Menger and the misunderstanding of Marx

[Dialectical_Materialist]

Elsewhere this was posted as a refutation of Marx - I don't know the original source but it is clearly copied and pasted:

>>>>>>
"Carl Menger and the Personal Value of Things

Karl Marx died in 1883, at the age of 64. A decade before his death, in the early 1870s, his labor theory of value had been overturned by a number of economists. The most important of them was the Austrian economist, Carl Menger (1840-1921), in his 1871 book, Principles of Economics.

Menger explained that the value of something was not derived from the quantity of labor that had been devoted to its manufacture. A man might spend hundreds of hours making mud pies on the seashore, but if no one has any use for mud pies, and therefore does not value them enough to pay anything for them, then those mud pies are worthless. Value like beauty, as the old adage says, is in the eyes of the beholder. It is based on the personal, or "subjective," use and degree of importance that someone has for a commodity or service to serve some end or purpose that he would like to satisfy. Goods do not have value because of the amount of labor devoted to their production. Rather, a certain type of labor skill and ability may have value because it is considered useful as a productive means to achieve a goal that someone has in mind."
<<<<<<

Now I write of the making of mud-pies as being wasted-labour, i.e. not useful, and therefore not the producer of use-value and therefore, besides the point. Are there any other interpretations?

[ComradeAllende]

Well, I'd first argue that prices and values are two different things, the former only rarely (if ever) equally the latter. But in modern capitalist markets, where most industries operate under uncompetitive conditions (monopolies, price discrimination, etc.), values cannot be subjectively determined because the market agents (corporations, regulating agencies, etc.) can use market-share to influence prices as opposed to pure supply and demand, although the ability of consumers to pay the price is also taken into account.

[Tim Cornelis]

lol. it's from an article with this title "The Austrian Economists Who Refuted Marx (and Obama)". Yeah... I'm going to look at each sentence of the article quickly. So far, every single sentence is wrong.


Marx insisted that the “real value” of anything produced was by determined by the quantity of labor that had gone into its manufacture.

real value, as opposed to?


" If it takes four hours of labor time to produce a pair of shoes and two hours of labor time to prepare and bake a cake, then the just ratio of exchange between the two commodities should be one pair of shoes in trade for two cakes. "

nope, because exchange value is merely the phenomenal expression of value. They're not identical.


Thus the quantities of the two goods would exchange at a ratio representing comparable amounts of labor time to produce them.

Does not follow then.


If a worker’s labor produced, say, three pairs of shoes during a twelve-hour workday, then the worker had a just right to the ownership of the three pairs of shoes his labor had produced, so he might exchange it for the productions of other workers from whom he wanted to buy.

Marx makes no moral commentary on rightful ownership. This is Proudhon's territory.

Ah fuck it, I'm not going to bother.

"Richard Ebeling
Richard Ebeling is a professor of economics at Northwood University in Midland, Michigan."

Further evidence that a lot/most academics are full of shit -- both Marxist and anti-Marxist academics. Jesus, I expected this to be some adolescent conservative blogger that spend a bit of time investigating on wikipedia.

[Anglo-Saxon Philistine]

Well, I'd first argue that prices and values are two different things, the former only rarely (if ever) equally the latter. But in modern capitalist markets, where most industries operate under uncompetitive conditions (monopolies, price discrimination, etc.), values cannot be subjectively determined because the market agents (corporations, regulating agencies, etc.) can use market-share to influence prices as opposed to pure supply and demand, although the ability of consumers to pay the price is also taken into account.

Value, as Marxists use the term, is not the same as subjective appreciation or willingness to pay. Value is what underlies prices; the money-equivalent of the value being the mean around which prices fluctuate. And willingness to pay does not determine prices; if it did, prices would fluctuate wildly according to individual circumstances. All of the "subjective theories of value" miss the point of what Marx was talking about. Also [email protected] "real value", the law of value is not metaphysical but an explanation of how capitalism works. (Which means, among other things, that there is no value in socialism, something many self-proclaimed Marxists still haven't absorbed.)

[Dialectical_Materialist]

Thanks for find the original source!!

[Dialectical_Materialist]

I really do struggle with these "mud-pie" and "I found a diamond in the bottom of the toilet" examples.

Is it me are they totally beside the point, total missing the point or are they miss-understandings or malignat mis-representations?

[Dialectical_Materialist]

I really do struggle with these "mud-pie" and "I found a diamond in the bottom of the toilet" examples.

Is it me are they totally beside the point, total missing the point or are they miss-understandings or malignat mis-representations?

[Guardia Rossa]

Marx's theory cannot be taken out of it's context: Capitalist Society and the market. Value is determined by production in society, based on the average work necessary to produce a commodity. These examples are logical fallacies, because they attempt to refute something Marx never said.

Instead of talking of fantasious mud-pies, that are produced as commodities only in the rotten mind of a sophist, let's talk about real, objective production of commodities in capitalist society.

At this point, these sophists usually scream "FREE MARKET OWNS U ALL, I WON!" and cry away, because they have no theory capable of actually refuting Marxist theory of value, as you simply cannot disprove what is already proven. (Try refuting the Laws of Physics. You might as well end up saying "THERE IS NO GRAVITY IN VACUUM, THEREFORE GRAVITY DOESN'T EXISTS, MUAHAHAHAHA!!" when the point is that the scientists know there is no gravity in vacuum, precisely because gravity is caused by mass. It is a fallacy.)

[mutualaid]

If the man is making mud pies for him and his own, then there isn't a problem (though the example does reveal an excretory fantasy apparently held by some capitalists, a rather crude result of commodity fetishism I think - freud would have much to say here); indeed, by definition, no economic theory (capitalism, marxism, maoism, whatever) can explain work that has no apparent 'value,' no more than it can explain why people like to dance or sing or write for themselves (even when no one else gets any 'value' from it). Labor value does determine the value of a commodity for the simple fact that a worker's essential needs must be met in order to work - the cost of those "needs" increases the 'value' of the commodity. The mass denial of this rather basic principle would be astonishing if it were not for the revolutionary consequences it portends.

