[OPE-L:7244] [OPE-L:769] Re: Value and Exchange Value

Ajit Sinha (sinha@cdedse.ernet.in)
26 Mar 99 14:02:13 IST (+0530)

> After following with some awe the explosion of posts on Gil's
> critique of
> Marx's "derivation" of the labor theory of value in the first
> pages of
> Capital, the following thoughts occurred to me.
> 1. The Marx passage in question is not very well-drafted, at
> least in the
> English translation. I don't read German, but I wonder whether
> there might
> be some tiny changes in tone in translation. For example, it
> makes a big
> difference whether one says the common element among the
> commodities "can
> be no other than" labor time, or "is nothing other than" labor
> time.
> 2. It might be more useful to point the discussion of the "common
> substance" type of argument at scientific rather than
> mathematical issues.
> The paradigmatic case of this kind of reasoning is the physical
> concept of
> mass, which I think Marx is invoking in this passage. Because we
> have an
> operational way of equating two objects (that they balance in a
> scale) this
> _suggests_, but does not prove, that they have some conserved
> substance in
> common (mass). Now in fact physicists have never satisfactorily
> explained
> mass, although the conservation of mass has been a fruitful
> theoretical
> principle for them. This isn't true all the time. For example,
> some
> physicists tried the same idea with heat, assuming that because
> one can
> operationally equate two systems through the equality of their
> temperatures, they must have the same amount of some conserved
> substance
> (which some of them called "phlogiston".) This turned out to be
> wrong, when
> thermodynamic analysis showed that heat was a form of energy, and
> linked to
> the degree of disorganization (or entropy) of the system.
> 3. I agree with the point that what Marx's very brief remarks
> support is
> the tentative identification of a substance common to the
> commodities,
> which I would call "value". Whether this actually exists or not
> is like the
> problem of phlogiston. Neoclassical economics, in my reading,
> explicitly
> denies the reality of value as an independent substance, and
> argues that it
> is like heat, just a result of aggregating price relations in the
> economic
> system. What, if it exists, it arises from (labor time, for
> example) is yet
> another question, and I agree with Gil that this paragraph of
> Marx's really
> offers no coherent argument in favor of the link. When I've read
> this in
> the past I've thought that Marx assumed the reader would be
> familiar with
> the labor theory of value, and that the purpose of this brief
> remark is
> merely to contextualize his discussion in terms of what the
> reader already
> knew.
> Duncan
I, to a large extent, agree with the points made here. I would add
two more points that I think should be taken into consideration:

(1) In a simple commodity producing economy, labor theory of value
will hold. Marx may be alluding to this conclusion by arguing in a
wrong way.

(2) Ricardo derived his rate of profit by dividing, in Marx's
terms, S/V. He had no way of deriving rate of profit when there was
constant capital in the system. Marx was particularly very critical
of both Ricardo and Smith for ignoring the constant capital element
in their analysis. The idea of maximum rate of profit in Marx stems
from always keeping the constant capital element present in the
analysis. Now, I think, once there is constant capital in the
system, there is no way of determining the uniform rate of profit,
other than the simultaneous equation method which Marx did not
know, then the way Marx went about it--i.e. by moving away from
relative value of Ricardo to his absolute value concept.
Cheers, ajit sinha
> Duncan K. Foley
> Department of Economics
> Graduate Faculty
> New School University
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> New York, NY 10003
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