Practical political importance of LTV

Steve.Keen at unsw.EDU.AU Steve.Keen at unsw.EDU.AU
Sat Nov 5 00:33:10 MST 1994

Louis challenged me and other anti-LTVers to put their case as succinctly
as Huberman. While I generally agree with Justin (and Marx!) that
succinctness isn't a measure of accuracy in economic theory, I'll post
my shortened version by first posting what Marx actually said, and Huberman
paraphrased, and then commenting:

"The past labor that is embodied in the labor power, and the living labor
|that it can call into action; the daily cost of maintaining it, and its
|daily expenditure in work, are two totally different things. The former
|determines the exchange-value of the labor power, the latter is its
|use-value. The fact that half a [working] days labor is necessary to keep
|the laborer alive during 24 hours, does not in any way prevent him from
|working a whole day. Therefore, the value of labor power, and the value
|which that labor power creates in the labor process, are two entirely
|different magnitudes; and this difference of the two values was what the
| capitalist had in view, when he was purchasing the labor power... What
|really influenced him was the specific use-value which this commodity
|possesses of being a source not only of value, but of more value than
|it has itself. This is the special service that the capitalist expects
| from labor power, and in this transaction he acts in accordance with
|the eternal laws of the exchange of commodities. The seller of labor
| power, like the seller of any other commodity, realizes its
|exchange-value, and parts with its use-value. (Capital I, p. 188.)

I argue that Marx explained surplus value from labor on the basis of the
characteristics that labor-power shares in common with all other commodities:
"This is the special service that the capitalist expects from labor power,
and in this transaction he acts in accordance with the eternal laws of
the exchange of commodities" that the seller of a commodity "realizes its
exchange-value, and parts with its use-value". The fact that the commodity
labor-power is "consumed" in productive consumption means that its
use-value to the capitalist is quantitative, and the length of the working
day is a convenient measure of its size relative to its exchange-value
(the cost of the means of subsistence).

Marx attempted to use the same logic to show that the means of production
only transfer their exchange-value to output, but his "logic" was a sham.
My gripe with the LTV has never been the measurement one that Allin and
Paul have defended, but the logical one to which Justin has most recently
alluded. To "prove" the logic that labor is the only source of surplus,
you must not only show that it is _A_ source; you must show that all other
inputs are not. This Marx did not do.

The wash is that all commodity inputs to production are potential sources of
surplus, as the Sraffians have been arguing for decades. But, as Justin
has noted previously, the fact that capitalists own the means of production
is no justification for them receiving the largesse they generate.

Steve Keen


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