This review essay was originally published in the April-May 2005 issue of the Marxist-Humanist paper News & Letters, available at newsandletters.org .
Why Marx's theory of value matters
by Tom More
The New Value Controversy and the Foundations of Economics, edited by Alan Freeman, Andrew Kliman, and Julian Wells, 2004,
This collection of 17 papers and an
"Introduction" by the editors "represent[s] the first response
by Marxist scholars to the debate initiated by MARXISM AND NON-EQUILIBRIUM
ECONOMICS (Freeman and Carchedi, 1996), a work that presented, for the first
time in book form, what has become known as the Temporal Single-System Interpretation
(TSSI) of Marx’s value theory" (ix). The "new value controversy"
is the latest chapter of an old debate, going back to the posthumous
publication of Volume III of CAPITAL (1894) and its misrepresentation, most
prominently by Böhm-Bawerk and Bortkiewicz.
What's important is the centrality of Marx’s value theory
to Marxism as a totality. If CAPITAL is the theoretical center of gravity of
Marx’s thought, then a correct interpretation of the categories and concepts of
what is standardly called Marx’s "labor theory of value"--value;
use-value and exchange-value; the commodity, money, and capital forms of value;
abstract and concrete labor; wage-labor; variable and constant capital; and
surplus value--will prove decisive for the understanding of Marxism. However
what counts as the right meaning of these categories and concepts is as
contested today as it was a century ago.
Bypassing the technical issues raised by THE NEW VALUE
CONTROVERSY, which are certainly crucial to pursue for anyone interested in the
project of recovering Marx’s Marxism for our time, we can begin by reflecting
on the larger significance of the appearance of this collection at this
juncture. We might think of the big picture this way. A century ago, arguments
that seemed authoritative claimed to demonstrate that Marx’s theory of value
was internally inconsistent. The "mainstream" simply accepted this
conclusion at face value and adduced it as grounds to dismiss Marxist theory as
such as resting on a mistake.
On the other side of the aisle, Marxian economists have
had to discern whether Bortkiewicz’s and other "corrections" of
Marx’s original theory count as progress within a "Marxist" paradigm,
or whether the project Bortkiewicz launched is really ANOTHER THEORY of
political economy that had too hastily concluded that Marx’s theory as it stood
was internally inconsistent. Unfortunately the "corrected" versions
of Marx's theory both violate the dialectical structure of CAPITAL and mangle
his most significant conclusions. The significant claim of TSSI is that Marx’s
own fundamental theoretical results can be shown to stand, that his theory is
coherent, and that the longstanding charge of internal inconsistency has been
refuted.
Undoubtedly these are high stakes. As the editors argue,
"At stake is the nature of scientific endeavor" (xiii). If the
Bortkiewicz interpretation (about which I will say more below) is NOT the
theory of Marx, "this matters," because "the exclusion of Marx
is one of the cardinal implicit tenets, one of the principal ideological
pillars, of modern economics....[The] standard basis for this exclusion is
precisely and only the assertion that his body of work is inconsistent. The
implications of TSSI therefore reach beyond Marxist economists to call into
question the foundations of neoclassical economics as a whole" (xiii).
The most worthwhile aspect of the volume is its
demonstration of the merits of a new return to the ORIGINAL presentation of Marx’s
theory, on its own terms, within the framework of the three volumes of CAPITAL
(as well as the GRUNDRISSE, THEORIES OF SURPLUS VALUE, and Marx’s other
far-flung manuscripts). I will not be able to discuss several of the papers in
this collection, which are eclectic and cannot be said to share a unified
theoretical perspective. But in their totality, they make it plain that the
return to the text of Marx is charged with explosive potential in the academy
and beyond it.
SCIENTIFIC THEORY--'EASIER AND RIGHT'
Perhaps Alan Freeman draws the most significant
conclusion for Marxist-Humanists. In contrast to what Andrew Kliman calls
"the ‘Whig interpretation’ of the history of economics" (20)--the
view that predecessor scientific theories are routinely superceded by successor
theories "in a unilinear progressive movement of theory"--Freeman
begins his paper with a meditation on the Copernican Revolution: Copernicus
achieved his basic conception from an older, even archaic source, Aristarchus
of Samos (55). What this demonstrates is that the scientific progress achieved
by Copernicus and Galileo "did not come through a forward development of
[the] dazzling system [of Eudoxus, Aristotle, and Ptolemy]. It arose in a
return to an earlier system of thought with two, and only two, features to
recommend it. It was easier, and it was right" (55).
Freeman invites us at least to consider a second example
of this more complex account of what constitutes scientific advance than the
simple-minded "Whig interpretation." He goes on to show not only that
Marx’s original theory has the features of elegance and explanatory power that
typically make for superior scientific theories, but also, on the precedent of
Aristarchus, the fact that Marx wrote in the 19th century is more or less
irrelevant to the contemporary mandate to find our way again to a theory that
can explain, among other things, "the outstanding phenomena of the modern
global market: mass world poverty in the midst of technical progress and
recurrent crisis" (65).
