I fully get where you are coming from, although I prefer to look at value in terms of “units of currency,” or what people are willing to exchange it for, for purely pragmatic reasons.
I have some observations to put in, which I only hope haven’t already been made (I don’t have time to read all four pages here).
- Most discussions of the details of economics systems and calculations, fail to back off from the subject matter enough to take into account the MOTIVATIONS of the people discussing each point. People end up arguing at complete opposite ends of the subject, often without realizing it, and so get furious with each other for nothing.
In particular, especially these days, many people are arguing economics from completely different goal sets. Some are arguing what should be valued how, because they are worried about or opposed to something (such as socialism or capitalism). Often, they aren’t even opposed to it because of the thing itself, they are opposed to it because they associate it with something else that upsets them.
Anyway. If your overall goal, is to make sure that every participant in the economy is fed and clothed and so on, you will likely come to completely different conclusions about how value is assigned, than if your overall goal is to make sure that people you don’t like, get their come uppance. Or, if your goal is to comfort yourself that your economics system is made up entirely of firmly defined, delimited, and predictable elements.
- I have yet to have seen anyone of note start from the recognition of the fact that labor itself has an actual measurable INTRINSIC COST to it. And even more important, I have never seen any instance where anyone was even aware of the REAL cost of acquiring an hour of labor of any kind. The most I’ve seen, is that occasionally someone notices how much it costs for a laborer to arrive at the work site, eat enough to perform the needed work, and then survive to the next day. No one has yet looked at the fact that in order to acquire and use an hour of labor, that the entire life of a being has to be taken into account, if the larger societies economy is to be sustained over any significant length of time.
This is the labor equivalent, to the way we at least used to, assume that because garbage we dumped in the nearest river was out of sight by the next day, that it didn’t cost us anything to use the river as a waste disposal system. Then one day, the people from down stream came after us with pitchforks, and we had to rethink things a bit more.
By allowing labor PURCHASERS to ignore the real long term costs of labor, we let them pass on those costs to everyone else, especially including our children. This is a part in particular, of the “system” of allowing how labor is valued, to be determined by the level of desperation of the workers alone, as most so-called “free market capitalists” seem to want.
Other economic theorists are so intent on making it easy for business people to predict their costs, that they will refuse to look at ANY of the actual costs of labor before limiting what is and isn’t to be taken into account before setting standards.
- One more somewhat amusing observation: the irony that many advocates against any and all socialism-related ideas, eagerly insist that if everyone is guaranteed enough to eat, and a safe place to sleep every day, that no one will ever strive to improve themselves further. This is rather ironic, since what most of those same people warmly declare to be the most central reason why capitalism is the way to go, is because everyone DOES want to strive to improve themselves further, and that that essential element of human nature is what capitalism engages.
Well, it would appear that several people in this thread disagree, such as smiling bandit right above this post, where he says that “I prefer to look at value in terms of ‘units of currency,’ or what people are willing to exchange it for, for purely pragmatic reasons;” or WillFarnaby in his examples one page over. And indeed, much as I’m loath to cite Wikipedia, its page on “value (economics)” parses value as "what is the maximum amount of money a specific actor is willing and able to pay for the good or service.” Now, *market *value may be something different yet from the “value” that everybody else has been talking about here, and it may not be subjective, but that already goes to show that “value” isn’t a closed-and-shut category of some “actual” or “real” dimension. There very obviously are quite subjective theories of value, and the sheer fact that there is a plurality of theories of value should give us pause to think.
Are WillFarnaby and smilingbandit wrong, in your mind, to say that the value of a hamburger is $5 plus my subjective believe that I have obtained a “consumer surplus” when buying it? If yes, good, I agree (well, I think it’s a less than useful conception of value); if not, then how is it not subjective?
Socially necessary labor time is not about the social necessity of the commodity produced—it’s about what is expenditure of labor time is necessary on average to produce the commodity. You’re getting hung up on a parsing of “socially necessary” that isn’t correct: if it makes it clearer, replace it with “average time it takes in the economy to make this product”. As I said, Marx never says anything about socially necessary labor—that’s taken for granted in any commodity, because any commodity must be “necessary” (or desirable, or even just desired) to even be a commodity in the first place. So Marx is saying: any commodity by definition has utility, and its value will be determined by the average amount of labor it takes to produce that commodity.
