Keen's thesis

Maoist Internationalist Movement mim3 at
Fri Nov 3 16:50:46 MST 1995

I read Keen's thesis and am glad I did.

Here is what I have to add and recapitulate.

1. On Sweezy, he has always hung out with economists. For him to 
downplay use-value as understood by Marx is just pedagogically
strategic. The gap between Marx and Ricardo is a mere stream compared 
with the great open sea between Marx and neoclassical economics. The 
neoclassicals and spontaneous defenders of the ruling class are not capable 
of understanding the word "use-value."

Keen does demarcate against subjectivism in his discussion of use-value, 
but he is emphasizing how Marx spruced up classical economics with the 
use-value concept. One can fault Keen's priorities, but he makes them clear 
and doesn't attempt to distort Marx to do it. Even with Juan Inigo's point 
about a certain text, Keen is ready to confront it and the rest of his thesis 
shows the same willingness. (If Keen weren't attacking the LTV openly
it would be a distortion of Marxism of course.)

2. On my page 39 of Keen's thesis where he discusses Dobb, Keen nearly 
answers why labor-power must be seen as the privileged commodity. The 
question is how can the law of value pertain AND accumulation/surplus-
value arise?

What Keen left out is how can we uphold the law of value and accurately 
characterize the class system at the same time? How could a capitalist class 
go on existing if it exchanged dead labor for an equal quantity of live labor?
With an LTV, obviously it's impossible and the riddle is solved with the 
concept of labor-power. (An exception--a section of the workers (labor 
aristocracy) receives equal dead labor for live labor but only at the expense 
of other workers superexploited who see to the reproduction of the system 
the labor aristocracy thrives in.)

If we allow other commodities the privilege of generating surplus-value, 
maybe we can allow an equal exchange of dead value for live labor for all 
workers, but then we are left with an unequal exchange between capitalists 
that allowed for the surplus-value created under a non-LTV which allows 
workers to exchange work for work. Not for nothing Marx said as Keen 
quoted that "not capital" is labour. 

A non-exception would be where Keen considers the situation where 
surplus-value originates from both labor-power and non-labor-power 
commodities. An interesting political question is how would such a 
situation persist? As Keen says, workers with any power whatsoever 
should be able to end it and make the capitalists at least share the surplus-
value from machines. So why is there so much war and class struggle in the 
world? With an LTV, there are only two possibilities for appropriation of 
labor, either by capitalist or by labourer; hence, explanation of political 

In reality, if Keen is correct, in a free market system, labor-power will NOT 
generate surplus-value according to Keen and other commodities will. I 
suspect ecologists might have more legitimate interest in that idea than we 
political economists would. We have in Keen the possibility that workers 
consume what they produce while the objects of the world save the day by 
allowing accumulation. Maybe if the sun shines a little brighter in foggy 
agricultural areas or if a meteor deposited amazingly fertile soil or 
industrial inputs, we could have use-values we didn't have before. 
However, sunshine and meteors do not belong in the subject of political 
economy as the source of accumulation. Alternatively if Keen is really 
saying that he is not interested in meteors and sunshine, perhaps he merely 
confused labor productivity (purified of other use-value inputs)  with fixed 
capital, which is why some anthropological and historical exercise of the 
mind might be useful.

So how to simultaneously uphold the following?
1. Equal exchange. (No wealth creation through exchange or capitalist 
class deception of itself.)
2. Creation of wealth.
3. Existence of classes.

Economists are called economists, not *political* economists, because they 
drop number 3. I submit that Keen is forced to drop either 1 or 3 in his 
arguments. In the 1995 context where most of the world's  workers still 
can be shot for organizing or joining a union, there is no free market for 
labor-power and Keen must drop #3. In his theorizing for a real free 
market situation for labor-power, he still drops #1.

