1.1 The aim of capital and Capital

Marx’s Capital sets out an exposition of the capitalist mode of production. The ultimate aim of capitalists (enterprises and their financiers) is the accumulation of capital. In Capital Marx shows how, via the production of surplus-value, capital is produced by labour. The value-form of commodities is the elementary form of the production and accumulation of capital. Core to Marx’s exposition is the dual character of commodities (as useful entities and as values) and the dual character of labour along with it. This is why the concept of value and especially labour’s production of value is a core one.

1.2 Marx’s paradigmatic break from classical political economy

Marx, the founder of the political economy paradigm that bears his name, accomplished a paradigmatic break from both Hegelian philosophy and classical political economy. Marx shares the fate of all founders of paradigms: the break to a large extent has to be formulated in the language of the former paradigm. This brings with it inevitable ambiguities. These ambiguities and problems of interpretation are in one way or the other resolved or accommodated by those working in the new paradigmatic language (this is what Kuhn, in The structure of scientific revolutions, called “puzzle solving”), which may take the shape of ‘reconstructions’ of the originator’s work.

1.3 Method: conceptual progress

Related to the previous point there has always been controversy over Marx’s method among Marxian authors, mainly as relating to the character of his break from Hegel. However, few dispute that Marx in Capital adopts a method of layered conceptual progress, starting with general and relatively uncomplicated concepts, to particular and complex concepts (this method might be denoted as a type of systematic dialectics, or as what Sweezy (1968 [1942]) called “successive approximation”). This applies to all of Marx’s main concepts, and especially also to his concept of value.

1.4 The historical order of Marx’s writings of and for Capital

We see this conceptual layering also in the design of the three volumes of Capital. As is well known, Marx completed only its first volume, the other two were edited by Engels on the basis of Marx’s manuscripts. For all of Marx’s main concepts, and especially also for that of value, it is most relevant that the manuscript for ‘Capital III’ and much of that for II, was written before Capital I (see Table 1, rows 1–3).

The order here is particularly important because, as MEGA editor Vollgraf indicates, with the drafts for Capital of 1864–81 Marx started in fact a conceptually new project, in contradistinction to his 1857–63 project. The two “differ in content and structure” (Vollgraf 2018, p. 71).

It is most likely that if Marx had lived longer, he would have rewritten his drafts for Volumes II and III in line with his new 1866–67 Capital I findings.

In §§2–4 I will draw on the works of rows 1–3 of the table, and also that of row 5, “Results of the direct production process”.

1.5 Marx as continuous critic of Marx

Marx’s two main projects and the continuous redrafting and re-conceptualisations of his texts (continued after 1867 – see especially MEGA II.4.3; II.7; II.11 and II.14) show how Marx was continuously his own main critic. This shows his thorough scientific attitude. It is most likely that had he lived longer this would have been prolonged. In my view, therefore, the best tribute to Marx is to not only interpret his texts (with all their problems – §1.2) but to be a critic of Marx in his vein and go on to reconstruct and expand his project. The worst attitude, alien to Marx, is to consider his writings handed down as the final truth.

1.6 Marx’s ‘averages’ account in Capital I

A final issue on which I will draw in the rest of this essay – an issue that has received too little attention in the literature – regards Marx’s ‘averages’ account in Capital I especially. I stressed this in a 2004 article. It was greatly highlighted again by Vollgraf (2012, pp. 50–1). He indicates that Marx was influenced by the Belgian mathematician and statistician Quételet, who in a work of 1835 was the first to apply ‘averages’ in social science.

Below (§3) we will see the import of the averages account in Parts Four and Five of Capital I, which are especially crucial for his conceptualisation of value. Marx starts from social averages, moves to deviation from and changes of averages, and then returns back to (new) social averages.

To be sure, this averages account of individual capitals is not the same as a macroeconomic account. Besides, Marx is very explicit that only in Capital II, Part Three (where he presents his reproduction schemes) does he move from the individual capital to the “total social capital” – or what since 1933 is called ‘macroeconomics’ (Marx 1893 [1885¹] EBF, especially pp. 427–30 and 469–70).