[RedMaterialist]

I really do struggle with these "mud-pie" and "I found a diamond in the bottom of the toilet" examples.

Is it me are they totally beside the point, total missing the point or are they miss-understandings or malignat mis-representations?

Maybe this could help.

As far as the mud-pies, Marx (and Smith and Ricardo) said clearly (in ch. 1 of Capital) that the labor which produces the commodity must be socially necessary labor, and that the product has to be an "object of utility." The Austrian economists, Menger, et al, can't see the social labor in a commodity, they can only see the object. The commodity object is therefore, for them, a fetish controlled by a magical power called "marginal utility" which even to this day they can't define.

Not too many people find mud-pies useful, except maybe the three yr olds who produce them, and the mud-pies are not produced by social labor, therefore they have no value as commodities.

The found diamond example is supposed to show that you can come into possession of something very valuable for which you did no labor, and, therefore, value has nothing to do with labor. This is a perfect argument for capitalists to justify their wealth even though they did nothing to produce that wealth.

The real issue is how much labor was required to dig the diamond rock from 1,000 feet beneath the ground, then process it, transport it to Amsterdam or India where it was polished and cut. How many hours of back-breaking and highly skilled labor were used to produce the diamond? There's a reason they are called "blood" diamonds. That blood is not washed clean, like Lady MacBeth's famous spot, just because the diamond was stolen, robbed or found.

[Dialectical_Materialist]

Maybe this could help.

As far as the mud-pies, Marx (and Smith and Ricardo) said clearly (in ch. 1 of Capital) that the labor which produces the commodity must be socially necessary labor, and that the product has to be an "object of utility."


This is the root I usually take. I also point out that Marx says in the 2nd or 3rd paragraph of Capital the use-values are independent of the quantity of labour, that they are the qualitative aspect of value etc. etc. etc.

[Dialectical_Materialist]

If the man is making mud pies for him and his own, then there isn't a problem (though the example does reveal an excretory fantasy apparently held by some capitalists, a rather crude result of commodity fetishism I think - freud would have much to say here); indeed, by definition, no economic theory (capitalism, marxism, maoism, whatever) can explain work that has no apparent 'value,' no more than it can explain why people like to dance or sing or write for themselves (even when no one else gets any 'value' from it). Labor value does determine the value of a commodity for the simple fact that a worker's essential needs must be met in order to work - the cost of those "needs" increases the 'value' of the commodity. The mass denial of this rather basic principle would be astonishing if it were not for the revolutionary consequences it portends.

Quite.

It's the fact that Marx is portrayed by some people as "refuted" or "defeated" when in fact very few of same people seem to even understand what MArx was saying.

Criticisms of the LTV are not criticisms of Marx's theory of value.

[Luís Henrique]

Anyone who earnestly thinks Menger refuted Marx certainly doesn't understand Marx (and, to be fair, quite likely doesn't understand Menger either, but this is of far less concern).

Luís Henrique

[Anglo-Saxon Philistine]

If the man is making mud pies for him and his own, then there isn't a problem (though the example does reveal an excretory fantasy apparently held by some capitalists, a rather crude result of commodity fetishism I think - freud would have much to say here); indeed, by definition, no economic theory (capitalism, marxism, maoism, whatever) can explain work that has no apparent 'value,' no more than it can explain why people like to dance or sing or write for themselves (even when no one else gets any 'value' from it). Labor value does determine the value of a commodity for the simple fact that a worker's essential needs must be met in order to work - the cost of those "needs" increases the 'value' of the commodity. The mass denial of this rather basic principle would be astonishing if it were not for the revolutionary consequences it portends.

Hm, not quite.

Workmen have certain needs that need to be fulfilled if they are to come to work next day, true. And generally, they satisfy these needs using commodities bought with wages. Therefore the needs of the reproduction of labour represent an additional cost, and increase the price of the commodity the workmen produce. But these needs are not the only component of the value (and consequently the price); otherwise the capitalist would not make any profit.

The real reason that value corresponds to socially-necessary labour time, I suspect, has more to do with the details of how humans produce things in capitalism. We're a short-lived species using mechanical production with an external energy source; as such, when many private entities exchange goods they aim to economise on that which is in shortest supply, which is time in this case. (Without external power sources, and if the human body were weaker than it is, it might be calories expended in production and so on.)

[mutualaid]

Hm, not quite.

Workmen have certain needs that need to be fulfilled if they are to come to work next day, true. And generally, they satisfy these needs using commodities bought with wages. Therefore the needs of the reproduction of labour represent an additional cost, and increase the price of the commodity the workmen produce. But these needs are not the only component of the value (and consequently the price); otherwise the capitalist would not make any profit.

The real reason that value corresponds to socially-necessary labour time, I suspect, has more to do with the details of how humans produce things in capitalism. We're a short-lived species using mechanical production with an external energy source; as such, when many private entities exchange goods they aim to economise on that which is in shortest supply, which is time in this case. (Without external power sources, and if the human body were weaker than it is, it might be calories expended in production and so on.)

I agree with this. Maybe I was unclear, I don't think labor is the "only component of value." It is however an essential component of value, and think this is the point that marx thought was so important

[Anglo-Saxon Philistine]

I agree with this. Maybe I was unclear, I don't think labor is the "only component of value." It is however an essential component of value, and think this is the point that marx thought was so important

Labour (or rather socially-necessary labour-time) is the only component of value in Marxist economics. The point was that this labour-time is more than the labour-time needed to reproduce the labour-power of individual workmen. The main part of the value is usually represented by the time workers directly work on producing a commodity.

