What's wrong with the labor theory of value

[trivas7]

Austrian economist David Gordon understands perfectly well what is wrong with the labor theory of value.



Marx assumed that an exchange is an equality: in our earlier example, 1 house = 2 cars. In sharp contrast, in the Austrian view, an exchange takes place only if there is a double inequality: each person must value what he gains more than what he gives up. This view seems to me far-reaching in its importance. It exposes a presupposition of classical economics which, once questioned by the Austrian, appears the very reverse of obvious. Why is an exchange an equality? Neither Marx nor any other defender of the labor theory has given an explanation for this assumption.

Further, Marx assumed that an exchange involves a very strong sense of equality. In his view, the equality constituting an exchange must be explained by a common element on both sides of the equality. In other words, for Marx an exchange was an identity, in the same way that the two sides of an equation in mathematics designate the same quantity. If 1 house = 2 cars, then both '1 house' and '2 cars' share some common quantity. To those not enmeshed in the Marxist metaphysics of value, this step seems if anything even more wrongheaded than its predecessor, the postulate of equality. And if even, per absurdum, one accepted identity, Marx offers no argument for the contention that the common quantity must be labor.

Still another problem arises from the fact that, as Marx well knew, market prices differ from labor values. Marx dealt with this by trying to show that labor values could somehow be transformed into price. Those interested in the technical details of this issue should consult Bohm-Bawerk, who, pace Thomas Sowell, understood Marx perfectly well. It seems to me that one fact is often overlooked in the details of simple and expanded reproduction, Divisions I and II, and other elements of the Marxist architectonic. Suppose that Marx could show that market prices can be derived from labor values, by using a formula that gives the 'correct' results. In what way would this prove that labor values are the explanation of price? Marx's assumption that labor value was 'ultimate' would remain just that-an assumption. Given these and other difficulties, it is small wonder that most of the recent 'analytical Marxists,' a group which has attempted to revivify Marxism by applying to it the techniques of analytic philosophy and modern economics, dispense altogether with the labor theory. But what of Marx's much vaunted explanation of profit? This too fails, even if one grants Marx the labor theory of value. Sometimes, first thoughts are best; and the phrase "the labor value of labour" is indeed unmeaning. Labor is the measure of value: if so, it cannot at the same time have a value. Marx quite correctly noted that one can on his theory obtain the labor value of a laborer. But laborers are not for sale on the capitalist market: this, on the contrary, is the situation that obtains in a slave society. The laborer sells exactly what the capitalist buys-his labor power. Marx's explanation of profit through labor exploitation goes wrong at its first step.

-- from David Gordon "Requiem for Marx"

[Jimmie Higgins]

Austrian economist David Gordon understands perfectly well what is wrong with the labor theory of value.Most of the time capitalist economists analyze the waves while ignoring the tides. In this case though, it seems to almost be a willful misreading and misrepresentation of Marx's arguments. Wikipedia explains these concepts better.

Read Capital. Marx talked about the fundamental working of the economy - the general tendencies and then he looked at specific examples and talked about how tons of other factors come into play when you look at history and the real world and consequentially it's easy to get thrown off by these factors and miss the most basic common denominators.


Why is an exchange an equality?It often isn't in the real world and Marx was well aware of this. However, what does this have to do with the creation of wealth (as is probably the implication of this criticism of Marx)? If a group of rich people are all trading items between themselves, it's quite possible to "buy low and sell high" and end up with more or less value than you had originally - but was any new wealth created in the group? No - the same value was shifted around between a group of people.


In other words, for Marx an exchange was an identity, in the same way that the two sides of an equation in mathematics designate the same quantity. If 1 house = 2 cars, then both '1 house' and '2 cars' share some common quantity. An object in motion tends to stay in motion - so why don't you fly when you jump up? Marx was interested in the fundamental workings of a complex and constantly-changing and shifting system - as I said above if you read Capital he spends most of the time showing how various different variables impact his formula to make them not turn play out in an exact or deterministic way but as a sort of fundamental mechanisms or dynamic.


Marx offers no argument for the contention that the common quantity must be labor.Yes he does. All commodities have value and can add value to manufactured commodities (i.e. resources, technology, and labor, all add value to a new commodity) but only labor adds surplus value to the process - adding above an beyond it's own inherent value.

[Revolution starts with U]

Austrian economist

Stopped reading there :lol:

[citizen of industry]

Marx was well aware that price often differed from value, that supply was usually different from demand. However, he noted the trend for the two to equalize in a general rate of profit. i.e; if one industry is making profits above average, investments will increase in that industry, the demand for labor will rise in that industry, and production will increase until there is over-production, supply outweighs demand, labor is reduced and profitability falls. On the flip side of the coin, if capital is taken out of an unprofitable industry and put into another, eventually the demand will outweigh the supply in the unprofitable industry and it will become profitable again. So even though there are constant fluctuations and price almost never matches value, taken over a long period of time there is an average rate of profit and commodities, on average, are sold at their values.

So if supply and demand are equal, what determines value? The amount of labor in the commodity. You are obviously not going to trade a plastic trash can for a car. Why? It takes a lot more labor to build the car. The car is made up of many more raw materials, which took much more labor to produce and extract. Unless so many cars are produced that they can't be sold, in which case they will be devalued.

