THE LABOR THEORY OF VALUE REVISITED
Heilbroner, Robert L.
The following article is excerpted from Marxism: For and Against, by Robert L. Heilbroner, © 1980 by Robert L. Heilbroner, to be published by W. W. Norton & Co. late in February. I Marx's view...
...We do not know, and have no way of measuring, how much "abstract labor" may be embodied in a General Motors car, or whether there is a difference between the labor power for which General Motors pays its wages and the labor it receives in exchange...
...As William Petty says, labour is the father of material wealth, the earth is its mother...
...Marx's contribution was not onl) to remove the disguise that allowed "land' and "capital" to appear as things, not socia' relations, but also to explain how the forces generated by the capitalist mode could systematically depress the value of labor power below the value that it would bequeath to commodities...
...No conventional explanation of the world of commodities can ever again be accepted at face value...
...To a limited extent Adam Smith acknowledged the source of all profits in a "deduction" from the reward to labor and , to a bolder but still incomplete degree, Ricardo did the same...
...Capital, Vol...
...but a very great quantity of other goods may frequently be had in exchange for it...
...Thus capitalism becomes, as Marx describes it, "an enchanted topsy-turvy world, in which Monsieur le Capital and Madame la Terre do their ghost walking as social characters and at the same time as mere things...
...Nonetheless, in his separation of labor into two constituents—a use-value for the capitalist, determined by the eventual exchange value of the products that labor would create, and an exchange value for the laboring power of the worker, determined by the subsistence wage required by the laborer— Marx discovered what he believed to be the innermost secret of capitalism...
...Commodities are useful, he notes, insofar as they are combinations of two elements— matter and labor...
...What we find at first, however, is something already discovered and explored by the classical economists...
...In this way, Marx's analysis of the commodity gives us a truly socioanalytic insight into the system...
...There are numerous problems associated with the labor theory of value that cannot be discussed here...
...This means, however, that there is no objective sense in the assertion that one gross national product is larger than another...
...What we find, instead, is that society manages to establish ratios that determine, for all its members, the terms on which deer can be exchanged for salmon (or to generalize the transaction, for money...
...tion in the XVIllth Century (London: Jonathan Cape 1952...
...Nothing 91 is more useful than water: but it will purchase scarce any thing...
...and the labor force becomes the provider of this homogenized labor power because it has no other way of securing a livelihood...
...I, p. 165...
...I, p. 280...
...In fact, however, there is no proof that surplus value existed even under these conditions...
...For one of the conditions of selling labor power as a commodity is that the working person abandons any claim to the product he or she creates...
...It is because of this confusion that even the most sophisticated economists speak of "land" as if the soil itself, and not the landlord, were being remunerated for its assistance to output, or as if the rewards "due" to capital were paid directly to a machine and not its owner...
...The answer is that these and other apparently basic concepts or institutions reveal themselves from Marx's perspective to be aspects of the system that can only be understood after we have grasped its quintessential nature...
...Its importance lies in its identification of the class struggle and the fetishism of commodities as the essential elements in producing and rationalizing the surplus that is produced by one class and appropriated by another...
...4 This assertion that labor is the regulator of exchange values, or prices, is commonly thought to be "the labor theory of value" on which the Marxian analysis of capitalism is conceptually based...
...To put it differently, wages would rise if labor were stronger, and labor would be stronger if its bargaining position were not undermined by economic processes and political policies rooted in the capitalist system...
...For Aristotle, see Thi Nicomachean Ethics, Book V, 3 Capital, Vol...
...In some industries—those employing farm workers, for example—the superior bargaining strength of the employer is still patently in evidence...
...But he also relieves the squeeze on surplus value by matching an increase in the demand for labor with an increase in its supply...
...that this abstract labor testifies to the social and technical relationships of a specific mode of production...
...Values, in Marx's scheme, reflect only the outpouring of labor energies, reduced to some common denominator...
...Marx would therefore have concurred entirely with Ricardo when the latter wrote: Suppose that in the early stages of society, the bows and arrows of the hunter were of equal value, and of equal durability, with the canoes and implements of the fisherman, both being the produce of the same quantity of labour...
