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Some notes on William Gibson’s new novel, Spook Country: “The door opened like some disturbing hybrid of bank vault and Armani evening purse, perfectly balanced bombproof solidity meeting sheer cosmetic slickness.” William Gibson’s prose is cool and precise: minimal, low-affect, attuned to surfaces rather than depths. It’s overwrought, filled to bursting with similes and allusions; … Continue reading “Spook Country”

I’ve been reading through Marx’s Grundrisse, which unaccountably I had never read before. It’s clear that this huge manuscript consists of rough notes, in various degrees of development. Marx never could have intended publication in this form. Parts of the manuscript are dazzlingly brilliant, and other parts are rather tedious (like the places where Marx, who was a philosophical giant, but evidently not a math wiz, takes twenty or thirty pages of tedious arithmetic calculations to establish, for instance, the fact that fractions which have the same numerator but different denominators are not, in fact, equal to one another). But against that, there’s the excitement of seeing Marx actually work through and work out philosophical and historical arguments (like that about what he later came to call “primitive accumulation”) which are only presented in finished form in Capital.

Here, too, Marx first works out the argument about “surplus value”: which is where we get a lot of the tedious and painfully elementary mathematics, but also where we get a full statement of the argument — not quite articulated in this way in Capital, or anywhere else in Marx’s writing, as far as I can remember — about how the whole notion of surplus needs to be thought in the sense of a radical incommensurability.

What I mean is this. (A lot of this is very elementary, but I need to write it all down here as part of the process if working it out for myself). The so-called labor theory of value, together with the quantitative calculation of surplus value, have long been the most contentious points in Marxist theory. This is largely for mathematical reasons which Marx clearly had a lot of trouble with (and which I myself can only partly understand). Basically, Marx (following Smith and Ricardo) defines the “value” of commodities and products in terms of the human labor that has been required to make them (even things like raw materials can be defined in these terms, since their value = the amount of human labor that was required to extract and appropriate them in the first place). Overall, this is an argument about how resources and productive forces are allocated by society as a whole, in terms of both production and distribution.

The trouble is that such a global concept of “value” does not actually correspond to the way that individual commodities are actually bought and sold. There is no direct equivalence between a commodity’s value as Marx defines it, and its empirical price in the marketplace. These are two separate dimensions; Marxian values have to do with the overall social organization of the economy, while prices have to do with the fluctuations of supply and demand (and especially marginal supply and demand). Marx endeavored at great length to figure out the mathematics of how value could be converted into price (or more precisely, how value — as a reality at the level of economic production — is in fact transformed into price, and surplus value correspondingly turned into profit, in the actual movements of the marketplace). But he failed; his mathematics was flawed, and apparently no general mathematical solution is even possible, aside from very special circumstances. (This is the so-called transformation problem. Marxists have offered various ways around the problem, usually based on questioning the premises under which the mathematical calculations are carried out in the first place: for instance, all the models imply a situation of equilibrium in the economy as a whole; but Marx is always suggesting that this equilibrium cannot be pre-assumed, since capitalism really moves in terms of disequilibrium and crisis).

If value cannot be calculated in empirical terms, then neither can surplus value (or the quantitative amount that capitalists are appropriating from workers). Marx knows that there is no simple one-to–one correspondence between the rate of exploitation in a given firm or industry, and its profit; rather, the entire social surplus (the excess of what is produced over what is paid for in production costs) gets distributed among capitalist enterprises through the market. But again, Marx never succeeded in linking the macro-level to the micro-level mathematically. This has led the majority of economists to conclude that questions of value and surplus value are simply irrelevant, and that Marx’s claim that workers are being exploited is without justification. “Value” is considered by these economists to be merely a metaphysical notion; for them, the positive quantities of price are all that matters, since they are all that can be calculated empirically.

Throwing out the whole dimension of value, however, is like throwing out the baby with the bathwater. You need some concept like value if you are ever to try to look at the economy (of the world, or of a given nation or society) systematically rather than just atomistically. The “price” paid by neoclassical marginalist economics, which looks only at prices, is precisely that all sorts of politico-economic questions are ruled out of bounds, and only “purely” economic issues are addressed. You can talk about the effect of an interest rate increase on the rate of inflation, but not about its effect on class relations. (I called this a “price” paid by neoclassical economics, but actually it is not a bug, but a feature: the whole purpose of neoclassical economics is to rule out the sort of question that would put the naturalness and inevitability of capitalist relations into doubt).

