Aristotle points out that "in exchange associations, it is such justice which holds them together, reciprocal justice on the basis of proportionality and not on the basis of equality." (e)n me\n tai=j koinwni/aij tai=j a)llaktikai=j sune/xei to\ toiou=ton di/kaion, to\ a)ntipeponqo/j, kat" a)nalogi/an kai\ mh\ kat" i)so/thta. 1132b32) He continues that "through proportional reciprocity namely, the polity remains together" (t%= a)ntopoiei=n ga\r a)nalogi/an summe/nei h( po/lij 1132b34). The reciprocal give and take of exchange is what constitutes society on the basis of practical everyday association and gives rise to men's "communication" (meta/dosij 1133a2). Through it, men "remain together" (summe/nousin 1133a2) in association. The exchange of useful things in civil society can only work as a practical social bond if they are exchanged in just proportions, and without them "there would be no exchange and no association" (ou)k e/)stai a)llagh\ ou)de\ koinwni/a 1133a24). This link between the practice of exchange and the constitution of social community is reflected also in the Greek word, koinwni/a, whose semantic field stretches from "dealings" and "sociability" through "association" to "community".
How is a just give and take in actions between the owners or producers of different products to be achieved? "Nothing, namely, can prevent the product of one of the parties being better than that of the other, and in that case therefore they have to be equalized." (ou)qe\n ga\r kwlu/ei krei=tton ei)=nai to\ qate/rou e)/rgon h)\ to\ qate/rou, dei= ou)=n tau=ta i)sasqh=nai 1133a13) The exchange of useful products and services only makes sense if the products are different and are suitable for different uses. Aristotle uses the example of the exchange of a physician's services for a farmer's products which "have to be equalized" (dei= i)sasqh=nai. 1133a18). "Thus everything must be comparable in some way if exchange is to be." (dio\ pa/nta sumblhta\ dei= pwj ei)=nai, w)=n e)stin a)llagh/. 1133a19) And how is this comparability achieved? Aristotle continues, "Money has resolved this and is a kind of middle term, for it measures everything and so also too much and too little and how many shoes are equal to a house or food." (e)f" o(\ to\ no/mism" e)lh/luqe, kai\ gi/netai/ pwj me/son: pa/nta ga\r metrei=, w(/ste kai\ th\n u(peroxh\n kai\ th\n e)/lleiyin, po/sa a)/tta dh\ u(podh/mat" i)/son oi)ki/# h)\ trofv=. 1133a20)
Money is thus the solution in practical human social life for how different things which are suitable for very different uses can be compared and measured, thus forming the basis for a just, proportional exchange of everything in which one value is exchanged for another, equal value. The justness is apparent in the mutual satisfaction of the exchangers themselves who have struck a deal on the proportions to be exchanged. Even though everything differs from each other in their respective uses and thus in their use-values, everything is comparable as being useful in abstracto. "So it is necessary for everything to be measured by some unity" (dei= a)/ra e(ni/ tini pa/nta metrei=sqai 1133a26) and this unity is "in truth, use, which holds everything together" (tou=to d" e)sti\ tv= me\n a)lhqei/# h( xrei/a, h(\ pa/nta sune/xei: 1133a28), for exchange is carried on in order to acquire the useful things which one lacks. "Thus as a kind of substitute for use, money has come about by agreement." (oi(=on d" u(pa/llagma th=j xrei/aj to\ no/misma ge/gone kata\ sunqh/khn 1133a29)
Money is the universal representative for useful things in the broadest sense and is the medium or middle term which mediates their exchange with one another and thus the give and take of daily social intercourse. It arises as a practical solution from the context of the practice of exchange itself, enabling fair and just association in dealings with one another. "Thus, like a measure, money makes things measurable and creates an equality, for without exchange no community would be possible and without equality there would be no exchange, and without commensurability there would be no equality. In truth, however, it is impossible that things so different could become commensurable, but with respect to use this is sufficiently possible. Thus there must be a unity and this is so from what has been supposed." (to\ dh\ no/misma w(/sper me/tron su/mmetra moih=san i)sa/zei: ou)/te ga\r a)\n mh\ ou)/shj a)llagh=j koinwni/a h)=n, ou)/t" a)llagh\ i)so/thtoj mh\ ou)/shj, ou)/t" i)so/thj mh\ ou)/shj summetri/aj. tv= me\n ou)=n a)lhqei/# a)du/naton ta\ tosou=ton diafe/ronta su/mmetra gene/sqai, pro\j de\ th\n xrei/an e)nde/xetai i(kanw=j. e(\n dh/ ti dei= ei)=nai, tou=to d" e)c u(poqe/sewj 1133b17) The proof that very different things are commensurable is a practical, conventional one, for very different useful things are in fact exchanged and thus their uses equated in some way. In mediating exchange, money proves itself to be the embodiment of universal use, for it can be used to purchase anything useful, but in being exchanged for money, the concrete, particular use of a specific thing is abstracted from or bracketed off. Money is thus the abstract, universal, unified representative of the uses of things, i.e. their abstract exchange-value.
Each thing is useful and thus valuable or good-for-something in its own way, but in its potential exchange for money it becomes abstractly valuable and commensurable in value with everything else that is good for some application or other. Only this abstraction from all concrete, useful qualities to pure quantities allows a just exchange of goods because, according to Aristotle's treatment of exchange, a kind of proportionate equality has to be achieved in the exchange relation for it to be fair and equitable. Justice therefore entertains an intimate relation with arithmetic, for justice is concerned with fairness, and the Greek word for 'fair', i)/soj, is also the word for 'equal'. The abstraction from the myriad concrete differences as use-values among the goods in exchange leads necessarily to pure monetary quantity, and the dimension of exchange-value is distinguished only quantitatively within itself. The reason for this is that justice in general is a phenomenon concerned with the relations between different people and their goods, so that the relations require some sort of common ratio. These relations are the forms of association on which society is based and they must be such that fairness prevails and no one gains the better of the other.
Where difference prevails, recourse to a kind of quantifiable equality that serves as a common ratio or denominator must be taken. The existence of markets shows that this kind of equalizing of all sorts of marketable goods does take place on a daily practical level. Even very different qualitative, non-commodity goods (including things like esteem, reputation, privacy, etc.) which come into relation with each other in social life (such as when one person slanders another) have to be quantitified in some way if fairness and equity are to prevail (such as a penalty imposed on a slanderer to redress by means of monetary compensation the wrong done to the slandered person in depreciating the esteem and reputation in which that person is held). So money can serve the cause of justice even in the case of 'non-marketable' goods.
In the above citations of Aristotle, one of the pivotal words, h( xrei/a, has been rendered as 'use'. In other translations the same word is rendered as 'demand' or 'need'. Depending upon the translation chosen, it is use, need or demand "which holds everything together", and money is conceived as having come about "as a kind of substitute for" use, need or demand. Employing the word 'demand' in relation to the exchange of products would seem to be the most modern alternative for a translation because we are familiar with conceiving of exchange on the market as the interplay of supply and demand. However, the Greek word xrei/a has nothing to do with economic demand but means lexically in its primary significations either 'need' or 'use'. But is it admissible to orient oneself towards dictionary meanings? Not in the least, because it is the phenomena themselves to which Aristotle is pointing which must decide what the most appropriate rendering is. The Greek verb related to xrei/a is xra/omai, which means 'to use' or 'to need' and comes from the word for 'hand', h( xei/r. With regard to the goods involved in a reciprocal exchange, it is the use to which these goods can be (potentially) put and enjoyed in the usages of daily life which forms the basis upon which they are needed and not the other way around.
