From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Wed Nov 29 2006 - 01:14:06 EST
Please let us remember that Marx did not derive the labor theory of value from his explanation of surplus value, defined as M'-M. In that sense surplus value was recognized long before Marx; the question of course is whether it was buried by neoclassical economics as Joan Robinson complained often and vociferously. Marx's explanation of the persistence of the surplus value value presupposes the labor theory of value, for on that basis--as well as Gil's favorite assumption of price value equivalence--Marx reasons that capital considered here as a perfect aliquot of the whole cannot have paid for labor time actually expended. What did it then purchase--the worker's ability to perform labor...We all know the story...If the labor theory of value is true, then that ability must have a lesser value than the value added by expenditure of labor. And indeed input output analysis confirms that as true--as even the critic Meghnad Desai himself underlines. Of course that does not resolve the question of exploitation because the wage could represent full payment for labor performed, discounted in terms of labor's present time preference. The problem here is a fetishization of time which is of course better than its elimination. But all this leaves hanging the question of how did Marx then ground the labor theory of value? Did he not bother do exactly this because he assumed it obvious and unquestionable on the authority of the political economists? Did he only see his task as one of reconciling the contradiction between observable phenomena and the labor theory of value which he also clarified with the concept of socially necessary abstract labor time? This is, I think, the standard story. Marx as a minor or creative Ricardian. Minor in that he is only clarifying and thinking through the implications of the giant on whose shoulders he stands and creative in the sense of the mediations he offers to solve the remaining puzzles regarding profit and wages, rent and of course money. And we all know the response of Rubin and Grossman to this interpretation. Let me try to lay out Marx's argument as I understand it. The real debate begins with the analysis of the implications of the first premise below. And in my estimation the most important locus for this debate is Erik Olin Wright's response to the Rubin interpretation in the Value Controversy, ed Steedman. More on this later. But let me begin simply. 1. The Ontological Primacy of Social Labor Activity Inherently limited, the available social labor time must be distributed both quantitatively and qualitatively to allow for the use of the otherwise inactive factors of production (land, means of production, draught animals) and the reproduction of society thereby. 2. The Premises of Reification 2.a.Assume that people relate to each other only through commodities 2.b. The social labor time which is to be distributed to an activity must manifest itself (from 1)and can only manifest itself in the expression of one commodity in another commodity (from 2a). 2.c. This mode of expression distorts within strict limits the value of a commodity (chaotic price movements still gravitate around values, and the double divergence of profit from counterfactually imputed surplus value embodied in an individual commodity and the cost price of the used up means of production from their value creates only a small divergence between the price and value of a commodity). But this distortion, though strictly limited, is the most important reason that the price form appears as a hieroglyph, yet price must remain a function of value (this simply follows from 1, 2a and 2b). 3. The Nature of Surplus Value Moreover, the redistribution of value effected by the distorting price form does not affect the conclusion that the only source of new value in the system as a whole is the exploitation of labor, i.e. the 'labor fund' which the capitalist class apportions to the working class for its reproduction is less than the new value the defacto enslaved workers have created and the capitalist class 'rightfully' appropriated. 4. Capital as living contradiction Capitalist production works at cross purposes: it strives to lower unit values yet it does just that by raising the organic composition of capital and thereby depressing the general profit rate and putting out the flames of expanded reproduction. 5. The transience of value Once the nature of value is understood, all belief in the necessity of the bourgeois mode of production vanishes.
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