But how do we make sense of Marx’s whole theory of value, if we stand apart from the questions of calculation that he tried but failed to put into practice? All sorts of answers have been given in the course of the last century. I am inclined to accept Karatani’s suggestion that the theory of value needs to be regarded, not as an empirical phenomenon, but as the “transcendental condition,” in a Kantian sense, for the functioning of a capitalist-commodity mode of production and distribution. Marx acutely notes at one point in Grundrisse that “language as the product of an individual is an impossibility. But the same holds for property” (490). It is much more familiar today than it was in Marx’s time to note that, although I express myself through language, the language in which I make this expression is not properly mine, and does not belong to me, because it is social and communicative, and even precedes me. Marx says that the same is the case with “private property”: it is only in a given social framework, only when there are others, and myself and those others stand in various forms of relation, that I can even make the claim that something is mine, that it represents me, that it belongs to me. Property relations, like language, already have to be given before the issues of personal expression and personal presence and personal belonging even arise in the first place.

Grundrisse actually helps with fleshing out this claim about the pre-existing, transcendental supposition of property relations and of what Karatani calls the “value-form.” For here, in first working out the theory of surplus value, Marx emphasizes the incommensurability between workers’ wages on the one hand, and the productivity of their labor power, on the other. There is no common measure between the way, as a worker who sells my labor power, I replenish on a daily basis my own conditions of existence (I may get more money rather than less, and have a higher living standard than other workers, but I am still always a paycheck away from default, bankruptcy or ruin, since my wages basically only allow me to reproduce my own standard of life), and the way that the production process as a whole creates values that expand the material wealth of society as a whole, leading to the expansion and accumulation of capital. I sell my labor-power as a commodity in order to get the money to pay for the commodities that I need in order to make it to another day of selling my labor power all over again (Marx calls this the circuit of C-M-C). Whereas a corporation invests money in the production of commodities, in order thereby to sell the commodities and end up with an expanding quantity of money (Marx calls this the circuit M-C-M’). A social surplus is always being produced (except in conditions of grave economic dislocation, or when there are disasters like famine, tsunami, earthquake, and plague), and this surplus is always credited to the account of capital (which grows and accumulates directly; the ultimate result may be something of an increase in my standard of living as a worker, but this only happens secondarily, as part of a “trickle-down” process).

Or to put it in another, more pragmatic way: when I go into credit card debt I am making trouble for myself; I will be increasingly unable to pay off the debt. But when a corporation goes into debt, it is generally enabled thereby to expand. Even in cases of bankruptcy: the Congress has recently passed laws making the conditions of recovery much more difficult and punitive for individuals than it was before; while corporations increasingly declare bankruptcy as a way to “reorganize” by breaking their labor contacts, decreasing wages and benefits, etc. (This is happening right now with Northwest Airlines and with the auto parts manufacturer Delphi, both major presences in the Detroit area.

As Deleuze and Guattari say, “it is not the same money that goes into the pocket of the wage earner and is entered on the balance sheet of a commercial enterprise.” For the wage earner, there is “a flow of means of payment relative to consumer goods and use values, and a one-to-one relation between money and an imposed range of products” (Marx’s C-M-C); while for the enterprise, monetary quantities are “signs of the power of capital, flows of financing,” and hence forces of multiplication, of the accumulation of capital itself (Marx’s M-C-M’) (Anti-Oedipus 228).

The qualitiative difference between the two circuits of exchange, that of the wage earner and that of the corporation, remains structurally or transcendentally significant — it determines everything — even if it cannot be specified quantitatively in ways that empirical economics is able to calculate. Though Marx makes repeated efforts to calculate the rate of surplus value throughout Grundrisse, he also foregrounds this basic incommensurability (in a more explicit way than he does later in Capital). For instance, Marx says that surplus labor isn’t just added on top of necessary labor, in such a way that reducing the working day in length would be enough to eliminate exploitation. For “in production resting on capital, the existence of necessary labour time is conditional on the creation of superfluous labour time” (398). The expropriated surplus, in a very real sense, comes first; it is only this surplus that motivates productive investment in the first place. For the capitalist, wages are just a deduction from total profit, an input cost like any other. Without the lure of the surplus, the whole process would come to a halt.

In this way, Marx’s notion of surplus value shows its affinity to the Derridean supplement and to the Lacanian notion of “surplus enjoyment” (which Zizek is always writing about); and beyond these, to Georges Bataille’s “notion of expenditure” (which powerfully influenced both Derrida and Lacan). Bataille is often taken to be anti-Marxist, because of his emphasis on expenditure rather than, and as opposed to, “the principles of classical utility” (Visions of Excess 116). But Marx is no defender of such principles of utility; his whole point about the separation of exchange value from use value points to the way in which capitalist reproduction isn’t really about utility at all. (When Marx writes of use value as serving “needs,” he means this latter word in the broadest sense — not economically basic needs as opposed to superfluous desires, but “need” as anything anybody wants, or is willing to pay for). It seems to me entirely coherent to say that surplus value is the form that Bataille’s excess takes in a capitalist society, and that the problem of expenditure is itself a more generalized form of the problem of overaccumulation or overproduction, which Marx sees as one of the problematic points of capitalism as a whole.