A usage is an "habitual use, established custom or practice, customary mode of action, on the part of a number of persons; long-continued use or procedure; custom, habit." (OED) Only because certain goods are usually used are they needed,(2) and these uses that are embedded in usages are historical discoveries and inventions based on human ingenuity that is in turn enabled by a given historical cast of thinking. Neither do needs fall from the sky, and they are not naturally inherent to the human being, but are always situated within the historically variable practices of everyday life. The use of the goods also involves handling them by hand in such a way that the hand's handling is appropriate for realizing the usefulness of the thing used. Such a realization of usefulness is the enjoyment of a possibility of human existence disclosed and proffered by the thing used and understood as such. The usages of daily life determine what things are useful and what are not for that usual way of living. The uses of things are embedded in the usages of daily life and only in the context of such habitual usages do needs for things which may be lacking arise.
The widening of the motive and aim of the exchange of goods beyond the 'satisfaction of need', which suggests some kind of mere subsistence or an 'objective', 'biological' necessity, fits well with the inauguration of political economy in the eighteenth century. Adam Smith writes that, "Every man is rich or poor according to the degree in which he can afford to enjoy the necessaries, conveniences, and amusements of human life",(3) himself echoing Cantillon's definition of riches, "La richesse en elle-même n'est autre chose que la nourriture, les commodités et les agréments de la vie". (cited in The Wealth of Nations Bk. I Ch. V p. 33). The enjoyment of life, or eu)= zh=n, and not merely the satisfaction of needs, lies at the base of the exchange of goods, and the enjoyment of life consists for the most part in practising the habitual usages which constitute an agreeable life in a given historical social milieu.
The context for the entire consideration of exchange as a paradigmatic form of reciprocal justice in Book V of the Nicomachean Ethics is social life in its habitual usages. Such usages for the benefit and sake of living well in society is what Aristotle has in view when discussing xrei/a, or use. This can be seen more clearly by considering money as a kind of "substitute" (u(pa/llagma 1133a29) for use. The use of money is to mediate the procurement of what is used habitually in the usages of daily life. Money represents these uses and substitutes for them as a thing which can be used now or in the future to supply what is needed for use in the practices of daily living (1133b13). Aristotle says that through money being this conventional substitute, it "has the name no/misma (money, or usage, custom) because it exists not by nature but by customary usage (no/m%) and can be changed and made useless by us". (tou)/noma e)/xei no/misma, o(/ti ou) fu/sei a)lla\ no/m% e)sti/, kai\ e)f' h(mi=n metabalei=n kai\ poih=sai a)/xrhston. 1133a31) This passage is usually taken to mean blandly that Aristotle is a proponent of a 'conventional theory of money'. Money is said to exist only by convention. But there is another, deeper perspective on this passage. For how is money being spoken of here?
The entire passage reads: "So it is necessary for everything to be measured by some unity, as was said before. This unity is in truth use, which holds everything together. If namely nothing were needed or not in a similar way, either there would be no exchange or it would not be the same. Thus as a kind of substitute for use, money has come about by agreement." (dei= a)/ra e(ni/ tini pa/nta metrei=sqai, w(/sper e)le/xqh pro/teron. tou=to d" e)sti\ tv= me\n a)lhqei/# h( xrei/a, h(\ pa/nta sune/xei: ei) ga\r mhqe\n de/ointo h)\ mh\ o(moi/wj, h)\ ou)k e)/stai a)llagh\ h)\ ou)x h( au)th/: oi(=on d" u(pa/llagma th=j xrei/aj to\ no/misma ge/gone kata\ sunqh/khn 1133a26ff) The problem is clearly that of unity, a unity which serves to hold everything together, i.e. to unify the social whole of practically living together. The social whole, however, is constituted by a sharing of uses in various diverse usages. In order to be able to share uses, exchange is necessary, but if uses become self-sufficient or they change, then either exchange is obviated or the changing uses makes reciprocally just exchange impossible. And if there is no exchange, there is no sociation and thus no society. Aristotle states this two lines before the passage quoted, "For without this [reciprocal proportion], there would be no exchange and no community (koinwni/a)" (1133a25).
Money thus arises for the sake of holding society together by sociation and this means, on the level of everyday life, that money enables a complex, intermeshing unity of the manifold usages in which things are used. This is the sense in which money has to be understood as customary, i.e. as related to usages. As related to usages, the use of money is in itself a usage unifying the multifarious uses by enabling and facilitating the exchange of what is needed for these uses. Since it is incorporated into the usage of exchange, and this is its raison d'être, money itself can be changed or taken out of use. This does not mean, of course, that the necessity for some kind of money as a substitute unifying all the various uses could be done away with. Thus money is both customary and necessary.
This alternative understanding of Aristotle's thinking on money and exchange has implications also for how society itself is to be thought. For can it be said that the basis of society is the satisfaction of need, given that there is a division of labour, thus necessitating the exchange of the products of labour? Or is it rather the case that human beings always already share a world and that this essential world-sharing, as a disclosure and enabling of existential possibilities, precipitates a communal sharing of the practised usages which then have to be unified in some manner? How can such a question of priority be decided? Only by proceeding from what is most originary. And what is most originary here is human being itself as sharing the openness to being, not just as a matter of what humans hold to be true, but practically in their shared and mutually understood, customary practices. Such a sharing of the openness to being can never be attained by proceeding from a notion of a division of labour and a consequent ('biological') necessity to exchange the products of labour in order to satisfy need (food, clothing, shelter), for a division of labour is already a sharing of practices based on a shared understanding of the world, at least to the extent that the various uses of things in the various usages are understood as such.
Furthermore, there is no such thing as a need for food, clothing and shelter because these latter generalities do not exist as such to be needed. Food, for instance, as a genus exists as a need only in its particularizations into flour, sugar, rice, ostrich meat, sweet potato, deer meat, and so on endlessly, and whether these particular foods are needed depends entirely upon the culinary usages of the specific society in question. For example, there is a need for flour only in a society that practises the custom of eating specific food (e.g. bread) and dishes in which flour is an ingredient. The modern orthodox text-book definition of economics as "the social science that studies the methods by which individuals and societies organize production activities and allocate scarce resources to meet material wants and needs" is therefore thoughtless.
Both Plato and Aristotle present their account of the genesis of society on the basis of such considerations of the gradual development of exchange between households and communities, and this account has its plausibility as an ontogenetic history. But ontogenesis should never be confused with the order which the phenomena themselves call for to be properly thought through in their being. And here the issue is the social being of human being itself. The association of society is most fundamentally the sharing of human beings' openness to being, i.e. the shared exposure to the clearing, which enables a communication with each other, a showing-off to each other in social exchanges and also a sharing of sociating practices in differentiated usages which requires the exchange of all sorts of different goods. Exchange relations mediated by money are a practical solution to the problem of how practical sociation can be constituted from diverse difference, so giving rise to a kind of whole social unity.