If TSSI can achieve the fertile results several of these
papers demonstrate, then Freeman is surely right to conclude "that the
time is right to begin work in a new empirical framework, to relaunch Marx’s
original project and the purpose of his enquiry: to discover the law of motion
of the modern economy" (65). I would only add that this discovery is
crucial to projecting a genuinely post-capitalist alternative to the vicious
present of capitalist society.
For a century now, the controversy in value theory has
been so oriented by Bortkiewicz’s classic criticisms of Marx’s system that the
historical reference is still an indispensable starting point. Bortkiewicz had
argued that Marx was guilty of self-contradiction in his solution to the
notorious "transformation problem." If he were right, then Marx’s
theory (in its "uncorrected" version) would run aground on the shoals
of internal inconsistency.
Marxists rightly deplore the exclusion of value theory
from mainstream economics as unscientific and ideological (a principal concern
of the editors’ lucid "Introduction," ix-xx), but on the other hand,
Bortkiewicz’s "correction" of Marx has had the ironic fate of
supplying a rationale and a justification for censorship at the same time it furnishes
a prominent school of Marxian economics with its scientific self-understanding.
If Bortkiewicz had successfully demonstrated that Marx’s solution is internally
inconsistent, then the theory of value would lapse into the incoherence and
absurdity its detractors have long insisted upon. Yet to the extent that
Bortkiewicz also advanced a "correction" of Marx’s "error,"
it has been taken by major Marxist economists, represented in this volume by
David Laibman, to signpost a supposedly royal road to a "20th century
Marxism" (Laibman, 4), that is, the "Bortkiewicz-Sraffa-Dobb-Seton
simultaneous equations, towards which," Laibman argues, "all
roads...apparently lead!" (12). Contrary to Laibman's assertion that Marx
himself was the first "20th century Marxist," this rewriting of Marx
has occurred to the detriment of Marx's own method of presentation.
NEW ERA, OLD ERROR
To this list of names could be added Sweezy, Meek,
Okishio, Morishima, Shaikh, Steedman, and others including Laibman himself,
establishing a canon of "20th century Marxism," post-Bortkiewicz,
through which alone, Laibman argues, lies the "one path leading from the
19th to the 21st [century]" (16). The other side to the new value
controversy, represented in this volume, includes Freeman, Kliman, Ted McGlone,
Fred Moseley, Bruce Roberts, Alejandro Ramos Martinez, Massimo De Angelis, and
Stavros D. Mavroudeas, whom Laibman calls the "new orthodox
Marxists," or "NOMists" (1). Collectively, they dispute what
could be called the "standard" or "20th-century Marxist"
view.
They question whether the solutions to the transformation
problem (among other issues) through the system of simultaneous equations
inspired by Bortkiewicz count as "corrections" of (and therefore
implicitly improvements upon) Marx’s own theory; or whether, as the editors put
it, although it is "almost invariably portrayed within Marxian economics
as ‘Marx’s theory of value’, [it] is actually a distinct theory in its own
right" (xi).
Arrayed against this "distinct theory," the
so-called NOMists defend two broad alternatives they claim to represent as
Marx’s theory in CAPITAL and other major texts: TSSI, and a simultaneist,
single-system interpretation (SSSI), defended in this volume by Fred Moseley
and Bruce Roberts. Leaving SSSI to one side, Andrew Kliman, in "Marx
versus the ‘20th Century Marxists’: a Reply to Laibman" (19-35),
summarizes what is fundamentally at issue for TSSI: TSSI "diverges from
the standard [interpretation] in two simple but crucial ways. Whereas the ‘20th
century Marxists’ represent values and prices as two separate, timelessly
determined, equation systems, the TSS interpretation argues that Marx conceived
of values and prices as magnitudes determined WITHIN HISTORICAL TIME and
INTERDEPENDENTLY. ‘Interdependently’ means that the ‘value’ rate of profit,
s/(c+v) enters into the determination of (output) prices, while the sums of
value advanced to production, constant and variable capital, depend partly on
(input) prices" (22).
For readers interested in coming to a bottom line,
Kliman’s Table 2.1 (23) is concise and illuminating. This table records how
many of "Marx’s Theoretical Results" each of the alternatives is able
to replicate. The three alternatives are "standard, simultaneous
dual-system" interpretation (represented by Laibman), SSSI (represented by
Moseley and Roberts), and TSSI (represented by Kliman, McGlone, Freeman, and
others). Of 12 results--grouped into five "equalities and
inequalities" (notably including Marx’s total price = total value and
total profit = total surplus value) and seven "relations of
determination" (notably including the thesis that "mechanization
itself can reduce [the] profit rate," contrary to Okishio’s 1961 theorem
purporting to refute Marx’s law of the tendential fall in the profit rate; and
also that "variations in living labor performed affect [the] profit
rate")--Kliman shows that the "standard, simultaneous
dual-system" interpretation replicates only two of Marx’s theoretical
results, negating fully ten of them; that the SSSI successfully replicates the
five equalities and inequalities, but none of the relations of determination;
and that only TSSI fully replicates all twelve of Marx’s theoretical results.
