Response to Richard Garner on Marx (2013), by D.J. Webb
Unfortunately, this writer, probably a good libertarian, knows almost nothing about Marx's views. I will comment in order as things come up in the ramshackle post above:
1. Marx did not say that goods would or should exchange on the basis of the labour time incorporated in them. [How could anyone tell or calculate this?] Marx said the opposite - that goods would NOT exchange on the basis of the labour time incorporated in them, or if they did so, it would be by accident.
2. The surplus value - well, the best way to approach this is to point out that in ALL economies there has to be a surplus for investment. There was in the Soviet Union too. No surplus=subsistence economics of cave men.
3. The Iron Law of Wages was only quoted by Marx as what he saw as an incorrect Lassallean view (see http://www.marxists.org/archive/marx//works/1875/letters/75_10_12.htm for Engels' condemnation of the adoption of the phrase by the German part he was involved with). Marx did, however, believe in the **relative** worsening of the position of the proletariat in relation to the growth in capital. He of course believed in the incorrect counterposition of labour and capital as opposing interests - in fact both of these should be freed and have a common interest in opposing rentierism.
4. Marx did not support Malthus' views and his belief in the immiseration of the proletariat was not based on demographic developments, such as undulations in the pattern of malnutrition and infant mortality. Marx described Darwin's theories as refuting Malthus' views of the "arithmetic" increase in food output and the "geometrical" increase in population. Unfortunately, Garner knows NOTHING AT ALL about Marx's views, which is painfully evident. He says empirical evidence did not back up Malthusianism -but that's what Marx pointed out too.
5. Supply and demand for labour - are covered in Marx's works. Wages reflecting productivity, etc - all covered. Incorrect assertions are made in this article about Marx's views on nearly everything.
6. "Marx’s presumption that wages will always tend to be less than the true value of the labour spent producing becomes untenable, and, if this is the case, his claim that capitalism is exploitative looks shaky too". ??? Apart from the meaninglessness of the sentence ("the true value of the labour spent producing wages"???), in all forms of economy, there has to be a surplus. To label is "exploitative" is to intrude a moral issue in what is just an economic fact. No one is going to pay someone £100 to add only £100 of value. I think there are statistics on gross value added in manufacturing - and the number is not the same as total wages. Unless Garner is saying that capitalism produces for a loss, then this article is of no value.
7. His long quotation about exchange value is not from Marx - and is not a correct summarisation of Marx's views. Marx most certainly did not believe that the price of anything reflected the amount of socially necessary labour in it.
8. "The price, of each house is not solely determined by the labour put into producing it but also by the geographical position and by the attractiveness of that position to those who would live in the house".... er... but Marx did not say that or anything like that. He was emphatic that the price goods exchanged at did not reflect labour time - geographical position, what people are willing to pay etc, are what determine the price - along with other factors.
9. This clown who wrote this article confused value and price all the way through. Marx made a clear distinction. His approach was to start abstract in volume 1 and paint in more details in volume 2 and 3 of Capital. So he starts with value - but by volume 3, he makes clear that value for him is just an abstract category and that price is the concrete visible phenomenon. What is the connection between the two? And why does he say goods don't exchange at what their abstract "value" is? Or to put it another way, why is value a useful category if it is only abstract and does not determine prices? He argued that you could start by looking at just one enterprise and discussing labour values, but one the free market is painted in, it creates a "capitalistic communism", whereby all goods go for whatever they can get - marginal utility theories would therefore describe the real price action. Marx did not deny this, despite the claims of the libertarian clown, Ian B. So why is he interested in his theory of labour values if he says they have no connection with price achieved? He believed that labour values only work on a whole-economy basis - ie that the total labour values of all the products would equal the total prices in aggregate (abstracting from inflation, as his approach of 'ascending from the abstract to the concrete' was to start abstract and paint in more features of reality, so arguments by Garner from Vol 1 are clownish, because they don't take account of Marx's gradual concretisation by the end of Volume 3). The "capitalistic communism" means that the market tends to - only a tendency - to more equal profit rates than labour values would indicate at least in so far as any business can sell its products for whatever it can get. The problem with the labour theory of value - at least as Marx has it - is that it becomes unfalsifiable, as no observable phenomena are asserted as corresponding to it. Marx said that if goods exchanged according to their labour values, it would be purely accidental. So what is labour value DOING in this theory if he denies that value=price, something Clown Garner didn't realise? The significance of labour values to Marx was that he argued that the move into higher and higher tech wold lead to a higher ratio of capital to labour, and that the rate of surplus value - something not measurable at a single-company level due to the capitalistic communism that converts value into price (something Marx called "the transformation process") - over the economy in aggregate would fall, eventually producing slumps, requiring restructuring before resumed growth and eventual rinse and repeat. Clown Ian B then rushes along and asserts that Marx believed value equals price and goods exchange at labour values!
