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“Marx’s Refusal of the Labour Theory of Value” by David Harvey

Marx’s Refusal of the Labour Theory of Value
David Harvey
March 1, 2018
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It is widely believed that Marx adapted the labour theory of value from Ricardo as a founding concept for his studies of capital accumulation.  Since the labour theory of value has been generally discredited, it is then often authoritatively stated that Marx’s theories are worthless. But nowhere, in fact, did Marx declare his allegiance to the labour theory of value.  That theory belonged to Ricardo, who recognized that it was deeply problematic even as he insisted that the question of value was critical to the study of political economy.  On the few occasions where Marx comments directly on this matter,1 he refers to “value theory” and not to the labour theory of value.  So what, then, was Marx’s distinctive value theory and how does it differ from the labour theory of value?

The answer is (as usual) complicated in its details but the lineaments of it can be reconstructed from the structure of the first volume of Capital.2

Marx begins that work with an examination of the surface appearance of use value and exchange value in the material act of commodity exchange and posits the existence of value (an immaterial but objective relation) behind the quantitative aspect of exchange value. This value is initially taken to be a reflection of the social (abstract) labour congealed in commodities (chapter 1).   As a regulatory norm in the market place, value can exist, Marx shows, only when and where commodity exchange has become “a normal social act.” This normalization depends upon the existence of private property relations, juridical individuals and perfectly competitive markets (chapter 2).  Such a market can only work with the rise of monetary forms (chapter 3) that facilitate and lubricate exchange relations in efficient ways while providing a convenient vehicle for storing value.  Money thus enters the picture as a material representation of value.  Value cannot exist without its representation. In chapters 4 through 6, Marx shows that it is only in a system where the aim and object of economic activity is commodity production that exchange becomes a necessary as well as a normal social act.  It is the circulation of money as capital (chapter 5) that consolidates the conditions for the formation of capital’s distinctive value form as a regulatory norm. But the circulation of capital presupposes the prior existence of wage labour as a commodity that can be bought and sold in the market (chapter 6).  How labour became such a commodity before the rise of capitalism is the subject of Part 8 of Capital, which deals with primitive or original accumulation.

The concept of capital as a process – as value in motion – based on the purchase of labour power and means of production is inextricably interwoven with the emergence of the value form.  A simple but crude analogy for Marx’s argument might be this: the human body depends for its vitality upon the circulation of the blood, which has no being outside of the human body.  The two phenomena are mutually constitutive of each other. Value formation likewise cannot be understood outside of the circulation process that houses it. The mutual interdependency within the totality of capital circulation is what matters.  In capital’s case, however, the process appears as not only self-reproducing (cyclical) but also self-expanding (the spiral form of accumulation).  This is so because the search for profit and surplus value propel the commodity exchanges, which in turn promote and sustain the value form.  Value thereby becomes an embedded regulatory norm in the sphere of exchange only under conditions of capital accumulation.

Figure 1

Figure 1

While the steps in the argument are complicated, Marx appears to have done little more than synthesize and formalize Ricardo’s labour theory of value by embedding it in the totality of circulation and accumulation as depicted in Figure 1. The sophistication and elegance of the argument have seduced many of Marx’s followers to thinking this was the end of the story. If this was so then much of the criticism launched against Marx’s theory of value would be justified.  But this is not the end.  It is in fact the beginning. Ricardo’s hope was that the labour theory of value would provide a basis for understanding price formation.  It is this hope that subsequent analysis has so ruthlessly and properly crushed.  Marx early on understood that this was an impossible hope even as he frequently slipped (I suspects for tactical reasons) from values to prices in his presentations as if they were roughly the same thing. In other instances he studied systematic divergences.  In Volume 1 Marx recognizes that things like conscience, honour and uncultivated land can have a price but no value.  In Volume 3 of Capital he explores how the equalization of the rate of profit in the market would lead commodities to exchange not at their values but according to so-called “prices of production.”

