Ethical Politics and Money

1. Introduction

“The root of all evil” is the title Alan Macfarlane gives to a brief discussion of the social effect of money in a collection of articles on The Anthropology of Evil (Parkin, ed., 1985). Here Macfarlane briefly explores the basis of the idea that money is evil. He points to the obvious connection between money and evil demonstrated in the greed, consumerism and profiteering characteristic of capitalism. “Yet money, and all it symbolizes, is the root of all evil in a deeper sense than this,” writes Macfarlane. And he (71-2) elaborates:

“Viewed from outside the system, money can be seen to do something even more insidious. It subtly eliminates the very concept of evil. Or, rather, it makes it impossible to discriminate between good and evil...'Money’, which is a short-hand way of saying capitalistic relations, market values, trade and exchange, ushers in a world of moral confusion. This effect of money has been most obvious where a capitalistic, monetary economy has clashed with another, opposed, system. Thus it is anthropologists, who have...noted how money disrupts the moral as well as the economic world. As Burridge, for example, writes of the effect of money in Melanesia: money complicates the moral order, turning what was formerly black and white into greyness. Money, he argues, ‘...invites a complex differentiation and multiplication of the parts and qualities of man’ (Burridge 1969:45). More broadly, it is money, markets and market capitalism that eliminate absolute moralities. Not only is every moral system throughout the world equally valid, as Pascual noted, but, within every system, whatever is, is right.

I present this quote because I believe it raises an issue that is at the heart of the problem of Ethical Politics. This framework makes it quite logical that a seminar on Spirit, Money and Modernity is followed by a discussion of Ethical Politics and suggests that money remains an essential aspect of this discussion.

The quote invites us to ask a series of questions. I pick up on a matter that might appear obscure to begin with but implore you to “hang about” for the way I tie it back into our central concerns towards the end of the argument. I speak to a point that Andy — amongst numerous others — have asked me to address, i.e. the roots of my contentious criticisms of Marx’s labour theory of value.

Firstly, I outline what I understand to be the guts of Marx’s labour theory of value. Secondly, I point out some of the reasons why I find it an inadequate theory. Thirdly, I suggest that the labour theory of value has serious political implications contra Marx’s revolutionary thrust. Finally, I argue that money is antithetical to processes of direct decision making necessary for substantive grassroots democracy, processes that necessarily involve decisions about production and distribution. Given incomparable ecological qualities, including human ones, a standard indicator is of little value. Specifically, money seems to be a necessary evil for the practice and ideology of production for exchange, capitalism. Dispensing with money will allow us to introduce Ethical Politics.

2. Marx’s labour theory of value

At this point I want to stress that Marx’s theory of surplus value, i.e. his key qualitative argument regarding exploitation is hiked on the labour theory of value. In this way his theory of surplus value is dependent on and distinct from the labour theory of value. Even though I have difficulties with his labour theory of value I do support Marx’s contention that capitalism is exploitative in both the qualitative and quantitative ways that Marx identifies. More on that later.

Baldly stated Marx’s labour theory of value claims that the exchange of commodities implies the exchange of the various labours involved in their production; a commodity is objectified labour and its value is derived from the socially necessary labour-time involved in its production. Marx asserts that this process is not obvious because commodities are exchanged according to prices, in a common monetary unit, but that this standard of price is also a measure of value and is a money commodity, its most appropriate material being a precious metal, say gold, or silver. Furthermore this universal equivalent is produced like all other commodities and obtains its value from the socially necessary labour-time involved in its production.

Marx’s theory of money is only a particular, even if crucial, aspect of his theory of value. This theory offers an original conception of ‘abstract labour’ and ‘socially necessary labour-time’ but follows in the tradition of labour theories of value. Money arises along with the exchange of commodities as a particular commodity, the universal equivalent and value in general. Marx presents the commodity in the first instance as the product of labour. As it is exchanged, it bears an exchange-value that implies money. In circulation this exchange-value becomes independent in money and allows for the development of capital. His dialectical elaboration is really neat and goes beyond most theories of money in its complexity and rigor. However, Marx does not acknowledge important implications of designing a monetary theory in which money is a commodity like all others with a value directly related to the labour-time socially necessary for its production (see Nelson, 1999). Some of these implications were recognised in Marx’s time by Ricardo and are the foci of most of the recent literature on Marx’s theory of the money commodity.

