jamiller at igc.apc.org
Mon Oct 30 19:43:43 MST 1995
THE LABOR THEORY OF VALUE
I'd like to respond to some of the recent posts on
the discussion of the law of value, or "labor theory
Louis said this topic has already been pretty well
chewed over in the past. Well, that was before my time
on this list. But it's something that won't go away just
because some people think it has been done to death.
First, we should keep in mind that new people will
continue to sign on to this list, and many of them,
presumably, will be interested in basic theoretical
Secondly, many people who have been through these
discussions before will want to return to them if there
is a new participant who might be able to add something
unique to the discussion.
Thirdly, as individuals, many of the list subscribers
are continuing to evolve in their theoretical capacities,
and thus do not approach issues the same way now as they
did a year ago or five years ago, and thus can benefit
from a discussion that once again returns to the most
basic principles of Marxism.
Of course, there are those who will not be attracted
to a discussion on value theory, for whatever reason,
and that's not a problem. There are plenty of other
threads to follow.
I feel I should apologize to John Ernst for hastily
dismissing his recent series of posts in response to
Steve Keen. While I feel that this kind of discussion
fails to get to the heart of the problem, still, there
is certainly nothing wrong with this kind of discussion
on this list.
Both John and Steve pointed to possible gaps in my
education in Marxist economic theory. If I could answer
Okishio, Steedman, etc., perhaps I might be better able
to intervene in discussions on value theory. I disagree
with this approach.
As I pointed out in my previous comments, there is
a very clear and striking contrast between Marx and
Keen. The best way to explain this difference is to
keep it as simple as possible, so that everyone in the
discussion will see the fundamental opposition between
the two appraoches to value theory. On this basis, people
can judge which one is the more scientific.
The reason why we are discussing Steve's criticism of
Marx, and not that of Okishio, or that of Steedman, is
because Steve is here to defend himself. The others are
not. However, if necessary, we can also have a discussion
later which might deal with the perspectives of Okishio,
Steedman, etc., if there are those here who want to defend
I don't feel that anyone involved in these discussions
should be pressured to reveal what they may or may not
have read. If it were a contest of literary exposure,
I feel that Rakesh would have us all beaten hands down.
A debate is a confrontation of ideas which tests the
theoretical strength of each participant. In order to
for a bystander, or judge, to evaluate the performance
of each participant in the exchange, what counts is the
quality of the intervention, the demonstrated command
of the material under consideration and the effectiveness
of the arguments advanced. The bystander, or judge, will
not be able to know what each participant has studied in
the past, only how well each participant seems to handle
the issues as they are posed in the current debate.
Steve argued that, "Jim's posts have come across to
those of us who are not convinced that Marx's analysis
was complete as ignorant of the many ways in which critics
have pointed out that it is--potentially--incomplete."
Of course, Marx's work was incomplete. He pointed that
out himself. Every Marxist knows this. And anyone who
has seriously studied science understands why science is
inherently incomplete by its very nature.
What Steve meant to say in this passage is not that
Marx's work was criticized for being incomplete, but that
these critics in fact thought Marx's analysis to be wrong.
Steve is himself one of these critics. The point of Steve's
thesis is to refute Marx, to disprove the labor theory of
value, to expose the invalidity of Marx's central
theoretical premise. But he prefers not to express himself
that way. Therefore, he forces me to do it for him. Someone
has to explain what Steve is trying to do. If he won't do
it, I will. "Incomplete" is a euphemism for "wrong."
Then Steve says, "...if I am correct, while much of
_Capital_ *is* incorrect, there is a much richer analysis
to be derived from the legacy Marx gave us, and reference
must be had to Marx for both analytic and political work."
This is just so much hokum. It is as though you can
rip out a man's heart, and then tell him, "it's o.k.
because you still have a perfectly good pair of lungs."
No. If you disprove the labor theory of value, you rip out
the heart. If you can prove that Marx was wrong on this,
then there's no point in paying attention to him. He's just
another 19th-century crank.
