxist discussions about political economy, volume 1 of “Capital” was dominating. It appeared not only 27 years before volume 3, its style is much more convenient than that of volume 2 and 3, and also volume 1 gives the reader the impression to present a complete whole: value, capital, exploitation, the capitalist mode of developing the productive forces, accumulation, and at the end an outlook to the socialist revolution in the future. Every reader must think: How should this work to be continued? Volume 2 and 3 seem to present only some details, material for experts. So, because production was the dominating issue of the biggest part of volume 1 and because this volume was so influential the Marxist tradition got in some respect a bias towards production. Money and exchange were understood as “mere” phenomena of circulation, but the real things, the important contradiction seems to be found in the sphere of production - exploitation, development of the productive forces, accumulation and so on. The only chapters outside volume 1, which attracted a little bit more attention, where those, which dealt with the tendency of the rate of profit to fall and with a theory of crisis - and both issues were presented without regarding money. But not to regard money at these chapters is a consequence of the structure of the presentation: the theory of credit is not “available”, its presentation follows later.

Engels’ edition of volume 3 tried to present things as ready as possible to the reader. So he strengthened the structure of the remarks on crisis theory, which were following the law of the tendency of the profit rate to fall. For the reader not only the impression emerged, that crisis theory there is nearly complete, especially crisis theory seems to be a consequence of this law. But if we look in Marx’s original manuscript, which was published for the first time in MEGA II.4.2 in the early nineties, then we see, that these considerations, which follow the presentation of the tendency of the profit rate to fall are rather first attempts without a systematic relation to this tendency (see about the differences between Marx’s original manuscript and Engels’ edition my article in Science & Society winter 1996/97).

The kind of reading, which followed the arrangement of Engels, fits very well in a production-oriented view, which was supported by taking volume 1 as a nearly complete whole. Relying crisis theory so strongly to the tendency of the profit rate to fall, reduces crisis theory to something, which is rooted only in the production process. The unity of capitalist production and circulation was destroyed by such a perspective, and crisis theory was shortened in a very serious respect.

This situation led on the one hand to this fierce defence of the law of the tendency of the profit rate to fall, although this law can be shattered by rather simple arguments. It was widely thought, that without this law, there would be no foundation of a Marxian crisis theory. On the other hand this one-sided orientation on production was for a long time an obstacle to conceive monetary and finance processes in an adequate way. Often a kind of an overproduction crisis, rooted only in production conditions, was seen as the only “real crisis”, with money and finance as not very fundamental things. Indeed sometimes Marxist scholars seem to construct the relation of production and circulation similar to that between essence and appearance (where additionally appearance often was reduced to wrong impression or to the minor important side).

Nowadays especially in some parts of the discussion about globalisation capitalist production is confronted with financial processes in a way, that production sounds real, sane and good and financial processes sound sick, virtual and bad. But there are not two different capitalist worlds, a good one and a bad one, a real one and virtual one. There is only one capitalism, a unity of production and circulation. So, in the same way, as we need a monetary theory of value, we also need a monetary theory of capital and crises. Not to substitute the production oriented bias by a circulation oriented bias, but to conceive the capitalist unity of production and circulation.


Analysing capitalism in a perspective of social emancipation, Marx’ critique of political economy is the strongest tool we know. But in using this tool we have to be aware about the problems, which are connected with it. I tried to sketch, that there is a whole line of ambivalences in Marx’s formulation of his critique of political economy, ambivalences, which have different reasons. I did this sketch not to reject the Marxian project, but to strengthen it.

An often heard answer coming from very convinced Marxists when confronted with such ambivalences is, that these ambivalences are only the expression of the ambivalent reality, which is full of contradictions. As a global defence of Marx, such an assertion is simultaneously dogmatic and in a logical sense wrong. It is dogmatic, because it states that Marx always must be right, without a discussion in detail, every critic is refused. It is not only dogmatic, it is also a very idealistic assumption, that a person, who did such an extensive scientific revolution as Marx did, that this person should have done everything at once in a perfect way, without problems and ambivalences. In the history of science, however, it is a well-known phenomenon, that the revolutionary head also contains a lot of the old stuff, see for example Galilei.

Perhaps more important is the other point, that the mentioned position is in a logical sense deficient. There may be a lot of ambivalences in reality, the relation between A and B may be an ambivalent, contradictory one. But the statement, that there is an ambivalence or a contradiction in reality, this statement itself can be made very clearly without any ambivalence or contradiction.

Insisting on this point, I don’t want to immunize my own statements against critic. Each of it should be disputed, but this needs concrete arguments. As a result of such disputes we may see things clearer, perhaps clearer than Marx saw some of them. It is the same old story: Standing on the shoulders of giants, we can see farer than they. We only must open our eyes.


[1] Already here the older English translations of “Capital” vol. I is misleading: It gives as subtitle: “A Critical analysis of capitalist production”. The correct subtitle can be found in the translation of Ben Fowkes (Penguin Books).

[2] The difficult structure of Marx’s “break” with the field of political economy, the remaining ambivalences and their consequences for the categorial structure of Marx’s critique (like for example the “transformation problem”) are the main issues in my book “Die Wissenschaft vom Wert” of 1991 (“The Science of Value”; a substantially enlarged second edition appeared in 1999, fourth edition in 2006).