Chapter 1 Capital and Social Form

In: The Spectre of Capital: Idea and Reality
Christopher J. Arthur
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The question of social form is central to the proper understanding of economic systems. It is only in virtue of differences in social form that Marx can insist that there is no such thing as ‘economics’ in general, but that each mode of production has its specific and peculiar laws of motion. Before directly addressing the logic of capital, then, let me summarise the general context in which it is placed, a peculiar social form of production.

In order to explain the specificity of the social form of capitalist commodity-production I employ the triad of categories: sociation, dissociation, and association.1 All economy begins with some particular mode of sociation of those productively active. In our society this is disrupted by the dissociation consequent on the social division of labour, immediately labour is private. It becomes posited as social labour only through a most peculiar form of association, namely the process of exchange of products. Let me elucidate.

By sociation is meant the universal, ahistorical reality that, in order to be active economically, people engage in social relationships and social practices.

By dissociation (the negation of sociation) is meant the historically specific reality of the separation between economic agents predominant in the bourgeois epoch; ‘separation’ here does not mean a geographical distance, but a social barrier. Dissociation has four dimensions: first that useful objects are held by persons as their private property and hence are not immediately available for satisfying the needs of others; second that production is carried out in enterprises likewise in the hands of private owners; third that labour power is separated from its object in that the most important means of production are held as the property of members of the capitalist class; fourth that production and consumption are separated, production is carried on by enterprises and consumption by households.

By association is meant that the opposition of sociation and dissociation is mediated in the form of exchange whereby consumers acquire the objects they require, production units acquire inputs and dispose of outputs, and through contracts of labour people find work and capitalist enterprises find workers. It is important to understand that when dissociation is negated through association this is on the same ground; that is to say, the basic element of privatised appropriation of goods is retained, but in mediated form. Thus association does not replace dissociation; rather it replicates it through developing its conditions of existence; sociation now takes the contradictory form of their unity.

Since the exchange relation provides the first moment of association it is the conceptual starting point of the presentation of the bourgeois epoch. The presentation proper will thus start with commodity exchange. Since exchange is a voluntarily undertaken transaction, not indicated by any central authority but rooted solely in the private purposes of the agents concerned, it is on the face of it extremely unlikely that any coherent economic order could emerge at all, still less one characterised by some beneficent ‘hidden hand’. The problem is to determine the form of social cohesion that unifies a system in which all decisions to produce and to exchange are private.

So far, I have not mentioned capital, the theme of this book. The point is that capital is a social form that emerges from the contradictory relationship of dissociation and association. Exchange is the historically specific condition of existence of this relationship, and of the capitalist system in general. This condition must be reproduced by the movement of the system of capital itself. Exchange, for example, must extend its reach, rather than die away. Only generalised commodity production requires universal exchange as its necessary foundation.

The main thesis to be explored is that capital itself achieves the reproduction of its own conditions of existence. Although the form of capital is shown to be the overriding moment in the system, the drive that provides the impulse for reproduction, I cannot start with it right away, because it is far too complex a determination. Rather this presentation of capital (in Part 2 below) deliberately starts with the most indeterminate characterisation of the whole, namely what is implicit in the commodity form. The argument develops precisely because of the need to overcome the inadequacy of this characterisation, measured either immanently, for example by its self-contradictory implications, or by reference to its failure to be self-subsistent. In this way thought is impelled onward to conceive a more concrete totality; only when the presentation reaches the whole is the starting point grounded in its connection with the whole and thereby validated as a true determination in this relative sense of being inadequate on its own but valid as one of the determinations that come together in a mutually grounding interchange to constitute the concrete whole. The whole is mediated in its elements, and these elements ground themselves in the whole. Commodities are the starting point; I do not at first raise the question of where commodities come from, whether they are produced or non-produced goods, or, if they are produced, under what relations of production. But the development of the argument itself eventually grounds them as results of capitalist production.

