Invisible Leviathan – Marx’s law of value in the twilight of capitalism

My foreword to Invisible Leviathan, by Professor Murray Smith of Brock University, Ontario, Canada, published by Brill in November 2018.   Relevant, I think, to my recent presentation on the contribution of Marx to economics made at the Rethinking Economics conference at Greenwich University, London.

The message of Murray Smith’s book is aptly portrayed by its title, Invisible Leviathan. The book sets out to explain why Marx’s law of value lurks invisibly behind the movement of markets in modern capitalism and yet ultimately explains the disruptive and regular recurrence of crises in production and investment that so damage the livelihoods (and lives) of the many globally.

This book is a profound defence (both theoretically and empirically) of Marx’s law of value and its corollary, Marx’s law of the tendency of the rate of profit to fall, against the criticisms of bourgeois, ‘mainstream’ economics, the sophistry of ‘academic’ Marxists, and the epigones of the classical school of David Ricardo and Adam Smith. As the author points out, even the great majority of ‘left’ commentators concur that the causes of the ‘Great Recession’ of 2007–09 and the ensuing global slump are not to be found in Marx’s theories, but rather in the excessive greed of corporate and financial elites, in Keynes’s theory of deficient effective demand, or in Minksy’s theory of financial fragility. When acknowledged at all, Marx’s value theory and his law of profitability are attacked, marginalised or dismissed as irrelevant.

None of this should be surprising given the main political implication of Marx’s laws: namely, that there can be no permanent policy solutions to economic crises that involve preserving the capitalist mode of production. I am reminded of the debate at the 2016 annual meeting of the American Economics Association between some Marxists (including myself) and leading Keynesian Brad DeLong, who seemed to characterise us as ‘waiting for Godot’ – that is to say, as passive utopians, waiting for collapse and revolution – while he stood for ‘doing something now’ about the deplorable state of capitalism. But as Smith explains so well, it is the ‘practical’ Keynesians who are the real utopians in imagining that actually existing, twenty-first-century capitalism – characterised by crises, war and ‘the avarice and irresponsibility of the rich’ – can still be given a more human and progressive face.

Against the many variants of ‘practical’ economics, Smith’s book sets out to:

uphold Marx’s original analysis of capitalism, not only as the most fruitfully scientific framework for understanding contemporary economic problems and trends, but also as the indispensable basis for sustaining a revolutionary socialist political project in our time. It does so by examining the crisis-inducing dynamics and deepening irrationality of the capitalist system through the lens of Marx’s ‘value theory’ – which, despite the many unfounded claims of its detractors, has never been effectively ‘refuted’ and which continues to generate insights into the pathologies of capitalism unmatched by any other critical theory.

Marxian value theory has been subject to ridicule, distortion and incessant rebuttal ever since it was first expounded by Marx 150 years ago. And the simple reason for this is that value theory is necessarily at the core of any truly effective indictment of capitalism – and essential to refuting its apologists. What truly motivates the ‘Marx critique’ of the bourgeois mainstream is graphically confirmed by the (in)famous argument of Paul Samuelson (the leading exponent of the ‘neoclassical synthesis’ in mainstream economics after World War II) according to which Marx’s value theory is ‘redundant’ as an explanation of the movement of prices in markets. The market, you see, reveals prices, and that is really all we need to know.

It is instructive to note that, shortly after Samuelson’s 1971 broadside against Marx, the (recently deceased) neoclassical economist William Baumol offered a trenchant response to Samuelson’s ‘crude propaganda’. In a paper from 1974, Baumol pointed out quite correctly that Samuelson had entirely misunderstood Marx’s purpose in his discussion of the so-called transformation of values into prices. Marx did not want to show that market prices were related directly to values measured in labour time. Quite the contrary:

The aim was to show that capitalism was a mode of production for profit and profits came from the exploitation of labour; but this fact was obscured by the market where things seemed to be exchanged on the basis of an equality of supply and demand. Profit first comes from the exploitation of labour and then is redistributed (transformed) among the branches of capital through competition and the market into prices of production.

The whole process reveals the ‘Invisible Leviathan’ at work.

Unfortunately, it is not just mainstream economics that has tried to rubbish Marx’s value theory. ‘Post-Keynesians’ like Joan Robinson and neo-Ricardian Marxists like Piero Sraffa and Ian Steedman have also done so. Like Samuelson, they resort to the argument that Marx’s value magnitude analysis is redundant, unnecessary and above all fallacious. As an alternative, Sraffa claimed that prices in capitalist markets can be derived directly from physical output.

Murray Smith demolishes these critiques and revisions, standing firmly on what he calls a ‘fundamentalist’ position that involves a return to both aspects of Marx’s fundamental theoretical programme: the analysis of the form and the magnitude of value, as well as a concern with the relationship of each to the social substance of value: abstract labour. I join him under this banner.