[mutualaid]

Labour (or rather socially-necessary labour-time) is the only component of value in Marxist economics. The point was that this labour-time is more than the labour-time needed to reproduce the labour-power of individual workmen. The main part of the value is usually represented by the time workers directly work on producing a commodity.

If labour time is greater than labour time needed to reproduce labour power then the work is, by definition, not "socially necessary" - then you are making mud pies - and cannot be explained with economics; that was the point I was originally trying to make - im not sure but I think we agree. To return to the op, the real question seems to be, does labor or desire determine the value of a commodity. Gramsci answered this question when he showed that the capitalist state manufactures desire, cultural hegemony, as a means to control labor (that is, socially necessary labour time), providing more evidence that the labor theory of value was indeed good to go.

[RedMaterialist]

If labour time is greater than labour time needed to reproduce labour power then the work is, by definition, not "socially necessary" - then you are making mud pies - and cannot be explained with economics;

It's socially necessary under the social conditions of capitalist for-profit production.

If the wage (the price of labor-power) of a worker is, say, $10.00 per hour, then the cost per hour of the reproduction of the worker is $10.00. The worker is a $10 per hour commodity. However, once the commodity is put to work, it-the worker- can produce a commodity worth more than $10 per hour. The excess, surplus-value, is appropriated by the capitalist and later realized as profit.

The connection of this to Menger and the marginalists might be that the capitalist does not do any objective, real work, yet believes that he or she is responsible for the value of the product. What better economic rationalization for the capitalist than the idea that all commodity value is determined by an individual, subjective, non-measurable psychological process?

[RedMaterialist]

providing more evidence that the labor theory of value was indeed good to go.

One problem, in my view, with the labor theory of value is that it had never been provable with actual economic evidence. However, with modern economic statistics I think that it might be proved.

The European EOCD produces economic figures that show that the median wage of a US worker is about $25K per year and that the median production of the worker is valued at about $50k per year. In other words the median wage of a worker is about half the value of what that worker produces. The production value does not include raw materials, etc., but is the value-added (interesting term) by the worker.

The U.S. GDP figures produced by the Bureau of Economic Analysis show that the total production of goods and services each yr is about 9 trillion dollars. Yet the total wages per year is about half that. (Financial services is only a small fraction of that, so if they want to include the salaries of hedge fund managers it wouldn't matter.)

Finally, U.S. the Labor Department puts out an index of labor wages and labor productivity (among other categories.) Would it come as a shock that the wage index is always less than labor productivity?

I remember watching a television show about auto production in Germany, BMW, I think. A factory supervisor, not a union rep, was talking about how the production workers produced the surplus-value which later became profit. I couldn't believe my ears. I guess the labor aristocracy over there really is an aristocracy.

[mutualaid]

It's socially necessary under the social conditions of capitalist for-profit production.


But if labor power cannot be reproduced, production wont be for profit.

"The connection of this to Menger and the marginalists might be that the capitalist does not do any objective, real work, yet believes that he or she is responsible for the value of the product. What better economic rationalization for the capitalist than the idea that all commodity value is determined by an individual, subjective, non-measurable psychological process?"

I think this is exactly right; the capitalists fetishize the commodity to legitimize their own role in the exploitation of labor; it's funny they fantasize about mud pies while they themselves create nothing.

[Anglo-Saxon Philistine]

If labour time is greater than labour time needed to reproduce labour power then the work is, by definition, not "socially necessary" - then you are making mud pies - and cannot be explained with economics; that was the point I was originally trying to make - im not sure but I think we agree.

I don't think we do.

The socially-necessary labour time it takes for me to reproduce my labour-power (which is also a commodity, because of the existence of wage labour) is the time it takes for me to sleep, eat, drink etc., so that I can work again tomorrow. This is part of the value of the commodity I produce, because the capitalist has to buy my labour.

But then there is the socially-necessary labour time it takes for me to produce the actual commodity (of course, no single worker produces an entire commodity by themselves today, but this is just an illustrative example), i.e. the time it takes for me to mix the ingredients for glass, put them in a kiln, blow the glass into shape etc. This is also part of the value of the commodity, in most cases the greater part. The difference between the full value and the value of the reproduction of my labour (which my employer needs to give to me in the form of wages) is the surplus value, the basis for the profit of the capitalist.


To return to the op, the real question seems to be, does labor or desire determine the value of a commodity. Gramsci answered this question when he showed that the capitalist state manufactures desire, cultural hegemony, as a means to control labor (that is, socially necessary labour time), providing more evidence that the labor theory of value was indeed good to go.

I honestly don't understand why people like Gramsci so much. He wrecked the Italian party on orders from Stalin, and then when he realised how shit and ineffective the resulting group was (going from begging fascists to fulfill their "democratic programme" to trying to get actual communists executed in the aftermath of the Second World War), he made up a nice idealist fairy-tale where nothing that happened was his fault, it was just mean old capitalist hegemony (because we all know words drive developments in the material world, right).

[Tim Cornelis]

I don't understand how Gramsci proved the labour theory of value. That explanation really seems clutching at straws. Cultural hegemony is a theory of political control, not of value production. The two have nothing in common.

[Luís Henrique]

The connection of this to Menger and the marginalists might be that the capitalist does not do any objective, real work, yet believes that he or she is responsible for the value of the product. What better economic rationalization for the capitalist than the idea that all commodity value is determined by an individual, subjective, non-measurable psychological process?

The point of Menger's work would be to make that "subjective, non-measurable" psychological process exactly measurable. In this, it is quite successful; it allows capitalist planners to plan the production (and pricing) of their companies in a much more efficient way.