2.1 Elements of the initial static or average account of value: Chapter 1

In Capital I, ch. 1, section 1, Marx posits the duality of the use-value and the value of commodities, and along with it the duality of concrete labour and abstract labour. In a commodity producing society, products not only have some use-value (usefulness) – which is the product of concrete labour – but also an exchange-value. The dualities introduced here are core to all of his further exposition in Capital.

(a) The value of commodities and the concept of abstract labour. This is how ‘abstract labour’ and ‘value’ are introduced for the first time:

If then we disregard the use-value of commodities, only one property remains, that of being products of labour. (…) If we make abstraction from its use-value, we abstract also from the material constituents and forms which make it a use-value. (…) [With it] the useful character of the kinds of labour embodied in them also disappears {aufgelöscht: dissolves} this in turn entails the disappearance of the different concrete forms of labour. They can no longer be distinguished, but are altogether reduced to the same kind of labour, human labour in the abstract. (Marx 1890⁴ [1867¹] EBF, p. 128; cf. 1890⁴ [1867¹] MEW, p. 52. Below I abbreviate the references as MEW for the German, and EBF for the English Ben Fowkes translation. Superscripts after a publication year always refer to the edition of a work.)

Thus, Marx continues, disregarding the usefulness of commodities:

There is nothing left of them … but the same phantom-like objectivity; they are merely congealed quantities of homogeneous human labour, i.e., of human labour-power expended without regard to the form of its expenditure. All these things now tell us {stellen nur noch dar: are exhibited only as} that human labour-power has been expended to produce them, human labour is accumulated {aufgehäuft: amassed} in them. As crystals of this social substance, which is common to them all, they are values – commodity values [Warenwerte]. (Marx, EBF, p. 128; MEW, p. 52).

After this he indicates: “The progress of the investigation will lead us back to exchange-value as the necessary mode of expression, or form of appearance, of value” (ibid.). (In his chapter 1, section 3, and chapters 2–3). Somewhat further on we have the one and only time that Marx uses the term measure(ment) of value in the fifty pages of chapter 1:

How is the magnitude of this value to be measured? By means of the quantity of the ‘value-forming {bildenden: constituting} substance’, the labour contained in the article. This quantity is measured by its duration, and the labour-time is itself measured on the particular scale of hours, days, etc. (Marx, EBF, p. 129; MEW, p. 53)

(b) Socially necessary labour-time and the intensity of labour. Next the terms ‘average’, ‘socially necessary labour-time’ and ‘intensity of labour’ are introduced for the first time.

The total labour-power of society, which is manifested {sich darstellt: is exhibited} in the values of the world of commodities, counts here as one homogeneous mass of human labour-power, although composed of innumerable individual units of labour-power.⁵ Each of these units is the same as any other, to the extent that it has the character of a socially average unit of labour-power and acts as such; i.e., only needs, in order to produce a commodity, the labour time which is necessary on an average, or in other words is socially necessary. Socially necessary labour-time is the labour-time required to produce any use-value under the conditions of production normal for a given society and with the average degree of skill and intensity of labour prevalent in that society. (…) What exclusively determines the magnitude of the value of any article is therefore the amount of labour socially necessary, or the labour-time socially necessary for its production. (Marx, EBF, p. 129; MEW, pp. 53–4).

(c) The productive power of labour. A final general concept regarding Marx’s conceptualisation of the value of commodities, is that of the “productive power of labour” (German: Produktivkraft der Arbeit), which should be distinguished from “labour-power”. Note that the term Produktivkräfte dates back to the 1845–46 German Ideology (in MECW 5 it is translated as “productive forces”). Unfortunately, the translator of Capital has withheld the concept from English readers, translating the phrase as “productivity of labour” – a concept that Marx also uses, but the two are definitively not the same.⁶ The concept of the “productive power of labour” will also play an important role in §3 below (dynamics), and it is essential to distinguish it from the “intensity of labour” introduced above. Henceforth I will correct the translator’s error by amending his “productivity of labour,” putting *productive power of labour* between asterisks. Marx writes:

The value of a commodity would therefore remain constant, if the labour-time required for its production also remained constant. But the latter changes with every variation in the *productive power of labour*. This is determined by a wide range of circumstances; it is determined amongst other things by the workers’ average degree of skill, the level of development of science and its technological application, the social organisation of the process of production, the extent and effectiveness of the means of production, and the conditions found in the natural environment. (…) The value of a commodity, therefore, varies directly as the quantity, and inversely as the *productive power* of the labour which finds its realisation {verwirklichenden: actualisation} within the commodity. (Marx, EBF, pp. 130–1; MEW, pp. 54–5).

