Are parts of Marxian economics wrong?

[RedWorker]

I sometimes hear that things like the labour theory of value, tendency of the rate of profit to fall and others are wrong.

Is this true? And if so, what is the effect on the communist movement?

[motion denied]

If the LTV is bogus then we're on difficult grounds to prove exploitation exists.

On another note, exchange on Marxian crisis theory with Michael Heinrich (http://monthlyreview.org/features/exchange-with-heinrich-on-crisis-theory/)

[RedWorker]

If the LTV is bogus then we're on difficult grounds to prove exploitation exists.

Why's that? The capitalist class is quite obviously earning money out of people who work for them and paying them only part of the profit, whether a specific theory is wrong or not.

[Ethics Gradient, Traitor For All Ages]

People who deny the LTV would claim that profit comes from exchange in the market place, meaning that workers were not exploited in the process of making the commodity and were in fact paid a fair share for their labor.

[Anglo-Saxon Philistine]

Speaking from personal experience, most of the people who claim to have "disproven" the labour theory of value are talking about something else. All "subjective" theories of value are of this kind; the "value" they're talking about is simply not the exchange-value that Marx was talking about.

And if they are applied to value in the Marxist sense, you get obviously nonsensical results, like the conclusion that the price of a commodity is going to fluctuate wildly as personal preferences change.

I think Marxist economics is fairly consistent with the data, predictive and parsimonious, although most bourgeois economists would rather be broken on the wheel than admit that. "Marxian" economics, on the other hand, covers everything from actual Marxist theory to godforsaken rad-lib nonsense.

[Red Star Rising]

I sometimes hear that things like the labour theory of value, tendency of the rate of profit to fall and others are wrong.

Is this true? And if so, what is the effect on the communist movement?

I'm pretty sure that most of the arguments against LTV are just a repeated strawman that doesn't address what Marx actually meant

[Red Star Rising]

Wasn't Marx referring to socially necessary labour time? i.e. someone who spends 10 hours making a commodity by hand that a guy operating a machine can do in one hour does not produce more value - the nine additional hours are not socially necessary and are therefore effectively wasted labour power. Similarly if somebody trips and finds a gold nugget in front of their face or something it is not any less valuable because society cannot expect to acquire large amounts of gold if everyone repeatedly falls on their faces hoping to find gold.

So it can be seen as the 'average' or typically socially necessary labour time that decides value. This, to my knowledge, has not been countered effectively.

[Anglo-Saxon Philistine]

Wasn't Marx referring to socially necessary labour time? i.e. someone who spends 10 hours making a commodity by hand that a guy operating a machine can do in one hour does not produce more value - the nine additional hours are not socially necessary and are therefore effectively wasted labour power. Similarly if somebody trips and finds a gold nugget in front of their face or something it is not any less valuable because society cannot expect to acquire large amounts of gold if everyone repeatedly falls on their faces hoping to find gold.

So it can be seen as the 'average' or typically socially necessary labour time that decides value. This, to my knowledge, has not been countered effectively.

The gold nugget example is particularly daft as the labour theory of value explains the working of capital (although to be honest a lot of leftists misunderstand it as a recipe for "perfect" exchange instead of a part of the explanation of why exchange is in increasing contradiction with the development of the productive forces [/rant]). Capitalism doesn't work by people falling on their faces and finding gold.

(And if finding gold after falling on your face was common, it would be worth as much as dirt.)

[DOOM]

The gold nugget example is particularly daft as the labour theory of value explains the working of capital (although to be honest a lot of leftists misunderstand it as a recipe for "perfect" exchange instead of a part of the explanation of why exchange is in increasing contradiction with the development of the productive forces [/rant]). Capitalism doesn't work by people falling on their faces and finding gold.

(And if finding gold after falling on your face was common, it would be worth as much as dirt.)

Really? I've heard right-wingers argue that the LTV doesn't work (lol, as if the book-title chosen by Marx was completely unrelated to the content of Das Kapital) which is quite funny, because they were arguing against capitalism.

[Tim Cornelis]

Surely, Marx's theory of value is the law of value, whereas the LTV is the theory of value of classical economics (which Marx critiqued).

[Creative Destruction]

I sometimes hear that things like the labour theory of value, tendency of the rate of profit to fall and others are wrong.

Is this true? And if so, what is the effect on the communist movement?

