It is argued that most approaches to industrial democracy use a model of capitalism based on the commodity status of labour. This gives rise to 'leap and logic' analyses of modes of production and changes between them which fall foul of the 'paradox of mode of production'. The labour process and value theory debates are used to illustrate this. An alternative reading of Marx's theory of value is proposed which gives a less determinist analysis of capitalist mode of production in terms of the development of the money form. The implications of this for conceptions of class and the rationality of production relations in capitalism are investigated and conclusions offered about how industrial democracy strategies might be evaluated.