But Marx was not primarily interested in price formation. He has a different agenda. Chapters 7 through 25 of Volume 1 describe in intricate detail the consequences for the labourer of living and working in a world where the law of value, as constituted through the generalization and normalization of exchange in the market place, rules. This is the famous transition, at the end of chapter 6, where Marx invites us to leave the sphere of circulation, “a very Eden of the rights of man” where “alone rule Freedom, Equality, Property and Bentham.’ And so we dive into “the hidden abode of production” where we shall see “not only how capital produces but, how capital is produced.” It is only here, also, that we will see how value forms.

The coercive laws of competition in the market force individual capitalists to extend the working day to the utmost, threatening the life and well-being of the labourer in the absence of any restraining force such as legislation to limit the length of the working day (chapter 10).  In subsequent chapters, these same coercive laws push capital to pursue technological and organizational innovations, to mobilize and appropriate the labourers’ inherent powers of cooperation and of divisions of labour, to design machinery and systems of factory production, to mobilize the powers of education, knowledge, science and technology, all in the pursuit of relative surplus value.  The aggregate effect (chapter 25) is to diminish the status of the labourer, to create an industrial reserve army, to enforce working conditions of abject misery and desperation among the working classes and to condemn much of labour to living under conditions of social reproduction that are miserable in the extreme.

This is what Diane Elson, in her seminal article on the subject, refers to as “the value theory of labour.”  It is a theory that focuses on the consequences of value operating as a regulatory norm in the market for the experience of labourers condemned by their situation to work for capital. These chapters also explain why Bertell Ollman considers Marx’s value theory to be a theory of the alienation of labour in production rather than a market phenomenon.3

But the productivity and intensity of labour are perpetually changing under pressures of competition in the market (as described in the later chapters of Capital).  This means that the formulation of value in the first chapter of Capital is revolutionized by what comes later.  Value becomes an unstable and perpetually evolving inner connectivity (an internal or dialectical relation) between value as defined in the realm of circulation in the market and value as constantly being re-defined through revolutions in the realm of production. Earlier in the Grundrisse (pp. 690-711), Marx had even speculated, in a famous “fragment on machines,” that the embedding of human knowledge in fixed capital would dissolve the significance of value altogether unless there were some compelling forces or reasons to restore it.4  In Volume 3 of Capital Marx makes much of the impact of technological changes on values leading to the thesis on the falling rate of profit.  The contradictory relation between value as defined in the market and value as reconstructed by transformations in the labour process is central to Marx’s thinking.

The changing productivity of labour is, of course, a key feature in all forms of economic analysis.  In Marx’s case, however, it is not the physical labour productivity emphasized in classical and neoclassical political economy that counts. It is labour productivity with respect to surplus value production that matters. This puts the internal relation between the pursuit of relative surplus value (through technological and organizational innovations) and market values at the center of Marx’s value theory.

A first cut at Marx’s value theory, I conclude, centers on the constantly shifting and contradictory unity between what is traditionally referred to as the labour theory of value in the sphere of the market (as set out in the first six chapters of Capital) and the value theory of labour in the sphere of production (as analyzed in chapters 7 to 25 of Capital).

But the materials presented in chapter 25 of Capital suggest that it is not only the experience in the labour process that is at stake in the value theory.  Marx describes the conditions of social reproduction of all those demoted into the industrial reserve army by the operation of the general law of capital accumulation (the subject of chapter 25).  He cites official reports concerning public health in rural England (most notably those by a certain Dr Hunter) and other accounts of daily life in Ireland and Belgium, alongside Engels’ account of The Condition of the English Working Class in 1844.  The consensus of all these reports was that conditions of social reproduction for this segment of the working class were worse than anything ever heard of under feudalism. Appalling conditions of nutrition, housing, education, overcrowding,  gender relations and perpetual displacement were exacerbated by punitive public welfare policies (most notably the Poor Laws in Britain). The distressing fact that nutrition among prisoners in jail was superior to that of the impoverished on the outside is noted (alas, this is still the case in the United States).   This opens the path towards an important extension of Marx’s value theory. The consequences of an intensification of capitalist competition in the market (including the search for relative surplus value through technological changes) produce deteriorating conditions of social reproduction for the working classes (or significant segments thereof) if no compensating forces or public policies are put in place to counteract such effects.

