Philip Pilkington, “Marx, Hegel, the Labour Theory of Value and Human Desire,” Fixing the Economists, August 13, 2013.Also, very interesting are his arguments in debates with Marxists on the labour theory in the comments sections of these blog posts:
Philip Pilkington, “Was Marx Right?,” Fixing the Economists, March 31, 2014.
Philip Pilkington, “Joan Robinson and the Labor Theory of Value,” Fixing the Economists, August 7, 2013.
Philip Pilkington, “Why Sraffa’s Theory Does Not Contain a Labour Theory of Value,” Fixing the Economists, May 6, 2014.
Matias Vernengo, “Sraffa and Marxism or the Labor Theory of Value, what is it good for?,” Naked Keynesianism, August 14, 2012.One of his good examples of how subjective value and advertising have a major role in explaining price is as follows:
Vienneau, Robert. “Vocabulary For Marxism,” Thoughts on Economics, July 8, 2012.
“I recall pointing to advertising a number of times and saying that this added value to commodities without any additional human labour.Some Marxists might reply that the “use values” of the two shoes are different: the one worn by the famous sports star now has a different use value because it is a status symbol.
I had a long argument with two Marxist economists about this and came up with a great example:
Two pairs of runners are made in the same Chinese factory. The inputs are identical -- including labour time. However, one pair gets a little tick stitched onto it and are seen in magazines being worn by Michael Jordan. The other have a little star stitched onto them and are sold in WalMart.
The pair with the tick are sold for four times as much as the pair with the star.
The Marxist economists couldn’t really fault my logic. Without recourse to the idea of false consciousness, or some other moral/metaphysical concept, the labour theory of value can say nothing about any of this.”
Philip Pilkington, July 10, 2012
http://robertvienneau.blogspot.com/2012/07/vocabulary-for-marxism.html?showComment=1341935604166#c1327734235898167917
While one might defend that idea, subjective and intersubjective value are the major forces driving and underlying this difference in demand and price.
And even if a Marxist wants to defend the “use value” explanation, it simply will not work, because Marx says clearly that exchange value is not determined by use value. When Marx explains why two commodities have a given exchange value, he argues they are equal and have a common element but the exchange values are not caused by differing use values, but labour value:
“This common element cannot be a geometrical, physical, chemical or other natural property of commodities. Such properties come into consideration only to the extent that they make the commodities useful, i.e. turn them into use-values. But clearly, the exchange relation of commodities is characterized precisely by its abstraction from their use-values. Within the exchange relation one use-value is worth just as much as another, provided only that it is present in the appropriate quantity. Or, as old Barbon say: ‘One sort of wares are as good as another, if the value be equal. There is no difference or distinction in things of equal value … One hundred pounds worth of lead or iron, is of as great a value as one hundred pounds worth of silver and gold.’We can see the argument better in a translation from the German that is more idiomatic English:
As use-values, commodities differ above all in quality, while as exchange-values they can only differ in quantity, and therefore do not contain an atom of use-value.
If then we disregard the use-value of commodities, only one property remains, that of being products of labour.” (Marx 1982: 127–128).
“‘This common factor,’ … ‘cannot be a geometrical, physical, chemical or other natural property of the commodities. Their physical properties come into consideration for the most part only in so far as they make the commodities useful, and so make them values in use. But, on the other hand, the exchange relation of commodities is obviously determined without reference to their value in use. Within this relation one value in use is worth just as much as any other, if only it is present in proper proportion.’” (Böhm-Bawerk 1949: 10).For Marx exchange value is not determined by use-value, but by abstract labour time. If two different types of shoes as goods have the SNLT, then they ought to have the same exchange value. But that is clearly not the case.
The business can charge a larger mark-up on one pair of shoes worn by a celebrity and people will buy it because of subjective and intersubjective value and demand.
The SNLT is irrelevant here, and does not determine price. In commodity after commodity, you could demonstrate the same thing too.
BIBLIOGRAPHY
Böhm-Bawerk, Eugen von. 1949. “Karl Marx and the Close of His System,” in Paul. M. Sweezy (ed.), Karl Marx and the Close of His System and Böhm-Bawerk’s Criticism of Marx. August M. Kelley, New York. 3–120.
Marx, Karl. 1982. Capital. Volume One. A Critique of Political Economy (trans. Ben Fowkes). Penguin Books, Harmondsworth, England.
Are you even being serious right now? Go look at the response I just tendered in the previous blog post. I completely demolished this argument, and sticking your head in the sand won't change that.
ReplyDeleteMy hope is that at some point you'll understand this subject well enough to look back and be embarrassed by the facile, ill-informed nonsense you're touting; the alternative, a lifetime of gleeful ignorance, is something I wish on no one.
You claim to be interested in rational discussion.
DeleteDo you dispute that Marx says explicitly that exchange value is not determined by use-value, but by abstract labour time? Yes or no?
You claim to be interested in substantive critique.