[Revolution starts with U]

It's really the difference between

Value is created by actions
or
Value is created by thoughts

it seems.

[citizen of industry]

It's really the difference between

Value is created by actions
or
Value is created by thoughts

it seems.

Well, taking a hamburger example. Maybe if there was a hamburger in front of us with no price, we would each pay a different amount based on what we think the value should be, what our budget is etc. But odds are the prices we offered wouldn't be dramatically different. Our conception of value would be based on material conditions. What we think the price should be would be based on prices we are used to, which in turn are determined by the cost of producing beef, lettuce, bread, tomatoes, etc. and the cost of wages for producing the burger, plus surplus value.

Each of those commodities may be priced based on supply and demand, but as already noted the trend is for the two to equalize over the long term. So labor is the determining value.

Maybe you receive more wages than me, so you'd be willing to pay a bit more. But that's really splitting hairs.

[citizen of industry]

But laborers are not for sale on the capitalist market: this, on the contrary, is the situation that obtains in a slave society. The laborer sells exactly what the capitalist buys-his labor power. Marx's explanation of profit through labor exploitation goes wrong at its first step.

Laborers are not for sale on the capitalist market but their labor power is: labor is a commodity just like any other. Marx's explanation of profit through labor exploitation doesn't go wrong, as it points out that the producers don't receive the value of what they produce. They create value, enough to reproduce their own labor, and enough to provide capitalists with a profit. So labor is the only value-creating component.

[Railyon]

Ah David Gordon, I remember writing a review of his book "Resurrecting Marx" from an anarchist perspective.

Dude is a total tool, Marx's value theory of labor is sound as fuck, end of story.

Also Hagendorf showed the validity of the LTV in microeconomic theory, Gordon got nothing on him.

[DinodudeEpic]

The labor theory of value is better explained like this.

Labor creates value -> the value changes, in the process of becoming the price of a good, according the consumer's desires. (As explained by 'Supply and Demand'.)

Austrian economists have their theories based on hysterical non-sense. Literally and blatantly.

[Azraella]

There really isn't anything wrong with the LTV. I like Kevin Carson's attempt to synthesize the LTV with the STV (http://www.mutualist.org/id56.html) actually. I think the LTV is pretty much right, but there are plenty of things the STV gets right like oppurtunity cost.

[Railyon]

Assuming there's anything worthwhile to be had in the concept of opportunity costs.

It's a more sophisticated way (if at all) of saying you can't have a cake and eat it. No-brainer stuff in my opinion. I think its only purpose is the whole homo oeconomicus hocus pocus.

[Jimmie Higgins]

The labor theory of value is better explained like this.

Labor creates value -> the value changes, in the process of becoming the price of a good, according the consumer's desires. (As explained by 'Supply and Demand'.)

Austrian economists have their theories based on hysterical non-sense. Literally and blatantly.

While this process certainty happens, this is price, not value. An individual capitalist can get rich on just price fluctuations alone - but the system can not create new wealth in this process, it's really just shifting existing wealth around. They system as a whole can not exists by buying low and selling high.

Price goes up and down but does not create new inherent value. Oil prices fluctuate but a barrel of oil is not worth more or less than a barrel of oil in value at any given time.

[Kronsteen]

Marx assumed that an exchange is an equality: in our earlier example, 1 house = 2 cars. In sharp contrast, in the Austrian view, an exchange takes place only if there is a double inequality: each person must value what he gains more than what he gives up.Two different senses of value. Marx's value is the labour power reqired to produce the commodity. Gordon seems to have a kind of use value in mind.


Marx offers no argument for the contention that the common quantity must be labor....except for the observation that commodities with nothing else in common are exchangable for quantities of cash.


market prices differ from labor valuesSo now Gordon's admitting that labour values exist? And therefore that labour value doesn't equal utility? Ah no, after a few sentences he's back to saying it doesn't exist.

Nevermind, he's talking about the transformation problem, which at least is a real issue. Which he doesn't address.


recent 'analytical Marxists,' a group which has attempted to revivify Marxism by applying to it the techniques of analytic philosophy and modern economics, dispense altogether with the labor theorySome did, some didn't.


Labor is the measure of value: if so, it cannot at the same time have a valueOf course it can. Speed is defined as distance divided by time. Speed is also calculated by dividing the distance by the time.

I'm sorry - there are intelligent objections to Marx, but this man Gordon doesn't give them.

[Revolution starts with U]

Hey... am I right that in Chapter 1 of Capital 1 Marx basically addresses and refutes the subjective theory of value (as meaningless), and even uses the "what about diamonds" example to do so?

I'll do a further critique later if anyone wants, but he talks about how value ultimately comes from people wanting to fulfill their desires, but is only able to be expressed through the abstract labor power of humanity and nature; nature is the mother and labor the father of value.

[DinodudeEpic]

While this process certainty happens, this is price, not value. An individual capitalist can get rich on just price fluctuations alone - but the system can not create new wealth in this process, it's really just shifting existing wealth around. They system as a whole can not exists by buying low and selling high.

Price goes up and down but does not create new inherent value. Oil prices fluctuate but a barrel of oil is not worth more or less than a barrel of oil in value at any given time.

I know that.

I'm saying that the PRICE is basically the labor value but with supply and demand as factors.

