Sombart, Werner. 1894. “Zur Kritik des ökonomischen Systems von Karl Marx” [Toward a Critique of the Economic System of Karl Marx], Archiv für soziale Gesetzgebung und Statistik 7: 555–594.Wilbrandt (1919: 100) appears to have taken the same view as in Engels’ supplement that the law of value in volume 1 of Capital was to be confined only to the pre-modern world of commodity exchange, while Sombart and Schmidt struggled to see how the law of value in volume 1 was empirical at all in light of volume 3.
Lexis, W. 1895. “The Concluding Volume of Marx’s Capital,” Quarterly Journal of Economics 10 (October): 1–33.
Schmidt, Conrad. 1895. “Der dritte Band des Kapital,” Sozialpolitisches Zentralblatt 22 (25th February): 254–258.
Sorel, G. 1897. “Sur la théorie marxiste de la valeur,” Journal des Economistes (March): 222–231.
Wilbrandt, Robert. 1919. Karl Marx: Versuch einer Würdigung. B. G. Teubner, Leipzig.
Engels had a correspondence with both Sombart and Schmidt on the labour theory of value, and this is what prompted Engels to write the Supplement to volume 3.
In fact, it was in a letter that Engels wrote to Werner Sombart (1863–1941) on March 11, 1895 that we have this admission:
“When commodity exchange began, when products gradually turned into commodities, they were exchanged approximately according to their value. It was the amount of labour expended on two objects which provided the only standard for their quantitative comparison. Thus value had a direct and real existence at that time. We know that this direct realisation of value in exchange ceased and that now it no longer happens.”The importance of this letter and Engels’ supplement cannot be stressed enough for understanding and refuting the labour theory of value.
Letter, Engels to W. Sombart, from London, March 11, 1895
https://www.marxists.org/archive/marx/works/1895/letters/95_03_11.htm
The importance of this letter and Engels’ supplement cannot be stressed enough for understanding and refuting the labour theory of value.
ReplyDeleteWhy?
If you don't know my views on this issue by now you are clearly wasting your time here.
ReplyDeleteYes, but I addressed those concerns. It is exactly correct to say that under capitalism, "direct realization of value in exchange ... no longer happens," because diversity of capital intensities and the formation of a general rate of profit mean market prices tend towards prices of production instead of values. That doesn't contradict the law of value, since this state of affairs emerges on the basis of it through the functions of merchant capital, as Engels explains very plainly in the supplement you've discussed. Even when obscured by the conditions of production, it nevertheless asserts "in the final analysis."
ReplyDeleteSo, you can't really make the argument you seem to be making. Hence my question above; I figured maybe you were working at some other angle I hadn't considered.
More of your dishonest nonsense:
Delete(1) there is no convincing evidence that the law of value in vol. 1 even applied in the pre-modern world of commodity exchange.
(2) the castrated and feeble law of value in vol. 3 is empirically empty and has no causal power or explanatory power.
(3) anyway, Marx in vol. 1 states and implies that his law of value applies to the 19th century there, and so he either was dishonest, incoherent or so incompetent he couldn't express himself properly.
LK, have you understood what Marx was trying to accomplish with the labor theory of value? for him it was only a tool to define exploitation, prove its existence and measure it...
DeleteTo sum up, it's possible to reject the labor theory of value completely, and still believe that Marx was trying to clarify something interesting...
"for him it was only a tool to define exploitation, prove its existence and measure it."
DeleteThis is patently untrue. For Marx, it was an empirical theory, as Engels makes clear:
http://socialdemocracy21stcentury.blogspot.com/2015/11/marx-and-engels-attempt-to-salvage-law.html
LK, perhaps an analogy can help you. Would you agree that Keynes's contributions to economics are worthless due to his acceptance of the Marshallian "demand and supply" in his "General Theory"? I think you wouldn't, right? And you should apply exactly the same reasoning to Marx and his use of the "labor value" theory.
DeleteNo, while supply and demand analysis has legitimate uses and empirical relevance on some occasions (where demand curves for a product are well behaved and prices are flexible), Marx's LTV is wholly useless. It is incoherent, cannot be properly formulated, is circular and utterly empirically untrue.
DeleteAnd by vol. 3, the LTV is even worse. It is reduced to a piece of sophistry.
LK, first, the LTV works quite well in practice because the differences in labor intensities tend to cancel out. The same can't be said about supply and demand curves given that 90%+ firms see drastic increasing returns. Second, you can also easily fix it by using the "dated labor embodied" approach proposed by Sraffa. Third, your own favorite price theory where each commodity has its own markup has one unknown for each price and thus is, in all honesty, quite worthless.
DeleteP.S: you can probably get rid of 90%+ of your misunderstandings about price theory by reading one Sraffian textbook.
And by the way, vol 3 was not considered ready for publication by Marx. It's just his private notes.
Delete"And by the way, vol 3 was not considered ready for publication by Marx. It's just his private notes.
DeleteI'm well aware of this.
So, what, are you suggesting we should ignore vol. 3 and take the LTV merely from vol. 1? In that case, it is empirically failed and internally incoherent.
"LK, first, the LTV works quite well in practice because the differences in labor intensities tend to cancel out"
DeleteWhat does this even mean?