Having reviewed Aristotle's conception of money as an abstract social thing mediating the exchanges among all the various use-values, thus enabling society to be "held together" in a practical, everyday way, we now make a leap to the eighteenth century to see how the Aristotelean understanding of money and exchange-value is modified in a different historical context. The aim is to see that already Adam Smith's notion of labour-value obscures the nature of exchange-value as abstract use-value.(4) For Smith, labour itself, which he regards essentially as the expenditure of effort required to acquire a thing and as such the "real measure" of value, is not simply measured in time. He writes:
The real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it. What every thing is really worth to the man who has acquired it, and who wants to dispose of it or exchange it for something else, is the toil and trouble which it can save to himself, and which it can impose upon other people. What is bought with money or with goods is purchased by labour, as much as what we acquire by the toil of our own body. That money or those goods indeed save us this toil. They contain the value of a certain quantity of labour which we exchange for what is supposed at the time to contain the value of an equal quantity. Labour was the first price, the original purchase-money that was paid for all things. It was not by gold or by silver, but by labour, that all the wealth of the world was originally purchased; and its value, to those who possess it, and who want to exchange it for some new productions, is precisely equal to the quantity of labour which it can enable them to purchase or command. (The Wealth of Nations Bk. I Ch. V p. 33f)This is how Smith introduces the concept of labour-value. It is based on a common-sense notion of what things are worth. They are worth the bother and toil of acquiring them, he says, but they are presumably acquired only because they are practically useful — and in this sense valuable — for one employment or another, and thus have a value in and of themselves. Labour has to be 'invested' as the 'purchase price' of every (valuable) thing, but this already implicitly presupposes that what is produced is valuable for use within the context of everyday social practices, or, put negatively, labour that does not produce use-values is in any case worthless, non-value-producing. This common-sense notion of labour-value, i.e. of what things are worth, is a derivative notion and based on a qualitative insight into social exchange and is aimed not so much at erecting an empirically applicable, quantitative theory of exchange relations, i.e. a labour theory of value. The qualitative insight consists in seeing that the exchange-value of a thing consists in "the quantity of labour which it can enable them to purchase or command". This amounts to saying that in exchange it is not so much the finished goods in themselves as reified entities, but ultimately the services of providing those goods that are honoured and paid for in exchange, i.e. the exchange relation of purchasing a commodity is at base a relation of recognition of the labour or service required to provide that commodity. What is directly purchased is mostly the finished product, but more or less indirectly it is the provision of a labour-service that is paid for, and that is why money is valuable, because it can "command" others' labour, i.e. their service-provision.
The kernel of truth disclosed in a distorted way by the so-called labour theory of value is therefore that 'labour-value' is (in part) a social relation of recognition of the labour in providing services to each other. The services provided are the exercise of abilities, powers that reside in individuals. The abilities that an individual is able to exercise and hire out as a service to the market, and above all the productivity of those abilities depend of course crucially on the knowledge and know-how this individual embodies (as well as the other factors of production: land, capital, entrepreneurial managment; see below), and this knowledge and know-how is a shared social good, albeit that it has to be individually appropriated, an aspect that cannot be further investigated here.
Adam Smith qualifies the insight into labour-value as follows:
But though labour be the real measure of the exchangeable value of all commodities, it is not that by which their value is commonly estimated. It is often difficult to ascertain the proportion between two different quantities of labour. The time spent in two different sorts of work will not always alone determine this proportion. The different degrees of hardship endured, and of ingenuity exercised, must likewise be taken into account. There may be more labour in an hour's hard work than in two hours easy business; or in an hour's application to a trade which it cost ten years labour to learn, than in a month's industry at an ordinary and obvious employment. But it is not easy to find any accurate measure either of hardship or ingenuity. In exchanging indeed the different productions of different sorts of labour for one another, some allowance is commonly made for both. It is adjusted, however, not by any accurate measure, but by the higgling and bargaining of the market, according to that sort of rough equality which, though not exact, is sufficient for carrying on the business of common life. (The Wealth of Nations Bk. I Ch. V p. 34f)The terms hardship and ingenuity refer to the dimensions of the intensity and productivity of labour, respectively. A more intense labour is a compression of time, and a more highly skilled labour produces a qualitatively better product than unskilled labour could do or more in a given time. These factors, along with others, come into play in determining the price on the market in the groundless interplay of supply and demand which finds its expression in what Smith calls "higgling and bargaining". The upshot of these qualitative considerations is that it is untenable to posit a quantitative law of labour value regulating exchange, and Adam Smith is quick to concede that what he calls "real price" measured by labour expenditure diverges from "nominal price". His intention is to establish a qualitative insight into "exchangeable value" and not to erect a quantitative theory which would satisfy the rules for acquiring certain knowledge as laid down in Descartes' Regulae, which is perhaps the inaugural text for the modern age in that it formulates how reliable, scientific knowledge is to be gained ultimately only by reducing the phenomena to quantitative equations. Labour-value for Smith is thus a measure of "rough equality which, though not exact, is sufficient for carrying on the business of common life". This is in line with the Aristotelean insight that the exactness of knowledge demanded has to adapt itself to the phenomena being investigated (cf. Chapter 12 iii); Eth. Nic. I iii 1094b11 25).
A further indication that Adam Smith is not concerned with establishing a quantitative law of exchange-value regulated by labour-time is that, when he comes to consider market price, i.e. the prices actually attained for products on the market, he treats not their deviations from their "real price" as expressed in labour expenditure, but from their "natural price" based upon customary or "natural rates of wages, profit, and rent, at the time and place in which they commonly prevail" (The Wealth of Nations Bk. I Ch. VII p. 62). This has often been regarded as a theoretical inconsistency which later theoreticians have attempted to reconcile. Thus the so-called 'transformation problem' of values arose in which labour-value 'prices' are transformed into prices expressing the average prevailing rate of profit. From the perspective of Smith's intentions, these efforts at establishing quantitative relations are a red herring, a red herring drawn across the trail by the quantitative Cartesian casting of scientific methodology which grasps beings exclusively by their magnitudes.(5)
Rather, Adam Smith's insight into labour-value must be seen in connection both with use-value and abstract value. Whereas Aristotle saw that it was use that 'held everything together' in that exchange practically equated all the different use-values by dealing with them as abstractly useful in quantities of money, Smith sees that exchange is also a practice that brings the labour-services of providing exchangeable use-values into an equivalence relation with one another, thus constituting an ongoing process of abstract, reciprocal social recognition of labours performed by diverse individuals, which could also be said to 'hold everything together'. But the drive toward a quantitative 'labour theory of value' is unstoppable, and Smith's 'labour theory of value' lends itself also to obscuring the practical abstraction from use-value and concrete, useful labour performed by generalized commodity exchange in favour of taking it to be merely a quantitative price theory. On its way to becoming the social science of economics, political economy will emulate the natural sciences in proclaiming a 'law of value', and Karl Marx, as the trenchant critic of 'bourgeois' political economy, will endeavour to reveal this so-called 'law of value' to be the basis of class exploitation, thus providing a 'scientific' proof of the injustice of the capitalist form of economic life.