Basically, Supply and Demand in addition to the labor value change the price.

[Luís Henrique]

Austrian economist David Gordon understands perfectly well what is wrong with the labor theory of value.


Marx assumed that an exchange is an equality: in our earlier example, 1 house = 2 cars. In sharp contrast, in the Austrian view, an exchange takes place only if there is a double inequality: each person must value what he gains more than what he gives up. This view seems to me far-reaching in its importance. It exposes a presupposition of classical economics which, once questioned by the Austrian, appears the very reverse of obvious. Why is an exchange an equality? Neither Marx nor any other defender of the labor theory has given an explanation for this assumption.

Further, Marx assumed that an exchange involves a very strong sense of equality. In his view, the equality constituting an exchange must be explained by a common element on both sides of the equality. In other words, for Marx an exchange was an identity, in the same way that the two sides of an equation in mathematics designate the same quantity. If 1 house = 2 cars, then both '1 house' and '2 cars' share some common quantity. To those not enmeshed in the Marxist metaphysics of value, this step seems if anything even more wrongheaded than its predecessor, the postulate of equality. And if even, per absurdum, one accepted identity, Marx offers no argument for the contention that the common quantity must be labor.

Still another problem arises from the fact that, as Marx well knew, market prices differ from labor values. Marx dealt with this by trying to show that labor values could somehow be transformed into price. Those interested in the technical details of this issue should consult Bohm-Bawerk, who, pace Thomas Sowell, understood Marx perfectly well. It seems to me that one fact is often overlooked in the details of simple and expanded reproduction, Divisions I and II, and other elements of the Marxist architectonic. Suppose that Marx could show that market prices can be derived from labor values, by using a formula that gives the 'correct' results. In what way would this prove that labor values are the explanation of price? Marx's assumption that labor value was 'ultimate' would remain just that-an assumption. Given these and other difficulties, it is small wonder that most of the recent 'analytical Marxists,' a group which has attempted to revivify Marxism by applying to it the techniques of analytic philosophy and modern economics, dispense altogether with the labor theory. But what of Marx's much vaunted explanation of profit? This too fails, even if one grants Marx the labor theory of value. Sometimes, first thoughts are best; and the phrase "the labor value of labour" is indeed unmeaning. Labor is the measure of value: if so, it cannot at the same time have a value. Marx quite correctly noted that one can on his theory obtain the labor value of a laborer. But laborers are not for sale on the capitalist market: this, on the contrary, is the situation that obtains in a slave society. The laborer sells exactly what the capitalist buys-his labor power. Marx's explanation of profit through labor exploitation goes wrong at its first step.

On the contrary, this quote shows exactly how David Gordon is extremely ignorant about Marxism in general, and about labour theory of value in particular. Or, alternatively, how intellectually dishonest he is in his attempts to "debunk" Marx's theory.

Let's see:


Marx assumed that an exchange is an equality: in our earlier example, 1 house = 2 cars. In sharp contrast, in the Austrian view, an exchange takes place only if there is a double inequality: each person must value what he gains more than what he gives up. This view seems to me far-reaching in its importance. It exposes a presupposition of classical economics which, once questioned by the Austrian, appears the very reverse of obvious. Why is an exchange an equality? Neither Marx nor any other defender of the labor theory has given an explanation for this assumption.

That's exactly false. Marx never "assumed that exchange is an equality". Obviously you only exchange a given commodity for a different commodity if you want to have the latter, and can give up the property of the former. Use values are different; you cannot live in a car, you cannot travel from one place to another in a house. But this is trivial; the issue of value, as opposed to use value (a distinction that "Austrians" are blind to) is, how many cars a house is worth.

If I go to a show, and I want to have a drink, I will naturally discover that drinks there are sold by $ 2, while their normal price is $ 1. So I either go thirsty through the show, or I give up watching it to the end (thus throwing away the $ 20 I paid for the ticket), or I pay the extorsive price. But even if I do so, I perfectly know that I am being robbed. How do I know that? Because I know that the value of the drink is, and I know that I am paying more than it.

So Gordon's "reasoning" is either ignorant or dishonest.


Still another problem arises from the fact that, as Marx well knew, market prices differ from labor values. Marx dealt with this by trying to show that labor values could somehow be transformed into price. Those interested in the technical details of this issue should consult Bohm-Bawerk, who, pace Thomas Sowell, understood Marx perfectly well.

Evidently, values are transformed into prices. And of course, supply and demand are involved in such transformation, both in the trivial way - in that they explain the deviation from value into prices - and in the sence that demand determines, ex-post, how much labour should be have been used in the production of a commodity. And of course Gordon dispatches us to Boehm-Bawerk, because he cannot perform the criticism himself - and I doubt he can understand Boehm-Bawerk's criticism.


It seems to me that one fact is often overlooked in the details of simple and expanded reproduction, Divisions I and II, and other elements of the Marxist architectonic. Suppose that Marx could show that market prices can be derived from labor values, by using a formula that gives the 'correct' results. In what way would this prove that labor values are the explanation of price? Marx's assumption that labor value was 'ultimate' would remain just that-an assumption.

Let's take care that we don't drown in the ignorance that oozes from such analysis. The "details of simple and expanded reproduction, Divisions I and II, and other elements of the Marxist architectonic" seem to be here merely to confuse the reader and give the impression that Gordon knows what he is talking about. But he doesn't explain what they have to do with what comes next - probably because he doesn't know it.