Surplus value is only one of a number of areas in which Marx’s formulations in Grundrisse significantly add to what he presents later, in its polished and publishable form, in Capital. On the other hand, in Grundrisse there is little discussion of the “fetishism of commodities,” such as it is highlighted in the notorious opening chapters of Capital. (Notorious because these opening chapters have discomfited so many readers, including notably Althusser, who urged readers of Capital to skip those chapter altogether). To my mind, and contra Althusser, the discussion of commodity fetishism is crucial and invaluable; Marx had good reasons for opening Capital with it. Commodity fetishism is, as it were, the manner in which we live the world of Capital (what Zizek calls “ideology,” though for various reasons I am not happy with naming it in this way); and as that which constructs our “lived experience,” it is as real as are the “underlying” processes (exploitation, capital accumulation) that it masks.

This brings up the whole issue of subjectivity, and how we can understand it in Marxist terms. In the past, I’ve mentioned my discomfort with psychoanalytic/Lacanian/Zizekian approaches, which seem to me to depart too much from social and economic conditions, in their pursuit of a logic of the unconscious that is ultimately entirely separate from the economic logic of capitalist society. Zizek even says that, while Marxism defines “ideology” as “false eternalization and/or universalization,” the attribution of universality to something that has a specifically social and historical basis, psychoanalysis, to the contrary, denounces “ideology” as consisting in “an over-rapid historicization,” seeing something as merely contingent and historical, when in fact it is absolutely universal, “the Real of the Law, the rock of castration… which returns as the same through diverse historicizations/symbolizations” (The Sublime Object of Ideology 49-50).

Zizek here makes the “Hegelian” move of extending Marx’s logic (in this case, the logic of ideology and fetishism) to the point where he altogether abolishes it. When “ideology” is redefined as the ultimate impossibility at the heart of any subject whatsoever, it’s all of Marx’s analysis of the historical specificity of capitalism — its radical difference from other social formations and relations of production — that disappears. Althusser scandalously argued that some sort of “ideology” would continue to exist even in a communist society. And this seems right to me. But Althusser didn’t take the additional step that Zizek does: the step that dissolves the particularity of one particular regime of ideology. Though it is perhaps unfortunate that Althusser designated “science” as the asubjective alternative to ideology (meaning by “science” something like Spinoza’s understanding sub specie aeternitatis), I find Zizek’s claim to Hegelian/psychoanalytic analysis much more disturbing. Here is a point where a Kantian understanding of limits (or a Whiteheadian understanding of the irreduciblity, and yet the inevitable partiality, of all abstractions) would be helpful.

In Grundrisse, Marx takes a rather different tack, when he proposes that “the production of capitalists and wage labourers is thus a chief product of capital’s realization process. Ordinary economics, which looks only at the things produced, forgets this completely” (512). We need to think more about how subjectivity is itself produced in the capitalist process of production/circulation/realization/appropriation of the surplus. Needless to say, this has little to do with the old-fashioned Marxist distinction according to which consciousness or subjectivity would merely be a “superstructural” effect, determined by an economic “base.” It does have to do, to the contrary, with something like Deleuze and Guattari’s notion of the unity-in-division of libidinal and economic flows. Though I think that Toni Negri goes too far, in the opposite direction from Zizek, when he privileges Grundrisse over Capital, on the grounds that only the former work provides an account of class antagonism, and revolutionary subjectivity, Negri laments the absence of such a perspective from the more objective account of capitalist process in Capital itself. It seems to me, however, that Negri is too facile in the way he reads Marx’s demonstrations of the antagonism between workers and capital — class hatred, in short — as itself somehow the motor of a new subjectivity, one that already and immediately embodies Marx’s rather vague statements about how the capitalist mode of production itself already establishes the conditions for a communism that would transcend and abolish it. (All this is the source of the almost embarrassing optimism about the potentialities of the multitude that one finds in Hardt and Negri’s Empire and Multitude — but that is the subject for another post, in which I want to talk about monstrosity: the body of the multitude in relation to the body of capital).

I am even less sure than usual whether this long and rambling post makes any sense — and especially whether it gets the value/price question right — so in order to stop myself from rambling to infinity, I will publish it now.

