[OPE-L:4126] Re: use-value and value

Steve Keen (s.keen@uws.edu.au)
Fri, 31 Jan 1997 18:10:47 -0800 (PST)

[ show plain text ]

I guess this is the closest this list has seen to a flame for a while.

Andrew's characterisation of my argument:
>Whys this "nonsense"? Supposedly because it "implies that an increase in
>technological change can send capitalists bankrupt."
>Gee, now that's really unimaginable ...
>.. if you fetishize technology and productivity and material things, if you
>think that what drives capital is the self-expansion of use-value, if you have
>unshakable *faith* that rising physical productivity causes the rate of profit
>to rise.
>There is a name for this piece of dogma: the capital productivity theory of
>the profit rate.

is a valid label for things such as neoclassical theory, as he indicates.
I'm quite well aware of it, and I expect just as critical as Andrew. But I
am also quite used to having my pespective quickly thrown into the same
(rubbish) bin.

My argument, Andrew, is different. It is based, not on the neoclassical
treatment of use-value, but Marx's treatment. On that point, I suggest a
quick look at the Marginal Notes on Wagner:

"On the other hand, the obscurantist has overlooked that my
analysis of the commodity does not stop at the dual mode in which
the commodity is presented, ... 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, but
that, *nota bene*, it only comes into the picture where such
consideration [of value, use value, etc.] springs from the
analysis of given economic forms, not from helter-skelter
quibbling over the concepts or words `use-value' and
`value'." (Carver, Marginal Notes on..., p. 200.)

So my argument is that Marx uses his own unique concept of use-value, in
conjunction with his concept of exchange-value, to derive the proposition
that surplus is derived from labor. I argue that he then *misused* the same
logic to arrive at the proposition that surplus cannot be derived from

On the ancillary points:

>Is there any evidence for this piece of dogma? Please don't give me arguments
>like a more productive firm or country does better than the less productive.
>I understand what redistribution of value is. I'm asking about evidence for
>the system as a whole? How do you explain the fact that the world is in deep
>misery despite the immense breakthroughs of the past 200 + years? How do you
>explain the absolute immiseration that has gripped most of the 3rd world, and
>the fact that the worldwide slump of the past two decades *continues*, despite
>what seems to be an unprecedented wave of innovation and potential
>productivity breakthrough provided by the microprocessor? Why aren't we all
>wallowing in comfort and luxury and working 30 minutes a day? When I was
>growing up in the 1960s, that was exactly the kind of thing that was being
>told to us, and that was even before the microchip. So what has gone wrong?
>Are the greedy evil rich people just taking from the poor and the middle
>income? Is that what you think explains all this? Or how about that
>aggregate demand is low? Wonderful tautology. Investment is sluggish? Gee,
>if physical productivity is what makes things profitable, the capitalists
>should be investing like crazy in all the new technocrap if they had any sense
>at all. Maybe their brains have atrophied along with their animal spirits?
>Or maybe rising real wages are depressing the profit rate? But we're not in
>the 1970s anymore, Toto. What condition do you think things would be in if it
>were not for the massive explosion of debt, even in percentage terms?

>Give me a break. There is only one theory I know of that can explain the
>coincidence of the microelectronics revolution, the mass unemployment, and
>continuing slump and immiseration. It is the rising composition of
>capital/falling rate of profit/capital devaluation theory (Marx, _Capital_
>III, Chs. 13-15).

A certain Karl Marx once argued that the mode of production can become a
fetter upon the means of production. That applies whether you believe that
the means of production are or are not productive -:). From my perspective,
I double the indictment above. One of my many problems with explanations
which site capitalism's problems at the level of the means of
production--and face it, that's what the rising composition of capital
argument does unless you can prove that the same would not happen under
socialism--is that they ignore issues of the mode of production. This is
where the action is, and the true indictment of capitalism is, since it
can't produce utopia despite the enormous productive power of our
technology. The problem lies in the areas of income distribution, debt
accumulation, and the motives for capitalist investment--none of which I
would regard as intrinsic to a discussion of the transformation problem.

And pardon a bit of a flame back, but what else--really--have Marxists been
discussing for the last century? Even the TSS can be so characterised, since
part of its innate appeal is that it avoids the transformation problem,
whereas the simultaneist is still stuck in it.

>Even given Steve's theory according to which machines create value, what do we
>have? Imagine a machine that produces replicas of itself. But it produces
>the replicas more cheaply than it itself was produced, due to rising
>productivity. So capital acquires a machine at time t having a value of X,
>but at time t+k, it is only worth X - d. Looks like devaluation of capital to

Yep, looks like it to me too. And it causes no problems in my analysis.

>The *only* way to deny this is to say, either directly or indirectly, that the
>*substance* of value is use-value. (The indirect way to say this is to have
>numeraire prices. The even more indirect way is to make labor the substance
>of value, but then to make the labors of two different times unequal if their
>use-value productivities are unequal, as Bruce does explicitly and all
>simultaneist "Marxist" value theory does implicitly.)

I don't say that; neither do I argue that Marx does. His argument is however
that use-value is an essential component in the understanding of how:

The conversion of money into capital has to be explained on the basis of the
laws that regulate the exchange of commodities, in such a way that the
starting point is the exchange of equivalents.(24*) Our friend, Moneybags,
who as yet is only an embryo capitalist, must buy his commodities at their
value, must sell them at their value, and yet at the end of the process must
withdraw more value from circulation than he threw into it at starting. His
development into a full-grown capitalist must take place, both within the
sphere of circulation and without it. These are the conditions of the
problem. Hic Rhodus, his salta! (Ch. 5)

And to solve this problem, Marx argues

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 (Ch 6)

>Steve: "there's no guarantee that Marx got it right."
>There's no *guarantee* that he didn't have two or more value theories.
>There's no *guarantee* that Steve Keen isn't the Messiah. But don't we need
>to look at the EVIDENCE, or am I just a pre-post-modern fuddy-duddy? There's
>no *evidence* that Marx got it wrong. There's a lot of *evidence* that he got
>it right.

As I interpret it, there's a lot of evidence that Marx got (many of the
things you note above right but) the detail of his theory of value wrong. If
he didn't why are we still arguing about it A CENTURY LATER?

I am not under the delusion that I am going to convince you of my case,
Andrew--I've had too much experience for that! But if you want to read my
arguments, rather than simply assume they are neoclassical, check the
Journal of the History of Economic Thought, 1993, vols. 17 Nos. 1 & 2 (there
are 2 papers).

Steve Keen
Senior Lecturer
Economics & Finance
Faculty of Business & Technology
University of Western Sydney
PO Box 555 Campbelltown NSW 2560
s.keen@uws.edu.au (046) 20-3254 Fax (046) 26-6683
Home: (02) 9558 8018