MARXIAN SOCIALISM

Evening Post, Volume CI, Issue 150, 25 June 1921, Page 5

MARXIAN SOCIALISM

OBJECTIONS ANSWERED

(By J. P. Gros&mann, M.P., Professor of History and Economics, Auckland .University College.)

Since writing my last article, I have been informed that I have been publicly charged with "misrepresenting" Marxianism, and I have already dealt with some aspects of this criticism. It has occurred to me, however, that, before going on to discuss Surplus Value, I may fairly make a few additional explanatory Comments on the Labour Cost theory, which, as I have said, is virtually the economic foundation of the rest of the Marxian doctrines. As I have explained, Marx was himself well aware that his Labour Cost theory of Value could not be made to. square with facts, and that, when it was tested by appealing to the actual operations of exchange and trade in the world's markets, it broke down completely. But, unfortunately, Marx's devotion to his own dogmas was stronger than his logical, faculty, and he attempted to get oat of this difficulty by a very palpable evasion. He maintained that, no matter what can be proved about the exchange value of any single commodity, the sum total of all commodities will always be sold at^a price which is the sum total 1 of. all their values measured in Labour Cost. But this attempt at avoiding trouble once lnore destroys the Labour Cost principle as a theory of Value. TOTALITY OF VALUES. v For Value, as Marx quite correctly admits, represents a relation betvyeen a commodity and what~we/get in'exchange for it, and what his theory tries to establish is a relation between, the selling price of a given quantity of and the amount of Labour embodied in its production. But, this being so, what good does it do to tell us that, as Salter puts it, "the totality of all commodities is sold at a price which is the sum of all^their values"?' More than a generation ago the__futility of..this way of putting the case"was plain to.Marxians and their critics alike. As Boehm-Bawerk has said in his "Karl Marx and the Close of his System,", "when wjs ask for information regarding the exchange of commodities in Political Economy, it is no answer to our question to be told the total price which they fetch when taken altogether, any more than if, on asking by how many \fewer minutes the winner in a prize race had covered the course than his competitors, we were to be told that all the competitors together had taken twenty-five minutes and thirteen seconds." Commenting on Blarx's statement and this criticism, Salter, in hia recently-published "Karl Marx and Modern Socialism," justly observes that "the whole point of a law of value is that it explains how separate commodities are related to one another as regards exchange: if it starts talking about a total of all commodities, with the mdi-, vidual differences averaged out, it is no use* ait all." But the use that Marxians ■make of his theory, put in this meaningless and futile form, is simply to bolster up the claim "for the whole product of Labour" by supplying what purports to be an economic foundation for . Labour's vastly exaggerated demands. ■-, | VALUE AND PRICE. One more point before leaving the Labour Cost theory to itself. My attention has recently been drawn to a book published by the Plebs League—"Easy Outlines of Economics," in which the author, N. Abletfc, attempts a defence of the Labour Cost theory by. asserting , that Marx when he talks about the value of commodities does not mean that they are'really sold at their value measured in Labour power or Labour time. "In no place,'* says Mr. Ablett "(except when he .deliberately assumes it),, does ,Marx say that^commodities are sold, at their value." I have heard this curious argument . before, and it merely illustrates the unfortunate fact that by quoting one sentence from a book j and disregarding all the rest, it is possible to give a wholly misleading and inaccurate impression of the book's meaning. All I have to, say in reply to this is, that Marx; constantly asserts that exchange value is fixed by cost of production measured in Labour: and I will quote one out of manyi statements that I might cite from "Capital" and others of his works. In the pamphlet oil "Value, Price, and Profit," in which the original Labour Cost theory is somewhat simplified, Marx says definitely that, apart from certain exceptional circumstances and conditions, "all descriptions of commodities are on th« average sold at their respective values or natural prices.' There is no escape from this, but I may add that if Marx is not talking /about exchange value or selling price whon he is exponding his Labour Cost theory oiValue, the theory itself and everything that he says about it becomes absolutely incoherent and meaningless. THE WORST BLUNDER. As a matter of fact, as I have already -explained, Marx himself does, at tHe close of his great treatise—in the third volume of "Capital," published after his death—admit that, while what" he there t calls the "real" value of commodities, does depend on the amount of labour embodied in them, yet their selling price may^have nothing to do with this, but, as Salter has said, "is determined by what is required to bring in an average rate of profit on the whole capital invested," This is the so-called "great contradiction," the glaring inconsistency in the Marxian Value principle to which I have already referred; and it is a matter of history that, as Professor Scott of Glasgow, 'has recentlyf shown in I his "KarJ Marx on Value," the revelation, of this change of front -sa tha part of "the Master" produced a great seiiEation among his disciples, and ultimately induced many of them to give up tho Labour Cost theory of Value altogether, or to declare that it' was relatively of small importance, and that to discuss it further' would be only waste of time. . WHAT OF SURPLUS VALUE?, But, unfortunately, all Marxians alike, whether they hold th» Labour Cost doctrine in its original form or profess to have surrendered it unconditionally,* still maintain in some shape or other the doctrine of Surplus Value; and as I have already pointed out, the only shred of , economic argument ever advanced in support of this doctrine of Surplus Value ;is the Labour Cost principle. For the doctrine of Surplus Value .simply assumes that Labour produces all vvealt,!i; ; and the only proof, in economic form, 1 that Marx and his followers' have ever | advanced in defence of this vast assump. i tion is the supposed correspondence lie- ! fcween Labour Cost and Exchange Value. [ For if commodities did actually exchange |at rates proportionate to or dependent I on.the amount of Labour-power or LaI boar-time embodied in them, then there would seem to be a "prima facie" case for the view that "material things possessing Exchange Value"—in other words, all forms of Wealth—are all produced by Labour tad by Labour alone.

Now this is what the doctrine of Surplns Value virtually assumes, But this sup--. posed correspondence between Exchange Value and Labour Cost is wholly nonexistent —as I have shown, and .as Marx / ultimately admitted. Therefore, it follows that the doctrine of Surplus .Value, deprived of its only economic foundation, •-■ at once in an economic sense collapses and disappears. There may be other grounds for defending or discussing it, but as an economic doctrine,, it depends directly and solely on the baseless assumption involved in the Labour Cost theory. In criticising Labour Cost, I have thus already disposed of Surplus Value in advance. But there are a number of other more or less economic axgu.-; ments and objection® involved in the discussion of Surplus Value which are of great interest and importance, and these I will now proceed to consider.