3.1 The untenability of the labour theory of value as a theory of just exchange masking exploitationEven with the move from Adam Smith to David Ricardo in the next generation one can detect a shift to a more quantitative view of economic phenomena, as Ricardo's name is firmly associated with the 'law of labour-value'. Ricardo proposed simply that there was indeed a measure for the fairness of the exchange of goods apart from fair price and that this measure resided in the amount of labour embodied in the things exchanged. The labour theory of value was adopted also by Karl Marx in the nineteenth century, although he went further and deeper than his predecessors in investigating philosophically, i.e. ontologically, how the abstract labour whose magnitude purportedly determined exchange-value ultimately assumed the form of price and money under generalized commodity production and exchange. He offered an ontology of that unique social thing, money,(6) thus echoing Aristotle's deep insights into the nature of money and attempting to adequately grasp the phenomena in an Hegelian movement of concepts.
For Marx, following Ricardo, the equitable exchange of goods was based on the exchange of equal labour-times embodied in those goods. Marx not only sees the phenomenon that the practice of the generalized exchange of the products of labour as commodities practically effects a kind of equalization or Gleichsetzung (MEW23:65,(7) 74; cf. Aristotle i)sasqh=nai Eth. Nic. V 1133a13) of diverse kinds of concrete labour and thus the constitution of what can rightly be termed 'abstract labour', but he goes further and pronounces abstract labour to be the "value-building substance" (wertbildende Substanz, MEW23:53) which constitutes exchange-value and also quantitatively determines its magnitude. To take this additional step and obtain a value-substance, Marx must introduce an ambiguity or, more than that, a polysemy, into the concept of abstract labour. It cannot be i) simply commodity-producing labour in its quality as being universally practically equated on the market with all other kinds of labour, but it must have ii) an instrinsic existence independent of the practice of commodity exchange (which is a relation, not a substance) if it is to serve as a 'value-substance' and measure capable of quantitative determination of the magnitude of value. To serve as substance, abstract labour is therefore determined iii) to be "productive expenditure of human brains, muscles, nerves, hands, etc." (produktive Verausgabung von menschlichem Hirn, Muskel, Nerv, Hand usw., MEW23:58), i.e. "expenditure of human labour power in the physiological sense" (Verausgabung menschlicher Arbeitskraft im physiologischen Sinn, MEW23:61), and the phenomenally visible, socially practical abstraction corresponding to this is iv) that "in our capitalist society, depending upon the changing direction of demand for labour, a given portion of human labour is supplied alternately in the form of tailoring or weaving" (MEW23:58), i.e. the ability to deploy labour 'abstractly' in different industries in a social division of labour, depending on demand is said to be the practice underlying the abstraction of abstract labour, as distinct from the abstracting practice of generalized commodity exchange that abstractly equalizes all the very different concrete commodity goods.
Marx argued further on the basis of these third and fourth understandings of abstract labour as value-substance that the peculiar commodity, labour power, has the characteristic of creating in the production process more labour-value than it is itself worth on the market. Since labour power as the potential to labour residing in the labourer is not itself simply a congealed objectification of labour but is embodied in a living human, its value, according to Marx, has to be determined qualitatively and quantitatively indirectly by the exchange-value of the goods consumed in maintaining and reproducing that labour power. On the basis of the assumption that both the fair and factual exchange of goods are determined by magnitudes of ("socially necessary") labour-time measuring abstract labour as value-substance, whilst excluding the possibility that entrepreneurial labour could play a part in determining the value of the commodity product, Marx develops the concept of surplus value which purportedly demonstrates that the labourers give more value to the capitalists than they receive in wages and are thus quantitatively exploited of a portion of the exchange-value they produce through the expenditure of their labour power during working hours.
Without postulating a quantitatively determinate value-substance residing in a kind of abstract labour, Marx would not have been able to develop the theory of surplus value as a quantitative theory of class exploitation which is perhaps the foundation of so-called "scientific socialism" from which Marxism historically drew much of its persuasive strength and above all, moral justification. The labour theory of value as the foundation for the theory of surplus value serves as a purported proof of capitalism's essential social injustice. The essentially 'unfair' exchange between the wage-labourer and the capitalist entrepreneur, independently of any agreement at all made between them (commutative injustice claimed at the heart of the hire contract for labour power under the guise of fair exchange), serves to expand into a critique of the entire 'capitalist system' as socially unjust in toto (distributive injustice suffered by the working class).
In Kapital Marx explicitly refers to Aristotle's treatment of reciprocal justice, which is a variant of commutative justice concerning mainly proportionately fair exchange at value, in Book V v of the Nicomachean Ethics and claims that Aristotle was unable to discover abstract labour as the "value-building substance" and labour-time as the quantitative measure of this substance regulating fair exchange because he lived in a society based on slave labour. Marx writes:
Daß aber in der Form der Warenwerte alle Arbeiten als gleiche menschliche Arbeit und daher als gleichgeltend ausgedrückt sind, konnte Aristoteles nicht aus der Wertform selbst herauslesen, weil die griechische Gesellschaft auf der Sklavenarbeit beruhte, daher die Ungleichheit der Menschen und ihrer Arbeitskräfte zur Naturbasis hatte. Das Geheimnis des Wertausdrucks, die Gleichheit und gleiche Gültigkeit aller Arbeiten, weil und insofern sie menschliche Arbeit überhaupt sind, kann nur entziffert werden, sobald der Begriff der menschlichen Gleichheit bereits die Festigkeit eines Volksvorurteils besitzt. Das ist aber erst möglich in einer Gesellschaft, worin die Warenform die allgemeine Form des Arbeitsprodukts, also auch das Verhältnis der Menschen zueinander als Warenbesitzer das herrschende gesellschaftliche Verhältnis. Das Genie des Aristoteles glänzt grade darin, daß er im Wertausdruck der Waren ein Gleichheitsverhältnis entdeckt. Nur die historische Schranke der Gesellschaft, worin er lebte, verhindert ihn herauszufinden, worin denn 'in Wahrheit' dies Gleichheitsverhältnis besteht. (Das Kapital Vol. 1 MEW23:74)But, it must be countered, by keeping the phenomenon at hand clearly in view, Aristotle does indeed find out in what this relation of equality consists "in truth", a phrase which is in fact a quote from the relevant passage in Aristotle. We have already seen above that use or utility (xrei/a) is "in truth" the unity "which holds everything together" (1133a28). And this unity consisting of diverse, qualitatively different commodities requires a quantitative measure for exchange to equalize the products exchanged, which is provided by money. Money thus arises from the usage of exchange itself and becomes the unified, visible, palpable, practical, reified measure which, while divorced or abstracted from use, which it measures, nevertheless precisely in this separation (abstractly and quantitatively(8)) measures the inherent unity of use upon which all exchange of goods is based. For goods are exchanged only because they are useful in the usages of daily life and this nexus is the first, rudimentary, sociating bond practically constituting society, the association among human beings both locally and with foreigners, domestically and abroad.