It's not true. After WWII, there were some Keynesian Marxists that started to look at Marx through that new lens. They found that, within a static framework, that Marx's economics don't check out. What they failed to realize is that the world is not static, and so Marx was not dealing with a static framework. Unfortunately, at least for academic Marxists, this view that the LTV and the tendency of the rate of profit to fall, have been "discredited" so they keep pushing this bullshit. The guy who kicked this all off was Nobuo Okishio. They're basically doing what Marx criticized the physiocrats for doing in Capital.

In response to them, since the 80s, there has been a correction done to those academic's revisions. It's called the TSSI - temporal-single-system-interpretation. One of the biggest proponents and developers of this idea is Andrew Kliman. I'd recommend his books Reclaiming Marx's Capital and The Failure of Capitalist Production (the latter book shows, empirically, that the tendency of the profit rate is to fall, and he argues that this is the source of the latest crisis; rather than underconsumption, which is the most popular argument on the left right now.) Brendan Cooney set up a playlist of one of Kliman's talks about this, as well:

https://www.youtube.com/playlist?list=PL1C9F9B977B8D26B5

The logical conclusion of doing away with Marx's value theory and pinning it all on Keynesian consumptionist theories is that if we just reformed capitalism, instituted higher wages, then everything would be fine. Arguably, this underpins many of the programs of Eurocommunists and modern US socialist parties like the Socialist Alternative. It's just completely wrong. The fact of the matter is that, for example, if we have a shock-increase of minimum wages to a living wage, that would decimate profits for a lot of capitalists and cause the profit rate to fall even more, thus possibly triggering another crisis. Investment in the economy would fall, people would be laid off, etc. The question we have to deal with then is; why the fuck should we live under a system that punishes society for people trying to make a living?

[Creative Destruction]

Surely, Marx's theory of value is the law of value, whereas the LTV is the theory of value of classical economics (which Marx critiqued).

Marx's value theory uses a revised version of the LTV. He did critique Smith and Ricardo's LTV, but in doing so, he developed his own.

[Dave B]

The ‘labour theory of value’ predated Marx and was general with people like Benjamin Franklin, Adam, Smith and Ricardo.

There were other interesting theories like the wheat theory of value which was being plugged by the capitalist farmers; to the irritation of the manufacturing capitalists who according to that theory were essentially ripping off the agricultural ‘sphere’ of production.

As well as a ‘wages of supervision theory’ that imploded with the development of money or finance capitalism.

Karl added to the ‘labour theory of value’ with the concept of labour power being a commodity.

The marginal utility theory came later and also out of Lanchashire with William Jevons.

http://en.wikipedia.org/wiki/William_Stanley_Jevons

http://www.econlib.org/library/Enc/bios/Jevons.html

just links with no endorsement of content

It looks like superficially as if that might have be a response or reaction to Marxism but I suppose you would need to be a history student of that subject to work that out properly.

Karl and Engels (as do the Von Mises people) seemed to have ignored Jevons and his theory which is unfortunate in retrospect.

Maybe everybody else did at the time?

I think Engels mentioned his name in passing a couple of times.

I have read a bit of Jevons stuff but not much.




The problem with utility theory is that once you get past the surface of it it is like spaghetti harder to follow than Marx.

[Creative Destruction]

The problem with utility theory is that once you get past the surface of it it is like spaghetti harder to follow than Marx

The problem isn't that it's "hard to follow" like Marx -- where Marx makes sense -- but utility theory is complete nonsense and outside the realms of material reality. It's capitalist idealism and abuses mathematics in attempts to be obscurantist. It allowed schools based off of marginal utility, like the Austrians, to come up with insane bullshit like Praxeology, that dispenses with the use of the scientific method and any logical argument.

[Redistribute the Rep]

Well if all they can say is "it's wrong" in place of an actual criticism then I'd say we don't have anything to worry about.

As for the implications on the communist movement if there were errors, I'd say marginal effects if any at all. History has seen some pretty massive workers movements, I don't think they were motivated by people seeing validity in some economic theories. We're not a bunch of college aged libertarians who get off on reading von Mises, daydreaming about how we're totes more logical than everybody else; communists strive for the emancipation of the oppressed workers, many of whom have little other choice but to take part due to their current living standards. That's not to say Marx's economic theories havent had profound impacts on the theoretical development of socialism, but I wouldn't say flaws in them would make workers any happier with capitalism or any less likely to want to abolish it

[Creative Destruction]

Well if all they can say is "it's wrong" in place of an actual criticism then I'd say we don't have anything to worry about.