In the same way that the value theory of labour is foundational for Marx’s approach to value, so “a value theory of social reproduction” emerges as an important focus for study.  This is the prospect that Marx opens up in the last sections of chapter 25 of volume 1 of Capital. This is the focus of those Marxist feminists who have worked assiduously over the past forty years to construct an adequate theory of social reproduction.5

Marx (Capital, Volume 1, p.827) cites an official report on the conditions of life of the majority of workers in Belgium who find themselves forced “to live more economically than prisoners” in the jails. Such workers “adopt expedients whose secrets are only known (to them): they reduce their daily rations; they substitute rye bread for wheat; they eat less meat, or even none at all, and the same with butter and condiments; they content themselves with one or two rooms where the family is crammed together, where boys and girls sleep side by side, often on the same mattress; they economize on clothing, washing and decency; they give up the diversions on Sunday; in short they resign themselves to the most painful privations.  Once this extreme limit has been reached the least rise in the price of food, the shortest stoppage of work, the slightest illness, increases the worker’s distress and brings him to complete disaster; debts accumulate, credit fails, the most necessary clothes and furniture are pawned, and finally the family asks to be enrolled on the list of paupers.”   If this is a typical outcome of the operation of the capitalist law of value accumulation then there is a deep contradiction between deteriorating conditions of social reproduction and capital’s need to perpetually expand the market. As Marx notes in Volume 2 of Capital, the real root of capitalist crises lies in the suppression of wages and the reduction of the mass of the population to the status of penniless paupers. If there is no market there is no value. The contradictions posed from the standpoint of social reproduction theory for values as realized in the market are multiple.  If, for example, there are no healthy, educated, disciplined and skilled labourers in the reserve army then it can no longer perform its role.

The dialectical relations between competitive market processes, surplus value production and social reproduction emerge as mutually constitutive but deeply contradictory elements of value formation.  Such a framework for analysis offers an intriguing way to preserve specificities and differences at the theoretical level of value theory without abandoning the concept of the totality that capital perpetually re-constructs through its practices.

Other modifications, extensions and elaborations of the value theory need to be considered.  The fraught and contradictory relation between production and realization rests on the fact that value depends on the existence of wants, needs and desires backed by ability to pay in a population of consumers. Such wants, needs and desires are deeply embedded in the world of social reproduction.  Without them, as Marx notes in the first chapter of Capital, there is no value.  This introduces the idea of “not-value” or “anti-value” into the discussion. It also means that the diminution of wages to almost nothing will be counterproductive to the realization of value and surplus value in the market. Raising wages to ensure “rational consumption” from the standpoint of capital and colonizing everyday life as a field for consumerism are crucial for the value theory.

What happens, furthermore, when the presumption of perfect competition gives way to monopoly in general and to the monopolistic competition inherent in the spatial organization of capital circulation poses another set of problems to be resolved within the value framework. I have recently suggested, following on some relevant formulations by Marx, that the usual acceptance of the idea of a single expression of value be replaced by recognizing a variety of distinctive regional value regimes within the global economy.

Marx’s value form, I conclude, is not a still and stable fulcrum in capital’s churning world but a constantly changing and unstable metric being pushed hither and thither by the anarchy of market exchange, by revolutionary transformations in technologies and organizational forms, by unfolding practices of social reproduction, and massive transformations in the wants, needs and desires of whole populations expressed through the cultures of everyday life.  This is far beyond what Ricardo had in mind and equally far away from that conception of value usually attributed to Marx.


  1. See “Notes on Adolph Wagner,” in Marx., K., Value: Studies by Marx (ed. A. Dragstedt), London: New Park Publications, 1976.