A notable feature of the presentation to come is that I do not thematise labour until after conceptualising the general form of capital. To begin with I analyse the commodity form itself, and only at the end give reasons for picking out as systematically important those commodities that are products of labour. In this way, by exploring to the full the dialectic of form, and letting the form itself reach the content it demands, I do something very different from those who are always in a hurry to address the material content. However, under definite historically emergent conditions, the value form comes to acquire a ground in labour, or, conversely, labour comes to express itself in value.

To sum up: the sociation-dissociation contradiction is the presupposition of the entire epoch, and hence of our presentation below; it is association through exchange that gives this contradiction ‘room to move’; exchange is a primary mode of social synthesis in the bourgeois epoch, and it reproduces the dissociation of social production into autonomous units; the first concrete category is therefore this mediation, and we study its further development; this first category of movement determines goods as commodities, and hence the first object of analysis is the commodity, a unity of use-value and exchange-value; this doubling is a relation in which form dominates matter; the value form is therefore the theme of the categorial dialectic.

An important foundation of this book is that the argument is shaped by the protocols of value-form theory. This sets itself against those who neglect the relevance of the form of value, as if this form passively reflects the material metabolism of production. On such an account, money veils – or even distorts – the real relations of production; value itself is often simply identified with labour in such interpretations of Marx’s theory of value. By contrast, value-form theory affirms that the money form has an active role in directing economic life; it is not merely a mediator of more fundamental forces. It follows that theory must accept the reality of formal determination, distinct from – albeit working alongside – causal determination. It is the value form that determines the dimensions of the so-called ‘production’ of value.

For example, when it is claimed that the magnitude of value is a function of socially necessary labour time, it may be considered that the former is ‘caused’ by the latter. However, such a view fails to account for the very existence of such a relation. It is only the social form of commodity exchange that determines why, and how far, such a function can exist. Moreover, the actuality of value presupposes a fully developed capitalist social formation. Two things follow. First, that the ideality of the value form develops from commodity to money to capital in accordance with a dialectical logic of totalisation; second, the material pole develops in response to formal determination, but predicated on what is materially possible for the available human and natural resources.

My aim is to reconstruct the inner nature of capitalism through interrogating the founding category of value. The truth of value becomes real only in the totality of its forms. While the dialectic of the value form appears at one level as a self-referring system, at another level it depends on a material ground from which it is estranged. Conversely insofar as social labour finds expression in this system of estrangement it appears only as an abstraction from itself, as reified labour. The material and ideal moments of the economic system are never coherently unified. I come back to this at the end, but it must be borne in mind throughout.

I argue (in Chapter 5) that the starting point of a systematic presentation of the idea of capital is the pure form of exchange, from which both use-value and labour are absented. Since it is common for these to be considered superior foundations for ‘economics’, we address them in the remainder of this chapter. (After all, nothing is exchanged unless it has use-value for others, and nothing is there at all unless someone makes it!)

I begin with ‘use’. In Marx’s terminology, the nature of commodity exchange is analysed using the categories of ‘use-value’ and ‘exchange-value’. It should be explained that in his usage ‘use-value’ is identified with the material body of the good concerned. It is the various properties inherent in it that allow it to have various uses, but rather than focussing on such relations Marx employs the term substantively, such that it is possible to speak of a commodity as ‘a’ use-value. Putting the point this way heightens the sense of paradox when it is contrasted with its ‘value’, because, again, this too is to be taken, not in a relational sense in which it stands for an exchange ratio, but substantively again, such that the commodity is ‘a’ value. Now, while speaking of a commodity as ‘a use-value’ might be deemed a somewhat peculiar locution, there can be little objection, in that the material body of the commodity taken under this description is clearly something present to inspection. By contrast, to speak of ‘value’ as such (as I do in Part 2) could be taken as highly objectionable.

To proceed, in exchange a practical abstraction from the material properties of goods leaves a pure form, namely the form of value, within which they are determined as commodities for both parties. Value contains not an atom of matter; it is in effect an ideal social form opposed to the material characteristics that give the commodity some sort of use-value. Here we presuppose the objective validity of the ‘abstraction’ predicated on exchange relations.2 Whatever may be true before and after exchange, in the sphere of exchange itself the commodity is entirely abstracted from its character as a use-value.