So far Chapter 1’s section 1. Anticipating §3 (dynamics), I record that Marx first introduced the average intensity of labour and next, as distinguished from it, the productive power of labour.

(d) Complex ‘empowered labour’ and the reduction to simple labour. Section 2 expands on the duality of labour as producing use-values and as producing the value actualised in commodities. I focus on one main issue, namely Marx’s conceptualisation of ‘simple average labour’. He writes according to the translator:

But the value of a commodity represents {stellt da: exhibits} human labour pure and simple {schlechthin: plainly}, the expenditure of human labour in general {überhaupt}. (…) It is the expenditure of simple labour-power, i.e., of the labour-power possessed in his bodily organism by every ordinary man, on the average, without being developed in any special way. Simple average labour, it is true, varies in character in different countries and at different cultural epochs, but in a particular society it is given. More complex labour counts only as intensified, or rather multiplied simple labour, so that a smaller quantity of complex labour is considered equal to a larger quantity of simple labour. (EBF, p. 135; cf. MEW, p. 59)

As a translation from the German, the last dotted text is utterly wrong. The German reads: “Kompliziertere Arbeit gilt nur als potenzierte oder vielmehr multiplizierte einfache Arbeit …” (MEW, p. 59). That is: “More complex labour counts only as empowered or rather multiplied simple labour …”.⁷ In §3.1 we will see the relevance of this amended translation. Here I record the order of Marx exposition: he first introduces the average intensity of labour (EBF, p. 129; MEW, pp. 53–4), and after his introduction of the concept of the ‘productive power of labour’ (EBF, p. 130; MEW, p. 54) he now introduces the concept of ‘empowered labour’. Immediately after this Marx writes:

Experience shows that this reduction [of empowered into simple labour] is constantly {Beständig: continually} being made.⁸ A commodity may be the outcome of the most complicated labour, but through its value it is posited as equal to the product of simple labour, hence it represents {exhibits} only a specific quantity of simple labour … The various proportions in which different kinds of labour are reduced to simple labour as their unit of measurement are established by a social process that goes on behind the backs of the producers; these proportions therefore appear to the producers to have been handed down by tradition. In the interests of simplification, we shall henceforth view every form of labour-power directly as simple labour-power; by this we shall simply be saving ourselves the trouble of making the reduction. (Marx, EBF, p. 135; cf. MEW, p. 59)

I have nothing against Marx’s concept of ‘empowered labour’: it is a great and utmost important concept (as we will see in my §3). However, his concept of “reduction” requires a brief comment. Marx does not tell how this reduction of labour-power is operationalised. My problem is not that he glosses over this at this point (Chapter 1). The problem is that in all three volumes of Capital he never returns to this matter. The extent to which this is important depends on whether at some stage one would want to apply this empirically and operationalise it. I think that this simplification precludes the adding up of labour-times before settling the trouble of making the reduction.⁹ Indeed, I think that this simplifying abstraction (here: assumption) makes a quantitative procedure at the empirical level of adding up concrete premarket hours of labour very dubious.

(e) Labour creates purely social value in the form of commodities (labour is not itself value). In Chapter 1, sections 3–4, it becomes clear how we must read the earlier sections in retrospect. Within the space constraints for this essay I merely highlight two conclusions of Marx from section 3 (“The value-form, or exchange value”). In this section Marx sets out how the value of commodities appears in relations of exchange. At the opening of this section he writes:

Commodities (…) only appear as commodities, or have the form of commodities, in so far as they possess a double form, i.e., natural form and value form. (…) Not an atom of matter enters into the objectivity of commodities as values (…) their objective character as values is therefore purely social. (Marx, EBF, pp. 138–9; cf. MEW, p. 62)

Thus, to be sure, when we perceive a single commodity (bread or a car) there is no way to detect its value from that perception. As such, its value seems super-sensuous. The value character of commodities emerges {hervortreten} only in their relation to other commodities (EBF, pp. 141–2; MEW, p. 65) and in particular in their manifestation (Gestalt) of the commodities’ common value-form, that is, the money form (EBF, p. 139; MEW, p. 62; MEW, p. 75 and EBF, p. 162; MEW, p. 84). Early on in this section Marx concluded already:

Human labour-power in its fluid state, or human labour, creates value, but is not itself value. It becomes value in its coagulated state, in objective form. (Marx, EBF, p. 142; cf. MEW, p. 65)

Thus the value of commodities is explained by labour-time.

