From: Rakesh Bhandari (rakeshb@STANFORD.EDU)
Date: Mon May 12 2003 - 22:15:28 EDT
Hi Andy, As someone who has thought long and hard about these matters, may I ask you to address my worries about the theory of value? You write: > The peculiarities of >commodity relations and capital entail that labour stripped of all >sensuousness takes independent effect as value. The key to >grapsing this is: (i) to grasp that there *must* be a 'third thing', a >material thing, constituting commodities as values, a necessity >which stems from basic materialist premises in the context of the >specific historical form of the commodity; (ii) to see that this thing >can only be abstract labour, since labour time is the only material >property of commodities not abstracted from in exchange (this >cannot be grasped without recognition of products as embodiments >of labour). I guess I am having difficulty seeing how abstract labor is in fact abstracted in exchange. A buyer sets out not to pay a price for a commodity which reflects more than the social labor time needed to reproduce it; I suppose you are suggesting that he'll look for the "best value", the price which reflects just that time to reproduce it with the most advanced technique, or even for a price less than value (say a distress sale). But the consumer's estimation of a commodity's value is more or less subjective. He doesn't know the actual value of the used up means of production or the actual direct labor time expended. In fact, in making an estimate of the commodity's value, he'll at best add up the costs of its production in his head, not the number of hours expended which he'll then translate into a money price based on his estimate of the prevailing monetary expression of labor time. If the consumer remains in the putatively fetishistic world of prices, this seems to be the case with the seller, too: the seller wants to sell that commodity for what it cost him. But the seller neither knows nor cares about the unit value of his commodities. He knows the money price, not the value,of the used up means of production; and he accustoms himself to a reasonable return on the money capital which he has invested, not the actual surplus value produced. So if value is a subjective estimate of the consumer and an unknown and unobservable entity to the seller, then how does it or how can it possibly come to regulate exchange and production in bourgeois society? That's my first question. Shouldn't we look for some theory of prices and profits which makes no appeal to variables which are unknown, unobservable and practically ignored in the processes of price and profit setting? Since the Sraffian theory seems to do just that--no value, no preferences, no metaphysical posits--shouldn't we adopt it on the basis of what some would call Ockham's Razor? As Ajit reminded us, we don't even need an unknown, unobservable and practically ignored entity like surplus value to solve for prices and profits with the development of simultaneous equations. Why do we have to posit the existence of this peculiar substance of abstract labor? That's my second question. Even if Marx is able to reconcile logically the law of value through mediations and abstractions with the observable phenomena of profits (redistributed surplus value), rent (extra surplus value), wages (value of labor power), this doesn't prove the existence or reality of value in itself. But Marx seems to have made just that mistake; he took the object of economic science to be the reconciliation of the law of value with the market phenomena that seemed to contradict it. And let's say that his reconciliation is in fact perfectly logical (for different reasons, we both don't think there is logical transformation problem). But this still presupposes the regulatory power of the law of value; it does not prove it. Perhaps Marx's theory of value has been validated by the occurence of the developmental tendencies which he predicted on its basis (alternation between prosperity and depression, concentration and centralization, absolute increase in the size of the exploited proletariat, rising rate of exploitation, development of the world market, absolute growth in the industrial reserve army of labor and surplus population) . But I can see no other basis for concluding that the substance of abstract labor has explanatory power over prices, profits, rent and wages. And the task of validating Marx seems difficult. And Gil (as well as Daniel Little) would of course argue that these developmental tendencies can be "derived" simply from the proper institutional specification of capitalism; there is no need for the theory of value. What do you think of the empirical attempts to validate the labor theory of value as an explanation for prices? Yours, Rakesh
This archive was generated by hypermail 2.1.5 : Wed May 14 2003 - 00:00:00 EDT