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A Critical Dissertation on the Nature, Measures' and Causes of Value
This historic book may have numerous typos and missing text. Purchasers can usually download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1825 edition. ...as the things, the value of which is to be ascertained; that is, there is none which is not subject to require more or less labour for its production." It has been already shown in the first chapter, not merely that such a commodity is physically impossible, as here conceded by Mr. Ricardo, but that the supposition of such a commodity, for such a purpose, involves contradictory conditions'. We could not in the nature of the case have any commodity of invariable value, by which to ascertain the fluctuations of all other things, unless all commodities were of invariable value, in which case there would be no fluctuations to ascertain. Should Mr. Ricardo, or rather should any of his followers, shelter himself under the notion of real value, and thus escape the absurdity here charged upon him, it would only be taking refuge in another absurdity equally great. We have also seen in the present chapter, that the demand for invariablenes of value in any commodity to be used as a measure, is founded altogether on a false analogy; that fluctuations in value are not ascertained by any measure, but by historical evidence; that a measure of value can signify nothing but a medium of comparison for contemporary commodities; and that we have as good a measure in this sense, not only as it is possible to have, but as it is possible to conceive. Besides these errors, there is to be discovered in Mr. Ricardo's views, as to the uses of a measure of value, a singular confusion of thought, which I shall here endeavour to explain. The specific error of Mr. Ricardo on the subject of invariable value consists, as before explained, in supposing, that if the causes of value affecting one commodity remained the same, the value of that commodity...
48 pages, Paperback
First published September 12, 2013
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April 22, 2024
A vital read for anyone interested in the inner workings of capitalism's most fundamental institution.
This has immediately become one of my favourite books. If you want a systematic takedown of the Ricardian labour theory of value, you will not find a better text.
Bailey is ferocious and utterly uncompromising in his critique. At first he simply shows the flawed logic used by Ricardo, Mill et al. when progressing from their theory of value to even the most minimally fleshed-out examples, but later in the book he goes ham ripping the LTV's basic premises to shreds.
He does all of this with precise and taut chains of argument that are a joy to read; I can't count the number of times I said "hey [partner name], listen to this...!"
\---
Bailey, like Marx, takes seriously the importance of the ontology of value. He understands that the form of production and exchange have huge ramifications for society as a whole. And while Marx definitely provides greater scope and more sociological depth, Bailey lays vital groundwork for effectively doing this kind of sociological analysis.
Given that I'm a Marxist and that I read this book to further my knowledge of the value-form, I'm going to start with Marx and work from there.
\---
Some of you may also know that Marx explicitly critiques Bailey's book in his 1861-1863 manuscripts (later to be edited into *Theories of Surplus Value*, but unfortunately Marx's criticism of Bailey is lacking. While I love chapter 1 of Capital as much as any Wertform nerd, Marx definitely hung on to the LTV a bit too hard by virtue of his "third thing" argument.
Marx's (very angry) critique of Bailey mostly reduces to this "third thing" position: he believes that in order for commodities to be commensurable (ie, able to be be exchanged for one another on a quantitative basis), they must have some substance in common, which Marx terms abstract labour. Think of how if object A is 1 metre tall and object B is two metres tall, these objects have a property in common, namely, spacial extension.
Likewise, Marx believes (at least in the manuscripts) that each commodity as such only has one value, which can then be expressed in some quantity of another commodity. Marx's model looks something like this:
Abstract Labour -> Value -> Expression of Value
There are some problems with this. First, like utility in neoclassicism, abstract labour is completely unmeasurable, and it can be inferred only in retrospect.
Second, this model explicitly does not handle other subjects of exchange that utilise the value form but are not products of labour (land being the obvious example, something Marx only gets around to later and unsuccessfully, c.f. the transformation problem debate).
The problem is that if there are things that use the value-form but don't have value, then price and value are two different phenomena, of which price is a mere surface expression. This then creates the transformation problem and the questions over whether or not capitalists are evolutionarily pressured to maximise value or price, and so on. It becomes a huge mess that at best requires *extensive* exegetical work to render functional.
Bailey on the other hand dispenses with all this in one fell swoop, by showing that value is inherently relational and nothing but relational.
In other words, something may have use-value (read: function), completely outside of exchange or comparison: bread is food, iron can be used to make tools. But we do not call this value, typically. We would ask "what is the use [or function] of iron?" but not "what is the value of iron?" for this purpose.
"The value of iron" inherently implies comparison and the choice between alternatives: do I want X more than Y?
