[OPE-L:3622] Re: "Labor Theory of Value"--not used by Marx!

Steve Keen (s.keen@uws.edu.au)
Thu, 7 Nov 1996 16:09:39 -0800 (PST)

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I have to agree with Jerry, that those who dismiss the importance of the
first chapters of V1 are on the road to missing the foundations of Marx's
analysis. (However, I don't think that Marx's statement of this analysis is
as good as in its raw form in the Grundrisse.) That foundation is clearly
the analysis of the commodity:

> The wealth of those societies in which the capitalist mode of
>production prevails, presents itself as "an immense accumulation
>of commodities,"(1*) its unit being a single commodity. Our
>investigation must therefore begin with the analysis of a

The essence of this, IMO, is the characterisation of the commodity as having
two aspects: its use-value and its exchange-value. However it's quite
possible to read those opening statements as if he basically agrees with
Smith and Ricardo that use-value is an irrelevance:

>As use-values, commodities are,
>above all, of different qualities, but as exchange-values they
>are merely different quantities, and consequently do not contain
>an atom of use-value.

and that the essence of his analysis is the axiom that labor is the only
source of value (by which I mean something which is an unquestionable given,
rather than something which is itself based on prior axioms and/or
established by analysis):

> If then we leave out of consideration the use-value of
>commodities, they have only one common property left, that of
>being products of labour.

However, the clue that his approach is radically different to that of Smith
and Ricardo--by incorporating use-value as an essential component of his
analysis--is given in the opening to Chapter 6. I give the full cite below;
the part I highlight is:

>We are, therefore, forced to the conclusion that the change originates in
the >use-value, as such, of the commodity, i.e., in its consumption.

This is the crux of my interpretation of Marx, which--as Jerry and some
others on this list realise--leads to a radically different view of Marx
than one based on the labor theory of value.

Steve Keen

>Paul Z wrote in [OPE-L:3609]:
>> The significance of the issue is the extent to which Marx broke from the
>> classical economists in his whole conceptual framework.
>I agree that the "conceptual framework" that Marx employed was radically
>different from the framework employed by Smith, Ricardo, J.S. Mill, etc..
>As Marx explains in the "Preface to the French edition" (dated March 18,
> "the *METHOD OF ANALYSIS* which I have employed, and which had not
> previously been employed to economic subjects, makes the reading of
> the first chapters rather arduous, and it is to be feared that the
> French public, eager to know the connection between general
> principles and the immediate questions that have aroused their
> passions, may be disheartened because they will be unable to move
> at once" (Penguin ed., p. 104, emphasis added, JL).
>I highlighted "method of analysis" above to indicate that for Marx this
>was not *only* a question of the method of *presentation*, as some have
>interpreted. This "method of analysis" that some (including and
>following Althusser) have suggested has too many "Hegelianisms", Marx
> "[...] I am *powerless to overcome*, unless it be by forewarning
> and forearming those readers who zealously seek the truth. There is
> no royal road to science, and only those who do not dread the
> fatiguing climb of its steep path have a chance of gaining its
> luminous summits" (Ibid, emphasis added, JL).
>This suggests clearly that Marx viewed the method of analysis, apparent in
>the first chapters, as *indespensible* for the understanding of his work.
>It would also seem to contradict the belief by many (e.g. Althusser,
>Sweezy) that the first chapters can be skipped as they are filled with too
>many "Hegelianisms" and "Feuerbachianisms" (Althusser) or are too
>difficult and non-essential (Sweezy).
>Was this what you had in mind, Paul? :-)
>In solidarity,

The full quote is:

The change of value that occurs in the case of money intended to be
converted into capital cannot take place in the
money itself, since, in its function of means of purchase and of
payment, it does no more than realize the price of the commodity
it buys or pays for; and, as hard cash, it is value petrified,
never varying.(1*) Just as little can it originate in the second
act of circulation, the resale of the commodity, which does no
more than transform the article from its bodily form back again
into its money form. The change must, therefore, take place in
the commodity bought by the first act, M-C, but not in its value,
for equivalents are exchanged, and the commodity is paid for at
its full value. We are, therefore, forced to the conclusion that
the change originates in the use-value, as such, of the
commodity, i.e., in 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, whose actual
consumption, therefore, is itself an embodiment of labour, and,
consequently, a creation of value. The possessor of money does
find on the market such a special commodity in capacity for
labour or labour power.
Steve Keen
Senior Lecturer
Economics & Finance
University of Western Sydney
PO Box 555 Campbelltown NSW 2560
s.keen@uws.edu.au (046) 20-3254 Fax (046) 26-6683