When volume 3 of Capital was published by Engels, Achille Loria was a major critic of the contradiction between volume 3 and volume 1 (see Loria 1895 = Loria 1902: 71–150).
In the supplement to volume 3 of Capital, Frederick Engels quoted some of Achille Loria’s criticisms:
“No economist with any trace of sense has ever concerned himself or will ever want to concern himself with a value which commodities do not sell for and never can sell for (ne possono vendersi mai) .... In asserting that the value for which commodities never sell is proportional to the labor they contain, what does Marx do except repeat in an inverted form the thesis of the orthodox economists, that the value for which commodities sell is not proportional to the labor expended on them? ... Matters are not helped by Marx’s saying that despite the divergency of individual prices from individual values, the total price of all commodities always coincides with their total value, or the amount of labor contained in the totality of the commodities. For inasmuch as value is nothing more than the exchange ratio between one commodity and another, the very concept of a total value is an absurdity, nonsense ... a contradiction in abjecto....”Alexander Gray, in analysing the extraordinarily absurd attempts by Marxists to harmonise Marx’s views, states:
“Was there ever such an utter reductio ad absurdum, such complete theoretical bankruptcy? Was ever scientific suicide committed with greater pomp and more solemnity! (Nouva Antologia, Feb. 1, 1895, pp. 478–79.)”
“… we are still left very much in the dark as to the nature of that peculiarly Marxian value, which flits back from the third Volume to illumine the dark places in the first Volume of Capital—that value described by Loria as a ‘fantastical or transcendental value’ which neither possessed nor could possess any relationship to facts. Dr. Lindsay at least realises that some definition of the elusive ‘value’ is required, and he suggests that ‘intrinsic exchange value is for Marx the value which a commodity would have in a properly organised society where labour was performing its proper function.’ Apart from legitimate doubts as to where such a view could be founded in Marx, it will be observed that we are very properly left to guess for ourselves what is a properly organised society, and when labour is performing its proper function—two very sizable hares to start in one sentence.That is most insightful, and a tactic I see myself: Marxists are forced to reduce that LTV to an analytic statement, a mere tautology or equality true by definition. But in that case, why did Marx go to so much trouble in Chapter 1 of Capital to try and prove empirically that exchange values really are, ultimately, an equality determined by abstract socially-necessary labour time? Why does he actually try to explain real, individual exchange values in terms of socially-necessary labour time?
It is to Mr. Cole that we owe the alluring and confident title: What Marx Really Meant. On the immediate question, he argues—and rightly, if regard is to be had to the third Volume—that the Marxian theory of value is somewhat unique in not being a theory of prices; indeed, as he adds, it is doubtful whether in the end it has any point of contact at all with prices. As to the elusive Marxian ‘value,’ we are told that in Marx’s writings, ‘value’ came to mean what commodities were really worth in consequence of the amounts of labour incorporated in them, as something quite distinct from the prices which they actually fetched, or tended to fetch, in the market. But the identity of value and embodied labour was surely something that Marx thought he had proved (and which therefore required proof) in the opening pages of Capital. It is true that Croce also says that Marx assumed the equivalence of value and labour. If the identity of value and labour is a matter of definition and assumption, then at least we know the meaning Marx attaches to ‘value’; but in that case the pretended proof in the opening chapter is mere eye-wash; since one states, but does not prove, definitions. Also in that case it is to be feared that the whole of Capital, resting on an arbitrary definition which implies the conclusion to be reached, is an example of wandering vainly in a circle, even more glaring than the most critical critics had thought possible. If, on the other hand, the identity of value and labour is a matter of proof and not of definition, we are still left to grope for the meaning Marx attaches to ‘value.’” (Gray 1946: 318–319).
“If throughout Volume I Marx speaks quite generally as if commodities tended to sell at their values, the plain man would suggest that it was probably because this idea was most frequently in Marx's mind. Marx was almost criminally careless in neglecting to define his terms, and the natural result of such carelessness is that words jostle about in the mind, each trailing half a dozen potential meanings, with consequent confusion of thought. With just a touch of scorn, Croce speaks of Marx as having ‘despised and neglected all such preliminary and exact explanations as might have made his task plain.’ It is significant, in connection with Mr. Cole’s question, that Engels, playing the part of official interpreter, also speaks as if the opening chapters of Capital provided a guide to the price-tickets in Bond Street. Anti-Dühring is for the most part a most dreadful book—fit only to be one of six books given to Hitler on a desert island—yet it has its uses as an official summary of Marxism as then understood. It is instructive to ponder what Engels implies when he speaks of ‘the law of value of modern bourgeois economics, according to which the value of a commodity is measured by the socially necessary labour embodied in it.’” (Gray 1946: 320).
Just to take one example from volume 1 of Capital, Marx refers to the labour value and price of cotton:
“Suppose that the price of cotton is one day sixpence a pound, and the next day, as a result of a failure of the cotton crop, a shilling a pound. Each pound of the cotton bought at sixpence, and worked up after the rise in value, transfers to the product a value of one shilling; and the cotton already spun before the rise, and perhaps circulating in the market as yarn, similarly transfers to the product twice its original value. It is plain, however, that these changes of value are independent of the valorization of the cotton in the spinning process itself. If the old cotton had never been spun, it could be resold at a shilling a pound after the rise, instead of at sixpence. Further, the fewer the processes the cotton has gone through, the more certain is this result. We therefore find that speculators make it a rule, when such sudden changes in value occur, to speculate in the raw material in its least worked-up form: to speculate, therefore, in yarn rather than in cloth, and indeed in cotton itself rather than in yarn. The change of value in the case we have been considering originates not in the process in which the cotton plays the part of a means of production, and in which it therefore functions as constant capital, but in the process in which the cotton itself is produced. The value of a commodity is certainly determined by the quantity of labour contained in it, but this quantity is itself socially determined. If the amount of labour-time socially necessary for the production of any commodity alters –and a given weight of cotton represents more labour after a bad harvest than after a good one – this reacts back on all the old commodities of the same type, because they are only individuals of the same species, and their value at any given time is measured by the labour socially necessary to produce them, i.e. by the labour necessary under the social conditions existing at the time.” (Marx 1982: 317–318).It quite clear that Marx is trying to explain movements in the real prices of cotton here in terms of unit socially necessary labour used to produce them. But, by the time of volume 3 of Capital, this analysis in volume 1 would make no sense, since by that time Marx will say that abstract labour time does not determine individual commodity prices.
Gray, Alexander. 1946. The Socialist Tradition: Moses to Lenin. Longmans, Green and Co., London and New York.
Loria, Achille. 1895. “L’opera postuma di Carlo Marx,” Nuova Antologia di Scienze 55.3 (February): 460–496.
Loria, Achille. 1902. . “L’opera postuma di Carlo Marx,” in Achille Loria, Marx e la sua Dottrina. Sandron, Milan. 71–150.