Discussion

1. Comment by: William Wall

   Nov 2nd 2010 at 09:11

   I may not be reading this correctly, but isn’t Brenner’s argument central to Marx’s in Capital? i.e. that the pressure of greater productivity/lower wages/lower production costs/new technology etc is always going to undermine the economy?
   I note that this article is “Part 1″. I look forward to Part 2.
   By the way, I was an early adopter of the computerised rubber chicken and I can tell you that the non-computerised version worked better.

2. Comment by: Philip Pilkington

   Nov 2nd 2010 at 10:11

   @William Wall

   While Brenner’s argument certainly bears affinities to Marx’s, such as the fact that both are chronic, the two - in my opinion at least - couldn’t be more different.

   Brenner’s - I think - is more influenced by Joseph Schumpeter’s account of creative destruction. It is essentially an oversupply argument, with new technology and expanded labour-markets as it’s engine. Expanded labour-markets allow capitalists and investors to open factories in new places - and this so, faster and faster. Rapid technological change leads to plant and equipment becoming obsolete within a very short period. This leads to an oversupply of capital goods (plant and equipment etc.). And when there’s oversupply, well, value has to be slashed. The value that’s slashed are the capital goods themselves - and this eats into the overall manufacturing profit-rate.

   As you can see, this process is creative - insofar as it increases productivity very quickly due to the rapid changes in technology - and also destructive - insofar as it destroys the value of capital goods and, ultimately, drags down profit-rates.

   Marx’s argument - which is basically rubbish - is altogether quite different. He claimed that the increase in what he called ‘constant capital’ - which is essentially plant and equipment (what I call capital goods) - will push profit-rates down because profit comes strictly from ‘variable capital’ - that is, in essence, wage labour. So, Marx’s assumption is that ALL profit comes from the ’surplus value’ extracted from wage labour. Hence, one cannot make profit without labourers - i.e. if we had purely robotic factories there would be no profit.

   Marx’s argument is flawed because his theory of value is flawed. Value doesn’t come from wage labour at all - in fact, value doesn’t seem to have any ‘materialistic’ determinate.

   Hope that helps. Part II is in the pipeline…

   Just to point out to everyone, the link in the article that says ‘historical account of global capitalism since 1945′ is a link to a .pdf of Brenner’s latest forward to his book. Written post-crash, he summarises his argument quite well…

3. Comment by: William Wall

   Nov 2nd 2010 at 10:11

   Philip, like most people economics is a foreign language to me. On one simple point though, surely the wage labour is archived in the robot in the same way as it’s archived in any other product? (I’m out of my depth already - I’m gasping for air in fact).

4. Comment by: Philip Pilkington

   Nov 2nd 2010 at 10:11

   @William Wall

   I’d encourage people to ask questions about economics - most of it’s not rocket-science and it’s often wielded like a cudgel by policy-makers…

   Anyway, you’re right, a Marxist - or rather, an Orthodox Marxist, since I believe that Brenner is, in fact, a Marxist - would argue that labour is ‘congealed’ in our hypothetical robot. I think that they would refer to this as ‘dead labour’.

   However - according to Orthodox Marxists, and I think they’re blatantly wrong on this - unless the robot was endowed with human powers of creativity, it would not create value. This is what Marxists - sorry, Orthodox Marxists - mean when they quote Marx about Capital being ‘dead labour that sucks, vampire-like, off living labour’.

   In their view all value stems from labour and the logical consequence of this is that, say, technology cannot produce value (as they would claim that technology is built by ‘living labour’).

   At this point the argument becomes circular and really doesn’t have any value from an economic point-of-view - which is why Orthodox Marxists tend to fall back on philosophical justifications. But you’ll see that it’s central to the Marxist idea of how the profit rate falls.

   Marx is quite clear on this - a relative increase in ‘constant capital’ and relative decrease in ‘variable capital’ leads to less surplus-value and hence less profit. And in Marx’s system robots that weren’t endowed with human capabilities would be considered ‘constant capital’ and thus unable to produce surplus-value.

5. Comment by: William Wall

   Nov 2nd 2010 at 13:11

   Thanks Philip. I suppose I could say I now know more, but I’m none the wiser!
   Anyway, I’m really enjoying your articles. I know enjoying is the wrong word. These days the only people who are enjoying anything are the politicians who seem to get a perverse pleasure out of talking about everyone else’s pain. Our leaders are never so great as when they are disciplining and punishing us.

6. Comment by: Roisin de Rossa

   Nov 2nd 2010 at 16:11

   Philip, if you really think that Marx explained the tendency of the rate of profit to fall *simply* by means of the increase in the organic composition of capital then you haven’t read volume 3 of Kapital and I doubt you even got the meaning of volume 1.
   You completely misrepresent Marx’s own position and then seem perplexed that you find yourself in agreement with a highly orthodox marxist such as Brenner. Marx’s treatment is very nuanced indeed and brings in so many layers of relationships (hence the myriad schools of marxist economics which emphasize different factors). Indeed the Tendency of the Rate of Profit to Fall is only that, a tendency, not everyone even subscribes to it.
   Your treatment of value theory is chronic and really only reflects on yourself - attacking Marx is always extremely dangerous given the complexity of the dialectical style in which he contructs an understanding of the economy.
   Marx’s explanation of the economy obviously included international competition that you talk about, the problem is that he he has already gone way beyond that when dealing with the TRPF. The difficult question most marxists I know are debating right now is assessing/calculating to what extent the TRPF is driving the international competition which is causing a global race to the bottom and everything else you describe. Another big issue dividing marxist economists is whether the collapse reflects oversupply or underconsumption. And another school of marxists holds a more monetarist explanation relating to gold values underpinning the economy.
   If you are going to attack Marx, then I would advice you to really make some effort to understand him. I realise it is not easy and there are all sorts of schools of marxism out there and it will take a great deal of time but I truly believe that your efforts will be rewarded. Brenner is a good place to start in my opinion - but there are many others. Don’t believe the hype about dogmatism - in the field of economics marxist economists are miles ahead of the rest simply because they understand that economics cannot be collapsed to a neat collection of mathematical equations based on a idealised view of the world.
   Read Kalecki on Equilibrium theory and you will see the power of marxist economics and just how intellectually dishonest is mainstream economics.
   On the LTV, the key question is really where is value created? Smith and Ricardo both tended to Marx’s position on this. But the classical economists said it is in exchange? If so, where does that profit come from? And if you add up all the profits are they negated by all the losses? Do you see the problem?
   The neo-classical response is to assume an arbitrary cost of capital deployed (say about 3%) - but that too very clearly lacks any material basis (much worse than Socially-necessary Labour time). I would argue that it is at least as valid from a purely empirical perspective to assume that capital accumulation results from surplus value as to build in a fixed ‘rate of exploitation’ within the ‘rate of return’ on capital deployed. The question is whether you believe that workers are exploited in production (as I do) or whether you believe that capitalists who ‘forego’ the enjoyment of their riches to invest it have a moral justification for seeking a minimum ‘return’ on it.
   Now the monetarists move away from that to say that the value of money decreases with time but its all the same sleight-of-hand. It really comes down to your perspective - workers or capital.