Now, we can't "suppose" that Marx could show a "correct" formula of transformation; for there is no "correct" price in any instance - just prices that will result in bigger or smaller profits, depending on how much of a given commodity can be sold at each price.

And Marx's "assumption" may be just an assumption, but it is the only logical assumption, for, except for labour, there is no other element that can explain the creation of value, unless we concede that magic is a real possibility, and that the production of commodities can perform what alchemists have tried in vain - to transmutate other materials into gold.

How can inanimate things, land or instruments of labour, or risk, or marginal preferences create value, unless we admit they have supernatural properties?


Given these and other difficulties, it is small wonder that most of the recent 'analytical Marxists,' a group which has attempted to revivify Marxism by applying to it the techniques of analytic philosophy and modern economics, dispense altogether with the labor theory.

Indeed, but "these and other difficulties" boil down to the difficulties both "Austrians" and "analytical" "Marxists" have understanding the subject.


But what of Marx's much vaunted explanation of profit? This too fails, even if one grants Marx the labor theory of value. Sometimes, first thoughts are best; and the phrase "the labor value of labour" is indeed unmeaning. Labor is the measure of value: if so, it cannot at the same time have a value.

And, evidently, it hasn't a value. Which is the reason Marx never talks about the value of labour, a circumstance that Gordon is too ignorant to realise. And that, even without going into the absurd of Gordon's proclamation: so if we use lead as a measure of weight, how would that mean that lead has no weight of itself?


Marx quite correctly noted that one can on his theory obtain the labor value of a laborer. But laborers are not for sale on the capitalist market: this, on the contrary, is the situation that obtains in a slave society. The laborer sells exactly what the capitalist buys-his labor power. Marx's explanation of profit through labor exploitation goes wrong at its first step.

One can almost feel pity for Gordon. He doesn't understand the distinction between labour and labour power, and bases his "rebuttal" of Marx in his own inability to understand it.

Come on, this is a poor and lame critique of Marx, even by the low standards of "Austrian" school - which by the way are already lame and poor even by the low standards of bourgeois economy in general.

Luís Henrique

[Rafiq]

Reminds me of when Austrians talked about how the LTV was wrong because no one wanted mudpies. And then, I remembered in the first fucking couple pages of Capital Marx explains only a commodity, which is a product of labor of course, that is desired (in some way) has value.

The truth is simple: Economist criticisms of Marx are done so in a fashion where they are too scared to read his works, to safeguard their ideological gibberish.

[Book O'Dead]

Austrian economist David Gordon understands perfectly well what is wrong with the labor theory of value.

"Requiem for Marx"

They've been singing that 'requiem' for 150 years and they still can't bury the bearded chap!

[Luís Henrique]

"Requiem for Marx"

They've been singing that 'requiem' for 150 years and they still can't bury the bearded chap!

People will stop talking about David Gordon much before they stop talking about Karl Marx...

Poor idiot.

Luís Henrique

[Revolution starts with U]

Reminds me of when Austrians talked about how the LTV was wrong because no one wanted mudpies. And then, I remembered in the first fucking couple pages of Capital Marx explains only a commodity, which is a product of labor of course, that is desired (in some way) has value.

The truth is simple: Economist criticisms of Marx are done so in a fashion where they are too scared to read his works, to safeguard their ideological gibberish.

I'm only about half way through chapter 1 (found it on audio book, so I decided to tackle vol 1 :lol: ), and it's painfully obvious that no austrian has actually read das Capital.

[Tukhachevsky]

It's sad, people still read Marx like the bible or like a native chinese in the 60's always repeating without critical understanding.
Marx couldn't even imagine a world where someone can speak with another person from the other side of the globe in minutes, or where mechanized work had filled the role of almost all unskilled workforce, or where all the world food production is dependent of a single resource called oil...

[cb9's_unity]

It's sad, people still read Marx like the bible or like a native chinese in the 60's always repeating without critical understanding.
Marx couldn't even imagine a world where someone can speak with another person from the other side of the globe in minutes, or where mechanized work had filled the role of almost all unskilled workforce, or where all the world food production is dependent of a single resource called oil...

I saw you post something similar to this elsewhere. As someone who still has a lot of Marx to read, how much of him have you actually read?

Marx always aimed to be historical and empirical. He would be the first person to advise against a dogmatic reading of his works. In fact, Marx himself revised his works as the world change and as new empirical evidence came in front of him. By appreciating massive new developments in technology a Marxist doesn't disavow Marxism, instead the Marxist can only stay a Marxist exactly by appreciating incredible technological development.

The real importance in Marx isn't in his predictions for capitalism (even though they continue to be better than modern economists) or even in his specific analysis of capitalism in his time. Essentially, it's not what Marx said, by how he said it. The methods of Marxism still give us better tools to analyze capitalism than any of its intellectual competitors. Austrians and all other bourgeois economists just can't handle the inter-connectivity of capitalism, they can't see how impossible it is to break apart things like politics and economics without loosing the ability to understand both.

No developments in capitalism have blown apart the Marxist model of analysis. Capitalism has developed since Marx's death, but he never claimed it wouldn't. However, capitalism has developed more along the lines that Marx thought it would than any other thinker thought it would.