...14 For a recent effort to reconcile the theory of surplus value with corporate profits, see Ernest Mandel, Late Capitalism, Chap...
...IS An often heard criticism is that the validity of the labor theory of value is vitiated by the extraordinary power of modern-day technology...
...This leads to a very important consequence...
...7 Capital, Vol...
...Even this is a question difficult to answer with certitude...
...So far we have concentrated mainly on the peculiar nature of the labor that endows commodities under capitalism with exchange value...
...For there is nothing in the concrete reality of labor that qualifies it to be a common denominator of "value" within commodities...
...From this more follows...
...But labor power offered on the market as a commodity, Marx pointed out, also has an exchange value...
...For the two-fold nature of a commodity—on the one hand a concrete thing indisputably possessing use-values, on the other a container of invisible social relationships—brings a special and far-reaching mystification to our perception of capitalist realities...
...If there is surplus value available from hiring labor, one would think that employers would hire more labor to enlarge the base from which they can draw profits...
...Marx calls this mystification the fetishism of commodities...
...It is an heuristic rather than an operational concept...
...Does an imbalance in bargaining strength and an undertow of technological unemployent still bring about a permanent differential between the price of labor power—the wages paid to labor—and the value of the labor that is obtained for the payment of these wages...
...Commodities are objects that embody usefulness or pleasures for mankind—use-values as Marx called them, following the lead of the classical economists...
...On the contrary, labor as we see it in life consists of actions as different and as uncomparable as the traditional apples and oranges...
...I. (New York: First Vintage Book Edition 1977), p. 134...
...or Raymond de Lull, "It is seemly .. . that the knight, who rides and does a lord's work, should get his wealth from the things on which his men spend much toil and fatigue...
...Yet, to our surprise, his socioanalysis of the system does not begin with a description of its historic origins, a matter that does not receive direct attention until the very end of Volume I of Capital...
...14 The existence of surplus value therefore remains an unprovable proposition exactly as it was in Marx's time...
...Therefore I think it is a reasonable presumption that labor power sells for less than it would in the absence of pressures produced directly or indirectly by capital itself...
...This is not only a useful clarification, but might result in a better definition of national income accounts...
...It is apparent, however, that employers do not combine labor and capital (machinery or other nonliving means of production) in the same ratios in all fields...
...Grundrb.se, pp...
...Marx assumes that competition creates a uniform rate of surplus value—that employers in all fields extract the same proportion of surplus value from their workers...
...BEFORE WE PROCEED to that question, however, there is an issue that requires further exploration...
...8 Capital, Vol...
...Value is an abstract concept, like energy in physics...
...The workman may be as necessary to his master as his master is to him," wrote Adam Smith, "but the need is not so immediate...
...Much more important, it is the key to the historic past of capitalism, the clue to the existence of social relationships essential for, but now half concealed from, capitalist society...
...Note that these depressant forces do not bear on any other commodity, for instance, the machines the capitalists produce and sell to one another...
...Therefore if labor is to become a means of comparing or measuring the values of commodities, the individualized and differentiated activities of hunters and fishermen, farmers and factory workers, must be reduced to a common kind, as undifferentiated and quantifiable as grain or coal...
...It therefore organizes its productive mechanism in such a way as to reduce the costs of production to a minimum...
...A diamond, on the contrary, has scarce any value in use...
...He also assumes, as do 98 all economists, that competition brings about a more or less uniform rate of profit that employers earn on their total capital...
...8 Were the hypnosis cast by the fetishism of commodities not so powerful, economics, which scrutinizes the mechanisms and institutions of capitalism, would not be the darling social science of bourgeois culture...
...My italics...
...These prices need not—and as Marx pointed out cannot— correspond precisely to values...
...This is another example of the fetishism of commodities, leading us to confuse machinery as a source of use-value with its role as a source of exchange value...
...Unemployment also continues to act as a pressure against wage raises...
...In turn, as Adam Smith was the first to point out, this impels capitalist manufacturers to seek what Smith called a "division of labour"—a method of reducing individuated and differentiated work to routine and regular motions...
