Marx Against A Simple Labor Theory Of Value

Marx distinguishes, at least, between market prices, prices of production, and labor values. For the first volume of Capital, Marx assumes market prices bob around or tend to labor values, not prices of production. I think Marx nowhere says he is assuming the organic composition of capital does not vary among industries. He adopts the labor theory of value in when considering capitalist production as a whole so as to address the question of how owners of capital are able to regularly obtain a profit. He wants this explanation to apply when capitalists are not cheating each other. Nor are they cheating the workers.

I have noted before a few passages in the first volume where Marx demonstrates that he is making a simplification, to be dropped in volume 3. Consider the following:

"If prices actually differ from values, we must, first of all, reduce the former to the latter, in other words, treat the difference as accidental in order that the phenomena may be observed in their purity, and our observations not interfered with by disturbing circumstances that have nothing to do with the process in question. We know, moreover, that this reduction is no mere scientific process. The continual oscillations in prices, their rising and falling, compensate each other, and reduce themselves to an average price, which is their hidden regulator. It forms the guiding star of the merchant or the manufacturer in every undertaking that requires time. He knows that when a long period of time is taken, commodities are sold neither over nor under, but at their average price. If therefore he thought about the matter at all, he would formulate the problem of the formation of capital as follows: How can we account for the origin of capital on the supposition that prices are regulated by the average price, i. e., ultimately by the value of the commodities? I say 'ultimately', because average prices do not directly coincide with the values of commodities, as Adam Smith, Ricardo, and others believe." -- Marx, Capital, volume 1, last footnote in chapter 5.

Marx above distinguishes between what he will come to call prices of production and labor values. Labor values, for Marx, are important for the economy as a whole. But individual prices are attracted by prices of production, not labor values. Or again:

"The calculations given in the text are intended merely as illustrations. We have in fact assumed that price = values. We shall, however, see, in Book III, that even in the case of average prices the assumption cannot be made in this very simple manner." -- Marx, Capital, volume 1,last footnote in chapter 9, section 1

He is explicit above that the calculations are examples, not literally true. But the occassion of this post was when I stumbled across the following:

"The law demonstrated above now, therefore, takes this form: the masses of value and of surplus value produced by different capitals - the value of labour power being given and its degree of exploitation being equal - vary directly as the amounts of the variable constituents of these capitals, i.e., as their constituents transformed into living labour power.

This law clearly contradicts all experience based on appearance. Everyone knows that a cotton spinner, who, reckoning the percentage on the whole of his applied capital, employs much constant and little variable capital, does not, on account of this, pocket less profit or surplus value than a baker, who relatively sets in motion much variable and little constant capital. For the solution of this apparent contradiction, many intermediate terms are as yet wanted, as from the standpoint of elementary algebra many intermediate terms are wanted to understand that 0/0 may represent an actual magnitude. Classical economy, although not formulating the law, holds instinctively to it, because it is a necessary consequence of the general law of value. It tries to rescue the law from collision with contradictory phenomena by a violent abstraction. It will be seen later how the school of Ricardo has come to grief over this stumbling-block. Vulgar economy which, indeed, 'has really learnt nothing', here as everywhere sticks to appearances in opposition to the law which regulates and explains them. In opposition to Spinoza, it believes that 'ignorance is a sufficient reason'." -- Marx, Capital, volume 1, Chapter 9, Rate and mass of surplus value.

I would like to say volume 1, being the only volume of Capital Marx published in his lifetime, should be central in understanding his theory. The above is another demonstration in opposition to this view, at least as far as the analysis of capital goes. In a even larger project, Marx intended to "examine the system of bourgeois economy in the following order: capital, landed property, wage-labour; the State, foreign trade, world market." It is arguable that some of these steps were incorporated into Capital, but he never arrived at the last three.

No where in this post do I address Marx's curious rhetoric. He talks about real illusions, uses Hegelian terminology, and a lot of fierce irony.

As a throwaway comment, let me note one area where I think Marx is weak. Why do the workers consitute a universal class? Why did Marx think the next social revolution would be the last, ending humanity's prehistory? He provides a philosophical derivation of the role of the working class in such early works as Critique of Hegel's Philosophy of Right and The German Ideology. This derivation in tension with the empiricalism that one should build on the materialist theory of history. Since then, we have seen Lenin and Mao look at the role of the peasants in revolutions in less developed areas of the world. Franz Fanon looked at the global south and the revolutions accompanying decolonization. Michael Hardt and Antonio Negri talk about the 'multitude'. You may have noticed that I do not talk much about praxis. But do workers around the world still have a privileged position in hopes for social change?