One of the big problems -- perhaps the biggest one -- with almost every discussion of Marx's theory of value is that there's little or no discussion of the purpose of that theory. Often, it is assumed (without any kind of proof) that Marx was using "labor values" to predict or explain or understand prices. As people who make that assumption note, much of Marx's CAPITAL makes no sense if that was the book's goal. They, of course, reject CAPITAL, or most of it.
I don't think that Marx's goal was to grasp pricing issues. If asked to explain prices, Marx would turn first to supply and demand (with little emphasis on what we now call "market imperfections" such as monopoly). Then, to discuss the "center of gravity" around which supply and demand gravitate -- in order to add content to the S&D story -- he'd point to long-term "prices of production" (Smith's "natural prices" or modern "long-term average costs"). These in turn reflect technology, input prices, and the tendency toward the equalization of profit rates between sectors. That is, on the practical -- empirical -- issues of price-determination, Marx was very much a Ricardian. (and Ricardo didn't think that "labor-values" explained prices 100% of the time.)
If Marx's goal was to explain prices, he should have simply skipped volumes I and II of CAPITAL (as, I believe, economist Paul Samuelson has said). But value had other purposes for him. I think the main concept of the entire book is "commodity fetishism," referring to the way in which market exchange (and commodity production) hides and distorts the appearance of the societal relations of production, specifically class relations. People who live within the system typically see the social relations between the various producers as being nothing but the exchange of things, perhaps mediated by individual buyers and sellers. Neoclassical economics takes this fetishized vision and runs with it.
Value, as I see it, represents a tool -- a method of abstraction -- for cutting through the fetishized fog, to reveal the societal nature of capitalism as a whole. (It's a tool of _sociological_ analysis.) Value -- socially necessary abstract labor-time -- represents _contributions_ to the wealth of the hidden (latent) community of producers that comes from the production and sale of a commodity. That community doesn't rule the world, since capitalism and its social system of alienation (fetishism) does -- but the solidarity of workers still represents a potential.
One way of saying this is that if commodities actually sold at value, Marx's conclusions would be obviously true to almost all involved. The commodity fetishism involved in price/value deviations is thus one factor that stabilizes the system by keeping the true nature of the system.
Marx distinguished value from exchange-value (though not as clearly as he should have). Exchange-value (in money terms, price) represents the amount of value that the sale of a commodity can _claim_ when it is sold. For simplicity, I'll call exchange-value "price."
Just as someone can put a different amount of money into a kitty than he or she takes out, under capitalism, "unequal exchange" rules: almost all commodities sell for prices that are higher (or lower) than their values. Some commodity-sellers are able to claim more (or less) value than they contribute. This value/price deviation is as important to Marx as is the connection between values and prices.
As shown in "transformation problem" discussions, value/price gaps arise mostly because (1) different commodities are produced using different technologies (measured by different organic compositions of capital) and (2) surplus-value is produced. In volume I of CAPITAL, Marx assumed that exchange was such that values = exchange values, while appropriately abstracting from the manifest differences amongst industries. He also starts with a world without surplus-value in order to explain its existence (in volume I) before turning to the implications of its existence (in volumes II and III).
In this light, values also represent the types of exchange-values that would prevail if we had simple commodity production (i.e., market-oriented production with no class distinction). That kind of (hypothetical) simple society represents a bench-mark that Marx uses for analyzing capitalism by means of comparison.
The volume I world is one of abstract capital exploiting abstract labor. He turns only later to the heterogeneity amongst capitalists, while the heterogeneity amongst workers seems to have been left to the never-written book on Wage Labor.
I am not the sort who does textual justifications of my interpretations of Marx, since I have a bad memory for quotations (and the meaning of quotations depends on context). Rather, I think that if this interpretation is applied, suddenly Marx's analysis in CAPITAL makes total sense. That doesn't mean, BTW, that it's "correct." That depends on how well it helps us understand, explain, and even predict events in the real world, playing some part in guiding practice.
I don't think there's any indication that Marx wanted socialism to involve trading at value. Similarly, he didn't see values as "just prices." However, Charlie Andrews' FROM CAPITALISM TO EQUALITY (http://www.LaborRepublic.org) presents a picture of "feasible socialism" that centers around trade at value by not-for-profit organizations. It's a useful alternative to consider when discussing Parecon. Andrews also presents a good interpretation of Marx's theory of value, one that's helped my understanding a lot.
------------------------ Jim Devine jdevine at lmu.edu & http://bellarmine.lmu.edu/~jdevine
> -----Original Message-----
> From: Wojtek Sokolowski [mailto:sokol at jhu.edu]
> Sent: Thursday, September 25, 2003 6:50 AM
> To: lbo-talk at lbo-talk.org
> Subject: RE: [lbo-talk] Parecon Discussion...
>
>
>
> > Isn't the Marxist conception of this based on exchange
> > of labor time?
> > In
> > other words, if you were willing to exchange what you
> > made during your
> > time painting with whatever someone else was doing
> > during their time
> > working, then this is the basis of the economy now,
>
>
> That was Ricardo if memory serves, Marx simply adopted the concept
> because it suited his claim that only labor (not capital) is the
> producer of value. Of course that statement may only be true in a
> labor-intensive economy where different jobs are relatively homogenous
> e.g. making a table takes about as much skill and effort (albeit of a
> different kind) as say making an iron plow.
>
> Things get a bit more complicated where you have capital-intensive and
> labor-intensive industries operating side by side e.g.
> hospital care and
> computer mfg. A claim that an hour of a surgeon's and an assembler's
> work produces a more or less equal value is ludicrous on its face.
>
> Wojtek
>
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