[OPE] Law of value

I am sorry, Alejandro, but none of the quotations you provide actually prove that Marx ever believed that the law of value ruled or dominated the whole economy of bourgeois society. I am to my knowledge actually the first historical materialist to argue explicitly that Marx didn't believe this, against orthodox Marxism. It has enormous implications for how you understand social cohesion, social integration, general equilibrium and the nature of markets (it's a "paradigm change").

In fact your interpretation was first advanced by the young Werner Sombart in his "Marxist" days, in a critical-sympathetic article which strongly influenced Marxist opinion, upon the publication of Capital Vol. 3. See: Archiv fur soziale Gesetzgebung und Statistik, vol. VII, 1894. Sombart's intellectual career really took off after he rejected Marx's analysis.

Discussing Sombart's interpretation in his afterword to Capital Vol. 3, Engels argues that the law of value regulated commodity production and exchange directly up to the 15th century, but thereafter, with the expansion of capitalist market production, production became regulated by the prices of production (cost prices and profit averages).

The idea of the law of value dominating all of economic life, or even bourgeois society as a whole, was later emphasized by the likes of Che Guevara, Charles Bettelheim and Ernest Mandel. They were wrong about that; they confused the "law of value" with the existence of "market forces". The Keynesian and Post-Keynesian economics discourse obviously could only think in terms of "market allocation or state allocation" and this seemed to map onto Preobrazhensky's conflict of the law of value and social planning. Later Hillel Ticktin and Toni Negri, not being economists, declared that the law of value no longer operated and had finished. They were also wrong about that. We have to leave this uninformed leftism aside.

At most, your quotes could be interpreted as saying that "the output and exchange of commoditized products from sphere of capitalist production" is regulated by the law of value.

The fallacy is similar to the fallacy that GDP covers "the whole economy", which I have noted before. For professional social accountants, such an idea is simply ridiculous.

Anyway at least for non-Marxists like myself, and most sensible people, the whole economy of a society does not consist only of capitalist commodity production. That is a Marxist interpretation, according to which Das Kapital is the revealed truth about bourgeois society as a whole.

In reality, as German Marx-scholar Michael Heinrich notes, in Volume 3 "Marx was nowhere near solving all of the conceptual problems" and even in what Marx published himself, he remained somewhat ambivalent qua attitude to the classical political economists, David Ricardo in particular.

Engels also strongly edited Vol. 3, which means that when Fred Moseley refers to "Marx's method" Moseley is in reality often referring to Engels's method, which truncated Marx's different, unfinished "layers" of analysis for the sake of making a coherent story (a rather ungrateful job, since Marx hadn't actually solved the problems he raised in his manuscripts, and therefore left Engels, his benefactor, a legacy of big and controversial scientific issues to solve).

If e.g. you look at US society today, you find that the money-value of capital tied up in physical means of production is only about 30% of the total money-value of all physical capital assets. If you added financial assets to total capital, then physical means of production represent less than 10% of total capital, even if you excluded expenditure on education and R&D.

I will discuss all these points in more detail in my article on Marx's law of value. I have provided a few clues meantime, in a wiki http://en.wikipedia.org/wiki/Prices_of_production

Basically, to make scientific progress from Marx, we have to "make a clean ship", and clear away both the Marxist garbage and the anti-Marxist garbage in the literature, in order to complete Marx's real project ("the close of his system"). This is not a matter of reciting a liturgy, but of thinking logically and empirically through the conditions of the problem, guided by the texts we have, and the more intelligent interpretations of them. Once we understand the foundational concepts properly, it's not very difficult. The biggest obstacle is Marxist authoritarianism getting in the way of science, and stupid economists dismissing Marx's significance for understanding the biggest economic growth and population growth process in the history of the world.

Jurriaan

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Received on Sun Mar 22 09:04:01 2009