So you’re right to say that “if making apple sauce is not socially necessary, neither is the time devoted to it;” but that’s not a useful complaint. The question Marx raises is “if making apple sauce is ‘socially necessary’ (i.e., has utility, produces a commodity), then what makes it valuable? That part of the labor time spent producing it that is socially necessary, i.e. no larger than the average time needed to produce apple sauce”. So absolutely, if you’re not producing a commodity, then no amount of time spent producing that non-commodity will add value; but if you HAVE produced a commodity, then whence comes it value? From the socially necessary (i.e., average) labor time. Again: socially necessary in this last phrase does not denote that the good is wanted, but only says something about how much time is needed to make it.
I had wanted to say something about the Monet example when Shodan brought it up again, but didn’t, so let me do so briefly here: it’s a crap example for a number of reasons. First, Marx’s theory is a theory of capitalist commodity production through wage labor, and it’s unlikely cutting up Monets will ever be that.
No, that’s just not so. First, these words all become important later, but not at the point where the LTV is introduced. But more importantly, to assume that all these terms are required for a theory of value is wholly conditioned by what I still have to assume is your preference for a neoclassical theory of value. Again, I realize that I’m asking you to abandon these notions as (while useful for some purposes) not a “truth” of real life.
It’s far less obvious or trivial a conclusion than you make out here—and, unless I’m mistaken, it’s a conclusion that goes beyond supply-demand theory by explaining equilibrium price (I’m still not happy about the value=price equivalency, which I think is not correct for what Marx is doing). Again, unless I’m mistaken, supply-demand just says: let’s observe the equilibrium market and see what sellers and buyers agree on, and then we know the true value of the good being exchanged. The price is what it is, though we can theoretically determine the processes whereby sellers and buyers arrived at it, and the factors which played a role in it. Marx, essentially, asks what the $5 of the hamburger measure: WHY all the processes involved in the supply and demand equilibrium end up a $5 for a hamburger, $10 for a menu, and $10.000 for a car. It’s a measure of abstract societal labor involved in the production of these goods, says Marx. So it does not add another unnecessary complication, it adds a possible explanation, purely as economic reasoning.
As political reasoning, it highlights the importance of labor, and everything that springs from it, which I have oft stated now in this threat. Note, by contrast, the political work that the kind of value theory which WillFarnaby et al have does: because any exchange will yield an (immeasurable) “surplus” to the exchangees, it’s almost literally impossible to have an unfair economy. Your hamburger costs $6 instead of $5? I’m just not buying it! Fine for hamburgers, but what happens when it’s water, or grain, or a roof on my house, that I can’t afford–or that I must afford, even though I don’t want to or am unable to afford? Well, I made an exchange, right, so my sense of financial security in the future must have been worth less to me than the roof that I desperately need now–a fair deal, no? This is an extreme, of course, but it goes to show the absurd extremes to which any theory can be driven.
I believe you are confusing two specific pieces of information.
The value you personally receive out of any transaction is subjective. The value of the transaction itself is objective; it consists of exactly what you do, in fact, trade.
If you walk into a restaurant and pay $5.00 for a burger, the subjective value of the meal is how satisfied you feel. It will vary from day to day, or even hour to hour. One day, you’re anxious about a relationship, and that burger may not be very much on your mind. It’s just something you ate to keep going and you don’t care about the flavor. If asked, you’d say it was, “meh.” Then the next day you’ve gotten over the hurdle and asked your girlfriend to marry you, and she says yes, and two of you are having fun around town with smiles the size of both Carolinas put together making plans, and you stop for burgers. The same hamburger could be great and filled with flavor, satisfying you deeply, because you’re having fun with someone you love.
The economic terms are the same. The restaurant got $5.00. You got a burger. You could argue that maybe the burger the second time was slightly fresher or something, but economically it’s pretty irrelevant: the caloric content is going to be almost identical.
I’m working with what you’re giving me, am I not?
Not to put too fine a point on it, this does not seem to be a distinction you yourself are making when you say, as you did above, “I prefer to look at *value *in terms of “units of currency,” or what people are willing to exchange it for, for purely pragmatic reasons;” nor, quite clearly, is it what WillFarnaby is saying. More problematically, the only meaning for your “transaction value” term (which hasn’t come up before, anywhere in this thread) that I could find just now is “the actual price of a product, paid or payable, used for customs valuation purposes.” How many “values” are there? How are they distinguished? What value are you talking about when, as you do in the quote, you are just talking about “value”?
Alright. I’m not sure what this has to do in a discipline that likes to call itself a “science,” but fair enough.