According to Smith:

Marx’s theory of value yields two postulates that are central to his critical analysis of capitalism: 1) living labour is the sole source of all new value (including surplus-value), and 2) value exists as a definite quantitative magnitude that establishes parametric limits on prices, profits, wages and all other expressions of the ‘money-form’. From this flows Marx’s fundamental law of capitalist accumulation: that the tendency of the social capital to increase its organic composition (that is, to replace ‘living labour’ with the ‘dead labour’ embodied in an increasingly sophisticated productive apparatus) must exert a downward pressure on the rate of profit, the decisive regulator of capitalist accumulation.

The book’s theory of capitalist crises rests firmly on Marx’s law of profitability. But, as Smith insists,

Marx’s law of value is merely a ‘necessary presupposition’ of this law of profitability, not a sufficient one. Yet, there is a sense in which the latter stands as a corollary to the former, even if not a theoretically ineluctable one. For capitalism is a mode of production in which the goal of ‘economic activity’ is only incidentally the production of particular things to satisfy particular human needs or wants, while its real, overriding goal is the reproduction of capitalist social relations through the production of value, that ‘social substance’ which is the flesh and blood of Adam Smith’s powerful yet also fallible ‘invisible hand’ – of our ‘Invisible Leviathan’.

And so:

[T]hese laws provide a compelling basis for the conclusion that capitalism is, at bottom, an ‘irrational’ and historically limited system, one that digs its own grave by seeking to assert its ‘independence’ from living labour even while remaining decisively dependent upon the exploitation of living wage-labour for the production of its very life-blood: the surplus-value that is the social substance of private profit.

Smith is by no means content with a purely theoretical defence of Marx’s analysis of capitalism’s Invisible Leviathan; he moves on to empirical verification of the ‘economic law of motion’ of capital as postulated by Marx. I share his view that this is essential. The contrary opinion of certain Marxists is that it is simply impossible to verify Marx’s laws, as the latter are about labour values and official bourgeois data can only detect movements in prices, not values. Moreover, according to this line of thought, statistical verification of Marx’s value-theoretic hypotheses is unnecessary, as the regular recurrence of crises under capitalism is a self-evident fact revealing its obsolescence.

But this is passing the buck. Any authentically scientific socialism demands rigorous scientific analysis and empirical evidence to verify or falsify its theoretical foundations; and Marx himself was the first Marxist to look at data in an effort to confirm his theories. In this connection, Smith writes:

Marxist analysis of the historical dynamics of the capitalist world economy ought not to dispense with serious attempts to measure such fundamental Marxian (value-theoretic) ratios as the average rate of profit, the rate of surplus-value, and the organic composition of capital. To be sure, such attempts can never offer much more than rough approximations. Even so, they are vitally important to charting and comprehending essential trends in the [capitalist mode of production] – trends that can usefully inform, if only in a very general sense, the political-programmatic perspectives and tasks of Marxist socialists in relation to the broader working-class movement.

Murray Smith’s own empirical analysis is original and somewhat controversial. He revives the approach of Shane Mage, whose pioneering empirical work of 1963 on the rate of profit treated the wages of ‘socially necessary unproductive labour’ (SNUL) as a systemic ‘overhead’ cost that should not be regarded as a ‘non-profit’ component of (or absolute ‘deduction’ from) the surplus-value created by productive labour, but rather as a special form of constant capital. In Smith’s view,

by conceptualising SNUL as a necessary systemic overhead cost, the constant-capital approach emphasises that capital’s room for manoeuvre with respect to [persistent problems of valorisation and profitability] is quite limited, giving Marx’s proposition that ‘the true barrier to capitalist production is capital itself’ a somewhat new twist.

And indeed, his analysis of the US capitalist economy (from 1950 to 2013) does reveal a long-term fall in the average rate of profit that is significantly correlated with a secular rise in the organic composition of capital, entirely in accordance with Marx’s view. This hugely important result has been replicated by many other Marxist studies in the last 20 years, several of which appear alongside Smith’s in The World in Crisis, a volume edited by Guglielmo Carchedi and myself. Many are also referenced in my own recent book The Long Depression.1 (It is noteworthy that Smith’s initial empirical study of Marx’s law of the tendency of the rate of profit to fall, employing data on the postwar Canadian economy, was first published in 1991, with an updated version appearing in 1996. The results of those studies, along with some others, are also to be found in the present volume.)

Theory and evidence should lead to practice – which means not ‘waiting for Godot’. At the end of the book, Smith refuses to evade the practical upshot of his theoretical and empirical investigations:

The essential programmatic conclusion emerging from Marx’s analysis is that capitalism is constitutionally incapable of a ‘progressive’, ‘crisis-free’ evolution that would render the socialist project ‘unnecessary’, and furthermore, that a socialist transformation cannot be brought about through a process of gradual, incremental reform. Capitalism must be destroyed root and branch before there can be any hope of social reconstruction on fundamentally different foundations – and such a reconstruction is vitally necessary to ensuring further human progress.

