“Marx’s Refusal of the Labour Theory of Value” by David Harvey.
This is the best short essay on, Marx's so-called "Labor Theory of Value" or really his "Value Theory of Labor" which I have ever read.
I’m not sure I share your enthusiasm for Harvey’s paper. As I read it, the piece insists on holding both ends of the stick. It argues that Marx’s did not have – or rejected the possibility of – a labour theory of value. But it also posits that labour values, although slippery and ever-changing, not only exist, but also continue to rule capitalism in occult ways that only dialectical experts can see.
Many of the arguments made in this thread reiterate claims we have dealt with in our 2009 book Capital as Power, so I won’t elaborate on them further.
Instead, I will conclude with a few paragraphs we have written on Marxist attempts to save Marx from his science:
The notion that Marx was concerned with the qualitative rather than quantitative aspects of capitalism seems to us apologetic and unfounded. More significantly, in our view the belief that his theory of capitalism – or any theory of capitalism for that matter – could be fractured into two independent subsets leads to a dead end.
Begin with the issue of Marx’s emphasis. His work was certainly a critique of capitalist ideology. But it was much more than that. Marx tried to create an alternative science, a framework that could replace both bourgeois political economy and the positivist social management of Auguste Comte. This scheme stood on two main foundations. One was a dialectical history that provided the basis for revolutionary consciousness. The other was a value theory that broke the front window of prices and offered a starting point for future democratic planning.
Nitzan, Jonathan, and Shimshon Bichler. 2009. Capital as Power. A Study of Order and Creorder. RIPE Series in Global Political Economy. New York and London: Routledge, pp. 121-122 (http://bnarchives.yorku.ca/259/).
The starting point is valuation. Because capitalism is a system of commodities, and because commodities – and the social groups behind them – are related through prices, any general theory of capitalism must rest on a theory of value. Marx based his own theory of value on labour time – and more specifically, on socially necessary abstract labour time. The exchange value of commodities, he said, depends on the average productive labour needed to make them (the socially necessary aspect), and this socially necessary labour, he continued, can be measured in universal (read abstract) units. In this way, the labour of productive workers, properly socialized and abstracted, becomes the elementary particle on which the entire logic of capitalism rests.
This quantitative aspect of the theory – i.e., its reliance on the magnitude of socially necessary abstract labour time – is the heart and centre of Marx’s scientific socialism. Marx claimed his theory to be superior to the bourgeois alternatives, partly because it did something they couldn’t: it objectively derived the rate of profit – the quantitative compass of capitalism – from the material conditions of the labour process. Prices of production, he wrote, ‘are conditioned on the existence of an average rate of profit’, which itself ‘must be deduced out of the values of commodities. . . . Without such a deduction, an average rate of profit (and consequently a price of production of commodities), remains a vague and senseless conception’ (Marx 1909, Vol. 3, pp. 185-86). The very same point was reiterated by Engels. ‘These two great discoveries’, he wrote, ‘the materialistic conception of history and the revelation of the secret of capitalist production through surplus value, we owe to Marx. With these discoveries socialism became a science. The next thing was to work out all its details and relations’ (Engels 1966, Section I).
Bichler, Shimshon, Jonathan Nitzan, and Tim Di Muzio. 2012. The 1%, Exploitation and Wealth: Tim Di Muzio interviews Shimshon Bichler and Jonathan Nitzan. Review of Capital as Power 1 (1): 9-10 (http://bnarchives.yorku.ca/342/)
The fact that Marx erred in trying to anchor prices specifically and somewhat mechanically in labour values is secondary. It certainly requires no cover-up or apology. Many eighteenth- and nineteenth-century physicists now seem dated, if not irrelevant. Yet, without their breakthroughs physics would not be where it is today. The same is true for Marx’s labour theory of value. It was the first theory to put the study of society on a systematic footing. Had it not been for the stifling influence of the Soviet Union, the spirit of that theory would likely have kept Marxism a vibrant science.
Nitzan, Jonathan, and Shimshon Bichler. 2009. Capital as Power. A Study of Order and Creorder. RIPE Series in Global Political Economy. New York and London: Routledge, p. 123. (http://bnarchives.yorku.ca/259/)