merchants and financiers were concerned, redistributed existing value between themselves.30 On this point, Ricardo is a good example of where value theory has a real political impact. His critique of ‘unproductive’ sectors of the economy was influential in the transformation and development of the British state away from aristocratic remnants of the feudal mode of production towards the increased power and dynamism of industrialists.
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The substantialism of Smith and Ricardo is open to critique on several fronts. Well-worn objections note how the value of ‘old furniture’ and ‘old masters’ is entirely independent of labour.31 Indeed, even freshly manufactured products on the market cannot have their value read-off from the amount of embodied labour-time expended in their production, because otherwise ‘the capitalist who employed the most workers and the least machinery would make the most profit’.32 A similar argument is wagered on the basis of utility theory. If twice as much labour contributes to the killing of a beaver than that of a deer, then the beaver will exchange at twice the price of the deer. But this can only hold in the presence of ‘maximizing behaviour’ in the first place, ‘whether imposed by scarcity or social conditioning’, and the necessities of social reproduction inherent in this behaviour impose certain structures of value regardless of the labour expended in the production of the good at hand. Moreover, for the ‘deer–beaver exchange rate’ to function at all requires ‘a prevailing disutility of labor’, insofar as labour is experienced not as a ‘positive pleasure’ but an ‘onerous task’ that must be rewarded in exchange.33
Searching deeper into the foundations of embodied labour theories of value, institutionalist Thorstein Veblen associated the flawed ‘conservation principles’ that informed substantialism with the role of scientific developments in the intellectual life of contemporary society. Veblen sees substance as akin to a kind of ‘economic energy’ that underpins the ascription of ‘equivalence’ and ‘equilibrium’ to the ratio between the expenditure of force in production and the return achieved in the market. This rests on the inappropriate assumptions that ‘the orderliness of natural sequence’ bestowed by energy conservation in the natural sciences can be applied seamlessly to the social world, and that the scientific principles in themselves capture the reality of the natural world – when they themselves were in fact surpassed by a relational ‘field’ understanding of energy.34
The flaws of applying conservation principles to the relationship between value and embodied labour as an order-bestowing force become clear when one considers the issue of price. For substantialist theories of value, labour acts as a means by which things are moved from the natural sphere of pure use value to the market sphere of exchange. But the price its products attract in the market is the only means by which the purported ‘order’ that labour grants becomes clear. This price can only become apparent with the buying and selling of the goods labour transforms as commodities. Thus, the basis of value in labour is revealed only through a sequence of circumstances that have little to do with labour itself and everything to do with ‘the adventitious circumstances of relative scarcity and utility, in which labour plays no role’.35 Whilst, according to this reasoning, Ricardo was correct to exclude from his considerations of the labour theory of value scarce, rare and non-reproducible items, the wider substantialist tradition has tended to advocate a metaphysical approach to value as something embalmed in objects, regardless of price.36 But the notion of labour somehow ‘embodied’ in an object is itself an abstraction, a ‘mental convenience’ that renders labour ‘homogeneous when plainly it is not’. In this way, Ricardianism, in common with all substance theories of value, ‘impose[s] upon empirical “facts”’ theoretical models that bring order, coherence and plausibility to the immediate appearances of phenomena, rather than engaging in the ‘theorization of real-world processes’ themselves.37 In so doing, the surface appearances are taken to represent the entirety of the phenomena itself.
This is not to diminish the considerable impact of substantialist approaches to the labour ‘embodied’ in commodities. The ‘calculation’ of exchange ratios and rates of profit using input–output figures owes its conceptual foundations to some notion of a substance of value embodied in things themselves. Such a mathematics of value relies upon the judgement that ‘the value of a commodity [is] determined by the physical data relating to methods of production rather than vice versa’, focusing on ‘the determination of value rather than the determination by value’. But, ultimately, this fundamentally misinterprets the directionality of the relationship between labour and value, insofar as ‘it is only through the exchange of products that individual labours are commensurated’ and the labour-times socially necessary for their production established. The substantialist embodied-labour perspective, when channelled through the formulas of input–output, ‘understand[s] values as mere derivatives of physical quantities required for production’. However, as we will go on to see, ‘the social quantification of production requirements’ is in actual fact ‘posited in the value abstraction’ itself.38
Marx
Marx himself is often thought of as advocating precisely such a substantialist or ‘embodied’ position, in his labour theory of value, as that found in the political economy that preceded him. In this account, a commodity’s value always stems from the ‘labour time necessary in production’, and ‘labour performed under the command of capital’ likewise always ‘produces value, regardless of what later happens to the product’, the commodity’s value differing from its underpinning value substance only due to the artificial fluctuations of supply and demand.39 From this perspective, Marx holds to a similar set of ‘conservation principles’, insofar as labour-time extracted in production reappears in the commodity, where it subsists independent of other activities such as trade and circulation, which can only transfer commodities and their values.40 The presentation of such a reading of value in Marx’s work was partly as a result of political expediencies, sitting within a political and theoretical tradition that has staked its analyses and objectives on the power bestowed upon workers to create the value contained in the world of commodities and lay claim to the wealth produced. Regardless, the substantialist approach to value that we find in Marx represents ‘the culmination of the substance-theory tradition’ – and, we might add, its most sophisticated and forceful rendition.41
In his masterwork, Capital, Marx ‘start[s] from the simplest form of the product of labour’ in the society under study, which is that of capitalism.42 In capitalist society, this product is the commodity. Whilst some, as we will go on to see, have read this as an indication of the primacy of monetary exchange to Marx’s understanding of value, a substantialist reading of Marx’s value theory would instead suggest that Marx selects the commodity for the same reason as it was the starting point of Smith’s analysis: because it is a product of labour, which is the true underpinning principle of value.43 Marx suggests that the commodity is ‘the simplest social form in which the labour product is represented in contemporary society’.44 The commodity matters because labour matters. On this account, instead of looking at prices and seeking an explanation of why they are as they are, the aim for Marx was instead to understand the forms that labour takes and what the consequences of these forms might be.45 Marx stated the importance of a perspective rooted in labour in his engagement with Smith, suggesting that ‘As individuals express their life, so they are. What they are, therefore, coincides with their production, both with what they produce and how they produce.’46
Commodities, for Marx, possess a use value and an exchange value. On the market, commodities are equalized where their exchange values are concerned, and differentiated with regard to their use values. The former is what allows the commodity to be exchanged with others; the latter is what makes the commodity attractive as an object of utility or desire.47 Commodities must be sufficiently different from one another in order to have specific, particular characteristics that render a good or service a worthwhile purchase amongst all the