As for the implications on the communist movement if there were errors, I'd say marginal effects if any at all. History has seen some pretty massive workers movements, I don't think they were motivated by people seeing validity in some economic theories. We're not a bunch of college aged libertarians who get off on reading von Mises, daydreaming about how we're totes more logical than everybody else; communists strive for the emancipation of the oppressed workers, many of whom have little other choice but to take part due to their current living standards. That's not to say Marx's economic theories havent had profound impacts on the theoretical development of socialism, but I wouldn't say flaws in them would make workers any happier with capitalism or any less likely to want to abolish it

The theoretical base of the organization of the working class does matter, because there are serious political implications stemming from theory. Again, if we were to take the view that Marx's LTV is wrong, that means that there isn't inherent economic exploitation in capitalism; it means that the cause of crisis isn't falling rates of profit, but something else, on and on. If these things are true, and they aren't actually happening as Marx described, then we need to be looking for another basis on which to organize movements for solutions. So, in the place of LTV, we have underconsumptionist theories, which basically posit that the working class just isn't getting paid enough to keep capitalism running, thus all the bad things happen flow from that; crisis and what not. This would imply that we can "save" capitalism and just have a social democratic, liberal capitalist utopia, and that'd be the end of history. Fukuyama's theory would be correct.

The problem is is that the LTV is valid, and it does show exploitation and it does show that there is a tendency for the profit rate to fall, and it's that tendency that leads to crisis. That contradiction, according to the LTV, is inherent in the system. That would lead us to say that capitalism can't be saved and must be overthrown if we don't want to suffer through this anymore.

Organizations don't exist on theory-less basis. The theory and ideas and views of a movement matter, almost as much as the act of organizing people itself. Theoretical work and understanding how capitalism works is part and parcel to a movement.

[RedWorker]

So, in the place of LTV, we have underconsumptionist theories, which basically posit that the working class just isn't getting paid enough to keep capitalism running, thus all the bad things happen flow from that; crisis and what not. This would imply that we can "save" capitalism and just have a social democratic utopia, and that'd be the end of history. Fukuyama's theory would be correct.

Or not; many other parts of Marxism would still be valid. For instance, the base ultimately determines the superstructure, so politics will always be shitty for workers in capitalism; plus, in capitalism workers will always be earning less than the value they produce, and so on. Therefore it could still be concluded that it is needed to overthrow capitalism, and Marx's materialist conception of history would remain unchallenged.

[Creative Destruction]

Or not; many other part of Marxism would still be valid. For instance, the base ultimately determines the superstructure, so politics will always be shitty for workers in capitalism;

It'd be relatively shitty, reduced to a mere matter of inequality. The logical end-point of underconsumption (which many Marxists have taken up these days, like David Harvey, et. al.) is that if workers were just paid enough, then we could just spend ourselves out of any situation (both on a governmental level and on a personal leve, through higher wages.) People like Harvey may not want to cop to that, but that's pretty much the conclusion that other prominent Marxists, like Paul Sweezy, have arrived at. If underconsumptionism is true, and not the fact that the labor theory of value's calculation that there is rampant and inherent exploitation of labor and that profit rates dictate crises, then we should all just be happy with a Nordic style social democracy. If our conclusions don't actually lead us to the fact that its capitalism itself as a cause of crisis, and it's just a matter of political will, then what's the use in trying to over throw it?


plus, in capitalism workers will always be earning less than the value they produce, and so on.

This would require a formulation under the LTV. Underconsumptionism (Keynesianism, basically) and marginal utility, which are both frameworks upon which neo-Marxist academics have been trying to reshape Marx, do not concern themselves with labor value. It's useless talking about labor's value, and thus its exploitation, in these terms because there's no room for them in those other theories. They're predicated on subjective theories of value; not labor value.


Therefore it could still be concluded that it is needed to overthrow capitalism, and Marx's materialist conception of history would remain unchallenged.

Marx's materialist conception of history rests, itself, on his theories of value. That's what I'm saying: if you actually, truly understand his value theory, instead of treating it as a modular part in a larger framework which can be readily switched out for something else, then you would be led to an understanding that everything else within Marx's framework leads back to the law of value, as articulated in Capital and other works. If it's underconsumption, and not falling profit and inherent exploitation of labor, that is the true cause of crisis, and if Marx is primarily concerned with crisis and emancipation, then the historical materialism concept would mirror Fukuyama's formulation, where liberal capitalism and social democracy are the end points of human social development. It doesn't. It posits that there are inherent contradictions in the system, which require the LTV to explain. If you take the LTV out, it does seem incoherent, as Okishio posited.