All things being equal, I would prefer with Keen that there be just one 
category of commodities, not labor-power and all the rest. However, not 
all things are equal. He says lawyers make distinctions, but we could just as 
easily say that economists abstract from history and institutions for the 
benefit of having simple assumptions for the creation of formal models. 
Marx's "The Poverty of Philosophy"  on the uselessness of categories of 
thought at the expense of the concrete is applicable here.

Aside from doing without classes in a Bowdlerized LTV, an example is his 
discussion of the reserve army of unemployed and 
Bowles and Gintis. For Keen there is only a choice between an absolutely 
commoditized labor force or an un-commoditized labor force. There are no 
degrees or historical untidiness. Again this reflects how an economist 
thinks--not anything about the real world. To his credit, he did say he 
found something about the Bowles and Gintis as persuasive; he just didn't 
integrate or synthesize the insight he claims to have seen.

It may take a long time for the LTV to be worked out in all the detail and 
modeled in a way that would satisfy intellectuals. One could easily suspect 
we don't have the mathematical ability as a species yet. This doesn't mean 
we should give up reality in order to model something slightly easier to 

3. Skilled labor. As I already said, the difference in the real world in wages 
for skilled and unskilled may originate partly in superexploitation. That 
involves an examination of political institutions including unfree labor. Few 
would argue a slave deserved as little as s/he got, but many seem to forget 
the implications of having a bifurcated labor-power market, where unions 
and negotiating are still in question in some places, and not  in others.

I also raised the caveperson example. Something about culture and 
organization through the efforts of civilization over long periods of time 
does accumulate. The caveperson can do nothing with an assembly-line for 
cars. Keen has spoken of reification, but vivification is what happens with 
machines: "The accumulation of knowledge and of skill, of the general 
productive forces of the social brain, is thus absorbed into capital, and 
more specifically of *fixed capital,* in so far as it enters into the production 
process as a means of production proper." "Grundrisse," Section "G," 
Nicolaus ed. Keen's discussion of this around page 98 in my version of his 
thesis seems to miss Marx's irony, sarcasm and grimness with regard to 
how dead labor commands live labor.

He also did not comment on how Marx imagined communism would 
change everything. His discussion of machines as mainly important for use-
value occurs in the "Grundrisse" in a section where exchange-value has 
already disappeared--i.e. communism: "As soon as labour in the direct form 
has ceased to be the great well-spring of wealth, labour time ceases and 
must cease to be its measure, and hence exchange value [must cease to be 
the measure] of use value. [Pat comments: You would have thought Keen 
would love this quote so far, but read on as to what circumstances this is 
true in.] The *surplus labour of the mass* has ceased to be the condition 
for the development of general wealth, just as the *non-labour of the few,* 
for the development of the general powers of human head. With that, 
production based on exchange value breaks down, and the direct, material 
production process is stripped of the form of penury and antithesis." 
("Capitalism, Machinery and Automation," Section G, "Grundrisse")

4. Because Keen wanted simpler assumptions, he was free to attribute 
logical errors to all his opponents. Hence his argument with me already 
recapitulates his argument with Desai. Keen is quite correct that it boils 
down to his "point 4" on my page 106 of his thesis. What Keen is calling a 
logical error is in fact though a matter of reality. Is it in fact possible for 
live labor to exchange for an equivalent of dead labor, both in accounting 
and overall social terms? What about the "Critique of the Gotha Program"? 
It seems that Keen has left out the workers' social obligations for 
investment, insurance etc. and the issue of who controls them. But then 
again, as I said, it is most convenient for economists to produce theories 
where it is assumed there are no classes and no social obligations, just 
individual actors. It's as if everyone is an independent contractor or 
consultant. In his vision of the LTV as strawman, there aren't any trustfund 
babies or other parasites being fed, clothed and sheltered by the workers. If 
such parasites are introduced into theory, Keen protests to the theorist 
about "unequal exchange."

Another aspect of simplification of assumptions means that for Keen, there 
is no matter of degree in market relations. Even though he admits that 
Marx meant to critique the market as a place where coercive social 
relations are covered up, he feels no obligation to account for the dynamics 
of intra-capitalist competition and how they might differ with class struggle 
between workers and capitalists--again because the hidden assumption is 
that there are no classes. In this regard, he suffers from mild 
commodity fetishism in regard to labor-power and takes Marx's comments 
on equality in the marketplace too literally. 