The problems with the "Menger refuted Marx" line are different: first, Menger (and the other marginalists) used to think of their theories as "models": it is not that they believed that they had proven Marx "wrong", but that they believed that they had built a model that explained reality, a) better than Marx's; and b) without having to resort for a few concepts that they deemed problematic, especially "value" as an independent variable, that seemed "metaphysical" to them.

Second, and most importantly, their model is unable to "refute" Marx exactly because it refuses to "speculate" about what causes "demand". And so, they must let open the possibility that what dictates demand is "value" in the Marxist sence. Bastiat remarkably conceded that, in stating that "utility is not having to work", which just reintroduces a labour theory of value through the back door, after having expelled it through the front porch.

And indeed Marx demonstrates, in the v. III of capital, how "socially necessary labour" is connected to demand (which is also the reason why mud pies have no value: they are not "socially necessary labour", and "labour" that is not socially necessary, in a capitalist society, is simply not "labour" at all. If people indeed make mud pies, we call that activity a "game" or a "hobby", not "labour", because its products are not commodities).

Luís Henrique

[mutualaid]

The socially-necessary labour time it takes for me to reproduce my labour-power (which is also a commodity, because of the existence of wage labour) is the time it takes for me to sleep, eat, drink etc., so that I can work again tomorrow. This is part of the value of the commodity I produce, because the capitalist has to buy my labour.


That is exactly what I said - labor must be able to reproduce itself in order to be "socially-necessary."




But then there is the socially-necessary labour time it takes for me to produce the actual commodity (of course, no single worker produces an entire commodity by themselves today, but this is just an illustrative example), i.e. the time it takes for me to mix the ingredients for glass, put them in a kiln, blow the glass into shape etc. This is also part of the value of the commodity, in most cases the greater part. The difference between the full value and the value of the reproduction of my labour (which my employer needs to give to me in the form of wages) is the surplus value, the basis for the profit of the capitalist.

Again, I agree, see above.



I honestly don't understand why people like Gramsci so much. He wrecked the Italian party on orders from Stalin, and then when he realised how shit and ineffective the resulting group was (going from begging fascists to fulfill their "democratic programme" to trying to get actual communists executed in the aftermath of the Second World War), he made up a nice idealist fairy-tale where nothing that happened was his fault, it was just mean old capitalist hegemony (because we all know words drive developments in the material world, right).
That's fine, I think Gramsci made some interesting contribution regarding cultural ideology, but I assume we can agree there are plenty of places to find evidence that value starts with labor and not the commodity

[mutualaid]

I don't understand how Gramsci proved the labour theory of value. That explanation really seems clutching at straws. Cultural hegemony is a theory of political control, not of value production. The two have nothing in common.

I think for Gramsci "political control" and "value production" are the same thing, so I don't consider that clutching at straws; the point of my argument was that the "desire" of a commidity is a fantasy that the capitalist manufactures in order to further exploit labor. The reason I brought up gramsci is because he directly addresses the issue of cultural desire, which was the very thing that menger had thought would undo marx; if you don't like gramsci that's fine, but I think the point stands.

[Tim Cornelis]

Maybe you have some profound understanding of Gramsci that escapes me, but to me it seems like you're filling in gaps in your knowledge with random guesses about what Gramsci may have said. Gramsci tried to explain how capitalism absorbed opposition by theorising that consent for the capitalist system is manufactured through cultural hegemony. This is distinct from an explanation of how value arises. I don't see how those connect (directly).

And in marginal or subjective value theory, it doesn't matter how desires arise, what matters is that they're converted into prices. Of course marginal theorists recognise that desires are influenced by external factors, by commercials, propaganda, social conformism, culture, peer pressure, etc. This isn't at all relevant. If I have an innate desire for a particular commodity, and am willing to pay 5 dollars for it, or whether I have a manufactured desire for a commodity, and am willing to pay 5 dollars for it, either way, I'm willing to pay 5 dollars for the commodity, and this is the feedback that I as consumer give to the producer. What informs my desire, the subjective construction of my desires, to buy the commodity isn't really relevant.

[mutualaid]

Maybe you have some profound understanding of Gramsci that escapes me, but to me it seems like you're filling in gaps in your knowledge with random guesses about what Gramsci may have said. Gramsci tried to explain how capitalism absorbed opposition by theorising that consent for the capitalist system is manufactured through cultural hegemony. This is distinct from an explanation of how value arises. I don't see how those connect (directly).


I make no claims to a "profound understanding" - quite the opposite. You can accuse me of ignorance "gaps of knowledge", or we could discuss what gramsci actually wrote:

"In my opinion, the most reasonable and concrete thing that can be
said about the ethical and cultural state is this: every state is ethical
in as much as one of its most important functions is to raise the
great mass of the population to a particular cultural and moral
level, a level (or type) which corresponds to the needs of the
productive forces of development, and hence to the interests of the
ruling classes. The school as a positive educative function, and the
courts as a repressive and negative educative function, are the
most important state activities in this sense: but, in reality, a
multitude of other so-called private initiatives and activities tend
to the same end - initiatives and activities which form the
apparatus of the political and cultural hegemony of the ruling
classes."

When you say "theorising the consent for the capitalist system" that is just another way of referring to the state's "apparatus" of political hegemony, which, as gramsci clearly states above, "corresponds to the needs of the productive forces of development," thus providing an explanation for "how value arises."

