The Value controversy

by Ian Geoff Hodgson Eric Oli Steedman

One of the fruits of the revival of socialist economic theory over the past decade has been a wide-ranging debate about the validity of Marx’s labour theory of value. At the heart of the discussion stands the theoretical work of Piero Sraffa and the conclusions drawn from it by such economists as Ian Steedman. Initially confined to a relatively narrow circle of specialists, the controversy about value theory has since spread to wider circles of the left. But although general awareness that the stakes of the dispute are of concern to all socialists is now extensive, understanding of the issues involved has remained more restricted than need be. This volume presents, for the first time, a comprehensive yet accessible overview of the discussion. The essays discuss not only the value debate itself, but also its relevance to such issues as capitalist crisis, the theory of exploitation, and historical materialism. Comprehensible to the non-specialist, but without sacrificing rigour or oversimplifying the issues, the articles assembled here offer a definitive summary of the current state of one of the crucial aspects of Marxist thought.

Genres: Economics, Politics

Hardcover

First published January 1, 1987

Reviews

[Theodore Wright · Rating 5 out of 5]

Absolute must read for anyone interested in political economy.

[Left_coast_reads · Rating 4 out of 5]

Marx's theory of value has sparked debates in economics for many years. In 1960, Cambridge economist Piero Sraffa published his book Production of Commodities by Means of Commodities. This work, along with Ian Steedman's book Marx After Sraffa (1978) reignited debates that were already rising in relevance with the oil crisis. This book brings together essays by numerous authors debating the meaning of Marx's economic writings, whether they are compatible with Sraffa, and what this means for Marxism more broadly.

A quick rundown of Marx's econ: Time spent laboring is fundamental for the reproduction of all societies. In capitalism, labor time is controlled in numerous private processes which don't produce to meet social need directly. The necessary social division of labor is coordinated by the exchange of commodities and pursuit of profit.

Generalized market exchange abstracts away from any specifics of these commodities and the concrete labor that produces them. It is thus abstract labor in Marx's parlance which is the regulating principle of capitalist production. The average socially necessary abstract labor time determines the value of commodities.

The issue is that in most cases labor time does not allow us to directly calculate prices. This is the infamous "transformation problem." How do we get to prices from labor time.

Steedman argues that the concept of value in Marx is redundant, since we can calculate prices without it. The essays respond to this charge in various ways. G. A. Cohen says that the Marxist concept of value isn't logically necessary to explain exploitation or other Marxist ideas. Erik Olin Wright makes the case that value is still important even if it doesn't directly determine prices or profits, acting as a structural limit.

Anwar Shaikh has the clearest and most rigorous response to Steedman, explaining why Marx's theory still holds and exactly where Sraffa and Steedman get it wrong.

This book is challenging but I enjoyed it. I try to remain open-minded and not dogmatically adhere to any particular theory. Marx's work has enduring relevance, but we should also engage with other traditions. I want to read more on this topic.