Value: reply to John Ernst

Steve.Keen at Steve.Keen at
Mon Oct 16 07:40:16 MDT 1995


Yes, agreed it has turned; hence my change of title
rather than replying with the "Freeman" heading. The
reason for the twist is simple enough: while I
applaud Alan's introduction of discrete time
dynamics into Marxian economics, I think that his
initial motivation for so doing--to preserve the
LTV against Steedman's attacks--is misguided. This
is because I see the LTV itself as misguided, and
of course you're right that this is far from a new
issue for me: I first developed this analysis when
I read Capital 20 years ago, my thesis on it was
finished in 1990 (after my belated adoption of
an academic career), and my papers on it were published
two years ago.

I have also had plenty of (unsatisfactory)
experience of discussing this issue over the Internet,
with the usual outcome of debate being lost in a melange
of competing interpretations, and pre-set notions (both
mine and those of my discussants): talking past each other
becomes the order of the day, leading eventually to
an agreement to disagree. Hence my habit of posting
oblique and irregular comments on this line; I have too
much respect for this forum to clog it with didactic
statements of my unusual perspective--something I have
seen happen on the pkt list occasionally.

Nonetheless, it's been a long time since this issue has
arisen, so I'll try to do it justice with you for a
while--but I think we'll end up not persuading each
other, and agreeing to disengage at some point.

You object to my argument that the use-value of
labor-power is labor, and that this use-value is
transferred to the product, saying:

|But you say that somehow use-value is transferred.  What
|does that mean?  Are we not now adding use-values and
|exchange-values?  Why? ...

My approach does indeed involve the quantification of the
use-value of inputs to production. As foreign as this notion
may seem, it is something which Marx does do. I'll support 
this contention with cites in a moment, but the essential
point is that Marx's concept of use-value is quite different
to that of the neoclassicals, as the cite from Hodgson that
I recently sent off makes clear: use-value to Marx was
objective, but assessed from the point of view of the
consumer. Thus the use-value of a chair is the fact that
you can sit in it (the user's perspective), but not how
comfortable it makes you feel (which would be a subjective
concept of value).

In the case of inputs to production, the user point of
view is the capitalist's, and his/her interest in the
inputs is quantitative only: their use-value is therefore

Perhaps the best cite to indicate that this was (in part)
Marx's way of thinking is the following:

"For it [capital], the use-value of labour power is precisely 
the excess of the quantity of labour which it performs over 
the quantity of labour which is materialised in the labour 
power itself and hence is required to reproduce it. 
Naturally, it supplies this quantity of labour *in the 
determinate form* inherent in it as labour which has a 
particular utility, such as spinning labour, weaving labour, 
etc. But this concrete character, which is what enables it to 
take the form of a commodity, is not its *specific use-value* 
for capital. Its specific use-value for capital consists in 
its quantity as labour in general, and in the difference, the 
excess, of the quantity of labour which it performs *over* 
the quantity of labour which it costs." (TSV I, p. 400,
Progress Press edition. This is the Addenda chapter,
Productivity of capital/productive and unproductive labor
section, The specific use-value of labour for capital

But I can point to many such instances. Marx was quite
comfortable with regarding the use-value of labor-power
as something quantitative. He thus makes a comparison
between the quantitative exchange-value of labor-power
and its quantitative use-value to uncover the source of
surplus: "The former determines the exchange-value of the 
labor power, the latter is its use-value" (Capital I,
as cited previously).

Incidentally, if this notion of Marx treating use-value
(in productive consumption only!) as quantitative seems
foreign to your impression of Marx, check out p. 506
of Vol I (2nd last page of Ch. 19):

"Exchange-value and use-value, being intrinsically incommensurable 


Either that was an almighty slip of the pen by Marx,
or the fact that it has been missed by his followers
is an almight slip in their intprepretations.

On the point of the use-value and exchange-value of
machinery, I agree that Marx does not completely
ignore use-value (I was using a rather severe
short-hand); but what he does do is omit serious
consideration of what its use-value might be, whereas
he applies strong and clear logic to what the
use-value of labor-power is not a dozen pages

The "sleight of mind" that is going on, in my
view, is that it is also trivially true that the
exchange-value of labor-power is transferred to
the product--the value of the means of subsistence.
However, as Marx made satirically clear, if that was 
where it stopped, then there would be no profit.
The profit comes because the use-value of labor-power
exceeds its exchange-value, and the use-value is
the true measure of what is "transferred" to the product
by the act of labor (I could not find references of
Marx using the word "transfer" to describe this wrt
labor, but he used it innumerable times when discussing

Likewise with machinery, I argue. The exchange-value of
a machine is transferred to the output; but its
contribution goes beyond this. By arguing that:

"Therefore, the means of production can never add more value 
to the product than they themselves possess independently of 
the process in which they assist. However useful a given kind 
of raw material, or a machine, or other means of production 
may be, though it may cost $150, or, say 500 days' labour, 
yet it cannot, under any circumstances, add to the value of 
the product more than $150." (Vol I p. 199.)

Marx is effectively arguing that the use-value of a
machine necessarily is equal to or less than its
exchange-value. Yet this contradicts the logic by
which he derived the result that labor was the source of 

I'm not sure whether what you wrote conveys what you meant
at the end of your post:

|Thus, it would seem that for Marx to it right we
|need to
|1. Assume that the use-value of labor-power, labor,
|   is transferred to the output like that of a
|   machine.
|2. That the wearing out of the instruments of
|   production and the role that that process plays
|   in the analysis is tantamount to ignoring
|   the role of use-value.
|3. That the comparison Marx makes between the
|   increase in productivity and the increases in
|   devaluation or depreciation as capital grows
|   somehow shows that machines create value.

but if it did, that is close to what I am arguing.

As I put it to Chris Burford some time back, I have
proposed that, in effect, there are 2 sets of axioms
underlying Marx's analysis: the conventional axioms
of the labor theory of value, and what I have called
the "Commodity axioms", based on what Rosdolsky called the
'contradiction between use-value and exchange-value'.
Secondly, I argue that Marx believed these two sets
were consistent, and that in fact the former could be
derived from the latter. Thirdly, I argue that this
was incorrect: the positive part of the LTV, that
labor is a source of surplus, can be derived; but the
negative part, that the other means of production are
not sources of surplus, could not be so derived
without contradicting the logic of these commodity

While this perspective of mine is destructive of
the much of what has passed for Marxist economics--I
use it to criticise the tendency for the rate of
profit to fall, the transformation problem, etc.--
I see it as fundamentally positive, because it leads
to what I regard as a far more accurate critique of
capitalism than has been achieved by Marxism to
date. But I rarely get to the positive points in
discussions, because of what--from my perspective--
is a "religious" reaction to my proclivity to
slaughter the "sacred cows" of Marxism. Such is
the life of a heretic.


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