Power theory of value

[Comrade #138672]

I just read about something called the 'power theory of value', which opposes both the labour theory of value and the marginalist theory of value.



Nitzan and Bichler argue that it was never possible to separate economics from politics. This separation is required to allow for neoclassical economics to base their theory on utility value (http://en.wikipedia.org/wiki/Utility) and for Marxists to base the labour theory of value (http://en.wikipedia.org/wiki/Labour_theory_of_value) on quantified abstract labour (http://en.wikipedia.org/wiki/Labour_power). Instead of a utility theory of value (http://en.wikipedia.org/wiki/Utility_theory_of_value) (like neoclassical economics (http://en.wikipedia.org/wiki/Neoclassical_economics)) or a labour theory of value (http://en.wikipedia.org/wiki/Labour_theory_of_value) (as found in Marxist economics (http://en.wikipedia.org/wiki/Marxian_economics)), Nitzan and Bichler propose a power theory of value. The structure of prices has little to do with the so-called "material" sphere of production and consumption. The quantification of power in prices is not the consequence of external laws — whether natural or historical — but entirely internal to society.

In capitalism, power is the governing principle as rooted in the centrality of private ownership. Private ownership is wholly and only an act of institutionalized exclusion, and institutionalized exclusion is a matter of organized power. And since the power behind private ownership is denominated in prices, Nitzan and Bichler argue, there is a need for a power theory of value.

Capitalization (http://en.wikipedia.org/wiki/Market_capitalization), in their theory, is a measure of power, as illuminated through the present discounted value of future earnings (while also taking into account hype and risk). This formula is basic to finance which is the overarching logic of capitalism. The logic is also inherently differential as every capitalist strives to accumulate greater earnings than their competitors (but not profit maximization (http://en.wikipedia.org/wiki/Profit_maximization)). Nitzan and Bichler label this process differential accumulation (http://en.wikipedia.org/wiki/Differential_accumulation). In order to have a power theory of value there needs to be differential accumulation where some owners' rate of growth of capitalization is faster than the average pace of capitalization.Source: http://en.wikipedia.org/wiki/Jonathan_Nitzan

What do you think about this? It seems as if the power theory of value just reverses the labour theory of value, starting from the abstract rather than the concrete.

Also, what do Anarchists think about this theory? This should, at least to some extent, appeal to them.

[RedMaterialist]

it's complete non-sense

[blake 3:17]

The idea is intriguing. And, yes, I think there needs to be a basic recognition of the drive to dominate economically to further social or political ends.

Once one has enough wealth to have an absolutely secure future, indulge in luxuries, provide for a large number of dependents, what other goal is there but power?

[diagrammatic]

Interesting. But its name aside, I have doubts as to the practicality and even the sincerity of a comparison of this "power theory" to neo-classical and especially to Marxian theories of value. Principally, its apparent absence of any agency ("labour") to transform one species of commodity (eg "linen") into another (eg "a coat"), seems to leave it severely lacking: as if "power" commodities can truly emerge out of thin air!! Certainly my lack of knowledge of finance goes far to explain my incredulity in regard to this theory; to a financier, the very notion of "value" must invest itself fundamentally differently than in would to a wage-labourer. But therein lies the crux of my argument: though the neo-classical and Marxian approaches lend themselves with varying degrees of simplicity to comparison with one another, this "power theory" seems to me an entirely different bird, altogether.