[Strannik]

Mud pie argument willingly misrepresents Marx's point under guise of simplifying it; i.e "labour theory of value" it disproves is not Marxian theory of value. Value of something is derived from quantity of socially necessary labour devoted to its manufacture. This means that social negotiation or planning under certain conditions is necessary and unavoidable component of lab-our time - at least in understanding of Marx. And this is precisely what mud pies lack - their baking in the example is never socially negotiated; mud pie baker has no social circumstances whatsoever. Therefore mud pies don't contain any socially necessary labour time, i.e. are valueless according to Marxian theory of value.
Labour time described in mud pie example has more in common with Ricardo and Adam Smith. Marx added to their theory precisely the "subjective" component mud pie example claims is not there. But Marx's understanding is wider than that of bourgeois theoreticians: his "subjective" component does not exist in vacuum but under certain social and natural conditions. What a person considers useful, what labour time is considered well spent, is determined by environmental conditions and productive relations in which human being exists.
So there are actually three contending theories of value - LTV of classical economics, marginal theory of pure abstract subjectivism and Marxian theory of social labour time, which takes the best of both worlds - understanding that value of labour depends on social circumstances and all the circumstances have a common universal component: time we spend in creating value.

[Tim Cornelis]

I make no claims to a "profound understanding" - quite the opposite. You can accuse me of ignorance "gaps of knowledge", or we could discuss what gramsci actually wrote:

"In my opinion, the most reasonable and concrete thing that can be
said about the ethical and cultural state is this: every state is ethical
in as much as one of its most important functions is to raise the
great mass of the population to a particular cultural and moral
level, a level (or type) which corresponds to the needs of the
productive forces of development, and hence to the interests of the
ruling classes. The school as a positive educative function, and the
courts as a repressive and negative educative function, are the
most important state activities in this sense: but, in reality, a
multitude of other so-called private initiatives and activities tend
to the same end - initiatives and activities which form the
apparatus of the political and cultural hegemony of the ruling
classes."

When you say "theorising the consent for the capitalist system" that is just another way of referring to the state's "apparatus" of political hegemony, which, as gramsci clearly states above, "corresponds to the needs of the productive forces of development," thus providing an explanation for "how value arises."

He's not giving an explanation for the arising of value at all. Of course it corresponds to the needs of the productive forces of development, but this is not at all (at all) the same as an explanation for value. It is basic base-superstructure interaction. Literacy is ubiquitous in Western capitalism, not because the ruling class or the political caste is interested in elevating the social standing of people, but because capital has developed to become more complex and literacy is necessary to sustain productivity of the working class. This is pretty much what Gramsci points out (I just give a concrete example). So where does 'value' come in? Literacy is necessary for production, production of value, but it in itself of course does not produce value. It just seems you don't know what we're talking about when we talk about value. Gramsci is simply not talking about the law of value, or production of value. But this can only be demonstrated when you tell what 'value' is in your view, not simply leaping into conclusions as you did ("thus providing an explanation for "how value arises" -- which simply does not follow).

What your reading of this suggests is that value is a supra-historical concept as well.

[mutualaid]

Literacy is ubiquitous in Western capitalism, not because the ruling class or the political caste is interested in elevating the social standing of people, but because capital has developed to become more complex and literacy is necessary to sustain productivity of the working class. This is pretty much what Gramsci points out (I just give a concrete example). So where does 'value' come in?


This is precisely my point - you've just said, in so many words, that political control, in this case "literacy," is a mechanism of economics. But now I see the misunderstanding; for gramsci, and for all the marxists that I know, superstructure is indeed determined by the base, a point karl marx makes repeatedly. Here is the quote marxists refer to when discussing base and superstructure: "In the social production which men carry on they enter into definite relations that are indispensable and independent of their will; these relations of production correspond to a definite stage of development of their material forces of production. The sum total of these relations of production constitutes the economic structure of society--the real foundation, on which rises a legal and political superstructure and to which correspond definite forms of social consciousness. The mode of production in material life determines the social, political and intellectual life processes in general. It is not the consciousness of men that determines their being, but, on the contrary, their social being that determines their consciousness." - Karl Marx, preface to the critique

you seem to be suggesting that I said the superstructure creates "value" - I never said this. You asked "how value arises" and said that's distinct from what gramsci says. My point is that it they are directly related, that the base (forces of development, how value arises, or whatever you prefer to call it) determines superstructure (things such as literacy), which was gramsci's argument. Indeed, the superstructure proves we can't rely on "desire" as a way to determine value, in the marxian sense, precisely because value isn't produced in the superstructure - this was the entire point of my post and the reason I brought up gramsci. When I said "political control" and "value production" were the same thing for gramsci, that's probably misleading, so I apologize for that; but what I meant to say is that the base (means/relations of production, that is to say, where value is produced) determines political control: menger's analysis will always beg the question, where does desire come from, to which, because we know its manufactured, in part thanks to gramsci, we can point back to labor as the source of value, again in the marxian sense of the word - that's all I was trying to say.

[Tim Cornelis]

Of course the base and superstructure are related, but not in the way you suggest, nor, incidentally in a one-way causal relationship as you also insinuate.

'Desire' isn't a concept that belongs in the superstructure.

"menger's analysis will always beg the question, where does desire come from" which doesn't matter, as I explained previously.

[RedMaterialist]

The point of Menger's work would be to make that "subjective, non-measurable" psychological process exactly measurable. In this, it is quite successful; it allows capitalist planners to plan the production (and pricing) of their companies in a much more efficient way.


Luís Henrique

As briefly as possible (in a post) how, exactly, do capitalists use marginal utility to plan production and pricing? I've been trying to get my head around it for years and can't make any sense of it; one additional unit, etc.

And, if they are successful in this, why can't it work in socialism?

[mutualaid]

Of course the base and superstructure are related, but not in the way you suggest, nor, incidentally in a one-way causal relationship as you also insinuate.

I never suggested a "a one-way causal relationship" - you've misrepresented my views a number of times now without seeming to understanding my argument in the least - which is odd, because everything i've said is rather doctrinaire.




'Desire' isn't a concept that belongs in the superstructure.