7. Comment by: Philip Pilkington

   Nov 2nd 2010 at 16:11

   @ Roisin

   First of all, I just want to highlight something to anyone else reading these comments. Marxist economics can often be just as elitist as any other sort of neo-classical or any other type of economics. Usually it involves vague references to dialectics (which is a form of argumentation - although many Marxists don’t seem to appreciate this…) and equally vague references to baroque sections of Volume III. Personally, I dislike this economics no matter who it comes from. My feeling is - as JK Galbraith once said - there’s nothing important in economics that can’t be explained in plain English.

   Now, just a few technical points (sorry to bore everyone…):

   “The difficult question most marxists I know are debating right now is assessing/calculating to what extent the TRPF is driving the international competition which is causing a global race to the bottom and everything else you describe.”

   How on earth would they calculate that? If the LTV is incalculable - don’t believe me on this, it’s right there in Vol. III - then there’s no way to calculate or assess how much Marx’s dysfunctional TRPF operates.

   “Read Kalecki on Equilibrium theory and you will see the power of marxist economics and just how intellectually dishonest is mainstream economics.”

   I don’t think Kalecki was using the labour theory of value… He was closer to Keynes…

   “On the LTV, the key question is really where is value created?”

   Here’s my answer: in your noodle! Value is a social relation. I value something more if you value it and vice versa. Think Nike trainers. Nothing to do with labour (which costs nothing); this has all to do with the idea that someone else values the product highly. It’s a question of esteem.

   All value comes down to this - and it is essentially linked to Veblen’s concepts of invidious and conspicuous consumption. The big secret of value is… that it’s a phantom. An incalculable phantom.

   Dean Baker did his PHD thesis along these lines - I always thought it should get more attention:

   http://www.scribd.com/doc/29776477/8821544

   So, yes, value does indeed come down to perspective. To yours or mine - or his or hers - or what the TV says… It truly is a perspective matter - and, unfortunately, perspective can’t be measured.

8. Comment by: William Wall

   Nov 2nd 2010 at 16:11

   er…….. I’ll just stand here and watch if you don’t mind….

9. Comment by: krupskaya

   Nov 2nd 2010 at 18:11

   An interesting discussion, but marred, I think at the outset by some false analysis.

   The idea that only Labour can create Value is not specific to Marx. Adam Smith codified it. More importantly, it’s true. A shovel cannot create a ditch, only make the labour in creating a ditch more productive than bare hands (a JCB more productive still).

   Robots don’t change that fact, they demonstrate it. Most car production now is to some degree robotised, but they require labour to operate. Likewise a hi-tech precision tool or a vast pharmaceutical factory, overseen by tiny numbers of people while the production process is automated. The automation and robotisation is the driving force behind falling prices because the labour value in them is falling. Drugs prices are only kept artificially high by patents- as soon as they expire, ‘generic’ drugs’ prices ensure they collapse. Precision tools require constant reinvestment to remain competitive.

   Brenner’s analysis has merits but, as you counterpose him and Marx, you plump for the incorrect analysis. In the spirit of keeping terms readily understood, to be correct Brenner’s analysis would have to show why this period was qualitatively different from all preceding periods, although we know the locomotive force of capitalism shifted from Italy, to the Netherlands, to England and then to the US over centuries.

   This presented little local difficlties for the capitalists concerned by did not lead to a generalised fall in the profit rate, which instead experienced massive growth within those periods.

   Finally, you chart on profits is completely incorrect and reproduces the lack of scientific (ie Marxist) categorisations. Put simply, where do the financial profits come from, if not mainly other private sector agents? All you’re then measuring is the redistribution of profits within sectors of capital.

   To measure the rate of return on anything you need to know the initial outlay. The capital rate of return (profit) needs to be measured versus the capital deployed. This is why Marx is right to insist on the accumulated capital deployed (its ‘organic composition’). He was also right to insist that this grows ove time, even after depreciation. That’s why you work at a laptop now, not at a desk with a paper & pen. From that, it follows that actual profits cannot keep pace with the continuous accumulation of the capital stock, hence the inner tendency of the rate of profit to fall.

10. Comment by: Philip Pilkington

    Nov 2nd 2010 at 18:11

    @ krtupskaya

    Better ‘false analysis’ than no analysis. Where are you pulling this stuff from?

    ‘The automation and robotisation is the driving force behind falling prices because the labour value in them is falling.’

    That’s an assertion, not a proof. What stops me from saying, I dunno: bunnies are the driving force behind falling profits because the bunny value in various products in them is falling.

    Okay, that’s a bit much - but let’s try carbon or oxygen. Sure, a shovel can’t produce value without a person behind it - but the person can’t produce value without the expenditure of oxygen or carbon… so couldn’t we then measure value in oxygen or carbon?

    ‘Brenner’s analysis has merits but, as you counterpose him and Marx, you plump for the incorrect analysis.’

    Another assertion. Do you see the difference between what I just wrote - which is an argument - and what you just wrote - which is an assumption? If not, then I give up now…

    ‘Put simply, where do the financial profits come from, if not mainly other private sector agents?’

    That statement means nothing. Not to mention it doesn’t make sense (why couldn’t financial profits come from the public sector - like when, say, public sector pensions are channeled into the stock market?)

    I argue that financial profits come - from nowhere!!! They’re a dream - dreamt up by speculators. Animal spirits as Keynes called them.

    ‘From that, it follows that actual profits cannot keep pace with the continuous accumulation of the capital stock, hence the inner tendency of the rate of profit to fall.’

    I can assure you… it really and truly does not follow…

11. Comment by: Philip Pilkington

    Nov 2nd 2010 at 19:11

    Here, before this goes any further - here’s a fine blog post by some grad student or other (a Marxist, no less) that explains quite clearly why classical Marxist theory cannot understand the contemporary finance-sector. This is not even to get into the sticky issues of understanding declining profit-rates which shouldn’t even be controversial any more:

    http://takingplace.blogspot.com/2009/07/marxs-theory-of-finance.html

    Now, the key problem with applying Marx’s thought to finance is that finance does not produce goods in the traditional sense. They do not buy low and sell high to their investors. On top of this, the tertiary finance sector which trades in derivatives, is two steps removed from the traditional economy. Thus, Marx’s M-C- M’ profit formula and fundamental motivation becomes, at best, only indirectly applicable. In the most traditional finance sector – savings and loan – the leap is relatively easy for Marx. Financiers invest (add M) for a slice of the final profits M’. This formula for motivation and economic causation however does not apply to speculative derivatives trading, collateralized debt obligations (CDOs), and other tertiary financial economic activity that has become a mainstay in our system.