In this bicentennial year of his birth, I can’t help thinking Marx would be pleased. The enemies of his transformative, socialist vision will no doubt be disgruntled.

Michael Roberts


January 2018

65 thoughts on “Invisible Leviathan – Marx’s law of value in the twilight of capitalism

  1. It sounds a good analysis. Capitalism is passing by another long crisis, but is there an empirical evidence that demonstrates that capitalism is at its “twilight”?

  2. It’s a pity that the price of invisible Leviathan ($US186) precludes it being accessible to a larger readership.

  3. Although I have said publicly that I will not comment here, I feel the need to. The above book appears to be solid which I am sure is why you agreed to write the foreword. However, as valuable as it is to demonstrate the laws in action by verifying them against the rise in the organic composition of capital and subsequent fall in the rate of profit, we are still left with the transformation problem. The focus of the attack on the law of value lies here, with the problem of translating market value into market prices of production. Many attempts to resolve this problem have been made, most in my opinion, have been wrong. Again it is a matter of public record that we disagree on this issue. I remain convinced that the approach I have set out is the correct one. For a full explanation of this methodology visit

    In the period leading up to the revolution, solving the transformation problem has ideological significance, after the revolution and the conversion of a pricing system that rewards profits into one that rewards labour, it has practical significance.

    1. Has your theory been submitted to any index, peer reviewed journals? What are some critiques or concerns about it? Thanks.

  4. I just recently discovered a nice little dissertation about Gorbachev’s speeches. A shame it only exists in Portuguese (since it was made by a Brazilian), but I’ll put the link for the pdf here for the ones who read the idiom:

    The most striking thing by the meticulous analysis of Gorbachev’s speeches is that what struck a nerve in the ideological front of the Cold War in the Soviet system wasn’t the traditional, neoliberal/liberal discourse of capitalism (the “American system”/way of life), but the Scandinavian welfare state/post-war social-democratic system. Even that came only after a decade of stagnation of the Soviet system, so it’s not like the Soviets were that lured by the Scandinavian system either, but approached it in a last act of desperation.

    In other words, the Soviets were never lured by the ultraliberal ideal of life, but, in face of the secular stagnation of their own system, looked to the Scandinavians.

    In fact, the Soviets were always quite lucid about the contradictions of capitalism. See, for example, the tales of the children’s book Dubno. The Totalitarian thesis in the West that Stalinist propaganda was extremely efficient, and that so the Soviet people knew nothing or almost nothing of life in the capitalist world is a myth. It is also very unlikely the North Korean people is not aware of life in South Korea — at least not any less than, e.g. a farmer in the American Midwest has about life in Paris (the French one).

    It is tempting to read Gorbachev’s speeches in the 21st Century as if he was attempting to implement the Chinese market socialism system in the USSR, but that would be an anachronism. First of all, the Soviets were extremely Eurocentric, and considered anything Asiatic as exotic and even backwards. Second, there was a schism with the Chinese during the Krushchev era (between Soviet pacifism and Chinese more “Trotskyist” approach), so their diplomatic ties were already effectively broken since the late 60s. Third, China was still a very poor and chaotic nation even after 12 years of “reform and opening up” coordinated by Deng Xiaoping. In fact, China almost fell in 1989 (Tiananmen Square). China’s “reform and opening up” market socialism would only show definitive results after 2001, when it entered the WTO, and mostly after 2011/2, when it became clear it could become a superpower.

  5. Living within the belly of the beast, I fully agree with Smith’s understanding of socially necessary unproductive labor as a form of constant capital. Modern capitalism IS imperialism. Armed violence– composed of living and dead labor–is the sine quo non of imperialism’s global industrial infrastructure.

  6. So is there an easy to read or listen tutorial on Marx’s Labor Theory of Value that includes it’s development and possible forks along with responses to criticisms. This would be directed to newbies with little to no macro-economic training. Besides the person you mentiom if found this lecture series which talks about overdetermination here:

    Also in 2018 at the British Communist University site, Moshe Machover talked about his develpments to this theory.

    So i am looking for an easy to understand article or book about all this. Do you have any suggestions?

  7. What I find particularly frustrating about value theory is all the different interpretations of it. Particularly where abstract labor is concerned. The New Marx Reading people, that Open Marxism people, the more “traditional Marxist” people…exactly how one is to know “what Marx really meant” seems almost impossible at this point.

    1. If there is so many interpretations as opposed to outright misinterpretations then somethings in this theory are vague and not fully worked out or philosophical which is a real problem to practical economics. Especially after 150 years. This is a bit disturbing.