2.2 Money as the measure of value in practice: Chapters 2–3

The current subsection is not relevant for the remainder of this essay. However, regarding Marx’s conceptualisation of value I cannot neglect to focus the reader’s attention to Chapters 2–3 of Capital I, Part One. Each one of the Parts of Capital constitutes a unity.

Marx started Ch. 1, section 1, with the exchange-value of commodities. He systematically introduces this concept in section 3, where he also posits the form of money – expanding on the latter’s broad social implications in section 4.

The relatively brief Ch. 2 on the process of exchange, introduces social actors of exchange and the action of society to turn a particular commodity into the general equivalent ‘money’ (EBF, p. 180) within a society of generalised commodity production (EBF, p. 187). In sum it posits the prevalence (Dasein) of money in practice.

Money itself (i.e., its systemic existence) is derived in Ch. 3. Notably it is systematically derived from exchange, just as the commodity and value were derived from exchange. It is only later (that is in all the rest of Capital) that the role of the money-form of value, that is money’s role in production and in the full circuit of capital will become explicit. But in order to comprehend this role, Ch. 3 is absolutely crucial.

Here I restrict myself to one brief quotation from its section 1 (“The measure of values”):

Money as a measure of value is the necessary form of appearance of the measure of value which is immanent in commodities, namely labour-time. (Marx, EBF, p. 188; MEW, p. 109)

Marx starts his exposition in this chapter with the sentence: “Throughout this work I assume that gold is the money commodity, for the sake of simplicity” (ibid). Whereas this was not strange in 1867, it has nevertheless been controversial among Marxian scholars. I refer to three contrary positions, each one plausible in itself, that are in the end, in my view, nevertheless complementary. These are Campbell 1997, Williams 2000 and Bellofiore 2005.

2.3 Some concluding remarks on the social dimensions adopted by Marx

The result of Part One is that in all of Capital value entities are expressed in a monetary dimension (using some currency standard such as £); the same applies to all numerical examples.¹⁰ Throughout Marx adopts two main social dimensions, namely labour-time and monetary value. “Labour, creates value, but is not itself value.” It is important to (re)emphasise the latter since in some interpretations of Marx’s Capital ‘value’ is itself taken to have a labour-time dimension. Those same accounts often adopt the term ‘labour values’ – a term never used in Capital.¹¹ At the level of the production of capital (Capital I) Marx aims to explain value and surplus-value (in the monetary dimension) in terms of labour-time (in Parts Three to Five, 350 pages) – an explanation in terms of labour-time does, of course, not mean that value actually ever discards its monetary dimension.¹²

3.1 The dynamics as presented in Capital I, Part Four

Marx’s major dynamic conceptualisation of value is in Capital I, Part Four (“The production of relative surplus-value”). Starting from averages, he next considers changes in the value of commodities due to changes in labour’s productivity. There are two factors affecting such changes. Each of these were already briefly treated in the book’s Ch. 1 (§2.1 above under b to d).

(a) The intensity of labour. Taking the degree of “empowerment of labour” as given (see under heading b below), the productivity of labour will change with the “intensity of labour”, that is, the effort and strain of labour, as initiated by some capitalist in some sector. Along with it Marx introduces the concept of the “degree of density” of labour, implying that clock-time is an insufficient measure.¹³ He treats this matter in Part Four, chapter 15 (ch. 13 of the German edition). He writes:

It [intensification of labour] imposes on the worker an increased expenditure of labour within a time which remains constant, a heightened tension of labour-power, and a closer filling-up of the pores of the working day, i.e., a condensation of labour, to a degree which can only be attained within the limits of the shortened working day. This compression of a greater mass of labour into a given period now counts for what it really is, namely an increase of the quantity of labour. In addition to the measure of its ‘extensive magnitude’, labour-time now acquires a measure of its degree of density.¹⁴ (…) the same mass of value is now produced for the capitalist by, say, 3⅓ hours of surplus labour and 6⅔ hours of necessary labour, as was previously produced by 4 hours of surplus labour and 8 hours of necessary labour. (Marx 1890⁴ [1867¹] EBF, p. 534; cf. Marx 1890⁴ [1867¹] MEW, pp. 432–3)

According to Marx, however, differences in the intensity of labour tend to be levelled out by way of competition between workers. I add that this may perhaps seem obvious within some sector (branch) of production, though less so between sectors of production. Given the current skills of labour, a levelling out between sectors would seem a medium or long run matter. As long as this is not effectuated we would have diverging rates of surplus-value between sectors.

(b) The empowerment of labour. The second factor affecting changes in the productivity of labour is the “empowerment of labour”. It is treated in chapter 12 (chapter 10 of the German edition), where Marx systematically introduces the “productive power of labour” (German: Produktivkraft der Arbeit). Again the English translator renders Produktivkraft into ‘productivity’. In all quotations below I amend this, as marked by asterisks (*). Marx writes:

increase in the *productive power of labour* (…) cannot be done except by an alteration in his [the labourer’s] tools or in his mode of working, or both. (…) By an increase in the *productive power of labour*, we mean an alteration in the labour process of such a kind as to shorten the labour-time socially necessary for the production of a commodity, whence a smaller quantity of labour acquires the power of producing a greater quantity of use-value. (Marx, EBF, p. 431-amended; MEW, p. 333)

And:

The technical and social conditions of the labour process and consequently the mode of production itself must be revolutionized before the *productive power of labour* can be increased. (Marx, EBF, p. 432-amended; MEW, p. 334)

Regarding the “empowerment of labour” the following is the key sentence:

The labour operating at this exceptional productive power acts as empowered labour; it creates in equal periods of time greater values than average social labour of the same kind. (Marx, my translation of MEW, p. 337; cf. EBF, p. 435)¹⁵

Fowkes – and hence all English language readers – completely misses the point because he translates the German “potenzierte Arbeit” by “intensified labour” so muddling it with the distinction that I introduced above under (a).¹⁶

This beyond average value-creating empowerment of labour cannot be simply measured in clock-time. (The latter’s insufficiency is the one similarity between the intensity and the empowerment of labour.) Marx continues:

Hence, the capitalist who applies the improved method of production, appropriates as surplus-labour a greater portion of the working-day than the other capitalists in the same business. (…) On the other hand, however, this extra surplus-value vanishes, as soon as the new method of production is generalized …. (Marx, EBF, p. 436; cf. MEW, p. 337)

This is quite right. Note, however, that Marx feels (rightfully) constrained to exhibit a change in the social-average productive power as a change within one sector of production. He (rightfully) posits no mechanism for generalisations of the productive powers between sectors. (Anticipating §4, it can already be remarked that would such a mechanism exist, it might perhaps imply an equalisation of compositions of capital?!)

In the absence of such a mechanism and given the value-generating empowerment, Marx’s exposition here implies divergences in rates of surplus-value between sectors. These stem from diverging technical changes, a factor independent of the intensity of labour, even if the two can be combined – as Marx indicates.¹⁷

3.2 The new matter about technique related empowerment of labour: comparison with 1861–63 and 1864 manuscripts

All the evidence that we have establishes that Marx developed his insights regarding the “empowerment of labour” related to technique only in 1866–67 when he worked on the final draft for the first edition of Capital I. Regarding the 1861–63 text this can be checked since we have these texts: MECW 30 and 34 (based on MEGA II/3). Because the 1863–64 penultimate draft for Capital I was blended into the ultimate draft, except for the 1864 Results (§1.4, Table 1), the latter might provide a further indication. In this text Marx presents a quite extensive treatment of technical change. Nevertheless, as in the earlier manuscripts, he here treats only the intensity of labour.

