labor value

Steve.Keen at unsw.EDU.AU Steve.Keen at unsw.EDU.AU
Mon Oct 30 23:51:02 MST 1995


Jim, in my last polite to you, I tried to be as polite as possible.
After your last post, I'll give up on politeness as wasted effort,
and state my opinion of you and your interpretation of my work
bluntly. Your opinion of yourself is that your 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....

My opinion is that, if the following is what you think I say in
that thesis, then you lack the capacity to read intelligently.
Quoting you from a previous post, you say that:

|One of Steve's claims, repeated several times, is that there is
|a contradiction in Marx's writing. At one point (when considering
|simple circulation) Marx is supposed to have claimed that use
|value and value are "unrelated," and at another point (when
|considering the circuit of capital) that they are interrelated....
|   Steve's feeling that Marx had stated initially that the two were
|"unrelated" results from a misunderstanding of Marx's conception
|of the relatedness of use value and exchange value. Marx never
|said they were "unrelated," even in simple circulation. One has to
|pay closer attention to what Marx said....
|   The topics that can be discussed under the heading of "specific
|ways in which use value and exchange value interact" include
|"the use value of labor power," "the use value of the means of
|production" and "the use value of the precious metals," to name
|a few. And the specific ways in which use value affects exchange
|value become more critical in capitalist production than before,
|but these processes develop without obliterating the original
|distinction between use value and exchange value. There is no
|need to belabor this point. In any case, after arguing that Marx
|initially held the view that use value and exchange value were
|"unrelated," Steve showed how Marx held that the two are in fact
|related in specific ways, and provided copious documentation of
|Marx's views on the subject....

So I say that Marx says use-value and exchange-value are unrelated,
and then I say that he says they are related, and that's the
contradiction I'm pointing up? Bullshit! As I pointed out in
a previous reply to you, the point re "unrelated" was that:

"the use value *of commodty x* plays no role in determining the
exchange-value *of commodity x*"

On the other hand, at the conceptual level, the relationship
between use-value and exchange-value was the most important
aspect of Marx's thinking, which has been not merely negelected
by suppressed by previous so-called scholars on Marx. There is
*no* contradiction between the distinctions and dialectical
relations between use-value and exchange-value, on the one hand,
and the proposition that, in exchange, the use-value of a
commodity plays no role in determining its exchange-value.

The contradiction I explore is in the application of the
principle of the unrelatedness as it pertains to labor-power
on the one hand, and machinery on the other. In the case of
labor-power, Marx applies the principle to uncover the source
of surplus:

"The past labour that is embodied in the labour
power, and the living labour 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 labour power, the latter is its
use-value.* (Capital I, p. 188 Progress Press Edition)

However, when discussing machinery, he in effect relates the
use-value of a machine to its exchange-value by arguing
that the latter sets an upper bound on the former. The
contradiction takes several forms, one of which (cited in
part of my thesis which you decided you didn't need to
read) is to argue that the measure of a machine's
contribution to output is not its use-value, but its
exchange-value:
"its use-value has been completely consumed,
and therefore its exchange value completely transferred to the
product." (*Capital*, p. 197.)

You, in your thickness, think you've refuted me: you have
instead done a "brilliant" job of misreading me.

You make much of me dumping on your contributions, Jim,
but I wasn't the only one to do so. Both John Ernst and
Jerry Levy also told you, in effect, to "bug off" and
read the literature, because, in Jerry's words, your
smug postings betrayed that you were unfamiliar with
"the last 20 years" of scholarship on the issue.

Most of the critical component of that last 20 years has
sought to do what you think I'm about:

|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...
|   Then Steve says, ..."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.

The labor theory of value has been taking intellectual body
blows from the time of Bohm-Bawerk on. They have been so
severe that many once-leading marxist economists--such as
Herb Gintis, for an obvious example--have abandoned not just
the labor theory of value but Marxian-style economics entirely.
Others, such as Roemer and his Analytic Marxism style, have
argued that, for instance:

"the relationship between exploitation and profits does not
depend on the proportionality of labor values to prices, and
so nothing of substance is lost by acknowledging that the
labor theory of value is false" (Roemer, 1988, _Free to Lose,
p. 47)

They have ended up adopting the methodology of neoclassical
economics, while the leading developers of non-orthodox
economics have been not Marxians, but Post Keynesians--most
of whom regard Marxian economics with almost as much
disdain as they do neoclassical economics. While I agree
with them about post-Marx marxism and the labor theory of
value itself, I feel that this leads them to reject Marx
in his entirity, when, in my opinion, Marx provides an
axiomatic foundation for Post Keynesian economics that could
make it much richer than it already is.

You seem to be utterly unaware of the parlous state of
marxian economics in general, and the incredible difficulties
that have been encountered by those who have tried to defend
the labor theory of value against attack. That's why I
gave you a set of readings Jim. If you want to rave down at
the pub with some leftie mates about the evils of capitalism,
then you're better equipped than most. But if you want to
mix it with modern fans and foes of the labor theory of
value, you're a century behind the debate.

That's why I haven't bothered replying to you: you misread
me and call it a critique; you are ignorant of a century
of scholarship and think you're an informed discussant. Sorry,
but I think you've got more in common with a Mormon
missionary, and until you show otherwise, I'll treat you
the same way I do them: by shutting the door.

Keen


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