value

[James Miller <jamiller@xxxxxxxxxxx>]

THE LABOR THEORY OF VALUE

   I appreciate John Ernst's comments, as well as
those by Jerry Levy, in response to the very confusing
and confused arguments advanced by Steve Keen in an
apparent attempt to show the weaknesses of Marxism.
   Marx has to be first understood and appreciated on
his own ground. His theory ought to be throroughly
studied in all its ramifications, and only then can
one identify any flaws that might exist. But this is
not Steve's method. Steve pulls bits and pieces of
Marx's thought out of their framework, and he then
tries to reinterpret them in the light of the specific
theoretical structure which inhabits his own mind. I
won't try to define this "structure" any further, except
to say that it owes little to Marx.
   Steve's purpose is not to clarify Marx's views on
use value and exchange value, which, I think, is a task
he could accomplish if he wanted to; but rather he has
decided to pick out a few quotations that suggest that
Marx may have contradicted himself on this analysis,
and that Marx may have been confused about it, saying
one thing in _Capital_, another thing in _Grundrisse_.
Nothing could be further from the truth. Marx was very
consistent in his use of these conceptions, both in
_Capital_ and in _Grundrisse_.
   When Steve argued that the use value of labor power
is transferred to the product, John responded that there
could be no "transfer" of use value. The use value of
labor power is its capacity to create value. Capital
purchases this use value so that the workers can create
value and surplus value in the production process. They
pay for it at its value, and then this use value gets
used up and has to be replenished. Wages are paid every
week or every month so that the use value of labor power
can be continuously reproduced.
   Steve then responded saying that use-value inputs to
production can be quantified. What does this mean? He then
quotes Marx (_TSV_ I, P. 400) saying that the "use value
of labor power is precisely the excess of the quantity of
labor which it performs over the quantity of labor which
is materialized in the labor power itself...".
   Steve thinks this somehow obliterates the distinction
Marx made in _Capital_ between value and use value. He
says, "Marx was quite comfortable with regarding the use-
value of labor power as something quantitative." But here
it should be clear to Steve, in case he may have been
confused by the form of expression in the _TSV_ quote,
that the use value of labor power, for the capitalist,
is the value that it creates over and above its own
exchange value, i.e., the surplus value that this labor
power creates in production. It is not the use value of
the labor power that interests the capitalist, it is what
this use value can create, or provide. What Steve very
conveniently refuses to mention, in this context, is the
difference between use value and value, i.e., the difference
between what the capitalist has to purchase (labor power),
and what the capitalist really wants (surplus value), which
this labor power has the capacity to create.
   The capitalist doesn't want the labor power for its own
sake. Labor power is not a commodity to be consumed for the
satisfaction of the consumer. It is a special commodity, not
for what it is in itself, as a use value, but for what it
can do, what it can create. Labor power is the only source
of value, because when the capitalist consumes it, it
functions as living labor. As such it creates value. This
is the idea that Marx expressed, and he expressed it very
well.
   Steve argues that, "in the case of of inputs to
production, the user point of view is the capitalist's,
and his/her interest in the inputs in quantitative only:
their use value is therefore quantitative." But he omits
to mention that what interests the capitalist is not
use value at all, but exchange value, and the capitalist
doesn't purchase labor power for its use value as such,
but as a means to an end, that being the production of
more exchange value than that which is represented in the
worker's wages. This simple conception, with which Marxists
are very familiar, seems unreachable for Steve.
   What is quantitative about labor power? From the
standpoint of the capitalist the quantitative aspect is
firstly, how much value can be produced when this labor
power is activated in the labor process; and secondly, how
much of this value product will accrue tothe capitalist.
Yet this has nothing to do with quantifying the use value
of labor power as use value, rather it is a question of
quantifying the value product of labor power. If the use
value of labor power, as such, is considered from its
quantitative aspect, then what we are considering is
the quantities of various consumer articles purchased by
workers: so many shoes and shirts, so much bread and
coffee, etc. These consumer articles, if their value is
left out of account, can only be measured in pounds and
liters, square feet and cubic inches, and many other
subtler forms of measurement, all of which have a bearing
on the relationship between the consumer and the object
of consumption. But there is nothing commensurate between
