Value (to John Ernst 4/4)

Juan Inigo jinigo at
Thu Nov 16 20:47:50 MST 1995

John Ernst writes:

>Man, what shook your cage?   Chill out a bit.  Note
>that in the section from one of my posts that you
>quote, I stated "typically if we assume ..." and go
>on to state that what I though I had done is briefly
>summarize the neo-Ricardian manner of dealing with
>value.  You impute the summary to me.  I find this
>odd since I don't agree with it either.

Is John's concept of value as slippery as it seems?

John started by presenting to the list a quasi-equation between three
different material things, then an equation formed by three elements
measured in an unspecified material unit, and finally an equation formed by
what, at best, are three amounts of concrete labor (and I say, at best,
since in capitalism the dead concrete labor materialized in the means of
production cannot be unequivocally measured). Then he presented these
relations as being three different expressions of:

>  c       +  v       +  s        =   w

and he claimed:

>Note that no matter how we compute the rate of
>profit s/(c+v),  we get the same thing rate of
>profit whether we use material terms or the
>labor hour expression. It is 25%.   This is
>the essence of Steedman's criticism of Marx in

I replied John by pointing out how none of the supposed "profit relations"
presented by him where actually such, but the very negation of value. They
are constructed on the basis of putting concrete private labor as if it
directly were its opposite, socially necessary abstract labor. And this is
done, despite the fact that the commodity-form has its specificity
precisely given as the indirect resolution of the separation between the
former and the latter. Furthermore, I briefly developed, reproducing the
path opened by Marx, how the value of a commodity can only express itself
as a certain amount of the use-value of a different one and hence, in
general, in money. Then, I briefly showed how Sraffa's so-called
commodities actually are the products of a social system where the concrete
labors are immediately determined as parts of the social labor in the very
moment they are performed; therefore, Sraffa's "commodities" are the very
negation of commodities. Thus, I showed how the assertions about value
being "redundant," etc. lack any content of reality other than that of
being pure mental abstractions, pure ideology.

John now replies, as we have seen, that he was just referring to:

>the neo-Ricardian manner of dealing with
>value.  ... I don't agree with it either.

Actually, John pointed out his disagreement with Steedman in his original post:

> I think and
>have argued to Keen that Steedman is wrong and
>can be shown to be wrong ...

But was John claiming that Steedman is wrong concerning the inversion that
value suffers in Steedman's hands, actually served by Sraffa's hands, and
upon which all his claims are supported? Of course, ... not:

> ... if we consider the
>manner in which Marx deals with accumulation.
>Hence, to me, agreement about value at this
>level is less than crucial.  The critics of
>Marx, often less honest than Keen, will sit
>there and agree with you, knowing that using
>the above example it's no simple matter to
>show a falling rate of profit if you hold the
>real wage constant. (the Okishio Theorem)
> ...
>Let's be clear.  I could have demanded that he agree
>with the LTV from the start.   He knew full well
>that I'd hit a brick wall when it comes to accumulation.

According to John, the "above example" was far from being a false starting
point made of inverted relations, but a true trap that allows "the critics
of  Marx, often less honest than Keen (?!)," to sit on that "brick wall"
with their "Okishio Theorem" ready! And according to John, nothing could be
done against this fantastic construction (that actually comes down to
nothing but the repulsive apologetic of the eternality of capital as soon
as the value-form is not abstracted from its specificity) until
accumulation is brought into consideration!

Is it something else needed to make evident that John is absolutely
convinced that, contrary to what Marx carefully proved, value can directly
express itself through its substance? Or, in other words, is it something
else needed to make evident that from John's point of view value is an
inverted abstraction, a mental construction achieved by completely
abstracting the present-day general social relation from its historical
specificity? Yet, John himself wants to provide us with further evidences.
Now he claims:

>I do think that your criticisms of neo-Ricardian view do
>not amount to much.   If you want to talk of value, you
>claim you cannot be in labor hours per se.  OK.  Put
>the darn thing in terms of money and deal with it.
>It seems to me that you pick up on relatively simply matters
>and blow them up into a big thing.  But it is not clear what
>that big thing is as no one ever knows what the consequences
>of your insights are?   That is, by using labor hours in the manner
>I sketched,  have neo-Ricardians done away with "the economic law
>of motion of modern society"?   To this question, I would
>answer, 'Yes!"  Perhaps, you would as well.  But I fail to see
>how changing the units of the example makes your answer --
>"Yes!"  To convince anyone you are right you've got develop
>your argrument beyond debates about definitions.

