Saturday, March 17, 2018
“Marx’s Refusal of the Labour Theory of Value” by David Harvey
It is widely believed that
Marx adapted the labour theory of value from Ricardo as a founding concept for
his studies of capital accumulation. Since the labour theory of value has
been generally discredited, it is then often authoritatively stated that Marx’s
theories are worthless. But nowhere, in fact, did Marx declare his allegiance
to the labour theory of value. That theory belonged to Ricardo, who
recognized that it was deeply problematic even as he insisted that the question
of value was critical to the study of political economy. On the few
occasions where Marx comments directly on this matter,1 he
refers to “value theory” and not to the labour theory of value. So what,
then, was Marx’s distinctive value theory and how does it differ from the
labour theory of value?
The answer is (as usual)
complicated in its details but the lineaments of it can be reconstructed from
the structure of the first volume of Capital.2
Marx begins that work with an
examination of the surface appearance of use value and exchange value in the
material act of commodity exchange and posits the existence of value (an
immaterial but objective relation) behind the quantitative aspect of exchange
value. This value is initially taken to be a reflection of the social (abstract)
labour congealed in commodities (chapter 1). As a regulatory norm
in the market place, value can exist, Marx shows, only when and where commodity
exchange has become “a normal social act.” This normalization depends upon the
existence of private property relations, juridical individuals and perfectly
competitive markets (chapter 2). Such a market can only work with the
rise of monetary forms (chapter 3) that facilitate and lubricate exchange
relations in efficient ways while providing a convenient vehicle for storing
value. Money thus enters the picture as a material representation of
value. Value cannot exist without its representation. In chapters 4
through 6, Marx shows that it is only in a system where the aim and object of
economic activity is commodity production that exchange becomes a necessary as
well as a normal social act. It is the circulation of money as capital
(chapter 5) that consolidates the conditions for the formation of capital’s
distinctive value form as a regulatory norm. But the circulation of capital
presupposes the prior existence of wage labour as a commodity that can be
bought and sold in the market (chapter 6). How labour became such a
commodity before the rise of capitalism is the subject of Part 8 of Capital, which
deals with primitive or original accumulation.
The concept of capital as a
process – as value in motion – based on the purchase of labour power and means
of production is inextricably interwoven with the emergence of the value form.
A simple but crude analogy for Marx’s argument might be this: the human
body depends for its vitality upon the circulation of the blood, which has no
being outside of the human body. The two phenomena are mutually
constitutive of each other. Value formation likewise cannot be understood
outside of the circulation process that houses it. The mutual interdependency
within the totality of capital circulation is what matters. In capital’s
case, however, the process appears as not only self-reproducing (cyclical) but
also self-expanding (the spiral form of accumulation). This is so because
the search for profit and surplus value propel the commodity exchanges, which
in turn promote and sustain the value form. Value thereby becomes an
embedded regulatory norm in the sphere of exchange only under conditions of
capital accumulation.
Figure 1
While the steps in the
argument are complicated, Marx appears to have done little more than synthesize
and formalize Ricardo’s labour theory of value by embedding it in the totality
of circulation and accumulation as depicted in Figure 1. The sophistication and
elegance of the argument have seduced many of Marx’s followers to thinking this
was the end of the story. If this was so then much of the criticism launched
against Marx’s theory of value would be justified. But this is not the
end. It is in fact the beginning. Ricardo’s hope was that the labour
theory of value would provide a basis for understanding price formation.
It is this hope that subsequent analysis has so ruthlessly and properly
crushed. Marx early on understood that this was an impossible hope even
as he frequently slipped (I suspects for tactical reasons) from values to
prices in his presentations as if they were roughly the same thing. In other
instances he studied systematic divergences. In Volume 1 Marx recognizes
that things like conscience, honour and uncultivated land can have a price but
no value. In Volume 3 of Capital he explores how the
equalization of the rate of profit in the market would lead commodities to
exchange not at their values but according to so-called “prices of production.”
But Marx was not primarily
interested in price formation. He has a different agenda. Chapters 7 through 25
of Volume 1 describe in intricate detail the consequences for the labourer of
living and working in a world where the law of value, as constituted through
the generalization and normalization of exchange in the market place, rules.