And so it is impossible to express the value of a thing except through some other thing. And this is true even prior to the mode of production: this is a deeply, fundamentally human process: any process of making a decision between alternatives. If we ask someone "what do you value in a partner?," for example, what it really means is something like "what traits do you select for?." It's raw evaluation.
So when Marx (or Ricardo, or Heinrich) say that a commodity has both a real AND nominal price, or is "trading above/below it's value," or the like, what can that possibly mean? What would it mean for a thing to have a value *as a property inherent in itself* prior to any act of exchange?
To be clear someone can list anything for any price at all: I could list my boots on eBay for ten million pounds of I so desire, but no one will buy them.
On the other hand, if they sell for 500 pounds, you would be well within your right to say "I don't think they're worth that much," but *all that actually amounts to* is the fact that *you* wouldn't make that exchange. This is a perfectly valid position, but it doesn't erase the reality that this act of exchange did actually occur.
Bailey's insight is that even in a world dominated by commodity fetishism [read: universalised commodity production where an article produced for exchange is immediately and automatically granted the property of 'price'], this is ultimately a mental process.
Neither the different uses/functions of the cornucopia of the world's commodities, nor different kinds of labour share anything to render them commensurable with each other. Instead, they are rendered commensurable only via the real abstraction of exchange, of which there is no underlying substance, Only people deciding to do the specific act of exchange.
Much like Austen's performativity whereby to say "I promise" is the very act of promising, to act out exchange between a Snickers bar and 1 pound *is itself to render a Snickers bar as being worth a pound* (at least at this moment in time and space).
\---
One has to take Occam's Razor to Marx's model: what is the point of maintaining that labour (even in abstracted form) is the source of value? Especially given that we *know* there are things like land and collectors' items that both break this supposed rule constantly.
Worse still, what abstract labour even *means* is highly controversial within Marxism, and numerous completely incompatible understandings exist amongst very intelligent and well-read Marxologists with very impressive degrees.
\---
To his credit, Marx is hitting at something very important here, it's just that abstract labour is a suboptimal tool to represent it. What he is hitting at is fourfold:
First, he's hitting at cost of production in general, which sets a hard limit to the viability/profitability of a product. The greater the competition between producers, the more closely the price of a commodity will orbit this cost of production.
Secondly, he's hitting at the cost of maintaining the life of the average worker (the reproductive cost of the worker, also known as the "real value of labour" in the political economic literature), which is both a cost of production and a transcendental minimum necessary for any work to be carried out at all (you need your workers to be alive to do their jobs).
Thirdly, he's pointing out that different labours are worth different amounts. It's impossible to tell whether a professor writing a paper is working harder than a bricklayer for instance, they're just not commensurable activities. Social prestige also effects the price of labour-power: female-dominated industries are generally considered less valuable and have lower pay rates.
Finally and most innovatively is what Sohn-Rethel calls the social validation of labour: every society must decide how to expend it's ability to labour, and labour can be wasted. It's only at the point of successful exchange that the labour expended in the production of a commodity in a sense joins the mass of successfully utilised labour. And what makes capitalism unique is that this decision of expenditure is fundamentally decentralised and uncontrolled.
\---
But why put this multitude of factors inside the value-form itself, when the value-form clearly doesn't actually give a solitary crap any of these issues? In fact it is the sheer dumb simplicity of the value-form that causes so many problems:
The value-form has no concept of society, survival or necessity, so welfare and collective bargaining by workers becomes necessary in the face of capital accumulation.
The value-form has no mechanism beyond raw market forces to analyse *why* one kind of labour is worth more than the other. Costs of production, misogyny and bargaining power are all downstream of the form itself, and the form doesn't have any analysis or opinion about how valuable any specific article *should* be.
The value-form has no way of rewarding inventions as such, only the sale of particular units of commodities, so superstructural social forms like intellectual property rights emerge in order to reward innovation. These forms then tend to undergo regulatory capture as the evolutionary pressures move towards intellectual property-based rent-seeking on the part of capitalists.
The value-form has no way of rewarding infinitely reproducible articles, like digital data, and so artificial limits (DRM), artificial scarcity (NFTs) and moralistic claims like "developers need to eat and deserve a reward for their hard work" are levelled to try to *squeeze digital objects into the value-form*, despite them being an objectively poor fit.
The value-form does not know what an externality is and has no mechanism to account for externalities.
The value-form does not have a concept of corruption, or the external legal institutions required to make a capitalist society actually functional, and will erode them naturally.
