The Value Dimension (Routledge Revivals)

Marx versus Ricardo and Sraffa

Ben Fine

• Publisher: Routledge
• Year: 2013
• Print ISBN:
  9780415837606
• eBook ISBN:
  9781135040390
• Topic: Business
• Subtopic: Business General
• Index: Business

The essays in this edited collection, first published in 1986, focus on important debates surrounding the central Marxian problem of the transformation of values into prices. The collection brings together major contributions on the value theory debate from the decade prior to the book's publication, and assesses the debate's significance for wider issues. Value theory emerges as much more than a technical relation between labour time and prices, and the structure of the capitalist economy is scrutinised. This is a relevant and comprehensive work, valuable to students, academics and professionals with an interest in political and Marxist economy.

CHAPTER 1

Introduction

Ben Fine

It is normal for an introduction to an edited collection to engage in a broader literature survey, to explain the criteria of selection and to summarize and give a guide to the pieces that have been included. I have not attempted to do any of these, although some are partially covered in passing. Instead, I have attempted to construct a potted history of the debate over the period concerned, giving some explanation of why the contributions came as and when they did. For this reason, I presume some knowledge on the part of the reader of what the transformation problem is and of some of the issues which are raised by it. To a large extent, even at an elementary level, this is the subject matter of the readings included here, so that a return to this introduction may be warranted after a reading of the text.

Any such history as intended here, is bound to contain a heavy element of subjectivity and bias. It is as if a minor character in a play is responsible for a review of it. The scenes in which the character appears are necessarily going to figure more prominently and other scenes, whatever their importance, may pass unobserved. Like a play, it will be argued in this introduction that the transformation problem is open to alternative interpretations and presentations – according to the way in which the relationship between production and exchange is understood and which aspects of this relationship are the subject of attention. To see it as the search for and discovery of a definitive solution to a well-defined problem, the calculation of prices as the Sraffian or post-Sraffian interpretation would have it, is only one construction of the transformation. But it is not the only one (although it has, from different viewpoints, been central to much recent debate); if it were, it would be a simple matter to rehearse the solution, even with varying interpretations, for each new generation of economists and the play need never grace the stage of original research nor original context again.

The setting

From the late 1960s onwards there was a considerable growth of interest in Marxism within the western academic world. Following the student activism of the immediately preceding period, the general liberalization of life-styles amongst the young and the expansion of university and other higher education, teaching and research posts became open to a new breed of academic Marxists. But the traditions that it found available within the existing literature were far from satisfactory as the capitalist world economy moved into recession in the early 1970s. Whilst there were Marxist theoretical journals of considerable sophistication, most notably New Left Review published in the UK, these were remarkable for the lack of articles on economic matters, whether theoretical or empirical. In the United States, the world of political economy was dominated by a single text, Monopoly Capital by Baran and Sweezy. As has been increasingly realized in retrospect, this book contained many theoretical and empirical weaknesses. But most significant for our purposes is that it essentially rejected Marx’s value theory, substituting a theory of potential surplus in its place. This reflected an explicit dependence of Baran and Sweezy on the role of the lack of effective demand (underconsumption) as the underlying contradiction of modern capitalism.¹ For this a value theory in itself, let alone one based on labour time, is redundant.² Accordingly, there was little here on which a new generation of political economists could hone their analytical powers.

In the UK, a growing challenge to orthodox neoclassical economics was perceived to be contained in the Cambridge critique of capital theory. In its details, this involved an attack on neoclassical one-sector growth and distribution theory and, for some, by implication from the work of Sraffa (1960), an attack on neoclassical theory as a whole.³ The Cambridge critique constructed a theory of prices and distribution (the wage-profit relation) by reference to ‘production conditions’ (input-output coefficients) alone and without reference to demand (subjective preferences as expressed by utility).

This solution to the determination of prices and profits from given production conditions was, then, originally intended as the basis for a criticism of the neoclassical orthodoxy. And it has proved to be such and has even given rise to a more positive alternative in the school of post-Keynesian economics, which emphasizes aggregate macroeconomic relations, monopolization, class-based distributional struggle and other common sense realities of the modern economy in contrast to the orthodoxy.⁴ But the determination of prices and profits within the Cambridge critique has also proved to be the basis on which to launch an attack on Marx’s value theory under the rubric of the transformation problem to which it is perceived to be offering a correct solution. Not surprisingly, the originators of the Cambridge critique, with the exception of Sraffa himself, had no particular commitment to Marxism and the person, Joan Robinson, with whom the critique and its popularization is most closely associated, had always been a critic of Marx’s value theory and the propositions derived from it.⁵

Meanwhile, the flag of Marxist political economy had been held aloft, particularly by Maurice Dobb and Ronald Meek. For the former, in his academic writings, the labour theory of value figured very much as a tool with which to create both a sociology of capitalist exploitation (as opposed to bourgeois welfare economics) and as a means to uncover the laws of motion of capitalism (as opposed to the dominant stream of neoclassical/Keynesian economics). In the first instance, this was a return to the ‘natural right’ of labourers to the full fruits of their work, a moral that had been basic to the Ricardian socialists.