10. "In other words, the only way to tell if a commodity is valuable or not, or even if it has value, is by observing the action of the market process – the act of exchange. This is a hell of a concession!" It's not, because Marx's theory is precisely that value diverges from price in nearly all circumstances. He is ONLY interested in the way that a theory that labour values underly the economy in aggregate - read those words again - in aggregate - affect the total-economy rate of profit.
11. "Marx has in fact ended up with something very different from a labour theory of value". Er... yes... but read to the end of Capital, and you'll know why. I'm not saying Marx is right - he is specifically wrong for counterposing the interests of labour and capital, and his own work talks extensively of "countervailing tendencies" to the falling rate of profit, making it unclear, even from his own work, whether he has established a falling rate of profit as a necessary trend.
12. "He has claimed, in effect, that the value of a product is determined in so far as it is useful in satisfying the preferences of the consumer and not by the amount of labour time spent producing it at all!" Once again, confusing value and price - which is the WHOLE point of Marx. Marx said exactly this - once the word "value" is replaced by "price".
13. Margin utility theory - is talking about price and is not in contradiction to Marx's views.
14. "It is obvious that under these conditions there would be a demand for more labour, because buyers (capitalist employers) profit from the difference between the price they pay for labour power and what they receive in exchange for its product, which, under these conditions, would be nothing (because price equals cost)." Er... Clown Garner says this here - but it contracts what he said (see point 6) above! Of course, there has to be a surplus in all economies other than pure subsistence. Once agriculture developed in the Middle East, the possibility of producing a surplus was achieved: in real terms, not 100% of everyone's labour had to be devoted to mere production of food. One 90% of people could feel 100% of the population, there was a surplus, allowing for others to be deployed on investment projects like canals, irrigation, road etc. Production of a surplus is not exploitation - it is just a necessity as Clown Garner realises here.
15. Workers paid for marginal productivity - this is talking about wages, which is a price (see Marx's abstract value-price distinction). Marx did not deny any of this.
There is nothing but buffoonery in this article.
David McDonagh (another former Marxist) Reponds
I saw Richard Garner’s name in the LA post and I thought I would read what he had to say but got this piece of criticism from Mr Webb instead.
I have not read any of Richard’s articles but I have read his E mails to the LA discussion lists, which were often quite good. We also met and we became friends to some extent.
He did embrace the false idea that society was zero sum that not even Marx embraced. Mr Webb ends with a few words that are ambiguous in that they can be read as referring to his own criticism whether, that is apt or not, but I write in as I think they do apply to Mr Webb maybe better than to Richard as Mr Webb reports Richard, especially on the idea of surplus value in Marx. He might be right that Richard erred on Marx [I have not read anything by Richard on Marx still and will not do so till later, if ever] but his idea that surplus value relates to the surplus there has to be in any society for it simply to ever be economic is simply silly.
It is also silly of Mr Webb to say that exploitation is ethical here rather than economic. Marx liked the ambiguity, of course.
I think Richard was a good libertarian propagandist. Maybe Mr Webb is too. Anyway, we all thrive on criticism, as Popper ought to have said.
1) Marx was confused but his theory was basically a price theory. Mr Webb is right that they will only exactly exchange on labour embodied in them by chance, or accident, but they will always roughly relate to that according to Marx, though increased efficiency changing the socially necessary labour time input might upset the price of earlier made wares.
2) This idea that surplus value relates to economic surplus in fact is the main false idea in what Mr Webb says that led me to reply. This apology is a complete howler.