One of Marx's first and most clear-sighted critics took the so-called "law of value" (Wertgesetz) to task as the theoretical foundation of Das Kapital shortly after Engels finally edited and published the third volume of this momentous work in 1894. Eugen von Böhm-Bawerk had already published a critique of the labour theory of value twelve years before he published his Zum Abschluß des Marxschen Systems (On the Close, or Completion, of the Marxian System) in 1896 in which he attempts to show up the irreconcilability of the contradiction between the "law of value" and the theory of prices of production at which capitals sell their commodity products to reap an average rate of profit. This is the so-called transformation problem which has been with economics since the 1880s and which has drawn the attention of illustrious names in this social science. The transformation problem is confronted with the contradiction of two different quantitative determinations of commodity prices, namely, by quantities of abstract labour time, on the one hand, and by costs plus average profit, on the other. This transformation problem can be formulated as a system of simultaneous equations, which many economists have since done over the last century in various ways.
But Böhm-Bawerk does not concentrate his intellectual fire-power exclusively on this quantitative problem; he returns even to the ontologically prior, simple grounding of the concept of value itself in Kapital Vol. I. He notices perspicaciously that Marx had already borrowed "from old Aristotle the thought that 'exchange cannot be/exist without equality, and equality not without commensurability'".(9)
It is to Aristotle that thinkers return when approaching the simple phenomenon of exchange and value, but perhaps even Marx did not listen closely enough to Aristotle and follow what he had in view. Böhm-Bawerk points out the fallacy in Marx's reasoning in deducing abstract human labour as the value-substance which makes exchange commensurable. He claims, contrary to Marx, that, in considering what is "common" (gemeinsam) when two different commodities are equated in exchange, one could just as well conclude that it is abstract use-value:
Wenn Marx zufällig die Reihenfolge der Untersuchung verkehrt hätte, so hätte er mit genau demselben Schlußapparat, mit welchem er den Gebrauchswert ausgeschlossen hat, die Arbeit ausschließen und dann wiederum mit demselben Schlußapparat, mit welchem er die Arbeit gekrönt hat, den Gebrauchswert als die allein übrig gebliebene und also gesuchte gemeinsame Eigenschaft proklamieren und den Wert als eine 'Gebrauchswert-Gallerte' erklären können. (Böhm-Bawerk op. cit. p. 89)Hegel has a similar insight in his Rechtsphilosophie § 63, where he sees that the universality (Allgemeinheit) of a useful thing is "need in general" (Bedürfnis überhaupt). Abstracting from the particular usefulness of a thing results in "the value of a thing" (der Wert einer Sache). In the addition to § 63 we read, "The qualitative being disappears here in the form of something quantitative. ... In property, the quantitative determinacy which steps forth from the qualitative determinacy is value. ... The value of a thing can be very diverse in relation to need; but when one wants to express not the specific being, but the abstract being of value, this abstract being is money." (Das Qualitative verschwindet hier in der Form des Quantitativen. ... Im Eigentum ist die quantitative Bestimmtheit, die aus der qualitativen hervortritt, der Wert. ... Der Wert einer Sache kann sehr verschiedenartig sein in Beziehung auf das Bedürfnis; wenn man aber nicht das Spezifische, sondern das Abstrakte des Wertes ausdrücken will, so ist dieses das Geld.) Hegel as a genuine phenomenologist sees no need to recur to a value substance residing in labour, but sticks with the phenomenon to uncover value as abstract usefulness. In his notes to the Rechtsphilosophie, Hegel even writes that "What money is can only be understood when one knows what value is — A lot becomes clear — when one has the firm determination/definition of what value is." (Was Geld ist, kann nur verstanden werden, wenn man weiß, was Wert ist — Es wird vieles klar, — wenn man die feste Bestimmung dessen hat, was Wert ist.) What becomes clear is that value results from an abstraction from usefulness or use-value, and this abstraction is carried out practically by the all-encompassing, i.e. universal exchange relations in which one use-value is set equivalent to all others.
Both Böhm-Bawerk's and Hegel's insight would have been in line with Aristotle and also would have been truer to the phenomenon of exchange itself, not through a string of deductions, but by carefully considering the phenomena themselves. Since use-values are universally equated in the social practice of generalized commodity exchange, they are indeed abstracted from, and this practical abstraction could very well be termed abstract use-value, just as Aristotle says that it is "use which holds everything together". But being true to the phenomenon of commodity exchange and not asking too much of the phenomena and thus deducing abstract use-value would also be the end of the matter, for abstract use-value does not offer any obvious intrinsic quantitative measure (such as time) which could then be postulated as the (causal) determinant of the exchange proportions (as a kind of "determination of reflection"; cf. Hegel Enz. I, Die reinen Reflexionsbestimmungen §§ 115ff), nor any obvious intrinsic substance. This is where the labour theory of value goes awry and does violence to the phenomena. Although it is perfectly admissible to point out that the social practice of generalized commodity exchange abstracts from the concrete labours producing specific concrete use-values, thus giving rise to something which could rightly be called abstract labour, this in no way justifies concluding that labour under this determination constitutes a value-substance which quantitatively — in the dimension of quantified time — measures the magnitude of value and determines the exchange proportions.
Once this fallacy is seen, the entire transformation problem becomes secondary and in fact entirely irrelevant; it evaporates — something which Böhm-Bawerk does not see. The transformation problem misses, or rather, skips over the more elementary and far more crucial point. The problem is that the quasi-science of economics has no quantitative law at its foundation with which it could compete with modern mathematical natural science and emulate its success in postulating quantitative, precalculative and therefore predictive 'laws of motion'. There can be no social science of economics establishing laws on firm grounds, but there could be a phenomenology of katallactics that investigated the fathomlessness of social interplay.
The postulation of abstract labour-content as the substance for the measure of equitable exchange does not stand up to the test of a closer, unclouded look at the phenomena themselves, for labours, too, are qualitatively different and diverse, being the exercise of diverse labouring powers or abilities in combination with more or less productive powers (produced and natural means of production), and the phenomenon of the mobility of labour power between different branches of industry within the social division of labour must be clearly distinguished from the levelling practice of generalized commodity exchange of the products of labour and the role of money in this exchange. The postulation seems motivated by an ideal of abstract, formal human equality valid in other social spheres, viz. one person-one vote, democratic government and abstract equality of persons before the law, and is directed initially toward justifying private property ownership claims according to how much labour is put into property. It was John Locke who famously justified private property ownership by mankind through labour: "Whatsoever then he removes out of the State that Nature hath provided, and left it in, he hath mixed his Labour with, and joyned to it something that is his own, and thereby makes it his Property. It being by him removed from the common state Nature placed it in, hath by this labour something annexed to it, that excludes the common right of other Men." (John Locke Second Treatise of Government § 27; italics in the original) This is a germ of the labour theory of value which, under the influence of the Newtonian-Cartesian spirit of mathematical science, is amenable to reformulation as a quantitative theory of relative prices, thus providing a foundation for a pseudo-mathematical science of economics. Note, however, that even labour postulated as a justification for private property in itself says nothing about the quantitative exchange-value of that property.