Marx is basically unique in making a system designed to adapt to real developments in the world. Austrians and bourgeois economists still want to find timeless universals of economics within whatever particular form of capitalism exists today. Time will inevitably make their speculations useless, ironically, only a completed socialist revolution will make Marx's analysis of capitalism irrelevant.

[Luís Henrique]

It's sad, people still read Marx like the bible or like a native chinese in the 60's always repeating without critical understanding.
Marx couldn't even imagine a world where someone can speak with another person from the other side of the globe in minutes, or where mechanized work had filled the role of almost all unskilled workforce, or where all the world food production is dependent of a single resource called oil...

If Marx's works were about the way people would communicate with each others, or on the relation between food production and this or that resource, then this would be relevant (he did in fact imagine mechanised work replacing unskilled workforce). But it isn't; it is about how wage labour and the production of commodities for the sake of producing value and accumulating capital necessarily leads into crises. All those things remain; when they disappear, Marx's works will become irrelevant except in a historical sence. Until then, the problems he points remain, never mind how comfortable Austrian ostrichs feel when tucking their neoclassic heads into the ground.

Luís Henrique

[Tukhachevsky]

As someone who still has a lot of Marx to read, how much of him have you actually read?

Obviously The Capital and the communist manifest.


Marx is basically unique in making a system designed to adapt to real developments in the world.

Actually no, there were a lot of socialist thinking, theorizing and even testing in the 19th century.
You probably will answer that soviet union* wasn't a real manifestation of marx theories (so what is? we dwell in religious thinking) but nevertheless I point to the era of stagnation as evidence they at least need to be reformed.


*Not denying of course the huge GDP growth after october revolution or the fact that gulags were an excellent method of industrialization and colonization of remote areas; and that many countries should adopt, instead of over crowded and expensive prisons, a kind of voluntary and reeducating labour with criminals similar to gulags

[#FF0000]

You probably will answer that soviet union* wasn't a real manifestation of marx theories (so what is? we dwell in religious thinking)

Hand-wave as hard as you want but it doesn't really change the fact that it's true -- the soviet union didn't and couldn't have possibly established a socialist society.

[Jimmie Higgins]

It's sad, people still read Marx like the bible or like a native chinese in the 60's always repeating without critical understanding.
Who does that? Have you read any debates among Marxists that have happened over the last 150 years? No one reads Marx as the final completed "word" - hell he didn't even finish Capital. Marx is a starting point and he is still read and considered important because he was writing about the fundamental functions of the system which is why these fundamentals still apply even though many specific features change or things adapt. Marx presents capitalism as a system of constant change - it's right there in the beginning of the Manifesto. Events happened which he could never foresee such as fuller development of imperialism, introduction of credit, world wars, workers revolutions which defeated the existing ruling class but failed to establish a rule by the working class. That's why people have tried to expand on all these ideas or formulate ideas for new features of the system. This is why almost no one reads ONLY Marx but also reads Lenin or Luxemburg or Gramnsci to name just a tiny few - because they either correct or expand or update working class revolutionary theory.

Now if you're talking about the USSR or other dictatorships that called themselves socialist, then yes, Marx (and Lenin) were fetishised and their works turned into dogma for the service of the ruling group. This can not be blamed on Marx or on people who see Marx's writings and all of revolutionary theory as a living and breathing guide.


Marx couldn't even imagine a world where someone can speak with another person from the other side of the globe in minutes, or where mechanized work had filled the role of almost all unskilled workforce, or where all the world food production is dependent of a single resource called oil...And people who studied the mechanics of aerodynamics probably couldn't have conceived of jet-engines - does that negate the fundamentals of flight? Or is it just changing the variables on the same fundamental process?

That's what capitalism is - it's the same system now as it was in the past. A car rather than a bike doesn't change the nature of moving from one point to another, it just changes the how and how-fast of travel. Capitalism is about production for profit - this can be organized in numerous ways, but the fundamentals from Capital are still true. In fact, read the book - Marx's whole project is separating the variables from the fundamental workings of the system, the common denominators.

Proof of the value of his insights is that every major economic crash sees capitalist economists wrong and "rediscovering" Marx's ideas and marveling about how relevant they are to understanding what's going on despite his "crazy" ideas about class struggle and worker's revolutions. Then in boom times, the economists always say, "Oh well crisis is a thing of the past, so Marx was wrong".

[A Marxist Historian]

Austrian economist David Gordon understands perfectly well what is wrong with the labor theory of value.

Other folk here have knocked Gordon down on his misunderstandings of Marx. But let's get to the key point.

According to Gordon, and the Austrians, exchange happens because each side thinks that what they are exchanging for has a higher value than what they trade.

But this is, obviously, purely subjective and wrong. In that case, at least one and probably both of the exchangers are misvaluing by objective criteria, from the standpoint of society as a whole. And that's the only standpoint that matters for a scientific economist.

Just because somebody thinks something has a particular value doesn't mean it actually has that value, for anyone other than the deluded misvaluer.

-M.H.-

[A Marxist Historian]

It's sad, people still read Marx like the bible or like a native chinese in the 60's always repeating without critical understanding.
Marx couldn't even imagine a world where someone can speak with another person from the other side of the globe in minutes, or where mechanized work had filled the role of almost all unskilled workforce, or where all the world food production is dependent of a single resource called oil...

