3. Labour Theory of Value A favourite line of attack against the revolutionary Marxist movement is that which portrays Marx as a great champion of the oppressed who just cooked up a weird and useless brand of economics to justify his political stand. A central target of this attack is the Labour Theory of Value.
This theory lies at the core of Marx's economic thinking. And it is perfectly true that bourgeois economists manage to bumble along quite well without the labour theory of value, But this is because of the nature of their business: tinkering with the surface, immediate problems of the capitalist economy, as they appear to the board of directors of a firm or to the Chancellor of the Exchequer. But this was not the concern of Marx. He developed his economic theory in order to lay bare the economie laws of motion of modern society" And it is for this task that the law of value is an indispensable tool.
COMMODITIES As Marx pointed out, capitalism appears as great quantities of goods and services bought and sold on the market - the term he used for these goods and services was "commodities'. He began by examing the nature of these commodities and saw that they have two fundamental features: first they have a usetul quality - a use-value. Without that use-value no one would wish to buy them. And secondly, these commodities have an exchange The Red Mole 3 February 1973 Page 6 value - that is a value in relation to other commodities in the market. This exchange value is expressed in terms of price. Marx then asks the question: what is it that makes x quantity of socks the equivalent value of y quantity of beer? And he answers that it is the common substance: human labour. And the question of whether a given quantity of one commodity equals in value a given quantity of another depends upon the amount of labour-time expended upon Does that mean that a worker who takes twice as long as another worker to produce a pair of socks produces socks twice as valuable? On the contrary, Marx pointed out that what determines the value of commodities is the quantity of socially necessary labour-time required to produce them. In other words, value was determined by the average amount of labour-time required to produce them in a given society. The conclusion which Marx draws from this is that prices are basically determined not in exchange, but in production. The value of a commodity appears to be decided by the variations of supply and demand in the market. In fact the value of commodities is determined by the social relationship between men engaged in productive activity.
In short, prices and profits are determined by quantities of socially necessary labour time. This does not mean that prices are exactly proportional to values. Many interpreters of Marx forget that he discussed how prices deviate from values in the third volume of Capital. Despite this it is very frequently asserted that Marx had a crude price=values theory. In fact the deviation of price from value is not transitory but permanent. It is not true that prices tend to hover around values, and that on average prices remain proportional to values. The labour theory of value is not directly a theory of relative prices, although it leads to an understanding of the real mechanisms of price determination. MECHANISM The labour theory of value therefore shows the mechanism by which the social product is distributed in society. It is not a moral law about what should happen in a socialist society. Such an interpretation was given by Stalin, but presumably he ran into theoretical difficulties in justifying the high income received by himself and the bureaucracy! The theory concerns exchange values in a commodity producing society, and particularly in a capitalist society = 1 0510 words one dominated by generalised commodity production. In a socialist society the social product is distributed by other mechanisms than socially necessary labour-time - namely by planning.
The labour theory of value turns the world of bourgeois common sense upside down. It uncovers the real, underlying mechanisms of capitalist development. Without the labour theory of value, economics is locked in superficial appearances. And these are no foundation for a revolutionary strategy to overthrow capitalism. led yet another demonstration to the Town Hall.
Given this lack of perspective at a critical turning point in the struggle, there was of course no way out of the demoralising descent into campaigning for the return of a Labour council which implemented the hated rent scheme.
REAL LESSON The introduction to the pamphlet, by Hugh Kerr, is noteworthy, if only for its ingenious ability to completely misunderstand the lessons made clear in the pamphlet: "The most important lesson which comes over from the pamphlet is the amazing strength and initiative of working people when they go into action."
The real lesson of the pamphlet, however, is the opposite: that even the most militant struggle is open to defeat if a wrong political strategy gives the State the opening it needs. Jack Lewis.
RANK AND FILE Technical Teachers meetingsunday, 4 reb., 1.00pm at the Hoebuck pub in Tottenham Court Road-discussion on Constitution and the current wage claim and the Freeze. INDOCHINA: Class Coalition or Class War? IMG public meeting, Monday, 12 Feb., 8.00pm at the Conway Hall, Red Lion Square (Holborn tube). Speaker: Pat Jordan.
INTERNATIONAL MARXIST GROUP RED FORUM A series of introductory discussions for those in the London area on the politics of the Fourth International. Every Tuesday at 8.00 p.m.
General Picton pub, Caledonian Road (five minutes walk from Kings Cross tube).
"Independence means for us much more than acquiring a flag to wave and an anthem to