It is of great importance here that this abstraction is not effected by consciousness but is objectively constituted in the real process of exchange. This is a practical abstraction from the character of the commodities as use-values, which latter is ‘absented’ for the period of exchange. The commodities acquire as a new determination the character of values; and the bodies of the commodities concerned play the role of bearers of this determination imposed on them while passing through this phase of their life cycle. They become subject to the value form.

What is at issue in the constitution of the value form is by no means the same sort of abstraction as natural science employs when it studies mass, for example, and treats bodies under this description regardless of their other properties. For mass is indeed a given property of the bodies concerned, inhering in each. But there seems no limit in the form of exchange itself to what people might take to exchanging.

At first sight, then, it seems an empty mediator, tailor-made to registering various heterogeneous relations. The advance of value-form theory is the insight that the value form develops to the point at which, with self-valorising value, it is constituted as a self-relation, and ‘takes over’ the world of production and consumption given to it.

The exchange determinations are dimensionally incommensurable with use. Notice that to say ‘we abstract from use’ is very different from generating the abstraction ‘utility’ from heterogeneous use-values, by disregarding the particularity of use. Exchange is certainly not an actualising of the ‘common property’ of utility.

Moreover, the thing must be realised as an exchange-value before it can be as a use-value. It might be said that exchange is underpinned by the comparative preferences for A and B by the parties, but in this case what is actualised is some weight of such preferences in the minds of the exchangers rather than an identity in the commodities A and B. The latter identity, namely of A and B, is the value in exchange of them, whatever external conditions shape the ratio of exchange. Moreover, exchange could not be based on their identity as use-values, or it would have no point; rather they must be different, so that one person’s preference may be for A and one for B. The non-identity of the commodities as use-values is set aside then in their identity as exchange-values.

While it is a fundamental condition of commodity exchange that a commodity bears the character of ‘use-value for others’, its use-value is ‘suspended’ for the duration of exchange. However, this ‘absenting’ is equivalent not to destruction but to ‘distantiation’, so that use-value remains potent at a level immediately removed from exchange determinations; the body of the commodity appears in exchange, but simply as a ‘bearer’ of value, its use-value having been substantively displaced. (Nonetheless we show later that use-value has its own economic determinacy.)

Value and use-value are immediately contraries. Where value is, use-value is not: if use-value is, value is nothing: there are two different regions of being in which what is present in the one region is absent in the other. It is a feature of the structure of commodity relations that use-value and value exhibit such duality (yet eventually interpenetrate).

To sum up: exchange brings about a sui generis form without any given content, because all use-value is absented, not merely all determinate use-value but the category itself. It is presupposed to exchange and actualised after exchange but simply not present in exchange.

Now I turn to the second important issue, the place of labour. For me labour is not the starting point of my presentation of value theory. But is not value theory centred on the capital relation? And does not that imply it concerns itself not merely with capital but with that which stands in an essential relation to it, namely labour? The short answer to this is that capital is related to waged labour, a form of capital itself; a longer answer is given throughout this book.

So why is labour not the starting point for a systematic-dialectical presentation of capitalism? It is true that historical materialism takes the mode of production to be the central determinant of all social formations. It is also true that the immediate producers, and their work, seem central to that. Nonetheless it is impossible to specify the mode of production without attending to the social relations within which work is carried on by producers. But are not such relations nothing but their relations? That depends. I take the position that capital is structured by inhuman relations which posit human agents simply as their bearers.

