[OPE-L:7110] [OPE-L:609] Value and equivalence

David Laibman (DLaibman@brooklyn.cuny.edu)
Sat, 06 Mar 99 13:11:00 EST

Dear OPE,

While I am in a composing mood. . . :-)

A brief comment on the long thread between Gil-Steve-Brendan (on one side),
and Alan (on the other), concerning the postulate of a third substance that
is equalized in an act of exchange.

R, S, T, linearity, composability, decomposability, etc. etc. are swimming
around in my head like flies, and I feel a need to step back and reconsider
this crucial issue in simpler terms.

Marx (I:1) says x of A <==> y of B necessarily implies existence of a third
thing, not itself among commodities in the chain (the expanded form of
value), whose presence in equal amounts makes the exchange possible and
establishes its quantitative proportions. He then finds, by a simple
negative argument (argument by exclusion of alternatives) that this substance
must be abstract labor.

Gil et al question this; and it is imo right to question everything right
down to foundations. Marx certainly does not prove it, and I agree with
the interpretation that he did not intend to offer a proof, and most likely
did not think that this was something that could or should be "proved."
Perhaps only exchange values -- relative proportions -- exist. If you can
determine a vector of money prices, or a (slightly shorter) vector of real
relative prices, why do you *need* a value substance, a *tertium

Instead of getting into the dense thickets of equivalence sets, etc., I would
rather try to *answer* this question, by showing (if I can) that the value
postulate emerges inherently from a full political economy of capitalism
(leaving other forms of commodity production aside for the moment). I have
most recently approached this not by trying to show that we *need* value
*first* in order to understand capitalism, but the other way around: when we
grasp all aspects of the way in which capitalist exploitation is reproduced,
including processes that are not part of conscious calculation by class
actors, we will find that labor-values are fully and uniquely determined.
The value postulate is therefore confirmed, and serves as a way to "lock in"
the full, multi-layered understanding of capitalist social relations.

The full argument, as it stands to date, is in my paper for Boston: "Value
Theory and the Quest for the Core of Capitalism: A New Expedition." For
anyone who won't be there, and will not receive the bound set of papers, I
will be happy to send a copy on request (snailmail).

One small point, just on the possibility of the value postulate. Gil's
counterexample concerning land (which of course is also in Bohn-Bawerk)
misses a methodological claim that Marx does make, and which imo makes
sense. Marx programmatically restricts his attention to *reproducible*
commodities (following Ricardo quite clearly in this), but for a deeper
reason than Ricardo's: by carrying out (what I like to call) *pure
reproduction analysis*, Marx focuses in on the most basic and general process
of class formation and exploitation, which in the world of experience (the
"real world") is always overlain ("overdetermined"?) by other forms of
exploitation based on ownership of non-freely-reproducible resources. It is
another aspect of the "even if" argument that has been mentioned (by someone)
on OPE: *even if* there were no monopolies of land and other natural
resources (Henry George: are you listening), the power of capital to extract
surplus value would be massively present, on the basis of ownership over
production of reproducible commodities. From this standpoint, Marx would
seem to be justified in ignoring land and other violations of the
pure-reproduction framework, until *after* the basic capitalist relation has
been theorized. He thus incurs an obligation to show later, by successive
concretization, that land, and indeed other forms of exchange mentioned by
Gil, such as financial instruments, can be integrated into what becomes a
fuller, more concrete picture. In general, most of the critiques of the
value postulate -- and they are all in Bohn-Bawerk -- trace back to one or
another violation of the pure reproduction assumption: land and natural
resources; skill differentials that cannot be accounted for by training and
education; and (most clearly) the momentary ("short-run") market in which
quantities supplied are fixed (the famous horse fair example in
Bohm-Bawerk's *Positive Theory of Capital*, for example, or the cases of
non-reproducible goods like rare paintings).


David Laibman