...We see, then, that labour is not the only source of material wealth, of use-values produced by labour...
...The socioanalytic question is raised by the exchange values that commodities "possess...
...2 Wealth of Nations (1936), p. 28...
...Again since Aristotle, economists have been struck by, and have sought to explain, the relation between these two attributes of a commodity: The things which have the greatest value in use have frequently little or no value in exchange [writes Adam Smith...
...3 It is not, however, because of their usevalues that Marx chooses the commodity as his point of entry into capitalism...
...THE THEORY OF SURPLUS VALUE is central to Marx's socioanalysis, and we must take a moment to subject it to critical inquiry...
...On the contrary, what fascinates Marx—and what he chides the classical economists for having failed to note—is the existence of a fundamental question whose answer has already determined that quantities of labor will be the regulators of exchange relationships...
...Marx, along with Smith and Ricardo, recognized that "subsistence" was a sociological, not a biological, norm...
...The labor that goes into the creation of "labor power" is the living labor of the present and the stored-up labor of the past required to "make" the labor power offered on the market...
...Therefore, there can be no permanent layer of surplus available in machines, comparable to that which is maintained within labor power...
...9 But, under the capitalist order, a similar transfer of wealth from those who produce it to those who play little or no direct role in the production of wealth can be subjected, without any qualms, to the most precise "scientific" inquiry...
...I, p. 167...
...Capitalism is a socioeconomic system built on profit gained from production, not from plunder, sharp trading with foreigners, or feudal exactions...
...For a recent review of the problem, see Journal of Economic Literature, January 1971 and March 1972 and 1973...
...It is therefore as meaningless to add my utilities and yours as to add my hearing and yours...
...5 Thus a market for homogenized labor arises because dispossessed peasants and artisans are forced to offer their labor power in the form needed by the social class that now owns the farms and manufacturing establishments...
...Utilities and disutilities are held to be entirely private states of mind, with no public counterpart to "abstract labor...
...What appears to naive eyes as the external reality of work becomes, from a Marxist perspective, the specific form of work required by the capitalist process...
...Rather, the exchange values possessed by commodities are put there by society...
...And what was formerly only a simple unit of wealth called a commodity now appears, in Marx's words, as a "social hieroglyphic...
...97 As such, the theory of surplus value provides an explanation for a problem that has always been the Achilles heel of economics, namely, the source of profits...
...The puzzle of exchange value is how this social determination is made and what it represents...
...They believed that the effect of a generalized increase in the demand for labor would be a stimulus to population growth, as the labor force used its increased earnings to produce or rear more children to working age (Smith estimates child mortality at about 50 percent...
...Why not the business enterprise, the locus of the distinctive form of productive activity in capitalism...
...Again Smith (and Ricardo) preceded Marx with such a mechanism...
...Conventional neoclassical theory, which eschews a labor theory, is content to depict aggregate production (such as gross national product) as a sum of priced objects, and does not inquire into any real common denominator of that sum, In fact, each object in the collection is regarded by conventional economics as reflecting in its prices the interplay of the marginal utilities that it affords and the marginal disutilities that it requires for its creation...
...I, p. 277...
...10 Locke, Second Treatise on Government (1962,1975),p...
...In others, such as the garment industry, the preponderance of power may now have swung to labor's side, which often holds the threat of bankruptcy over its employers' heads...
...III, p.830...
...And for this purpose, the "ordinary" commodity offers a special point of entry, just as daily speech or nightly dreams serve as portals through which the psychoanalyst can enter the hidden domain of the unconscious...
...Marx's depiction of surplus value carries the conviction of his outraged sense of justice, but even he did not claim to have "proved" its presence by a resort to empirical evidence...
...9 Thus Aristotle writes, "From the hour of their birth, some are marked out for subjection, some for command" (Politics, Book I...
...For Marx is only following in the footsteps of Ricardo (and along the broad trail blazed by Smith) when he asserts that the regulating principle by which society extablishes its common ratio of exchange is the quantity of labor that is embodied in each commodity, including the labor stored up in the tools or machinery used in its production...