    ……

    So, what makes tertiary finance so special and un-amenable to a basic understanding of capitalist economics that we have to create a whole new interpretation of it? Capitalism, at its core, works because it adds real value to real things and earns a fair return from it. As Marx throws away talk about prices as a proxy for understanding the real value added, we too must throw away the notion that capitalism makes money simply because it gets more money than it puts in. Tertiary finance latches on to this process in a very distant way, putting money into money that is somewhere backed by real value-adding processes. These financiers make money when the money they invest produces more money. The problem is that, because the link to real value-added process is so convoluted and, adding to that, the gambling economy of short-term trading practices, the M’ that traders achieve is not easily traceable to any actual value created. Hence we can have toxic assets with no way to measure their actual value.

12. Comment by: William Wall

    Nov 2nd 2010 at 19:11

    Eh? “Capitalism, at its core, works because it adds real value to real things and earns a fair return from it.” Hah!

13. Comment by: roisin de rossa

    Nov 3rd 2010 at 00:11

    It’s late and I read this…
    First of all, I just want to highlight something to anyone else reading these comments. Marxist economics can often be just as elitist as any other sort of neo-classical or any other type of economics. Usually it involves vague references to dialectics (which is a form of argumentation - although many Marxists don’t seem to appreciate this…)
    You clearly have not a whit of understanding of Marx or Hegel and have not taken the time to engage with either in detail. You will never get any vague references to dialectics from me - I can assure you. My dialectics are materialist and they are solid.
    Kalecki was a marxist, check him out anywhere - including his own writings and on wikipedia if you prefer. Of course he was influenced by Keynes but Keynes was influenced by Marx as he said about the General theory ‘there will be a great change, and, in particular, the Ricardian foundations of Marxism will be knocked away’.
    The transformation problem has been countered in a variety of ways, see Shaikh for instance. Has the Cambridge controversy been resolved yet?
    Re: value coming from your head (!) - maybe you can explain if you tot up all the incomes made by those selling and subtract those expenditures made by those buying - where does the difference come from? Your head?

14. Comment by: roisin de rossa

    Nov 3rd 2010 at 01:11

    Fair play Krupskaya although I would tend to be a little more favourable to Brenners analysis. I think the process known as globalisation and the mobility of capital has ushered in a new era.
    The financialisation arguments are interestingly dealt with by the monthly review school - have you come across this stuff?

15. Comment by: William Wall

    Nov 3rd 2010 at 08:11

    How about this from Lenin’s Tomb? http://leninology.blogspot.com/2005/03/value-and-valuation.html
    ———————————————-
    Value and valuation
    A Jane Austen-style title for a response to the impeccably classical Paul Craddick, who has raised a question about the Marxian version of the labour theory of value:

    I’d be interested to know how anyone who still credits Marxian value, at least as a heuristic (or, better, as an apprehension of something basic and undeniable about economy and production), answers the basic “Austrian” contention:

    “… a suit is not eight times as valuable as a hat because it requires eight times as much labor as a hat to produce. It is because a finished suit will be eight times as valuable [Ed. sc., desired-demanded] as a finished hat that society is willing to employ eight times as much labor for the suit as for the hat.”
    (Roepke, paraphrasing Wicksteed, in Economics of the Free Society, p. 20, n. 2)

    Someone in the comments box adds that “the fatal flaw in Marxist economics is the inability to identify an autonomous realm of supply and demand — the market, in other words — which gets wholly subsumed to production.”

    Inasmuch as the circuit of market transactions are where value is seen to be realised, there is an element of truth in this. Value, for marxists, derives from production or, more specifically, from labour. But the answer to the commenter, which partially deals with Paul’s point as well, is to be found in Marx’s brief pamphlet, Value, Price and Profit, chapter I, part IV . Taking issue with a by now famous Citizen Weston over the determinants of wages Marx says:

    You would be altogether mistaken in fancying that the value of labour or any other commodity whatever is ultimately fixed by supply and demand. Supply and demand regulate nothing but the temporary fluctuations of market prices. They will explain to you why the market price of a commodity rises above or sinks below its value, but they can never account for the value itself. Suppose supply and demand to equilibrate, or, as the economists call it, to cover each other. Why, the very moment these opposite forces become equal they paralyze each other, and cease to work in the one or other direction. At the moment when supply and demand equilibrate each other, and therefore cease to act, the market price of a commodity coincides with its real value, with the standard price round which its market prices oscillate. In inquiring into the nature of that VALUE, we have therefore nothing at all to do with the temporary effects on market prices of supply and demand. The same holds true of wages and of the prices of all other commodities.

    As I say, this partly answers Paul Craddick’s query. If marginal utility can be seen as a factor regulating demand, then it becomes a factor in the fluctuation of prices around the natural value of a commodity. The example provided by the ‘Austrian’ merely compounds this: if the coat requires eight times as much labour to make, that itself is significant. At the moment, it doesn’t require any work at all to acquire air, although this could by no means be said to be a substance lacking in utility for most people. Yet, it costs nothing, and will cost nothing until our skies become so polluted that air worth breathing requires labour.

    http://leninology.blogspot.com/2005/03/value-and-valuation.html

16. Comment by: Philip Pilkington

    Nov 3rd 2010 at 17:11

    My last word:

    http://fixingtheeconomists.wordpress.com/2010/11/03/transvaluation-of-values/

    I’m done with this - part II on its way…

17. Comment by: krupskaya

    Nov 3rd 2010 at 19:11

    @ P Pilkington

    Shame you’re ‘done with this’ as it’s little undemocratic to make a series of long sideswipes at your critics, far longer than the original crticism, and then announce you’re taking your ball home.

    re the silly point about oxygen or carbon: On this planet, these are elements of life, not generally factors of production. In creating a ditch, you can put oxygen and a shovel together, you still won’t get a ditch. You can put diesel, a JCB, oxygen and carbon together, but you’re still ditch-less.

    Of course, profits can com from the public sector, which is why I used the word ‘mainly’, but in your excitement you seem to neglect the actual arguments counterposed to your own.

    Likewise, I went on to argue that your plumping for Brenner where he disagrees with Marx (in fact you only agree with Brenner where he disagrees with Marx) was on his weakest terrain, where he ascribes the current crisis to continued relocation of capital and ’sunk costs’, yet this has been a constant feature of capitalism, both internationally and indeed locally (the Manchester Ship Canal was replaced by the railways), and is not unique to this period.

    But you never addressed that argument. Merely asserted that there was no argument. This is an MO; eg in asserting a Marx’s alleged inability to explain finance, including derivatives. Apart from inventing the term ‘fictitious capital’ Marx dissected exchange rate movements and the function of the stock exchange.

