In a recent article, Max H. Stein declared the debate about the labor theory of value to be dead, and suggested that Marxists, if indeed there is anything left of Marxism, should busy themselves with other things. Truly it would be nice to do so, but unfortunately, such a task cannot be accomplished so long as such strong bourgeois ideological indoctrination continues to get passed as a Marxist theoretical intervention. Perhaps we have Herr Heinrich to blame for this terribly noxious combination of Marxological mistreatment of the issue with neoclassical economic dogma, but nonetheless I’ll specify where in particular Stein has gone wrong and why precisely it is relevant to Marxist strategy.

1) Abstract Labor

With regard to abstract labor, Heinrich, and Sohn-Rethel and Zizek before him, have all advanced a particular reading of Marx which insists that there is something special about the “abstract” part of abstract labor. Sohn-Rethel and Žižek, for example, insist that this abstraction, unlike ordinary abstractions, does not occur “within the mind” but in practice and therefore reality. Heinrich himself says something similar in his introduction to Marx’s Capital; however, in the article by Stein he quotes Heinrich’s currently untranslated work to suggest that Marx in his theory actually conflates two abstractions, one of labor becoming increasingly mechanized and similar but still a concrete example of labor, and “abstract labor” of which no concrete example exists. This is a nonsense critique for many reasons. For one, “simple average labor” which Stein invokes to contrast with “abstract labor” is not an ideal type of labor embodied by workers being forced to work at an average pace in a mechanized fashion. It is literally an “average” of many different types of labor, and is therefore itself an abstraction with no concrete example. It is also in this way that Heinrich, Sohn-Rethel, and Žižek are all mistaken in understanding the “real abstraction” of “abstract labor,” which is in fact an abstraction of the mind, an ordinary abstraction of real things in the same way an average is. I will have more writings on this topic explaining this point in greater detail at some point (such as through the materiality of thought), but nonetheless I feel compelled to make this basic point as it has annoyed me to no end that this falsehood has so infected Marxist discourse.

When Stein says that “What meaning does the concept of “time” actually retain here if it cannot be measured in seconds, minutes, or hours? Heinrich therefore infers a “so-to-speak (!) abstract labor time.” Nothing then remains of time as time except its name.” it is therefore quite befuddling, as it is only Marxologists such as Heinrich who insist that Marx is not speaking of a time that can be measured in seconds or hours. An average of time is already abstract time.

It is also worth mentioning that when Stein dismisses Ian Wright's causal powers thesis, he does so on the basis that typical labor is not innovative, but standardized and mechanized, and in doing so he totally misses the point that it is this capacity for innovation and adaptation which makes labor so valuable, as it is this which makes it capable of being standardized and organized into so many different forms. Just as before, Stein confuses the ideal or typical characteristics of abstract labor for the real, concrete characteristics which define the uniqueness of such labor.

2) Labor Value Determining Price

Stein dismisses the notion that there is any causal mechanism connecting quantitative measures of value to actual prices. As he says of Ian Wright’s theory:

“Wright defines a “technology field” as the network of present conditions of production and calculates a commodity’s labor-value by vertically integrating direct and indirect labor times. In this sense, the magnitude is determinable. But its calculability does not yet establish the causal role attributed to it: Wright simultaneously declares the labor-value to be the hidden regulator—namely, the attractor—of the market price. It is precisely the transition from calculated reproduction labor time to price regulation that would have to be proven. The field analogy does not substitute for this proof.

The core of the problem is nevertheless the same: a magnitude can be defined or calculated as a labor coefficient. That alone does not yet show that it is a magnitude of value acting upon prices.

And to say it at once: of course a connection can always be found between labor times and prices, or sums of prices. What else? Labor is necessary for production and enters commodity prices through wage costs. Who would want to dispute that? But no law of value is to be found here.”

