[OPE-L] Fwd: Marx's Form of Analysis

From: glevy@PRATT.EDU
Date: Mon Feb 21 2005 - 08:40:36 EST

---------------------------- Original Message -----------------------
Subject: Marx's Form of Analysis
From:    "Jurriaan Bendien" <andromeda246@hetnet.nl>
Date:    Mon, February 21, 2005 7:05 am

Paul Bullock asks: Please explain this comment of yours: "The existence of
value  does not presuppose exchange, even if the abstract thinking about
value  emerges only in the context of more sophisticated trade."


The argument here is, that products of human labor have value, even when
they are not being traded, although perhaps we cannot quantify that
exactly.  It is not just that the people producing them subjectively
regard them as  having a value, but that they have an objective social
value, since one can  say with certainty, that they cost a certain amount
of labor-effort to make,  and that it would cost a certain amount of
labour-effort to replace them  under current conditions. On that basis
already, one could conclude without  hesitation that some products have a
greater value than others, and this is  in fact the initial basis for
value comparisons in the more primitive or  simple forms of trade.

That is to say, even when there is no trade, home oeconomicus still
economises and applies valuation principles in allocating time, energy and
 resources because he knows the objective consequence of alternative
courses  of action in this regard. Marx remarks that all economy reduces
to the  economising of (labor-)time, but this economising already
presupposes value  comparisons of products based on practical experience.
Thus, value as  concept and reality (in contrast to exchange-value) does
not originate from  exchange, but simply from the reality of homo
oeconomicus as producer and  moral subject in society, who is confronted
with the problem of allocating  his time efficiently.

What the development of trade up to very abstract monetary valuations does
 among other things, is to quantify and objectify the value and cost of an
 increasing range of products ever more exactly through (price)
comparisons,  and along with the abstraction of value, there is the
abstraction of  labour-time. Thus the concept and reality of value is
shaped up, with ever  more refined distinctions.

You can say that through exchange, abstraction is made from the specific
labor-efforts by specific people, and that moral considerations are
separated from economic considerations, but obviously social labor already
 exists, even when there is no exchange, and to some extent at least,
people  can in that situation judge the objective consequences of
alternative  labor-allocations, and economise accordingly, resulting in an
initial  "division of labor" - the economics of which may be distorted by
power  relationships.

We can say that in a market economy, people economise largely according to
 price signals (although up to 40% or 50% of society's total labor-time
may  happen to be unpaid), but it would be quite wrong to think that they
do not  seek to economise if there are no price signals. Yet in this
economising,  they are already attributing value to labor-products,
regardlessa of whether  they are priced, and they know that objectively
the social value of some  products is greater than others.

The insight which Kozo Uno (and also Ernest Mandel) emphasise is that
trade  originally develops at the boundaries of economic communities who
trade  surpluses, first incidentally and then more regularly. At this
stage, the  economy of labor in the sphere of production is not yet
regulated by the  pattern of exchange of products, even although social
labor is performed.  Over a lengthy span of history, production activities
become increasingly  subordinated to trading relations; not just outputs
but also inputs become  marketed goods, and are only obtainable as
marketed goods. Marx then asks  the question "how does it come about, that
the activities of labor become  dominated by the value of their

But when Marx tries to show, with Hegelian coquetry, that the substance of
 value is abstract labor, when he distinguishes between value and
exchange-value, and tries prove that labor is the common factor which
makes  commodities commensurable, he does so in a way which is not really

It invites the accusation that his proof is metaphysical or tautological.
Because in truth all that is really required for commodities to be
exchanged, is that they can be traded, and that obstacles to their
exchangeability are removed. The regulation of labor according to
commercial  value is a separate story. Hence Kozo Uno's clear separation
of the  "doctrine of circulation" from the "doctrine of production";
Mandel in his  book Marxist Economic Theory prefers to show the same
thing, using  historical examples of the origins and evolution of trade
and exchange  relations.