    But, no matter, you are a believer that, “Capitalism…works because it adds real value to real things and earns a fair return from it”.

    So, now I see it isn’t the oxygen, or the shovel, or the labour, but ‘Capitalism’ that adds “real” value and earns a fair return from it’. And the feudal serf, tilling the soil, growing the crops, or the ancient slave doing likewise, they presumably added no value because this is a property of Capitalism.

    No wonder you have no use for Marx. You have no use for logic or even accurate terminology.

18. Comment by: Philip Pilkington

    Nov 3rd 2010 at 20:11

    “Shame you’re ‘done with this’ as it’s little undemocratic to make a series of long sideswipes at your critics, far longer than the original crticism, and then announce you’re taking your ball home.”

    A little ‘undemocratic’ - what does that even mean? People can weigh up my argument and your assertions and see which is more reasonable… simple as…

    If you want, you can make a blog post going through your assertions about value theory. That’s the essence of democracy - I’m not ‘undemocratic’ because I disagree with you…

    “re the silly point about oxygen or carbon: On this planet, these are elements of life, not generally factors of production. In creating a ditch, you can put oxygen and a shovel together, you still won’t get a ditch. You can put diesel, a JCB, oxygen and carbon together, but you’re still ditch-less.”

    But you can put a man, a JCB and diesel together - but if you’re in a vacuum, all you’ll get is a mess. This is a stupid point, I’ll grant - but a point is going to be stupid when it’s aimed at a theory that’s 150 years out of date…

    “where he ascribes the current crisis to continued relocation of capital and ’sunk costs’, yet this has been a constant feature of capitalism, both internationally and indeed locally (the Manchester Ship Canal was replaced by the railways), and is not unique to this period.”

    The speed at which this relocation is now taking place is unique - this is why Brenner is saying that it’s causing crises… I agree…

    “Capitalism…works because it adds real value to real things and earns a fair return from it”

    I didn’t write that - I quoted a blog post that wrote that. If you’d read and understood MY blog post you’d see that I write:

    “Value is no longer determined by scarcity OR by human labour – but by fleeting psychological moods, often influenced by the mass-media or by one’s peers.”

    So, why did you quote a summary I linked to instead of quoting what I actually wrote/think? Well, because you just want to set up a strawman and then attack me. You did this instead of arguing with the argument I put forward. Nice one… class act…

19. Comment by: William Wall

    Nov 3rd 2010 at 20:11

    er… I think I was the one who quoted “Capitalism…works because it adds real value to real things and earns a fair return from it”. I quoted it because I thought it was hilarious (hence the indication of laughter after the quote). It has nothing to do with you.

20. Comment by: Conor McCabe

    Nov 3rd 2010 at 23:11

    “Value is no longer determined by scarcity OR by human labour – but by fleeting psychological moods, often influenced by the mass-media or by one’s peers.”

    That is nonsense. I suppose if we had happy news stories they’d be no economic crisis.

    mind you, it’s what Brian Lenihan said was the answer to Ireland’s economic problems three years ago, and pretty much what Bertie ahern said when he told moaners and cribbers to commit suicide.

    Maybe we’ve been wrong about Ahern and Lenihan after all, and that at times of crisis it’s not deep societal and economic forces which are at play, but news headlines.

21. Comment by: Donagh

    Nov 4th 2010 at 10:11

    Hehe, “a theory that’s 150 years out of date…”

22. Comment by: Philip Pilkington

    Nov 4th 2010 at 10:11

    @ Conor McCabe

    I don’t think you really understand what I’m saying at all… The crisis was caused by a contraction of an inflated housing bubble, right? And that housing bubble was inflated on credit and hype, right?

    Well, then, so far my value theory holds. So what caused the crash? Well, obviously the credit bubble contracted because… well… peeps couldn’t pay their loans back - because their wages were too low.

    So, value was created on the supply-side using credit, interpersonal hype and media feel-goodery (adhering to my conception of value) and then this came crashing down due to insufficient money on the demand side (adhering to the conception of debt-financing to produce a wealth effect that I’ll be putting forward in part II).

    So, yes - deep social and economic determinates WERE at work in the eventual crash - but they weren’t at work in the inflating of the bubble (at least not the Irish bubble - they were certainly at work in the US bubble… more on that in part III).

    Trashing the labour theory of value doesn’t equate to ruling out the reality of stark economic disparities and the problems these cause. In other words: ‘Marx = out-of-date’ does not equal ‘Brian Lenihan + Bertie Ahern’.

    @ Donagh

    Your video friend is only looking at Marx’s theory of accumulation - this is the part of Marx’s theory that businessmen and Wall Streeters like (remember the ‘Marx rejuvination’ a few years back?). What they ignore is that Marx’s theory of accumulation is structurally reliant on his theory of surplus value - which is ultimately reliant on the labour theory of value.

    Every time the lecturer writes ‘V’ on the board he is implicitly assuming that Marx’s theory of value holds - which it doesn’t.

    I’ll be the first to admit that there are aspects of Marx’s theory that are very interesting - but then there are aspects of Medieval metaphysics that are very interesting. But both these theoretical constructions are part of ‘total systems’. And when the cornerstone of these systems falls apart, the whole theory goes with it.

    By the way… is it just me or does the lecturer look remarkably similar to UCD sociology lecturer (and Marxist) Kieran Allen?

23. Comment by: Conor McCabe

    Nov 4th 2010 at 11:11

    Philip,

    “The crisis was caused by a contraction of an inflated housing bubble, right?”

    Well, really no. That’s the crisis we are going through now. The slowdown in the market in 2007 was due to a number of factors, not least the fact that mortgages had reached their absolute maximum price and people were finding it hard to reach the prices demanded by sellers. The structural defects in the Irish banking system were exposed by the international credit crisis of 2008, the slowdown in the housing market, which begins around 2006, but again linked in part to wage rates and the price of mortgages, the collapse in prices is, well, now. We still have another few years to go on that one.

    In terns of Marxism and Marxist theories of value, in the opening pages of Capital Marx makes it very clear that in terms of commodities he is talking about commodities within the capitalist mode of production. when he is talking about value, he is talking about value under the capitalist mode of production. He is NOT talking about value as a universal, ahistorial, concept. Now, you don’t have to agree with Marx or Marxist theories of value, but if you are going to dismiss them you should at least know what you are dismissing - that is, you should know what you are talking about and in terms of Marxist theories of value, I don’t see any evidence from your post or your comments that you do.

    Now, it is a common trait of right-wing economics to treat Marxist theories of value as if Marx meant them as ahistorial, universal concepts, when he is blatantly clear in the opening pages that that is not what he means. I’m not saying that you are coming from a right-wing perspective Philip, but from the evidence above it certainly looks that your reading of Marxism is coming from those type of secondary sources.

