[OPE] Value form theory 101

I'm sorry Jerry, with due respect, whereas I think you are perfectly entitled to your 101 value-form theory, this is not at all what Marx himself argues, and I can prove that very easily with chapter & verse. In brief, Marx never argued at all that "that for a commodity to represent value it must have use-value and exchange-value".

This is also not what Geert Reuten argues in his "value form theory" either, he argues that value and the labour-abstraction is constituted by the exchange-relation, and he rejects a Ricardian "labour-embodied theory of value". In this case, labour "takes on the form" of exchangeable value within specific relations of human association (Reuten uses a complicated language of "sociation" and "dissociation"), but labour is not the "substance" of value in this theory because there is no substance.

Marx himself says explicitly and specifically that a commodity has a value and a use-value (utility), but for the value quality (the value substance) of this commodity to become clearly and quantitatively manifest, its magntiude is expressed in a specific relative "form", and that form is one or another expression of exchange-value, in the most developed sense, a relatively stable money-price (however, although he mentions it, Marx himself does not theoretically develop the "price-form" in any detail, anymore than bourgeois price theory does this).

Marx then says "everybody knows that commodities have a common money-form" but "we have to perform a task never even attempted by bourgeois economics... to show the origin of [the] money-form, we have to trace the development of the expression of value from its simplest, almost imperceptible outline". The purpose of his digression about the forms of value is to demonstrate how money originates through the development of trade and is necessitated by that development. It would be easy to call this a "commodity theory of money" but it isn't, it is only a brief theoretical explanation of the origin of money.

See further on this his discussion of the "value form" in Cap. 1, Chapter 1, section 3 et seq. The "dual nature" of commodities is, according to Marx, that they are simultaneously "objects of utility and bearers of value", NOT that they observably have a use-value and exchange-value - this is what Marx himself says if you care to read it. In fact the very title of the ch. 1 section 1 refers specifically to the "two factors of the commodity: use-value and value" (NOT use-value and exchange-value, as in Marxist vulgarisations). In section 2, he then shows how this duality maps onto the dual character of social labour, which he regarded as one of his main innovations in economic thought.

This whole Marxian argument however applies only if the commodity is a reproducible labour-product, the value magnitude of which will then get a stable form through regularised trade in it. It does not apply to all assets or products, nor to all prices, and consequently the "law of value" cannot be considered to rule the whole economy either, that was just a fiction propagated by some Marxists poets.

Marx argued already explicitly in his book "A contribution to the Critique of Political Economy" (1859) that "This abstraction, human labour in general, exists in the form of average labour which, in a given society, the average person can perform, productive expenditure of a certain amount of human muscles, nerves, brain, etc. It is simple labour (English economists call it "unskilled labour") which any average individual can be trained to do and which in one way or another he has to perform. The characteristics of this average labour are different in different countries and different historical epochs, but in any particular society it appears as something given." In Capital he repeats this exact argument, and he never changed his mind about that (however he never developed any critique of the political economy of skills, anymore than a comprehensive critique of the forms of wage-labour or the labour market).

In other words, Marx's argument is that in ANY society, an economy of social labour-time effectively exists, shaped up by customary practice, techniques & organisation, and a certain average level of labour-productivity, which determines the "normal" expectations of labour-effort.

By implication, the equation of different quantities of labour-time through economic exchange is NOT in fact the historical or practical prerequisite for the abstract treatment of labour-time; all that is required is that the magnitudes of different labour-efforts in society are known, comparable and compared, yielding averages indicating the known "normal" labour-time associated with a task. The real prerequisite is not exchange, but social labour, i.e. labour-cooperation. Exchange only validates and renders more exact something which already existed prior to exchange. That is where the so-called "value-form theory" goes wrong, and in fact it makes socialist economic organisation impossible to understand, other than as state-directed economic organisation. That is where I part company with the Marxists.

If, for example, we study the historical records of the Roman latifundia, we discover that a sophisticated economizing and calculus of labour-time existed, even quite independently of the economies of trade. The Roman overseers were able to calculate the average labour-time associated with different tasks with considerable accuracy, and consequently they could estimate that you needed X number of slaves of a certain strength and skill level per actus quadratus or centurium, to work the land for a certain number of hours per day, at a certain maintenance cost, to obtain a certain yield, assuming no unfavourable weather.

It is just that capitalism universalizes the abstract treatment of labour-time, clearly separating out paid work from other, unpaid activities; through the universal use of money and the general exchangeability of labour, all forms of labour become comparable in value, and can be economised on that basis. Thus, through the growing sophistication of trade, an increasingly close connection between the economy of labour-time and the economy of trade in labour-products is achieved, enabling a fairly precise calculation of unit labour-costs in money terms.

It is obviously possible for labour product-values and their product prices to diverge, due to all sorts of causes (i.e. the economy of labour-time and the economy of trade can attain a relative autonomy from each other) but this according to Marx occurs within definite quantitative limits, and definite modal proportions nevertheless exist, for the simple reason that extreme price fluctuations are irreconcilable with the social economy of labour-time, manifested in the cost structure of production. For example, speculation may cause the price of a barrel of oil to vary between $30 and $140 or so, but if oil trades at $5 a barrel long-term, the oil mining industry is likely to close down, and if it costs $1000 then the world economy is likewise practically wrecked.

It is this sort of analysis which also helps explain how multinationals can profit from international differentials in the formation of social labour, and why those differentials will gradually disappear with greater international market integration.

Why I refer to "bourgeois Marxism" is not primarily because of some pejorative intent, but for the scientific reason that in such theories, value is formed, created and constituted by exchange transactions.

Simply put, trading activity generates new value, and that is also exactly how it is presented in national accounts and in the textbooks. But that is precisely what Marx himself denied, he says this is the prime illusion of the market, his whole argument is that product-values are formed and exist prior to exchange, and even irrespective of exchange, and that is how it is possible for labour-exploitation in production to be profitable, even regardless of all sorts of market fluctuations to which the price-form is "admirably adapted" as he says. If that wasn't the case, Marx's transformation procedure would indeed become a nonsense, since it is predicated on the idea that a flow of new surplus value exists and is produced prior to its distribution as profit, interest, rent, tax, and fees.

Jurriaan

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Received on Wed Dec 10 09:50:32 2008