Date: Thu, 31 Jul 1997 22:20:47 +0100 From: Chris Burford <cburford-AT-gn.apc.org> Subject: Re: M-TH: Labor Theory of Value and Keynesianism At 09:13 AM 7/30/97 -0400, Leo wrote: >I think it is most interesting that he raises the question of whether or not >the value of the Marxian labor theory of value is essentially heuristic, >since that has always been my understanding. That is, to put the question in >it simplest form, the labor theory of value allows one to see how >exploitation can take place within the labor process, but it has little or no >utility in terms of economic analysis. I agree with Leo that it has very little utility in terms of economic analysis. It exists at a high level of generality, of abstraction. The nearest I can see to an application in concrete reality is using it to compare aggregate figures for prices of whole sectors of the economy, as Cockshott and Cottrell have done to demonstrate its existence. But a) "heuristic" implies to me something relativistic, something unreal. The relations of value are IMO real, but operating at a high level of abstraction through the economy. b) I think it is more than a way of arguing how surplus is creamed off despite the fair exchange of values under capitalism. It is about the inner laws of working of the economy. It can explain for example that the landed capitalists are not inevitably homogeneous with the industrial capitalists. They can be picked off and their property can be brought under social control. c) Marx apparently never used the term "labour theory of value". There are various references to laws of this or that, including the law of value. Nowhere was it defined operationally. I think this is because it is implicit that Marx and Engels thought they were analysing a living system with various internal workings. I think Rakesh puts it well: <<That >is, by providing us with the metaphysical concept of abstract labor time, >value theory allows us to compare the abstract labor time contents and talk >about, as one example, the unfair aspects of exchange between imperialist and >dominated countries. Is then value theory basically normative?>> To which I >would answer yes. Presumably here the question is what is the norm? and who is setting it as between countries with very different technical levels of production? >I find very interesting the question Rakesh raises of the collapse of >Keynesian economics, since I see this as directly related to the 'pullback' >of liberal Democrats and certain European Social Democrats (ie, Labor) from >more progressive, redistributive policies, and the increasing abandonment of >key features of the welfare state. I am skeptical that the labor theory of >value will tell us much about that, but I am willing to be convinced, since I >see this matter as a live, important issue. Here, are the questions I have: >To what extent is the collapse of Keynesianism a function of its (and >capitalism's) intrinsic contradictions, and to what extent is it the result >of a shift in the balance of forces, such that working class and progressive >forces are on the defensive? Was Keynesianism a policy of an industrial phase >of capitalism which could not survive in a post-Fordist capitalism, or will >it be possible to recreate some new form of Keynesianism in the knowledge >based economy which is now emerging? I do myself believe the workings of the law of value on a global scale are crucial to understanding why the post war Keynsian settlement in the technologically advanced countries of the west has come to an end. Keynes like Marx described the capitalist system as prone to over capacity and underconsumption. Marx describes the capitalist system as overcoming crises by partly discounting old capital but also by capturing new markets and intensifying the exploitation of others. As humans have poured off the land throughout the world the West has had a bonus for several decades of cheap migrant labour and relatively captive markets. A capitalist economy whose exchange value is growing by only a few additional percentage points on average per year, as a result of these uneven exchanges of value, has a great advantage in riding out the troughs and taking advantage of the peaks. This has made social democratic compromises more possible with the working class in the advanced metropolitan countries. But that edge of advantage has gone with the rise of some of the Asian capitalist countries. Because the total exchange value in the world is finite unless more wage workers can be created. Keynsian reflation is not now a safe option for an individual country because it may lead to stagflation. This is because of shifts in the law of value on a global scale, as hidden and as important as the great rivers of water that flow beneath the oceans, and sometimes alter their direction. Chris Burford London. --- from list marxism-thaxis-AT-lists.village.virginia.edu ---
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