3.3 Capital I, Part Four: return to averages

In Chapter 17 of Part Five (German edition ch. 15) – synthesising Parts Three and Four – the main focus is again on social averages (this also applies for the next and last chapter of this Part). Given Marx’s method in Capital I there is nothing wrong with this. For the purposes of this essay I merely record that he continues to make a clear distinction between the intensity and the productive power of labour. Thus he writes that at a given average real-wage rate per “normal working day”, the rate of surplus-value depends on:

(1) the length of the working day, or the extensive magnitude of labour, (2) the normal intensity of labour, or its intensive magnitude, whereby a given quantity of labour is expended in a given time and (3) the *productive power* of labour, whereby the same quantity of labour yields, in a given time, a greater or a smaller quantity of the product, depending on the degree of development attained by the conditions of production. (EBF, p. 655; cf. MEW, p. 542)

Marx emphasises strongly that the three determinants mentioned in this passage are not only variable, but also may occur separately or in several combinations. In what follows this passage, he analyses each of these in turn, in four separate sections. Marx here usually assumes that the determinants have been generalised across the economy, whereas the previous chapters (briefly discussed in §3.1) also treated (the initiation of) changes.

4.1 Marx’s 1864–65 manuscript for Capital III: prices of production

At the very beginning of Part Two (in the manuscript the full Part is one single chapter), Marx immediately delimits the scope of his theorising about the rate of surplus-value. He writes:

In this chapter {i.e., Part} we … assume that the degree of exploitation of labour, i.e., the rate of surplus-value, and the length of the working day, is the same in all the spheres of production …. (Marx 1894, EDF, p. 241).

Below I use the following notation: s = surplus-value; v = the wages sum; sʹ = the rate of surplus-value (sʹ = s/v); c = constant capital (means of production used up); c/v = the ‘composition of capital’ (abbreviated CC); rʹ = the rate of profit (rʹ = s(c+v)). Subscripts i and j refer to any sector. Later on I use ρ for the post-transformation profits.

In Ch. 8 Marx sets out the following prepositions, indicating a hypothetical state prior to the transformation:

Hence this set of presuppositions [A–E] is incompatible. At least one of these must be wrong.

In Ch. 9 Marx introduces the new concept of ‘production price’, which is predicated on preposition [E]. The production price is a “transformation of value”. Here he sets out three numerical schemes. The first and the second scheme apply presuppositions [A]–[D]. The third scheme applies [B]–[C] and [E] and introduces prices of production. For the sake of brevity, Table 2 compresses these three schemes to one single and reduced one.

Thus Marx drops sales at value (presupposition A), introduces production prices instead, and thereby gets rid of diverging profit rates (presupposition D). He does this with hardly any argument. Note that he maintains the production of surplus-value, which is now redistributed as profits ρ.

However, presupposition [A] is not abandoned altogether. Marx posits two aggregate equalities: that of aggregate surplus-value and profits, and that of aggregate values and production prices (see the bottom row of Table 2).

For Marx’s exposition in Ch. 10 of how this transformation actually comes about as a process, I refer to Reuten 2018, §2.4. Here I focus on one main aspect of it. Marx writes about the constellation prior to the transformation and the surplus-value produced after it:

[E]quality in the grade of exploitation of labour or the rate of surplus-value (…) presupposes competition among the workers and an equalisation that takes place by their continuous migration from one sphere of production to another. (Marx {1864–65 ms}1993¹ MEGA, p. 250, my translation; cf. Marx {1864–65 ms} 2016, EBF, p. 286 and Marx 1894, EDF, p. 275)

Thus regarding the rate of surplus-value he has merely the intensity of labour in mind, because only this would be relevant for the migration.

5.1 Incompatibilities

Many commentators of Marx have rightly pointed to the defects of this transformation (Marx was aware of quite a number of them), as well as its incompatibilities with his Capital I text. This is not the place to review these defects, and there is not one independent review of the positions that I could refer to. A novice reader of Marx might perhaps start with the now ‘classic’ Sweezy 1968 [1942], pp. 109–30.