Marx himself has to admit the qualitative difference between labours and labour powers, just as Aristotle does, and base his investigation of quantitative labour values on the simplifying assumption of presentation that "every kind of labour power is regarded directly as simple labour power, whereby only the trouble of a reduction is made superfluous" (Der Vereinfachung halber gilt uns im Folgenden jede Art Arbeitskraft unmittelbar für einfache Arbeitskraft, wodurch nur die Mühe der Reduktion erspart wird. MEW23:59). First of all, qualitatively different kinds of labour and of labour power are transformed into merely various forms of "complicated labour" (komplizierte Arbeit, MEW23:59), the first step in a quantitative reduction of difference by introducing a scalar factor. But by what measure can "complicated labour" regarded quantitatively as "multiplied simple labour" (multiplizierte einfache Arbeit, MEW23:59) be reduced? Marx himself admits plainly that this reduction only takes place "by a social process behind the backs of the producers" (durch einen gesellschaftlichen Prozeß hinter dem Rücken der Produzenten, MEW23:59), to wit, through the exchange of the products of labour themselves on the market in which the "value [of a commodity product of the most complicated labour] equalizes it [the commodity ME] with the product of simple labour" (Eine Ware mag das Produkt der kompliziertesten Arbeit sein, ihr Wert setzt sie dem Produkt einfacher Arbeit gleich und stellt daher selbst nur ein bestimmtes Quantum einfacher Arbeit dar. MEW23:59), thereby reducing his postulate of labour content as the independent or intrinsic measure for exchange to vicious circularity.
It is to be emphasized that these criticisms are aimed at the much discredited quantitative labour theory of value as a theory enabling the exchange ratios between commodities to be causally determined in terms of a quantitatively measurable value substance, and not at Marx's ontological analyses of the form of value as the abstract universal form of sociation of labour in societies dominated by generalized commodity production. In re-considering Adam Smith's notion of labour value, as we have seen, the exchange of commodities is an ongoing social interplay of recognition and validation of human abilities. The circularity is only vicious for as long as one is aiming at a quantitative theory of relative price in which relative prices are determined theoretically by some independent cause and measure (a determination of reflection, in Hegelian terms), whether this be labour-content measured by labour-time, marginal utility, or something else. If the ongoing reciprocal recognition of services provided in producing commodities is seen to be what it is, the emulation of modern mathematical natural science that modern social science has been chasing after for so long reveals itself to be a cover-up for a genuine philosophical understanding of exchange as a rudimentary act of human association whose fathomlessness as social interplay demands to be thought as such — without reflection away into some other 'factor' such as labour-time.
'Recognition', 'fathomlessness', 'social interplay' are all hallmarks of the social process of exchange of commodities, whether they be produced things or services provided. The products themselves are pro-duced, i.e. brought forth knowingly through the exercise or actualization of powers, namely, labour power, natural powers and the powers of already produced means of production. These powers working together as e)ne/rgeia — in the literal Aristotelean sense of 'being-at-work' — on the raw materials, which themselves possess passive powers allowing them to admit being worked upon, constitute the labour process, whose product is then validated abstractly on the market as being valuable, thus recognizing not only the labour power producing them as valuable, but also the powers of nature and means of production that have been employed in the labour process. To have value (German: Wert) is itself a power in the sense that these goods and services command a certain price and thus can be exchanged for something else. The original sense of value derives from L. valere which, apart from meaning 'to be able-bodied, strong, powerful, influential, to prevail' can also mean 'to be worth something in exchange for something else, to have monetary value'. Etymologically, 'valere' is related (via an Indo-European root *ual-; cf. Duden) to German 'walten' which means 'to prevail', again from L. prævalere 'to be very able', 'to have greater power or worth', 'to prevail' and thus itself a comparative or enhanced form of possessing power. L. valere, in turn, is the standard Latin translation of du/nasqai, so that the connection to the Greek word for power, du/namij, in all its senses, is secured. This is not merely a scholarly matter to excite philologists and lexicographers, since it points not only to power as a fundamental experience of human being in the world, but also to the multi-dimensional layers of the phenomenon of power. In particular, the productive powers that bring forth products of all kinds must be distinguished clearly on a fundamental ontological level from the 'exchange powers', i.e. the exchange values, of those products in being worth something in interchange on the markets where they are validated as actually (e)nergei/#), and not merely potentially (duna/mei), being valuable. Since this interchange is an interplay of powers, it is a game in the strict, i.e. not merely playful, sense that defies the specification of any single power, such as the labour power of the labourers producing one of the products in the exchange process, as prevailing over the others, thus determining the product's exchange value independently of the fathomless interplay of powers itself.(10)
The fixation on natural science with its productionist metaphysics as the paradigm for social science depends also in part on forgetting a distinction made in Aristotle's thinking between those movements (ki/nhsij) and states of affairs that always are as they are and those movements and states of affairs that "admit having it another way" (e)ndexo/menon a)/llwj e)/xein Eth. Nic. 1140a23 and passim). That which "admits having it another way" is further subdivided into what happens "in most cases" (e)pi\ to\ polu/, as a rule) and what happens accidentally out of the blue (kata\ sumbebhko/j Met. 1027a.32). Modern-day science also no longer knows that Aristotle's thinking has a category for thinking groundlessness, namely, to\ sumbebhko/j, contingency, that which simply 'comes along' (sumbai/nein, 'to go along with'). There can only be a science (e)pisth/mh) of those movements and states of affairs that do not admit having it another way, so that the movements can be derived reliably from first principles (a)rxai/) that govern the movement. "Because what simply comes along [to\ sumbebhko/j] cannot be gathered [into the limits of the lo/goj], and does not fit into the limits of a rule, it cannot be learnt or taught; it lies next to the rule and comes about one way and then another."(11) Both art (te/xnh) and skill (e)mpeiri/a) are concerned with those realms of human affairs that admit having it another way but still have regularity, but whereas te/xnh for Aristotle is in effect always concerned with making or at least bringing-forth (poihtikh/ 1140a23) in which a fore-knowing a)rxh/, as a single starting-point, reliably governs the movement of bringing-forth in manipulating things and humans regarded as things, in the realm of social interchange, such as exchange on the market, there is no single governing a)rxh/ that with gathered, composed, knowing fore-sight (meta\ lo/gou 1140a23) reliably governs the outcome of social interplay. Even supply and demand regarded as 'variables' remain in fathomless interplay, pace Marx, who at times, like many political economists, relates demand to need and treats this latter as an independent constant that can account for market prices. Aristotle's thinking, i.e. his foundational metaphysics, never comes to ontological grips with the phenomenality of social interplay. The genuinely social realm of interaction and interchange and interplay not only admits having it another way, but it refuses a single a)rxh/ whence any social movement, i.e. any social interchange, could be determined with pre-calculable fore-sight. To quote a phrase from Adam Smith, "...in the great chess-board of human society, every single piece has a principle of motion of its own..."(12)
All modern economic theory, since it measures itself against the paradigm of mathematical physics ushered in by Newton, is fixated upon quantitative laws and derides metaphysical consideration of the simple phenomena themselves which seem to be and are the most 'obvious' and apparently 'self-evident'. It is precisely obviousness that always has to be made questionable in any deeper philosophical inquiry. Thus, for instance, Schumpeter characterizes Marx's labour theory of value as having been adopted holus-bolus from Ricardo. "His theory of value is the Ricardian one. [...] Marx's arguments are merely less polite, more prolix and more 'philosophical' in the worst sense of this word."(13) Schumpeter's aversion and hostility to philosophy are apparent not only here. They lead him to shy away from philsophy as mere "speculation" in favour of empirical social scientific analysis. But it is precisely the step back to a philosophical consideration of the simple phenomena themselves that can provide the way forward for liberating Marx's philosophical insights from the constrictures of a Ricardian labour theory of value in particular and from the self-evident standard quantitative, precalculative concerns of economic theory in general, in order to gain insight into the essence of money and exchange relations and ultimately into the enabling dimension of human sociation itself and the essential nature of human interchange.(14)
Nor even can value creation be attributed to labour power in conjunction with the other factors or powers of production (produced means of production and nature) whose active combination is the labour process proper, since value is not 'created', not produced at all, but comes about as an interplayful process of acknowledgement of all the powers exercised to make the product available in free interchanges on the market.(15) (There is an essential ambiguity in the term 'labour' regarded on the one hand as the exercise of labour power pure and simple, and on the other as the realization of the powers residing in labourers, means of production and natural forces all working in combination in a labour process.) The corollary is that there is no surplus value creation attributable to surplus labour. There is also no intrinsic, independent measure for the exchange relationship between capital and labour, but only the price relations factually established in the market-place. This market-place, of course, is also a place of competitive struggle, a vieing with each other, over the price of labour power (the potential to labour) and the conditions of labour in which the interplay of supply and demand decides. Supply and demand in this case include the organization of workers in labour unions, the organization of capitalists in employers' associations, strikes, lock-outs, the mobility of capital and labourers regionally and globally, the level of education and training of the workforce, and many other such factors. These factors do not 'make' (L. facere) the price of labour power, but flow into an interplay that, because it is a vieing interplay, is groundless and continually shifting.