This sentiment betrays a deep naivety about value theory, as this dismissal is not just of Marx’s value theory but of value theory entirely. You speak to any analyst who does market research, and they will tell you that there very much is something like a “technology field” in any given industry which determines prices; it is the array of fixed capital, labor, and productivity of the existing firms producing those goods. There is an industry-wide cost curve determined by that field, and it's only when investments are made, and firms enter and exit, that this field changes, rather than the immediate vicissitudes of the market. That is practical value theory. The only theoretical distinction of Marx’s value theory is that it makes a specific claim about the relationship between fixed capital, labor, and productivity, specifically that machines only pass on their costs to the end value of a product, rather than adding surplus to it. This claim has not been proven or disproven by empirical research, and it would probably take very sophisticated data sets of real-world economies that do not exist. Whether or not Marx is right or wrong, there should be no controversy at all that values regulate prices.

3) Exploitation

Stein suggests that Marx’s quantitative theory of exploitation rests on the homogenization of labor, and thus this theory fails in the face of heterogeneous concrete labor. For one, this is not at all how Marx argues his case for exploitation as the basis of profit, for two, a quantitative theory of exploitation does not in fact require homogenous labor, merely fungible labor.

Marx’s logic that profit must arise from exploitation of labor goes like this: a capitalist who buys all the factors of production at their going value (labor, raw materials, fixed capital like machinery) and uses them to produce a given amount of widgets will find that profit will only occur depending on the quantity produced, specifically the quantity which, at a given price, is greater than the cost of those inputs. It doesn't matter how much utility is created, how much the capitalist saved, or what risks they took; so long as that quantity is not produced, there is no profit. This logic is reflected in the accounting relationship of the Kalecki profit equations, where profit is equal to capitalist consumption plus investment. Thus it becomes obvious there is a quantitative application of this theory of exploitation, whether or not the labor theory of value is true. Since labor is fungible, such that 1 million dollars worth of labor can be purchased and then coordinated to accomplish arbitrary tasks, the surplus identified by the Kalecki equations, what is left after the costs of reproducing the workers and fixed capital, can be translated into labor commanded. This is indeed often how archaeologists and anthropologists will think about ancient societies and their surpluses. If you want to be more specific, as Wright does with his superintegrated labor coefficients, it's possible to decompose all products into their real labor costs.

4) Bourgeois Ideology

I have suggested that there is indeed a relevance to Marxist strategy in all this. The lesson of the labor theory of value, and in value theory more generally, is the lesson of understanding that the “technology field” is a type of map of economic territory. As I have repeated previously, supply chains and production are a real source of power, and the development of the productive forces is changing the topology of this, quite energetic, field. The Heinrich sort of view that there is an ex post “validation” process for socially necessary production, in a way that neatly slots into the neoclassical economics notion of utility being the source of value, obscures the realities of production, hence why our author here insists on dismissing what is “hidden”.

In my own thinking on issues such as the transformation problem, I considered a thought experiment where an economy is split into types of firms: half of the firms make all final sales, and the other half undertakes all expenditures and uses the resources to produce goods. The essential point Marx makes about the transformation from labor values to prices of production is not necessarily that exact operation, but the broader principle that income to firms is not the same as value production. In that sense, we can look at this two-sided economy in the thought experiment and see that there is one half which is indeed producing the value, the half which is actually engaged in production, and that whatever scheme connects the income-earning firms to the producers such that it can reproduce this system is one which obscures this reality. This is not merely a hypothetical thought experiment either. The trade ties between the US and China can be thought of in similar terms, where American intellectual property and financial services allow certain rents to be collected that obscure where much of the value is being produced as a matter of organization of labor and machines. Of course, value is not necessarily a regulator of geopolitical strength, but this informs our current political realities, and in ways that have often been neglected by academic Marxists and neoclassical economists alike, right up to the point they can no longer be ignored.

Similarly, ignorance of value, quantitative understandings of exploitation, and the tendency for the rate of profit to fall lead to an impoverished understanding of our strategic options and opportunities (eg whether social democracy is a viable path beyond capitalism, what the impact of universal automation might be on the economy, or the relative numerical strength of the capitalist vs working class).

All of which is to say, to understand production as Marx did is to do so quantitatively, in terms of magnitudes, to analyze it as good or if not better than the best professional analysts doing market research. What remains of Marxism is exactly this desire to understand the realities of how our world reproduces itself in the most precise terms so as to change it, a duty which Stein so flippantly abnegates.