Second, Dobb’s view implied there existed the labour theory of value, based on the labour time required to produce a commodity (labour embodied). In this, the labour theory of value of Ricardo is identical to that of Marx. Indeed, Dobb referred to the Ricardo-Marx labour value theory, something which, in the light of recent literature ought now to be impossible, as we shall see. So, in his hands, the labour theory of value became an analytical tool which might be useful for some purposes (which would differ between Ricardo and Marx) but which, in principle, might not be useful for others.

Subsequently, particularly in the context of the transformation problem, many were to argue that in practice the labour theory of value was at the very least useless and even erroneous. This became true of Meek, as a result of which much of his work, distinguishing Marx’s labour theory of value from that of his predecessors, drew little (sympathetic) reading.

Value form

An early and cogent criticism of the Dobb-Meek position was provided by Pilling (1972)

.⁶ Whatever its limitations,⁷ it was to provide a model for one of the two strands in the first phase of the debate around value theory and the transformation problem. As such, it had a number of crucial features. First, as has been made clear, a distinction was to be drawn between the labour theory of value of Marx and that of Ricardo. The failure of writers such as Dobb to make this distinction, despite their sympathy to Marx, was something shared in common with bourgeois critiques of Marx which (particularly around the transformation problem) became unanswerable. Not surprisingly, then, these bourgeois criticisms were found to have been embraced by Dobb and Meek and Marx’s transformation found wanting. Inevitably, those who failed to distinguish Ricardo’s and Marx’s theories of value did so by imposing the former’s on the latter’s.

Second, emphasis was placed upon the unique character of Marx’s method. Here, reference was made to the distinctions between and/or the relationship between form and content, essence and appearance, the qualitative and the quantitative, historical specificity and logical abstractions, and dialectics and contradictions. Third, this was closely tied to the object of study – value theory. Where Ricardo and his followers employed a simple concept of labour embodied, a mental construct with or without useful purpose, Marx derived the labour theory of value from the workings of commodity-producing society itself, as a consequence of social relations between producers. From here, a discourse was derived which explored the relations between use value and exchange value, value and price and concrete and abstract labour. These were quite notable for their absence in the works of Ricardo and his conscious or unconscious followers.

They were to become the focus for analysis, leading to the fourth characteristic of one strand of the early contributions to value theory – the interrogation of the texts of Marx and, on occasion when it suited, those of other writers of the past such as Rubin (1973) and Rosdolsky (1977). This is not surprising given the previously observed lack of a continuing trend of literature faithful to and developing Marx’s own contributions. It led to an ethos of Capital reading groups whose existence became expressed socially in the creation of new journals, the most important of all for this purpose in the UK being Capital and Class or the Bulletin of the Conference of Socialist Economists, as it was then known. But equally, the debates found their way into other journals such as Economy and Society which had itself been created by the wave of interest in Marxist theory.

The result was that very little attention in this strand was paid to the quantitative aspects of the transformation problem. Focus was placed on the opening chapters of Volume I of Capital and the series of texts by Marx, such as the Grundrisse, that had led up to it. To a large extent, even Marx’s own treatment of the transformation in Volume III of Capital warranted little attention since it was not concerned to establish the social, historical and logical relation between value, as created in production, and its form of existence in exchange. It was more or less presumed that the conceptual so...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Original Title Page
• Original Copyright Page
• Table of Contents
• Excerpts
• Chapter 1: Introduction
• Chapter 2: The law of value in Ricardo and Marx
• Chapter 3: Production, circulation and value
• Chapter 4: Transformations of physical conditions of production: Steedman's economic metaphysics
• Chapter 5: On Marx's theory of agricultural rent
• Chapter 6: Sraffa versus Ricardo: the historical irrelevance of the 'corn-profit' model
• Chapter 7: Note: A dissenting note on the transformation problem
• Chapter 8: The logic of prices as values