Yes, matter of fact he could. He and Engels didn't engage in much futuristic speculation, but on the rare occasions that they did, they imagined things even wilder from a 19th century perspective than that.

He most certainly visualized mechanization and automation, as that is exactly the foundation stone of Marx's theory of the falling rate of profit.

I recall that at one point he even says that the rate of profit would still fall if technology advanced to the point that "the workers could live on air."

None of the technological advances you mention have any impact on Marx's economic formulas whatsoever. They just mean a higher level of organic composition of capital and therefore a lower rate of profit.

-M.H.-

[trivas7]

According to Gordon, and the Austrians, exchange happens because each side thinks that what they are exchanging for has a higher value than what they trade.

But this is, obviously, purely subjective and wrong. In that case, at least one and probably both of the exchangers are misvaluing by objective criteria, from the standpoint of society as a whole. And that's the only standpoint that matters for a scientific economist.
-M.H.-
What objective criteria are you appealing to? Only individuals engage in economic activity; there is no scientific "standpoint of society as a whole".

[Revolution starts with U]

No, that's false Trivas. People often have a delegate speak for them economically within a group. You've taken methodological individualism too far. Yes, groups don't act. But individuals DO act IN groups.

Lobbying firms come to mind. This is companies, ie groups of people, delegating to a lobbyist the authority to speak for them in Congress. They buy the services of this lobbyist... it certainly isn't each individual coming and paying him.
In fact, most economic activity by common people is for the whole family, not themselves. I think it would be safe to say that MOST economic activity is social, and not individual.

In the social sciences we seek a certain inter-subjective objectivity. The criteria is usually happiness and/or prosperity, which tho subjective terms can find objectivity through the inter subjective action of individuals.

[Baseball]

No, that's false Trivas. People often have a delegate speak for them economically within a group. You've taken methodological individualism too far. Yes, groups don't act. But individuals DO act IN groups.

Lobbying firms come to mind. This is companies, ie groups of people, delegating to a lobbyist the authority to speak for them in Congress. They buy the services of this lobbyist... it certainly isn't each individual coming and paying him.

It is not clear how this example supports that which Marxist Historian claimed. These companies are concluding that the value of the service which the lobbyist provide exceed whatever the costs are associated with using that lobbyist. As in the "family" argument you had made, they are people who are closely tied together, bound by common interests and desires. How does this play-out amongst millions of different people with different interests and desires?

[Revolution starts with U]

The claim was that all economic actions are individual actions. The refutation was that they are not. If we can engage in certain actions collectively, what is the reason we cannot in others? What is different about more people, than just more people? It's not like I HAVE TO be connected to my family.

[trivas7]

The claim was that all economic actions are individual actions. The refutation was that they are not. If we can engage in certain actions collectively, what is the reason we cannot in others? What is different about more people, than just more people? It's not like I HAVE TO be connected to my family.
No; I'm claiming that only individuals act to obtain their ends. This is the meaning of economic activity; it follows that collective entities don't engage in economic activity.

[Revolution starts with U]

Except that, you know, they do. What do you think the chamber of commerce is? A corporation? Again, you have taken methodological individualism too far.

[Luís Henrique]

No; I'm claiming that only individuals act to obtain their ends.

But do individuals act to obtain their ends? If so, how do we explain mistakes?

And if different individuals pursue mutually exclusive ends, then what?


This is the meaning of economic activity;

Well, no. You are taking a "philosophical" axiom as self-evident, but it is certainly not even close.


it follows that collective entities don't engage in economic activity.

Your reasoning is that only birds fly, so it follows that either bats are birds or they don't fly at all. Evidently, if only individuals engage in economic activities, then collective entities don't. Which means that corporations either don't engage in economic activities, or they are individuals.

No actual knowledge can be achieved from such kind of dogmatism.

Luís Henrique

[trivas7]

Your reasoning is that only birds fly, so it follows that either bats are birds or they don't fly at all. Evidently, if only individuals engage in economic activities, then collective entities don't. Which means that corporations either don't engage in economic activities, or they are individuals.

No actual knowledge can be achieved from such kind of dogmatism.

Luís Henrique
It's self-evident to me that individuals act toward ends. If that strikes you as dogmatic, so be it. Collective entities are merely the agencies of individual wills often at odds with one another.

[Revolution starts with U]

Yet those collectives still make decisions, real impactful decisions.

Are corporations individuals? Your position forces you to say yes.

EDIT: I am fully in agreement with the MI proposal to analyze groupthink, or groups in general, as the collective will of individual decisions. But to act like groups don't make decisions is just ludicrous ideology.

[Baseball]

The claim was that all economic actions are individual actions. The refutation was that they are not. If we can engage in certain actions collectively, what is the reason we cannot in others? What is different about more people, than just more people? It's not like I HAVE TO be connected to my family.

You can CHOOSE to be in whichever group you wish, I suppose. And you can CHOOSE not to do so- at least in a capitalist community.

How true is this in socialist community? Not very, since its basis is the group. Aside from the being straitjacketed with respect to economic issues, there are of course political implications with HAVINg to be part of the prescribed group.