[Fakeblock]

Or not; many other part of Marxism would still be valid. For instance, the base ultimately determines the superstructure, so politics will always be shitty for workers in capitalism; plus, in capitalism workers will always be earning less than the value they produce, and so on. Therefore it could still be concluded that it is needed to overthrow capitalism, and Marx's materialist conception of history would remain unchallenged.

As rednoise said, that would again be a recourse to the Marxist theory of value - on which the theory of surplus-value depends.

Capital is the defining work of historical materialism. Marx's formulation of 'the materialist conception of history' is descriptively inadequate, for historical materialism is not simply a way of studying history, a mode of historical interpretation. As a problematic, it is merely a framework within which Marxists compose theories. So yeah, disproving Marx's theory of capitalism would not definitely invalidate historical materialism, but I doubt very much that the problematic constructed by Marx, so rigorously applied in Capital, could survive such a blow. Everything that Marx ever said about capitalism, everything regarding the class struggle under capitalism, the transition to capitalism, the transition from capitalism is dependent on his theory of the capitalist mode of production. Without concrete demonstration in theory, statements such as "the base ultimately determines the superstructure", "class struggle is the motor of history", etc. etc. are empty signifiers, meaningless. Simply repeating those philosophical mantras does not prove them. We need to be able to show their truth by means of theory - and reject them if we can't.

[RedMaterialist]

I sometimes hear that things like the labour theory of value, tendency of the rate of profit to fall and others are wrong.

Is this true? And if so, what is the effect on the communist movement?

There is a connection between the decline in the rate of profit and labor value. As commodities are more and more machine produced the labor content of the commodities is more and more reduced and they become cheaper, as Marx predicted. The rate of profit is therefore reduced.

But if the labor theory of value and the theory of the decline in the rate of profit are wrong, then that would mean the marginalists are right and that value is determined solely by the subjective value each individual consumer places on a commodity. Consumers still would need money to buy commodities and they would still need to sell their own commodity, their labor, to buy what they need. And the labor owners have no choice but to sell their commodity to fewer and fewer buyers.

So, you would still have wage-labor and there would still be two, at least, antagonistic classes of people, workers and capitalists. And the conflict will result in another financial crisis and finally in a revolution.

[RedMaterialist]

Simply repeating those philosophical mantras does not prove them. We need to be able to show their truth by means of theory - and reject them if we can't.

I would say Marx has already shown their truth by means of theory. What we need to do is show their truth by means of practice. Several studies have shown that the tendential fall in the rate of profit since 1930 or so is real (one study was done by Paul Cockshott, who used to post here.) What has yet to be shown is that the value of a commodity (including the profit) is created during production (including transportation, etc.) and that no value is added after the commodity enters the market.

My own view is that economic statistics are beginning to show this. The BEA, Bureau of Economic Analysis, shows that the per unit price of a product or service is made up of labor costs, non-labor costs and profit. In other words, profit is in the price before a commodity goes on the market.

There are also statistics from the OECD which show the value (price) of production of employees and the wages of employees. The median value produced by an employee is about $50k a year, the median wage is about $25k a year, which is exactly what Marx predicted.

I'm no economist and I don't expect mainstream economics to admit the labor theory of value, but I think the proof is already there. Besides, even Adam Smith believed in the labor theory of value.

[G4b3n]

If the LTV is bogus then we're on difficult grounds to prove exploitation exists.

On another note, exchange on Marxian crisis theory with Michael Heinrich (http://monthlyreview.org/features/exchange-with-heinrich-on-crisis-theory/)

Ehh I think that is a bit of a stretch. There are plenty of morality based arguments against capitalist exploitation, just because Marxists don't like to entertain them doesn't mean they don't exist or don't have some sort of force.

[Creative Destruction]

Ehh I think that is a bit of a stretch. There are plenty of morality based arguments against capitalist exploitation, just because Marxists don't like to entertain them doesn't mean they don't exist or don't have some sort of force.

Moral arguments are flimsy, unconvincing and subject to a whole bunch of metaphysical issues, ultimate relativist clashes and what not, which is the point in trying to use the scientific method to suss these issues out. That's not to say they can't useful arguments in some contexts, but they're extremely limited. Within the LTV -- which, again, still holds true and which we can see where Marx's main arguments have bore out -- there is a material explanation for exploitation, which is exploitation happens through the taking of surplus value from the working class.

If we, as a society, are to hold that exploiting individuals is undesirable and -- in fact -- leads to material societal wide degradation, then that's a more compelling argument than just saying hierarchy or whatever is inherently exploitative. Many people don't think hierarchy has an inherently immoral or even has an exploitative quality, and you can't prove it to them using a moral argument. They'll just retort with their own moralistic argument.