The commodity fetishism is compounded when we realize that Keen's 
theory tolerates unequal exchange in results quite openly. He is willing to 
see workers as getting their share or more but somehow some capitalists 
must be getting cheated by others in results. The significance of unequal 
exchange to Keen is only as a reason to say that labor-power cannot be 
*treated* at the *beginning* of an exchange process as any different than 
any other commodity.

For economists Keen will still have appeal, because of their penchant for 
ahistorical generalizations. However, if we run Keen in reverse, can his 
work survive the same scrutiny he gave to the LTV? 

5. Ernst says Keen is not Steedman, but at least in this thesis it is obvious 
that the main part of the work is the Sraffaesque attack on the LTV. The 
whole distinction Keen draws out of Marx regarding use-value is entirely 
friendly to Steedman. Most of the work that this distinction does in the 
thesis is in fact to refute the LTV.

Keen then tells us we don't have to solve the transformation problem 
anymore and that now we know why the FRP may not be happening; 
although I wonder if a lot of fixed capital --"c"-- wasn't destroyed in World 
War II and the like, and how much of an attack on Marx is left if the profit 
rate rebounds only at such cost?

Ernst seems to think there is some payoff from not having to solve 
problems anymore and maybe Keen's idea has some new implications. I 
have to agree with Miller that left with just use-value and a supposed 
dialectic, there is nothing really left. I see Keen's work as possibly 
destructive of Marxist theory and its potential, but I also believe a Keen-
like approach to itself would also be highly destructive, and being left no 
where, I prefer the LTV with realistic assumptions and some solutions to 
for some problems.

6. As long as a reader goes into Keen's book with the question in his/her
minds--how much historical, institutional and social reality am I willing to 
sacrifice to eliminate one distinction that creates two categories instead of 
one?--I think one can learn some things about Marxism from Keen's book.

I'm still troubled by the influence of the political economy of academia on 
the Marxism List. Ernst says Miller should shut up and do his own work. 
That's the kind of thing we expect to hear in academia where people are 
supposed to be doing work to get a job. If it were a "Post-Keynsian" or 
"alternative economics" list, maybe Ernst would be justified. If 
"Marxology" is not a contradiction in terms since Marx believed people 
learn in practice including the practice of class struggle, then maybe Ernst 
would be correct in his response to Miller on a "Marxology" list. But 
people going down to the pub belong on a "Marxism List." This pro-
experts attitude of Ernst's is not Marxist. We are trying to get theory to 
seize the people like lightning as Marx said.

As for what Proyect said, as usual it is self-evident sectarianism in the name 
of fighting sectarianism. He admits he duked it out on the LTV years ago, 
but now he thinks the subject is too bookish. At the same time he leads a 
seminar on fascism piled high in books, (with an underrepresentation by the 
people actually involved in fighting fascism for that matter). All we are 
supposed to be allowed to do by Proyect is participate in his supposedly 
non-sectarian seminar on fascism. He doesn't like the competition from 
people who believe we gotta study political economy. That's sectarian, by 
putting his studies agenda ahead of others that are obviously also 
necessary, at least according to Marx. Proyect should at least allow us to 
judge for ourselves whether he wasted his time in studying LTV. We will 
apply the same standard to his seminar.

Keen's project is a great intervention in Post-
Keynesianism or economics generally, since academia is not going to be 
Marxist anytime soon. Since we must intervene in academia, I revert to the 
sales question. What makes Keen think that the LTV is any less coherent 
than anything else? It would be a bad result if Keen persuaded many people 
to stop investigation of the LTV, because it is allegedly less logical than 
other possibilities. Any assumption can be set up in formal terms. I'm not 
persuaded that the LTV is any less fit for logical expression than anything 

Pat for MIM

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