Socialist Worker

Marx's idea of value

Marxist economist Alfredo Saad Filho spoke to Joseph Choonara about the continued relevance of Marx’s critique of capitalism

Issue No. 1954

Alfredo Saad Filho

Alfredo Saad Filho

Marxist economics has an image problem. In recent years a new movement has challenged the idea that there is no alternative to the neo-liberal capitalism espoused by the multinationals, governments and global bodies such as the International Monetary Fund and G8.

But the vibrant mobilisations of the anti-capitalist movement seem a world away from the three dusty volumes of Karl Marx’s Capital. Alfredo Saad Filho, a Brazilian Marxist based at London’s School of Oriental and African Studies, is trying to close that gap.

He recently collaborated with Ben Fine on the latest edition of Marx’s Capital, which presents Marx’s ideas to a new audience. He also edited and contributed to a collection of essays entitled Anti-Capitalism: a Marxist Introduction, which tackles key issues for the movement from a Marxist standpoint.

Militarised neo-liberalism

Saad Filho is clear on his role. “There’s a greater acceptance today that militarised neo-liberalism is incredibly dangerous,” he says. “People are looking for solutions. Many of them will take some ideas from works by Marx and by Marxists, but much more needs to be done.

“We have to say things about contemporary capitalism that resonate with people’s concerns and make them want to find out more about Marxist theory.”

Saad Filho’s work centres on value theory. He says that this theory, developed by Marx, has two main components. The first is that it shows “the centrality of labour and the importance of people’s interaction with each other, and with nature, through their labour”.

Secondly, value theory can tell us about the way capitalism is structured. “If you want to know how a particular society reproduces itself, you have to look at how people relate to each other in production.”

Marx shows in Capital how the value of commodities, whether they are material goods or immaterial services, reflects the amount of labour that has gone into creating them. Capitalists bring together workers and machinery to produce commodities, but it is not the machinery that produces value.

“Machines make people more productive,” says Saad Filho. “But it is people who produce machines, and people who use machines to produce commodities, including new machines.” Marx referred to machinery as “dead labour” — the product of the labour of workers in the past—which must be brought together with the living labour of workers to create more value.


For Saad Filho capitalist society is based around a central relationship between capitalists and workers — a wage relationship. This is a relationship of exploitation. “Value theory allows you to look at the process of production and identify the form of exploitation that is typical of and essential to capitalism — the creation of surplus value.

“A certain amount of value is produced each year and some of this value is controlled by the workers. The rest is called surplus value. This gives a measure of exploitation — it shows that workers are creating something they do not control and that, in fact, controls them.”

The question of whether exploitation is rising or falling is a complicated one to answer. “You can measure wages,” says Saad Filho. “But it’s also about the wealth that workers control. If you take the health service, you can ask if it is structured to serve the needs of the general population, or if it is mainly structured to serve the needs of groups other than workers.”

The bit-by-bit privatisation of the NHS in Britain is one example of a government and groups of capitalists “attempting to absorb new areas into the commodity system… if they can achieve that, they will have increased the rate of exploitation of workers, regardless of the changes in wages”.

Although the theory of value is powerful, it does not explain everything, says Saad Filho. “The labour theory of value is about the production of the goods and services required to reproduce society—to keep it producing in the future, and replicate the social structures and relations of exploitation typical of capitalism.

“Art works, for example, are not immediately included in value analysis. They might come to the market, but if they are not reproducible then they are not normal commodities.”

One important role of value theory is to distinguish between poverty and oppression on the one hand, and exploitation on the other. This runs against the common sense view that workers in the Third World are more exploited than those in the West, or that those in Marx’s time were more exploited than today.

Level of exploitation

“It is obvious that absolute poverty has declined in the West,” says Saad Filho. “But this is something completely different to exploitation. You can have a technologically advanced society, in which workers are very productive, where the level of exploitation is higher than in a poorer society.

“For example, Western workers are far better off than those in Sub-Saharan Africa or South Asia, but they also produce far more surplus value and there is evidence that they are more exploited.”

Although capitalists are rarely keen to increase the wages of their own workers to allow them to consume more, they are always eager to ensure other workers buy their commodities.

“One of the most important levers of exploitation today is the demands of consumption. New goods are being continuously added to the bundle of goods that workers consume.