...Thus the concrete sum we call "profit" is not the same as the abstract sum of surplus value...
...I, Part VIII 6 Capital, Vol...
...12 Marx relies on this inherent inequality in his assumption that workers have nothing to sell but their labor power, and that capitalists have the bulk of society's wealth at their command...
...As John Locke could write, without sensing any inconsistency, "the grass my horse has bit, the turfs my servant has cut, and the ore I have digged . . . become my property without the assignation or consent of anybody...
...For it is his contention that even in such a setting—"the very Eden of the innate rights of man," as he called itl 1—the value of labor power will always be less than the value a capitalist will receive from the commodities that this labor power will produce...
...For once again we find all capitalist governments deliberately "trading off" unemployment against inflation—which is to say, creating unemployment in order to hold down wage increases, and thereby to restrain inflation...
...It is the double nature of a commodity...
...Land, labor, and capital then appear only as things that "cooperate" to create social wealth, each contributing its measurable share, for which each is properly rewarded...
...The labor theory possesses, however, one advantage of immense importance: it gives meaning tc the measurement of aggregate production...
...The prehistory of capitalism, Marx shows, is characterized by a violent separation of peasants and artisans from direct access to, or ownership of, the means of production...
...Economists from early days have taught us that wealth is the result of land, labor, and capital bestowing their respective contributions to the production of useful things...
...96 Curiously, the matter cannot be settled by direct inspection...
...In fact, Marx's intent was not to show its presence by measurement, but by argument...
...The antagonisms and conflicts apparent in the view of these same things as social relationships, in which some classes work and others exert claims of ownership, is effectively screened from view...
...The idea of gross national product is therefore a summation of individuals' utilities and disutilities...
...To forestall that outcome, Marx introduces two elements into the bargaining situation that tilt the balance of power in the favor of the capitalist...
...15 NOTES I The interior quotation is from Marx's previous essay, A Contribution to the Critique of Political Economy...
...Labor becomes ever simpler as a consequence of the division of tasks...
...By this he means that the exchangeability of commodities appears to result from their physical properties, not from the hidden social relationships that, by filling them with abstract labor, endow them with their attributes of exchange value...
...The choice of the commodity as the point of entry into capitalism seems odd...
...Under such circumstances the value of the deer, the produce of the hunter's day's labour, would be exactly equal to the value of the fish, the produce of the fisherman's day's labour...
...The idea has a prima facie plausibility in the historic setting in which Marx conceived it, a setting unforgettably portrayed in the ferocious chapter of Capital on "The Working Day...
...In this way the rise of capitalism brings into being a new form of labor that is indeed capable of being bought and sold like coal or grain, a homogeneous commmodity called labor power created out of the original heterogeneous labors of precapitalist modes...
...The second surplus-value-protecting element is a "mechanism" that will prevent wages from rising under the stimulus of competition...
...Now we must examine more closely Marx's analysis of the commodity labor power itself...
...13 Therefore the relevance of the theory of surplus value must be judged by different criteria...
...and once again, Marx, Capital, Vol...
...Competition among employers was fierce, and profits in many sweated trades may have been very low or even nil...
...Yet, Marx goes on the say, in words that dispel the fetish: Nature builds no machines, no locomotives, railways, electric telegraphs, self-acting rules, etc...
...6 II The decipherment of the social hieroglyphic of the commodity thus alerts us in the first instance to the fact that a commodity is not just a thing but also a bearer of social relationships...
...rather, the human being comes to relate more as watchman and regulator to the production process itself...
...Peasants are separated from their lands by the enclosure movement that gives rise to commercial agriculture...
...For commodities in society do not exchange in differing ratios, as would likely be the case if individual hunters bartered their deer against the salmon caught by individual fishermen...
...In all European capitalisms, without exception, we find the importation of cheap labor forces from low-wage nations, such as Italy, Greece, Yugoslavia, Turkey, or Portugal...
...Thus the profit drive itself creates powerful forces to homogenize labor and to simplify its form...