Here we simply disagree, which is why I brought up gramsci in the first place - as you yourself insinuated, "literacy" is one of many cultural "desires" manufactured as a part of the superstructure. I'll make one more attempt to refer to the op (thus far ignored), "desire" is not an adequate way to determine "value" (again, I'm speaking strictly in the marxian sense) because we already know that the base determines the superstructure in order to facilitate productive forces; in other words the capitalist state creates the "desire" of literacy to facilitate its bureaucracy (I would apologize for the "one-way causal relationship", but it's your example.) Above, you have already admitted that "desire" belongs in the superstructure "commercials, propaganda, social conformism, culture, peer pressure," these are your examples of where desire is controlled - all in the superstructure.

when you say, "the subjective construction of my desires, to buy the commodity isn't really relevant." this is just plain wrong (you don't even mention why) and discounts that base determines superstructure, my entire point for bringing up gramsci and, again, straightforward marxian economics. The real problem with menger, and now your analysis, is the claim to know the difference between "innate" and manufactured desire - to say it's not relevant is to say the superstructure isn't relevant.

[Tim Cornelis]

I never suggested a "a one-way causal relationship" - you've misrepresented my views a number of times now without seeming to understanding my argument in the least - which is odd, because everything i've said is rather doctrinaire.

" superstructure is indeed determined by the base" suggests a mechanical, one-way relationship between the base and superstructure. Maybe I'm misrepresenting (rather misinterpreting) your point, or maybe you're constantly shifting goal posts. What you're saying is not "rather doctrinaire", it's rather nonsense to be blunt.


Here we simply disagree, which is why I brought up gramsci in the first place - as you yourself insinuated, "literacy" is one of many cultural "desires" manufactured as a part of the superstructure. I'll make one more attempt to refer to the op (thus far ignored), "desire" is not an adequate way to determine "value" (again, I'm speaking strictly in the marxian sense) because we already know that the base determines the superstructure in order to facilitate productive forces; in other words the capitalist state creates the "desire" of literacy to facilitate its bureaucracy (I would apologize for the "one-way causal relationship", but it's your example.)

You don't get to chalk this up to a matter of disagreement, because you're simply wrong about what subjective value theory entails. You're not making any sense at all. We're talking about desire for commodities. Now, for some reason, you're talking about the desire for literacy (not a commodity) -- so in other words, you've shifted from consumer desires for commodities, to social desires for particular social phenomena: two different fields of study. But you're using arguments from the latter to argue against theories from the former. What does that have anything to do with the value of commodities? Presumably, you will fire off irrelevant arguments about base, superstructure, etc. That doesn't matter. All this suggests you don't know what 'value' is in either the labour theory of value, law of value, or the subjective theories of value. Which is why I invited you to give your perspective on what it means, which you haven't done. I can't make explicit the error on your thought process unless you explain it.

Once more. In marginal or subjective value theory, it doesn't matter how desires arise, what matters is that they're converted into prices. Of course marginal theorists recognise that desires are influenced by external factors, by commercials, propaganda, social conformism, culture, peer pressure, etc. This isn't at all relevant. If I have an innate desire for a particular commodity, and am willing to pay 5 dollars for it, or whether I have a manufactured desire for a commodity, and am willing to pay 5 dollars for it, either way, I'm willing to pay 5 dollars for the commodity, and this is the feedback that I as consumer give to the producer, whom then readjusts prices accordingly in concert with the feedback that other consumers give to it. If the producer has priced his commodity 6 dollars, but my subjective desire only evaluates it to be worth 5 dollars, the item will go unsold to me. If, in a simplified scenario, I'm the only consumer, it will mean that the producer has to lower his price to 5 dollars. So prices are a reflection of the subjective evaluations consumers make on the basis of prices and commodities -- according to subjective value theory, that is. And again, whether I have determined the commodity to be worth 5 dollars because of peer pressure, propaganda, commercials, or whether it's innate isn't at all relevant -- all are subjective evaluations. So it can't be a refutation of the subjective theory of value, as it already accounts for it.

In conclusion:

1) Gramsci's theory of cultural hegemony is not a theory that concerns itself with the value of commodities;
2) Even if it did, it doesn't refute subjective value theory because STV (or SVT) accounts for externally manufactured desires, it isn't a theoretical obstacle at all;

[mutualaid]

I will leave it up to the discerning reader whether I've made any sense or if I know what the labor theory of value is. I feel that you are intentionally looking past what ive tried to say, so this is as simple as I can make it. So-called "innate desires" cannot be defined or measured - this was the point of my first post; I cant explain someone who wants to make mud pies, i can explain the exchange the might happen if a second person wanted a mud pie. Thus, what you call "innate desire" belongs to the psychologist, not the economist. I cannot believe how distracted this conversation has become, and I challenge anyone to point out a specific argument I made that does not accord with marxist theory; in all sincerity, I would like to correct any misconceptions I have.

"Gramsci's theory of cultural hegemony is not a theory that concerns itself with the value of commodities" this isn't going anywhere, my argument is simply that base determines the superstructure, which includes "desires" that support the base, gramsci elaborates on that - hardly a controversial statement, and your own examples prove the point - perhaps it's a generalization but a common assumption among the marxists I know, if you don't happen to prefer gramsci, that's fine

" STV (or SVT) accounts for externally manufactured desires" I never suggested it didn't - the whole point of the mud pie scenario is to isolate what you call "innate" desire.

Also, it is entirely reasonable to describe literacy as commodity, it's manufactured, bought, sold, etc. But even if you don't, the example works with anything, just think about it- the base determines our desires for fashionable clothing, this was the point gramsci was going for and why, in part, it is impossible to define "innate" desires - was I born wanting an overpriced t-shirt? probably not, do I have an innate desire for warmth? probably, but it will forever be impossible to distinguish the two, and as a result we can't rely on innate desires to determine "value" in the marxian sense: labor determines the value of the commodity because the workers "innate desires" or "needs" must allow them to reproduce their labor - thus "needs" are inscribed inside the relations of production and do not create value in the commodity - this is not 'nonsense' but basic marxist theory or the labor theory of value.