    The problem I have with your post is that you have dismissed Marxist analysis as silly and beneath the intelligence of intelligent men and women, so I can’t really see you bothering to trawl through the actual works when you’re already come to such definite conclusions about something you obviously have never read - or if you have, you haven’t understood it.

    I mean, the link to the blog you provided, declaring it to be written by a Marxist no less, is nothing of the sort. Again, it’s that right-wing analysis that value is created in the market so that all Marxists want is a redistribution of that market-produced value. Where in Marxism is the concept that value is created in the marketplace? One of the core concepts is that value UNDER CAPITALISM (again, not in ahistorical, universal terms) is derived from the human production of use-value commodites. This value - which is over and above that which is compensated by wages - is stolen from the worker at the point of production, not at the point of consumption. It’s a pretty basic concept within Marxism, but it also happens to be a pretty powerful one, which is probably the reason why is it dismissed out of hand by right-wingers, who somehow mutate Marxism into social democracy, and then criticise it for being social democratic.

    for what it’s worth, krupskaya is pretty much spot on his h/er comments regarding the actual theories.

    Again, you don’t have to agree with Marxist theories of value and human labour under capitalism, but at least know what you don’t agree with.

24. Comment by: Philip Pilkington

    Nov 4th 2010 at 11:11

    “Well, really no. That’s the crisis we are going through now. The slowdown in the market in 2007 was due to a number of factors, not least the fact that mortgages had reached their absolute maximum price and people were finding it hard to reach the prices demanded by sellers.”

    I just said that… look:

    “this came crashing down due to insufficient money on the demand side (adhering to the conception of debt-financing to produce a wealth effect that I’ll be putting forward in part II).”

    That’s pretty much what you just said. As for the international situation - we can’t really get into that at the moment. But Ireland’s housing market bubble was pretty much self-made.

    “he is talking about commodities within the capitalist mode of production. when he is talking about value, he is talking about value under the capitalist mode of production. He is NOT talking about value as a universal, ahistorial, concept.”

    Come on, that’s very wishy-washy… Of course I know about Marx’s ‘historcism’. But Marx states quite clearly that ALL VALUE COMES FROM HUMAN LABOUR - this no matter what system we live under. In Communist society value - for Marx - is still produced by human labour. This is total bullshit.

    Anyway, this is a moot point - I don’t argue about recipes for the cook-shops of the future… it’s dull and I’ll leave it to the utopians and the philosophy students.

    But still, I think you’re mistaken. Answer me this: if value is only the product of human labour under capitalism, where does it come from in other economies (according to Marx)? Where does it come from in slave societies? In feudal societies? Or again, according to Marx, where does value come from in communist societies?

    I think it’s you that haven’t understood Marx’s argument. But please, prove me wrong and answer the above question…

25. Comment by: Conor McCabe

    Nov 4th 2010 at 11:11

    What about commercial property? Can you tell me anything about commercial property prices, about what was going on with commercial property in 2006? What about hotels? what about Section 23 Tax relief? How do these fit into your residential property market explanation?

    “But Marx states quite clearly that ALL VALUE COMES FROM HUMAN LABOUR - this no matter what system we live under.”

    no. He doesn’t. Ignorance repeated is still ignorance Philip.

26. Comment by: Conor McCabe

    Nov 4th 2010 at 11:11

    As for this:

    “Where does it come from in slave societies? In feudal societies? Or again, according to Marx, where does value come from in communist societies?”

    Now I know you haven’t read Capital. If you had you’d know just what a daft point you’ve made.

27. Comment by: Philip Pilkington

    Nov 4th 2010 at 11:11

    “What about commercial property? How do these fit into your residential property market explanation?”

    Commercial property was subject to the same credit arrangements as residential property (and general debt). As credit flowed - nay, was pushed on people and businesses - and the property prices went up in a credit-fuelled speculative frenzy, the commercial property section was extended credit which may have been unaffordable.

    As domestic demand slumped - due to the retraction of credit lines - this combined with the rising interest rates and businesses found it more and more difficult to repay their mortgages.

    I’d need a full post on this - I’ll do one up in the next few weeks though.

    “Now I know you haven’t read Capital. If you had you’d know just what a daft point you’ve made.”

    A nicely elite, I-know-more-than-you-but-don’t-have-to-say-what answer. Answer the question though, stupid as it may be:

    In feudal and slave societies, where, according to Marx does value come from - simple question - gimme a simple answer…

28. Comment by: Conor McCabe

    Nov 4th 2010 at 12:11

    Great. Now I’m dealing with someone who thinks that reading something makes you an elite.

    and while you need a full post to deal with commercial property, you want me to summarize the final part of volume one of Capital in a comment?

29. Comment by: Philip Pilkington

    Nov 4th 2010 at 12:11

    No, reading something and then pretending you have incommunicable knowledge makes you elite - like an old Aristotlian schoolmaster.

    But let’s avoid ad hominems, just answer my question and I’ll be happy (if you can, in fact, answer my question - as I don’t think you can, because you’re wrong…).

30. Comment by: Conor McCabe

    Nov 4th 2010 at 12:11

    Well, ok, then I’m wrong.

31. Comment by: Roisin de Rossa

    Nov 4th 2010 at 12:11

    Philip, you are doing nothing less than parading your ignorance.

    “In feudal and slave societies, where, according to Marx does value come from - simple question - gimme a simple answer”

    You will need to specify if you mean Use value or Exchange value.

32. Comment by: Roisin de Rossa

    Nov 4th 2010 at 12:11

    Philip…

    “But Ireland’s housing market bubble was pretty much self-made.”
    (Wrong)

33. Comment by: Roisin de Rossa

    Nov 4th 2010 at 12:11

    Philip…
    “As domestic demand slumped - due to the retraction of credit lines”
    Wrong

34. Comment by: Roisin de Rossa

    Nov 4th 2010 at 12:11

    Philip…
    “this combined with the rising interest rates and”
    (wrong)

35. Comment by: Roisin de Rossa

    Nov 4th 2010 at 12:11

    From Philip Pilkingtons self-description on his blog…

    “I write; well, I type, mostly. I write company blogs and features content for a living - for, er, pleasure I write fiction; political/historical/economic commentary”

    I think that semi-colon after fiction should be a colon.

36. Comment by: Philip Pilkington

    Nov 4th 2010 at 12:11

    @ Marxists

    Christ! Have you guys actually read Marx or do you just invoke his name???

    In Marxian value theory there are two types of value: use-value and exchange-value. The former is the amount that the product is actually worth (a useless notion that harkens back to out-dated utilitarian psychologists), while the exchange-value is the amount that the product is worth in the market-place (i.e. vis-a-vis other products).

    However, the product has another, more primal, measure of value. Marx just refers to this as, simply, ‘value’. For Marx, this is something like the ‘true value’ of the product (i.e. it determines every other value) and this is determined by THE AMOUNT OF LABOUR PUT INTO THE PRODUCT.