The ‘original’ unity of social production is here radically disrupted through various kinds of separation or dissociation. If one searched for the common social substance of the economy, it is no longer to be found in social labour. So, either there is no social substance at all, or unity is now established by an alien social substance-subject. This is capital. Capital is founded on the exploitation of living labours. But these labours are brought into connection, (a) only through an alien mediator, (b) only as abstract. ‘Abstract labour’ is in truth a value-formed determination. (See my treatment of this form in Chapter 10 below.) It should not be identified with some naturally given physiological identity of labour. In sum, if labour is structured by the requirement to produce saleable commodities, and that is solely the aim of capital, then it is logical to begin our investigation with the conceptual development of the form of the commodity into that of capital.3

Since, in the Preface, I said this is a work of pure theory, it is necessary to distinguish it from the view of ‘pure theory’ advanced by Kōzō Uno, and his followers, Tom Sekine, and Robert Albritton. They make the methodological stipulation that, for the purpose of pure theory, labour is to be taken as completely reified. (This assumption is to be relaxed as a less abstract level than pure theory.) For me, however, not only do I take capital to constitute itself only through overcoming its other, labour, but that necessity of its constitution is precisely the basis of my vindication of the labour theory of value. (Of course, capital has a tendency to reify labour, and part of my theory for simplicity takes this tendency as completed.) So the defining characteristic of capital is not the same here as in the Uno tradition of ‘pure theory’.

I accept that the alienation of the social substance of labour consequent on exchange remains as the unspoken standing condition of the very possibility of, and necessity for, the dialectic of capital. In no way does this value form merely express a pre-existing unitary substance, namely social labour. Yet in order to ground itself in the real material world, capital takes possession of labour and then substitutes its own principle of unity on these divided labours. The big question is how far this alien world can effectively reproduce its own preconditions, thus making itself absolute.

The ultimate object of our theory is the capitalist form of social material production; but it does not follow that in the presentation it is necessary to evolve general categories of production and then further specify these in terms of capitalism. Because of the importance of exchange in shaping the character and direction of social production, the presentation starts with the form of exchange, bracketing for this purpose the origin of the objects of exchange.

It is characteristic of the dialectical development of concepts that initial simple abstract definitions be replaced by successively more complex and concrete ones. My initial abstract definition of ‘value’ is that it is ‘the power of exchange’ inherent to a commodity. It may be claimed that reference to labour should be included even at the most abstract level of determination of the Idea of value, because the entire value-form problematic springs from the social division of labour with its consequent contradiction of a labour that has to be simultaneously private and social.

The plausibility of this argument is undermined by the peculiarly abstract character of the value form itself. Insofar as it resolves the contradiction through an exchange system socially associating the products of dissociated producers within a universal form, it overshoots the parameters of the original problem. The commodity form is so empty of given content that it not only allows the exchange of heterogeneous goods produced in private enterprises, but the inscription of all sorts of other heterogeneous material. So it is illegitimate to argue that exchange-value is simply the form of association of private labours. The fit of form and content here is too loose. It is noticeable that Marx bridges the gap peremptorily, by introducing a stipulative definition of value as the objectification of labour. This leaves non-products as surds in the value form.

The most abstract level of analysis of the value concept is therefore that of a pure form of association, namely association through exchange, devoid of ‘content’. Hence it should be possible to present a value-form derivation of money and capital without simultaneous reference to the commensuration of labours. But later the requirement of concretion yields the theoretically argued identification of products of capital as the only content adequate to the self-determination of the value form. Then I argue that the social ontology of living labour within capital gives good grounds for asserting a version of ‘the labour theory of value’.

At the level of the immediate process of production the various concrete labours find their place in the structure of total social labour. Although they are denatured and posited as bearers of capital’s motion, it still seems all capitalist economic determinations are reducible to exploitation of labour. But in the capital system the various capitals are structured by total social capital, and are posited as profitable, only within the rhythms of social reproduction. In this context capital’s own determinations appear to subsume and supplant those of labour. My thesis requires recognition of a dual ontology of economic life; at ground level there are material relationships, but ideal ones supervene on the material (see Chapter 14 below).

It is impossible to start with labour and show the commodity is a form it takes on, because this form is an alien imposition on labour. It is through exchange that abstraction imparts itself to labour, making it abstract human labour, because it is the form of exchange that establishes the necessary social synthesis in the first place before labours expended are commensurated in it.

The method of presentation must engage with the value form first, and then provide reasons to narrow the focus of the inquiry to products, rather than start from ‘labour value’, and then inexplicably allow the scope of the commodity form to include non-values. (Just stipulating that non-products do not count as values merely begs the question.)