Wait. Are you saying that in the “economic” (whatever that is, as opposed to the other example–is that NOT economics? because it sure looks like neoclassical, even Austrian, to me) terms, $5=1 burger? In the “economic” exchange, these things have the same value? Because I was making exactly this point above, and was called a moron for it. Or are you still saying $5(+ x consumer surplus value)=1 burger(+y [which may or may not be =x] other guy’s emotional surplus value)? Because if the latter, I do not see how your two examples are in any way distinct?
And, just as a sidenote: I’m tickled by the fact that once upon a time, “work” (labor?) would have been measured in calories…so it almost looks like your last sentence is saying: “well, in economic terms, these trades are equal, because the labor in them is the same”…I’m kidding, of course…
Again, you are arguing in a circle. It isn’t a commodity unless it has exchange value. The amount of labor time that produces it isn’t socially necessary unless it increases exchange value. Labor doesn’t add value apart from the exchange value, and therefore the idea of labor value is a meaningless addition and doesn’t add anything.
You keep trying to say that labor adds value apart from exchange value, and then trying to sneak in exchange value.
If I can produce one widget an hour, and my neighbor can produce two widgits in an hour, then the LToV should say that my widget has twice as much value as his. Instead it is going to have less value, because he can produce twice as many as I do. And that is determined entirely by the exchange value, and the average amount of labor time to produce this socially necessary commodity of widgits does not add anything to the discussion.
Regards,
Shodan
??? I have been saying no such thing. Nor have I been “sneaking in” exchange value, it’s been there all along. Nor am I arguing in a circle–even your precis above isn’t circular (except to say that meaningless additions don’t add anything). Plus, it makes no bleeping sense, despite my having said, four, five, six times now, that “socially necessary” doesn’t mean what you persist in thinking it means. You may, of course, feel free to dismiss Marx’s argument for reasons to do with your persistent misconstruction, just like you may feel free to dislike cats because they have scales and croak–but then your dismissal just has nothing to do with Marx.
In the simplest way I can say it, a final time: All commodities have value. Their relative values are determined in exchange–thus the appearance of their value is their exchange value. How is the relative magnitude of their exchange value determined? By socially necessary labor time, the average amount of labor it takes to produce a certain commodity. Which is why:
Is wrong. You’re simply wrong. Hellestal actually gave you the quotes from Marx that tell you that this is precisely not how the LTV operates. Here, again, Marx:
“Socially necessary labour-time is the labour-time required to produce any use-value under the conditions of production normal for a given society and with the average degree of skill and intensity of labour prevalent in that society.” (129)
So if you and your neighbor, for the sake of abstraction, constitute “society”, then, Marx says, your widget has (lo and behold!) the same value as each of the ones your neighbor has produced. Because the “normal” conditions of production would appear to allow twice your productivity (this is the way Marx renders this in the example of the power-loom’s introduction). Again, as I said above, I think it should *really *be the average between these two productivities, as Marx says above, but Marx is dealing in whole societies, and you’re just giving individualized examples; but you and the LTV are in agreement that your labor does not add a full day’s value to your widget.
It is indeed the same thing, but we can only reasonably measure one element. See below.
Yes, that’s a pretty accurate definition.
The value of any and every transaction consists of exactly two pieces of information: what you give and what you get. There is no mystery. It’s just really, really hard to measure if one of those things is not currency, which is why it’s almost never tracked or measured.
Economics tries very hard to apply scientific principles and measurement, but it still a social science. The social and psychological value of what any given person receives in a transaction is vital, since that’s exactly why people engage in any trade.
I won’t call you a moron, and I don’t believe that’s the case. I believe you are going around in circles and over-complicating things because you believe in an incorrect ideology.
From a purely economic point of view, all trade occurs because receive or think they receive greater value in a trade. They may be wrong, but they are almost always right. Both sides benefit from trade, which is the only reason it occurs. This is not mysterious. When you buy a burger, it’s because you want the burger more than you want the $5.00 bill that pays for it. These items do not have the same value. However, you are correct in that I misused terminology. (In fairness, economic has the worst and most twisted jargon on any field, anywhere, period.)
*The value of the burger as purchased will always be more than $5.00, since you won’t engage in the trade unless you get more than the pure exchange.
*The economic value of the burger is $5.00, since that’s the maximum you will to pay for it. (You can also look at the larger macroeconomic picture and average it out, and say that over the entire national economy or whatever, people will pay $5.34 for a burger if you like.)(
I hesitate to say this, because as I will say a couple of lines down, I think we really have little to say to one another, but: “the value of a transaction”? The act of exchange itself does not have value, does it?
