[OPE-L:5242] Re: Re: Re: [Mike W] Re: use-value as quantitative

From: Steve Keen (s.keen@uws.edu.au)
Date: Fri Mar 23 2001 - 16:49:48 EST

I've been waylaid by the final production details of 'Debunking Economics', 
and quite a few reply posts have accumulated during this time. I'll reply 
to each in turn, so my apologies if any reply omits reference to some 
development of that reply made in a later post!

I agree with Duncan's opening paragraph--in fact, this provides a second 
explanation to the one I gave to Michael as to why labor-power and 
machinery are not strict commodities.

The definition of the use-value of labor-power I agree with completely. 
Duncan's position on the use-value of the commodity inputs to production is 
one where we part company.

The former expresses use-value as quantitative and measured in value 
units--precisely the proposition I have been putting. I have no argument 
with the statement that "The 'use-value' of labor-power to the capitalist 
is its ability to produce value (and hence surplus value)", except for 
perhaps the placing of inverted commas around use-value (discussed below 
under the # sign because it's a side issue to my main point).

However the latter provides an indirect definition of the use-value of 
machinery as a quasi-qualitative force: "The 'use-value' of a machine to 
the capitalist is the reduction in labor costs the machine permits". This 
is of course a reading which is common amongst those Marxist scholars who 
do acknowledge the role of use-value in Marx's logic: my three criticisms 
are that (a) this is not how Marx himself used the term,(b) it provides two 
different classes of definition for   the use-value of the inputs to 
production, when Marx emphasises that it is the aspects of a commodity 
which labor-power has *in common* with other commodities which explains 
surplus-value, and (c) it provides no explanation of why the contribution 
of machines to value output precisely equals their cost of production.

(a) Check that section of Capital I after p. 188 (Progress Press; Section 
7.2: The production of surplus-value) where Marx discusses the value 
contribution of machinery. You will see that (i) it is entirely in terms of 
the use-value and exchange-value of the machine (ii) Marx never makes the 
simple definitional step which is common in post-Marx scholarship on this 
point (iii) his discussion of the use-value of machinery is always in terms 
of the value *it* transfers, not any impact of machinery on the value 
transference capabilities of labor-power.

(b) There is no doubt that, prior to the Grundrisse, Marx used a logic 
somewhat like this to explain surplus-value and why labor/-power was its 
only source. It was an explanation based on the unique characteristics of 
labor/-power, and in this case two different definitional approaches to 
labor-power and capital-machinery respectively were quite justified. 
However, when he developed his use-value/exchange-value logic, he switched 
from this (as Bohm Bawerk put it; see under ## below) "negative" 
methodology to a positive one. With this positive approach, the rules must 
be applied to every input to production, and therefore the same class of 
definition should also apply; Marx had no problem with this--"The seller of 
labour-power, like the seller of any other commodity, realises its 
exchange-value, and parts with its use-value"--but subsequent Marxists 
haven't really escaped from an acceptance of his earlier negative 
methodology to an appreciation of his positive methodology.

(c) *IF* this was how one should define the use-value of a machine--"The 
'use-value' of a machine to the capitalist is the reduction in labor costs 
the machine permits"--then why should we have *any* quantitative term for 
the value contribution of a machine to the value of the output? Why record 
c against it on both sides of the ledger? Why not record c on the input 
side, but some multiplicative factor times v on the other side? This way of 
approaching the use-value of machinery gives no justification for any 
quantitative value attribution to machinery in the value production 
process, and forces one to rely on some metaphysical argument about 
preserving the value it contains--something again which is common in 
marxist scholarship, but completely missing in Marx.

Missing except, I argue, where Marx tries to make his two schemas--the old 
negative one and the new positive one--consistent in Capital. Thus he 
concludes his discussion of the use-value and value contribution of 
machinery with a phrase that I am sure all on this list know well:

"The maximum loss of value that they can suffer in the process, is plainly 
limited by the amount of the original value
with which they came into the process, or in other words, by the 
labour-time necessary for their production. 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. Its 
value is determined not by the labour-process, but by that out of which it 
has issued as a product. In the labour process it only serves as a mere 
use-value, a thing with useful properties, and could not, therefore, 
transfer any value to the product, unless it possessed such value 
previously." (Capital I p. 199)

As I argued at length in my Journal of the History of Economic Thought 1993 
papers, this is a bastardisation of the logic which Marx had previously 
applied to labor-power itself. There, the use-value was a crucial aspect of 
labor which explained surplus; here use-value is "mere".

 From my point of view, the reason for the bastardised treatment of his own 
logic was obvious: it was the only way to dismiss the possibility which had 
first occurred to him in the Grundrisse, and which threatened to unravel 
his familiar critique of capitalism:

"It also has to be postulated (which was not done above) that the use-value 
of the machine significantly (sic) greater than its value; i.e. that its 
devaluation in the service of production is not proportional to its 
increasing effect on
production." (Grundrisse, p. 383.)

The prospect Marx entertained there was that the exchange-value of 
machinery was c, but that its use-value was greater than c. As he put it, 
its devaluation (c) was different to its "increasing effect on production". 
This could perhaps be interpreted as Duncan has done in his post--except 
that in the numerical example which followed, Marx had one firm in which c 
was 10, and the value-creation attributed to machinery was 13 1/3.