And, indeed, Steve himself has no use for any part of
Marx's "legacy," except in so far as he can use one of his
carefully-indexed quotations from Marx as a weapon against
Steve also pointed out that my contribution "lacked
depth." Apparently that's the reason why Steve failed to
make the attempt to refute the arguements I advanced against
his thesis. Perhaps if my arguments had been deeper, he would
have been inspired to make the attempt to defend himself.
I have a different view. I believe that my arguments,
while undoubtedly incomplete due to their brevity, nonetheless
point to the superiority of Marx over Keen, and show up fairly
well the defects of Steve's case against Marx. I am still
waiting for him to respond to the arguments I made in the
two posts devoted to a criticism of his thesis.
Steve says that my characterization of his assault on Marx
constitutes a "misreading of my argument of breathtaking
It is certainly true that I see his argument differently
than he does. After all, I inspected his argument from the
perspective of one who understands and defends the labor
theory of value, a theory which Steve is unable to explain
and unable to refute.
Steve writes me off. He says, "once your posts betray an
awareness of the intervening debate between Marx and ourselves,
and an ability to read a critic constructively, rather than
simply looking for any basis whatsoever with which to dismiss
him/her, then your postings to this--and any other lists--
might evoke response, rather than silence."
If I want to get back into the good graces of Prince Keen,
I have to bicker with him about secondary questions, the way
Ernst does, and let slip an occasional reference to Sraffa.
But that's not my style.
Is it true that I "dismiss" Steve, as he charges? Quite the
contrary. No one on this list has paid anywhere near as much
attention to his thesis as I have. No one (including Ernst)
took the trouble to provide an insightful critique of his
thesis, quoting from it and summarizing its major flaws. I
did not "dismiss" Steve, I "refuted" him. Steve is not
accustomed to having his ideas taken seriously, and he fails
to recognize it when he sees it. But no matter. He prefers
the perfunctory adulation of his faculty advisor, J.E. King,
who, although disagreeing with Steve, emphasizes the
scholarly method of Steve's thesis. I will grant Steve's
scholarship, and I said this before, but I view that as
a minor question. What counts is the scientific quality.
Further, is it true that I sought "any basis whatsoever"
to "dismiss" Steve? No. My basis was _Capital_, Vol. I, Chap.
I. One might fault me for a slip here or there in the way
I interpreted Marx. Nobody's perfect. But no one who read
my posts will fail to notice that I attempted to defend the
labor theory of value as Marx laid it out. For his part,
Steve considers this in itself not worthy of comment.
Will Steve defend himself against me? So far he thinks it
safest not the make the attempt. Perhaps he's right. He might
get himself in deeper than he already is. Of course, he can
console himself with the fact that it's only the "ignoramus"
Jim Miller who is ripping him up one side and down the other.
On the other hand, Steve may believe that he has already
refuted me. It's possible. After all, Steve is the man who,
in a few short years, managed to accomplish what Marx labored
a lifetime and failed to accomplish: that is, to understand
the nature of value.
Is Steve too modest? Or not modest enough? On the one hand
he writes a thesis disproving Marx. One might think that he
would trumpet this to the skies. But he's very reticent about
it. Modest, perhaps. On the other hand, he stands so far above
other people, the Jim Millers of this world, that he can't
allow them to just come up to him and talk about it. First you
have to download his thesis from CSF. O.K., I did that. Then
you have to provide written proof that you have studied
Steedman, Sraffa, etc., then he will talk to you. Perhaps a
Are we really to believe that, were I to say something
really cute about Okishio, that then Steve would respond in
full to my critique of his thesis?
It's true that my criticism of Steve's thesis didn't go
very far. It was only the opening sally in a debate. I'm still
waiting for Steve's response. And if he can't fight me, he
certainly won't be able to defend himself against people who
are truly erudite, and have risen far above my level.