And this is why I think we really have nothing to say to one another. First, the notion of an “incorrect ideology” is really…baffling. As I noted to Hellestal, it presupposes an outside of ideologies that allows us to judge them as “right” or “wrong”, and such an outside just doesn’t exist.
As I said above, this is certainly one way of looking at it, and it has its political and economic consequences. I would argue that all trade occurs because participants in them receive utilities they do not otherwise have, but trade these utilities at equal exchange values.
We agree on this bit, except that your version requires you to lump to disparate magnitudes (price and personal feelings) together, even as you admit that one of them is not in practice measurable. While mine keeps two disparate characteristics of the commodities we trade apart (utility and exchange value), merely acknowledging that utility has to be there for both parties.
But this remains the question which I posed to WillFarnaby: how is this not entirely tautological? I exchange money for burger because I value the burger more, and the observer knows I valued the burger more because I exchanged money for it, right? And the “more” remains unmeasurable?
Right, so just to reiterate: for Marx, I exchange $5 for a burger because the burger has a utility that the $5 don’t have, the same as if I, a producer of fries, exchanged fries for burgers from you, a producer of burgers. I’d give you $5 worth of fries for a burger. We have each now two items of utility where previously we had one. The only thing that is different between our parsings is that your version requires I figure this utility into some now-unmeasurable whole of “value”, so I can say the value has increased, instead of keeping these things separate. But why? Why is not good enough to say that what Marx would call our “wealth” (the number, as it were, of use values) has increased, while the values have remained constant? The answer, I think, is your (and, in the obverse, my) political predilections, as I suggested to UltraVires. (I mean, I can of course argue that Marx’s version is simpler, and makes more sense because it doesn’t conflate the measurable and the immeasurable, and doesn’t require a leap of faith, but simple the acceptance of a deduction (that, I will say again, no-one here has yet managed to disprove). But you’re not going to buy it.)
Again, all I am shooting for here with those of you who are adamantly capitalist, neoclassically oriented, is not that you accept Marx’s version as true, but simply to acknowledge that ultimately, the only possible choice between them is ideological; and to see, further, that Hellestal’s initial parsing of Marx is just wrong. It’s just as easy to dismiss Marx on ideological grounds with a correct understanding of what he’s saying. So I’m really only looking for something like “oh, so THIS is what his argument is; well, I still doesn’t float my boat” (which is my reaction to neoclassical arguments…).
Enterprise, I had to laugh when I saw this comment.
We can check how the original compares.
I believe the average reader of English knows what the word “exclusively” means, but I could translate the original German if that turns out to be necessary.
There is more.
Where does VALUE come from?
Human labor. That’s it. That’s where it comes from.
There is more.
This is an even stronger statement.
It’s not only that VALUE only comes from labor. That has already been established. But now we can all see that Marx goes even further than that, his statement is even stronger than that. When Marx is defining the very substance of VALUE, he says labor is that substance. It not only that it comes from labor alone, but even on top of that, its substance is literally labor. In order to measure VALUE, we must necessarily measure the amount of labor, because that is doing the same thing.
There is more.
Definite article here. What is the “value-forming substance”?
Labor.
Labor is the value-forming substance.
He makes the point explicit. Again, and again, and again. VALUE comes from labor. VALUE is literally the substance of labor. VALUE is measured only with relative amounts of labor-time. And yet we have this.
Yaaaaas, he does. Many, many times.
I think I’ve made my case on this, but I can keep going. One more example while we’re talking definitions.
He defines himself into the place where he “ends up”. That’s what a tautology is.
The quotes above already establish that Marx says that VALUE comes exclusively from labor, is the substance of labor, is measured with labor. That’s not quite the same thing as this claim. To demonstrate that this is a tautology, I need to show the circularity from the original definition. That is, I need to show that VALUE coming from labor is not a conclusion of his reasoning, but rather a deliberately chosen starting point. I need to show VALUE coming from labor is a definition, not a logical deduction from other definitions.
The easiest way to do this would be to show a specific place where he specifically says, “I’m defining VALUE to come from labor.” That might seem like a problematic thing to find.
It’s not.
I quoted that just before. It demonstrates that VALUE comes only from labor. But let’s now explore the beginning of the next paragraph with it.
He even uses the word defined himself.