value and these measures of use value. Marx explained that
in Chap. I.
   Steve quoted from _Grundrisse_ (p. 383), where Marx says
that, "the use value of the machine is significantly greater
than its value, i.e. that its devaluation in the service of
production is not proportional to its increasing effect
on production." Steve seems to think that here Marx has
obliterated the distinction between use value and exchange
value, and that both can be amalgamated into a common
quantitative measurement. You might think that's what it
meant if you only read the first part of the sentence, but
the second part suggests something else. (Here, as elsewhere,
we have to be careful not to read something into Marx that
was not there, and this is sometimes a problem because of
the translation, or because Marx often made mistakes due to
his illnesses, his extremist work habits, etc. And keep in
mind that _Grundrisse_ was unedited by Marx.)
   John responded to this explaining that this quote does
not suggest that Marx thought machines could create value.
What Marx was thinking when he wrote this is that a new
machine might make possible a higher rate of value creation
than its cost would suggest that it could. A new machine
might cost double the old one, but because of the new
techniques utilized in its construction, might be able to
process raw material ten times faster than the old machine.
It is true that, in this case, the machine is worn out ten
times as fast. But the result is that each worker can produce
ten times as much output in a day, greatly increasing the
ratio of the value of the product to the value of labor
power.
   Also, if a machine is much more durable than the one it
replaces, this also that "its devaluation in the service of
production is not proportional to its increasing effect on
production." If a machine is ten times more durable than the
one it replaces, yet only costs twice as much, then its
effect on production (the production of value and surplus
value for the capitalist), is more than its cost would
indicate. And this is strictly because of its characteristic
as a use value.
   There is not, and cannot be, any mathematical commonality,
or commensurability, between use value and exchange value. As
Steve himself quotes from Marx (_Capital_, I, p. 506),
"exchange value and use value, being intrinsically
incommensurable magnitudes...". And this is ABC from Chap. I,
as anyone who has seriously studied it can attest. Further-
more, this incommensurability has been recognized and
commented on in many summaries of Marx's economic theory
from Engels, Kautsky and Hilferding, to Sweezy, Rosdolsky,
Mandel and many others. Yet Steve is so confused that he
thinks this may have been a "slip of the pen by Marx."
   Changes in the technique of production result from science
and the specific ways scientific principles are adapted for
use in production. This is a technical process, and goes on
in all forms of human society, whether or not value exists at
all. Unless homo sapiens degenerates, over time, to the level
of the apes, we will be the tool-using and tool-making species
(among other things) for millenia to come. We don't need value
for this.
   Value plays a role in human society only when commodities
are produced for exchange by private individuals, and the
commodity has to take the form of money in order for the
exchange to take place. This is a social process, and, as such,
can be dispensed with if a higher form of society abolishes the
private ownership of the means of production, and thereby
replaces the production of commodities with a system of
production of use values to satisfy human needs.
   If Marx's theory of value is properly understood, i.e., taken
as he wrote it, not as others reinterpret it, its revolutionary
implications soon become obvious. The law of value has imposed
itself as a social relation on societies of tool-using, tool-making
humans, growing out of barter relations. Its logical evolution
results in the rise of capitalism, the first form of society in
which the law of value dominates the vast bulk of human productive
activities. Its further evolution is seen in the growing
polarization of society between proletariat and bourgeoisie, the
struggle between them, and the possibility of the creation of
a society of the associated producers.
   But none of this makes any sense at all unless the distinction
between use value and exchange value is clearly absorbed as the
starting point (_Capital_ I, Chap. I). To muddy the distinction
between use value and exchange value has been one of the central
objectives of bourgeois economics since Bohm-Bawerk. It is not
hard to understand why. They believe that capitalism is the be-all
and the end-all and will never die. But can they refute Marx?
That's another question. Because you can't refute it unless you can
properly summarize and explain it. Then you know what you're
arguing against. Bohm-Bawerk couldn't do this. Can Steve do it? I
don't know, but we see here that he's not trying. Thus Marx's ideas
still stand waiting for Steve to make the attempt to challenge
them.
   Enough for now.

Jim Miller
Seattle


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