What happens when Kojin Karatani reads Marx’s “critique of political economy” through the lens of Kant’s Critiques? This is the big question of the second part of Transcritique. Excuse me for once more dipping into the murky (and not very elegantly written) world of Marxist theory, and moving through the issues somewhat ploddingly, repetitiously, and overly academically, with a lot of Philosophy 101-style paraphrasing of basics. Unfortunately, this is the only way I can make these matters clear to myself.

In Karatani’s account, Marx delineates the “transcendental conditions” of a capitalist economy. But these conditions involve Antinomies, which can only be traversed (since they are never definitively resolved) by a process of continual “parallax,” or shifting of focus between one position and another. A Kantian “transcendental deduction” occurs in the form of what Karatani calls “transcritique,” a shuttling back and forth between the disparities generated by the shifts in perspective. Karatani discusses at great length the various parallax shifts in Marx’s argument; as Marx moved from Germany to France to England, he also moves from the critique of German idealism (Hegel and the young Hegelians), to the critique of French “utopian” socialism and political theory, to the critique of British empiricism and political economy. (I will pass over the interesting way that Karatani reads Marx’s essay on The 18th Brumaire of Louis Bonaparte as a “critique of national politics” (151), putting forward a theory of the State that, according to Karatani, the later Marxist tradition has failed to take the full measure of).

Marx, in a certain sense, repeats the Kantian Antinomy between idealism and empiricism, by working through the parallax between Hegelian dialectics, on the one hand, and British empiricism and utilitarianism, on the other. But more specifically, Marx examines such an Antinomy within the tradition of British empirical political economy itself. On one side, there’s the political economy of Ricardo, grounded in the labor theory of value: Marx is commonly regarded as the great inheritor of this tradition. But on the other hand, there is the political economy of Samuel Bailey, who criticizes Ricardo (in 1825) on the grounds that there is no intrinsic substance of value, neither “labor time” nor anything else. Bailey argues instead that value is a purely relational (today we would say “structural”) phenomenon: it exists only as a marker of the way that commodities are related to other commodities for which they can be exchanged. Karatani suggests that Bailey is the forgotten precursor of the neoclassical economics that was developed in the later 19th century and still holds sway in “bourgeois economics” today. The neoclassicists, like Bailey, reject the labor theory of value, or any other theory of intrinsic value; they claim that values are only formed “on the margin,” in the process of sale and purchase, as affected by shifts in supply and demand. From the point of view of neoclassical economics, Marx is simply dismissed as irrelevant, on the grounds that he still holds to the essentialism of the labor theory of value. Of course, this serves as a perfect alibi for neoclassical economics to ignore all the issues that Marx brings up: questions of the ownership and distribution of capital, of exploitation, in short, of class. Instead, neoclassical economics only considers questions of “efficiency” and “utility”: it takes the politics out of “political economy,” and becomes just plain “economics” instead.

Karatani claims that Marx’s reading of Bailey shook him out of his previously unquestioned Ricardianism, in the same way that Kant’s reading of Hume shook him out of the “dogmatic slumber” of idealist rationalism. Karatani doesn’t give any evidence for this claim; nor could I discern any special importance given to Bailey when I took a cursory glance at Marx’s discussion of Bailey in Theories of Surplus Value. But whether or not Marx actually got important insights from Bailey, I do find Karatani’s overall account of Marx’s thought plausible and convincing. Some Marxist economists (such as Stephen Resnick and RIchard Wolff) have long argued that Marx rejects Ricardian essentialism. Karatani argues that Marx’s “critique of political economy” operates precisely in the Antinomy, or parallax, between the labor theory of value, on the one hand, and Bailey’s (and the neoclassical economists’) positivistic dismissal of value theory altogether on the other. Karatani notes, first, that even the theory of surplus value was not original to Marx; left-wing Ricardians had already developed it as an explanation for profit and exploitation, in much the same way that the leftist Young Hegelians, like Feuerbach, had already developed a theory of alienation, and a critique of religion, upon which the young Marx originally drew, but which he later rejected as inadequate. As for the other half of the antinomy, Karatani notes that “Bailey’s skepticism [regarding the labor theory of value] is similar to Hume’s criticism that there is nothing like a Cartesian ego cogito” (5). And just as Kant responds to Hume by saying that Hume is right, in the sense that the Cartesian ego does not substantively exist, but also that Hume is wrong, in that the unifying form of the ego must nonetheless be posited as a transcendental condition of apperception — so similarly, according to Karatani, Marx rejects Ricardian essentialism (the labor theory of value in its classical form), but also insists, against Bailey’s (and later, neoclassical) nominalism, that a “transcendental reflection on value” (6) is necessary in order to make sense of capitalism as a system.