The struggle over wages and working conditions must be seen as fundamentally a relation of recognition between the contracting parties, albeit perhaps a grudging kind of recognition.(16) The fairness of the struggle thus depends on customary social conditions and rules of play, and cannot be said to be inherently and systematically unfair and unjust. Despite its toughness, the struggle may even be fair in the sense of 'beautiful' for those with an eye to appreciate such power plays. The class antagonism between capital and labour over the determination of wages, although as a conflict of interests it remains a perpetual struggle, can lead to a fair and just result in the Aristotelean sense of reciprocal exchange if the metabolism of free market interchange is allowed to hold sway without undue monopoly influence on either side. Whilst the given state of flux of the markets may not make workers entirely content with their wage levels, the metabolism of competitive interchange on the whole tends to an enhancement of material standards of living, especially because productivity improvements are a systematic way of gaining a competitive edge on the market from which consumers, especially the workers, profit. (Such a general rise in the standard of living, of course, does not guarantee that there are no losers in the competitive economic struggle. And the rise in material living standards of the populace in general is only a superficial justification for capitalist social relations that has long since been countered by the critique of consumerism and so-called 'materialism'.) Neither is the relationship between capital and labour unjust in the sense of outright fraud or robbery (as long as the rules of contractual intercourse are adhered to or enforced under the rule of law) and thus the wage deal is not an instance of injustice falling under the rubric of corrective justice.(17)
From the outset it must be kept clearly in view that the question concerning the justice or injustice of the capitalist wage-labour relation as a philosophical-ontological question is not, and cannot be, the question concerning the injustice of factual relations in the world that are understood to be unjust. The philosophical question must be a question concerning the essence of the capitalist wage-labour relation, not the question concerning whether reality corresponds to its essence. The fact that there are endless injustices in the world only shows that an understanding of what justice and injustice are enables factual injustice to be visible for understanding in the first place. When, for example, Marx graphically points out and depicts the "despotic" (despotisch, MEW23:351) nature of the nineteenth century English factory system and its cruel conditions of work, this is understood by the reader as injustice only because we have an understanding of what justice is. The philosophical question is whether the capitalist wage-labour relation is inherently, i.e. essentially unjust, and such a question cannot be answered by empirical investigation. The struggle to improve working conditions, and so lessen the 'despotism' of the capitalist over the wage labourers, is only possible because those working conditions are measured against acceptable, just, fair working conditions. If this movement toward fair working conditions takes place historically, whilst maintaining capitalist employment relations, it shows only that the concept of the capital-wage labour relation is congruent with a concept of justice. Pointing out the factual existence, say, of miserable sweat-shops readily admitted to be unjust, is no argument against capitalist wage labour, but only an argument that these sweat-shop conditions be changed for the better under the guidance of an understanding of what constitutes just, fair working conditions. Reality is then brought into line with its concept.
But is the very concept of capitalist wage labour unjust? Is accepting a job and its conditions of employment per se an injustice? Is it an injustice per se that I subordinate my will to a capitalist employer, or is it an injustice only under certain factual conditions that I can specify which constitute an injustice? What constitutes an injustice in this context, of course, is not merely a matter of whether a practice is legal or illegal. As Marx and countless others have copiously pointed out, the 'bourgeois' legal system has historically ridden roughshod over workers' legitimate rights, and it is easy also today to point to factual instances of the abuse of legitimate workers' rights. Legality and legitimacy, law and right, factual injustice and essential injustice, however, must not be confused with one another. So, is it an injustice per se that the individual worker has to hire out his or her labour power to some company or other to make a living and is not in a position to dictate just how he or she would like to work? Or is it an injustice only if the factual working conditions themselves are unacceptable, i.e. unfair and unjust? If factual working conditions are unjust in the sense that they contravene the law, then the judiciary can correct this injustice. If factual working conditions are unjust in the sense that they do violence to an understanding of justice whilst at the same time being in compliance with the state's positive law, then it is positive law that does not correspond to the concept of justice, and this law can be changed, often through some kind of social-political struggle to have that law changed. Through this movement, reality comes closer to the concept of justice, which itself serves as yardstick.
We thus return to the question whether it is an injustice per se for a worker to have to make a living by hiring out his or her ability to labour to a capitalist entrepreneur and having to accept 'alien' working conditions which that worker is not able to posit him or herself. Since the working conditions are posited by another, namely, the company or its managing entrepreneur, the working conditions themselves are in this neutral sense 'alien', i.e. imposed by another, so there is justification in talking of an essential alienation in the capitalist wage labour relation.(18) But is this alienation pernicious? Does it amount to an essential injustice? Or is it part of social human being itself to have to accept conditions of earning a living that one has not posited through one's own free will? If we are not willing to concede that every individual has the inalienable right to determine its own working conditions without being interfered with by 'alien' influences, i.e. by others, then the question becomes, under what essential conditions alien working conditions are unjust. Are they essentially unjust if the worker does not have a 'say' in determining his or her own working conditions? Is this 'say' sufficient merely through the fact that, as a free person, the worker is able to choose among the jobs on offer or negotiate with the potential employer on working conditions to some extent? After all, the prevailing labour market conditions at any given time allow a greater or lesser degree of leeway. Or does this 'say' have to extend to co-determination of working conditions in some kind of internal company set-up in which the employees collectively, through their representatives, are able to shape working conditions in ongoing negotiations with the employers? Or is this possibility, historically realized above all by German Social Democracy, optional with regard to the question of justice? One could argue pro and con whether co-determination is a better, more efficient way of organizing the capitalist labour process that enhances its productivity, but that is not the question here. One could also argue pro and con whether shallow organizational hierarchies are better, i.e. more efficient and productive, than steep, 'authoritarian' hierarachies, but again, that is not the question here. The question is also not whether the working conditions 'imposed' by the company harm the workers' health or dignity since this would be unjust according to the concept of the person, whose life and dignity have to be respected in any contractual arrangement.