3. Why not Marx’s labour theory of value?

One of the appeals of Marx’s labour theory of value is that it deals directly with the primary exchange in capitalism, the exchange of one commodity with another. Money is not absent here but embraced by its source labour, the process by its goal. There is a certain neutrality in this commodity exchange because it deal solely with form.

Marx’s labour theory of value is quite deliberately a neutral framework. Once the commodity content or substance is introduced it’s a different matter. The content of the exchange drives its meaning. The most obvious example, the exchange of labour power for a wage creates the basis for his development of the theory of surplus value. This theory of surplus value has qualitative as well as quantitative aspects. The most significant point in terms of Ethical politics is that it implies servitude. The worker’s will is appropriated by the capitalist and, on a broader level, the capitalist social and cultural system involves the appropriation of the citizen’s will to the capitalist state that supports the market. Theoretically Marx’s labour theory of value does not involve exploitation. That’s why he has a separate theory of surplus value. This situation of non exploitation only arises in the highly theoretical case of a society composed purely of small commodity producers, i.e. ‘simple commodity production’, where there are no workers and so capitalists all produce to sell.

The strength of Marx’s analysis is that he understands commodity exchange as a human relationship, as a social act in a complex of human relationships that structure a capitalist society. So why do I, amongst plenty of others, have difficulties with this seemingly neat and unobjectionable simplification of capitalist relations of production and exchange? I'll just make a couple of points that refer to difficulties with being able to see how the labour theory of value makes sense of the market system I live in and experience day to day. I could make more points but I haven’t time. Bear with me. It’s always easier to mount propositions of belief than disbelief, to explain how something might work rather than why it doesn’t.

3.1 Not all products that circulate are the direct or even indirect product of waged labour. I refer here not just to land and nature in general as the basis of means of production but to second hand goods and to speculative investment properties. Marx’s theory most easily and adequately (in the narrow sense) applies to factory production and exchange. Marx’s theory of primitive accumulation partly covers what I regard to be the necessary contingency of the forceful appropriation of nature but tends to undercut his broader argument in the process by referring to unequal exchange.

3.2 The fundamental relationship between human and non human nature is an exchange of energy flows causing material transformation, birth, growth and death. Marx’s labour theory of value makes commodity exchange an internally rational system in terms of human subsistence energy flows. He seems to argue that capitalism can only exist if it ensures workers’ subsistence; the beauty of the market system is holistic social production based on a rationale of time efficiencies that involves money and socially necessary labour time. However the precise functioning of socially necessary labour-time is questionable in a system characterised by unequal wages per hour of labour both within and between professions, trades and services.

3.3 What I see in front of me is an almighty bun fight. I see money circulating goods that arise from nature and labour. I see monetary evaluations and exchanges determining decisions related to production. I see the production of more money/commodities/capital as the main aim in my society. I am allowed to believe in any god or religion I chose but I must accommodate or satisfy the money ‘god’ too. We all have too. Money connects the incomparable. The market involves a series of discrepancies and inadequacies that make a farce of economic theory whether it be mainstream or alternative or Marxian. I think that money gives capitalist exchange the appearance of rationality and balance and neutrality in a system that instead presents as a dog eat dog world, has no conceivable labour or ecological rationale and features decision making regarding production that gives monetary assessments, prices and profits, pride of place.