STEVE'S RESPONSE TO PAT (MIM)
On 10/30 Steve continued the defense of his theory against
Pat. Here he wants to expose a self-contradiction by Marx from
_Grundrisse_. First he quotes from this book a passage which
indicates the opposition between capital and commodities:
"the opposite of capital cannot itself be a particular
commodity, for as such it would form no opposition to capital,
since the substance of capital is itself use-value; it is
not this commodity or that commodity, but all commodities."
Then on p. 272 Steve finds a quote which appears to
contradict that one. "The communal substance of all commodities,
i.e. their substance not as material stuff, as physical
character, but their communal substance as *commodities* and
hence *exchange values*, is this, that they are objectified
labor. ...The only use value, therefore, which can form the
opposite pole to capital is labor (to be exact, value-creating
To Steve it seems like you can't have it both ways. Either
you argue that all commodities are the opposite of capital,
or that labor (power) is the opposite of capital. He picks
the former. Thus he says, "so my argument is that there is
not one privileged commodity [labor power]--vis a vis value
creation--but all commodities, and that all commodities
CANNOT be reduced to labor alone."
Here I think the problem is that Steve lacks the patience
to see whether Marx could have been giving a valid theoretical
expression of the nature of capital in both quotations, and
that they are not mutually exclusive.
First, as to the opposition of capital to all commodities:
This is a theme developed at some length in _Grundrisse_.
Marx probes the development of capital as exchange value in
its opposition to use values. This develops first as money,
but does not remain at this level of development. The merchant
in precapitalist conditions becomes a specialist in exchange
with the view in mind not of accumulating use values as such,
but rather to accumulate abstract wealth, which, in itself
represents the potential accessibility of all use values. In
merchant's capital, we see the nature of money take a leap
towards the fulfillment of a qualitatively different role than
that which it fulfilled in simple circulation. In the latter,
money existed to facilitate the exchange of use-values. Use-
value was the content, exchange value the form. Now, as capital,
money steps to a higher level, representing an end in itself,
the accumulation of wealth as extracted from, and counterposed
to, simple circulation, yet unable to free itself from this
Here capital becomes counterposed to the world of
commodities, not as money in its simpler form, which serves to
facilitate exchange, and therefore is subordinate to use-value;
but as wealth which seeks to perpetuate and enlarge itself as
an end in itself, and which therefore cannot be subordinate to
use-value, but rather seeks to subordinate all use-value to
itself. Capital, as wealth which strives to stand apart from
and rise above all use values, thus expresses its nature as
counterposed to these use values, since it is indifferent to
all their particularities, and is only concerned about them
insofar as they can participate in the preservation and
enlargement of capital.
Capital rises above mere money as standard of exchange
and token of exchange-value to absorb, not just precious
metals, but all commodities, all use values, as the material
substance in which it expresses itself. For capital, any
commodity can serve as material for the expression of
abstract wealth. In this it shows its development beyond
money as medium for exchange. So capital, unlike money in
simple circulation, becomes opposed to the entire world
of commodities at once, not just to this or that commodity
So much for the opposition of capital to all commodities.
If it were not for this opposition, there could not be any
such development as merchant's capital, much less industrial
capital. Here Marx's logic reflects the historical necessity
of the transition from money to merchant's capital. It must be
kept in mind here that the scientific character of Marx's work
consists in the fact that he correctly grasps the inner logic
of the development of history. He began with the facts:
production of the necessities of life, barter, exchange, the
growth of the opposition between use value and exchange value,
the origin and development of money, the opposition between
use values as content of simple circulation and exchange
value as represented in a separate use value (precious metal),
the development of a separate sphere (merchant capital) which
develops the inner potential of money as wealth in itself, and
finally, the entry of capital into production and the origin
of industrial capital. In _Grundrisse_, Marx works out the
logical development of these categories which he has derived
from the facts of history. If Steve were to give more thought
to this, it would greatly improve his capacity to appreciate
As to the second quote from _Grundrisse_, Marx points to
the opposition between capital and labor power. But this
cannot develop historically until capital has already
expressed itself in everyday life as counterposed to the
entire world of commodities. Merchant's capital, penned
initially in the sphere of circulation, must penetrate
into the sphere of production before it can form this
particular relation with wage labor.