(The original phrase is “wie er eben bestimmt ward”. bestimmen is a synonym for definieren. From the Duden: 1. a. festlegen, festsetzen b. verbindlich entscheiden c. für jemanden, etwas vorsehen; zu etwas ausersehen d. [wissenschaftlich] ermitteln, klären; definieren. The word wissenschaftlich means scientific usage. Marx often insisted his approach was scientific. The two English translations I’ve checked have also used defined for bestimmt here.)
So yes, it is in fact his definition that VALUE comes from labor, as he admits from the start. It’s his explicit definition. This definition is the starting point for this analysis. It is also the ending point of his analysis: his claims about capitalist “exploitation” are based on VALUE coming only from labor, and he defined VALUE coming only from labor, as he said himself.
Again, I just have to laugh. It’s all right there in the original.
I need to make one last point on definitions and tautologies.
Or this comment later on:
First is a basic language issue.
This is not a “deduction”. It’s not even close to a deduction.
People can look up the broader context for that quote if they’d like. There are no other premises there. But a deduction is a logical implication from the given premises. Primes are only divisible by themselves and the number one, and 13 is a prime, are potential premises. Deduction from those premises: 13 is only divisible by itself and one. This is putting pieces of information together in order to come to conclusions. This isn’t remotely close to what Marx is doing here. Nowhere does Marx provide any previous pieces of information, from which we might logically conclude that the only property in common of “commodities” – ignoring use-value – is that they are “products of labor”.
Marx is making an assertion. Marx is attempting to assert a statement about the “properties” that “commodities” have in common, ignoring use-value. This assertion is not a deduction. It comes out of nowhere. There is no argument for it. He just fucking pulls it out of his pants in dramatical fashion and plops it down on the table in front of him for the world to see.
It’s a bare assertion, spoken as if it’s self-evidently true. It is, in fact, self-evidently false. Ignoring use-value, there about a bajillion properties that “commodities” have in common apart from being “products of labor”.
In any positive statement, one counterexample disproves the statement.
If someone says, “Eleven is the highest prime number!”, then a single mention of 13 completes the proof that the statement is incorrect. Mentioning 17 is unnecessary. This can even work more generally. A statement that “There is a number x which is the highest prime number” can be disproved in the same fashion. We can form a new general number, which is all the primes up to x multiplied by each other. Then we add one. This new number is not divisible by any prime up to x. This necessarily means that this higher number is either prime itself, or is divisible by a prime bigger than x. Either possibility contradicts the original statement and completes the proof that there is no highest prime. We only need to form one counterexample, even an abstract counterexample, to disprove the statement. Marx’s statement out of nowhere is: “If then we disregard the use-value of commodities, only one property remains, that of being products of labour.”
And in this thread, I have given not one, but about a bajillion different properties that commodities have in common beyond labor, even ignoring their use-value.
The proof is done. Only one counterexample was needed, and many were offered. What’s most startling here is that you have personally offered yet another counterexample that I didn’t think of.
Necessary conditions for all commodities are themselves properties (Eigenschaften) common to all commodities. (I’m not entirely sure why that has been pointed out.)
If we disregard the use-value of commodities, then according to you, at least two properties remain: that of being products of labor, and also, exactly as you say, the property of being “in a relation of exchange on markets”. Being traded on markets, and so having a relation of exchange, is not the use-value of commodities. (This can be added to all the other many properties previously listed in the thread. But one counterexample is sufficient.) Now, I can imagine someone arguing, aha, but commodities would not have an exchange-relation on markets if they had no use-value!
And if it has no VALUE, it would not be in a relation of exchange in markets.
Major problems with this. Such an argument would prove too much, because it could equally be applied to commodities’ status as “products of labor”. Without the use-value, there would be no purpose to have labor crystallized in them. If we are to disregard their having an exchange-relation as a common property of “commodities” because there would no exchange-relation without use-value, we must similarly disregard the property that they are “products of labor”, because they would likewise not be products of labor if they had no use-value. No one would bother to make “commodities” if the output of their strenuous efforts were use-worthless.
There’s no rescuing this, outside of a circular argument.
Declaring arbitrarily that goods are no longer “commodities” if they have no use-value is – AGAIN – part of the definition of what it means for something to be a commodity with VALUE. It is a belated, post hoc part of the definition, a last-minute attempt to shore up the inherent unavoidable weakness of the original definition. But it is, nevertheless, part of the definition. Abstracting from use-value, the only way for labor to be “the remaining property common to all commodities” – the only way that we can be forced to ignore all the many, many, many other properties that they have in common – is for labor to be defined as the only remaining “property” that remains. This would be an arbitrary definition that excludes everything that Marxists don’t want to include.