[Creative Destruction]

There is a connection between the decline in the rate of profit and labor value. As commodities are more and more machine produced the labor content of the commodities is more and more reduced and they become cheaper, as Marx predicted. The rate of profit is therefore reduced.

But if the labor theory of value and the theory of the decline in the rate of profit are wrong, then that would mean the marginalists are right and that value is determined solely by the subjective value each individual consumer places on a commodity. Consumers still would need money to buy commodities and they would still need to sell their own commodity, their labor, to buy what they need. And the labor owners have no choice but to sell their commodity to fewer and fewer buyers.

So, you would still have wage-labor and there would still be two, at least, antagonistic classes of people, workers and capitalists. And the conflict will result in another financial crisis and finally in a revolution.

No, the argument doesn't lead to that conclusion. Building an argument on marginalism still points to certain mechanisms within capitalism that can be reformed and where crises could be "managed" more easily. Class antagonism is almost specifically based on exploitation, and exploitation is concretely rooted in a labor theory of value.

There's no way to form a coherent argument based on Keynesian economics or marginal economics that doesn't lead, in some sort or another, to just plain reformism, because at the heart of it all is the assumption that the fundamentals of capitalism are sound. No amount of Marxian rejiggering of those frameworks can separate those theories from what they are, else they become completely incoherent themselves. Which is why the argument is; if Marx's LTV is actually untrue, erroneous, wrong, illogical or whatever, then we shouldn't be wasting our times on revolutionary folly. We should be putting our resources and energy into tweaking capitalism to the point where it does the least harm and ensures it runs as smoothly as possible, as Keynes ultimately argued.

[RedMaterialist]

No, the argument doesn't lead to that conclusion. Building an argument on marginalism still points to certain mechanisms within capitalism that can be reformed and where crises could be "managed" more easily.

Marginalism and Keynesianism have been tried now for 75 years. If one thing is clear it is that capitalism has not solved its crises.


Class antagonism is almost specifically based on exploitation, and exploitation is concretely rooted in a labor theory of value.


It certainly is rooted in the labor theory of value; however, it does not follow that exploitation must always be based on the original labor theory of value. Capitalism has clearly evolved and developed since the 19th century. Monopoly finance capitalism bears almost no resemblance to industrial capitalism. It is possible that "value" has also changed and is no longer based on labor or no longer even exists in a meaningful economic sense.


There's no way to form a coherent argument based on Keynesian economics or marginal economics that doesn't lead, in some sort or another, to just plain reformism, because at the heart of it all is the assumption that the fundamentals of capitalism are sound.

That is the assumption of the bourgeois economists, not the reality. All it will take is one more 2008 crisis and a refusal by the people to bail the banks out to destroy the whole system. If, and when, another 1929 depression occurs a revolution will break out and capitalism, one hopes, will be destroyed. After that the labor theory of value may well become an item of interest only to historical economics.

I personally believe the theory is still valid, but with computers, machines and robots taking over more and more production, it is inevitable that the labor portion of the commodity is slowly shrinking. As Marx predicted, when labor becomes more productive, through the use of machines, the commodity becomes cheaper. Once a commodity is, say, 99% machine produced, then the value of the commodity is practically zero. That doesn't mean it will be given away, just that it could be, as under communism, for instance.

[Creative Destruction]

Marginalism and Keynesianism have been tried now for 75 years. If one thing is clear it is that capitalism has not solved its crises.

Marginalism, maybe, but many people are taken with Keynesianism and usually cite the Nordic countries as models. Generally, the Nordic countries have been protected from world wide crises, except for when they slide into experimenting with marginalism. Of course, exploitation still happens in those economies and so do crises. But that's what the argument revolves around. It's "friendly" capitalism that the Eurocommunist parties and the American socialist parties have taken up in the last 50 years.

And if the argument goes that the LTV is no longer valid, and all we have are marginalism or Keynesianism, then there's no reason to be concerned with crises. There's no reason to be concerned with exploitation, because in those models, it doesn't exist -- at least, not in the way Marx meant. Crises becomes regarded as a nuisance where capitalism hasn't been fine tuned enough yet. That's the consequence of those frameworks.


It certainly is rooted in the labor theory of value; however, it does not follow that exploitation must always be based on the original labor theory of value. Capitalism has clearly evolved and developed since the 19th century. Monopoly finance capitalism bears almost no resemblance to industrial capitalism. It is possible that "value" has also changed and is no longer based on labor or no longer even exists in a meaningful economic sense.