      1. ‘If there is so many interpretations.’ But this is true of all areas of science. Were that not the case we would be dealing with revealed religious dogma. If everything were clear, then there would be no need of scientific enquiry, merely a few pragmatic measures.

      2. No. If you read Capital (book I) you can easily realize it is one of the most clear and unambiguous parts of the opus. Marx explained it detail by detail, in a language anyone can understand (he purposely simplified the language in order for it to be accessible to the working classes of his time).

        Those misinterpretations are mainly ideological (i.e. they are on purpose) or by professors in universities who want to prop up their own careers and sell books.

      3. @Jlowrie, sure take for instance Quantum Theory but what does that imply? Not all will survive empirically and/or logically, the worse case being that none survive at all. I asked previously for a review of the evolution of Marx ideas, warts and all and where these stand today thinking maybe less and less of these interpretations have survived and a convergence is happening.

      4. @vk you make the claim that these other interpretations are either ideological or to prop up careers. When I hear remarks like yours then a red-flag goes up but I do not dismiss them right away. They maybe correct. So it appears I have three people that do this. One is mentioned in this post from Mr. Roberts, I provided a video to another by someone involved in the overdetermination account, a third I heard from Moshe Machover. So exactly how are these people distorting Marx, all seem ok to me?

    2. If you want to understand the law of value, read Capital, book I, where Marx explains and demonstrates it scientifically. Accept no substitutes.

  8. “In this bicentennial year of his birth, I can’t help thinking Marx would be pleased.”

    Really? Pleased that capitalism has survived 136 years after his death? Pleased that the first workers revolution to seize state power rotted away, after the state power itself was used to dismantle revolutionary struggles in Asia, Africa, Europe?

    Somehow I don’t think Marx would give a rat’s ass about the viability of his labor theory of value in the face of the real, practical defeat of the workers’ struggles. Marx was first and foremost a revolutionist, not an “economist.”

    1. “Pleased that the first workers revolution to seize state power…”

      No “worker’s revolution” has yet seized state power.

      The Bolsheviks seized control of peasant revolution and were forced to carry out the first national liberation movement, because its leadership (under Lenin) realized that the country could only be developed industrially by de-linking from the almost fully matured imperial system (fully matured only after the 2nd world war with the incorporation of Germany and Japan).

      Isn’t the question really how the core capitalist countries (all the old colonial powers plus Germany and Japan) are able to continue to reproduce themselves and their imperial system despite continuing crises within their own ranks?

      Isn’t an historical/materialist application of Marx’s labor theory of value the best (and only) means to understand why all attempts by imperialism’s victims have failed to sustain de-linkage (and why the Chinese “imperialist” attempt to have it both ways has led to direct confrontation with the real imperialists)?

      But isn’t the question for marxists within the imperial core why so many of us continue to blame the victims (often of genocidal imperial intervention: Soviet Union, Korea, Vietnam….etc.) and not our own inability to see things in their increasingly life-threatening historical context.

      1. Disagree. The power of the soviets was in the industrial centers and cities, of the proletariat.

        And while Lenin and the Bolsheviks withdrew from WW1, they did not “attempt” to “delink” from capitalism. At all points in their administration of power, the Bolsheviks attempted to expand trade and exchange with capitalist countries. That embargoes and barriers were placed in their, the Bolsheviks’ path by the capitalist countries does not mean the Bolsheviks themselves sought such isolation. They clearly did not. Just take a look at Heywood’s “Modernizing Lenin’s Russia.”

        And to call the Russian Revolution, or the Bolshevik program before and after the seizure of power a struggle for “national liberation” is to miss the point completely. The Russian Revolution was anything but a “national liberation” struggle, precipitated as it was by the international configuration of capital, emerging as an international struggle against capitalism, requiring, as it did, international proliferation to address the specific problems of the Czarist legacy.

        As to your three questions, I certainly don’t think applying Marx’s principle that led him to his labor theory of value– “merciless criticism”– to actual social revolutions, the former Soviet Union, China, Korea, etc.etc.– amounts to “blaming” anybody. Rather it deepens our understanding of what a revolution will encounter and must overcome

      2. “The Bolsheviks seized control of peasant revolution […]”

        There was no “peasant revolution” in Russia.

        The situation was that, with WWI, peasants were being sent to the front, thus creating a pre-Gracchian Rome situation: even if they didn’t die in the front, they would die of starvation back home because they didn’t have the time to cultivate the land.

        The Tsar fell mainly because he wanted to continue the war. The Provisory Junta that formed the Provisory Government (February Revolution) was all about ending the war. Instead, they betrayed the peasant class, renewed the tsarist pact with the other European superpowers and decided to continue WWI.

