utopia/Freeman's dynamics

Steve.Keen at unsw.EDU.AU Steve.Keen at unsw.EDU.AU
Sun Oct 15 20:21:30 MDT 1995


None of what I see as wrong with the labor theory of value
rests on whether the interpretation of it is simultaneous
or sequential. The gist of it--which I argued at length
in the list's early days (I think before you joined)--is
that I regard the proposition that non-labor inputs to
production cannot be a source of surplus value as a

Plenty of other schools of economic thought feel
likewise--the neoclassicals, Sraffians, and most Post
Keynesians. Where my argument differs from all these
other critics is that I argue the proposition can
be refuted using Marx's own logic. This is centred
around the prominent role that I give to Marx's concept
of use-value in understanding his analysis, for which I
can claim the following antecedents:

"How often has the thesis of the `contradiction between
use-value and exchange value' been repeated? On the other
hand, how often has anyone really taken the trouble to
develop this thesis or regard it as something more
than a survival of the time when Marx `coquetted with the
Hegelian manner of expression'? In reality we are dealing here
with one of the most fundamental discoveries of Marx's economics,
the neglect of which makes his conclusions in the theory of value
and money appear utterly distorted". *Rosdolsky*, _The Making of
Marx's Capital_, p. 133.


"`Only a *vir obscurus*, who has not understood a word of
Capital could conclude [that] use-value plays no role for
him... use-value plays a far more important part in my
economics, than in economics hitherto'." Marx in Carver, T.,
_Karl Marx: Texts on Method_, Basil Blackwell, Oxford, 1975,
pp. 198-200.

In my papers, I argue that Marx
* attempted to employ what Rosdolsky above calls the `contradiction
between use-value and exchange value' to derive the labor theory
of value;
* Succeeded in deriving the proposition that labor is a source
of surplus value; but
* Failed to show that non-labor inputs are not sources of
surplus value. His assertion that they were not source of surplus
was based on a misapplication of his own logic.

I've gone over this ground on this list before--as I noted, I
think before you joined--hence my reluctance to enter into that
debate again. But you asked for one quote from Capital I to support
my views. I'll give three from Capital, and one from the

As to the role of the concept of use-value in discerning the sources
of surplus value:

The change of value that occurs in the case of money intended to be
converted into capital ... must ... take place in the commodity
bought by the first act, M-C, but not in its value, for equivalents
are exchanged, and the commodity is paid for at its full value. *We
are, therefore, forced to the conclusion that the change originates
in the use-value, as such, of the commodity, i.e. its consumption.*
In order to be able to extract value from the consumption of a
commodity, our friend, Moneybags, must be so lucky as to find, within
the sphere of circulation, in the market, a commodity, *whose
use-value possesses the peculiar property of being a source of
value.* (p. 164. Emphases added.)

That labor is such a commodity, a source of surplus-value:

"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.*" (p. 188)

[In other words, labor-power is purchased at its exchange-value
and its use-value is transferred to the product. Logic correctly

His foul-up in logic in deciding that non-labor inputs are
not such commodities, and therefore not sources of surplus-value:

"If we now consider the case of any instrument of labour
during the whole period of its service, from the day of its entry
into the workshop, till the day of its banishment into the lumber
room, we find that during this period its use-value has been
completely consumed, and therefore its exchange-value completely
transferred to the product." (p. 197)

[In other words, a machine is purchased for its exchange-value
and its exchange-value is transferred to the product. Logical
error--use-value neglected.]

But getting it right in the Grundrisse:

"It also has to be postulated (which was not done above) that *the
use-value of the machine significantly (sic) greater than its value*;
i.e. that its devaluation in the service of production is not
proportional to its increasing effect on production." (p. 383.
Emphasis added.)

Steve Keen
PS all of the above is gone over in much more detail in my
papers in the Journal of the History of Economic Thought
(1993, Vol. 15 Nos 1&2), and even more so in my thesis,
which is on the marxism archives and at csf.colorado.edu
PPS All Capital references are to the Progress Press edition

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