[OPE-L:681] Re: LTV an assumption?

Steve.Keen@unsw.edu.au (Steve.Keen@unsw.edu.au)
Fri, 8 Dec 1995 13:47:36 -0800

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I have to agree with Fred's general argument that the LTV--or indeed the
utility theory of value--cannot be "proven" in the sense that it
rests on a set of "methodological presupposutions about how a theory
of capitalism should be constructed", and that these presuppositions
are unprovable.

As Meek's _Studies_ argues so well, Marx's presuppositions are in
the "just price" tradition of basing value upon the effort involved in
production, whereas the neoclassical presuppositions are based
upon the Mercantilist tradition of basing value on the willingness of
the buyer to pay, and hence on subjective valuations.

These presuppositions themselves cannot be "proven", and in
this sense Fred is correct that, when comparing Marx's
analysis to neoclassical theory, the choice ultimately comes
down to how well they enable the practitioners to analyse

But one can also analyse the derivation of concepts from
these competing presuppositions and say (a) whether the
derivations are logical; and (b) whether these concepts lead
to conceptual conundrums.

(b), for example, is the transformation problem for marxian
economics; it is the Cambridge Controversies for
neoclassical economics.

(a) is what I was referring to when I said that Marx's presuppositions
were about the nature of the commodity under capitalism, and that
from these he *derived* the result that labor is the only source of
value. This derivation began from the three-fold nature of the
commodity as embodying value, exchange-value, and use-value,
and as Fred knows I hammer the point that this process of
derivation was conventionally ignored by Marxists, who instead
began with the LTV itself "as if" it were Marx's initial

While I agree with Fred's two points as part of Marx's set of
presuppositions, I don't see those as the only components of
that set. Instead, I argue that he "codified" this objective
approach to value in the concepts of exchange-value and
use-value, and used these two concepts to derive the labor
theory of value. To quote Marx on this from the _Marginal
Notes on A Wagner_, where he castigated Wagner for
arguing that use-value played no role in Marx's economics:

"On the other hand, the obscurantist has overlooked that
,... that *surplus value* itself is derived from a `specific'
*use-value of labour-power* which belongs to it exclusively
etc etc., that hence with me use value plays an important
role completely different than [it did]] in previous [political]
economy..." (p. 200 of Carver, T., *Karl Marx: Texts on
Method*, Basil Blackwell, Oxford, 1975.)

Where I differ from Marxists on this point, as Fred would
remember from debates on the marxism list, is that
as regards (a), I believe that the labor theory of value
does *not* follow of necessity from Marx's

Steve Keen