Jesus Christ. Not this ridiculous argument again.

http://replygif.net/i/114.gif

[RedMaterialist]

And if the argument goes that the LTV is no longer valid, and all we have are marginalism or Keynesianism, then there's no reason to be concerned with crises. There's no reason to be concerned with exploitation, because in those models, it doesn't exist -- at least, not in the way Marx meant.

It's the capitalists who try to claim that crises no longer happen. The fact that they do still happen under Keynesian economics only shows that the underlying contradictions of capitalism still exist. But that is a separate question from whether the LTV is still valid. My point is that monopoly capitalism can still function without the LTV.

As productivity increases the labor value of commodities continues to decrease and commodities become cheaper. This is probably the reason that the economists no longer focus on the cost of production as a measure of value. Why should they? Costs of production are approaching zero. Costs are becoming marginal.

A Walmart can put a t-shirt on the shelves for maybe $.50, yet it can charge $5.00 for it. I think there are two reasons for this: it is an effective monopoly and the t-shirt has been produced almost entirely by machine.

The t-shirt has almost no exchange-value (in the Marxist sense), but it still has utility value. (If you don't worry about fashion, the damn things can last a year.) In other words, the economy is moving toward a stage where it only produces utility value.

Isn't that what communism is supposed to do? Produce only utility value? Capitalism can't continue to exist without exchange-value and profit. This is not to say that that the transition to socialism will be easy or peaceful.

Just some thoughts on the LTV.

[Creative Destruction]

It's the capitalists who try to claim that crises no longer happen.

No, capitalists don't claim that crises no longer happen. They admit it. Their point of view is to tweak capitalism to lessen crisis. Within their frameworks, though, it's a cost of doing business and running the economy. Without a Marxist framework, crisis becomes a nuisance, rather than something that needs to be combated completely. To them, it's a matter of legislating capitalism. For liberal Keynesians, it's a matter of legislating capitalism and putting in welfare nets to deal with capitalism. But none of the end conclusions come to overthrowing the system itself. It's pinned to some bad apples and a need for regulations.


The fact that they do still happen under Keynesian economics only shows that the underlying contradictions of capitalism still exist.

No, without the LTV, which is Marx's framework, contradictions no longer exist as a concept. And whatever contradictions you can gin up under a Keynesian and marginalist framework are said to be dealt with through legislating the economy.


But that is a separate question from whether the LTV is still valid. My point is that monopoly capitalism can still function without the LTV.

Then your point has nothing to do with what we're talking about here, because no on disputed that monopoly capitalism couldn't exist without the LTV to analyze it.


As productivity increases the labor value of commodities continues to decrease and commodities become cheaper. This is probably the reason that the economists no longer focus on the cost of production as a measure of value. Why should they? Costs of production are approaching zero. Costs are becoming marginal.

What the hell do you mean "economists no longer focus on the cost of production as a measure of value"? First, the term "value" to marginalists and Keynesians is different from Marx's value, so to say they focus on it at all, when we speak of value, is nonsense.

Aside from that, cost of production is Macroecon 101. So, even taking into consideration that they don't use Marx's designation of value, you're still wrong. I have no clue where you're getting these ideas from, but they're not based in reality. Just because capitalists try to approach commodity production to zero out labor costs, doesn't mean they don't still take into account fixed capital costs.


A Walmart can put a t-shirt on the shelves for maybe $.50, yet it can charge $5.00 for it. I think there are two reasons for this: it is an effective monopoly and the t-shirt has been produced almost entirely by machine.

Walmart doesn't have a monopoly, effective or in actuality, on t-shirt production. What in the ever loving fuck are you talking about? Do you understand what "monopoly" means?


The t-shirt has almost no exchange-value (in the Marxist sense), but it still has utility value. (If you don't worry about fashion, the damn things can last a year.) In other words, the economy is moving toward a stage where it only produces utility value.

It's becoming clear that you don't know what the "Marxist sense" of anything is. As long as a commodity is manufactured with exchange and profit in mind, then there is always going to be exchange-value, regardless of whether you can ultimately bring all labor costs, at least of physical goods, to nil. If you're suggesting that capitalists are going to automate themselves out of existence, then you're completely off in an entirely different universe.

Come on. Take a year off from posting here and go read Capital. I'd even settle for you to sit through David Harvey's awful lectures. You're slipping up on the most basic things.