DeleteDo you dispute that taking a passage out of context does not strengthen an argument? Yes or no?
Because of course exchange value is determined by value in the last instance, but the two are almost never equal in an individual commodity. Do you dispute that Marx says this explicitly? Yes or no?
Again: I have read Marxist scholars from every interpretive camp and literally none of them, not one, interprets Marx as saying that value and price do not diverge in individual commodities (because, again, he is absolutely crystal-clear explicit about it). Individual price/value equality is a simplifying assumption held in volume 1, and eventually discarded, but the aggregate equality remains constant.
Taking individual price/value equality to be the theory's general case is a straw man on par with arguing neoclassicals actually believe expectations are rational and perfectly predictive in the real world, or that physicists actually believe in spherical cows.
Goodness, look at how quickly you're becoming unreasonable and combative. Take a nice deep breath.
DeleteIf you have read Chapter 1 of Marx, you should know perfectly well I've taken nothing out of context: Marx says that plainly and explicitly that use value does not determine exchange value:
“‘This common factor,’ … ‘cannot be a geometrical, physical, chemical or other natural property of the commodities. Their physical properties come into consideration for the most part only in so far as they make the commodities useful, and so make them values in use. But, on the other hand, the exchange relation of commodities is obviously determined without reference to their value in use. Within this relation one value in use is worth just as much as any other, if only it is present in proper proportion.’” (Marx, Vol. 1, Chapter 1, in Böhm-Bawerk 1949: 10).
So I ask you again in the interests of fair and reasonable dialogue: Do you dispute that Marx says explicitly that exchange value is not determined by use-value, but by abstract labour time? Yes or no?
Goodness, look at how quickly you're becoming unreasonable and combative. Take a nice deep breath.
DeleteHaha, did you seriously just 'u mad' me? God.
Your fair and reasonable dialogue is nothing of the sort. You've been absolutely resistant to absorbing very simple concepts. In this case, you seem to think "the exchange relation of commodities is obviously determined without reference to their value in use" in any way undermines individual price/value variance, which indicates a deep-seated failure to grasp something very basic that I've been explaining over and over in simple language for days now.
Case in point: You didn't even read my last reply, or else you'd notice you don't need to ask me "again," because I answered "of course" I did not dispute the claim (italics and all!), but that said claim does not specify what you are indicating. And since that means you're presenting me with a false dichotomy between "value does not determine exchange value in any way" and "value determines all individual prices directly," the correct answer would in fact be "mu."
If you're really and truly interested in fair and reasonable dialogue, you'll actually take the time to make sure you're using the vocabulary correctly. Also, you should totally answer the questions I posed in response.
...Unless, wait, is this an April Fools' joke?
Also, if adopting the format of your own questions without any particular acrimony qualifies me as either "unreasonable" or "combative" (especially in light of the fact that I'm the only one who bothered to answer the other's query), maybe that's a sign that you should take a moment or two to consider your own tone.
Delete(1) So you admit use value (according to Marx) does not determine exchange value, but you want to do exactly that in your previous comment:
DeleteIf two shoes are identical in all manner except one has a Swoosh and the other does not, then they have the same value (assuming the Swoosh shoe doesn't require more time or money to make), though they command two different prices and are, in fact, two distinct use-values. The Swooshless shoe acts as a shoe and a shoe alone, while the Swooshed one acts as a shoe AND something more: a status symbol, something one associates with a person one wishes to emulate, etc.
Here you're implying the disparity in price is caused by different use values. That is clearly incompatible with what Marx says.
(2) Because of course exchange value is determined by value in the last instance, but the two are almost never equal in an individual commodity. Do you dispute that Marx says this explicitly? Yes or no?
Marx only says this in volume 3, and his theory there is radically inconsistent with volume 1 of Capital, where it is quite clear Marx thinks of individual prices ARE determined by labour value.
What you can't fathom is that Marx's work is internally inconsistent and contradictory. You even say that explicit statements by Marx in vol. 1 about SNLT determining individual prices is just a "simplifying assumption held in volume 1, and eventually discarded"! No, it is a severe, blatant contradiction between vol. 1 and vol. 3 of Capital.
(2) Also, you have clearly said you think that only in the aggregate can some equality of value = price hold in which the profit rate is equalised but individual prices above or below values will cancel each other out to make aggregate prices equal value.
This is blatant admission that individual prices can't ever = value, except by rare accident.
But you then go on to say that Pilkington was wrong to actually identify subjective and intersubjective value as fundamental determinants of price, as if you still adhere to the view in vol. 1 of Capital where individual prices said to be determined by labour value!
So you admit use value (according to Marx) does not determine exchange value, but you want to do exactly that in your previous comment
DeleteNo, I do not. You do not know what use-value means. I spelled this out already:
When you say "use-value" is not "the key element" you betray a faulty grasp of the terms. Use-value is not a property of an object, as utility is ("that thing HAS utility"). Rather, it is a category of object ("that thing IS/ISN'T a use-value"). One wouldn't speak of use-value as more important or less important to a commodity's price because it is fully qualitative and therefore not numerically expressible (save in boolean terms). An object that is not a use-value has no realizable price on the open market. An object that is a use-value *can* have a price, but this in no way specifies *what* price.
