Okay – I’m classifying this stuff as way stronger than ‘hunch’, but still quite a bit weaker than ‘I can cash this out in a 100,000 word monograph’. From the top:
1) The Labour Theory of Value, as (I think) it’s generally understood, is wrong. (Which requires a bit of elaboration, so)
– It’s not totally clear to me what ‘the Labour Theory of Value as generally understood actually is. I think there are probably a few different sets of ideas that can be referred to as the LTV. Let’s say the basic one is something along the lines of: you’ve got your human beings. When human beings work, when they labour, as well manipulating and transforming physical objects (or the minds of impressionable young folk; or computer code; or whatever) they also confer onto those objects (or whatever) a social property – value. According to the LTV, labour is the source of all value. Now I’m not totally clear on how formulations like this are generally understood – but this picture seems to me to be prima facie implausible. How is value understood to be transmitted from labourer to product, or understood to be created in the manipulation or creation of the product? The LTV, in this form, seems to be to be powerfully counter intuitive.
– Now I don’t think adherents of the LTV believe that the value created by labour is simple market price. Rather, there’s understood to be a complex relationship between price and value, such that value in some sense regulates price, but that price can and often does massively deviate from value. This removes some of the prima facie implausibility; but it seems to me just to push the implausibility back a step. I’m not sure exactly how value is generally taken to regulate price [because a) I’m pretty ignorant of the literature; and b) what little I’ve read strikes me as obscure] – but assuming there’s some causal relation such that value regulates price, and assuming that value is ultimately understood to be created entirely by labour, you’re still left with the question – what exactly is being created or transmitted in the labouring process (and what is the mechanism of that creation or transmission?) Labour in > prices out. How?
– The simplest way of understanding this would be that human activity creates some sort of mana (???) or immaterial substance (??), ‘value’, which is embedded in the products of labour (and which can then be transmitted from those products to other products through the mediation of further labour). But this seems, again, implausible. It seems metaphysically implausible (why are we positing such a substance, even if we call it a social substance rather than a metaphysical one?), and it also seems empirically implausible. It seems like a familiar empirical fact that lots of commodities that don’t involve much labour in their production sell for high prices – or are regarded as very valuable. Whereas lots of commodities that involve heaps of labour sell very cheaply and are regarded as relatively valueless. Obviously this isn’t true all the time; but there seem to be pervasive enough counter-examples to throw what seems to be the LTV into some doubt.
– [Plus how exactly would labour inputs determine price? People buying products don’t know how much labour has gone into producing them; the people selling them need not either. And even if everyone does know the relevant labour inputs, why would this influence exchange values? If the influence is taken to be indirect, what would the causal mechanism of this indirect influence be? I can’t think of a plausible causal chain, here, that transmits labour inputs into prices, even as a general trend or in aggregate.]
– If I understand right, many adherents of the LTV don’t argue that the LTV is true at any micrological level (even as a long-term trend), but argue that it is true for the system as a whole. Which again, removes some prima facie implausbility, but again seems to me simply to push the implausibility back a step. Put aside as irrelevant the fact that it only makes limited sense to talk about prices in aggregate. (Because it does make sense to talk about, say, the rate of profit in aggregate, and that kind of thing is where the LTV is taken as having descriptive / explanatory power.) I still don’t see why say the ratio between constant and variable capital (or, in orthodox economics’ terms, between capital and labour) should influence the rate of profit (= the amount of value created relative to money spent). The question is still – what’s the causal mechanism here?
– [For what it’s worth, I’ve been in intermittent attendance at the Historical Materialism conference; on Sunday Geert Reuten presented an interesting paper (cowritten with Peter Thomas) about the shift in Marx’s discussion of the falling rate of profit between the Grundrisse and Capital. Basically (if I understood right) Reuten was talking about a shift (in Marx’s thought) from the falling rate of profit as a long term trend, with an eventual apocalyptic conclusion for capitalism, to a cyclical account that sees crises as providing capitalists, or capital, with the opportunity to recalibrate the capital-labour relation in a way that re-establishes a more substantial rate of profit. As far as I can tell, the implication of this latter argument (though Reuten didn’t I think discuss this) is that the falling rate of profit shouldn’t be understood as a long-term trend, and that therefore the changing organic composition of capital is not the major factor in the establishment of the profit rate. But that’s probably by-the-by.]
– Anyway, upshot is I just don’t see how the labour theory of value can provide an adequate account of the determination of prices, micrologically, in aggregate, or in the short or long term.
More to follow in subsequent posts.