  2. Much of what follows derives from Harvey, D., Marx, Capital and the Madness of Economic Reason, London, Profile Books; New York, Oxford University Press, 2017

  3. Elson, D., “The Value Theory of Labour,” in Elson, D. (ed.) Value: the Representation of Labour in Capitalism, London, CSE Books, 1979; Ollman, B., Alienation, London, Cambridge University Press, 1971.

  4. The so-called “fragment on machines” has been widely debated in recent years. See Carlo Vercellone, “From Formal Subsumption to General Intellect: Elements for a Marxist Reading of the Thesis of Cognitive Capitalism,” Historical Materialism15 (2007) 13–36

  5. See the recent survey and collection in Bhattacharya, T., Social Reproduction Theory: Remapping Class, Recentering Oppression, London, Pluto Press, 2017.


“Listen, Anarchist!” by David Harvey

“Listen, Anarchist!” A personal response to Simon Springer’s “Why a radical geography must be anarchist”

David Harvey
City University of New York, USA

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Simon Springer (2014) has written a lively and polemical piece in which he argues that a radical geography must be freshly anarchist and not tired-old Marxist. As with any polemic of this sort, his paper has its quota of misrepresentations, exaggerations and ad hominem criticisms, but Springer does raise key issues that are worthy of discussion.

Let me first make clear my own position. I sympathize (but don’t entirely agree) with Murray Bookchin, who in his late writings (after he had severed his long- standing connection to anarchism), felt that “the future of the Left, in the last analysis, depends upon its ability to accept what is valid in both Marxism and anarchism for the present time and for the future coming into view” (Bookchin, 2014: 194). We need to define “what approach can incorporate the best of the revolutionary tradition – Marxism and anarchism – in ways and forms that speak to the kinds of problems that face the present” (2014: 164).

Springer, judging from his piece, would want no part in such a project. He seems mainly bent on polarizing the relation between anarchism and Marxism as if they are mutually exclusive if not hostile. There is, in my view, no point in that. From my Marxist perspective, the autonomist and anarchist tactics and sentiments that have animated a great deal of political activism over the last few years (in movements like “Occupy”) have to be appreciated, analyzed and supported when appropriate. If I think that “Occupy” or what happened in Gezi Park and on the streets of Brazilian cities were progressive movements, and if they were animated in whole or in part by anarchist and autonomista thought and action, then why on earth would I not engage positively with them? To the degree that anarchists of one sort or another have raised important issues that are all too frequently ignored or dismissed as irrelevant in mainstream Marxism, so too I think dialogue – let us call it mutual aid – rather than confrontation between the two traditions is a far more fruitful way to go. Conversely, Marxism, for all its past faults, has a great deal that is crucial to offer to the anti-capitalist struggle in which many anarchists are also engaged.

Geographers have a very special and perhaps privileged niche from which to explore the possibility of collaborations and mutual aid. As Springer points out, some of the major figures in the nineteenth century anarchist tradition – most notably Kropotkin, Metchnikoff and Reclus – were geographers. Through the work of Patrick Geddes, Lewis Mumford and later on Murray Bookchin, anarchist sentiments have also been influential in urban planning, while many utopian schemas (such as that of Edward Bellamy) as well as practical plans (such as those of Ebenezer Howard) reflect anarchist influences. I would, incidentally, put my own utopian sketch (“Edilia”) from Spaces of Hope (2000) in that tradition. Continue reading

Uneven Growth: Tactical Urbanisms for Expanding Megacities


Exhibition: Museum of Modern Art (MoMA), NYC, Nov 22, 2014 – May 10, 2015

Film: Uneven Growth NYC (scroll down to view)

Essay: The Crisis of Planetary Urbanization by David Harvey

Book: Published by The Museum of Modern Art, New York
Edited with text by Pedro Gadanho. Text by Richard Burdett, Teddy Cruz, David Harvey, Saskia Sassen, Nader Tehrani.