[Baseball]

But do individuals act to obtain their ends? If so, how do we explain mistakes?

People are not perfect- perhaps they are wrong.
Why would tis be any different in a socialist community?


And if different individuals pursue mutually exclusive ends, then what?

Indeed, a vital problem in the socialist community.
The capitalist community- no so big a problem- or one that can be solved.

[Luís Henrique]

You can CHOOSE to be in whichever group you wish, I suppose. And you can CHOOSE not to do so- at least in a capitalist community.

Well, not so.

You can't "choose" to be a member of the group of "White people", and you can't "choose" to be a member of the group of the "10 richest people in the world", or of the group of the "10 most famoust physicists ever".

Also, capitalism has little to do with your ability to choose what groups you are a member of. Quite harsh dictatorships, that would forbid you from being a member of certain groups (that would forbid the very existence of some groups, indeed) have been based on capitalist economies. Just to avoid Godwin's law, here are a few examples: Spain under Franco, Greece under Papadopoulos/Ioannides, Brazil or Argentina under the military, Chile under Pinochet, Portugal under Salazar, Indonesia under Suharto, Taiwan under Chiang Kai Chek. Believe me, this is a short list, that could be easily multiplied by five or six.


How true is this in socialist community? Not very, since its basis is the group.

Nope. The basis in a socialist society is the individual. Indeed, a much freer individual, not subjected to the crazy whims of that collective called capital.


Aside from the being straitjacketed with respect to economic issues, there are of course political implications with HAVINg to be part of the prescribed group.

Which groups do you believe people would HAVE to be part of under a socialist society?

Luís Henrique

[Luís Henrique]

People are not perfect- perhaps they are wrong.
Why would tis be any different in a socialist community?

So, if they are wrong, they are not really acting toward their ends, are they? Moreover, what can possibly make them wrong?


Indeed, a vital problem in the socialist community.
The capitalist community- no so big a problem- or one that can be solved.

Ah, but if A and B pursue mutually exclusive goals, then one of them at least will fail, which again means that his/her actions were not conducive to his/her ends. How can that be?

Luís Henrique

[Dean]

Austrian economist David Gordon understands perfectly well what is wrong with the labor theory of value.

And apparently you don't, since you still have nothing to contribute to the debate.

[Baseball]

You can't "choose" to be a member of the group of "White people", and you can't "choose" to be a member of the group of the "10 richest people in the world", or of the group of the "10 most famoust physicists ever".

Rev with U was claiming a desire to work collectively in areas beyond mere family or lobbyists. He or she was also claiming that such arrangements can be optimal for securing people's "happiness and/or prosperity."

What's the name of the group of the "10 most famous physicists ever"? How often do they meet?


Also, capitalism has little to do with your ability to choose what groups you are a member of. Quite harsh dictatorships, that would forbid you from being a member of certain groups (that would forbid the very existence of some groups, indeed) have been based on capitalist economies.

Different argument-- again it was a response to Rev with U comment.



Nope. The basis in a socialist society is the individual. Indeed, a much freer individual, not subjected to the crazy whims of that collective called capital.

As opposed to the "crazy whims" of the group.




Which groups do you believe people would HAVE to be part of under a socialist society?

Beat me. Yet again, it was Rev with U making this claim in response to Trivas.

[Baseball]

So, if they are wrong, they are not really acting toward their ends, are they? Moreover, what can possibly make them wrong?

Probably.
What's the point?




Ah, but if A and B pursue mutually exclusive goals, then one of them at least will fail, which again means that his/her actions were not conducive to his/her ends. How can that be?

Maybe.
What's the point?

[Luís Henrique]

Probably.
What's the point?

If A's interests are to achieve x, but his actions instead end in !x, then what else is in action, besides A and his/her interests?


Maybe.
What's the point?

If A and B have mutually exclusive interests, and A's are achieved, to the exclusion of B's, does this mean there is something else besides A and B and their respective interests at stake?

Luís Henrique

[Baseball]

If A's interests are to achieve x, but his actions instead end in !x, then what else is in action, besides A and his/her interests?



If A and B have mutually exclusive interests, and A's are achieved, to the exclusion of B's, does this mean there is something else besides A and B and their respective interests at stake?

Luís Henrique

What's the point?

[Luís Henrique]

What's the point?

That methodological individualism is invalid.

Luís Henrique

[Revolution starts with U]

Rev with U was claiming a desire to work collectively in areas beyond mere family or lobbyists. He or she was also claiming that such arrangements can be optimal for securing people's "happiness and/or prosperity."

What's the name of the group of the "10 most famous physicists ever"? How often do they meet?
Professors regularly meet and discourse with other members of their field. This is nothing to be surprised at.
In fact, what lead to Hawking's now-proven thesis that Black Holes do, in fact, leak information was a bet made between him and Penrose (Hawking lost the bet btw, he didn't think they would) made at a dinner party they were having.

You can find any number of physics conferences to attend. This is also basically the foundation of the peer-review process, is that we move forward faster working together than against each other. And often their papers will be attributed to multiple authors, i.e., collectively innovating scientific progress.