        The Bolsheviks simply convinced the peasants that, if they wanted “bread, land and peace”, they would have to go with socialism. Before the February Revolution, they were essentially a urban entity – that’s true. But between July-October 1917, they quickly grew in size, spreading to the peasant areas of Russia. When the October Revolution happened, the Bolsheviks already were not just a pan-Russian force, but also the single major political force. The fact that it all happened fast doesn’t mean it was less legitimate or didn’t happen.

        So, to sum it up: the peasants only wanted the end of WWI. That the Tsar fell doesn’t make it a revolutionary process necessarily: monarchs in Ancient Regime Europe fell periodically, often to murder and palacian coups. What made the February Revolution a revolution was the October Revolution. The revolutionary class in Russia was the urban proletariat of Moscow and St. Petersburg, where the Bolshevik soviets were.

      3. Yes, the bolsheviks were aligned in the cities with the industrial workers. But Lenin, even before the war, developed his theory of imperialism which viewed Russian industrial capitalism as peripheral and comprador. Without the peasant soldier revolt and chaos in the countryside (and peasant women and children fleeing to the cities), there would have been no proletarian-led revolution whose slogan was necessarily “bread, land, and peace”.

        In the event (world war, bourgeois/liberal and social democrat fomented civil war, the desperate failure NEP), the bureaucratizing new soviet state was forced to de-link from the imperial system whose sole aim was to crush any attempt it made to industrialize independently of it.

        The primary goal of any state, especially an isolated, revolutionary one, is self-preservation. All in all, I think we should view the Soviet Union’s role in the global emancipatory movement positively. “Leftists” that blame the collapse of the socialist movement on “stalinists”, maoists”, chavistas, etc. are blaming the victims on the peripheries of the imperial centers in which they live. This is like biting off our nose to spite our privileged heads, upon with the imperial chickens have come home to roost.

      4. I wonder if we might avoid discussion of the Russian Revolution here, and confine our arguments to an analysis of capitalism and an exposition of Marx’s ”Capital”?

      5. “I wonder if we might avoid discussion of the Russian Revolution here, and confine our arguments to an analysis of capitalism and an exposition of Marx’s ”Capital”?”


        Hilarious. God forbid our discussion of Marx’s theoretical critique of capitalism embodied Capital should ever be muddied by the practical critique of capital as expressed in the Russian Revolution.

        Marx, I’m sure, would be pleased….once he stopped spinning in his grave.

    2. ”Hilarious. God forbid our discussion of Marx’s theoretical critique of capitalism embodied Capital should ever be muddied by the practical critique of capital as expressed in the Russian Revolution.”

      But there will then be no end to it: add the Albanian, Yugoslav, Chinese , Vietnamese, Cuban etc. Revolutions!

      “Pleased that the first workers revolution to seize state power…”

      No “worker’s revolution” has yet seized state power.”

      ”The Bolsheviks seized control of peasant revolution.”

      ”Disagree. The power of the soviets was in the industrial centers and cities, of the proletariat.”

      Are such theses and counter- theses at all enlightening? Clearly there is no space here to examine these questions with the requisite degree of argument to make them meaningful . What social relationships for example are expressed in the concept ‘peasant’?

      It would surely be much more useful to examine ucanbpolitical’s thesis on the ‘transformation problem.’ I personally should certainly appreciate comments on this from those who feel they could contribute to the debate. That few do suggests that this is an area that demands more theoretical analysis. It is all too easy to make banal comments on the Russian Revolution. I have done it myself. They belong elsewhere!

      1. Sometimes I wonder what Marx was up to in trying the resolve the transformation problem, since, as you point out, the “problem” should be viewed as an “ideological” one (in the sense that Marx considered capitalism-even if viewed within its ideal free market–to be inherently contradictory and unstable). The “practical” problem of transition would then be one of a socially necessary ecological and societal reconstruction of the disastrous ecological and human effects of capitalism’s violent pursuit of an illusion.

        Regarding Jlowry’s impatience with with those who “make banal comments on the Russian revolution”, notwithstanding my own (and Jlowry’s) banalities (to say nothing of anticapital’s), my intention was to point out that there are no purely economic questions for marxists, that the military/police/surveillance costs of the present imperial order (or disorder) has to be figured into the economic equation that necessarily includes expropriation of use values (mostly from the super-exploited labor of the peripheries) and transformed into monetarily expressed surplus values at the centers.