Isn't that what communism is supposed to do? Produce only utility value? Capitalism can't continue to exist without exchange-value and profit. This is not to say that that the transition to socialism will be easy or peaceful.

Just some thoughts on the LTV.

I don't think you're even that familiar with the ins and outs of Marx's LTV. First, you're trying to argue that the LTV might be insufficient because Marx couldn't see into the future, and now you seem to be arguing that capitalists are just going to purposefully automate everything and then we'll have socialism. Very little of what you're saying makes any sense.

But more than that, absolutely nothing you've said here actually addresses the fact that taking away an analysis based on the law of value, and supplanting it with modern liberal economic theories, doesn't do anything but lead us to the conclusion that it isn't capitalism itself that is the issue.

[Red Star Rising]

It's the capitalists who try to claim that crises no longer happen. The fact that they do still happen under Keynesian economics only shows that the underlying contradictions of capitalism still exist. But that is a separate question from whether the LTV is still valid. My point is that monopoly capitalism can still function without the LTV.

How can surplus value, which is perhaps the centre piece of marx's critique of capitalism, exist without the LTV?

[piet11111]

A lot of anti LTV argumenters like to use the strawman of "sending someone to the desert to dig holes" then say no value was created through his work and as such the LTV is wrong.

While marx made very clear what he meant by the LTV.

[Red Star Rising]

A lot of anti LTV argumenters like to use the strawman of "sending someone to the desert to dig holes" then say no value was created through his work and as such the LTV is wrong.

While marx made very clear what he meant by the LTV.
I usually respond with:

"Nothing can have value, without being an object of utility. If the thing is useless, so is the labour contained in it; the labour does not count as labour, and therefore creates no value." - Capital Volume 1

Then they spectacularly misunderstand the concept of use and exchange value and accuse me of relying on a tautology.

[RedMaterialist]

How can surplus value, which is perhaps the centre piece of marx's critique of capitalism, exist without the LTV?

It can't. That's why the rate of profit declines (but not the aggregate amount of profit.) Only human labor can produce value in the Marxist sense. When human labor is completely replaced by machinery then the product will have no exchange-value, no value, only use-value, which is why under communism, production will be only for utility and not profit.

[RedMaterialist]

But none of the end conclusions come to overthrowing the system itself. It's pinned to some bad apples and a need for regulations.

Well, you're right. The Keynesians don't want to overthrow the system. But that's not the point.



Then your point has nothing to do with what we're talking about here, because no on disputed that monopoly capitalism couldn't exist without the LTV to analyze it.


Could you untangle that double negative? Are you saying that monopoly capitalism can exist without the LTV, because I am saying that is a possibilty.



What the hell do you mean "economists no longer focus on the cost of production as a measure of value"? First, the term "value" to marginalists and Keynesians is different from Marx's value, so to say they focus on it at all, when we speak of value, is nonsense.


Economists = bourgeois keynesians and marginalists (not david harvey, or Kliman or richard wolff). Their concept of value is completely different from Marx's. They don't believe there is anything such as exchange-value. Their value is nothing but the value of "marginal utility."



Just because capitalists try to approach commodity production to zero out labor costs, doesn't mean they don't still take into account fixed capital costs.


They don't zero out labor costs. What they say is that the workers are paid most of the value of their product or the "marginal utility" of their work. They say that if workers are paid on average $10.00 per hour then that is that value of what they have produced. There is no such thing as surplus value for them. Any additional value they find in the market.

They view fixed capital costs the same way. They are costs of production but their use doesn't create (or transmit. in the Marxist sense) any value.

What I'm saying is that capitalists are forced to produce with fewer and fewer workers. Their greatest dream is to produce something without the use of any labor. But by doing this they unwittingly reduce the very surplus value which produces their profit. We have begun to reach the point where machines can produce almost anything, even machines themselves.



Walmart doesn't have a monopoly, effective or in actuality, on t-shirt production. What in the ever loving fuck are you talking about? Do you understand what "monopoly" means?


Oh, you are wrong about that. Walmart controls the price it pays for the t-shirt and it controls the price that it charges. It controls the production, distribution, exchange and consumption of the t-shirt.




As long as a commodity is manufactured with exchange and profit in mind, then there is always going to be exchange-value

Exchange value is not created because a capitalist wants to sell for a profit. Exchange value is created by the use of abstract, generalized labor in the production of the commodity. The fact that the capitalist then sells it for a profit is only because the production process creates surplus value.



If you're suggesting that capitalists are going to automate themselves out of existence, then you're completely off in an entirely different universe.