[Tim Cornelis]

I will leave it up to the discerning reader whether I've made any sense or if I know what the labor theory of value is. I feel that you are intentionally looking past what ive tried to say, so this is as simple as I can make it. So-called "innate desires" cannot be defined or measured - this was the point of my first post; I cant explain someone who wants to make mud pies, i can explain the exchange the might happen if a second person wanted a mud pie. Thus, what you call "innate desire" belongs to the psychologist, not the economist. I cannot believe how distracted this conversation has become, and I challenge anyone to point out a specific argument I made that does not accord with marxist theory; in all sincerity, I would like to correct any misconceptions I have.

It's not necessarily that your arguments are 'un-Marxist', it's that they don't make sense. You may be correct in one thing: I miss the point you are making. You are very confusing, either that, or very confused. But I question your sincerity. Because I've invited you twice to explain what you think value is according to various theories, so I could make explicit what I believe is clearly an error in your thought process, but you haven't done so.


"Gramsci's theory of cultural hegemony is not a theory that concerns itself with the value of commodities" this isn't going anywhere, my argument is simply that base determines the superstructure, which includes "desires" that support the base, gramsci elaborates on that - hardly a controversial statement, perhaps a generalization but a common assumption among the marxists I know, if you don't happen to prefer gramsci, that's fine

"desires that support the base", what an odd way to say 'ideology'. I don't know why you choose to abstract so nonsensically. This odd abstraction is the source of your confusion. By making this abstraction, you lump together utility and ideology, and think that a theory about ideology can somehow directly be applied to questions of utility of commodities simply because both, in some vague, sense constitute 'desires'.

Yes, ideology can reinforce the base of society. Yes, you are correct that this is a core belief in Marxism. But what you repeatedly ignore is that ideology has nothing to do with the production of value in and of itself. What you claim is that the Marxist theory of ideology somehow refutes the subjective theory of value. This is simply not true, and you have not provided a single argument for this.


" STV (or SVT) accounts for externally manufactured desires" you've apparently misunderstood what I've said from my first post on ... of course it does, but my criticism is that no economic theory can define what you call "innate" desire, only a psychologist or an artist can do that; economics can only ever study exchange - we're not telepathic.

You have apparently misunderstood my point. My point is exactly that it is irrelevant whether desires are innate or external. It's pretty hard to miss: "it doesn't matter how desires arise ... This isn't at all relevant ... whether it's innate isn't at all relevant". I'm not, here, interested in uncovering how desires for commodities arise, nor is subjective value theory, but you operate on the mistaken belief that it is. And I think my example of commodity X with a price of 6 US dollars, etc., demonstrates that your ideas about it being refuted simply do not apply. I also think this is why you have ignored it twice now.

You seem to be arguing that prices are objective, so subjective evaluations can't be the basis for prices, and misapplied Gramsci's theory of cultural hegemony to it for some reason. But this argument is really the Marxist equivalent of the mud pie argument.

In conclusion.

1) Value theories seek to explain value (of commodities);
2) Gramsci's theory of cultural hegemony does not try to explain the value of commodities;
3) Invoking Gramsci's theory of cultural hegemony to refute a value theory therefore makes no sense at all.

Lastly, capital and value are social relationships. Saying that we can only study exchange is very odd if you style yourself a Marxist. Economics is about relationships between people, not things.

And if this doesn't clear it up, I'll just leave you with your confusion. Because this is just going in circles.

[RedMaterialist]

'Desire' isn't a concept that belongs in the superstructure.


Human desire may not belong in the superstructure but it's been firmly placed there by capitalist production: everything becomes commodified, including human emotion. The Poverty of Philosophy.

In Poverty Marx comes close to anticipating the argument of marginal utility:


The consumer is no freer than the producer. His judgment depends on his means and his needs. Both of these are determined by his social position, which itself depends on the whole social organisation. True, the worker who buys potatoes and the kept woman who buys lace both follow their respective judgments. But the difference in their judgements is explained by the difference in the positions which they occupy in the world, and which themselves are the product of social organisation.

Chapter One.

For Marx desires, needs, wants, ability to pay, judgement of what to buy, are determined by social position in the organization of production, not by individual subjectivity. Thus, maybe there is a connection between cultural hegemony and value, assuming that price and value are the same thing, which the marginalists assume.

[Tim Cornelis]

That would simply mean that the theory of cultural hegemony is compatible with the subjective theory of value, not refute it. Our desires are constituted on the basis of cultural hegemony (ridiculously reductionist but okay), and our desires then feed into the market as feedback mechanism which adjusts prices -- there's not incompatible about the two theories. Again, it isn't relevant how desires for commodities come about.

[mutualaid]

It's not necessarily that your arguments are 'un-Marxist', it's that they don't make sense. You may be correct in one thing: I miss the point you are making. You are very confusing, either that, or very confused. But I question your sincerity. Because I've invited you twice to explain what you think value is according to various theories, so I could make explicit what I believe is clearly an error in your thought process, but you haven't done so.



"desires that support the base", what an odd way to say 'ideology'. I don't know why you choose to abstract so nonsensically. This odd abstraction is the source of your confusion. By making this abstraction, you lump together utility and ideology, and think that a theory about ideology can somehow directly be applied to questions of utility of commodities simply because both, in some vague, sense constitute 'desires'.

Yes, ideology can reinforce the base of society. Yes, you are correct that this is a core belief in Marxism. But what you repeatedly ignore is that ideology has nothing to do with the production of value in and of itself. What you claim is that the Marxist theory of ideology somehow refutes the subjective theory of value. This is simply not true, and you have not provided a single argument for this.



