Value of Marx, The

Value of Marx, The

Moseley, Fred

Alfredo Saad Filho. The Value of Marx. London: Routledge, 2001, pp. 177. ISBN 0-415-23434-4 (hbk) L45.00

Alfrede Saad Filho’s book presents a new interpretation of Marx’s theory of value (along the lines of the earlier work of Ben Fine), with the following distinctive characteristics:

1. it is based philosophically on E.V. Ilyenkov’s ‘materialist dialectics’;

2. it is interpreted as mainly a theory of surplus-value, rather than a theory of individual prices; and

3. the organic composition of capital is interpreted in a novel way, which leads to a novel interpretation of the transformation of values into prices of production.

One of the most interesting aspects of Saad Filho’s book is that it relies on the ‘materialist dialectics’ of Ilyenkov, a Russian philosopher whose two books that have been translated into English are Dialectical Logic: Essays on its History and Theory (1977, original Russian edition in 1974) and The Dialectics of the Abstract and the Concrete in Marx’s ‘Capital’ (1982, original Russian edition in 1960). Saad Filho is to be commended for this rare emphasis by a Marxian economist on the philosophical issues of Marx’s logical method, and for introducing Ilyenkov’s distinctive and very interesting interpretation of Marx’s method to English readers. The main aspect of Ilyenkov’s materialist dialectics emphasized by Saad Filho is that Marx’s theory is based on real or concrete abstractions, not on mental or purely theoretical abstractions. Marx’s theory does not begin with a theoretical ‘model’ or assumptions, but instead begins with the most important aspects of concrete reality, i.e. of the real capitalist economy. Analysis of the most important aspects of this concrete reality leads to the discovery of the inner essence, or the inner laws, that determine the particular phenomena of this concrete reality, and is this way leads to the reconstruction of the concrete in theory.

For example, Marx’s theory begins with the commodity, the most universal and fundamental aspect of the real capitalist totality. Analysis of the actual concrete properties of commodities (use-value and exchange-value) leads to the discovery of abstract labour as the essence, or the determining cause, of the phenomena of the exchange-values of commodities. Similarly, Marx’s analysis of capital begins with the most important concrete phenomenon of capitalism-the actual transformation of money invested as capital into more money, through the purchase and sale of commodities (i.e. M – C – M’). The ‘general formula for capital’ is not a mental generalization, but is instead a concrete abstraction from the real capitalist economy, an abstraction which captures the single most important characteristic of real capitalist economies-the characteristic that determines everything else-the production of surplus-value and profit.

According to Saad Filho, Marx’s theory of value (the labour theory of value) is then used to explain this all-important empirical phenomenon of surplus-value. Contrary to the widely held view-both among non-Marxists and Marxists as well-Marx’s theory of value is not mainly a theory of individual prices, but is instead a theory of the total surplus-value produced in the capitalist economy as a whole. Thus, Marx’s theory of value and surplus-value is primarily a theory of exploitation of the working class as a whole by the capitalist class as a whole.

Saad Filho also emphasizes the impressive explanatory power of Marx’s theory of surplus-value. According to Marx’s theory, there are three main ways to increase the total surplus-value: increase the length of the working day, increase the intensity of labour, and increase the productivity of labour which reduces necessary labour time. Marx’s theory predicts that capitalists will continually try to increase the working day and the intensity of labour in order to increase the surplus-value produced. But these attempts by capitalists will be resisted by workers, who do not want a longer working day or a higher intensity of labour. Therefore, Marx’s theory (and Marx’s theory alone) provides an explanation, on the basis of its theory of value and surplus-value, of the conflicts over the length of the working day and over the intensity of value which have been so prevalent throughout the history of capitalism. The third way to increase surplus-value-increasing productivity -also explains why technological change is an inherent, ever-present feature of capitalist economies.

In terms of the ‘transformation problem,’ Saad Filho argues that Marx’s theory of prices of production in Part 2 of Volume 3 is presented in terms of the organic composition of capital, rather than the value composition, as almost everyone else thinks. According to Saad Filho (following Fine), the difference between the organic composition of capital and the value composition of capital is that the value composition of capital takes into account changes in the prices of the inputs in the transformation of values into prices of production, and the organic composition of capital does not. In other words, the organic composition of capital takes into account only the redistribution of surplus-value across industries by the transformation of output prices. It does not take into account the further effects of changes in input prices on output prices. Therefore, Saad Filho’s reply to the long-standing criticism that Marx ‘failed to transform the input prices’ is that it misses Marx’s point. Marx was trying to answer a different question. He was not trying to determine long-run equilibrium prices, as were Smith and Ricardo. Rather, Marx was explaining how surplus-value gets redistributed so that the profit appropriated in each industry is in general not equal to the surplus-value produced in each industry, which obscures the origin of surplus-value (the surplus labour of workers).

I am dubious of this interpretation of the transformation problem and the organic composition of capital. Marx said many times that his prices of production were essentially the same as Smith’s and Ricardo’s ‘natural prices’ and that they were long-run ‘centre-of-gravity’ prices around which actual market prices fluctuate (for references, see my ‘Marx’s Concept of Prices of Production as Long-Run Center of Gravity Prices,’ at www.mtholyoke.edu/fmoseley). Saad Filho’s ‘prices of production’ are not such long-run centre-of-gravity prices, because inputs are not yet transformed into prices of production. And Saad Filho acknowledges that, if Marx’s transformation procedure is extended to include changes in the prices of the inputs, then the Sraffians are right about all the issues in dispute-the rate of profit is determined simultaneously with prices of production (and not derived from the total surplus-value produced by surplus labour), and one of Marx’s two aggregate equalities cannot be true (either total price is not equal to total value or total profit is not equal to total surplus-value). In the final analysis, Saad Filho’s different interpretation of the organic composition of capital makes no essential difference. Saad Filho’s equation for the determination of long-run equilibrium prices (equation 8.3 on p. 98) is exactly the same as the familiar Sraffian equation: p = (pA + wL) (1 + r).

My own interpretation is that Marx was indeed trying to explain long-run centre-of-gravity prices (like Smith and Ricardo), but that Marx did not fail to transform the inputs, as the critics think. Rather, the inputs (constant capital and variable capital) are taken as given, as quantities of money-capital invested to purchase means of production and labour-power in the first phase of the circulation of capital. And the key point is that the same quantities of constant capital and variable capital are taken as given, both in Marx’s theory of surplus-value in Volume 1 and in Marx’s theory of prices of production in Volume 3. That is why Marx did not fail to transform the inputs, not because Marx was not trying to explain long-run equilibrium prices (see my The ‘New Solution’ to the Transformation Problem: A Sympathetic Critique, Review of Radical Political Economics, 2000, 32:2).

Despite this disagreement, I think this is an excellent book, with many new ideas, new interpretations, new authors, etc. I think Ilyenkov is especially important, and should be studied further. There are also discussions of the ‘new dialectics’, the ‘new solution’ to the transformation problem, the ‘value-form’ interpretation of Marx’s theory, etc. It is a prodigious work of scholarship-roughly a third of the book consists of endnotes, a thorough and helpful index, and the bibliography. For interested scholars who wish to ‘catch up’ on recent developments in Marxian economics, this book would be a very valuable resource. It is also evidence of the continuing vitality of Marxian economics.

Copyright Conference of Socialist Economists Summer 2003

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