There is no logical defense of the absurd notion that the only “common property” of commodities is their being “products of labors” (ignoring use-value). No logical defense, but of course, there is a definition-based defense. The only outlet left is to define everything from the beginning so that it fits the way he wants it to fit in a fully tautological manner.
And this, of course, is exactly what Marx does.
This thread is reaching the point of diminishing returns.
Or maybe it’s well past that point already. Marginal utility diminishes. Demand curves slope down. It’s not worth the same time and effort that it used to command from me, so I’ll check it just once a week from now on, Saturday or Sunday, and reply if I feel my previous posts have not been fairly represented.
This was also a silly thing to write:
Underline added.
…but I see on preview, that it’s been walked back.
It’s good that this was walked back, because my example was directly based on Marx’s own statement.
Except my example here wasn’t my own. It was Marx’s.
Marx is talking abstract: A>B and C<D. All I did that supposedly “made a hash” out of things was to make concrete what he left abstract. All I did was fill in the numbers for A,B,C,D to make Marx’s own example more illustrative. If my example had been “a hash”, that would’ve been a direct criticism of the source. But since this no longer seems to be an issue, I can leave it there.
No, you’re just demonstrably unfamiliar with the history and practice of science and mathematics.
One of papers above? They use an Information Theoretical approach to the notion of simplicity. This is to say that they are using a mathematical approach to simplicity in order to evaluate potential models. As an ideal, this is fully standard in the modern scientific approach. (Implementation is hairier, as I was trying to explain when I was discussing those papers.)
Simplicity has a precise definition. I brought it up, because those papers brought it up. They use this sort of idea to evaluate model simplicity.
I wouldn’t say they were being “ideological” in trying to defend one model over another on the grounds of simplicity. I would say, rather, that they were being sophisticated thinkers. When I’m talking about evaluation of scientific models, I’m using the same definition of simplicity that they are using when they try to compare models pricing “commodities”. My problem with their model – and I already pointed this out above, too – is that they get their results from restricting the scope.
That doesn’t mean their results are bad. Their results are pretty good. The question is whether you can get better results from a slightly different model – with “better” defined exactly as I used it above: able to describe the data. You can get good results from a more modern model, and the more modern model would also provide good results in a much wider variety of contexts.
There is also a discussion to be had of purely statistical models vs more structural models, but I don’t want this to be any more confusing to you than it apparently already is. The point is that there are actually people in the world with some experience in trying to model scientific or even social-scientific ideas, such as some of the authors above trying to defend at least a statistical notion of the LTV. Some models are more complex than others (in a precisely defined sense). All else equal, we wouldn’t want that added complexity, but some models add more complexity in order to answer broader problems. Unfortunately, some models add complexity to no particular purpose. Some models even add complexity without adding the benefit of any sensible testable predictions.
And some “ideas” that have been written down in words can’t actually be transformed into a format that can be put into any computer, because the pieces contradict each other from page to page. The program would blow up.
I have lots of complaints about modern mathematical economics. Lots and lots and lots of complaints. But one thing that it does teach people is how to put more than two ideas together without one contradicting the other. The hard problem is then converting the ideas back from math into English in a way that continues to make some sense, which… not everybody in the world is particularly good at. But people who work purely in a verbal method tend to have some serious problems. There are occasional internal consistency problems in Adam Smith, Ricardo, Keynes, Marx, and just about anybody else you could name. Marx’s problems are even worse than average, because his system is built on a foundation of a tautology, and when he tries to leave the sanctuary of his tautology (as in Volume 3), he faces internal consistency and math problems. But I didn’t want to focus on that for this thread because it gets too far into a dark unfriendly forest that’s not worth visiting.
It’s enough for me to describe how his original idea falls down.
That doesn’t mean everything in his book is wrong. But an awful lot of it is very silly, because he defines himself where he wants to go. You could learn an awful lot about what you seem to think you already understand if you tried to program as much of his system as possible into a computer. I’m not going to get into the transformation problem in Volume 3, but there are jagged pieces that stick out. It is not a cohesive idea.
There are various other comments I might deal with later, on the weekend. Rather than this sprawling mess, I might try to focus only on just a few ideas at a time.