You have apparently misunderstood my point. My point is exactly that it is irrelevant whether desires are innate or external. It's pretty hard to miss: "it doesn't matter how desires arise ... This isn't at all relevant ... whether it's innate isn't at all relevant". I'm not, here, interested in uncovering how desires for commodities arise, nor is subjective value theory, but you operate on the mistaken belief that it is. And I think my example of commodity X with a price of 6 US dollars, etc., demonstrates that your ideas about it being refuted simply do not apply. I also think this is why you have ignored it twice now.

You seem to be arguing that prices are objective, so subjective evaluations can't be the basis for prices, and misapplied Gramsci's theory of cultural hegemony to it for some reason. But this argument is really the Marxist equivalent of the mud pie argument.

In conclusion.

1) Value theories seek to explain value (of commodities);
2) Gramsci's theory of cultural hegemony does not try to explain the value of commodities;
3) Invoking Gramsci's theory of cultural hegemony to refute a value theory therefore makes no sense at all.

Lastly, capital and value are social relationships. Saying that we can only study exchange is very odd if you style yourself a Marxist. Economics is about relationships between people, not things.

And if this doesn't clear it up, I'll just leave you with your confusion. Because this is just going in circles.

I've advocated hardly any of what you've ascribed to me here - this is a bit much - quibbling about me not using the word ideology? give me a break. You make some personal insinuations about my politics which I find unfortunate - I was having a conversation in good faith; you questioning my beliefs indicates this is over. You say I said "exchange of things" which everyone who cares can just look and see is a clear falsehood on your part - yet another misrepresentation - though why you feel the need to go on the attack is beyond me.

[RedMaterialist]

Economics is about relationships between people, not things.


Well, capitalist production creates social relationships between things and converts human relations into objects. If value is a social relationship then price must be a relationship between things?

[Dialectical_Materialist]

Second, and most importantly, their model is unable to "refute" Marx exactly because it refuses to "speculate" about what causes "demand". And so, they must let open the possibility that what dictates demand is "value" in the Marxist sence. Bastiat remarkably conceded that, in stating that "utility is not having to work", which just reintroduces a labour theory of value through the back door, after having expelled it through the front porch.


I'm interested to know more about what you mean here, are you saying that Menger et al. or refuse to speculate about what causes demand or that Marx does?

[Tim Redd]

And indeed Marx demonstrates, in the v. III of capital, how "socially necessary labour" is connected to demand (which is also the reason why mud pies have no value: they are not "socially necessary labour", and "labour" that is not socially necessary, in a capitalist society, is simply not "labour" at all. If people indeed make mud pies, we call that activity a "game" or a "hobby", not "labour", because its products are not commodities).Socially necessary labor is the average/mean amount of labor required to build some commodity X by all of those engaged in producing commodity X. It has nothing to do with demand other than that the reason any commodity is created is because there is an objective use value need for the commodity.

[Tim Redd]

Well, capitalist production creates social relationships between things and converts human relations into objects. If value is a social relationship then price must be a relationship between things?

When you mention 'value' are you referring to 'exchange value' or 'use value'? The distinction has a bearing on what you are asserting with regard to 'value'.

[RedMaterialist]

When you mention 'value' are you referring to 'exchange value' or 'use value'? The distinction has a bearing on what you are asserting with regard to 'value'.

Value is the amount of abstract, socially necessary labor contained in a commodity.

[Tim Redd]

Value is the amount of abstract, socially necessary labor contained in a commodity.

There is also what political economists including Marx in Capital, call "use value". Use value is one or more properties, functions, duties or operations a thing has. A thing must have both exchange value and use value in order to be a commodity. Marx emphasizes this point in Capital in many places.

[Tim Redd]

superstructure is indeed determined by the base" suggests a mechanical, one-way relationship between the base and superstructure.You aren't a materialist unless you understand that in the relationship between the base and superstructure, the base has primacy, that the base mainly determines the superstructure and not vice versa. Just as a materialist understands that it is practice that mainly determines theory and not vice versa.

Of course at some times and in some cases the superstructure plays the predominant role over base and at some times and in some cases theory plays the predominant role over practice.

A materialist accepts what I stated in my first paragraph above. A dialectical materialist also accepts what I state in my second paragraph.

[Tim Redd]

'Desire' isn't a concept that belongs in the superstructure.

Whether or not 'desire' "belongs" in the superstructure depends upon what kind of 'desire' you are referring to.

There are various kinds of 'desire': 1) the desire for the maximum profit return on an investment, 2) the desire for the use value (function, product, services, etc.) of some object, 3) the desire for the enjoyment of a good literary plot, 4) the desire to eliminate all exploitation and oppression as classes are abolished in society which Lenin says is a key goal of the communist movement. Of course there are innumerable other kinds of desire in myriad areas of life which I have not mentioned.

[Tim Redd]

Elsewhere this was posted as a refutation of Marx - I don't know the original source but it is clearly copied and pasted:

>>>>>>
"Carl Menger and the Personal Value of Things

Karl Marx died in 1883, at the age of 64. A decade before his death, in the early 1870s, his labor theory of value had been overturned by a number of economists. The most important of them was the Austrian economist, Carl Menger (1840-1921), in his 1871 book, Principles of Economics.

You must be kidding. The Austrian school was at core about moulding economics to serve the needs of capitalists, institutions that facilitate the workings of capital and finally the political flunkies who use state power to aid and maintain the operation of capital.


Menger explained that the value of something was not derived from the quantity of labor that had been devoted to its manufacture. A man might spend hundreds of hours making mud pies on the seashore, but if no one has any use for mud pies, and therefore does not value them enough to pay anything for them, then those mud pies are worthless. Value like beauty, as the old adage says, is in the eyes of the beholder.Marx expounded this very concept in Grundrisse and Capital. This is hardly a foreign or new idea in Marxist political economy. You need to up your scholarship if in fact that is your honest intent