[OPE] Understanding value (reply to Michael Heinrich)

Paul,

Speaking of scholastic conceptions, you edited Makoto Itoh's "The Basic theory of capitalism", so surely you should be aware of the difference between the substance of value, and the form of value.

If a product cannot be sold, it has no exchange value, that's true. But this does not necessarily mean it has no value (it is worthless), or indeed that it has no use-value (it is useless). In Marx's own theory (which I think is different from Marxism) value-relationships and price-relationships (exchange relations) exist independently of each other, even if they influence each other, though for most products the two are statistically pretty closely related. In the modern globalised world, there is often a lot of market intermediation. This means that the product is resold many times before it reaches the final consumer, or that service is subcontracted many times. This has a clear effect on the way in which supply and demand adjust to each other.

The fact that a product cannot be sold, itself does not directly affect the value of that kind of product. After all, the product has been already produced and its has a current replacement cost in living labour time. The failure to sell as such only has an indirect value effect, namely less of that product may be produced in future and consequently that less of society's labour is devoted to producing that kind of product.

Apart from this value implication, there may also be a price implication, but like I say I think for Marx, values and prices are distinct and different dimensions, since values refer to the economy of labour time, and prices (exchange values) refer to the economy of trade.

Perhaps I should sketch my view on this a bit more:

As regards labour-time, you have basically "economized" when you have saved labour effort in creating a certain result, and optimally utilised available labour.

As regards trade, you have "economized" basically when you have purchased more cheaply (saved on costs), sold more advantageously (more sales volume at a better price), or obtained greater net income from the transactions; most generally, you have economized in trade when you have attained full financial control over the trade so that all transactions are predictable.

The original question Marx inquired into (beginning in 1844) is, "how exactly are the economy of work-effort and the economy of trade related"? He realised straightaway that Proudhon's philosophy was inconsistent and with typical German rigour attacked the theoretical problems that Proudhon (and others) had raised.

In defining economic value in whatever way as an operable, measurable concept (a concept with a meaning sufficiently precise that it permits quantification), we face the problem that we have to analyse and specify the ontological "structure" of economic value (this is really what Paula is grappling with). There are different issues - how do products acquire value, whether they have value or not, and how the magnitude of value can change. The value structure of different sectors is also different. I studied this once, using national accounts data.

But Marx's analysis of the ontology of economic value, although brilliant, is rather incomplete, since he doesn't analyse the implications of use-value and utility (the sphere of consumption) and he doesn't analyse the forms of prices in much detail. Marx's analysis of the value-form is not incorrect, but incompete. One reason for that is simply the stage of development of capitalism itself. There were many market phenomena that Marx could not really envisage, such as the complete reorganisation of consumption according to the laws of money-making, and trillions of dollars of dolars of value which exists only if earnings are as predicted in the future.

Had my life gone differently I would have been able to offer you a treatise on all this. Life happens to you while you make other plans. Maybe writing for OPE-L doesn't help much. If I get lucky there may be more time to write and study. It's a bit of a catch 22 - to get anywhere you have to publish good stuff, but to publish good stuff you need an opportunity to write it.

Michael Heinrich's research on one of Germany's great thinkers is very valuable, but I am myself less convinced now that the 70's generation of Marx scholarship got it right. Also, value relations in "actually existing capitalism" (the title of a book I planned to write) are quite different from Marx's time in many respects.

Jurriaan

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Received on Tue Apr 28 15:01:46 2009