...and that some of the forces pressing against wages, especially that of an unequal bargaining power, had been considerably alleviated by the formation of powerful unions and welfare support systems...
...Instead, the examination begins with what appears to be an unremarkable aspect of the system, indeed its simplest and seemingly most understandable element...
...Here is where Marx's analysis begins to show its power...
...705, 706...
...The purpose of the theory 01 surplus value is therefore to explain what is otherwise inexplicable—the presence of an enduring, although ever-threatened, surplus within the capitalist mode of production...
...There are few insights in all of Marx's writings as striking as the fetishism of commodities—indeed, few in all of social science...
...For his argument reveals that it requires a particular set of historic circumstances to bring about such a peculiarly "abstract" kind of labor...
...But commodities also embody exchange value, the capacity to command other objects or money in the transactions of daily life...
...Marx's italics: slight changes in punctuation and wording...
...Indeed, it is only because this difference exists that capital itself can be brought into being...
...Technological unemployment thereby creates a "relative overpopulation" that plays the same role as the absolute rise in population proposed by the classical economists...
...the power of knowledge, objectified...
...This unexamined question is how we are able to use labor as a means for establishing ratios of exchange...
...As we read the accounts of English factory labor employed for 12- and 14-hour days and paid a near-starvation wage, the existence of surplus value seems as undeniable as the naked extraction of a surplus from slave labor...
...10 That is why the cars coming off an assembly line, like turfs that Locke's servant has cut, do not belong to the workers or even to the management, but to the company whose "servants" both workers and management are...
...Not less important, the capitalist mode of production creates a market for labor, rather than a traditional man-master relationship...
...Capitalism in his eyes is a stage and a staging ground in a long historic journey...
...The effect of the Marxian identification of the fetishistic element within the humble commodity is therefore shocking...
...As such, it remains an essential part of Marx's socioanalysis, without which we cannot penetrate to the core of the system...
...The first was the weak bargaining power of labor that derived from its inability to subsist very long if it held back its labor...
...But the determination of exchange ratios is by no means the most important consequence for Marx of his analysis of value...
...Against this institutional redress of bargaining power, however, must be placed the deliberate efforts of all capitalist governments to prevent labor's strength from "getting out of hand"—that is, from raising wages until profits are squeezed out...
...The perception that commodities possess the property of exchange value because they are the repositories of an abstract form of labor...
...As the first sentence of Capital reads: "The wealth of those societies in which the capitalist mode of production prevails, presents itself as an 'immense accumulation of commodities,' its unit being the single commodity...
...If wages were low, so was productivity...
...and that the subsistence required by the labor force would increase as the productive capabilities of society grew...
...Labor, on the other hand, is the actual expenditure of human energy and intelligence that becomes embodied in the commodities that laborers create...
...The confusion of this social right with the physical reality of productivity is a central and enduring part of the fetishism that obscures the workings of capitalism...
...The labor theory of value in Marx's hands is therefore not merely a key to exchange ratios...
...Thereafter all efforts to explain profits disappeared before the fetishism that attributed rent to the productivity of tilt "land," and interest or profits to that of "capital...
...If there is a "surplus" to be gained from the use of a machine, capitalists will bid for it until its price rises to the value that the machine embodies...
...These are products of human industry . . . They are organs of the human brain, created by the human hand...
...Book of the Order of Chivalry, cited in Cambridge Economic History, Vol...
...Land and capital, however, like labor, are also social relationships—namely, the right accorded to the owners of land and capital to exert a claim on production on behalf of the contribution to output made by "their" resources or capital goods...
...13Here lies the source of the famous and still controversial "transformation problem...
...Prices reflect actual costs, and the ebb and flow of supply and demand...
...Insofar as the bargaining position of labor is concerned, undoubtedly the balance has greatly changed since Marx's time...
...Why not an abstract model of the system as a whole, setting before our eyes the framework of ideas that would subsequently be demonstrated in detail...
...But the land and capital of which economists speak refer only to the thing-like aspects of resources and artifacts, which do indeed always enter into commodities to help endow them with their use values...
