Love As Arson
09/08/09, 06:41 PM
Why do communists still rely upon the discredited Labor Theory of Value? The LTV has no real meaning at all. It attempts to find an objective value of goods, and goods are only valued subjectively by individuals.
Eric Roll is right to criticise the mechanistic thesis of Bukharin, according to which the marginalist school reflected the special interests of a new stratum of rentiers which had made its appearance among the bourgeoisie .77 But Bukharin was right when he stressed that the marginalist school adopts the point of view of the rentier, or, more precisely, of the capitalist who has withdrawn from the sphere of enterprise, for this school does start from individual consumption rather than social production, which had been the starting point of the classical economists and of Marx. It is not accidental that the examples used by the founders of the neo-classical school are nearly all drawn from luxury production.
The special nature of the neoclassical school is further emphasised by the fact that it was for a long time unable to determine the marginal value of capital goods. In the end it managed to do this only by introducing, with Böhm-Bawerk, the notion of a “roundaboutness” of production which becomes more and more intensified as capital goods increasingly enter into the process. a “roundaboutness” which has to be “paid for”. It is, moreover, unable to explain how, from the clash of millions of different individual “needs” there emerge not only uniform prices, but prices which remain stable over long periods, even under perfect conditions of free competition. Rather than an explanation of constants, and of the basic evolution of economic life, the “marginal” technique provides at best an explanation of ephemeral, short-term variations. It is significant that in Walras’s fundamental work he starts from the example of sellers and buyers “inclined to go in for bidding”, that is, to stock-exchange speculators.
Today, most economists readily admit that the equilibrium system of the neo-classicists is totally divorced from reality. It does not take into account the particular institutional framework of capitalism, which makes quite absurd the notion that wages are determined by “the product of the last unit of his time that the worker wishes [!] to give up rather than devote it to leisure”. It does not take into account the dynamic character of competition and the continual disturbances of equilibrium. which it causes. It is essentially static and brings dynamics as at most an element disturbing equilibrium, whereas in reality equilibrium is only a transient moment in a spasmodic economic movement which is in ceaseless oscillation. It has no explanation to offer either for periodical crises or for structural crises. Carried to its logical conclusion, it even denies the phenomenon of imperialism, or, more precisely, denies that there is any connection between imperialism and the laws of development of capitalism.
The neo-classical theory is not only divorced from social reality as whole. It is also divorced from the practical reality of everyday life. The labour theory of value can be demonstrated empirically. even if only in the sense that, in the last analysis. all the elements of the cost of production of a commodity tend to. be reduced to labour, and to labour alone, if one goes far enough back in the analysis. Despite all the teachings of the neo-classical school, capitalist businessmen continue to calculate their costs of production on this basis. And whoa they seek to make comparative productivity calculations, they do this using the yardstick of “amount of labour expended”, and using this yardstick only.
http://www.marxists.org/archive/mandel/works/marxist-economic-theory/marginalists.htm
Eric Roll is right to criticise the mechanistic thesis of Bukharin, according to which the marginalist school reflected the special interests of a new stratum of rentiers which had made its appearance among the bourgeoisie .77 But Bukharin was right when he stressed that the marginalist school adopts the point of view of the rentier, or, more precisely, of the capitalist who has withdrawn from the sphere of enterprise, for this school does start from individual consumption rather than social production, which had been the starting point of the classical economists and of Marx. It is not accidental that the examples used by the founders of the neo-classical school are nearly all drawn from luxury production.
The special nature of the neoclassical school is further emphasised by the fact that it was for a long time unable to determine the marginal value of capital goods. In the end it managed to do this only by introducing, with Böhm-Bawerk, the notion of a “roundaboutness” of production which becomes more and more intensified as capital goods increasingly enter into the process. a “roundaboutness” which has to be “paid for”. It is, moreover, unable to explain how, from the clash of millions of different individual “needs” there emerge not only uniform prices, but prices which remain stable over long periods, even under perfect conditions of free competition. Rather than an explanation of constants, and of the basic evolution of economic life, the “marginal” technique provides at best an explanation of ephemeral, short-term variations. It is significant that in Walras’s fundamental work he starts from the example of sellers and buyers “inclined to go in for bidding”, that is, to stock-exchange speculators.
Today, most economists readily admit that the equilibrium system of the neo-classicists is totally divorced from reality. It does not take into account the particular institutional framework of capitalism, which makes quite absurd the notion that wages are determined by “the product of the last unit of his time that the worker wishes [!] to give up rather than devote it to leisure”. It does not take into account the dynamic character of competition and the continual disturbances of equilibrium. which it causes. It is essentially static and brings dynamics as at most an element disturbing equilibrium, whereas in reality equilibrium is only a transient moment in a spasmodic economic movement which is in ceaseless oscillation. It has no explanation to offer either for periodical crises or for structural crises. Carried to its logical conclusion, it even denies the phenomenon of imperialism, or, more precisely, denies that there is any connection between imperialism and the laws of development of capitalism.
The neo-classical theory is not only divorced from social reality as whole. It is also divorced from the practical reality of everyday life. The labour theory of value can be demonstrated empirically. even if only in the sense that, in the last analysis. all the elements of the cost of production of a commodity tend to. be reduced to labour, and to labour alone, if one goes far enough back in the analysis. Despite all the teachings of the neo-classical school, capitalist businessmen continue to calculate their costs of production on this basis. And whoa they seek to make comparative productivity calculations, they do this using the yardstick of “amount of labour expended”, and using this yardstick only.
http://www.marxists.org/archive/mandel/works/marxist-economic-theory/marginalists.htm