C'mon Baseball, you should know by now you stand on nothing more than a floating log. Even the slightest socialist wave can push your arguments over. Better to just admit the only defense of Capitalism is a healthy respect for the status quo, and throw your chips behind the "the masses are too stupid to lead themselves" line. :thumbup1:

[trivas7]

No, that's false Trivas. People often have a delegate speak for them economically within a group. You've taken methodological individualism too far. Yes, groups don't act. But individuals DO act IN groups.


The claim was that all economic actions are individual actions.
No; the claim that only individuals act to (economic) ends is not the same as saying that all economic actions are individual actions (which clearly is not the case as rightly point out).

[Revolution starts with U]

What objective criteria are you appealing to? Only individuals engage in economic activity; there is no scientific "standpoint of society as a whole".


No; I'm claiming that ONLY individuals act to obtain their ends. This is the meaning of economic activity; it follows that collective entities don't engage in economic activity.


It's self-evident to me that individuals act toward ends. If that strikes you as dogmatic, so be it. Collective entities are merely the agencies of individual wills often at odds with one another.

Ya, that's exactly what you were claiming.

[Baseball]

Professors regularly meet and discourse with other members of their field. This is nothing to be surprised at.

And I wasn't. LH was referring to a group people could NOT choose to join,






C'mon Baseball, you should know by now you stand on nothing more than a floating log. Even the slightest socialist wave can push your arguments over.

I tend to find that the wave always shifts.


Better to just admit the only defense of Capitalism is a healthy respect for the status quo, and throw your chips behind the "the masses are too stupid to lead themselves" line. :thumbup1:

And as you often say, the socialist has no responsibility to describe how the "masses" might lead themselves (in a socialist way). The waves are real easy to create when it is claimed there is no need to describe and define the waves.

[Baseball]

Ya, that's exactly what you were claiming.


Capitalism describes a way in which people work together.
Socialists object to such ways.
Fine.
But why 'gotcha" on Trivas when yourself says socialism has no duty to describe their own workings together?

[Baseball]

That methodological individualism is invalid.

Luís Henrique

No. I think it proves that socialism has standards it cannot possibly reach.
How does socialism keep a person from pursuing the "wrong thing"?

[Deicide]

So, Trivas, have you become big bourgeois yet? How's that fantasy going? Or are you still living in your mom's basement?

[Luís Henrique]

No. I think it proves that socialism has standards it cannot possibly reach.
How does socialism keep a person from pursuing the "wrong thing"?

It doesn't. If a person wants to pursue the "wrong thing", then s/he will do exactly that. The point is how to avoid a person pursuing the wrong thing harming other people, which in capitalism is unavoidable.

Still, you haven't explained how mistakes happen, and how do they not contradict the idea that people always act on behalf of their interests.

Luís Henrique

[Baseball]

It doesn't. If a person wants to pursue the "wrong thing", then s/he will do exactly that. The point is how to avoid a person pursuing the wrong thing harming other people, which in capitalism is unavoidable.

And how is it avoidable in socialism?


Still, you haven't explained how mistakes happen,

I did- people are not perfect.


and how do they not contradict the idea that people always act on behalf of their interests.

Or perceived interests.

But isn't such a critique more of a problem for socialism?

[trivas7]

Marx is basically unique in making a system designed to adapt to real developments in the world. Austrians and bourgeois economists still want to find timeless universals of economics within whatever particular form of capitalism exists today. Time will inevitably make their speculations useless, ironically, only a completed socialist revolution will make Marx's analysis of capitalism irrelevant.
Few people take Marx seriously anymore as a economist. I read Capital is a critique of all political economy. Until such time as the socialist revolution becomes a reality your prognosis for the future is merely a blank check waiting to be cashed.

[Workers-Control-Over-Prod]

Few people take Marx seriously anymore as a economist. I read Capital is a critique of all political economy. Until such time as the socialist revolution becomes a reality your prognosis for the future is merely a blank check waiting to be cashed.

If you seriously want to come to the RevLeft website and say that you read Capital by Karl Marx, then start dissecting each paragraph and do some work, get going, we are all waiting for actual disagreements with actual descriptions and statements by Karl Marx. You just come here and spout incomprehensible nonsense.

[Dean]

Few people take Marx seriously anymore as a economist. I read Capital is a critique of all political economy. Until such time as the socialist revolution becomes a reality your prognosis for the future is merely a blank check waiting to be cashed.


What, then, of your and Mises' rejection of all history? Both make claims regarding the bearing of history and economics, and while you may "read" Marx as pure criticism of political economics, Mises actively states (as do you) that he is not drawing upon history to make his assertions.

If we are even to give you the benefit of the doubt, Marx has only said those who came before were wrong - you, on the other hand, say you won't even hear them out.

What is most bizarre is to think how you sell this shit to yourself. There's a reason I put that quote from Mises in my signature - more than anything else, it shows what a fucking joke he was. As you are for holding the same line.

[Dean]

If you seriously want to come to the RevLeft website and say that you read Capital by Karl Marx, then start dissecting each paragraph and do some work, get going, we are all waiting for actual disagreements with actual descriptions and statements by Karl Marx. You just come here and spout incomprehensible nonsense.

He betrays his own ignorance by repeating the most basic errors presented in the mainstream narrative on Marx. Namely, he seems to think that Marx thought humans were not driven by self interest - when Marx actually says precisely that early in Capital. It's a fair enough error if you haven't read Marx, though, but he shouldn't be pretending.