      2. I think the “transformation problem” has three roots:
        1. Are there the “pure scientists” who claim that what I can not calculate does not exist.
        They assume that between the price surface and the value depth of the commodities a mechanical links must exist, like gears and levers, so that a change in one level causes a precisely calculable change in the other level.
        Although Marx started from the price level to uncover the value level, he never started from certain prices in order to arrive at certain value sizes. The ratios of price and value are not simply determined mechanically.
        This can be reproached Marx, then quantum physics must also be reproached Einstein.
        2. Are there the capitalist users:
        They are looking for a capitalist useful application of Marx’s theory and find none. Marx’s capital criticism is not economically applicable, for example, for “correct” pricing. What has no economic benefits for these users, in their eyes has no benefit at all.
        3. Are there the socialist users a la Paul Cockshott etc..
        These people are looking for a socialist useful application of Marx’s theory and have to assume a mechanical connection between values and prices, so that they can rely on the theory of Karl Marx in their arbitrary price determination for products of centrally controlled production, and thus their bureaucratic arbitrary decisions can wrap a scientific coat.
        This then creates a discussion on two levels:
        First, a furtive “discussion” between user 2) and users 3) who want to copy each other off (“learn from each other”).
        Second, an open “discussion” between the “pure scientists” and the socialist users of Karl Marx. In this discussion between 1) and 3) necessarily the socialist user users always draw the short straw, which they do not attack because they are on the “right side of history” and because Marx can not be wrong. : D

        As far as my mustard to the “transformation problem”

        Wal Buchenberg, Hannover

  9. The theory of value affirms that the goods are changed according to the social work they contain.

    If The affirmation is false why should we believe that Marx’s Theory is true?

      1. Just to be more clear: the totality of commodities at a single point of the arrow of time of a capitalist society always trade (circulates) itself for exactly its value. In order to create more value, circulation must resort to production (exploitation of labor).

        But, less than the totality, goods are traded by their prices of production, not their (single) values. Since Marx’s value theory states (living) labor time is the substance of value, his theory stands.

      2. But to say that the total monetary value of the goods produced is to provide the total monetary value of the social work used is always true as I can always do the division of both amounts.

        A good law is one that is fulfilled but has no reason to be fulfilled. Laws that are met by definition are not laws.

      3. “But to say that the total monetary value of the goods produced is to provide the total monetary value of the social work used is always true as I can always do the division of both amounts.”

        But that’s what the vulgar economists say, not Marx. For them, suply=demand.

        Indeed, Marx stated exactly what you said in your comment (if memory doesn’t fail me, in book II): that, from the capitalist point of view, demand always comes from the ones who can pay, so demand is always met if the goods are sold — by definition. It is indeed circular logic or, best case scenario, a tautology.

        The supply=demand also doesn’t explain how society changes, or why a given good is US$ 1.00 instead of US$ 1,000,000,000.00 in a given point of time.

      4. You Should tell me what Marx said with the Law of Valor:

        “Since Marx’s value theory states (living) labor time is the substance of value”

        This phrase you say doesn’t mean anything if you don’t say how I can measure the value . Marx’s Theory does not say anything if it does not say that it is value and how it can be measured.

      5. “Marx’s Theory does not say anything if it does not say that it is value and how it can be measured.”

        Time. Abstract labor is measured by time, and as labor-time.

        “Time is everything; man is nothing. He is at most time’s carcass”– Poverty of Philosophy

        “All economy is the economy of time.”

      6. rojaspedro1959 Measurement is not independent of price and sale, which ‘validate’ the labor time devoted to this branch of production as a fragment of the total social labor for the period in question, i.e. as ‘socially necessary’. Even sale is not enough. If we can explain a sudden collapse in price as due to excess supply – eg due to a super growing season – then much of the labor time expended will not have been ‘socially necessary’. Similarly if a spike in price can truly be explained as due to an unanticipated spike in demand – due to a hurricane in the South or whatever, then the firms in that line of production will ‘sell above value’ – precisely because we can explain the spike this way. These are the least interesting ways ‘price’ might deviate from ‘value’ You might take a look at the straightforward first 10 pages of the old Foley pamphlet that are visible here to see if you can break from the idea that there is supposed any direct explanation of exchange ratios. (It is maybe a little too straightforward.)

      7. And for the umpteenth time:

        Marx’s law of value in the abstract, that is abstracted from the very social conditions which are its origins, says that the value of a commodity is determined by the labor-time consumed or embedded in the commodity’s production.

        In the concrete, because value does not arise separate and apart from the configuration of the means of production as PRIVATE PROPERTY, requiring EXCHANGE with human labor-power, the law MEANS that the value of commodities is determined by the labor time SOCIALLY necessary for their REPRODUCTION.

        Time is the measure. Time of reproduction of the labor power determines the wage; allows for the appropriation of the surplus labor-time as surplus value.

      8. Thanks, Anti-capital.

        It is also what I think of the Law of Value.

        But the goods are not sold according to the Law of Value —-> —->The Law of Value is false.

      9. As a matter of fact, commodities are exchanged according to the concrete circumstances of their production, of their existence not simply as commodities, but as extensions, extrusions, of capital. The essential relation, value, can only be expressed in the apparent form as price.