3.4 There is little evidence to suggest that at the end of the day (month or year) that everything equals out numerically or quantitatively in the way the labour theory of value requires. In fact the system features rising debts at a personal, commercial, local and international level. Okay, so for every debtor there is a creditor but the materialism of what could be referred to as the “subsistence accounting” of the labour theory of value is not readily apparent. Money certainly does not arise from commodity exchange in the way Marx’s theory of the money commodity suggests. In fact, following Schumpeter and Bellofiore (1985 and Ed. 1998), money seems to be created as a symbol prior to production so the system fits a credit/debt framework more neatly than an equal exchange framework. I believe that a credit theory of money is more plausible than Marx’s theory of the money commodity. This kind of framework is as easily, in fact more easily, adapted to theories of social exploitation.

In short, Marx’s labour theory of value is a philosophical proposition not a concrete one. It is not scientific even in the Marxian, arts, sense of the term. I reject it as an adequate explanation of what I see in front of me.

4. Objectionable political implications of the labour theory of value

In particular I worry about the political implications of accepting the labour theory of value. This is where I return to the Macfarlane quote, to Ethical Politics and money. The labour theory of value suggests that monetary exchange is rational in terms of socially necessary labour time. That implies an exchange of labour and the products necessary to sustain that labour giving the capitalist system rationality that I don’t believe it embodies. A bun fight theory of exchange might appear to be no theory at all, but war is war. Why is market exchange necessarily any more rational than gift exchange, love or war? Its quasi-mathematical appearance, made possible by the use of money, is a primary deception.

If the labour theory of value was correct monetary exchange might remain a useful technique to use in the transitional stage to socialism. Marx regards dispensing with the state and money as essential. But, in the same way as taking over the state was a new stage in the proletarian revolution, some have argued that monetary exchange can be adapted to socialist ends, at least temporarily. The communist experiments of the twentieth century in Russia and Cuba grappled with the difficulties of monetary exchange but never overcame them (Nelson, 2001). Especially in his early works Marx castigated the utopian socialist for their confidence in the manipulation of money to eliminate exploitation. Even though he designed his theories as a critique of their, as he saw it, muddleheaded proposals for reform, the labour theory of value has given solace to reformers following their tradition. In fact money seems to be a veil for social war; money is a weapon (Cleaver, 1979).

5. Ethical politics

I am a mother or I am a peasant or I am a clan member. I have access to certain natural resources. I have some knowledge of the potential and limitations of local human and non human resources. I have mouths to feed, generations to nurture, civilisations to reproduce culturally, socially and materially. I don’t need money to evaluate these human and non human resources. I don’t need money to distribute these human and non human resources. I do not need money to (re)produce these human and non human resources. I do need commonly agreed upon social principles and processes to assess the utility of these human and non human resources, to organise the reproduction of them and to distribute them. Our job, the job of ethical politicians today, is to design non monetary forms of appropriation and distribution of material and non material resources.

I believe that this will constitute the basis of a truly postmodern society featuring ecologically sustainable behaviour (ESB) and social justice. A society without myths associated with modern society regarding money. The ethical politics of a post economic universe must feature substantive grassroots democracy and ESB. There will be no pretence at neutrality but rather a conscious and conscientious effort to create a balance within and between the fulfillment of the various needs and wants of all the contenders for existence. We want a world where people deal with people and non human nature directly and collectively and care.


Bellofiore, Riccardo, “Marx after Schumpeter”, Capital and Class, # 24, Winter 1985: 60-74.

Bellofiore, Riccardo, (Ed.), Marxian Economics, a Reappraisal, Volumes I and II, London/New York, Macmillan Press/St Martin’s Press, 1998.

Cleaver, Harry, Reading Capital Politically, Brighton (Sussex), The Harvester Press, 1979.

Macfarlane, Alan, “The root of all evil”. In Parkin, David (ed.) The Anthropology of Evil, Basil Blackwell, Oxford, 1985: 57-76.

Nelson, Anitra, Marx’s Concept of Money: the God of Commodities, Routledge, London, 1999.

Nelson, Anitra, “The poverty of money: Marxian insights for ecological economists”, Ecological Economics, March 2001: 499-511.