I suggest Marx's political economy is incomplete, insofar as it lacks an
analysis of the mode of regulation of consumption and consumer behaviour.
The idea here is that consumer behaviour is not simply a matter of
subjective utility preferences, an idea already implicit in Marx's concept
 of use-value as the tangible characteristic of a good which can satisfy a
 need, and his view of human needs as possessing a definite structure, due
to  their anthropological nature. The question then is how the value-forms
begin  to structure the satisfaction of human needs, and how they become
an  organising principle for it (to some extent this is reflecting in
discussions by Michel Aglietta and Ben Fine, and e.g. discussions about
"Fordist culture" - the pattern of consumption must be made to conform to
the requirements of the mass production of commodities for profit, based
on  relations of private appropriation). The lack of a political economy
of  consumption has I think had bad effects in previous attempts to
organise a  socialist economy - the emphasis was on the worker as producer
creating the  material foundations of wealth, to a large extent
disregarding the worker as  consumer; as if the adequate satisfaction of
consumer needs was not critical  to productive effort.


The theoretical dispute about value referred to above may seem like a
byzantine or obscure bit of anthropology, but I think it is really
important  to understand, from the point of view of the organisation of
resource  allocation, if market relations are abolished or heavily
regulated. It is  also important in assessing in what situations market
relations are  beneficial, and where they are not. Presumably a socialist
economy does not  seek to allocate resources primarily on the basis of the
law of value,  because it does not regard value as reducible to
exchangeability or price  relations, and seeks to allocate resources
according to socially established  priorities, restricting commercial
activity only to those areas where it is  deemed beneficial.

Nevertheless, it would still operate with a concept of value, since to
produce goods carries an objective economic cost, and a cost in
labor-time.  All that the abstract theory of value tells us here is, that
such a concept  of economic value exists, regardless of the existing of
market valuations,  insofar as that objective economic cost in time and
energy exists. But a  socialist economy might well take into account other
cost and benefit  criteria, relating to the health of the producers, and
the health of the  biosphere, reflected in its legal and moral system.


The centre-piece of neo-liberal theory is that markets provide the best
way  to assess the costs and benefits of resource allocation. If goods can
 exchange and have a price, then an optimal allocation will eventually
result. But from a socialist point of view, they are only one way, and not
 necessarily the best way, because it rests on the dubious Smithian
supposition that the pursuit of self-interest is always in the interest of
 all. Markets could be beneficial, but it is not true by definition. From
a  socialist point of view, the dispute is not about "markets or no
markets",  but about which property relations best promote human
development. Thus, the  neo-liberal defense of markets is in truth really
meaningless, because the  real debate is about property relations and
income sources. The real  advantage of a socialist economy is that
property relations can be  experimented with to a far greater extent,
since the political state can  institute different systems to guide
economic behaviour in directions  beneficial to all; given that, if we are
realistic, the desired morality for  citizens will not appear
spontaneously through market behaviour or through  the propagation of


The argument here is not that the accounting and economising of private
enterprises is necessarily all wrong, it is just that social enterprises
ought to take into account criteria which, although they do not involve
monetised costs and benefits, refer to human, social or ecological costs
and  benefits. This is not simply a theoretical nicety either; already
there are  many discussions in corporate circles about "social
responsibility" of  enterprises and "environmentally friendly" procedures.
Even although  ideologues may declare planned economy impossible, the
reality is that  corporations and governments are forced to engage in a
large amount of  "planned economy" already.

What the problems are, is already pretty clear; but the dispute revolves
around what forms and pirnciples of social organisation and association
can  harmonise human interests, if these are not expressed through the
cash  nexus, and how bureaucracy can be avoided. You need some kind of
workable  morality here. Obviously a crude identification of "planned
economy" with  "Stalinist command economy" is not helpful, but, the
reality of corporations  is that already parts of it are also a form of
"command economy" since  internal to the corporation at least, price
signals are insufficient as a  guide to economising resources - which
creates a concern with "corporate  culture" to shape up those behaviours
though to be beneficial for corporate  policy.

The attempt to overcome the problems with more and more internal
cost-centres in a large organisation, causing more and more complexities
of  accounting, ultimately fails because they become unworkable and people
flout  the rules in practice. This then focuses attention again on the
forms of  association which are required for efficient production, the
personal  morality and social values involved, etc.


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