The Micawber Solution

The Micawber Solution
David Harvey
August 6, 2014

“Something,” the endearing but eternally indebted Mr Micawber in Charles Dickens’ David Copperfield was fond of saying, “is bound to turn up!” “Welcome poverty! Welcome misery, welcome houselessness, welcome hunger, rags, tempest, and beggary!” said he, “Mutual confidence will sustain us to the end!” It sounds like an opening chorus for a Broadway musical called “Austerity Politics,” featuring Paul Ryan and George Osborne dialoguing across the Atlantic backed by a chorus of Republican governors of the United States and IMF officials, with a walk on role for Angela Merkel dressed as Medea poised to sacrifice the children of Europe rather than surrender to the fire-breathing paper dragon of inflation. The collective austerity budgets designed to cure all economic ills would provide a wonderful décor for a cacophonous second act. But in the final act Mr Micawber will stride upon the stage to save the day, with an ingenious solution to the problem of universal indebtedness.

He announces his solution “with much solemnity,” says Dickens, but only after consuming “two glasses of punch in grave succession.” Seeking to clean up his affairs as he readies himself to migrate from London to Australia, here is what Micawber proposes: Continue reading

Afterthoughts on Piketty’s Capital

David Harvey

Thomas Piketty has written a book called Capital that has caused quite a stir. He advocates progressive taxation and a global wealth tax as the only way to counter the trend towards the creation of a “patrimonial” form of capitalism marked by what he dubs “terrifying” inequalities of wealth and income. He also documents in excruciating and hard to rebut detail how social inequality of both wealth and income has evolved over the last two centuries, with particular emphasis on the role of wealth. He demolishes the widely-held view that free market capitalism spreads the wealth around and that it is the great bulwark for the defense of individual liberties and freedoms. Free-market capitalism, in the absence of any major redistributive interventions on the part of the state, Piketty shows, produces anti-democratic oligarchies. This demonstration has given sustenance to liberal outrage as it drives the Wall Street Journal apoplectic.

The book has often been presented as a twenty-first century substitute for Karl Marx’s nineteenth century work of the same title. Piketty actually denies this was his intention, which is just as well since his is not a book about capital at all. It does not tell us why the crash of 2008 occurred and why it is taking so long for so many people to get out from under the dual burdens of prolonged unemployment and millions of houses lost to foreclosure. It does not help us understand why growth is currently so sluggish in the US as opposed to China and why Europe is locked down in a politics of austerity and an economy of stagnation. What Piketty does show statistically (and we should be indebted to him and his colleagues for this) is that capital has tended throughout its history to produce ever-greater levels of inequality. This is, for many of us, hardly news. It was, moreover, exactly Marx’s theoretical conclusion in Volume One of his version of Capital. Piketty fails to note this, which is not surprising since he has since claimed, in the face of accusations in the right wing press that he is a Marxist in disguise, not to have read Marx’s Capital.
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Rebels on the Street: The Party of Wall Street Meets its Nemesis

Rebels on the Street: The Party of Wall Street Meets its Nemesis
David Harvey
Verso Books Blog
October 28, 2011

The Party of Wall Street has ruled unchallenged in the United States for far too long. It has totally (as opposed to partially) dominated the policies of Presidents over at least four decades (if not longer), no matter whether individual Presidents have been its willing agents or not. It has legally corrupted Congress via the craven dependency of politicians in both political parties upon its raw money power and upon access to the mainstream media that it controls. Thanks to the appointments made and approved by Presidents and Congress, the Party of Wall Street dominates much of the state apparatus as well as the judiciary, in particular the Supreme Court, whose partisan judgments increasingly favor venal money interests, in spheres as diverse as electoral, labor, environmental and contract law.

The Party of Wall Street has one universal principle of rule: that there shall be no serious challenge to the absolute power of money to rule absolutely. And that power is to be exercised with one objective. Those possessed of money power shall not only be privileged to accumulate wealth endlessly at will, but they shall have the right to inherit the earth, taking either direct or indirect dominion not only of the land and all the resources and productive capacities that reside therein, but also assume absolute command, directly or indirectly, over the labor and creative potentialities of all those others it needs. The rest of humanity shall be deemed disposable.
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Article: The Urban Roots of Financial Crises: reclaiming the city for anti-capitalist struggle

Socialist Register 2012New article in the Socialist Register 2012: The Crisis and the Left. Available now for subscribers and through many universities here.  Otherwise, look for it in your local bookstore in December, or pre-order on Amazon.