This is the famous transition, at the end of chapter 6, where Marx invites us
to leave the sphere of circulation, “a very Eden of the rights of man” where
“alone rule Freedom, Equality, Property and Bentham.’ And so we dive into “the
hidden abode of production” where we shall see “not only how capital produces
but, how capital is produced.” It is only here, also, that we will see how
value forms.
The coercive laws of
competition in the market force individual capitalists to extend the working
day to the utmost, threatening the life and well-being of the labourer in the
absence of any restraining force such as legislation to limit the length of the
working day (chapter 10). In subsequent chapters, these same coercive
laws push capital to pursue technological and organizational innovations, to
mobilize and appropriate the labourers’ inherent powers of cooperation and of
divisions of labour, to design machinery and systems of factory production, to
mobilize the powers of education, knowledge, science and technology, all in the
pursuit of relative surplus value. The aggregate effect (chapter 25) is
to diminish the status of the labourer, to create an industrial reserve army,
to enforce working conditions of abject misery and desperation among the
working classes and to condemn much of labour to living under conditions of
social reproduction that are miserable in the extreme.
This is what Diane Elson, in
her seminal article on the subject, refers to as “the value theory of
labour.” It is a theory that focuses on the consequences of value
operating as a regulatory norm in the market for the experience of labourers
condemned by their situation to work for capital. These chapters also explain
why Bertell Ollman considers Marx’s value theory to be a theory of the
alienation of labour in production rather than a market phenomenon.3
But the productivity and
intensity of labour are perpetually changing under pressures of competition in
the market (as described in the later chapters of Capital). This
means that the formulation of value in the first chapter of Capital is
revolutionized by what comes later. Value becomes an unstable and
perpetually evolving inner connectivity (an internal or dialectical relation)
between value as defined in the realm of circulation in the market and value as
constantly being re-defined through revolutions in the realm of production.
Earlier in the Grundrisse(pp. 690-711), Marx had even speculated, in a
famous “fragment on machines,” that the embedding of human knowledge in fixed
capital would dissolve the significance of value altogether unless there were
some compelling forces or reasons to restore it.4
In Volume 3 of Capital Marx makes much of the impact of technological
changes on values leading to the thesis on the falling rate of profit.
The contradictory relation between value as defined in the market and value as
reconstructed by transformations in the labour process is central to Marx’s
thinking.
The changing productivity of
labour is, of course, a key feature in all forms of economic analysis. In
Marx’s case, however, it is not the physical labour productivity emphasized in
classical and neoclassical political economy that counts. It is labour productivity
with respect to surplus value production that matters. This puts the internal
relation between the pursuit of relative surplus value (through technological
and organizational innovations) and market values at the center of Marx’s value
theory.
A first cut at Marx’s value
theory, I conclude, centers on the constantly shifting and contradictory unity
between what is traditionally referred to as the labour theory of value in the
sphere of the market (as set out in the first six chapters of Capital) and
the value theory of labour in the sphere of production (as analyzed in chapters
7 to 25 of Capital).
But the materials presented in
chapter 25 of Capital suggest that it is not only the experience in
the labour process that is at stake in the value theory. Marx describes
the conditions of social reproduction of all those demoted into the industrial
reserve army by the operation of the general law of capital accumulation (the
subject of chapter 25). He cites official reports concerning public
health in rural England (most notably those by a certain Dr Hunter) and other
accounts of daily life in Ireland and Belgium, alongside Engels’ account
of The Condition of the English Working Class in 1844. The consensus
of all these reports was that conditions of social reproduction for this
segment of the working class were worse than anything ever heard of under
feudalism. Appalling conditions of nutrition, housing, education,
overcrowding, gender relations and perpetual displacement were
exacerbated by punitive public welfare policies (most notably the Poor Laws in
Britain). The distressing fact that nutrition among prisoners in jail was
superior to that of the impoverished on the outside is noted (alas, this is
still the case in the United States). This opens the path towards
an important extension of Marx’s value theory. The consequences of an
intensification of capitalist competition in the market (including the search
for relative surplus value through technological changes) produce deteriorating
conditions of social reproduction for the working classes (or significant
segments thereof) if no compensating forces or public policies are put in place
to counteract such effects.