It does relate to what Marx [arbitrarily] too thought to be the source of the actual economic surplus, but that hardly means that the claim is right or that we cannot truly say that there is no surplus value in Marx’s sense. If that is what Richard said then I want to say that he was quite right! Surplus value is about as real as your soul. Anyone who says that there is no surplus value in Marx’s meaning says a truth.
Moreover, it is even a truth that some basically Marxist socialists have often said [they retain Marx on history, the future and on other things] as not all Marxists still retain the labour theory of value. One does not need to think the exploitation theory of Marx is right to think that communism is an option; but it is, in fact, not an option at all, as far as I can see. The economic calculation argument [eca] of Mises effectively refutes communism. See From Marx to Mises (1992) D.R. Steele.
Mr Webb is right that we need an societal economic surplus to have a society, of course. But that does not save the surplus value meme of Marx has any merit. Indeed, it does not begin to aid the bogus theory of surplus value out. It is completely irrelevant.
The late USSR was never ever non-capitalist, as Michael Polanyi made clear in his USSR Economics (1936) by use of the eca as well as the use of empirical evidence.
3) Marx did tend to hold that wages fell in absolute terms. He does use the idea of relative decline too, but he holds mainly the absolute impoverishment too. This idea that wages are absolutely declining is so clearly false that most readers just overlook it, but it is clearly there in Marx.
4) I agree that Marx was not in agreement with Malthus. Did Richard say that he was?
5) Marx is hopeless on supply and demand. He fails, badly, to adequately deal with it.
6) Richard looks to be basically right here. There is no surplus value from using hired labour. Nor can Marx ever hope to relate labour to any actual profit. The theory is hopeless. It is a much-laboured theory as well as a labour theory of value. It solves no actual problems but rather it poses a superabundance of them that no one can adequately deal with. As an exploitation theory, it fails. It explains no economic facts at all. Nor does it adequately explain any falsehood that it claims.
Oddly, Mr Webb says that no one is going to pay £100 to get only £100 of value, but that is exactly what both Marx and the marginal theory hold: that things sell at their value.
The idea of surplus value was that wages pays the full value of labour power but that this can be used to create surplus value so that things that did tend to sell at roughly their value but by buying labour power allowed the capitalist to push the workers into creating wares that might sell at way more than the value of the wages thus producing surplus value. But this is clearly false. There is no such unique surplus value coming only from labour. Marx was a complete failure with his supposed insight there.
7) I have not seen the quotation that is said not to be from Marx, but what Mr Webb reports about it suggests it might be apt, as Marx is on about something like a price theory in his labour theory of value.
8) Again, Mr Webb supposes that the labour theory is nothing like a price theory but it is about prices.
Richard’s comments that Mr Webb reports, once again, look better than his criticisms of them.
9) Yes, Marx followed Hegel in beginning with the abstract to aim towards the concrete but that does not mean it is not a price theory of sorts.
Also note that Marx did not really want to get volume one out but was pushed by Engels to do so. He never got the second volume out.
Marx was not pleased to see the vulgar economists win out with their new marginal theory in the 1870s. Indeed, it even further demoralised him.
It is not likely that Mr Webb is apt when he says that Richard was clownish on volume one owing to what Engels could later muster from his notes for volume three.
Popper did not hold that Marx could not be refuted but rather that the Marxists would forever attempt to dodge the refutations. I think Popper erred there. Some will try to dodge but others will face up to the facts.
Mr Webb repeats his idea that Marx held the correspondence between the prices of wares and their value according to Marx’s delusion or bogus outlook was accidental but does he imagine that that means that prices do not relate at all? I fear he does. If so then he certainly seems not to comprehend Marx. Not that it matters much, for Marx always was a failure.
10) Marx refuted his own theory with his attempt to save it by the socially-necessary-labour-time meme [SNLT] in chapter one of volume one and the rest of the book never began to save it.
P.H. Wicksteed told the Marxists this in an article in Today, a paper edited by Eleanor Marx in October 1884 called “The Marxian Theory of Value”. The replies defenders gave to this are all hopeless. It ended G.B. Shaw as a Marxist.
