by D.J. Webb
Unfortunately, this writer, probably a good libertarian, knows almost nothing about Marx’s views. I will comment in order as things come up in the ramshackle post above:
1. Marx did not say that goods would or should exchange on the basis of the labour time incorporated in them. [How could anyone tell or calculate this?] Marx said the opposite – that goods would NOT exchange on the basis of the labour time incorporated in them, or if they did so, it would be by accident.
2. The surplus value – well, the best way to approach this is to point out that in ALL economies there has to be a surplus for investment. There was in the Soviet Union too. No surplus=subsistence economics of cave men.
3. The Iron Law of Wages was only quoted by Marx as what he saw as an incorrect Lassallean view (see http://www.marxists.org/archive/marx//works/1875/letters/75_10_12.htm for Engels’ condemnation of the adoption of the phrase by the German part he was involved with). Marx did, however, believe in the **relative** worsening of the position of the proletariat in relation to the growth in capital. He of course believed in the incorrect counterposition of labour and capital as opposing interests – in fact both of these should be freed and have a common interest in opposing rentierism.
4. Marx did not support Malthus’ views and his belief in the immiseration of the proletariat was not based on demographic developments, such as undulations in the pattern of malnutrition and infant mortality. Marx described Darwin’s theories as refuting Malthus’ views of the “arithmetic” increase in food output and the “geometrical” increase in population. Unfortunately, Garner knows NOTHING AT ALL about Marx’s views, which is painfully evident. He says empirical evidence did not back up Malthusianism -but that’s what Marx pointed out too.
5. Supply and demand for labour – are covered in Marx’s works. Wages reflecting productivity, etc – all covered. Incorrect assertions are made in this article about Marx’s views on nearly everything.
6. “Marx’s presumption that wages will always tend to be less than the true value of the labour spent producing becomes untenable, and, if this is the case, his claim that capitalism is exploitative looks shaky too”. ??? Apart from the meaninglessness of the sentence (“the true value of the labour spent producing wages”???), in all forms of economy, there has to be a surplus. To label is “exploitative” is to intrude a moral issue in what is just an economic fact. No one is going to pay someone £100 to add only £100 of value. I think there are statistics on gross value added in manufacturing – and the number is not the same as total wages. Unless Garner is saying that capitalism produces for a loss, then this article is of no value.
7. His long quotation about exchange value is not from Marx – and is not a correct summarisation of Marx’s views. Marx most certainly did not believe that the price of anything reflected the amount of socially necessary labour in it.
8. “The price, of each house is not solely determined by the labour put into producing it but also by the geographical position and by the attractiveness of that position to those who would live in the house”…. er… but Marx did not say that or anything like that. He was emphatic that the price goods exchanged at did not reflect labour time – geographical position, what people are willing to pay etc, are what determine the price – along with other factors.
9. This clown who wrote this article confused value and price all the way through. Marx made a clear distinction. His approach was to start abstract in volume 1 and paint in more details in volume 2 and 3 of Capital. So he starts with value – but by volume 3, he makes clear that value for him is just an abstract category and that price is the concrete visible phenomenon. What is the connection between the two? And why does he say goods don’t exchange at what their abstract “value” is? Or to put it another way, why is value a useful category if it is only abstract and does not determine prices? He argued that you could start by looking at just one enterprise and discussing labour values, but one the free market is painted in, it creates a “capitalistic communism”, whereby all goods go for whatever they can get – marginal utility theories would therefore describe the real price action. Marx did not deny this, despite the claims of the libertarian clown, Ian B. So why is he interested in his theory of labour values if he says they have no connection with price achieved? He believed that labour values only work on a whole-economy basis – ie that the total labour values of all the products would equal the total prices in aggregate (abstracting from inflation, as his approach of ‘ascending from the abstract to the concrete’ was to start abstract and paint in more features of reality, so arguments by Garner from Vol 1 are clownish, because they don’t take account of Marx’s gradual concretisation by the end of Volume 3). The “capitalistic communism” means that the market tends to – only a tendency – to more equal profit rates than labour values would indicate at least in so far as any business can sell its products for whatever it can get. The problem with the labour theory of value – at least as Marx has it – is that it becomes unfalsifiable, as no observable phenomena are asserted as corresponding to it. Marx said that if goods exchanged according to their labour values, it would be purely accidental. So what is labour value DOING in this theory if he denies that value=price, something Clown Garner didn’t realise? The significance of labour values to Marx was that he argued that the move into higher and higher tech wold lead to a higher ratio of capital to labour, and that the rate of surplus value – something not measurable at a single-company level due to the capitalistic communism that converts value into price (something Marx called “the transformation process”) – over the economy in aggregate would fall, eventually producing slumps, requiring restructuring before resumed growth and eventual rinse and repeat. Clown Ian B then rushes along and asserts that Marx believed value equals price and goods exchange at labour values!
10. “In other words, the only way to tell if a commodity is valuable or not, or even if it has value, is by observing the action of the market process – the act of exchange. This is a hell of a concession!” It’s not, because Marx’s theory is precisely that value diverges from price in nearly all circumstances. He is ONLY interested in the way that a theory that labour values underly the economy in aggregate – read those words again – in aggregate – affect the total-economy rate of profit.
11. “Marx has in fact ended up with something very different from a labour theory of value”. Er… yes… but read to the end of Capital, and you’ll know why. I’m not saying Marx is right – he is specifically wrong for counterposing the interests of labour and capital, and his own work talks extensively of “countervailing tendencies” to the falling rate of profit, making it unclear, even from his own work, whether he has established a falling rate of profit as a necessary trend.
12. “He has claimed, in effect, that the value of a product is determined in so far as it is useful in satisfying the preferences of the consumer and not by the amount of labour time spent producing it at all!” Once again, confusing value and price – which is the WHOLE point of Marx. Marx said exactly this – once the word “value” is replaced by “price”.
13. Margin utility theory – is talking about price and is not in contradiction to Marx’s views.
14. “It is obvious that under these conditions there would be a demand for more labour, because buyers (capitalist employers) profit from the difference between the price they pay for labour power and what they receive in exchange for its product, which, under these conditions, would be nothing (because price equals cost).” Er… Clown Garner says this here – but it contracts what he said (see point 6) above! Of course, there has to be a surplus in all economies other than pure subsistence. Once agriculture developed in the Middle East, the possibility of producing a surplus was achieved: in real terms, not 100% of everyone’s labour had to be devoted to mere production of food. One 90% of people could feel 100% of the population, there was a surplus, allowing for others to be deployed on investment projects like canals, irrigation, road etc. Production of a surplus is not exploitation – it is just a necessity as Clown Garner realises here.
15. Workers paid for marginal productivity – this is talking about wages, which is a price (see Marx’s abstract value-price distinction). Marx did not deny any of this.
There is nothing but buffoonery in this article.