I’m not going to do more than that, because I think I’ve more than sufficiently made my case for the average reader of this thread. My goal is not to convince you. I doubt that’s possible. But if a random reader were inclined to think you were correct about “it’s not true that Marx says labor is the sole source of value”, they should be content with my response to that, even if you are inexplicably not.Back in the day when I was an undergrad in a Bible Belt university, I used to have discussions with fundamentalists about Biblical inerrancy.
This discussion has exactly the same flavor.
I even have an internal bet about which chapter and verse you’re going to cite next in a fruitless attempt to defend that which cannot be reasonably defended. I doubt I ever convinced even a single one of those old fundamentalists of the basic contradictions that they refused to read in their book. I doubt I’ll convince you, either. Feels exactly the same to me.
Hellestal, this is precisely the problem. You read, and laugh, and you feel yourself so much superior that you cannot but assume my inferiority. And thus you feel the need to insult me, my intelligence, my knowledge, my willingness to be open-minded, the need to equate me with religious fundamentalists, after I have three times at least said that I take a completely open stance on the essential, real-world “rightness” of any of Marx (something you needed to misquote me on, even!), and you invest all this energy instead of walking me through a rebuttal of my complaints.
Now, for the purposes of this threat, it’s *certainly *correct to say that all value comes from labor–and indeed, I have been treating it so throughout. I will note, indeed, that’s what I did note, however, that commodities explicitly incorporate use value, and no use value can be had without natural resources, as the quote I gave says, so there is something beyond labor that goes into value somewhere–all I was saying, really. By the stage of the argument we’re discussing, Marx has bypassed this into an argument about exchange value as the form of appearance of value, and exchange value is only labor. Does this change anything I was saying? It doesn’t. It’s a great and utterly superficial gotcha.
As for the rest. You want to play language games: on whether translating Marx to say “defined” makes his argument a “definition”; on whether “simplicity” is the right word (or whatever, really), instead of saying something about whether or not the word ‘value’ simply means different things in Marx and your orthodoxy, and that’s fine. You want to insist on you being right, and that’s fine. You want to claim you’ve done things you’ve not done (like offer “a bajillion different properties that commodities have in common beyond labor”), that’s less fine, but I’m slightly beyond caring.
But, to repeat: you feel a need to keep insulting me, my knowledge, my intelligence, and my open-mindedness, and you know what, I do care about that. [And yeah, I know, you’re not insulting anybody, you’re just making statements of evident fact!] I’ve made mistakes in this thread that I’ve admitted (you haven’t, and not because you’ve not made any mistakes), and which are insubstantial to my criticism of the mess you are making of Marx. In fact, you spend time harping on the statements I corrected, without even bothering to answer the very simple question I put after that correction. This is not how I will spend my time debating things, sorry. I had had, again, higher expectations of you.
As I’ve been saying: you certainly know more about neoclassical economic theory than I do. You probably believe you are giving a correct parsing of Marx. And you’ll certainly find more people agreeing with you here than I will. I don’t think that takes your promised weekend rebuttal of my complaints, so I would suggest you spend your weekend more profitably, and we’ll let this go.
Those two sentences directly contradict each other. Relative value and relative magnitude of their exchange value is the same thing. Assuming one isn’t actually negative.
The only thing that sets relative value is the act of exchange.
I realize that a different choice of words might have made it easier for you, but: the sentences do not contradict each other; the one says that value is a matter *of *exchange, the other *how *it is measured in exchange.
But there’s like a half-dozen paraphrasings throughout this thread that try to explain it in different words. You’re also getting silly: even if you should catch me in a misphrasing after having me go around the carousel dozens of times, that’s got nothing to do with Marx’s argument, which, again, you should read to be able to dismiss.
Yeah? Labor has nothing to do with it. Individual preferences expressed in the act of exchange is all that matters for relative value.
Well, I’ll be damned. You’ve convinced me! Marx is wrong. Let me get Milton Friedman’s collected works out and light a candle to Friedrich Hayek. Never say sound logic cannot convince me.
A trade is what you give and what you get. Nothing more.
If and when it purports to describe reality that values, then it may be judged on whether or not it is congruent with reality.
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As I said above, this is certainly one way of looking at it, and it has its political and economic consequences. I would argue that all trade occurs because participants in them receive utilities they do not otherwise have, but trade these utilities at equal exchange values.
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Bolding mine. That is not necessarily so. Exchange value has a very specific meaning in economic terms, and trade frequently does not occur at that point.