    This is… dun, dun, dun… the labour theory of value. Use value, according to Marx, is intrinsic - it cannot be increased. Exchange value, according to Marx, is an ‘illusion’ created by scarcity (i.e. supply and demand). But ‘value’ - that’s open to be increased or decreased according to the amount of labour that’s put in.

    In slave societies ‘value’ (i.e. amount of labour - i.e. labour theory of value) is put into the product and the slave owner makes a profit or extracts ’suplus value’ for his own usage. But there is no remuneration - no wages - and accumulation is based on bondage.

    In feudal societies ‘value’ is put into the product by the serf. The lord can then turn a profit or simply extract so-called ’surplus value’ by forcing the serf to give him his tithe. In return the serf doesn’t get a wage, but protection (and he is spared a beating by the lord…).

    Both these conceptions still rely on the labour of the slave/serf to create value. Hence, both assume that all VALUE comes from labour. Use value is inherent and not subject to change - exchange value is an illusion. Only VALUE is determinate…

    Class dismissed…

37. Comment by: Oisin Ni Ceardaigh

    Nov 4th 2010 at 13:11

    ah, wikipedia. The first, and last, refuge of the copyistas.

38. Comment by: Philip Pilkington

    Nov 4th 2010 at 13:11

    @ Roisin

    “wrong”

    Wow, I really see your point. You’re very good at explaining things - you should start a blog about economics…

    @ Oisin

    “ah, wikipedia. The first, and last, refuge of the copyistas”

    I didn’t quote Wikipedia - but then you assume I must have… how could one of the ‘impure’ know so much about Marxian theory. That special knowledge, after all, is only available for the select and believing elite, right? Well, wrong apparently…

    I’ve read quite a bit of Marx (and Hegel - seriously, I’m not posturing like most Marxists on this) - I used to buy into his theories, before I realised that I hadn’t actually engaged with other economic theories and that I had simply dismissed them off hand. I came to realise that my investment in his theories was more so emotional than intellectual.

    I wanted them to be true.

    So, no. Not Wikipedia - that’s all taken from my noodle. My main references would be: Capital and David Harvey’s online lectures on Capital.

39. Comment by: Oisin Ni Ceardaigh

    Nov 4th 2010 at 13:11

    It is so bad I assumed it must be from wikipedia. It is not. Instead, you are in possession of a brain that thinks like wikipedia.

    what would be the use and exchange value on a brain like that?

40. Comment by: Philip Pilkington

    Nov 4th 2010 at 13:11

    “Instead, you are in possession of a brain that thinks like wikipedia.”

    Elitism AND ad hominem attacks - and one’s with all the dull wit of wedding singer - now we’re really getting somewhere. I must say, I usually let comments pass the proverbial censor, but I’d delete yours… and I’d have no shame in doing so (hint)…

    I remember reading Bertrand Russell’s ‘The Practice and Theory of Bolshevism”. Russell - whose philosophy I think leaves something to be desired - was an ardent socialist. Nevertheless, when he visited Soviet Russia in the Lenin-era, he noted something disturbing about the Bolshies.

    Namely, they couldn’t be reasoned with - at least not in intellectual matters. Their theories were iron-clad and could never be criticised. First, they would try to defend them rationally - but that soon gave way to full-frontal assault. They would then spread rumors amongst themselves that the dissenter was a spy or a ‘capitalist stooge’.

    Once that was done they could attack the dissenter. Sometimes this would be simple ad hominem attacks - “He is a stooge of the bourgeoisie”; “He has not understood the dialectical method” etc. But sometimes they would lash out with institutional power. They would marginalise the dissenter by taking away his institutional power and privilege.

    This proved very effective in keeping everyone in line with the party dogma - and resulted in some tragic consequences. Russell - a keen historian of ideas - noted that this institutional and intellectual method had taken place somewhere before: the medieval church and its educational facilities.

41. Comment by: William Wall

    Nov 4th 2010 at 14:11

    As a writer, I’m finding this exchange very interesting.

42. Comment by: Philip Pilkington

    Nov 4th 2010 at 14:11

    @William Wall

    As someone who appreciates clear and rational argument, I’m beginning to find it childish and dull…

43. Comment by: Oisin Ni Ceardaigh

    Nov 4th 2010 at 14:11

    “I’m beginning to find it childish and dull…”

    It is starting to lose its value for you, is it?

44. Comment by: Philip Pilkington

    Nov 4th 2010 at 14:11

    @ Oisin

    Shouldn’t you be at school?

45. Comment by: William Wall

    Nov 4th 2010 at 14:11

    I don’t know that there’s as much rational argument in your replies as you think, Philip. Perhaps also a smidgeon of emotion…. What I’m appreciating is the conflict, anyway.

46. Comment by: Philip Pilkington

    Nov 4th 2010 at 15:11

    @ William Wall

    Getting pulled down to a certain level should sometimes be avoided - I’ll admit that.

    But I think that McCabe, yourself and Roisin (at first) were arguing rationally. It descended into attacks from there - Roisin pulled quotes from my profile to attack me; that bloke said I had a small brain; and a general consensus was launched that I didn’t understand Marx, by people who demonstrably do not understand Marx…

    When I refer to emotion, I mean that they don’t respond to rational argument at a certain point. Of course, being human, my arguments will be tinged with emotion - but prove me wrong and I’ll accept it. With Marxians - as with Christians - they don’t accept it. That’s what I meant by their arguments satisfying them emotionally rather than intellectually. What they want to believe is more important than what is logically sound…

47. Comment by: Roisin de Rossa

    Nov 4th 2010 at 15:11

    God help us if you have to give classes on value. You are completely wrong in almost every aspect of what you say - primarily because you haven’t taken the time to really understand what Marx says. Btw, taking something from wikipedia is no substitute for spending the days it takes to read and understand Capital. Here’s something which might help you understand in the meantime.

    The ‘forms of value’ are a conceptual device developed at the beginning of vol. 1 of
    Capital to indicate how it is possible for the value of one commodity to be expressed in the substance of another. The function is to explain how the private labours involved in commodity production find social expression in exchange, and, ultimately, to explain the role of money in this.

    Marx builds up the picture through the following steps.

    1. The simple form of value, which takes the form of
    x commodity A = y commodity B,

    means that

    x commodity A is worth y commodity B.

    In this form, commodity A functions as the relative form of value and commodity B as the equivalent form. The expression does *not* express the tautology that y commodity B is equal to the value of the x commodity A, but that y commodity B is a *representation* of the value of x commodity A. A quantity of use-value (the equivalent form) expresses the value of the relative form: abstract labour manifests itself as concrete labour. As such the equation is asymmetrical: by reversing it we do not reproduce the same equation but a different equation – with different relative and equivalent forms – of the same type. The expression
    of value is a relative and not an absolute one. If, for example, the value of A falls and that of B rises proportionally then the proportions expressed in the simple form remain unchanged.