In other words: just as what Kant calls “apperception” would break down entirely, if it were truly as atomized as Hume maintains it is, so the capitalist order would cease to function altogether, if it were truly as atomized and relativistic as Bailey and, after him, the neoclassical marginalists, claim. What keeps perceptual experience together, Kant says — what allows it to maintain some sort of identity through time — is indeed an “I”; but this “I” is not substantial as the Cartesian tradition claims, for it is merely an empty form, “a transcendental subject of thoughts = x” (First Critique, A346/B404). (This could bring us to a consideration of Marx in terms of Kant’s Paralogisms as well as his Antinomies. I won’t pursue this here, as Karatani does not mention it; but it is something I want to think about further, and write about at some later point. Deleuze and Guattari describe the “paralogisms” of psychoanalysis in terms that derive from Kant’s critique of the paralogisms of Rational Psychology). In a parallel way to how the empty, transcendental form of the “I” keeps subjectivity together through time, so the transcendental category that Marx calls the “value-form” keeps the capitalist economy together, allowing it to replicate itself through time, impelling and indeed compelling it to expand through time. Marx is making a Kantian “transcendental” argument, when he posits the double value-form of the commodity (use-value and exchange-value) against both Ricardo’s essentialist (substantive) labor theory of value, and against the nominalist, positivist and ultimately neoclassical rejection of the very category of “value.”

This kind of reading leads directly to the so-called “transformation problem,” one of the most vexing questions in Marxist political economy. Basically, in Volume 1 of Capital Marx uncovers the structure of exploitation in terms of “surplus value”: roughly, the incommensurability between the value of labor-power itself as a commodity (i.e. what the workers are paid) and the value of the commodities produced by labor. The excess of the latter over the former is abstracted and extracted from the labor process by the capitalist; it is the source of the accumulation of capital. In Volume I, Marx is writing on a very high level of abstraction, describing the structure of capitalist society as a whole. In Volume III of Capital, however, Marx is trying to write about individual capitalist enterprises, and about the actual mechanism of prices, and the actual distribution of profit. How does one get from the abstraction of “value” to the actual prices of individual commodities, and from the abstraction of “surplus value” to actual profits? It’s well known that Marx’s mathematical model for making this “transformation” is flawed; and that indeed the problem is mathematically intractable — the equations can only be solved under very special, limited, and unrealistic conditions — which is why Marx, like Ricardo before him, was unable to solve them. Many critics have seen this impasse as a fatal contradiction within Marx’s own thought; neoclassical economists argue that, in light of the impossibility of any transformation, “value,” “surplus value,” and “exploitation” are irrelevant concepts altogether, and that the economy can be best understood by looking only at prices and profits.

Now, I’m not competent to discuss the whole history of the transformation problem, and the various attempts Marxist political economists have made to move between value/surplus value and price/profit, rather than throwing out the former and only retaining the latter. (There’s also the neo-Ricardianism of Piero Sraffa, which I don’t understand very well, but which at the very least reinstates the project of looking at the entire national or world economy as a system, as against the atomism of microeconomic, marginalist approaches). The basic point is not to correct Marx’s mathematics — which cannot be done, given the presuppositions of the problem — but to question those presuppositions themselves. The whole problem of transforming values into prices itself seems to depend on the idea of capitalism as a closed, synchronic system in a state of equilibrium — which is what most economists, classical and neoclassical alike, in fact presuppose — but elsewhere in Capital Marx argues that such a view is entirely inadequate, since capitalism is a process that necessarily unfolds in time, and that it is never in a state of equilibrium. Crises, Marx argues, are endemic to capitalism. They are not (as neoclassical economists assume even today) mere aberrations or temporary departures from the norm of equilibrium. Rather, crises are intrinsic to the movement of capital, they are even what pushes it forward. Crises are unavoidable because of the temporal factor. If anything, crises and business cycles are the norm; equilibrium is a fictive idealization, an abstraction: and not even a very useful one. There is no good reason to prefer the mathematical abstractions of neoclassical economics (which, as I’ve noted elsewhere, arise really from misunderstandings of 19th century, pre-quantum and pre-relativity physics) to the “transcendental” abstractions worked out by Marx.