5.2 A reconstruction

We have seen that in Capital I, after the dynamic account of Part Four, Marx in Part Five returns to the account of average “socially necessary labour time”. There is nothing wrong with this. However, when considering different spheres of production as in (the draft for) Capital III, these averages are inadequate as the (presumably structural) between-sector deviations from the average are the crux. Marx’s inter-sector differing compositions of capital are one part of the relevant matter. The other part regards the differing technique related empowerment of labour, whence rates of surplus-value differ between sectors (§3.1). However, in the Capital III draft for Part Two Marx neglects this, which is even more remarkable because in Part Three he directly associates the composition of capital with the productive power of labour.²⁰ (I write that he ‘neglects’ it; perhaps he was not yet aware of it – see the following subsection.)

In Reuten 2017 (§4) it is shown that it is not difficult to reconstruct Marx’s account of value in Capital III, Part Two. In brief: cross out the “redistribution” of surplus-value and cross out “prices of production”. We have differing productive powers of labour between sectors that in equilibrium – because of intra-labour competition regarding the intensity of labour (effort and strain) – reduce to differing empowerments of labour. The latter are associated with technique-determined differing compositions of capital. As a result the rates of surplus-value differ between sectors. In equilibrium we have thus equalised rates of profit.

Hence the stylised example of Table 2 turns simply into that of Table 3.

Thus the core matter is that capitalists are out to raise the accumulation of capital by way of raising the rate of surplus-value via technical change, that is, change of the empowerment of labour associated with the productive powers. This is in line with all of Marx’s exposition in Capital I.²¹

All along we have the dimension of value as expressed in money. Furthermore, this reconstruction can be directly applied empirically, with two qualifications. Firstly, we have to neglect Marx’s “reduction to simple labour” (§2.1 above, under d). As indicated, Marx himself never returned to this matter – and it also plays no role in his transformation to prices of production. Secondly, the distinction between the intensity and the empowerment of labour is important, but the intensity of labour is very difficult to measure in an operational way, and especially so between sectors. Thus I assume (as does Marx) that in the long run it is levelled out between sectors. (I am not saying that the intensity of labour should be neglected, it is an important field for empirical research.)

5.3 Philological puzzles

The final point regards the question why Marx, as well as Marxian political economists working in his tradition, never came up with the simple reconstruction set out above.

It seems that – as indicated in §3.2 – the technique determined empowerment of labour was only developed by Marx during 1866–67. We might then hypothesise that he left for later the working out of its consequences for his ‘Capital III’ draft. (We can be glad that he gave priority to the far more important reproduction schemes of Capital II, where we find his foundation of macroeconomics avant la lettre.)

Against this hypothesis weights a letter he wrote to Engels on 30 April 1868. Here he starts out from the presupposition of equalised rates of surplus-value between sectors.²² Marx apparently continued to have in mind the ideas about the transformation found in the 1861–63 manuscripts, as well as his Capital I, Part Five ‘return to averages’ account. Apparently Marx’s mind was fixed on equalising rates of surplus-value.

At least at that time. There is a small manuscript of six pages – published for the first time in 2003 – that dates probably from 1878 (see Vollgraf and Roth with Jungnickel 2003, p. 697). Consider the following two passages:²³

For [the] calculation of the rate of profit that the social capital yields it was assumed {angenommen}, 1) that the rate of surplus-value {is} uniform for the different heaps of capital {Kapitalmassen} in different branches of industry, 2) and neglecting turnover, i.e., the turnover of the social capital over the year posited = 1. In fact for the different heaps of capital different rates of surplus-value and different turnover times. (Marx {1878ms; emphases in italics are Marx’s} 2003, p. 158, my translation)

The clarification following it (after seven printed lines on the calibration of turnover times) is very interesting. Note Marx’s usage of the term pure (rein) which he reserves for law-like entities.

These are just differences {Differenzen} emerging from the pure economic conditions, namely different {verschiedne} magnitudes of the capitals invested in business sectors, different rates of exploitation of labour-power, different turnover times. However [there are] other aspects of the equalisation such as unattractiveness, danger and standing of the work. (Marx {1878ms} 2003, p. 158, my translation)²⁴

As for the 1864–65 Capital III manuscript or the 1868 letter, this text cannot be taken as definitive. The greatness of Marx was that for him nothing was definitive (see §1.5). This is what I have learnt, and what all interpreters of Marx could learn from him.