In an article in the New York Times on 5 February 2011, entitled ‘Housing Bubbles Are Few and Far Between’, Robert Shiller, the economist who many consider the great housing expert given his role in the construction of the Case-Shiller index of housing prices in the United States, reassured everyone that the recent housing bubble was a ‘rare event, not to be repeated for many decades’. The ‘enormous housing bubble’ of the early 2000s ‘isn’t comparable to any national or international housing cycle in history. Previous bubbles have been smaller and more regional’. The only reasonable parallels, he asserted, were the land bubbles that occurred in the United States way back in the late 1830s and the 1850s. This is, as I shall show, an astonishingly inaccurate reading of capitalist history. The fact that it passed so unremarked testifies to a serious blind spot in contemporary economic thinking. Unfortunately, it also turns out to be an equally blind spot in Marxist political economy.

Property market booms and busts are inextricably intertwined with speculative financial flows and these booms and busts have serious consequences for the macro-economy in general as well as all manner of externality effects upon resource depletion and environmental degradation. Property booms and capitalist crises also refocus politics on the city as a terrain of anti-capitalist struggle. The history of urban struggles, from the Paris Commune through the Shanghai Commune, the Seattle General Strike, The Tucuman uprising and the Prague Spring to the more general urban-based movements of 1968 (which we now see faintly echoed in Cairo and Madison) is stunning. But it is a history that is also troubled by political and tactical complications that have led many on the left to underestimate and misunderstand the potential and the potency of urban-based movements, to often see them as separate from class struggle and therefore devoid of revolutionary potential. And when such events do take on iconic status, as in the case of the Paris Commune, they are typically claimed as one of ‘the greatest proletarian uprisings’ in world history, even as they were as much about reclaiming the right to the city as they were about revolutionizing class relations in production.

Karl Marx by Lionel Youst

This article originally appeared in The Advocate: The Progressive Voice of Coos County, Oregon, July 2011.

Karl Marx
by Lionel Youst

My life as an autodidact began when I dropped out of North Bend High School following my Freshman year. Since then I’ve tried to learn something new every day but it’s kind of hit and miss. Gaps and lacuna show up all the time. For example, I’m 77 years old and just now getting into Marx. I don’t know why it took so long, but it was worth the wait. The guy is a truly outstanding writer, when he wants to be, and he loves footnotes as much as I do. If you follow them along you find that he is sometimes witty and often sarcastic, stunningly well read, and really smart. Continue reading

Feral Capitalism Hits the Streets

(Matthew Lloyd/Getty Images)

Feral Capitalism Hits the Streets
by David Harvey
11 August 2011

“Nihilistic and feral teenagers” the Daily Mail called them: the crazy youths from all walks of life who raced around the streets mindlessly and desperately hurling bricks, stones and bottles at the cops while looting here and setting bonfires there, leading the authorities on a merry chase of catch-as-catch-can as they tweeted their way from one strategic target to another.

The word “feral” pulled me up short. It reminded me of how the communards in Paris in 1871 were depicted as wild animals, as hyenas, that deserved to be (and often were) summarily executed in the name of the sanctity of private property, morality, religion, and the family. But then the word conjured up another association: Tony Blair attacking the “feral media,” having for so long been comfortably lodged in the left pocket of Rupert Murdoch only later to be substituted as Murdoch reached into his right pocket to pluck out David Cameron.
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The Vote to End Capitalism

How does capitalism get reproduced over time? This question has puzzled political economists from the seventeenth century onwards. Many simple models have been devised to answer this very complex question. While none of them are fully satisfactory, many insights are to be had from studying them and in these times of deep and frustrating troubles it is very important that we do just that.

One such model can be extracted from the works of Karl Marx and however abhorrent his political views might be to many, we ignore his insights at our peril. So here is a Marx parable that has interesting relevance to our present circumstance.
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