...For once land and capital, like labor, have been sanctified into things (a Holy Trinity, Marx called them), all such possible subversive interpretations disappear...
...Labor power is the capacity for work that an employer buys when he hires a worker for a day or a week...
...This is the everyday commodity, the individual good in which the wealth of the system is incorporated...
...For the examination of any wealth-gathering system is potentially dangerous for its ruling classes whose disproportionate claims on the material output of society must then be explained, whether by an indifferent acquiescence in plunder and exploitation, or by recourse to religious or traditional rationales...
...The source of profit lies in the appropriation by the capitalist of the surplus value, or the difference between the value of labor power sold as a commodity by the working class, and the value of the product of that labor power when it is applied by the capitalist in the production process...
...The realization has many applications, not least the light that it throws on our conventional depiction of how wealth arises under capitalism...
...2 Marx had relatively little to say at first about use-values as a key to capitalist reality...
...Each commodity becomes in miniature a congelation of forces locked in combat, not in cooperation...
...Between the abstract world of values and the concrete world of prices and wages lies the push and pull of the marketplace...
...Marx has no dealings with such population reflexes...
...The essence is contained in an aspect of the commodity familiar to economics since Aristotle...
...Labor alone contains a potentially available source of profit—a conclusion that, as we shall see, has great significance for the fate of the system...
...Like all commodities, that value consists of the labor that has gone into its creation...
...artisans are driven from their crafts by the superior efficiency of nascent merchant-capitalist operations...
...This comes about because Marx sees the pressure of competition inducing employers to introduce cost-cutting, labor-saving machinery...
...For Marx the commodity is the simplest appearance through which we can pass to discover the essence of the system...
...Some of them—for example, the problerr of deriving "abstract" labor from the concrete labors of men and women, or the task of reducing complex labor tc simple labor—involve difficult, even recondite considerations...
...At the core of the idea is the difference between labor and labor power...
...Indeed, it will be Marx's purpose to enable us to see through the false simplicity by which business enterprise or the market mechanism or the larger structure of the system are ordinarily represented as the elemental building blocks of capitalism...
...Why not the marketplace, the social institution that organizes and colors so much of capitalist economic life...
...Specifically, we must ask whether the presence of differential class bargaining power, or of technological unemployment, still act to depress wages—the value of labor power—below the value that labor power creates...
...This particular set of circumstances is, of course, the mode of production called capitalism...
...In this way Marx's socioanalysis reveals that the classical assumption of a common kind of labor within all commodities poses the question for, not the answer to, the problem of value...
...Marx does not demonstrate this process very satisfactorily, and it has engaged the attention of Marxist (and nonMarxist) economists ever since...
...It is that the act of consuming its use-values yields a "surplus...
...The labor that is required to catch a 92 salmon is altogether different from, and unusable for, that needed to capture a deer...
...Whether this unemployment is primarily generated by technological displacement, or by the recurrent crises also envisaged by Marx, is difficult to say, but it hardly matters...
...Thus workers cannot mount a strike effective enough to secure the payment of wages equal to the value of their output...
...I Marx's view of capitalism is essentially historic, always on guard against temptations to depict the system in abstract terms that have no historical concreteness...
...Both elements had, in fact, been anticipated by Smith...
...Thus, in Marx's view, the weak bargaining position of labor and the pressure of technological unemployment both operate systematically to maintain the value of the commodity labor power below the level to which it would otherwise be forced by the competitive bidding of capitalists...
...What appears as the eternal personage of the worker becomes the unique status and discipline of the working person under the duress of capitalist institutions...
...and that a commodity is therefore the carrier and the encapsulation of the social history of capitalism—all this comes as a stunning realization...
...3. For the international transfer of surplus, see Arghiri Emmanuel, Unequal Exchange (New York: Monthly Review Press, 1972...
...The labor theory avoids this impasse by the assumption that abstract labor allows two disparate collections of objects to be "weighed" to determine which is larger...
...5 Among many accounts of this process, let me mention Karl Polanyi, The Great Transformation (Boston Beacon Press, 1957...