11) The economy is not a whole. It is polycentric. Marx realised it was an anarchy but not that it really was polycentric.
I tend to expect that Richard is more apt than is Mr Webb all along. Profit does not begin to relate to the economy as a whole and the theory of a falling rate of profit is as unrealistic as any idea can be. Profit relates only to the firm that makes them. The whole is as unreal as is God is, but that reality is a whole is a myth that nearly all have loved ever since Plato [at least].
Poor young Richard will not, now, be reading the notes that Engels worked so hard on. But Mr Webb can discuss them with me, if he wants to do so.
12) Richard’s point here quoted by Mr Webb reflects Wicksteed’s. It seems to be Mr Webb who needs to think again about backward Karl Marx.
13) Marginal theory does contradict Marx. It is the vulgar theory that Marx hated most of all. 1871 ruined Marx’s book.
14) Mr Webb repeats his error of equating Marx on surplus value with the actual societal economic surplus itself again. Marx did deny marginal theory but not that labour power sells at its right price but Mr Webb does, repeatedly, suggest that he thinks that means that all wares, including labour power, does not sell at its value too, that price does not even relate to value [just owing to the fact that Marx repeatedly said it is never exact] but though it might not ever be exactly so in Marx’s outlook, it always has to be roughly so, according to Marx, as it is, basically, a theory of prices. Mr Webb seems to want to deny that clear fact.
However, Mr Webb [or is it Mrs Webb?] does go harsh on himself in his conclusion.
David Webb Counter-Responds
Marx's economic theory - however it is to be appraised - did NOT say that goods exchange in "rough relation" to the labour embodied in them, but rather that the free market precluded any such exchange at "labour values". For him, value analysis related to total social capital only. Critique that - as a libertarian it would be a good idea to do so - but don't critique a straw-man incorrect version - or you will make a clown of yourself.
You continue - clownishly - to assert something on a subject you admit you know nothing about. Your entire post here is the meandering of a person of limited intellectual ability. Your point 2 is meaningless. All economies produce a real surplus, and Marx argued that in capitalism it took a specific form. Whether he was right or not was not the subject of my criticism of Clown Garner, so while Marx's views may be wrong - I didn't comment either way. My criticism of Clown Garner was for failing to know anything at all about the subject he was writing about - a failing repeated by Clown McDonagh. By all means do a critique of Marx's theory of surplus value - but know what it was first or keep silent. Your point 4) - yes Clown Garner did say that Marx agreed with Malthus.
You seem to hail from the Paul Marks school of assertive trolling with no argumentation. You don't have an argument why surplus value is not created - I probably would be interested in your argument if you had one - pure assertion is worthless. Imagine you are in a PhD viva voce, and you have to use only cogent arguments, not assertions. Argumentation only.
You constantly "assert" that Marx's theory was one of prices - but you conveniently say not one word about the transformation process that I discussed in detail. Clown McDonagh probably didn't understand what I wrote. Nearly the whole of your post is rendered meaningless by your failure to understand the transformation process concept. It may be right or wrong - but that is not the point and I didn't discuss whether it was right or wrong- simply put, you can't critique a theory by not understanding it in the first place. Clown!
Marginal theory is about PRICES. If you don't understand Marx's distinction between value and price, and his assertion that value theory only governs the economy as a whole, not individual prices or individual businesses or their rates of profit, then you can't critique it. By all means critique his actual theory. But you've got to know it first. Otherwise, you are a clown.
"Marx did deny marginal theory but not that labour power sells at its right price but Mr Webb does, repeatedly, suggest that he thinks that means that all wares, including labour power, does not sell at its value too, that price does not even relate to value [just owing to the fact that Marx repeatedly said it is never exact] but though it might not ever be exactly so in Marx’s outlook, it always has to be roughly so, according to Marx, as it is, basically, a theory of prices. Mr Webb seems to want to deny that clear fact. " Clown McDonagh - this is PRECISELY untrue. You can assert falsehoods till you're blue in the face, but it doesn't make them the more true. I can dig out some quotations, but I don't see why I should do the legwork. I gave a Wikipedia link on the transformation process idea - do your research from there?