Value, Technical Change and Crisis

Explorations in Marxist Economic Theory

David Laibman

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781315489476
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Negocios en general

This text brings together studies in various aspects of the theory of the capitalist economy. It focuses on major themes of the Marxist tradition that postulate the existence and importance of social relations and structures underlying the esoteric realm of economic categories: prices, profits, wages, etc. The author takes a reappraising, critical look at the concepts of the deep structure - value, explitation, immanent crisis - using the analytical tools of modern economics to improve those concepts. The book is divided into four parts. Part 1 explores the essential nature of capitalism, re-examining problems in the theory of value and exploitation. Part 2 tackles the issue of capitalism-specific paths of growth and technical change, putting forward a rigorous theory of biased technical change and non-steady-state growth. Part 3 examines the cyclical character of capitalist growth and the theory of crises. Finally, Part 4 places capitalism in the wider framework of modes of production, considering the theory of precapitalist formations and aspects of the theory and practical experience of socialism. The guiding theme is the combination, or confrontation, of rigorous, quantitative analytical techniques with equally demanding qualitative and political-economic conceptualization. The book's premise is that this interface is essential to a progressive yet distinctively Marxist social theory.

Part I
Value and Exploitation

1
Value and Labor: a Conceptual Reconstruction

The concept of value—a quantity of abstract social labor time, embedded in commodities and underlying exchange relations—is deeply embedded in Marxist economic thought. It has a clear basis in the thinking of the classical economists, whose naive assumption concerning labor as the "original purchase price" of goods was part of the intellectual background against which Marx formulated his ideas. One may therefore wonder whether, were Marx writing in the twentieth century, he would begin from a different starting point (Hodgson, 1980).

Central as it is in the Marxist tradition, however, the "labor theory of value" has been a source of continuing, and seemingly unresolvable, controversy. This is either because it is the source of unique insight, or because Marxists refuse to shed their prescientific shackles and allow an adequate alternative economics to emerge. The conflict between these interpretations is, of course, at the heart of the continuing value controversy (Steedman, et al., 1981; Science & Society, 1984-85).

Edward Nell (1983b), with apologies to Albert Einstein, has proposed a terminology to distinguish between the General Labor Theory of Value (GLTV), concerned with the concept of labor as the social substance of value, and a Special Labor Theory of Value (SLTV), which addresses a specific set of relative prices, proportional to direct plus indirect labor time. In this chapter I am primarily concerned with the GLTV and associated concepts; there is, however, no hard divider between the qualitative and quantitative aspects of the labor value concept, and we will need a simple set of tools to develop the value-calculation issues, which are further explored in the next chapter.

In the second section, the stage is set by introducing the concept of a substance of value, and by examining what I will describe as Marx's "negative argument" establishing labor time in that role.

The third section presents the essentials of the quantitative side, in the context of simple (precapitalist) commodity production. This is necessary to overcome what I believe is a false association of quantitative calculation with exchange value only; that is, I will seek to break the value-qualitative/exchange valuequantitative dichotomy. It will also help to answer some of the critics of the value concept, who have correctly asked how value theory links up with the consciousness (and rational action) of the economic actors themselves (i.e., Harris, 1983; Roemer, 1989). The final section addresses the main issue: the "positive argument" for labor value, the appropriate validity criteria for that argument, and the nature of its contribution to our understanding of the capitalist economy, and economic processes more generally. Full elaboration of this aspect will continue in chapter 3, which applies labor value concepts in the context of the theory of capitalist exploitation.

Before we begin the formal argument, however, it may be helpful to set the stage by considering more closely the controversy surrounding the traditional posing of the value issue. Is the intended connection between labor and value inseparably associated with qualitative insights into the capitalist process broadly considered? There are two answers to this question in the camp of the "post-Sraffa Marxians" (both coming from followers of Piero Sraffa, but perhaps not from the master himself; Sraffa, 1960). Sraffians (A): all of the qualitative insights in Marx are important: the role of labor in shaping human nature, or "species being"; the fetishistic character of commodity production and its relation to alienation; the role of fetishism and valorization of social relations in the reproduction of exploitation. But, they would argue, all of this is dissociable from the "value postulate"—the notion that labor is the "source of value" or "substance of value," conceived of as an absolute quantity of labor time. Sraffians (B): drop the search for "qualitative insights" altogether. It is this, rather than any particular putative source of those "insights," that shackles Marxian economics to prescientific ideology and condemns it to irrelevance. There are facts, and theories to explain facts. There are no "qualitative in-sights."¹

The value postulate, however, has proven itself to be resilient; in a manner similar to the alien invaders in H. G. Wells's War of the Worlds, no matter how many (Sraffian) bombs you drop on it, it keeps coming back. Orthodox Marxists (the term is not intended to be pejorative) continue to insist that value is essential to the Marxist project; proof lies in the cordial relations between Sraffians (A) and Sraffians (B), who between them are unable to deliver the coup de grace to the labor value connection.