In the same way that the value
theory of labour is foundational for Marx’s approach to value, so “a value
theory of social reproduction” emerges as an important focus for study.
This is the prospect that Marx opens up in the last sections of chapter 25 of
volume 1 of Capital. This is the focus of those Marxist feminists who have
worked assiduously over the past forty years to construct an adequate theory of
social reproduction.5
Marx (Capital, Volume 1,
p.827) cites an official report on the conditions of life of the majority of
workers in Belgium who find themselves forced “to live more economically than
prisoners” in the jails. Such workers “adopt expedients whose secrets are only
known (to them): they reduce their daily rations; they substitute rye bread for
wheat; they eat less meat, or even none at all, and the same with butter and
condiments; they content themselves with one or two rooms where the family is
crammed together, where boys and girls sleep side by side, often on the same mattress;
they economize on clothing, washing and decency; they give up the diversions on
Sunday; in short they resign themselves to the most painful privations.
Once this extreme limit has been reached the least rise in the price of
food, the shortest stoppage of work, the slightest illness, increases the
worker’s distress and brings him to complete disaster; debts accumulate, credit
fails, the most necessary clothes and furniture are pawned, and finally the
family asks to be enrolled on the list of paupers.” If this is a
typical outcome of the operation of the capitalist law of value accumulation
then there is a deep contradiction between deteriorating conditions of social
reproduction and capital’s need to perpetually expand the market. As Marx notes
in Volume 2 of Capital, the real root of capitalist crises lies in the
suppression of wages and the reduction of the mass of the population to the
status of penniless paupers. If there is no market there is no value. The
contradictions posed from the standpoint of social reproduction theory for
values as realized in the market are multiple. If, for example, there are
no healthy, educated, disciplined and skilled labourers in the reserve army
then it can no longer perform its role.
The dialectical relations between
competitive market processes, surplus value production and social reproduction
emerge as mutually constitutive but deeply contradictory elements of value
formation. Such a framework for analysis offers an intriguing way to
preserve specificities and differences at the theoretical level of value theory
without abandoning the concept of the totality that capital perpetually
re-constructs through its practices.
Other modifications,
extensions and elaborations of the value theory need to be considered.
The fraught and contradictory relation between production and realization rests
on the fact that value depends on the existence of wants, needs and desires
backed by ability to pay in a population of consumers. Such wants, needs and
desires are deeply embedded in the world of social reproduction. Without
them, as Marx notes in the first chapter of Capital, there is no
value. This introduces the idea of “not-value” or “anti-value” into the
discussion. It also means that the diminution of wages to almost nothing will
be counterproductive to the realization of value and surplus value in the
market. Raising wages to ensure “rational consumption” from the standpoint of
capital and colonizing everyday life as a field for consumerism are crucial for
the value theory.
What happens, furthermore,
when the presumption of perfect competition gives way to monopoly in general
and to the monopolistic competition inherent in the spatial organization of
capital circulation poses another set of problems to be resolved within the
value framework. I have recently suggested, following on some relevant
formulations by Marx, that the usual acceptance of the idea of a single
expression of value be replaced by recognizing a variety of distinctive
regional value regimes within the global economy.
Marx’s value form, I conclude,
is not a still and stable fulcrum in capital’s churning world but a constantly
changing and unstable metric being pushed hither and thither by the anarchy of
market exchange, by revolutionary transformations in technologies and
organizational forms, by unfolding practices of social reproduction, and
massive transformations in the wants, needs and desires of whole populations
expressed through the cultures of everyday life. This is far beyond what
Ricardo had in mind and equally far away from that conception of value usually
attributed to Marx.
NOTES
1. See “Notes on Adolph Wagner,”
in Marx., K., Value: Studies by Marx (ed. A. Dragstedt), London: New
Park Publications, 1976.
2. Much of what follows derives
from Harvey, D., Marx, Capital and the Madness of Economic Reason, London,
Profile Books; New York, Oxford University Press, 2017
3. Elson, D., “The Value Theory
of Labour,” in Elson, D. (ed.) Value: the Representation of Labour in
Capitalism, London, CSE Books, 1979; Ollman,
4. B., Alienation, London,
Cambridge University Press, 1971.