Bolding mine. That’s not correct. In most transactions, only one side gets money. (This isn’t always so, since lending is a form of trade. There are also complex trades that we don’t need to worry about.) But both sides get value, because they get what they want out of the trade. I simply used personal feeling as a colorful illustration of exactly what people are doing by handing a fiver over the counter for lunch.
It’s not tautological; it just describes what the act of trade, in fact, is. The more is precisely measurable: it is the sum total GDP of the globe, more or less.
Marx does not, and never did, understand the concept of trade, which is why his labor theory goes off in weird directions and ultimately self-immolates. The problem is that you are assigning a numeric value to something before then declaring it a trade, which has the problem of assuming the outcome. This is unfortunately a problem of Marxist LTV, and it is hardly unknown in that field of study.
I’m the board stickler who smacks posters with a rolled-up newspaper for confusing Capital with Free Markets. I’m a nerd, nothing more or less. But Marx gets it wrong because it does not, in fact, describe trade, or why prices are what they are on either a micro- or macro-economic level. He strenuously attempted to ignore all but one of main inputs of price. And this doesn’t work.
Who does the judging, based on what criteria of congruency?
It has a specific meaning in neoclassical economic terms, it has another (apparently) in Marxist economic terms, it may have a third in Keynesian economic terms, and if we ever develop another mode of looking at economics, it might have a fourth. There’s no truth to any of them.
Wait, sure, only one side gets money, but the other side spends money. So money is involved on both sides, and both sides need to figure their willingness to trade in monetary terms? Also, why:
“It is what it is” seems to me to be quintessentially tautological, but more to the point: GDP measures my (by WillFarnaby’s quote, entirely unmeasurable) personal valuation in purchasing the burger? Surely not. You’ve shifted the goal posts: I asked you if you agree that whatever the extra value of a $5 burger that makes me spend $5 on it is, in practice or theory, measurable. You say I only buy the $5 burger if I value it more than $5. My question is: can the more be quantified. Because if not, I would like to know why we cannot, with Marx, leave it out of an otherwise wholly quantified equation.
I didn’t quite get much of this–assigning a numeric value where? when?–but: Marx fully well knows, and says so, that price may differ from value, though he never got around to developing the theory of prices (that’s my parsing, others differ). Which is why I keep saying you should read the book: much of what you’re complaining about is actually in there (and, of course, much more is in later developments by Marxist economists).
When my girlfriend and I go shopping and she sees some female-ish item on the shelf for $49.99, she might exclaim, “That’s a steal at that price!”
Of course, I have no idea what it does, and when its function is explained to me, I don’t understand why people would take it if given to them for free.
What is the value of that item? To me it is $0. To my girlfriend, it might be $75. However, since enough people purchase the item at $49.99 such that a viable business model exists for selling it at $49.99, then society says it is valued at $49.99. That is no more tautological than saying that an oak tree is brown. It is because it is.
An exchange occurs between my girlfriend and the store because she subjectively values the item more than the $50 in her purse. No exchange occurs between me and the store because I value the $50 in my wallet much more than the item.
I am not sure why we are debating this particular facet of economics except to note that the amount of labor required to create the item cannot be deduced to any formula to determine the item’s value.
How do you know enough people purchase the item at $49.99 such that a viable business model exists? It might be the store will close down just as you leave–will only that determine the real value of that thing? Would the thing have higher value, then? Or if it is a viable business model, but a shop three streets away sells it for $45, and also is viable, is that (also?) its value? How does the quantification of the added value to the purchaser that you assume work? How do you get to the figure of $75 for your girlfriend? How does she get there?
In other words, you are unsure why we debate something, the truth of which you get to determine? I don’t know, either.
But I will say that this reply does not answer the questions I posed and remains wholly tautological. “An oak tree is brown. It is because it is.” That may be the explanation that you are satisfied with, but an oak tree, just to pick up your example, is brown for reasons: reasons having to do with the structure of its bark, light reflection, light reception, and so on; and perhaps more importantly, it “is” not brown: brown is a sensory impression, an “Erscheinungsform” or “form of appearance,” (maybe Hellestal will get a chuckle out of that) if you will. You are satisfied to note your perception of the surface and accept it as a given. That’s fine, I suppose–but you shouldn’t make your *literally *superficial observations into a truth to be accepted by all.
And that’s not even commenting on how it seems permissible to demand of the LTV predictive and explanatory powers, while it appears that the answer to “what value will this item have and why” in your explanation is: “we’ll see, and then it’ll be what it is because it obviously is”…and that’s fine?