This of course contradicts the labor theory of value proposition that labor 
is the only source of surplus value. I believe that this is an accurate 
logical deduction from Marx's theory of the commodity--but of course it 
undercuts the key component of the LTV.

This in itself is an achievement, not a failing; surely the last 130 
years(!) of debate of the transformation problem should have indicated to 
all and sundry that there is an insoluble conundrum at the heart of the 
LTV. Marx could have been the one who liberated the classical/surplus 
approach from this conundrum. Instead, committed Marxists have been defined 
by being confined within this conundrum--so much so that I think it's 
become a "home away from home" which, though oppressive, is too familiar to 

Leave it behind, and you find that Marx provides a sound philosophical 
basis for the surplus approach to analysing capitalism, the axiomatic 
foundation he provides enables a rich conception of many other issues 
besides, and we have a complete rival to the neoclassical school with none 
of its flaws.

But unfortunately this requires the abandonment of many articles of faith: 
the tendency for the rate of profit to fall, the inevitability of 
socialism,... From my perspective, these articles of faith are more 
important to most Marxist scholars than is the underlying analysis. So this 
and many other non-faith approaches to Marx are dismissed, and the old 
tenets embraced. And, as Jerry put it in the post which obliquely began 
this thread, Marxists could still be discussing the transformation problem 
on the day the revolution actually does arrive.

At 11:46 PM 3/21/01 +0100, you wrote:
>I think it's helpful to understand that "labor-power" and "capital" as 
>commodities in Marx's discussion are really derived "meta-concepts". Basic 
>commodities are products of human labor exchanged as private property. 
>This gives rise to the fundamental categories of value, exchange value, 
>and money.
>Labor-power is a concept derived from the special circumstance of the the 
>exchange of the potential to produce value. Capital is a concept derived 
>from the possibility of M-C-M' production for surplus value once 
>labor-power is available for purchase.
>Thus when Marx starts talking about the "use-value" of labor-power or 
>capital (say, a machine, or money) he is using a concept defined at one 
>level of abstraction (in terms of ordinary produced commodities) somewhat 
>metaphorically at a higher level. The "use-value" of labor-power to the 
>capitalist is its ability to produce value (and hence surplus value). The 
>"use-value" of a machine to the capitalist is the reduction in labor costs 
>the machine permits. Note that this way of talking involves a subtle 
>switch in focus. We might expect the "use-value" of labor-power to be its 
>concrete abilities (to do carpentry, or computer programming), but that is 
>not how Marx's metaphorical development works. We might also expect the 
>"use-value" of the machine to have something to do with its actual 
>productive capacity (to shape metal, or to execute calculations) but 
>that's not how Marx uses "use-value" in context. (This last problem 
>bedevils neoclassical economists like Robert Gordon, who try to derive a 
>quantitative measure of "real capital" by using the methods employed to 
>try to measure "real consumption" of households. So they try to find 
>measures of the "qualitative improvement" of capital. (The new machine, 
>which costs the same as the old one, can shape twice as many pieces of 
>metal or execute twice as many instructions.) This is completely foreign 
>to the Marxian/Classical (and even /Sraffian) way of looking at capital, 
>and, as far as I can tell, just adds confusing noise to the macroeconomic 
>data. If, as Marx argues, the use-value of a machine to the capitalist is 
>the amount of wage cost it saves, changes in the concrete performance of 
>the machine are irrelevant.

# It does emphasise Duncan's point that the 'commodities' in the M--C--M+ 
circuit (including labor-power) are quasi-commodities, which is fair 
enough; but when you look at Marx's discussion, he began by abstracting 
from this aspect and treating everything--including money--as a commodity. 
The non-commodity aspects of some entities was to be introduced at a later 
stage of his analysis--one he never got to in a systematic sense, but which 
there are inklings of in the manuscripts which became Vols II and III, and 
also of course the TSV volumes).

## "The second step in the argument is still worse: 'If the use-value of 
commodities be disregarded ... there remains in
them *only one other property, that of being products of labor*'. Is it 
so?... Is not the property of being scarce in proportion to demand also 
common... Or that they are all the subjects of demand and supply? Or that 
they are appropriated? Or that they are natural products... Or is not the 
property that they cause expense to their producers <193> common to
exchangeable goods? Why then, I ask again today, may not the principle of 
value reside in any one of these common properties a well as in the 
property of being products of labor? For in support of this latter 
proposition Marx has not adduced a shred of positive evidence. His sole 
argument is the negative one, that the value in use, from which we have 
happily abstracted, is not the principle of exchange value." (BB in Sweezy 
(ed.) p. 76.).

Leaving aside the neoclassical/Austrian nominations for common properties, 
this is quite a strong critique of Marx's original negative methodology, 
which I believe most Marxists are still more familiar with, and wedded to, 
but no critique at all of Marx's final positive methodology--in fact it is 
a gross misunderstanding of it. I feel that most Marxists are more akin to 
BB here than Marx, in that they make a similar misinterpretation of how 
Marx used the concept of use-value.

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