    2. The expanded form of value takes the form of

    x commodity A = y commodity B,
    or x commodity A = w commodity C,
    or x commodity A = v commodity D, etc.

    Now instead of confronting only one commodity (and thus having only one form of value), commodity A now confronts the entire world of commodities: instead of
    having only one value-form it now has as many value-forms as there are other commodities for which it can be exchanged.

    Reversing the expanded form we get:

    3. the general form of value:

    v commodity B}
    w commodity C} = y commodity A
    x commodity D}

    In the simple and expanded forms of value the relative forms expressed their values as quantities of the equivalent form as a use-value in its own right. Now, the equivalent form functions as a general equivalent, and it is no longer its original
    use-value that matters, but that deriving from the fact that every other commodity
    expresses its value *in it*.

    The term ‘exchange-value’ can be used in three senses. First, as a property, to indicate that an article has exchange-value; second, as a magnitude, to indicate, as a quantity of another commodity or commodities (including money), the measure of that exchange-value; and, third, to designate and so refer to an object according to the fact that it has exchange-value.

    Considered as a property, the exchange-value of a commodity is what determines in what quantity it exchanges for other commodities: as a measure,
    exchange-value is thus a relative (as opposed to value, which is absolute) magnitude, which is expressed in given quantities of other commodities.

    Exchange-value is determined exclusively by the amount of labour-time socially necessary to produce the commodities concerned.

    Insofar as that a commodity can be exchanged for others (including money) is a useful property then a commodity’s exchange-value also enters into its use-value.

    The two are interwoven. Use value includes exchange value but does not collapse to it. Hence your question and ‘class’ are exposed for what they are a poor attempt to ‘ape’ marxism.

48. Comment by: Philip Pilkington

    Nov 4th 2010 at 15:11

    @ Roisin

    But I didn’t take it from Wikipedia!!! Chrissake!!! I’m suing for libel unless you prove that I took that from Wikipedia…

    As for your little juvenile lecture… save it…

    “Use value includes exchange value but does not collapse to it. Hence your question and ‘class’ are exposed for what they are a poor attempt to ‘ape’ marxism.”

    That’s not what I said. I didn’t say that use-value collapsed into exchange-value. I said that use value and exchange value collapse into ‘VALUE’ - i.e. the amount of labour imparted to the commodity.

    So, you’re sort of arguing with no one there. Well, you’re arguing with the fantasy image that you’ve set up in your head of what my argument is. But that’s no good at all…

    So either you’re illiterate - which you’re probably not. Or you don’t really want to understand my argument…

49. Comment by: Philip Pilkington

    Nov 4th 2010 at 15:11

    Oh, and use-value does not include exchange-value - as use-value is value BEFORE the commodity goes to market.

    You’re embarrassing me here - I can only thank God that your ‘theories’ will never be put to any sort of test…

50. Comment by: Philip Pilkington

    Nov 4th 2010 at 16:11

    Here are some quotes:

    “Use-value is the immediate physical entity in which a definite economic relationship – exchange-value – is expressed.” (Economic & Philosophical…)

    You see? Use-value, for Marx, is the ‘physical entity’ in which the exchange value - that is market prices (’definite economic relationship’) - is EXPRESSED. It does not ‘include’ exchange value. Exchange value is EXPRESSED in it. My opinion of a painting is not ‘included’ in the painting - it is EXPRESSED THROUGH THE PAINTING.

    Again:

    “The use values of commodities furnish the material for a special study, that of the commercial knowledge of commodities. Use values become a reality only by use or consumption: they also constitute the substance of all wealth, whatever may be the social form of that wealth. In the form of society we are about to consider, they are, in addition, the material depositories of exchange value.”

    See? The use-values are the ‘material depositories’ of exchange-values. They are the ’stuff’ that exchange-values (ie. market prices) are realised through. So, for example, the value I attribute to the usefulness of a house (use-value) does not ‘include’ it’s exchange-value (market price). The exchange-value is not ‘included’ in the usefulness of the house…

    Why on earth am I giving lectures on 19th century economic theories anyway - I should have better things to be doing…

51. Comment by: John Green

    Nov 4th 2010 at 17:11

    I hesitate to get drawn into this debate once again, because it’s reiterating the same argument I had a couple of years ago practically point for point. And I’ll just make the observation that it’s as old as Anti-Duhring, in which Engels argued against Sergei Podolinsky’s Economic Thermodynamics. Podolinksy was trying to reconcile the laws of physics with the labour theory of value even then, but Engels was dismissive of his case (possibly he saw that it actually undermines the LTV, who can say?). There is, in any case, an entire tradition of Marxism that sees no need for the labour theory of value and which still regards itself as Marxist, namely, the Analytical Marxism of Roemer, Elster, Cohen and Olin Wright.

    In his latest book, Envisioning Real Utopias, Olin Wright has footnotes on page 101-2 that bear some relevance on this discussion:

    “8: The labor theory of value was a broadly accepted tool of economic analysis in Marx’s time and thus perhaps he did not feel the need for a sustained defense. When Marx does comment on the grounds for the belief that labor is the basis for value his argument is quite simple: we observe qualitatively different things exchanging in fixed ratios in the market–X pounds of steel are the same as Y tubes of toothpaste. How can such qualitatively different things be reduced to relative quantities? They must, Marx reasoned, have some quantitiative substance in common. Labor time expended in their production, he then argued, is the only common quantitative substance. But this claim is simply wrong. Steel and toothpaste also share the property that they are produced with a certain number of calories of energy, for example. One could on this basis construct an energy theory of value, along with an account of the relationship between profits and surplus energy value. More generally, the value of commodities should be thought of as determined by the amount of scarce resources of all sorts that are embodied in their production, not just labor. For a discussion of value relevant to these issues, see Ian Steedman, Marx After Sraffa.”

    I think it was Steedman’s argument, demonstrating the complete irrelevance of value in the determination of prices, that convinced the Analytical Marxists of the need to reformulate a theory of exploitation. There’s more on the problems of the labour theory of value in Howard and King’s two-volume History of Marxian Economics, btw.

    Olin Wright continues, with reference to the tendency of the profit rate to fall:

    “9: Furthermore, even if one accepts the central intuitions of the labor theory of value, the specific argument postulated by Marx for the tendency for the falling rate of profit is not persuasive. The pivotal idea in the theory is that rising capital intensity (referred to in this context as the “rising organic composition of capital”) will have the unintended effect in the aggregate of lowering the rate of profit. But once capitalist production is already highly mechanized there is no longer any reason to believe that capital intensity will continue to rise with subsequent innovation. A good example is the replacement of mechanical adding machines with hand calculators. This is not simply a “counter-tendency”: there is no inherent directionality to the capital intensity of technical change in the process of production once capital intensity has reached a certain point.”