When you consider the process of capitalist production and circulation temporally — when you look at capitalism diachronically instead of synchronically — then the transformation problem simply becomes irrelevant instead of insoluble. With an open future and its contingencies, goods can go unsold, equilibrium can no longer be presupposed, and what Karatani, following Marxist tradition, calls “trade cycles” — the boom-and-bust patterns we are so familiar with today — are always present as tendencies (that is to say, they are what Marx calls “tendential” processes: they are not predictable or inevitable, and countervailing factors can always dampen or even reverse them, but the tendency for them to happen is immanent to the whole capitalist process). Karatani therefore argues that value and surplus value, as posited in volume 1 of Capital, are the transcendental conditions of possibility of capitalism. Value and surplus value are the preconditions that make it possible, empirically, for capitalists to extract profit. But value and surplus value are themselves never encountered empirically. Empirically, we only encounter prices and profits. “Thus,” Karatani writes, “the insistence of neoclassical economists that the concepts of value and surplus value are false is in total accord with the everyday consciousness of the agents” (242). (This doesn’t mean that capitalist subjects suffer from “false consciousness”; but rather, that — as Zizek might say — the “ideology” of prices and profits is itself an objective part of social reality: as I discuss below).

Karatani suggests, therefore, that the often-alleged “discrepancy” between Volumes 1 and 3 of Capital is actually quite similar to what happens in Kant, “whose first critique tackles the issue of subject in general, but whose third critique engages in the issue of plural subjects” (243). Similarly, Marx deals with capital in general in Volume 1, and with the perspectives and actions of individual capitals in Volume 3. Volume 1, like the First Critique, is about universal structure: the transcendental conditions of possibility for all experience. Volume 3, like the Third Critique, is about singular experiences, and how you get from these multiple singularities to the transcendental conditions that they both generate and presuppose. In Volume 3, “Marx deals with plural capitals, while at the same time transcendentally asking how it is empirically possible that they realize profit or the rate of profit” (243).

Just as the Third Critique involves an Antinomy between 1)the universal nature of aesthetic judgment (the fact that it demands to be accepted universally) and 2)the ungrounded singularity of any individual aesthetic judgment (the fact that it cannot appeal to any preexisting concepts for justification), so Marx’s Volume 3 involves an Antinomy between 1)the grounding of price in value, and of profit in surplus value (Thesis: Ricardo); and 2)the independence of price from value and of profit from surplus value (Antithesis: Bailey). In this Antithesis, price is determined relationally, and independently of any notion of value, by supply and demand; while profit, from the point of view of the individual consciousness, is simply “price of production minus cost price” (241), and labor-power (sometimes today renamed, in neoclassical theory, “human capital”: quite a wonderful catachresis, since — by a mere shift of terminology — it simply spirits away the entire difference between capitalist investment, and workers selling their labor-power as a commodity) is just another input into production costs. Anybody who has read Capital knows how much time Marx spends criticizing the latter set of assumptions. But the criticism is necessary, precisely because these “ideological” assumptions do necessarily exist as “objective illusions”: for they constitute the actual manner in which individuals confront the market as buyers and sellers, consumers and owners. As for the other side of the Antinomy, the Thesis: the Ricardian labor theory of value is also an objective illusion, insofar as it is understood as an empirical actuality (something we encounter within experience) rather than as a transcendental condition of experience. We only encounter “surplus value” in and for itself in the way that we encounter time, space, and causality in and for themselves. They are conditions of experience, rather than things that we encounter within experience.This is why, Karatani says, “Marx’s labor theory of value and Ricardo’s are fundamentally different”; for Marx, “it is not that input labor time determines the value, but conversely that the value form (system) determines the social[ly necessary] labor time” (244). And, “while for the classical economists, labor value is just a replacement of the equilibrium price that is established within a unitary system, Marx began his whole analysis from manifold systems, and hence came to need the concepts of social and abstract labor value” (227-228).

These considerations lead Karatani to emphasize the importance of circulation, and of money, within Marx’s analysis of capitalism. There’s long been controversy as to why Marx begins Capital Volume 1 with a discussion of the commodity form and of money (and of commodity fetishism), before he gets to the theory of surplus value. Louis Althusser even advises readers to skip these chapters when reading Capital; Althusser sees them as a Hegelian throwback, and as a distraction from Marx’s main argument. Karatani, to the contrary, argues for the centrality of these chapters to Marx’s entire project. Indeed, for Karatani these chapters are the site of a rupture (what Althusser calls an epistemological break) with Marx’s earlier, more tentative theories: because they are the place where Marx develops the crucial notion of the value-form: “all the enigmas of capital’s drive are inscribed in the theory of value form… Value form is a kind of form that people are not aware of when they are placed within the monetary economy; this is the form that is discovered only transcendentally” (9).