5. The so-called “fragment on
machines” has been widely debated in recent years. See Carlo Vercellone, “From
Formal Subsumption to General Intellect: Elements for a Marxist Reading of the
Thesis of Cognitive Capitalism,” Historical Materialism15 (2007) 13–36
6. See the recent survey and
collection in Bhattacharya, T., Social Reproduction Theory: Remapping
Class, Recentering Oppression, London, Pluto Press, 2017.
US grants $60m to build mind-reading hardware
https://www.aljazeera.com/news/2018/02/grants-60m-build-mind-reading-hardware-180211182225695.html
Senate Expands 'Lobbyist Bill' to Deregulate Real Estate
https://www.youtube.com/watch?v=XwwXv6RkYTk
Coca-Cola Sees Public Health Debate as 'a Growing War,' Documents Reveal
Coca-Cola intentionally funded
the Global Energy Balance Network (GEBN) as a "weapon" in a
"growing war between the public health community and private
industry" on the causes of obesity, according to a press release sent to
EcoWatch by consumer group U.S.
Right to Know.
The quotes come from documents
obtained in a Freedom of Information Request filed by U.S. Right to Know that
formed the basis for a study published Wednesday in the Journal of
Epidemiology and Community Health. The study's authors focused on the documents
because they definitively proved that Coca-Cola funded the GEBN with the
intention of influencing public health debate in their favor.
"[C]onclusions about the
intentions of food and
beverage companies in funding scientific organisations have been prevented by
limited access to industry's internal documents," the abstract said. The
revealed documents therefore allowed the study's authors to draw those
conclusions.
The documents further revealed
that Coca-Cola intended the GEBN to appear as an "honest broker" in
the national conversation on obesity, but that it's actual purpose was to
"promote practices that are effective in terms of both policy and
profit," the abstract said.
The GEBN was a non-profit
dedicated to promoting the idea that exercise, not calorie counting, was the
key to weight-loss and
health. It was presided over by scientists from the University of Colorado, the
University of South Carolina and West Virginia University. The group imploded
after a series of events initiated when The New York Times reported in August 2015 that it was
funded by Coca-Cola. Then, in November of that year, The Associated Press
obtained emails showing that the soft-drink company had played a major role in
shaping the group's mission and branding, even instructing it not to use blue
in its logo, to avoid associations with Pepsi, CBS reported. The group disbanded a week later.
When the scandal broke,
Coca-Cola CEO Muhtar Kent told the Associated Press, "[I]t has become
clear to us that there was not a sufficient level of transparency with regard
to the company's involvement with the Global Energy Balance Network. Clearly,
we have more work to do to reflect the values of this great company in all that
we do."
The newly-released documents,
however, suggest that transparency was never the goal, and that the shadiness
of the GEBN's funding reflected the company's values rather accurately.
Even though Coca-Cola has
tried to buy scientific weight for its claims that exercise is more important
for combating obesity than diet, the scientific consensus actually runs the
other way, The Times reported in the article revealing the source of the GEBN's
funding. According to the Harvard T.H. Chan School of Public Health, drinking sugary
drinks regularly increases the risk of type 2 diabetes, gout, heart disease,
and obesity.
The authors of the Journal of
Epidemiology and Community Health study expressed concern that Coca-Cola is
borrowing tactics from another industry attempting to sell unhealthy products.
"Coca-Cola's proposal for
establishing the GEBN corroborates concerns about food and beverage
corporations' involvement in scientific organisations and their similarities
with Big Tobacco," the abstract said.
Just because the GEBN
disbanded doesn't mean Coca-Cola has stopped trying to influence public policy.
In February, U.S. Right to Know sued the Center for Disease Control (CDC) for
documents about its relationship to the soft-drink giant. Former CDC chief Dr.
Brenda Fitzgerald, who resigned in January after it was revealed she'd bought
shares in a tobacco company, also had ties to Coca-Cola. As Georgia Public
Health Commissioner she had co-run with the company an anti-obesity program
called Georgia SHAPE that promotes exercise but doesn't mention diet, U.S.
Right to Know reported.
Do atoms, genes, and electrons actually exist?
Do atoms, genes, electrons,
fields, and other theoretical entities in the physical sciences actually exist?