    I think the fact that it isn’t just “bourgeois economists” who have a problem with the labour theory of value means we shouldn’t cast aspersions on the bona fides NOR the degree of sophistication of those arguing against it. It’s perfectly possible to be a Marxist and regard the LTV as irrelevant.

    It’s also worth noting that there’s now an entire school of economics based on acknowledging, as neoclassical economics does not, the role of Nature in contributing value to commodities. At the risk of being accused of philisitinism, you can read about it here:

    http://en.wikipedia.org/wiki/Ecological_economics

52. Comment by: krupskaya

    Nov 4th 2010 at 18:11

    “but if you’re in a vacuum, all you’ll get is a mess”

    Precisely, but since the labourer and the material goods aren’t in a vacuum, value can still only be created by the application of labour-power.In contrast to your presentation, which does exist in a vacuum of logic, and all you’ve produced is a mess.

    “Value is no longer determined by scarcity OR by human labour – but by fleeting psychological moods”

    No, this is a measure of want or desire, not value. And, if value is no longer determined by human labour, how can it ever have been? Was there a time when humans didn’t have wants or desires?

    Yet the shovel still has a value, even if the labourer doesn’t want to use it.

53. Comment by: Philip Pilkington

    Nov 4th 2010 at 18:11

    “Podolinksy was trying to reconcile the laws of physics with the labour theory of value even then, but Engels was dismissive of his case (possibly he saw that it actually undermines the LTV, who can say?).”

    Interesting point… you read Philip Mirowski’s ‘More Light Than Heat’… there was definitely a cultural shift taking place at this time - away from absolutes etc etc

    “There is, in any case, an entire tradition of Marxism that sees no need for the labour theory of value and which still regards itself as Marxist, namely, the Analytical Marxism of Roemer, Elster, Cohen and Olin Wright.”

    The problem is that I don’t think any of these are truly Marxism. Olin Wright is Weberianism dressed in Marxist terminology - while Analytical Marxism is… well… technological determinism and ethical philosophy. Once again the terms are taken over, but they seem redundant… almost forced. It’s as if all these authors want to remain part of some club or something - it’s actually a bit weird…

    “One could on this basis construct an energy theory of value, along with an account of the relationship between profits and surplus energy value.”

    Thank you…

    “the specific argument postulated by Marx for the tendency for the falling rate of profit is not persuasive”

    Since this is how we began, I insist this gets underlined. THERE IT IS, ONE OF TODAY’S LEADING MARXISTS SAYING THAT THE TPRF IS BULLSHIT!

    “It’s perfectly possible to be a Marxist and regard the LTV as irrelevant. ”

    On this, I entirely disagree. Then Marxism is simply a vague wishy-washy faith. Marxism, for what it was, was an integrated theory of history. Take out the LTV and it crumbles. History can no longer be considered ‘materialist’ (a stupid term, anyway…), as it becomes the product of ideas etc. Even if there is economic determinism (which is dumb) if we take later theories of value into account this determinism is still driven by psychology/ideas etc. because these now play a role in economic decisions.

    You can throw the name around. But I might as well be claiming to be a Christian without accepting the resurrection of Christ… Am I really still a Christian? In name, perhaps… But it’s more likely I just continue to adhere to a vaguely Christian ethics and world-view - ditto with post-LTV Marxism.

    “It’s also worth noting that there’s now an entire school of economics based on acknowledging, as neoclassical economics does not, the role of Nature in contributing value to commodities.”

    I’m extremely suspicious of this trend. It often seems to end up postulating what I jokingly referred to as a ‘carbon theory of value’ and ends up proclaiming Peak Oil and the end of human civilisation or measuring things in terms of ecological damage. The latter may seem rational, but it’s actually sneaking an ethical judgment into economics through the back door. It’s attempting to build a science on ethical foundations…

    That’s an oxymoron… last time that was tried we got alchemy!

54. Comment by: Philip Pilkington

    Nov 4th 2010 at 18:11

    “Precisely, but since the labourer and the material goods aren’t in a vacuum, value can still only be created by the application of labour-power.”

    But if they’re not in a vacuum that means they have to rely on oxygen to live and that means that oxygen must go into value creation… at least by Marxist logic. Because if the oxygen goes away then the labour and the shovel cannot work together - Jesus, speaking like this makes me feel like an idiot!

    “In contrast to your presentation, which does exist in a vacuum of logic, and all you’ve produced is a mess.”

    Harharhar dee har… you’re very funny… No, you’re not, you’re just a half-wit.

    “And, if value is no longer determined by human labour, how can it ever have been? Was there a time when humans didn’t have wants or desires?”

    You’re taking that out of context. I was running through the theories as they developed - I believe that’s called a ‘dialectical argument’ - but you wouldn’t know anything about that, would you?

    “Yet the shovel still has a value, even if the labourer doesn’t want to use it.”

    If a tree falls in the wood with no one around to hear it, does it make a noise?

    Once again arguing with a Marxist proves to be the same as arguing with a stubborn and ignorant 1st year philosophy student… probably because most of them are stubborn, ignorant 1st year philosophy students!

55. Comment by: John Green

    Nov 4th 2010 at 18:11

    Heh heh. I don’t know much about ecological economics, Philip - the books are still on my shelves waiting to be read - but even they don’t disagree that they’re introducing ethical judgements into economics. They just claim that economics can’t avoid doing so.

    Let me re-phrase my other comment: it’s perfectly possible to CLAIM to be a Marxist and regard the LTV as irrelevant.

    Olin Wright says (footnote on page 100!!) “It is useful to distinguish between what might be called “sociological Marxism,” anchored in the Marxist analysis of class and the critique of capitalism, and the Marxist theory of history (sometimes called “historical materialism”), anchored in the theory of capitalist dynamics and historical trajectory. While the latter, I believe, is no longer defensible as it stands, the former remainsa highly productive framework for critical theory and research and an essential component of emancipatory social science.”

    Of course, one can also believe that class conflict is central to social dynamics and have a critical position regarding capitalism without being a Marxist. And your analogy of Marxism with Christianity is possibly apter than you imagine. Who, after all, is a real Christian today?

56. Comment by: Philip Pilkington

    Nov 4th 2010 at 18:11

    Well, I disagree with that. I don’t think Brenner’s argument has any ethical presuppositions, I think he just tries to provide a description as best he can. He doesn’t play the preacher in his theorising like most Marxists and ecological economists. Economics is enough of a priest-science as it is - when economists start dropping their masks and outwardly proclaiming their priesthood… well, then we’re all doomed!

    “Of course, one can also believe that class conflict is central to social dynamics and have a critical position regarding capitalism without being a Marxist.”

    I think both these things and I am certainly not a Marxist… but then, I’ve never cared much for belief-systems. I’m comfortable enough with my beliefs to admit that my ethics are my own…