In dialectical terms, to presuppose at the outset that the items exchanged are labour products marks a dogmatic beginning. This could be justified externally by appeal to the broader concerns of historical materialism with modes of production. But for a dialectical presentation a beginning without imposed conditions is needed. Only after developing the forms of circulation is there ground for picking out as systematically important those commodities that are products of labour. (This I do in Division II below.)

Addendum on ‘Simple Commodity Production’

If the object of analysis is the capitalist economy, circulation of commodities is to be considered the circulation of capitalistically produced commodities. Their value, and the relevant determinations of labour, are concretely constituted only in the capital relation. I reject then the model of ‘simple commodity production’.4

In such a model, exchange at ‘value’ is supposed to take place because otherwise people would switch into the less onerous occupation. Notice that this ‘law’ presupposes everyone knows what labour is expended by others; this is a very doubtful proposition historically. Even if it is accepted as an idealising assumption, nothing like an objective law is operative. For the other necessary assumption is that the only consideration affecting the choices of individuals is avoidance of ‘toil and trouble’. This subjective hypothesis has little to do with the fact that there exists in capitalism an objective law of value which makes exchange at value necessary. If the law relies on merely subjective judgements, then other subjective considerations to do with the trouble of learning new methods, or the preference for one occupation rather than another, may be operative also. Even if the fishermen noticed their working day was longer than that of the hunters with whom they exchanged, they might simply prefer life on the river to the darkness of the forest.

Key is the objective rationality of the system of capitalist competition, not an ideal type of ‘rational economic man’ read back into the natural state. There is a stark contrast between the peasant saying ‘Time costs nothing’ and the capitalist motto ‘Time is money’. It is only in modern industry that competition within a branch, and the mobility of capital between branches, brings about the development of a common measure. When all inputs, including labour power itself, have a value form, and production is subordinated to valorisation, then an objective comparison of rates of return on capital is possible and competition between capitals allows for the enforcement of the law of value. Only because capitals need a rule to allocate profits, according to the necessity of their form, is a rule of equivalence in exchange imposed to secure this; only because capitals are constituted through exploiting labour is this rule correlated with the amounts of labour extractable; and only because capitals are inherently time oriented in virtue of their form is the measure of such amounts of labour socially necessary labour time. The theory of surplus value grounds the law of value.


Before presenting the logic of capital (in Part 2) a number of contextualising chapters are required (here in Part 1). This chapter sketches the peculiarities of the social forms upon which the capital system is established. Centrally, there obtain a set of dissociations, such as that between units of production held in private hands. In order to remedy this, the form of exchange creates the requisite association, but only in a contradictory way, for, nonetheless, dissociation is retained. Exchange mediates this opposition.

For goods to be exchangeable they must bear some specific use-value. However, exchange gives rise to a radical abstraction from the heterogeneity of the goods exchanged, when they are identified with each other as exchangeable. Moreover, all putative characteristics of the exchanged commodities are rejected as possible supports for orderly exchange; in particular ‘utility’ and ‘labour’ cannot account for the almost infinite range of things that may be exchanged. The commodity form is, then, pure form.

However, it is anticipated that the pure form may well have real effects through a process of formal determination of the economic metabolism. It is further anticipated that, through a dialectical development, this elementary form logically results in the form of capital, and, indeed, of capitalist production. But, only once the general formula for capital is developed, is it appropriate to turn to the grounding of value in the production process.


Here I draw on the terminology of Reuten and Williams 1989, although I do not pretend to follow their definitions exactly.


Alfred Sohn-Rethel (in his Intellectual and Manual Labour) deserves credit for thematising abstraction in exchange. For the process he used the term ‘real abstraction’ (Sohn-Rethel 1978). Better is to say that exchange effects a ‘practical abstraction’ on the commodities exchanged. This last notion was advanced by Reuten and Williams 1989, pp. 63–4.


Cf. Uno 1980, pp. xxiv–xxviii.


The myth that this ‘model’ is used in Marx’s Capital I treat in Arthur 2005b.

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