Following Sweezy's vulgar steps into the vulgar economy that needs to label
itself Marxism, John does believe that Marx faces the development of
commodities into money with no further transcendence, and actually content,
than formulating some abstract comments, some abstract "theory of money,"
that can be completely left out when the "real thing" of capital
accumulation comes in. The only problem (from a critical point of view of
course) is that thus deprived from the necessity of its form, value is
turned into an abstraction and every trace of real content is expelled from
it. But, from John's point of view all comes down to some sort of "se
igual!" (more or less, "ts' the same!"): Do you "claim" that it cannot be
in labor hours? Put the darn thing "in terms of money," and nothing will be

In fact, as I pointed out in my previous post, the "deal with it" and the
"develop your arguments" John is asking for now should come to him as
something obviously done many years ago. Hasn't John pedantically claimed
"I have to read all three books of CAPITAL. It's not hard, try it"? Well,
these "deal with it" and "develop your arguments" are precisely what Marx
does along the three books of Capital. Maybe John should try a little
harder next time and read what Marx has actually written, instead of what
his vulgar prejudices as a vulgar economist tell him he must read "in
rigorous orthodoxy." Maybe if he does so, he will stop reading "material
units" or "hours of labor" where Marx writes "units of money" in the
multitude of examples Marx presents. And if John tries really hard (and
this has little to do with irony), maybe he will be able to follow Marx's
reproduction of the development of our general social relation from its
specific simple form, commodities, to its money-form, and from it to its
capital-form, until reaching its concrete forms like the falling rate of
profit, freed from the mental walls made of abstractions that torture him
so much today.

But, for the time being, John has decided to renew his love/hate
relationship with the Neo-Ricardian fantastic concept of value, to which he
finds nothing to object in itself, by stating:

>But remember one set of inputs  was at least part
>of a prior set of outputs.  Thus, if you can make a
>comparison of outputs, it seems to me you should
>be able compare inputs.   More important, what is
>the point of this?  No, it's not some sort of quiz,
>although when I taught Marxian Political Economy,
>I did demand that students know this stuff.
>It does trace back to the Okishio Theorem.  As Van
>Parijs(1981) pointed out the work of Okishio can be found
>albeit in a simple form in Tugan-Baranowsky(1898). Using
>a one-commodity model and simultaneously assigning
>values to inputs and outputs, Tugan noted that that
>one could compute the same rate of profit whether he
>used the materials or the values.  Thus, given that
>capitalists actually see the materials, they would never
>invest in a new technique that led to a fall in the rate
>of profit, if the real wage stayed the same.  Note that
>for Tugan's rate of profit to fall the constant capital
>must grow faster than the output for a given number
>of workers.  Note as well that for Tugan (like Steedman)
>the concept of value is, at best, redundant.
>This is a powerful criticism of the falling rate of profit.
>Van Parijs(1981) called it devasting.  It is.

Were John actually aware of the specificity of the value-form, he would
have never started by claiming that the technical composition of capital,
or the productivity of the total labor that produces commodities, can be
measured directly as such by resorting to the fuzzy, rather funny,
mathematics of the "it seems to me you should be able to compare..." Nor he
would have fallen to Tugan-Baranowsky, Okishio and Van Parijs'
fantastically "powerful and devasting" fantasies based on capitalists
computing the profit rate on the basis of material relations.

To assert such a grotesque absurd (that would make real capitalists wonder
what these guys are talking about until someone will whisper to them:
ideological lackeys, you know), at least two conditions must be
accomplished. And these conditions are the same needed to make the "moral
depreciation" that machinery suffers in reality vanish into the air when it
becomes fantastically inverted in the world of mental abstractions. The
first and truly essential condition, is the reduction of value to its
substance, followed by the inversion of this substance to its opposite,
concrete private labor. The second one, is to keep accountants as far away
as possible from vulgar economists, so the pedestrian, albeit necessarily
much more realistic, conceptions about the facts of capital's life of the
former do not interfere with the crude production of ideology by the

In his fever to jump from one real form to the next to turn all of them
into abstractions just like that, John has stepped on my own person. One
day, I was a defender of Neo-Ricardian view of value (albeit I did "not
even know it"), a couple of days later, someone who criticizes the
Neo-Ricardian view (albeit "not amount(ing) to much"). But maybe it is only
that John is projecting on me the ambiguity of his love/hate relationship
with Neo-Ricardianism. After all, what actually is that which he calls
value in his 1982 article and in his current work, "in rigorous orthodoxy"?
Is it:

a) the socially necessary abstract labor materialized in commodities that
is represented as their capacity for relating among themselves in exchange
thus socialy relating their producers, and that as such, can only express
itself as exchange-value in a certain quantity of another commodity's use
value that appears as its equivalent, being money the universal equivalent?

Or, on the contrary,

b) just the concrete, and hence private, labor materialized in commodities,
that is theoreticaly conceived by abstracting from its specificity, as
immediately being a socially necessary abstract labor, and hence, as being
able to expresses itself directly as such in units of labor-time?

Juan Inigo
jinigo at

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