[Marxism] Paper on the Labor Theory of Value

Louis Proyect lnp3 at panix.com
Wed Jul 2 12:13:18 MDT 2008

This is an excerpt from an article by John Imani that can be read in its 
entirety at: http://www.marxmail.org/LTV.htm

The ‘Markup’ and The ‘Workerless Society’

“He believes he has proved the untenability of economic Marxism, and 
confidently announces that ‘the beginning of the end of the labor theory 
of value’ has been inaugurated…Since his criticism deals with 
principles, since he does not attack isolated and arbitrarily selected 
points or conclusions, but questions and reflects as untenable the very 
foundation of the Marxist system, possibility is afforded for a fruitful 
discussion.” [1]

If not labor, then what

“Though he did not put his conclusion in this way, Steedman was 
essentially saying that Marx cannot be right that labour is the only 
source of surplus…The inconsistencies Steedman established undermined 
Marx’s sequence of claims that labour is the only source of value, that 
value is the only source of profits, and that value determines price.” [2]

I had heard of Ian Steedman’s assertion[3] that it is not necessary to 
make reference to value in order to determine prices.  I have not read 
his book.  However, without reading it, if such a notion as his leads to 
a conclusion that new value does not spring forth from  labor and labor 
alone, as Steve Keen asserts above, then such a notion can be 
challenged.  The below does not set out to sketch a ‘positive’ proof of 
the assertion that labor, and labor alone, is the source of all value. 
Instead, it is essentially a ‘negative’ undertaking in that it seeks 
only to demonstrate that without labor there is no new value created.

In a paper kindly hosted by Marxmail[4] I previously examined a somewhat 
similar proposition and found that the elimination of the labor force in 
one sector produced, as it ought, less purchasing power, and given an 
output that remained the same, supplemented as it was by the products of 
a workerless factory, systemic deflation and a fallen general rate of 
profit (P’).  Carried out to its expansio ad absurdum ‘logical’ 
conclusion i.e. the elimination of the workforces of the remaining 
sectors, it is here argued that the only ‘purchasing power’ that could 
possibly be produced would therefore be the portion of the 
commodity-value designated, by the capitalist, as profit (italics). 
‘Profit’ is italicized so as to indicate that, as the exploitation 
relationship in Marx’ theory of surplus-value, the requirement for the 
very existence of profit, is (with the workers) gone, we must call it 
something else or indicate in some way (italics perhaps) that, though we 
might continue to call this portion of commodity value ‘profit’, it is a 
horse of a different color for it would merely be a mark-up over the 
costs-of production that each of the ‘capitalists’ (italicized for the 
same reason as ‘profit’ above), the only ones left with ‘purchasing 
power’, would mutually charge each other and thereby benefiting none. 
This story has been best told in the account of the alleged encounter 
wherein Walter Reuther of the United Auto Workers responding to a proud 
and haughty Henry Ford as Ford, while showing off his latest 
labor-reducing machinery, exclaimed “Well…Walter, how are you going to 
get them to go on strike?”  Reuther is said to have responded with this 
rejoinder, “Well…Henry, how are you going to get them to buy Fords?”

Nevertheless, using Marx’ investigations of exchange between 
departments[5] in the ‘reproduction schemes’ he crafted in Vol 2, the 
proposition that new value can be created and realized, without the 
existence of the productive power of living labor, is below examined.

[1] Rudolf Hilferding.  Preface to “Böhm-Bawerk's Criticism of Marx.” 

[2] Steve Keen.  “Debunking Economics.”  Pluto Press.  Australia.  2001. 

[3] “If one is attempting to explain prices and the profit rate then 
‘labour theories’ are simply redundant.” “Marx After Sraffa and the Open 
Economy (Some Notes)”


[4]  http://www.marxmail.org/workerless-factory.html

[5]  “The total product, and therefore the total production, of society 
may be divided into two major departments:

I.                     Means of Production, commodities having a form in 
which they must, or at least may, pass into productive consumption

II.                   .Articles of Consumption, commodities having a 
form in which they pass into the individual consumption of the 
capitalist and the working-class.”  Marx.  “Capital.  Vol. 2.”  Chapter XX.


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