The theory of value-form turns on the dual nature of commodities: that they are at once both use-value and exchange-value. This sundering is only possible because of the role of money. Money is a universal equivalent, a special commodity that stands in for all other commodities. As a result, there is a radical “asymmetricity… inherent in the form of value” (200) between money and all other commodities. The use-value of money, unlike the use-value of all other commodities, has nothing to do with its sensuous properties. Marx contrasts money as a transcendental form with “the substantial aspect of money such as gold or silver. To take it substantially is, to Marx, fetishism” (196). SInce its use-value is purely formal or transcendental, money doesn’t have to take the form of precious metals; it can be made of paper, or even (as is generally the case in transnational finance today) be entirely virtual. “Anything — anything — that is exculsively placed in the general equivalent form becomes money; that is, it achieves the right to attain anything in exchange” (7). Nonetheless, the fetishism of money — the confusion of the transcendental with the empirical — is impossible to get rid of, since such a reification or fetishization of money is intrinsic to the functioning of the capitalist economy as such. Money, Karatani says, “is like a Kantian transcendental apperception X, as it were… money as substance is an illusion, but more correctly, it is a transcendental illusion, in the sense that it is hardly possible to discard it” (6).

The core problem in Marx’s Antinomy of value is that both sides ignore the actuality of money as universal equivalent. For Ricardo and the classical political economists on one side, and for Bailey and the neoclassical school, down to the present day, on the other, money itself is considered to be of no importance. For Ricardo, money simply measures the labor inscribed in commodities as their value; for Bailey, value is relational, but he pays no attention to money as the medium in which these relations are expressed and worked out. “Bailey overlooked a simple fact — that commodities cannot be exchanged directly” (194). Both Ricardo and Bailey see money as transparent, in the same way that traditional metaphysics sees language as transparent. Even today, as Doug Henwood puts it in his fine book Wall Street, “in (neo)classical economics, money is held to be neutral – a mere lubricant to trade, but not a force in itself”; economics builds “paradigms that often ignore money and finance completely, or treat it as an afterthought.” Marx, to the contrary, insists on the opacity of money and finance. As a universal equivalent or transcendental form, money does not merely put external terms (objects sold as commodities) into relation; it molds and alters those terms by the very fact of equating them (money as universal equivalent is what transforms things into commodities in the first place). Similarly, financial speculation — such as is overwhelmingly present in global markets today — is not just an illusion distracting us from the “real” economic activity that takes place in production. Or better, financial speculation is an illusion, but a transcendental one: its illusoriness is itself an objective force, one that drives the entire process of production and circulation. It is not Marxist political economy, but neoclassical economics, that reduces everything to production and to utility, and thereby ignores the structural and material importance of the delirious, ungrounded flows of finance capital that constitute the largest part of economic activity today.

Karatani even sees the central role of money in the capitalist world economy as a kind of return of the repressed. The classical economics of Smith and Ricardo was a reaction against the mercantilists, who “naively” imagined that money itself, in the form of of gold and silver bullion, was the source of national prosperity. But Marx, in his transcritique, plays off the mercantilists against the classicists. Karatani notes that Marx begins his discussion of money with the figure of the miser, who hoards monetary wealth instead of spending or investing it. The miser is the equivalent on an individual level of mercantilism on a national level. But the opposition between mercantilism and classicism returns at the heart of capitalism itself, in the difference between Marx’s two formulas of circulation: C-M-C (commodities are sold for money, which in turn is expended to acquire other commodities) and M-C-M’ (money is expended for commodities, which in turn are used to acquire more money). The first formula corresponds to the experience of individuals as workers, selling their labor-power as a commodity in order to obtain (through the mediation of money) those commodities that they need to survive, subsist, and reproduce. The second formula corresponds to what Marx calls the “self-valorization of capital,” its reproduction on an expanded scale, i.e. capital accumulation. Capitalism at its most “advanced” actually returns to a sublated (as Hegel would say) version of miserliness/mercantilism, in that its ultimate goal is money itself, rather than the things that can be acquired through the medium of money. This is why “capital’s movement has to continue endlessly. Indeed this is interminable and without telos” (209). This endless accumulation for its own sake is the return of the repressed, the re-emergence of (mercantilist) money (money as fetish) after the classical economists, and the neoclassical ones as well, have denied its significance.

Paying attention to money also means paying attention to circulation. Karatani points out that, even if surplus value is extracted in production, it needs to be realized in circulation, i.e. the commodities have to be sold. This has several consequences. For one thing, the success of circulation is contingent; it is always possible that given commodities will not be sold, and that surplus value therefore will not be realized, and capital will not be accumulated. Second, circulation takes time; the “turnover” of capital is never instantaneous, though there is continual pressure to make it happen faster and faster. Third, surplus value itself, as a transcendental form, is predicated on a discontinuity, or incommensurability, between heterogeneous registers of value. In Marx’s most direct formulation of the theory, there is a discontinuity in the realm of production between the value of the worker’s labot-power as a commodity, and the value of the commodities produced by that labor power. But when surplus value is realized in the realm of circulation, the incommensurability is one between the two circuits C-M-C and M-C-M’. These registers are discontinuous with one another, because the first is about simple self-reproduction (I sell my labor power in order to be able to buy the commodities that allow me to survive and sell my labor-power again tomorrow), while the second is about expansion and accumulation, a process that is free from day-to-day urgency. Karatani might well have quoted Deleuze and Guattari here, who note that “it is not the same money that goes into the pocket of the wage earner and is entered on the balance sheet of a commercial enterprise” (Anti-Oedipus 228).

