Saturday, January 30, 2016

Robert Wilbrandt’s Interpretation of Marx’s Law of Value in Volume 1 of Capital

The socialist German economist Robert Wilbrandt (1875–1954), the author of Karl Marx: versuch einer Würdigung (Leipzig, 1920), had an interesting interpretation of the “law of value” in volume 1 of Capital, as described by Alexander Gray:
“Professor Wilbrandt, in his very sensitive appreciation of Karl Marx, offers us two points which are of some interest towards an appreciation of what Marx's admirers think that Marx really meant. The first is a rather naive admission that the first Volume (1867) was bound to be misunderstood, until such time as the third appeared.1 In the course of these twenty-seven years Marx himself died, and as there are some who would place on Engels a not inconsiderable share of the responsibility for the third Volume, it might be a matter for consideration whether Marx himself ever had an opportunity of understanding Volume I—which, of course, is more or less what Croce says. In fact, however, it was not the publication of the third Volume which made possible a comprehension of the first: it would be truer to say that the publication of the third Volume imposed, post-haste, a revision of the orthodox interpretation of the first Volume, if a show of consistency was to be maintained.

The other significant contribution made by Wilbrandt towards a comprehension of Marx is, at the first blush, rather surprising. In opposition to the view that Capital represents an analysis of the workings of an abstract capitalism, not of any particular capitalistic State, but of a State which corresponds to the concept of pure capitalism as ideally conceived, Wilbrandt would have us believe that Marx, in writing the first volume, had in mind pre-capitalistic mediaeval conditions; and in this consideration alone do we find justification for Marx. It is not the usual view; but it has at least this in common with the totally opposed conception, that it makes it clear that whatever Marx may have been talking about, it was certainly not this world that we know here and now.” (Gray 1946: 318).
Note Wilbrandt’s view: that the law of value in volume 1 of Capital – that commodities tend to exchange at true labour values – was only meant to be applied to the pre-19th century world of commodity exchange in a lower form of capitalism.

Gray thought that this was “not the usual view,” and with respect to modern Marxists he is probably right.

However, a really important point is that both Marx and Engels in their later writings in the 1890s did actually hold this view! Certainly this is how Engels, in his “Supplement and Addendum” of 1895, later defended the “law of value” of volume 1 as an empirical theory from hostile charges that volume 3 refuted it (see Engels 1991 [1895]).

Wilbrandt’s interpretation has solid justification in Marx and Engels’ own writings, as I have carefully demonstrated (see here).

Finally, the 20th-century Marxist economist Ronald Meek (1917–1978) also appears to have defended a form of this interpretation. In Studies in the Labour Theory of Value (2nd edn.; 1973), Meek endorsed the view that supply prices of pre-modern commodities were equivalent to labour values, citing Engels’ Supplement of 1895 (Meek 1973: 198–200).

Engels, F. 1991 [1895]. “Supplement and Addendum” to Volume 3 of Capital,” in Karl Marx, Capital. A Critique of Political Economy. Volume Three (trans. David Fernbach). Penguin Books, London.

Gray, Alexander. 1946. The Socialist Tradition: Moses to Lenin. Longmans, Green and Co., London and New York.

Meek, Ronald L. 1973. Studies in the Labour Theory of Value (2nd edn.). Lawrence and Wishart, London.

Wilbrandt, Robert. 1920. Karl Marx: versuch einer Würdigung. B.G. Teubner, Leipzig.


  1. of This used to be a usual interpretation Marx's law of value, especially in soviet marxism, but this not a view held by Marx and there is no evidence that Marx thought that the law of value was supposed to work only in the very early capitalism (?), late medieval times.

    1. The law of value here -- that commodities tend to exchange at labour values -- was defended in this sense by Marx in Chapter 10 of volume 3 of Capital:

      “The exchange of commodities at their values, or approximately at their values, requires, therefore, a much lower stage than their exchange at their prices of production, which requires a relatively high development of capitalist production.

      Whatever may be the way in which the prices of the various commodities are first fixed or mutually regulated, the law of value always dominates their movements. If the labor time required for the production of these commodities is reduced, prices fall; if it is increased, prices rise, other circumstances remaining the same.

      Aside from the fact that prices and their movements are dominated by the law of value, it is quite appropriate, under these circumstances, to regard the value of commodities not only theoretically, but also historically, as existing prior to the prices of production. This applies to conditions, in which the laborer owns his means of production, and this is the condition of the land-owning farmer and of the craftsman in the old world as well as the new. This agrees also with the view formerly expressed by me that the development of product into commodities arises through the exchange between different communes, not through that between the members of the same commune. It applies not only to this primitive condition, but also to subsequent conditions based on slavery or serfdom, and to the guild organisation of handicrafts, so long as the means of production installed in one line of production cannot be transferred to another line except under difficulties, so that the various lines of production maintain, to a certain degree, the same mutual relations as foreign countries or communistic groups.

      In order that the prices at which commodities are exchanged with one another may correspond approximately to their values, no other conditions are required but the following: 1) The exchange of the various commodities must no longer be accidental or occasional, 2) So far as the direct exchange of commodities is concerned, these commodities must be produced on both sides in sufficient quantities to meet mutual requirements, a thing easily learned by experience in trading, and therefore a natural outgrowth of continued trading, 3) So far as selling is concerned, there must be no accidental or artificial monopoly which may enable either of the contracting sides to sell commodities above their value or compel others to sell below value. An accidental monopoly is one which a buyer or seller acquires by an accidental proportion of supply to demand.

      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).

    2. Ok. But how that quote justifies your point? Where does he say that the law of value is restricted only to some early time in the history of capitalism and later on it doesn't work anymore? He says something like that: there used to be a time in the early capitalism that the value of commodity corresponded perfectly to its price. As the capitalism has developed that assumption doesn't hold anymore perfectly, because prices now "fluctuate" around value. But in both cases agregate value = agregate prices.

  2. I also think this interpretation is very unconvincing. In my opinion the "correct" interpretation is that Marx didn't take a stance on prices and was investigating profits in labor value terms.

    1. Rubbish. Of course he took a stances on prices:

      (1) in vol.1 it is that prices gravitate around socially necessary labour time values, and

      (2) in vol. 3 that prices gravitate around Classical prices of production.

  3. Pray tell, what are some of Marx's writings from the 1890s?

    1. I am referring to vol. 3 of Capital published posthumously by Engels in Marx's name. Clear?