Marx's Law of Value

Marx's Law of Value
scanned from
The Weekly People
December 11, 1971

Marx's Law of Value

A fact constantly driven home by Daniel De Leon was that it is the workers who create all social values. Known in Marxian science as the law of value, the formulation of this fact was done by Karl Marx. The great founder of scientific Socialism did not formulate the law out of nothing, nor did he invent the fact.

EARLY CAPITALIST ECONOMISTS ACCEPTED THE LAW

Long before Karl Marx pointed to the fact and developed its formulation, Sir William Petty, Benjamin Franklin, Adam Smith and David Ricardo, among other pro-Marxian classical economists, agreed that commodities have value in relation to the amount of labor that went into their production.

Marx put the finishing touch to this value concept, usually called the labor theory of value by capitalist economists, by emphasizing that the value of a commodity is determined by the amount of socially necessary labor power that goes into its production. He also emphasized that the things produced must have use value, real or imagined. These distinctions, as De Leon once noted, rule out value in a ship constructed on the top of a mountain, obviously at a great waste of labor power and with no use value as a ship. The distinctions mean thot a commodity must be produced under the existing and average conditions of production and with the average degree of skill and intensity of labor, as Marx noted. If it is not so produced, it is an oddity rather than a commodity and can have value only by the accidental circumstance that a very few persons might consider it to have value for themselves.

The points made by Karl Marx, and hammered home by Daniel De Leon, are not esoteric pieces of information to be appreciated by a select few. They were part of a fundamental analysis of the economics of capitalism and, more generally, of society in general. They hold, too, in the Socialist society in which there will be no commodities, but in which, of course, goods (in the noncommercial sense that the things produced are good and necessary) will have values in terms of the labor power required to produce them -- without the intervention of money and the profit motive.

THIS IS WHY CAPITALISM REJECTS OF VALUE

The great lesson of the Marxian law of value is that if the workers create all social values the things created should belong to their creators.

Accordingly, the Socialist Labor Party, in accepting the Marxian law of value because it is true, works for a society in which the workers -- the useful producers, or everyone in a society without parasites -- will collectively own their collective products. The products will go to the producers. Any other arrangement, such as That of the capitalist present, in which the workers receive back but a part of their product and the capitalists keep the rest, amounts to robbery. This would be true, too, in a phony Socialist society in which politicians and bureaucrats, removed from production and therefore not needed for production, received incomes in return for being parasites, and for usurping the power that belongs to the useful producers of society.

The Socialist Labor Party does not compromise on this issue, for to do so would be to concede that the parasites -- capitalists or politicians and bureaucrats -- are entitled to the wealth they steal from the workers.

THE LAW OF VALUE IS A BASIC INDICTMENT OF CAPITALISM

The so-called radical parties that deny the validity of the Marxian law of value do concede at least part of their stealings to the stealers. For example, the Fabian Society of Britain, made up of such intellectuals as George Bernard Shaw, Sidney and Beatrice Webb, and many other such persons, rejected Marx's law of value and adopted the marginal utility value theory of William Stanley Jevons. This latter theory of value, almost simultaneously developed on the continent of Europe as a capitalist answer to Marx's law, and thus as a defense of capitalism, was an involved supply and demand theory that bypassed the concept of value's being created by the quantity of socially necessary labor embodied in a commodity. It thus ruled out the workers as the creators of social value, and "justified" capitalism's thefts. The subject of value is discussed by Marx in "Capital" and in "Value, Price and Profit," and by De Leon and Arnold Petersen in "Marxian Science and the Colleges." The latter work deals to a great extent with the law of value in relation to the common supply and demand theory of value, and to the more complicated marginal utility theory.

Here we must limit ourselves to recalling a WEEKLY PEOPLE article (Jan. 16, 1971) that showed, on the evidence of Joseph A. Schumpeter of Harvard and Dudley Dillard of the University of Maryland that the Marxian law of value is not wrong. Anne Fremantle, in her study of the Fabian "Socialists," noted that Bernard Shaw and the other leading Fabians were finally forced to abandon the marginal utility theory. They failed, however, to accept the Marxian law of value. And, because they failed to see The logic and factual content of "the law of value, the Fabians, like other false Socialists, constantly made concessions to capitalism that weakened even their mild demand for the building of a better society. One of the Fabians, Graham Wallas, wrote that by rejecting Marxism, they were able to permeate the capitalists of the Liberal party. (Miss Fremantle noted in her history of the Fabian Society that "their economic theory -- and everybody else's -- went down like tenpins before the triumphant genius of John Maynard Keynes. Keynes, however, stated in his general theory that he sympathized "with the pre-classical doctrine that everything is produced by labor"; and based his discussions of value on the "labor theory of value.")

WHY CAPITALISM'S DEFENDERS ATTACK THE LAW

In one of his editorials in "Marxian Science and the Colleges," De Leon said:

"That much of the space in the DAILY PEOPLE is taken up with the Marxian law of value and its corollaries is true -- and wise and proper 'tis 'tis so. Even if The reason did not prompt the policy, instinct would. The blood rushes to the spot that is struck, there to coagulate and protect the heal; in battle larger forces are massed to the defense of the objective of hostile attack. It is not always the best policy to attack an enemy's weakest spot. Good strategy often directs the attack upon The strongest. The strongest spot in the fortress of Socialism is the Marxian law of value. It is at once the keystone of Socialism and the hearth from which the refutation of all bourgeois [capitalist] schemes radiates. Against that spot the bourgeois artillery is directed most numerously, and correct Js the judgment or instinct of the bourgeois in their strategy. If the Marxian law of value could only be battered down, bourgeois society is vindicated .... The long and short of the story is that, directed by both instinct and reason, the forces of bourgeois attack center upon the Marxian law of value; reason and instinct, in turn, marshal the SLP to answer with the only strategy which the circumstances dictate-to mass its forces there, where the attack is strongest -- silence by refuting the open batteries, to unmask the concealed ones."

THE LAW EXPOSES THE ECONOMIC CAUSE OF THE CLASS STRUGGLE

The charge contained in the law of value, that all capitalist property is theft, or that is the workers who have been robbed, is the proclamation of a fact that, by , its very existence, calls for the workers' act of socializing the means of wealth production and of operating them democratically so that the theft is stopped and the product becomes the property of the producers. As De Leon said in another editorial reprinted in, "Marxian Science and the Colleges," "In a word, the Marxian law of value unveils, poses, pushes to the front and keeps there the class struggle as a social fact that imperatively demands solution -- not compromise or patching up."

The parties and factions, calling themselves Socialist, that failed to base themselves on the factual correctness of the law of value have disappeared or nullified themselves by being satisfied with reforms. The Socialist Labor Party cannot be so satisfied, for its knows that the collective capitalists steal from the collective workers so that they can keep on stealing into perpetuity, and that both the present and the future welfare of the useful producers of society can be met only by stopping the thievery and assuring the product to the producers.