Capitalists have no choice but to continue automating and making their products ever cheaper. That's what competition forces them to do. That's one reason the system goes through the crises it does. The process leads to over-production, under-consumption, falling rates of profit...the only way to recover is for capital to destroy accumulated capital, i.e. shut down factories, throw millions of people out of work, start wars, etc. and then start over.

What capitalists are doing is automating themselves into crisis after crisis. The real question is whether the working class will let them continue to do it.

by the way, invective, profanity, etc. is not an argument.

[RedMaterialist]

Parts of Marxian economics are not wrong, it's that they are incomplete, which should not be surprising since Kapital was written in 1864. 250 yrs have passed, numerous crises, two or three severe world depressions, two world wars, socialist revolutions, some successful, gigantic advances in production, take over of the economy by world monopolies.

What would be shocking is if Marxian economics had not changed.

[Alan OldStudent]

Parts of Marxian economics are not wrong, it's that they are incomplete, which should not be surprising since Kapital was written in 1864. 250 yrs have passed, numerous crises, two or three severe world depressions, two world wars, socialist revolutions, some successful, gigantic advances in production, take over of the economy by world monopolies.

What would be shocking is if Marxian economics had not changed.
Points well taken, although (not to be a nit picker), Marx wrote capital 150 years ago, not 250 years ago.

Regards,

Alan OldStudent
The unexamined life is not worth living—Socrates
Gracias a la vida, que me ha dado tanto—Violeta Parra

[RedMaterialist]

Points well taken, although (not to be a nit picker), Marx wrote capital 150 years ago, not 250 years ago.

Regards,

Alan OldStudent


Maybe it just seems that long.

[Vogel]

I present you with everything you could want to know about Marxian economics:
rdwolff.com/classes

rdwolff.com/content/marxian-economics-intensive-introduction

rdwolff.com/content/advanced-applied-marxian-economics-intensive-course

[Creative Destruction]

I present you with everything you could want to know about Marxian economics:
rdwolff.com/classes

rdwolff.com/content/marxian-economics-intensive-introduction

rdwolff.com/content/advanced-applied-marxian-economics-intensive-course

No. Wolff is an awful Marxian economist.

[FSL]

People who deny the LTV would claim that profit comes from exchange in the market place, meaning that workers were not exploited in the process of making the commodity and were in fact paid a fair share for their labor.

What this is is turning reality on its head, saying that value is created in distribution instead of production.
If no one works, nothing gets made. If nothing gets made, nothing gets exchanged.


The tendency of the rate of profit to fall is self-evident in the business cycles of capitalism. Bourgeois economists might suggest other reasons on why this is happening, like inadequate consumption (but why?) or government intervention with the interest rates leading to poor investment decisions etc

[FSL]

Wasn't Marx referring to socially necessary labour time? i.e. someone who spends 10 hours making a commodity by hand that a guy operating a machine can do in one hour does not produce more value - the nine additional hours are not socially necessary and are therefore effectively wasted labour power. Similarly if somebody trips and finds a gold nugget in front of their face or something it is not any less valuable because society cannot expect to acquire large amounts of gold if everyone repeatedly falls on their faces hoping to find gold.

So it can be seen as the 'average' or typically socially necessary labour time that decides value. This, to my knowledge, has not been countered effectively.
In modern economics, which Marx predates by a lot, phrases like "socially necessary" can be more easily understood as macroeconomic indices.

Socially necessary labour time can be compared with the average labor productivity of a given industry. Even gold or diamond mines have averages and reasonable expectations on what return they'll see on their investments.

[FSL]

The logical conclusion of doing away with Marx's value theory and pinning it all on Keynesian consumptionist theories is that if we just reformed capitalism, instituted higher wages, then everything would be fine. Arguably, this underpins many of the programs of Eurocommunists and modern US socialist parties like the Socialist Alternative. It's just completely wrong. The fact of the matter is that, for example, if we have a shock-increase of minimum wages to a living wage, that would decimate profits for a lot of capitalists and cause the profit rate to fall even more, thus possibly triggering another crisis. Investment in the economy would fall, people would be laid off, etc. The question we have to deal with then is; why the fuck should we live under a system that punishes society for people trying to make a living?

This is more like the "trickle down" theory of the rightist libertarians that people for some reason give more weight to.
Even in the economies that adopt a "keynesian" approach, labor costs somehow fail to rise. Labor costs are stagnant in the US and I think falling in Japan. This is considered a weakness and a failure when it's things working as intended.