WITHOUT
'LABOR-TIME'
Obviously, much more is at stake than a mere tabulation.
Kliman points to at least the following conclusions: TSSI is able to account
for the conclusions that Marx deemed to be the most important and central to
his value theory; it is able to account for these conclusions in a way that
demonstrates the internal consistency and coherence of that theory, contra
Bortkiewicz and his progeny, so that it no longer stands in need of the
time-honored "correction"; and it therefore also shows that the
exclusion of Marx’s theory from the canon of mainstream (neoclassical) economics
is baseless, since Marx’s value theory is neither internally inconsistent nor
incoherent under the TSSI interpretation. The contrary charge had constituted
the grounds upon which the mainstream concluded (or rationalized) that Marxian
economics did not deserve serious intellectual and scientific engagement.
Finally, Kliman concludes: "The source of the
problem is simultaneous valuation itself. When one stipulates that the
magnitude of a commodity’s value is identical at two different moments in time,
no matter how much the labour-time needed to produce it has changed, one has
stipulated that labour-time is irrelevant to the determination of its
value" (28; emphasis in the original). The key to mutual or simultaneous
valuation is the equalization of inputs with outputs (whether prices or
values). This is the principled atemporalism that Bortkiewicz and his
successors theorized as a requirement of the transformation of values into
prices of production (concerning the controversial ninth chapter of the third
volume of CAPITAL, "Formation of a General Rate of Profit (Average Rate of
Profit), and Transformation of Commodity Values into Prices of
Production"). Kliman’s point here is that a theory that entailed the
conclusion that "labour-time is irrelevant to the determination of [a
commodity’s] value," whatever other sort of theory it might be, is NOT
MARX'S THEORY OF VALUE.
The technical issues in play in THE NEW VALUE CONTROVERSY
would require a lengthier exposition than can be offered in this review.
Suffice it to say that our lexicon and argument would be organized on the basis
of three related terms of opposition: "simultaneism" versus
"temporalism" (what Bortkiewicz originally called
"successivism"); the dual-system interpretation of values and prices
as separate, tenseless equation systems, versus the single-system
interpretation; and the Sraffa-inspired view, which we can all
"physicalism"--the reduction of the value composition of capital to
its technical composition alone--VERSUS the view defended in this volume by
McGlone and Kliman ("The Duality of Labour," 135-50), the punch line
of which is this:
"What goes unrecognized in [the] view [that the
‘physiological’ character of abstract labour implies its existence
independently of society and history] is that the SPECIFIC SOCIAL CHARACTER of
the process of production SEPARATES the workers’ physiological activity from
their thinking, desires, and intentions.... What goes unrecognized, in other
words, is that abstract labour is labour that has the character of being merely
physiological, mere exertion, labour alienated from the workers’ personality
and human being as a whole. The workers’ real work, in other words, has a dual,
self-divided character (143)."
In contrast, Sraffian physicalism has no way of accounting
for "the specific social character of the process of production,"
specifically in the capitalist mode of production (the production process as
the valorization process).
MARX'S
INDISPENSABLE METHOD
The physicalism (as it is being labeled here) of the
"standard" interpretation goes hand-in-glove with simultaneous rather
than temporal valuation, and also a dual-system interpretation as opposed to a
single-system one. As Moseley puts it, Sraffa-inspired readings of Marx’s
theory take "the fundamental givens in Marx’s theory [to be] the physical
quantities of the technical conditions of production and real wage" (44).
But this physicalist substitution of "technical conditions plus real
wages" for Marx’s own value categories (crucially including "abstract
labor") renders the theory of value redundant (as Paul Samuelson famously
argued in 1971).
What is at issue, therefore, is the status and role of
Marx’s value categories, against the claim that Marx-like results can just as
well be derived directly from the physical data without recourse to the
specific social character of the capitalist mode of production (the milieu in
which the value categories not only make sense but also explain the capitalist
social relations that otherwise fall through the nets).
THE NEW VALUE CONTROVERSY AND THE FOUNDATIONS OF
ECONOMICS does us the favor of projecting new life into a theory cast by too
many too hastily into the dustbin of history. Moreover if we want an alternative to
capitalist society, we need to know what capital is. Nothing is more
indispensable to this aim than the right interpretation of Marx’s theory of
value, as Marx himself insisted on occasions too numerous to count.