The point can be illustrated by the following out-take from an imaginary dialog between "True Believer" (TB) and "Stubborn Skeptic" (SS) (Laibman, 1984-85):

SS. Value is redundant, irrelevant, and a headache.

TB. Value is essential. Without it, you see only the surface of capitalist reality; you miss the vital substructure.

SS. But you can't prove the validity of the labor theory.

TB. There's no need to "prove" it. It must at some level be intuitive; a nonarbitrary axiom of cognition. Its validity is only established in terms of what it can do, namely, reveal the substructure of capitalist social relations.

SS. But that "substructure" as you conceive it apparently consists of nothing but the propositions of the value postulate itself. Value reveals—itself! As for capitalist reality, value is redundant, irrelevant, and ...

And so the discussion runs, in a circle. For the observer who has some sympathy for both sides, it is like a mirage: now you see capitalism through value eyes, now you don't.

In an effort to break the impasse, I will try to formulate the labor value concepts in a rigorous manner that will defend their continued presence in a creatively developing Marxist political economy, but that will also take seriously the point of view of the critics and the need to incorporate aspects of the critical perspective. The ultimate object is to establish an operational role for value-as-labor, to ask, once and for all, what does value do? The word "do" must refer to something other than "reveal" or "lay bare" putative underlying realities that have no clear impact on the way capitalist economies—or pre- or postcapitalist economies—actually work. The effect of establishing value as—in some sense—an embodiment of social labor must be made indisputably tangible, even to hard-nosed Sraffians. Whether or not an exercise of this kind is ultimately fruitful, it should be attempted, since it alone will reveal whether the orthodox Marxists have indeed been onto something, or whether they are clinging to the "old magic" for emotional reasons only.

Labor as the Substance of Value: The Negative Argument

While the issues addressed in this section, and throughout the chapter, have a clear basis in the work of Karl Marx—and would indeed be unimaginable without that work—I have assumed that the relevant texts, thoroughly dissected during the last century, will not by themselves yield new results or resolve long-acknowledged ambiguities and difficulties. Since my interest is in the development of theory that matters in the interpretation of capitalist reality, and not in doctrinal history per se, I do not address Marx's texts explicitly, or burden the argument with long quotations. Indeed, I am not able to "prove" that my construction of the value categories corresponds uniquely to Marx's intentions; nor do I even think that is desirable. The basis of what follows in Marx's work will be clear to those familiar with that work.

Marx, in Capital, vol. I (Marx, 1967), begins his well-known discussion by imagining the apparent world of commodity exchange, in which commodities (goods produced with the intention to exchange) are traded in multiple varieties of ratios with other goods—multiple in the sense of large numbers of exchange ratios (none of which seems paramount or definitive), and in the sense that these ratios are continually changing over time. With the regularization of commodity production—its instantiation as the form of normal social reproduction, as opposed to its historical background role as an irregular and accidental secondary process at the margins or interstices of the central social relations—a set of benchmark price ratios emerges as the center of gravity steering the continual flux of momentary or market ratios. The first moment of synthesis, or distillation of fundamental concepts out of fortuitous complexities, then, is abstraction from the accidental impact of supply and demand, conceived as forces pulling market prices (money exchange values) away from their benchmark counterparts; we ask instead what determines the benchmark exchange values themselves.

Here we encounter the first of Marx's "negative" arguments—"negative" in the sense that a property is stated as a passive and obvious requirement, rather than one that plays an identifiable and constructive role in the theory. The property in question is the existence of a substance of value—something that lies behind the many and disparate exchange values of a given commodity, and determines them. This is the concept of absolute value: a quantity existing in each single commodity, as opposed to relative value: a relation, or ratio of exchange, between two commodities. This notion, of course, has been decried as "metaphysical" and obsolete, from Böhm-Bawerk onwards, among Marx's critics (Böhm-Bawerk, 1966), to the point where rejection of the old-fashioned "nineteenth-century" concept of value as an absolute, extensive magnitude has become almost axiomatic, unworthy of justification. I know of no argument to support this rejection, however, other than the dubious Occam's Razor (non-multiplication of entities beyond necessity). Even if we assume, for the sake of argument, some version of this principle, it is precisely the boundary of necessity—what is it that we "need"—that is at issue. Clearly, the notion of equivalence in exchange has a firm foundation in our experience and a role in consciousness of that experience. Marx clearly grasped the inadequacy of merely explaining the experience of equivalent, or equal, exchange in terms of money—the trap into which thinkers from Aristotle to Hume had fallen—since the money exchange value of a commodity is but the specialized name for one of its exchange values among many, and must therefore itself be explained by some general principle.

We are back to the question: What enables two commodities to exchange in some quantitative ratio? The question may be represented forcefully by means of a diagram (Figure 1.1). The symbol <=> there represents "equivalent exchange"; the exchange value relation is represented in the to...