The opposition of capital to wage labor is seen as a
logical consequence of the opposition of capital to all
commodities. Why is capital counterposed to the world of
commodities? Because capital represents the accumulation of
exchange value as an end in itself. Capital is not interested
in use-value as such, nor is it interested in an accumulation
of use-values, no matter how large, except insofar as this
accumulation of use values can serve as the material medium
of expression for exchange value. But what is it that makes
exchange value exist in the first place? What is the source
of exchange value? Labor.
From the standpoint of capital, exchange value is the goal:
its preservation and expansion. But exchange value cannot
exist apart from its materialization in commodities, whether
cattle or gold. But how is it that exchange value becomes
materialized in the products of labor? Human labor has been
expended in their production. Exchange value is this abstract
representation of labor, as materialized in commodities. Thus
capital, whether it knows it or not, is interested in the
accumulation of something that is the result of labor, though
not the particular use values themselves. Marx could not have
explained this at all, nor could anyone else, had he not first
understood value to be the result, or outcome, of labor.
It is human labor in general, first abstracted out as
a separate category through the process of exchange and
becoming represented in a separate substance (money), then
forming the basis for a new category rising out of money
(capital), that is the real substance of capital. Capital,
as the purified essence of human labor, separated out from
and counterposed to the everyday products of labor, is the
highest form of the alienation of human labor, the furthest
extreme from the production of use-values to satisfy human
needs. It is the concentrated essence of labor as source of
exchange value that forms the real substance of capital.
Thus, with the rise of industrial capital, capital as
wealth captures its source. Penned in the sphere of
circulation, capital cannot control the formation and
and generation of wealth. It can only fortuitously take
advantage of price differentials which arise independently
of its own sphere. With capital stepping into the sphere
of production, the possibilities for direct control over
the generation of abstract wealth multiply enormously. Thus
we have the prolongation of the working day, the growing
intensification of labor in the manufactory, then in large-
scale industry, the origin and development of relative
surplus value through technological innovation, etc.
The opposition between capital and labor, which Steve
thinks is Marx's error, is the preponderant social fact
of our age. It was Marx who explained this reality, starting
from the recognition that labor is the source of value. It
can be explained in no other way.
Steve doesn't seem to recognize that what is being
discussed here is the real world, and how it came to be
what it is today. Marx set an example for us, not only for
me, but for Steve as well, by showing that it is possible
to explain the origin and development of the social forms
that oppress and ravage humanity today. And he explained
as well how the logic of history provides the solution to
the social catastrophe that capitalism has become. He set
about doing that by basing his analysis on the real course
of history, studying it so as to grasp the inner logic of
its forms of development. The categories Marx examines are
forms of social relations which he derives from actual
social practice over thousands of years.
Later in his post against Pat (MIM), Steve recommends
the work of Arun Bose, who argues that, given the premise
that commodities are the joint product of labor and other
commodities (the means of production), if you set up a
mathematical procedure to proceed backwards in time
showing an increasing labor component and a dwindling
commodites component, you can never reach a point at
which commodities disappear altogether as a component
in the production of other commodities, with commodities
being the product of pure labor.
This is fool's arithmetic. Of course, such results are
guaranteed by the premise. This is only the way in which
Bose demonstrates his narrow academic approach to society.
It apparently never occurs to him that there was a time
in which commodities did not exist at all, when exchange
value did not exist at all. All he has to do is pick up
a book on anthropology to recognize that. The task is to
explain the origin and development of commodities and
commodity-production as a social fact. And from there,
to explain capital as the outcome of generalized commodity
Enough for now.
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