One can think here also of the role of credit. Money and finance/credit allow the separation of acts of exchange (purchase and sale) in time and space. “C-M (selling) and M-C (buying) are separate, and precisely for this reason, the sphere of exchange is infinitely expandable in both space and time” (207). But this separation too occurs in different, incompatible ways. Consumer debt has been at the center of the expansion of the American economy in the last severalo decades. But consumer credit is ultimately finite; individuals are enslaved to debt, since they need constant inflows of money just to pay for daily necessities. If I were to quit my job, I wouldn’t be able to pay my mortgage and my credit card balances. Business and financial credit, on the other hand, is for all intents and purposes infinite. Business credit allows for the indefinite deferral of any final reckoning. As Karatani says, “credit enforces capital’s movement endlessly at the same time that it hastens capital’s self-reproduction and eliminates the danger involved in selling” (219).Note that, in America today, bankruptcy laws for individuals have just been made far more rigorous, to the benefit of banks and credit card companies. On the other hand, for corporations, bankruptcy is most often just a formal procedure, allowing the corporations to cut wages and benefits as part of their “reorganization.”

Marx of course frequently attacks the fetishistic illusion that sees money as magically self-valorizing, as if no exploitation were needed to get from M, through C, to the larger quantity of M’. But Karatani notes that capitalist ideology in fact tends to elide what really happens in circulation, as much as it does what really happens in production: “the ideologues of industrial capital avoid the word ‘capitalism,’ preferring ‘market economy,’ which conveniently represents capital’s movement as people’s free exchange of things via money in the marketplace. This veils the fact that market exchange is at the same time the place for capital’s accumulation” (208). The difference between Marxist and neoclassical economics is not that the former emphasizes production and the latter looks instead to circulation; but rather that, in production and circulation alike, Marxist political economy focuses on the centrality of the process of capital accumulation, whereas neoclassical economics sees capital accumulation as merely a side-effect of an aggregate of equal exchanges between separate individuals.

Transcritique is not without flaws. Actually, I find some of the same limitations to the book as Zizek does, even though I resist Zizek’s attempt to turn Karatani’s Kantianism into a Hegelianism. For one thing, Karatani overemphasizes the idea that surplus value can only be realized in circulation; he seems to ignore its role in production altogether, and at times even to assimilate the profits of industrial and finance capital to those of merchant’s capital, which essentially depend upon arbitrage (profiting from the differences in pricing in two markets that are separate from another, a gap that the merchant alone bridges). But as I’ve already suggested, this “strange lacuna” (as Zizek calls it) is not fatal. For Karatani’s argument about the incommensurability between different economic registers applies as well to production as to circulation, even though Karatani only spells it out in the latter. Again, the key to all this is money (including credit) in its role as universal equivalent. Money is that which paradoxically gives a common measure to things that, in all other respects, remain incommensurable. Oppression takes place in other, and indeed often in harsher, forms in non-capitalist economies (feudalism, slavery). But it is only in a regime of money and commodity production that oppression takes the specific form of exploitation. And because of money’s universalizing power, because it works as a transcendental condition, capitalism tends to incorporate all other “modes of production” within its circle: this is what Marx calls the “formal” and “real” subsumption of all social forms under capital.

Karatani is also not very good at explaining how an alternative to capitalism, under present conditions, might arise. He puts his faith almost exclusively in LETS (Local Exchange Trading Systems), a form of association in which individuals and groups can exchange goods and services outside of the circuits of capital. While David Harvey, in his most recent book, A Brief History of Neoliberalism, does indeed suggest that LETS may be one of the more fruitful forms that contemporary resistance to capitalism can take, I find it scarcely credible that LETS by itself could somehow lead to the replacement of capitalism all by itself. But then, I find the other recent Marxist or quasi-Marxist proposals for overcoming capitalism — Hardt and Negri’s spontaneous uprising of the multitude, and Zizek and Badiou’s hyperromantic fantasy of a Leninist Event of radical rupture — to be just as unconvincing. We just don’t know what to do, and for now I will leave it at that.