To that end, yes, subjective value acts as the determinant of demand, and demand affects price. As I've already said.
The disparity in price is not caused simply because they’re separate use-values, but because conditions of supply and demand differs between them. In fact, let's stop using "use-value" because it's clear it's not clicking for you. Where we would say "use-value," let's use "useful good" now. That will prevent use-value/utility equivocation. It also makes it grammatically clearer that there's nothing quantitative happening at that level of analysis (unless we mean a quantity of said good).
Marx only says this in volume 3, and his theory there is radically inconsistent with volume 1 of Capital, where it is quite clear Marx thinks of individual prices ARE determined by labour value.
This has to be a joke. If not, I don't ever want to see you ever using a simplifying assumption, or else your readers will think you believe it to be a fact about the world.
Volume *1*(!), chapter 3, section 1:
"The possibility, therefore, of quantitative incongruity between price and magnitude of value, or the deviation of the former from the latter, is inherent in the price-form itself. This is no defect, but, on the contrary, admirably adapts the price-form to a mode of production whose inherent laws impose themselves only as the mean of apparently lawless irregularities that compensate one another."
(I suspect you'll probably raise a fuss about the use of "gold" in that passage, so please bear in mind a) context, both of the construction of the analysis up to that point and of the time in which he was writing, b) that he was himself an endogenous money theorist and c) that the Moseley paper I linked illustrates that the MELT calculations are algebraically identical for fiat money as for a gold standard.)
What you can't fathom is that Marx's work is internally inconsistent and contradictory. You even say that explicit statements by Marx in vol. 1 about SNLT determining individual prices is just a "simplifying assumption held in volume 1, and eventually discarded"! No, it is a severe, blatant contradiction between vol. 1 and vol. 3 of Capital.
Left that quote up for illustrative purposes. See, now, what a terrible combination "pompous and wrong" can be? I put it to you again: Until you have a grasp of the subject matter, please show some epistemic humility.
But you then go on to say that Pilkington was wrong to actually identify subjective and intersubjective value as fundamental determinants of price, as if you still adhere to the view in vol. 1 of Capital where individual prices said to be determined by labour value!
Show me where I said that demand is not a determinant of price (the thing we were discussing as being different between the two shoes). Go on. Find me even one instance. I'll wait.
(1) "The disparity in price is not caused simply because they’re separate use-values, but because conditions of supply and demand differs between them"
DeleteAnd yet you still attempted to dispute Philip Pilkington's explanation -- when he was saying the same thing, just emphasising the importance of subjective utility.
(2) your Marx quote doesn't prove that he never thought individual prices are determined by SNLT in vol. 1 of Capital. If Marx actually held the view you ascribe to him, why does he explain the price of diamonds in terms of labour time?:
"Diamonds are of very rare occurrence on the earth's surface, and hence their discovery costs,
on an average, a great deal of labour-time."
That is idiocy. The price of diamonds is explained by subjective utility, scarcity/supply and demand, not labour time.
Why does Marx -- absurdly -- attempt to explain the high cost of cotton after a spoilt crop in terms of wasted labour time increasing the unit labour value of reduced crop output?
I could give you dozens more examples.
(3) "Show me where I said that demand is not a determinant of price"
Fine. You admit demand is a fundamental determinant of price. So once again why did you absurdly attempt to dispute Philip Pilkington's explanation?
And yet you still attempted to dispute Philip Pilkington's explanation -- when he was saying the same thing, just emphasising the importance of subjective utility.
DeleteBecause he was equivocating on the word "value" and framing it as an immanent critique. I was very clear about this.
(2) your Marx quote doesn't prove that he never thought individual prices are determined by SNLT in vol. 1 of Capital.
Then I'm not sure anything will, to you, because that was explicit.
That is idiocy. The price of diamonds is explained by subjective utility, scarcity/supply and demand, not labour time.
The correct procedure is read -> comprehend -> respond. Omit step 1 and step 2 is suspect. Omit step 2 and step 3 is unproductive. So imagine my disappointment to only find 3 reliably represented.
He doesn't reference price in the quote you gave. He references "average costs," which is something you quite plainly agree reappear in price (plus markup), but do not solely determine it (see also supply, demand, etc).
Why does Marx -- absurdly -- attempt to explain the high cost of cotton after a spoilt crop
Read -> Comprehend -> Reply. I've already answered that.
I could give you dozens more examples.
And if they fit the trend, they'll be awful monuments to ignorance.
So once again why did you absurdly attempt to dispute Philip Pilkington's explanation?
He said "value" and then attempted to prove Marx's theory incoherent using the time-honored tactic of "disproof by equivocation." As I keep saying.