Answer:1.
We can only speculate. One possible explanation is that in the drafts that became Capital volume 3 Marx has to face up to an issue that threatens the foundations of his economic analysis: the “transformation problem.” Briefly, if all profit comes from the exploitation of labor then highly labor-intensive industries should be more profitable than those that use little labor. But they are not. Marx allows “values” to deviate from “prices” to address this problem, but most commentators think his maths was awry, and in any case once prices no longer directly reflect labor input, much of the intuitive appeal of Marx’s economics drains away. Doing better remains a serious technical question in Marxist economics; it may be that Marx knew his own solution was half-baked but couldn’t see how to do better.
2.Before we can confront what is meant by the transformation problem, namely the transformation of labor values into average prices (what Marx calls “prices of production”), we have to look at Marx’s argument for the labor theory of value itself. Why did Marx think that labor was the substance of value, and the duration of labor time the measure of its magnitude? Robert Paul Wolff (another “Wolffian” critic of Marx) offers the following: “Labor, as measured in units of time—hours, say—is the substance of value. It is what value itself is. This Marx takes here either as given by classical political economy or else as having been proved by the hasty arguments at the opening of chapter one [of Capital volume 1]” (Wolff 1984: 103). Wolff is certainly right that part of the story is that Marx is working with categories inherited from previous thinkers like Adam Smith, David Ricardo, and others. Note, for instance, his approving reference to Benjamin Franklin on the matter: “One of the first economists, after William Petty, to have seen through the nature of value, the famous Franklin, says this: ‘Trade in general being nothing else than the exchange of labor for labor, the value of all things is… most justly measured by labor’” (Marx 1976: 142 fn18). But it is also undeniable that Marx was doing something more than just taking on board, without critical modification, the ideas of his predecessors in making labor the substance and measure of value. R. P. Wolff refers to the “hasty arguments” for the labor theory of value at the beginning of Capital, and in another place contends that “Marx’s argument for it, at the beginning of chapter I of Capital, is extremely weak—so weak as not to constitute any argument at all” (Wolff 1981: 98). Wolff dismisses Marx’s argument without explanation. This is a serious mistake, common to many interpreters and critics of Marx. Marx begins with the dual character of commodities, namely that they have both a use value and an exchange value. Exchange value is the value something has in exchange, in the sense of what commodities one can get by exchanging the commodity in question. But when commodities exchange one for another, they are treated as equivalents, i.e., they are equated with one another, and this implies they are equal in some way. However, the most diverse commodities exchange for one another in relatively fixed ratios—say, a certain quantity of corn for a certain quantity of iron, or a coat for a certain amount of linen (to take some of Marx’s examples, abstracting for the time being from prices and their corollary money). A coat may have the exchange value of an indefinitely long disjunctive list of other commodities in definite quantities it might exchange for. All of these different commodities have different use values: that is, they are different material objects with different material compositions, and this makes them suited to satisfying diverse human needs or having different values in use. If they are so different, how can they be equated in exchange? What is common to all commodities insofar as they have exchange value? Marx answers, “If then we disregard the use-value of commodities, only one property remains, that of being products of labor” (Marx 1976: 128). Put briefly, then, the first phase of the argument goes something like this: (a) systematic exchange establishes a relation of “equality” across commodities; (b) this equality relation implies that there must exist “a common element of identical magnitude” in any two commodities; (c) this “common element” cannot involve any specific properties of the commodities as use values; and (d) abstracting from such properties, the only property that remains is that all commodities are products of human labor.
Step-by-step explanation:
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