        Remember we are not dealing with a system where mere production of the commodity is automatically determined to be socially necessary. Hence value is mediated, by market forces, and by size of the capitals deployed.

        Distortion of the abstract law is the expression of the law in the concrete, so price “bends” to the law, and the concrete fact that capitals of equal size claim equal profit.

        This is simply another representation of “socially necessary.” The secret to the transformation of value into prices of production is actually uncovered in Volume 1 of Capital, not Volume 3.

      10. ”But the goods are not sold according to the Law of Value —-> —->The Law of Value is false.” Clearly if Pedro would read Marx for himself, he would not attribute to him the thesis that ”goods are sold according to (sic) the law of value.” Leaving aside the opaque phrase ‘according to’, which personally I cannot comprehend, Marx affirms that commodities sell (or not!) at a price. It would be helpful if Pedro outlined his own understanding of what determines the selling of goods.

      11. The exploitation of labor does not need Marx’s Law of Value to be true.

        Capital requires a profit, or no capital is produced … (the capital has to be paid).

        The surplus value, understood with exploitation, is the difference between the benefit that the capital receives and the benefit that the capital should receive.

        There is a surplus value that is not exploitation but neither is it a benefit of capital. It is a no man’s land. It simply exists and is the force that moves capitalism.

    1. rojaspedro1959, for Marx, the topic of principal interest in characterizing any society is how it reproduces itself, in particular how it does this through labor, work, production, whatever. The differences between historically given social forms are in the ways the particular kinds of work are hooked together so as to amount to social reproduction, in particular how it is determined what work is to be done, how much, by whom and so on.

      This is for him taken as read before the description of the capitalistic mode of production begins; similarly he would take it as read if he were describing the social form of e.g. some pre-state people who learn what different things need to be made and pursued and done according to season, age, gender etc. as a part of their upbringing.

      It is clear that with production in the capitalistic form there is a sort of reciprocal causality between the going system of prices of the products of labor and the going system of application of society’s labor powers into different lines of production. Where such a reciprocal causality obtains, for Marx, labor is the ‘predominant moment’ – it always it is always the real, wirklich, source of everything (not to put too fine a point on it.) The system of prices of the several kinds of products of labor thus expresses the distribution of labor into those lines of production. Or: the way their work is split up or partitioned ‘appears’ to them in that form, and that ‘appearance’ is part of how their work is again split up – all somewhat catastrophically of course according to the decisions of firms, new methods, natural disaster etc. etc.

      The rest really resolves into these comparatively obvious points – we need a way of thinking of the movement of a ‘typical’ capital and its workers and the work done under its head that reflects its character as a fragment of the capital as a whole, of their work as part of the total social labor, etc. We need a way of zooming in on details that will make e.g. banking capital and rent intelligible, and fit with this form of concretization of social labor, and so on.

    2. Rojas, Marx’s law of value is based on a critique of the one you assert as Marx’s: political economy’s labor labor theory of value that asserts both that products exchange on the market “according to the social work they contain,” and that profit is produced in this exchange on the market–a contradiction that led to Smith’s and Ricardo’s failure to account for profit, which they tried to produce out of thin (or rather, hot) air. Later liberal economists got rid of political economy’s labor theory of value, but expanded on the hot air, very profitably.

      Marx’s labor theory of value is a critique of all that. It’s a tool, not for correcting capitalism’s imperfections, but for understanding the nature of its crises as based on capital’s contradictory social relation, both of which grow worse (inequality and crises) as the system appropriates more and more of the world’s wealth. It’s not a useful tool for those who really want to understand the system, definitely not for liberals.

      1. Correction: the last sentence should read, “It’s not a useful tool for those who really DON’T want to understand the system…”

      2. Marx’s labor theory of value is the self-evident one that human labor, in symbiotic relation with the natural environment, is the sole creator of wealth, defined as the material and intellectual products that satisfy human need–even the wealth enjoyed by the elites of hierarchal social orders. Prior to capitalism most production was for use, including the surplus products extorted by elite– which, Marx shows, is the surplus value (profit) embodied in the commodities unpaid labor produce for the capitalist elite.

        The concept of surplus value is the key for opening up the capitalist mode of production for analysis of the awful truth.

        How merchant capitalists came to introduce their contradictory and inherently violent system of production for profit rather than need is the taken up by Marx, but is presented in a more accessible and comprehensive way in the works of Eduardo Galeano, beginning with “Open Veins of Latin America”.