The value-form is entirely empty of all specific content. Chris Arthur is right when he says "there is a void at the heart of capitalism."
\---
Bailey also presages Marx and Roy Bhaskar in other important ways: the inherent emergent necessity of the money-form, and a stratified ontology with many interacting powers, but this review is already far too long, so I will leave these connections as an exercise to the interested reader.
\---
This is a book that should be widely read by Marxists of all stripes, as it will rip the guts out of any lingering Ricardianism rattling around your brain.
Chris Arthur is the name in particular if you want to read more in this direction (in fact, his paper *The Spectral Ontology of Value* is very good, and put me on this track in the first place). Other thinkers that Arthur lists in this tendency (of moving incorrect or downstream specifics out of the value-form) are I. I. Rubin and Kozo Uno.
This has immediately become one of my favourite books. If you want a systematic takedown of the Ricardian labour theory of value, you will not find a better text.
Bailey is ferocious and utterly uncompromising in his critique. At first he simply shows the flawed logic used by Ricardo, Mill et al. when progressing from their theory of value to even the most minimally fleshed-out examples, but later in the book he goes ham ripping the LTV's basic premises to shreds.
He does all of this with precise and taut chains of argument that are a joy to read; I can't count the number of times I said "hey [partner name], listen to this...!"
\---
Bailey, like Marx, takes seriously the importance of the ontology of value. He understands that the form of production and exchange have huge ramifications for society as a whole. And while Marx definitely provides greater scope and more sociological depth, Bailey lays vital groundwork for effectively doing this kind of sociological analysis.
Given that I'm a Marxist and that I read this book to further my knowledge of the value-form, I'm going to start with Marx and work from there.
\---
Some of you may also know that Marx explicitly critiques Bailey's book in his 1861-1863 manuscripts (later to be edited into *Theories of Surplus Value*, but unfortunately Marx's criticism of Bailey is lacking. While I love chapter 1 of Capital as much as any Wertform nerd, Marx definitely hung on to the LTV a bit too hard by virtue of his "third thing" argument.
Marx's (very angry) critique of Bailey mostly reduces to this "third thing" position: he believes that in order for commodities to be commensurable (ie, able to be be exchanged for one another on a quantitative basis), they must have some substance in common, which Marx terms abstract labour. Think of how if object A is 1 metre tall and object B is two metres tall, these objects have a property in common, namely, spacial extension.
Likewise, Marx believes (at least in the manuscripts) that each commodity as such only has one value, which can then be expressed in some quantity of another commodity. Marx's model looks something like this:
Abstract Labour -> Value -> Expression of Value
There are some problems with this. First, like utility in neoclassicism, abstract labour is completely unmeasurable, and it can be inferred only in retrospect.
Second, this model explicitly does not handle other subjects of exchange that utilise the value form but are not products of labour (land being the obvious example, something Marx only gets around to later and unsuccessfully, c.f. the transformation problem debate).
The problem is that if there are things that use the value-form but don't have value, then price and value are two different phenomena, of which price is a mere surface expression. This then creates the transformation problem and the questions over whether or not capitalists are evolutionarily pressured to maximise value or price, and so on. It becomes a huge mess that at best requires *extensive* exegetical work to render functional.
Bailey on the other hand dispenses with all this in one fell swoop, by showing that value is inherently relational and nothing but relational.
In other words, something may have use-value (read: function), completely outside of exchange or comparison: bread is food, iron can be used to make tools. But we do not call this value, typically. We would ask "what is the use [or function] of iron?" but not "what is the value of iron?" for this purpose.
"The value of iron" inherently implies comparison and the choice between alternatives: do I want X more than Y?
And so it is impossible to express the value of a thing except through some other thing. And this is true even prior to the mode of production: this is a deeply, fundamentally human process: any process of making a decision between alternatives. If we ask someone "what do you value in a partner?," for example, what it really means is something like "what traits do you select for?." It's raw evaluation.
So when Marx (or Ricardo, or Heinrich) say that a commodity has both a real AND nominal price, or is "trading above/below it's value," or the like, what can that possibly mean? What would it mean for a thing to have a value *as a property inherent in itself* prior to any act of exchange?
To be clear someone can list anything for any price at all: I could list my boots on eBay for ten million pounds of I so desire, but no one will buy them.
On the other hand, if they sell for 500 pounds, you would be well within your right to say "I don't think they're worth that much," but *all that actually amounts to* is the fact that *you* wouldn't make that exchange. This is a perfectly valid position, but it doesn't erase the reality that this act of exchange did actually occur.
