Date: Sun, 14 May 95 09:48:19 BST
From: Chris Burford <cburford-AT-gn.apc.org>
Subject: Value - Steve's paper: Part 3


Comments on Steve's "A Marx for Post Keynesians" Part 3


No doubt in some deeply unconscious way Steve is extraodinarily 
*keen* on the labour theory of value. But he is keen as a knife 
is keen on a piece of meat. He cuts it into small pieces and then
argues that it could never have functioned successfully as a
living muscle. 

Joking apart, the point is not a trivial one, and was made, with
respect, by Engels when he said

>>>
 Sombart, as well as Schmidt, -- I mention the illustrious Loria merely
as an amusing vulgar-economist foil -- does not make sufficient
allowance for the fact that we are dealing here not only with a purely
logical process, but with a historical process, and its explanatory
reflection in thought, the logical pursuance of its inner connections.
<<<

The quote is from "The Law of Value and Rate of Profit" 1895, which I 
maintain should be accepted as an addendum to Volume III of Capital.


When I first read Steve's formula in his list as the second axiom
of what he calls Marx's Labor Axioms, I thought I would be quibbling
if I said it did not seem quite right:

>>> Under capitalism, commodities exchange in proportion to the 
amount of value they contain; <<<

But later on he starts an argument thus

>>>If prices were strictly based on values (axiom 2 above) ... <<<

No No No! 

It disastrously misrepesents the Marxian model if it is 
assumed to mean that prices are directly determined by exchange value.

It becomes a wooden Aunt Sally, held together with string and drawing
pins, without any dynamic life, just ready to be pushed over by a puff 
of wind. No wonder Steve has exulted in its "demise".

Engels put it this way, in the article already quoted:

>>>> the Marxian law of value holds generally, as far as economic
laws are valid at all, for the whole period of simple commodity
production -- that is, up to the time when the latter suffers a
modification through the appearance of the capitalist form of
production.  Up to that time, prices gravitate towards the values fixed
according to the Marxian law and oscillate around those values, so that
the more fully simple commodity production develops, the more the
average prices over long periods uninterrupted by external violent
disturbances coincide with values within a negligible margin.  Thus, the
Marxian law of value has general economic validity for a period lasting
from the beginning of exchange, which transforms products into
commodities, down to the 15th century of the present era.<<<<

So Steve's version of a definition is 500 years out of date!

A passage from Marx illustrates how incredibly fluid and dynamic is 
the situation now, according to the Marxian model. I suggest it is 
also helpful for my examination of contrasting models with Steve, 
that it is from the section in Volume 1 of Capital entitled "The Value 
transferred by machinery to the product", 11th paragraph:

>>> Since the division of the day's work into necessary and surplus-labour
differs in different countries, and even in the same country at different
periods, or in different branches of industry; and further, since the
actual wage of the labourer at one time sinks below the value of his 
labour-power, at another rises above it, it is possible for the difference
between the prices of the machinery and the price of the labour-power 
replaced by that machinery to vary very much, although the difference
between the quantity of labour requisite to produce the machine and the
total quantity replaced by it, remain constant. But it is the former
difference alone that determines the cost, to the capitalist, of producing
a commodity, and through the pressure of competition, influences his 
action.<<<


So Steve is quite wrong when he summarises Marx as saying

>>> Under capitalism, commodities exchange in proportion to the 
amount of value they contain; <<<


I also agree strongly with Hans Despain and Andrew Kliman that the
transformation issue is a non-problem. It is only a problem to those
who do not try to understand Marx dynamically, who do not try to 
understand the Law of Value as a law of *motion* of capitalist 
society rather than a set of rules that might or might not be
logically false. It is a model and it should be taken for what it is
and it should be judged on its explanatory power.

The issue is perhaps whether Marx is learned in Sunday School or
in evening class. Without intending to be offensive to Scott or 
anyone else (Steve has already shared with me some very valid
comments I am sure about the dogmatic way some of these discussions
go) I feel I increasingly want to highlight this issue. We will get
nowhere in exploring further the continuing creative potential of
the Marxian model if we do not ask how it explains the strengths as
well as the weaknesses of capitalism.

IMO this does not require a dismissal of other models. They are all 
trying to a greater or lesser extent to explain the vast turbulent 
processes going on before our eyes. One reason why I was glad that
Chris Sciabarra was able to expand a little on the Austrian's school's
handling of the uncertainty of price formation nowadays, is because IMO
there are similarities with the fact that Marxism models how a
deterministic system based on labour exchange value can lead to non-
determinate results in prices.

My differences with Steve on the Labour Theory of Value are balanced
by my shared interest with him in exploring the dynamical aspects of 
Marx's analysis that look at times so close to some of the implications of
Chaos Theory and Complexity Theory. Inevitably blind though we have to be
to the full bewildering complexity of what is going on, I have little doubt
that with the help of our models we are all trying to touch, explore and 
analyse the same elephant. It is just that I start from the northern, and 
Steve from the southern end. It is to some extent a matter of luck for 
each of us, which way the elephant is facing while we grope our 
way to a fuller and thoroughly scientific analysis!

Cheers,


Chris Burford, London.




     --- from list marxism-AT-lists.village.virginia.edu ---

     ------------------