[OPE-L:3477] RE: OPE-L:[3432] Re: "Debunking Economics" and Marx's value theory

From: Steve Keen (stevekeen10@hotmail.com)
Date: Sun Jun 11 2000 - 18:21:30 EDT

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Phil Dunn, a "lurker" on the OPE-L archives and a contributor to IWGVT 2000,
asked me to forward the following post. I will reply to it in due course.

In reply to:
OPE-L:[3432] Re: "Debunking Economics" and Marx's value theory

Steve Keen wrote:

He [Marx] then emphasises that it is vital to properly identify what
is the exchange value of a commodity and what is its use-value, at
least in the case of the commodity labour power:

"Labour capacity is not = to the living labour which it can do, = to
the quantity of labour which it can get done - this is its
*use-value*. It is equal to the quantity of labour by means of which
*it must itself be produced*. The product is thus in fact exchanged
not for living labour, but for objectified labour, labour objectified
in labour capacity. Living labour itself is a use-value possessed by
the exchange value [,labour capacity,] which the possessor of the
product [,the capitalist,] has acquired in trade". (Grundrisse p.
576) [emphasisand interpolation in original - PD]

Steve Keen argues, here and elsewhere, that, starting from 1857, Marx
employed this dialectic of use-value and exchange-value extensively.
I agree that he did but he should not have done. Apart from smoking
all those cigars, it was the worst mistake he ever made. What I
want to get at here, therefore, is why Marx did this.

In ch. 15 of "Debunking Economics" Steve Keen quotes the first
paragraph of Capital I, ch. 6:

"The change of value that occurs in the case of money intended to be
converted into capital... must ... take place in he commodity bought
by the first act, M-C, but not in its value, for equivalents are
exchanged, and the commodity is paid for at his full value. *We
are, therefore, forced to the conclusion that the change originates
in the use-value, as such, of the commodity, i.e. its consumption.*
In order to be able to extract value from the consumption of a
commodity, our friend, *Moneybags, must be so lucky as to find,*
within the sphere of circulation, in the market, *a commodity, whose
use-value possesses the peculiar property of being a source of
value.*" [emphasis added by SK]

Why are we *forced* to the above conclusion? The answer is to be
found within the Grundrisse passage above which Steve Keen quotes:

"The product is thus in fact exchanged not for living labour, but for
objectified labour, labour objectified in labour capacity."

Since, here, both labour-power and the products making up the wage
bundle are objectified labour, equal exchange between them is
possible. The source of value then has to be something else, the
use-value of labour-power.

This is strange. The use-value of a product commodity is the useful
article. By analogy, one might reasonably expect that the use-value
of labour-power to be skill, the capacity to make useful articles,
either alone or in co-operation. To say that the use-value of
labour-power is the source of value is an intrusion of the material
into the domain of the value-form and is deeply suspect.

The root of the problem is that Marx treats labour-power as a
product, with labour objectified in it. Only then can there be
equal exchange between labour-power and normal product-commodities.
This is Marx's monolithic value-form. Everything with a value must
be objectified labour.

The way out is simple, though disorientating. The commodity
labour-power is not a product, i.e. not the result of the expenditure
of labour-power. There is no labour objectified in it.
Consequently, there cannot be equal exchange between the
commodity-product and labour-power. There cannot be unequal
exchange either. Equal exchange is possible between
product-commodity and product-commodity, and, separately, between
labour-power and labour-power. There are two separate systems of
exchange equalisation

The value-form must be seen, not as monolithic, but as complex,
having parts with distinct functions. The product we can allow to
be objectified labour. The role of labour-power is to add to
objectified labour. It is the power to create new objectified

This turns the problem around. It is no longer a question of what
is the source of value. That is labour, the expenditure of labour-power.

It is now a question of what is the value of labour-power.

I consider this to be the central problem in Marxian value theory.

These ideas are more fully discussed in a paper I gave to the IWGVT
2000 conference. It is available at the IWGVT website:


A later version with some corrections is available at:


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