...Although this does not "prove" the existence of surplus value (which in any event can never be empirically demonstrated), it is certainly a necessary condition if surplus value is still to exist...
...This special attribute of labor power comes about because its use-value lies in the products that are produced for the capitalist by the working man or woman during the period of time that he or she labors...
...Marx himself recognized the possibility that individual capitalists could increase their profits through monopolistic market power, or by technological advantages, or "unequal exchanges" abroad...
...He might concede that these are greater sources of profits for large-scale business than in his day...
...In big business, the strength of corporations and unions is perhaps evenly matched, the corporation as likely to yield as the union...
...The secret was that profit is won not as a result of sharp dealing in the commodity market, but as a normal part of the production of wealth—not in exchange but prior to exchange, in production itself...
...For this attribute of commodities does not reside in them in the way that use-values do— because the labors of men or the properties of the earth are physically incorporated in a bolt of cloth or a sack of grain to give them their capacities to serve their users...
...95 Marx's theory is not one of "unfairness," but of systemic tendencies that will generate surplus value even in situations where there is a formal "equality" of bargaining power, where worker and capitalist meet one another as free agents to enter into wage agreements, and where workers are paid the full value of their labor power...
...But Marx has discovered a special attribute of labor power that makes it unlike any other commodity...
...Moreover, wages would continue to increase as capitalists continued to compete for access to surplus value, until there was no more surplus value to be had—that is, until wages were so high that they left no quantum of unpaid labor within the capitalist's commodities...
...Marx himself anticipated this objection in a remarkable passage in the Grundrisse: To the degree that large industry develops, the creation of real wealth comes to depend less on labour time and on the amount of labour employed, than on the power of the agencies set in motion during labour time, whose "powerful effectiveness" . . . depends . . . on the general state of science and on the progress of technology . . . . Labour no longer appears to be included within the production process...
...Here we begin to pry open the commodity...
...Like all commodities it has a double aspect—usefulness and exchangeability...
...Yet, because Marx assumes that profits arise only from labor, not machinery, the question then arises as to how a common rate of profit can emerge from production processes with unequal labor /capital ratios...
...Thus we learn from the newspaper or from visiting stores that a pound of venison sells for $2.00 and a pound of salmon for $4.00, so that a common exchange ratio of 1:2 has taken the place of the innumerable ratios that might have prevailed had individual hunters exchanged their products with individual fishermen...
...Maurice Dobb, Studies in du Development of Capitalism (New York: Internationa Publishers, 1947...
...It is the question of whether the theory of surplus value is still relevant in the changed institutional and dynamic conditions of modern capitalism...
...Unwilling to attribute profits to the transfer of wealth from one class to another, bourgeois economists have struggled in vain to explain profits, not as a transient monopoly return or an evanescent technological advantage, but as a persistent, central feature of the system of capitalism...
...This does not mean, however, that all bookkeeping profit derives from surplus value...
...Paul Mantoux, The Industrial Revolu...
...Thus the demand for labor would increase, raising wages...
...Thus, as Marx writes, a "definite social relation between men themselves . . . assumes . . . the 93 fantastic form of a relation between things...
...4 Ricardo, Principles (1951), p. 26...
...To put it differently, it is the wages needed to sustain a worker in his conventional standard of living...
...If we take away the useful labour expended on them [he writes], a material substratum is always left, which is furnished by Nature without the help of man...
...Marx's theory of surplus value asserts that there must be a systematic difference between the two—that one must always be able to buy the capacity for work for less than the value that will be created when that capacity is put to use and commodities are brought into being...
...But such a concept is totally at odds with the conventional econimists' premise of the individuality of economic agents...
...This conventional standard need not be a bare minimum...
...12 Wealth, p.66...
...If 94 bread were labor power, so to speak, we would become rich by eating...
...and on the contrary, those which have the greatest value in exchange have frequently little or no value in use...
...The answer is that the market must cause the prices of production to diverge systematically from their values, in order to redistribute surplus values equally in all lines of business...
Vol. 27 • January 1980 • No. 1
