Chris,
First, there's a difference between saying "labor is value" and "labor is the source of all value." And neither of these phrases are sufficient to understand Marx's view.
He held that LIVING labor is not value, but that DEAD labor *is* value. "Human labour-power in its fluid state, or human labour, creates value, but is not itself value. It becomes value in its coagulated state, in objective form" (_Capital_ I, p. 142, Penguin/Vintage ed.)
What Marx is getting at with this distinction is that labor undergoes a transformation in the capitalistic production process. The labor is alienated from the worker and it takes on an autonomous existence. He held this view as early as his 1844 Humanist Essays.
Specifically, in the essay on "Alienated Labour," he argued that "The worker puts his life into the object, and his life then belongs no longer to himself but to the object. ... The *alienation* of the worker in his product means not only that his labour becomes and object, assumes an *external* existence, but that it [the labour] exists independently, *outside himself*, and alien to him, and that it stands opposed to him as an autonomous power."
Notice that the quote from _Capital_ affirms that LIVING labor creates value, i.e., is the source of value, to use another expression of Marx's. And he does hold that LIVING labor is the sole source of value. Hence, it does create all value. Cassidy's attribution of this view to Marx is 100% correct.
I'm afraid you've misinterpreted Rubin as well. On p. 111 of Rubin's _Essays ..._, two paragraphs above the one you've been quoting, he writes "This popular definition usually leaves unclear whether the value is *determined* by the labor or whether the value *is* the labor itself." Thus, in using Rubin's comment to criticize Cassidy, you've distorted its meaning. Rubin isn't trying to deny that Marx held that the magnitude of commodities' values is determined solely by labor-time, or (what is pretty much the same) that labor is the source of all value. He's merely trying to say that labor and value aren't the same thing (but he doesn't quite get the difference right; for instance, he implicitly denies that Marx held that dead labor IS value).
What Cassidy is arguing -- but he's a mere reporter parroting the ubiquitous myth of the economists, Marxist and non-Marxist -- is that Marx's theory that the magnitudes of commodities' values are *determined* by the labor-time needed to produce them is internally inconsistent. This issue has nothing to do with what Rubin was talking about.
And when you write "Cassidy was lumping together use-value and exchange value (probably as an internal inconsistency) ...," that is equally incorrect. I can't even see how you arrived at this. Cassidy writes, correctly, that in Marx's theory, (living) labor is the source of all VALUE. It was you who conflated this with the notion that labor is the source of all use-values (wealth), not Cassidy.
Chris: "It is unwise, I submit, to talk about the LTV."
I agree, and one reason is that Marx didn't use the term. In addition to "law of value," he consistently refered to the "determination of value by labor-time." But, when you say "The LTV is the classical theory," this isn't quite right. The problem is that the phrase is so imprecise, it can mean almost anything. Moreover, there was no one classical theory. Smith's and Ricardo's theories are radically different, for instance. Finally, none of them used the term either.
Chris: "Marx and Engels never used the phrase. It is essential in understanding their theory of value that prices gravitate around the socially necessary labour time ...."
To speak of "their" theory is wrong. Marx alone developed his value theory. Engels was quite distant from the whole process.
Moreover, it is simply NOT the case that, in Marx's theory, "prices gravitate around the socially necessary labour time ...." What prices tend to gravitate around, and then only in the absence of monopoly, rent, etc., is production price.
Ciao
Andrew ("Drewk") Kliman Home: Dept. of Social Sciences 60 W. 76th St., #4E Pace University New York, NY 10023 Pleasantville, NY 10570 (914) 773-3951 Andrew_Kliman at msn.com
"... the *practice* of philosophy is itself *theoretical.* It is the *critique* that measures the individual existence by the essence, the particular reality by the Idea." -- K.M.