[OPE] The Labour Theory of Value: a Marginal Analysis

From: Jurriaan Bendien <adsl675281@tiscali.nl>
Date: Mon Sep 15 2008 - 12:40:36 EDT

Well, quite. I don't think Marx would deny that subjective preferences are exercised, and that all sorts of utilitarian calculations are made, creating a certain "logic" of economic behaviour. But as far as I can see the real dispute is about something else, namely the objectivity of economic value beyond the objectivity of prices for transacting parties, which marginalists must still assume (BTW some prices I think are not objective, because they refer e.g. to a quantity of money which a trader or investor "probably" or "ideally" would pay, is expected to pay, or might pay, at some future date or under specific conditions).

If according to the materialist interpretation of history "relations of production" exist and are entered into by people independently of their will, and if these relations of production are expressed as value relations in capitalist society (essentially, proportionalities among quantities of living labour-time and/or labour-time materialised in products), then objectified value relations exist:

- independently of price relations
- independently of what particular individuals might think about them
- independently of whether products are traded or not

This is precisely what the Austrian economists deny - they deny the validity of the idea, that that value relations could objectively exist quite independently of what individual preferences or valuations might be in a given transaction for the simple reason that products have an objective production-cost expressible in the average quantity of human labour-time currently necessary to produce them. In their theory, the notion of value can apply only and exclusively to the personal valuations of economic actors. I think it can be shown that this interpretation is not coherent, inasmuch prices (the "price form") imply values.

If I read Marx correctly, the law of value asserts itself as an objective constraint or regulator on the trade in reproducible labour-products precisely through the divergences of values and prices. Goods can be, and most often are, sold above or below their economic value, and that is what is the critical factor in capitalist competition - the dyssynchrony or synchrony between them - and that is what shapes economic behaviour. Such divergence however makes sense, only if value relations can exist quite independently of price relations. I think it is precisely because of his belief in the independent existence of value relations that Marx largely disregards price fluctuations in his analysis; his argument (as stated in his 1859 work) is moreover that general notions of utility fail to express what is specific about the relations of production which form the economic structure, the base of society.

A model of economic choices does not tell us a great deal, if the kinds of choices in any given situation can be potentially infinite. It has predictive and explanatory merit only if the number of choices is limited by given parameters, and if some choices are vastly more likely to be made than others. In this sense, "rational choice theory" has some merit in explaining what motivates economic actors, it is just that subjective choices perceived to be possible might diverge from the objectively possible options, in which case everything depends on how we construe the rationality or reasonableness of choices actually made. In this respect, it is precisely the distinction between the objective and the subjective aspects of economic value that prevents us from falling into tautologies in describing the rationality of economic action.


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Received on Mon Sep 15 12:43:28 2008

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