Having a 'say' in working conditions could amount simply to a matter of negotiation, depending upon the strength of the workers' side to negotiate working conditions with the company or even the industry. Since workers as free persons have the right to associate, they have, in particular, the right to bargain collectively as an expression of personal liberty, so that the working conditions guaranteed contractually to workers in any company or industry would be the ever-evolving result of negotiations in which the partially opposed and even antagonistic interests of both sides are reconciled. The state would only guarantee and protect the workers' rights of association, and not stipulate and enforce particular procedures and organs of co-determination. The question of the justice of the capital-wage labour relation would then turn upon the freedom both individually and also — based on the right of free individuals to join together in their own shared interests — collectively to come to an agreement on acceptable working conditions including how much say workers have in influencing and shaping their ways of working. But, if this is the case, then it cannot be said that the capital-wage labour relation is essentially unjust, but on the contrary, is fully in conformity with the freedom of individuals to enter into contracts with one another on terms which they themselves agree.
That competitive economic life is a struggle and does not guarantee success for all participants does not speak for its injustice. Rather, those who are absolutely unable to fend for themselves in the competitive economy appeal to the charity of others to care for them. Charity is not a matter of justice, and there is no right to charitable assistance. The issue of support for those who cannot help themselves must be discussed in connection with the social welfare state.(19)
A further twist in trying to discover an essential injustice in capitalist wage labour is to point to the capitalist's 'privilege' in being at all in a position to hire employees. Why should some be in a position to do so while the 'masses' are forced to sell their hides? Apart from the envy that is blatantly apparent in such a claim, it amounts to a prohibition of the right to hire employees altogether. Such a right of private property to hire living labour power is claimed to be per se unjust. However, considering that free individuals of their own free volition are perfectly willing to work for someone else, and can even find such paid employment entirely rewarding in all senses of the word, it is hard to see how the capitalist employment relation could be essentially unjust. Rather, this kind of critique of capitalism is driven by envy and the conviction that one has been badly treated by life, in short, by resentment. Moreover, the role of the entrepreneurial capitalist is itself a kind of occupation with its own not inconsiderable skills and effort and especially risks that is not for everyone and which deserves its own reward. Furthermore, on the employers' side, it is easy to see that such employers are collective enterprises which, the larger they are, the more likely they are to be publicly listed companies so that to this extent private ownership is 'socialized' without abolishing relations of private property. If, once again, critics point out that only the 'well-off' can afford to buy shares in companies, the motive for this critique is again envy pure and simple. Moreover, with the increased affluence of employees who, in particular, are in a position to save, especially for retirement, their savings inevitably end up invested, through the financial markets, superannuation schemes, investment funds, state pension funds, etc., precisely in capitalist enterprises that earn profits which, as dividends, go toward financing these employees' retirement. So the basic flaw of regarding the right to hire employees as an essential injustice is not only exposed by pointing out its resentful nature, but also ameliorated and defused as a source of envy by the circumstance that even ordinary workers have genuinely capitalist interests, whether they are conscious of them or not.
So, on all scores it cannot be maintained that the capitalist wage labour relation is essentially unjust. It is not based on an essential exploitation of the workers' labour power; nor is it unjust for workers having to submit to the alien command of the capitalist to earn a living; nor is it unjust because some are able to employ workers while others are not. On the contrary, the abstract social relations of capitalism are so Protean that even satisfying, rewarding working conditions can be achieved in general for the working class along with wages supporting even a comfortable standard of living. But it must be kept in mind that worker satisfaction and the general standard of living are not the issue when considering the justice or injustice of wage labour under capitalist social relations. The term 'worker' here, of course, is used abstractly for all those employed by an employer, and should not be identified with the traditional notion of the proletarian 'blue collar' worker of the working class whose distinctive visibility has receded in today's developed capitalist economies.
Apart from all considerations which move within the realm of 'mere understanding' concerning whether capitalist wage labour is a pleasant, desirable, fulfilling or productive state of affairs, it must be seen that the free play of competitive market relations goes hand in hand with the socio-ontological constitution of the individual, so that the crux of the socialist critique of capitalism becomes the question whether individual freedom, despite all its many unpleasant drawbacks, is an historical, socio-ontological way of human being worth fighting for and defending vis-à-vis alternatives that invariably require that sociation be constituted by the exercise of state power of some kind rather than free association and interplay in civil society.
The market place struggles between wage labour and capitalist enterprises may be tough, but as free interplay they are not unjust.(20) They also do not even preclude the workers from living well under capitalism although this is not the issue of justice. The simple ontological structure of commodity exchange and social interchange has been investigated elsewhere.(21) There we see that all exchange and interchange involve at least two poles of the relation, two determining starting-points, origins or a)rxai/. The basic metabolism of civil society is the free interplay of many a)rxai/ on many diverse markets. In coming to agreement on the terms of an employment contract, the bi-archy and background competitive polyarchy of the relationship imply that competition and even conflict are a part of agreeing terms. This competition and conflict are carried out in a reified way mediated by the markets in which there are many actors. The given market conditions act like a dumb arbitrator that allows the conflict of opposed interests to be resolved in a compromise over wages, side-benefits and working conditions.
The often opposed or sometimes even antagonistic interests of capital and labour in reaching agreement on wages and working conditions are thus only one specific instance of the simple ontological structure of practical social interchange that is always confronted with having to realize an end, a te/loj, starting from two or more free, vieing starting-points. The resolution of any issue is the Aufhebung of the starting-points. This resolution may be simply the price struck in a bargain, or it may be a far more elaborate and complex agreement or compromise. Once the simple ontological structure of social interchange is clearly seen, it becomes apparent that the harmonious picture of a solidaric society as promised by socialist and communist ideology is a chimera that only comes at the cost of suppressing the free interplay of the many individuals as sources of liberty and covering it up with a sham ideology of a (ruthless, oppressive) Utopia in which 'egoism', 'individualism' and 'ruthless' social power relations have been overcome (or 'liquidated') historically and 'better' human beings have been socially 'constructed' through state educational measures over several generations. As a construction that violates the concept, i.e. the nature of human being as essentially individualized in its openness to being, the Socialist human being is untrue. Under a communist system, the public, competitive economic interplay of free powers is only transposed to the political structures of the state where they are disguised. Far from "withering away", the state becomes the theatre for ideologically camouflaged, covert political power struggles among individuals and social groups.