Excerpt from THE
PHILOSOPHY OF SCIENCE An Introduction, by STEPHEN TOULMIN, (London:
Hutchinson’s University Library, 1953), pages 135-137:
A child who had read that the
equator was 'an imaginary line drawn round the centre of the earth' might be
struck by the contours, parallels of latitude and the rest, which appear on
maps along with the towns, mountains and rivers, and ask of them whether they
existed. How should we reply? If he asked his question in the bare words,
"Do contours exist?", one could hardly answer him immediately:
clearly the only answer one can give to this question is "Yes and
No." They 'exist’ all right, but do they exist? It all depends on
your manner of speaking. So he might be persuaded to restate his question,
asking now, "Is there really a line on the ground whose height is
constant?" ; and again the answer would have to be "Yes and No",
for there is (so to say) a 'line', but then again not what you might call a
line. . . . And so the cross-purposes would continue until it was made clear
that the real question was: "Is there anything to show for contours
anything visible on the terrain, like the white lines on a tennis court? Or are
they only cartographical devices, having no geographical counterparts?"
Only then would the question be posed in anything like an unambiguous manner.
The sense of 'exists' in which a child might naturally ask whether contours
existed is accordingly one in which 'exists’ is opposed not to 'does not exist
any more’ or to 'is non-existent’, but to 'is only a (cartographical) fiction’.
This is very much the sense in
which the term 'exists’ is used of atoms, genes, electrons, fields and other
theoretical entities in the physical sciences. There, too, the question
"Do they exist?" has in practice the force of "Is there anything
to show for them, or are they only theoretical fictions?" To a working
physicist, the question "Do neutrinos exist?" acts as an invitation
to 'produce a neutrino', preferably by making it visible. If one could do this
one would indeed have something to show for the term 'neutrino', and the
difficulty of doing it is what explains the peculiar difficulty of the problem.
For the problem arises acutely only when we start asking about the existence of
sub-microscopic entities, i.e. things which by all normal standards are
invisible. In the nature of the case, to produce a neutrino must be a more
sophisticated business than producing a dodo or a nine-foot man. Our problem is
accordingly complicated by the need to decide what is to count as 'producing’ a
neutrino, a field or a gene. It is not obvious what sorts of thing ought to
count: certain things are, however, generally regarded by scientists as
acceptable for instance, cloud-chamber pictures of a-ray tracks, electron
microscope photographs or, as a second-best, audible clicks from a Geiger
counter. They would regard such striking demonstrations as these as
sufficiently like being shown a live dodo on the lawn to qualify as evidence of
the existence of the entities concerned. And certainly, if we reject these as
insufficient, it is hard to see what more we can reasonably ask for: if the
term 'exists’ is to have any application to such things, must not this be it?
What if no such demonstration
were possible? If one could not show, visibly, that neutrinos existed, would
that necessarily be the end of them? Not at all; and it is worth noticing what
happens when a demonstration of the preferred type is not possible, for then
the difference between talking about the existence of electrons or genes, and
talking about the existence of dodos, unicorns or nine-foot men becomes
all-important. If, for instance, I talk plausibly about unicorns or nine-foot
men and have nothing to show for them, so that I am utterly unable to say, when
challenged, under what circumstances a specimen might be, or might have been
seen, the conclusion may reasonably be drawn that my nine-foot men are
imaginary and my unicorns a myth. In either case, the things I am talking about
may be presumed to be non-existent, i.e. are discredited and can be written
off. But in the case of atoms, genes and the like, things are different: the
failure to bring about or describe circumstances in which one might point and
say, "There's one!", need not, as with unicorns, be taken as
discrediting them. Not all those theoretical entities which cannot be shown to
exist need be held to be non-existent: there is for them a middle way. Certainly
we should hesitate to assert that any theoretical entity really existed until a
photograph or other demonstration had been given. But, even if we had reason to
believe that no such demonstration ever could be given, it would be too much to
conclude that the entity was non-existent; for this conclusion would give the
impression of discrediting something that, as a fertile explanatory concept,
did not necessarily deserve to be discredited. To do so would be like refusing
to take any notice of contour lines because there were no visible marks
corresponding to them for us to point to on the ground.
[...]
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