James Miller jamiller at
Thu Oct 19 16:59:51 MDT 1995


   This is a preliminary and provisional assessment of Steve
Keen's thesis entitled, "The Demise of the Labour Theory of
Value." Since I've only read the first half, I can only draw
some tentative conclusions regarding Steve's approach and
aims, and I cannot yet evaluate his ultimate conclusions.
   I will state from the outset that I am convinced that he
is in error in his effort to disprove the labor theory of value
as explained by Marx. I will attempt to show that Marx
still has the upper hand as against Steve's arguments.
   Steve's thesis is broken down into several chapters
corresponding to his method of developing the case.
His stated aim is to show that, "the assertion that labor
power is the only source of value should be abandoned,
and a dialectic of labor developed as a fundamental tool
of Marxian analysis."
   And further: "that the definition of value is much wider
than that given by Marx, while the wage is best treated
as having two components, one reflecting the value of
labor, the other reflecting a share in the surplus."

   These statements appear in his preface. We can see
that he is already off to a rocky start, characterizing the
labor theory of value as, "labor power is the only source
of value." He would have been more accurate to say that
"labor is the only source of value." But we shall see
below what this reflects in Steve's thinking.
   Actually Steve does a pretty good job of reviewing
much of Marx's work on the topic of use value as it
affects exchange value. And in the initial part of his
thesis, this appears to be his main concern. He argues,
quite correctly, for the most part, that use value plays
a role in economics, and that Marx recognized this and
commented on it.
   But the role of use value as a determining element
in exchange value, as explained by Marx, is not what
really interests Steve. What interests him is what
Marx didn't say on this subject. As Steve points
out from the start, he has a bone to pick with Marx.
In his view, Marx didn't follow up on the implications
of his own statements on the determining role of
use value in relation to exchange value. In Steve's
view, Marx went so far, but not far enough. Steve
then will carry the analysis through to its completion,
and in so doing, will overthrow the labor theory of

   How, then, does Steve develop his case (i.e., his
own case, not Marx's case)? He begins by summarizing
Marx's arguments in _Capital_, Chapter I, and supplying
the necessary quotes. Marx calls attention to the
incommensurability of use value and exchange value.
Later in the book he points to the use value of labor
power as the source of exchange value and surplus
   The capitalist purchases labor power. The laborers
produce exchange value to the equivalent of the value
of their labor power, plus surplus value. For the capitalist,
the use value of labor power resides in its capacity to
produce more exchange value than it costs him to buy
it. The capitalist realizes surplus value as a result of
purchasing labor power and providing the laborers with
the instruments and raw materials to work with.

   To Steve, this indicates that now the specific use
value of this particular commodity, labor power, has
acquired a quantitative commensurability with value,
regarding use value as the source of exchange value.
But it is not the use value as such that creates the
value, it is the labor. The source of value is the labor
activity of the laborers themselves.
   If you begin to consider "use value" as such to be
the source of exchange value, you can fall into thinking
that "use value," not labor, is the source of exchange
value. There is a logical progression to this notion:

l. Labor creates all value.
2. Capital purchases labor power to create value.
3. The use value of labor power is to create value.
4. The use value of labor power creates value.
5. Use value creates all value.

   Steve comes close to this line of thinking when he
says, "however, under capitalist commodity relations,
use-value becomes a determinate form in political
economy in the relationship between capital and labor
because the incommensurability of the use-value and
exchange value of labor power is expressed as a
quantitative difference, from which the capitalist can
derive surplus." (From the Chapter: Use Value in
Marx's Economics, Section: The Grundrisse, Sub-
section: The Revelation.)
   I don't know how a quantitative difference can be
established between incommensurable magnitudes. This
is a self-contradictory statement, and not of a dialectical
variety. What Steve means to say is that the use value
of labor power and the value of the product of labor have
now become commensurable, so that a quantitative
difference can now be seen between them. And take
note: he is not talking about the quantitative difference
between the value of labor power and the value of the
product of labor.
   We must not forget the active role of labor in the
creation of value. Marx put it this way on one occasion:
"What the capitalist acquires through exchange is labor
capacity: this is the exchange value which he pays for.
Living labor is the use value which this exchange value
has for him, and out of this use value springs the
surplus value and the suspension of exchange as such."
(_Grundrisse_, p. 561-2)
   We must not forget that Marx always regarded labor
power as a use value of a peculiar kind, not like any other
use value. And yet, still a use value. The uniqueness of
labor power corresponds to the nature of capitalist
production, and the analysis of this form of production
has to be based on a recognition of all its specific
features, not glossing over, telescoping or omitting
these peculiarities. Above all, we cannot substitute
abstract reasoning for a scientific assessment of the
actually existing social relations. 
   This is only a preliminary assessment based on a
partial reading. I will present more substantive arguments
in my next post. Again, Steve's thesis is available on the
internet at, econ, authors, Keen.

Jim Miller

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