“This is a mechanism for what boils down to wage slavery. You have to work longer and longer hours to keep your head above water. Even though you might have higher levels of consumption, you also have higher levels of stress and debt, and a greater waste of human potential.”

One feature of capitalism that Saad Filho’s work discusses is the instability of the system. Most economic theories treat the system as if it were inherently stable. But for Marx there is always the necessity of instability and crisis.

Crises can take many forms, and each crisis has to be studied individually in its context. The form taken by a crisis will be shaped by “the relationship between the two key classes in society — capitalists and workers — and the competition between capitalists, which may take the form of competition within a country or competition between countries”.

Economic crisis

One important aspect of economic crisis identified by Marx is the tendency of the rate of profit to fall. Very crudely, the rate of profit can be viewed as the amount of profit capitalists earn for every pound they pour into the production process.

“The idea is simple,” says Saad Filho. “You have competition within capitalism. The competition is resolved through increasing productivity—which involves mechanisation.” Individual capitalists might be able to undercut rivals through investing in technology that allows them to produce a commodity more cheaply.

But when other capitalists also introduce the new technology, the long-term result can be a fall in the rate of profit because “as you mechanise across the economy, you are expelling living labour from production, and only labour produces profit. Machines and tools do not create profit — they have to be put to use by the workers.”

The capitalists are giving an ever-smaller role to the very thing that creates their profits—living labour. They now have to invest in vastly more machinery — dead labour — in order to produce a given profit.

Saad Filho argues against the crude way that Marx’s analysis has often been interpreted. “This process doesn’t happen on its own. If it did, capitalism would have collapsed a long time ago. Increased mechanisation does not mean the rate of profit will simply tumble.

“Marx also talks about counter-tendencies, mechanisms in the system that can support the rate of profit. Examples of such mechanisms include the increased exploitation of workers, or the purchase of cheaper inputs from other countries, which illustrates the potential importance of globalisation and imperialism for capitalist profitability.

“If you look at the actual movement of profit rates, they rise and fall. The tendency for the rate of profit to fall operates alongside the counter-tendencies.”

The rate of profit rose during the Second World War in most advanced countries, remained high during the 1950s, and began falling in the 1960s and 1970s. “From a key point around 1982 rates of profit began rising again in many countries,” says Saad Filho. “Why 1982? Because neo-liberalism began to be imposed around this time, which was a defeat for workers.”


Capitalism is not doomed to simply collapse, but Marx’s theory of capitalism is important as part of a wider attempt to build a different type of society. “The system has in-built fragilities, which are different at different times. Whether we can exploit those fragilities depends on the level of organisation of workers and the type of challenge they offer the capitalist system.”

But what kind of society could replace capitalism? “Marx doesn’t say very much about post-capitalist society, and some of what he says can be interpreted in different ways.

“I don’t think such a society would look like the Soviet Union, and I certainly hope it wouldn’t,” says Saad Filho. “If that were the aim it would be hard to convince people to embark on a difficult and protracted struggle.

“There are many ideas in circulation about what a post-capitalist society could look like, but there is no consensus. The question is an important one. The radical left cannot have a purely negative programme — you can’t convince people purely by saying that capitalism is a bad idea.

“They have to believe there is a viable alternative that offers something more than the current system. Otherwise we will be locked into defensive struggles to win reforms, rather than the leap into an alternative future which we desperately need to achieve.”

Alfredo Saad Filho will be one of the speakers at Marxism 2005. Go to


  • Capital, Karl Marx.
    Various editions are available new or second hand
  • Marx’s Capital, Ben Fine and Alfredo Saad Filho (£9.99).
    The best short account of Capital available
  • Anti-Capitalism: a Marxist Introduction, edited Alfredo Saad Filho (£15.99).
    Covers many of the debates in the movement
  • Neoliberalism: a Critical Reader, edited Alfredo Saad Filho and Deborah Johnston (£15.99).
    See reviews round-up
  • Economics of the Madhouse, Chris Harman (£3.50).
    An accessible introduction to Marxist economics
  • The Value of Marx, Alfredo Saad Filho (£70).
    A more advanced text on value theory, expensive but it can be ordered through your library

Books available from Bookmarks, phone 020 7637 1848 to order. Marx’s key economic works are also online — go to

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Sat 4 Jun 2005, 00:00 BST
Issue No. 1954
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