Bailey's insight is that even in a world dominated by commodity fetishism [read: universalised commodity production where an article produced for exchange is immediately and automatically granted the property of 'price'], this is ultimately a mental process.
Neither the different uses/functions of the cornucopia of the world's commodities, nor different kinds of labour share anything to render them commensurable with each other. Instead, they are rendered commensurable only via the real abstraction of exchange, of which there is no underlying substance, Only people deciding to do the specific act of exchange.
Much like Austen's performativity whereby to say "I promise" is the very act of promising, to act out exchange between a Snickers bar and 1 pound *is itself to render a Snickers bar as being worth a pound* (at least at this moment in time and space).
\---
One has to take Occam's Razor to Marx's model: what is the point of maintaining that labour (even in abstracted form) is the source of value? Especially given that we *know* there are things like land and collectors' items that both break this supposed rule constantly.
Worse still, what abstract labour even *means* is highly controversial within Marxism, and numerous completely incompatible understandings exist amongst very intelligent and well-read Marxologists with very impressive degrees.
\---
To his credit, Marx is hitting at something very important here, it's just that abstract labour is a suboptimal tool to represent it. What he is hitting at is fourfold:
First, he's hitting at cost of production in general, which sets a hard limit to the viability/profitability of a product. The greater the competition between producers, the more closely the price of a commodity will orbit this cost of production.
Secondly, he's hitting at the cost of maintaining the life of the average worker (the reproductive cost of the worker, also known as the "real value of labour" in the political economic literature), which is both a cost of production and a transcendental minimum necessary for any work to be carried out at all (you need your workers to be alive to do their jobs).
Thirdly, he's pointing out that different labours are worth different amounts. It's impossible to tell whether a professor writing a paper is working harder than a bricklayer for instance, they're just not commensurable activities. Social prestige also effects the price of labour-power: female-dominated industries are generally considered less valuable and have lower pay rates.
Finally and most innovatively is what Sohn-Rethel calls the social validation of labour: every society must decide how to expend it's ability to labour, and labour can be wasted. It's only at the point of successful exchange that the labour expended in the production of a commodity in a sense joins the mass of successfully utilised labour. And what makes capitalism unique is that this decision of expenditure is fundamentally decentralised and uncontrolled.
\---
But why put this multitude of factors inside the value-form itself, when the value-form clearly doesn't actually give a solitary crap any of these issues? In fact it is the sheer dumb simplicity of the value-form that causes so many problems:
The value-form has no concept of society, survival or necessity, so welfare and collective bargaining by workers becomes necessary in the face of capital accumulation.
The value-form has no mechanism beyond raw market forces to analyse *why* one kind of labour is worth more than the other. Costs of production, misogyny and bargaining power are all downstream of the form itself, and the form doesn't have any analysis or opinion about how valuable any specific article *should* be.
The value-form has no way of rewarding inventions as such, only the sale of particular units of commodities, so superstructural social forms like intellectual property rights emerge in order to reward innovation. These forms then tend to undergo regulatory capture as the evolutionary pressures move towards intellectual property-based rent-seeking on the part of capitalists.
The value-form has no way of rewarding infinitely reproducible articles, like digital data, and so artificial limits (DRM), artificial scarcity (NFTs) and moralistic claims like "developers need to eat and deserve a reward for their hard work" are levelled to try to *squeeze digital objects into the value-form*, despite them being an objectively poor fit.
The value-form does not know what an externality is and has no mechanism to account for externalities.
The value-form does not have a concept of corruption, or the external legal institutions required to make a capitalist society actually functional, and will erode them naturally.
The value-form is entirely empty of all specific content. Chris Arthur is right when he says "there is a void at the heart of capitalism."
\---
Bailey also presages Marx and Roy Bhaskar in other important ways: the inherent emergent necessity of the money-form, and a stratified ontology with many interacting powers, but this review is already far too long, so I will leave these connections as an exercise to the interested reader.
\---
This is a book that should be widely read by Marxists of all stripes, as it will rip the guts out of any lingering Ricardianism rattling around your brain.
Chris Arthur is the name in particular if you want to read more in this direction (in fact, his paper *The Spectral Ontology of Value* is very good, and put me on this track in the first place). Other thinkers that Arthur lists in this tendency (of moving incorrect or downstream specifics out of the value-form) are I. I. Rubin and Kozo Uno.
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