  10. off topic @Brexit:
    It is common among leftists to talk about a “German hegemony over Europe” – a left narrative. In fact, so far in the European Commission and at European government meetings, all decisions have been taken by consensus. Nevertheless, the EU authorities offer themselves as a projection screen for criticism from the member states, because within the EU there is the necessity and the compulsion to find uniform solutions. This has become more difficult since, in the aftermath of the 2008 crisis, and even more so since the 2015 refugee crisis, it is no longer just about distributing subsidies, but increasingly about allocating a shortage.
    Since 2008, criticism of the EU, in particular, has been used by former recipients of subsidies, such as Greece, Ungarn, Spain and Portugal or Italy, to distract attention from the failure of their own power elites. In England too, the economic decline was blamed on the Brussels authorities with increasing indebtedness of households and small businesses. Even in England, the criticism of the EU intended to distracted from the failure of the British power elites.
    Now these British elites are facing a self-created dilemma: they claimed that they could provide more prosperity by leaving the EU. This exposes itself as a big lie. If the EU disappears as a scapegoat, british politicians must find new scapegoats among themselves. This makes any compromise solution difficult. The once-sworn community of the British political class is falling apart.

    Wal Buchenberg, Hannover

    1. Well, the most simple explanation here is that Germany (and France) run a giant and well-oiled bribery machine behind the curtains, in order to buy votes and achieve “consensus” in the EU Parliament.

      You would be surprised by how much cheap those MEP of the weaker member States sell themselves.

      1. That’s the Brazilian point of view.
        My point is that it is easy to reach consensus in times of abundance, but difficult in times of crisis, decline and shortage.

      2. But it’s precisely in times of abundance that the bribery machines work the best in parliamentary politics. Nobody notices. But it also works in times of distress too.

        Remember that random Polish MEP who vetoed Greek financial rescue in 2014, but then suddenly changed his mind in a matter of a couple of days?

        Or when Belgium (Wallonia) magically changed its position on the approval of TTIP after just a week?

        Do you think Germany doesn’t put its bribery machine to work on these crucial circumstances so as to achieve “consensus” in the very diverse European Parliament?

        I’ll go beyond that: I state that, the day corruption ends, it will be the end of Europe. The very existence of Europe depends on corruption and bribery — but then, we can say they learned from the best (the Ancient Romans).

      3. All bourgeois rule uses bribery. That’s a truism. Your truism does not explain why the EU is falling apart right now and why the contradictions within the political elites in capitalist countries are escalating.

  11. Since this is about the future of socialism then here is a paper from a Marxist political philosopher which concludes with three big mistakes that Marx made and why Socialism’s emergence just does not go as Marx planned.

    1. So what, if socialism did not emerge as Marx anticipated ( hardly planned)? Marx was much less dogmatic than Wolff suggests.

      ”It followed immediately from the logic of Marx’s analysis that revolutionary change would be brought about, if at all, in the most advanced capitalist countries through the actions of the most advanced sector of the working class — the skilled industrial workers in those industries that had achieved the most efficient, sophisticated forms of capitalist production. Marx was not sentimental about the unskilled toiling masses, to whom he referred rather contemptuously as lumpenproletariat. ”

      First, Marx did not refer to unskilled workers as a ”lumpenproletariat.” The lumpenproletariat consists of minor criminals, prostitutes etc. Frankly, this is a major error. Marx certainly includes unskilled workers in the proletariat.

      Second, Marx in a letter of November 1877 warns against metamorphosing. ”my historical sketch of the genesis of capitalism into a a historic-philosophical theory of general development, imposed by fate on all peoples, whatever the historical circumstances in which they are placed” and turning his theories into ”an all-purpose formula of a general historico- philosophical theory whose supreme virtue consists in being supra-historical.”

      Certainly there are ‘Marxists’ who see only the urban proletariat as a revolutionary force, but there are altogether more distinguished ones who did not e.g. Lenin ”Our European philistines never even dream that the subsequent revolutions in Oriental countries, which possess much vaster populations in a much vaster diversity of social conditions will undoubtedly display even greater distinctions than the Russian revolution” (‘Our Revolution’ Pravda 16/1/23). Bogdanov argued that revolutions would not break out in the main centres of capitalism but on the peripheries where the weak links of capitalism were to be found and social contradictions most acute.

      Third, in discussing the failure of socialism to emerge might one not lay the principal blame on the genocidal violence waged against all socialist movements by the capitalist class? They certainly took and take Marx’s pronouncements seriously! How many tens of millions of direct victims, not counting the collateral victims of famine and disease.

      1. The author’s main focus was what is happening inside capitalist corporations. Examining accounting practices and moves on from there. Looks interesting but i do not have enough experience about Marxism to assess what is written. Hence my posts here.

  12. Professor Roberts, I’m delighted with your work. So simple, so profound… I’m a brazilian fighting to catch up some marxian concepts.
    That said, have a doubt: what do you mean when talk about socially necessary unproductive labour? Could you give me some exemples?

    Lucas Arieh, Natal, Brasil.

    1. Socially necessary unproductive labour would police, health education etc. Workers in these sectors do not create new value for capitalism but they are necessary either help capital rule or provide a minimum of skilled labour

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