“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: 318).In other words, what Marx is saying here is that when, say, 1000 abstract labour hours produce 1000 units of cotton, then the labour value of 1 unit of cotton would equal 1 abstract labour hour (how this labour value is mapped onto the “natural price” is never adequately explained by Marxists).
But if 1000 labour hours are expended on production but some natural disaster means only 200 units of cotton can be produced, then the labour value of 1 unit of cotton would now equal 5 abstract labour hours. The “natural price” corresponding to the labour value would rise too. Older and previously produced units of cotton would now fetch a price at this new labour value. This, for comrade Marx, explains why prices of agricultural goods rise when floods, droughts or other crop failures occur. Clearly, this is how Heinrich (2012: 43) interprets Marx.
As an explanation or even as a coherent theory, it is so patently absurd.
Why? The reason is that such an interpretation requires that abstract labour-power or abstract socially necessary labour time used in producing cotton has been magically or mystically transferred from the cotton crops that died or were destroyed into the ones that survived. It is even worse than the mystical nonsense about labour being objectified or materialised in commodities described here.
It is quite obvious that the labour expended in planting and maintaining crops that spoilt or were destroyed in some natural disaster was in vain. In retrospect, it was simply wasted labour. Wasted labour – whether concrete or abstract – cannot be some magical quantity that flows into the crops that survive.
Knut Wicksell, in an 1886 debate with the Marxist Atterdag Wermelin, made another criticism of this aspect of Marx: Wicksell pointed out that, when the price of cotton soars after bad harvests, it is the case that the amount of labour required to harvest the smaller crop can actually fall below that needed for a full crop, but this blatantly contradicts the labour theory of value (Lönnroth 1995: 104).
That is undoubtedly another devastating problem: just as Wicksell suggested, what if total abstract labour time for an industry-wide crop falls dramatically after a natural disaster early in the season such that unit labour values fall in relation to a good harvest, since considerably less labour is now needed to bring it to market (e.g., we know that for many crops picking and harvesting is very labour intensive). The labour theory of value requires that the natural price falls. We all know this doesn’t happen. In flexprice markets for agricultural goods not affected by commodity stabilisation programs, we all know the price would soar. It soars even though total labour time – whether concrete or abstract socially necessary labour time – would have fallen.
We see time and again the insuperable difficulties with and absurdities of the labour theory of value. I expect some Marxists in the comments section will tell me that no price ever corresponds to its labour value (in which case what is the use or explanatory power of this stupid theory at all?). Or I need to consult the right Marxist interpreting priest to understand the writings of the Master (though I did consult Heinrich 2012, but maybe he is just a plain heretic and doesn’t understand the Master’s work after all!!). Or maybe I need to read it in the original German. Or maybe I just need to take it on faith.
Heinrich, Michael. 2012. An Introduction to the Three Volumes of Karl Marx’s Capital (trans. Alexander Locascio). Monthly Review Press, New York.
Lönnroth, Johan. 1995. “Swedish Model Market Socialism,” in Ian Steedman (ed.), Socialism and Marginalism in Economics 1870–1930. Routledge, London. 102–115.
Marx, Karl. 1982. Capital. Volume One. A Critique of Political Economy (trans. Ben Fowkes). Penguin Books, Harmondsworth, England.