"Second, you can also easily fix it by using the "dated labor embodied" approach proposed by Sraffa"
oh, lol... so this isn't even about defending classical Marxism at all, but defending the pale, watered down Sraffian version of it. Why didn't you say so in the first place?
Why the loud-mouthed and arrogant defence of classical Marxism, as if Marx is your cult leader?
Oh, and if you knew your Sraffa, you'd know Sraffa thought the classical LTV was rubbish and mystical:
http://socialdemocracy21stcentury.blogspot.com/2015/03/piero-sraffas-damning-verdict-on-labour.html
"Third, your own favorite price theory where each commodity has its own markup has one unknown for each price and thus is, in all honesty, quite worthless."
DeleteAnd what, pray, are you even talking about? Many businesses generally determine a mark-up for the types of commodities they sell. The empirical evidence showing this is true is overwhelming.
If you deny it, you may as well come on this blog and defend creation science.
LK, empirically failed? Actually there is a paper that shows it's more successful than "demand and supply" and "prices of production" at predicting prices. Incoherent? As I've said, it's as coherent as the Sraffian system because it can be reduced to it with a very small modification (using the *dated* quantities of labor).
DeleteAnd what paper is that? Pray tell, old chap. This is going to be fun.
Delete"As I've said, it's as coherent as the Sraffian system because it can be reduced to it with a very small modification "
DeleteFalse. It is incoherent and empirically false.
The law of value in vol. 1 is described by Marx as this:
“The assumption that the commodities of the various spheres of production are sold at their value implies, of course, only that their value is the center of gravity around which prices fluctuate, and around which their rise and fall tends to an equilibrium.” (Marx 1909: 208–210).
This is false in the modern world. Marx and Engels later wanted to confine it to the pre-modern world of commodity exchange. It is false there too.
By vol. 3, the law of value as defended by Marx is even weaker and is castrated and feeble nonsense and comes in 3 senses, but they are (1) mathematical legerdemain, (2) vacuous tautology, or (3) a trivially true statement respectively.
I'll not bother to find that paper for you. Anyway your attitude seem very childish to me. The grown up attitude is very different and it consists in trying to understand what an author is trying to say before saying it's all nonsense.
DeleteAnd by the way, I do apply the exact same attitude when reading von Mises or Keynes books. If i had same attitude as you, i would not even read them, because they tried to build their argument on the empirically failed and logically flawed "demand and supply" nonsense.
Hey LK. Can you please tell me what part of my comment offended you, so I can cut that out and the rest can be published?
DeleteThanks.
Your whole comment is pointless trolling. We have been through these issues, and anyone interested can just revisit the discussion on previous posts.
Deletehttp://socialdemocracy21stcentury.blogspot.com/p/eventually-i-will-write-full-series-of.html
15 The Empirical Strength
Deleteof the Labour Theory of
Value
Anwar M. Shaikh
http://www.ehu.eus/Jarriola/Docencia/EcoMarx/EcoMarx%20frances/labthvalue.pdf
LK, And there is a whole literature on this topic. This is just one paper
About logical coherency, you simply don't know what you're speaking about. As i've already told you, read one good Sraffian textbook so you can understand the Ricardian economics that Marx was trying to build upon.
Oh, not more of this B.S. Yes, I am familiar with these papers. All they show is that prices tend to be correlated with labour costs. All educated people know this.
DeleteThis does not vindicate the classical Marxist LTV. Full stop.
Even Böhm-Bawerk knew that this does not vindicate Marx and explained why:
"That in the case of ‘other circumstances remaining equal’ prices rise and fall according to the amount of labor expended proves clearly neither more nor less than that labor is one factor in determining prices. It proves, therefore, a fact upon which all the world is agreed, an opinion not peculiar to Marx, but one acknowledged and taught by the classical and ‘vulgar economists.’ But by his law of value Marx had asserted much more.” (Böhm-Bawerk 1949: 39).
LK, Böhm-Bawerk didn't know what that paper shows. That paper shows that even when ‘other circumstances remaining equal’ is false, labor embodied values are often still quite right. And the same thing can NOT be said about "demand and supply" or Böhm-Bawerk "capital theory". These theories are less empirically robust.
DeleteAnd even with the ceteris paribus clause removed all it still shows is: prices tend to be correlated with labour costs. All educated people know this.
DeleteThis does not vindicate the classical LTV, which states much, much more.
LK, actually it states just that. Ricardo introduced it as a rough technique for estimating prices. Marx was somewhat more dogmatic on it, but he also never said that prices are exactly equal to labor values. He never clarified the relation between the two because he simply didn't have the necessary math techniques.
Delete"Marx was somewhat more dogmatic on it, but he also never said that prices are exactly equal to labor values."
DeleteOh, surprise, surprise!! So now Marx is "more dogmatic". Translation: Marx's LTV is dogmatic nonsense.
For the record, Marx's law of value in vol. 1 is described by Marx himself as this:
“The assumption that the commodities of the various spheres of production are sold at their value implies, of course, only that their value is the center of gravity around which prices fluctuate, and around which their rise and fall tends to an equilibrium.” (Marx 1909: 208–210).
That is untrue. Empirically false. If you had some intellectual honesty you'd admit it is false and stop wasting my time.
It is a prediction of marginal theory that the partial derivative of prices will be positively correlated with the cost of Labour. That does not mean it uses or vindicates the ltov. The effect is mediated through the supply curve.
ReplyDelete